EXHIBIT 10.3**EMPLOYMENT AGREEMENT**     **THIS AGREEMENT**, is made as of this 9th day of May 2006, by and between Bowater Incorporated, aDelaware corporation having a mailing address of 55 East Camperdown Way, Greenville, South Carolina29601 (the “Corporation”), and Ronald T. Lindsay, 1214 Belgrave Place, Charlotte, NC 28203 (the“Executive”).     **WHEREAS,**the Corporation initially employed the Executive as Vice President, General Counseland Secretary of the Corporation pursuant to the terms of an Employment Agreement dated January 16,2004 (the “Prior Agreement”), and the Executive was elected to Senior Vice President, GeneralCounsel and Secretary in January, 2005;     **WHEREAS**, the Corporation desires to continue to employ the Executive as Senior Vice President,General Counsel and Secretary, and the Executive desires to continue serving the Corporation insuch capacity, and the parties desire to enter into a new Employment Agreement to set forth theterms and conditions of the Executive’s employment;     **NOW, THEREFORE**, the Executive and the Corporation hereby agree to cancel the Prior Agreementand enter into this new employment agreement (the “Agreement”) as follows:     1. Employment. During the term of this Agreement, the Corporation agrees to employthe Executive as Senior Vice President, General Counsel and Secretary, and the Executive agrees toserve the Corporation in such capacities, in accordance with and subject to the provisions of thisAgreement.     2. Term. (a) Subject to the provisions of subparagraphs (b) and (c) of this Section 2, theterm of this Agreement shall be effective as of May 9, 2006 (the “Effective Date”), andshall continue thereafter until terminated by either party by written notice given tothe other party at least thirty (30) days prior to the effective date of any suchtermination. The effective date of the termination shall be the date stated in suchnotice, provided that if the Corporation specifies an effective date that is more thanthirty (30) days following the date of such notice, the Executive may, upon thirty (30)days’ written notice to the Corporation, accelerate the effective date of suchtermination.  (b) Notwithstanding Section 2(a), upon the occurrence of a Change in Control asdefined in the Change in Control Agreement between the Corporation and the Executive(the “Change in Control Agreement”), the term of this Agreement shall be deemed tocontinue until terminated, but in any event, for a period of not less than three (3)years following the date of the Change in Control, unless such termination shall be atthe Executive’s election for other than “Good Reason” as that term is defined in theChange in Control Agreement.  (c) Notwithstanding Section 2(a), the term of this Agreement shall end upon: (i) the death of the Executive;
 

 
 (ii) the “Disability” of the Executive as defined in Section 1.15 ofthe Supplemental Benefit Plan for Designated Employees of Bowater Incorporatedand Affiliated Companies (the “SERP”); or  (iii) the Executive’s retirement as of the retirement date.     3. Position and Duties. Throughout the term hereof, the Executive shall be employedas Senior Vice President, General Counsel and Secretary of the Corporation (subject to election bythe Board of Directors), with the duties and responsibilities customarily attendant to that office,provided that the Executive shall undertake such other and further assignments and responsibilitiesof at least comparable status as the Board of Directors may direct. The Executive shall diligentlyand faithfully devote his full working time and best efforts to the performance of the servicesunder this Agreement and to the furtherance of the best interests of the Corporation. TheExecutive shall report directly to the Chief Executive Officer of the Corporation.     4. Place of Employment. The Executive will be employed at the Corporation’sheadquarters, currently located in Greenville, SC, or at such other place as the Corporation shalldesignate from time to time.     5. Compensation and Benefits. (a) Base Salary. The Corporation shall pay to the Executive a base salaryof $309,435 (Salary Grade 34) payable in substantially equal periodic installments onthe Corporation’s regular payroll dates. The Executive’s base salary shall be reviewedat least annually and from time to time may be increased (or reduced, if such reductionis effected pursuant to across-the-board salary reductions similarly affecting allmanagement personnel of the Corporation).  (b) Incentive Plans. (i) Annual Incentive Plan. In addition to his base salary,the Executive shall be eligible to receive an annual incentive award under theCorporation’s annual incentive plan in effect from time to time determined inthe manner, at the time, and in the amounts set forth under such plan.  (ii) MTIP. The Executive shall be eligible to participatein the Bowater Incorporated Mid-Term Incentive Plan. The Executive’s awards,if any, shall be prorated based on his date of employment hereunder.  (iii) Stock-Based Incentive Compensation. Subject to theapproval of the Board of Directors, the Executive shall be eligible for anannual award under a Bowater stock-based incentive program, as modified fromtime to time, and for so long as such program continues. (c) Benefit Plans. The Corporation shall make contributions on theExecutive’s behalf to the various benefit plans and programs of the Corporation inwhich the 
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   Executive is eligible to participate in accordance with the provisionsthereof as in effect from time to time. (d) Supplemental Retirement Plan Enhancements. Executive shall continue tobe eligible to participate in the SERP. If Executive continues in employment with theCorporation through September 30, 2006, Executive shall be credited with two additionalyears and three months of service credit under the SERP (for a total of five years asof that date). If the Executive’s employment is terminated by either party for anyreason other than Disability or “Cause” as defined in Section 1.07 of the SERP, afterSeptember 30, 2006, Executive shall be entitled to receive an immediate lump sumdistribution of his accrued SERP benefit, and retiree health care and life insurancebenefits as otherwise provided in the SERP. If Executive is involuntarily terminatedfor reasons other than Disability or Cause at any time before September 30, 2006,Executive shall be credited with a total of five years of service under the SERP andentitled to receive an immediate lump sum distribution of his accrued SERP benefit andretiree health care and life insurance benefits as otherwise provided in the SERP. Insuch circumstances, the ten-year service requirement under the SERP for immediatedistribution of SERP benefits and entitlement to retiree health care and life insurancebenefits shall be waived. If the Executive’s employment is terminated because ofDisability, the Executive shall continue to accrue service in accordance with the termsof the Bowater Incorporated Retirement Plan, the Bowater Incorporated BenefitsEqualization Plan and the SERP (and receive the additional two years and three monthsof service credit described above) and be eligible for the Disability benefits underSection 4.04 of the SERP in accordance with its terms. Upon the earlier to occur ofthe Executive’s death, the Executive’s 65th birthday, or his recovery fromDisability, he shall be entitled to an immediate lump sum distribution of his accruedSERP benefit and retiree health care and life insurance benefits as otherwise providedin the SERP. If the Executive’s employment is terminated by death, his survivingspouse (or his estate, if his spouse fails to survive him) shall be entitled to receivean immediate lump sum distribution of his accrued SERP benefit (and receive theadditional two years and three months of service credit described above) and, if hisspouse survives him, she shall be entitled to retiree health care benefits as furtherdescribed in the SERP.  (e) Vacations. The Executive shall be entitled to paid vacation in keepingwith the Corporate policy as in effect from time to time, to be taken at such time ortimes as may be approved by the Corporation.  (f) Expenses. The Corporation shall reimburse the Executive for allreasonable expenses properly incurred, and appropriately documented, by the Executivein connection with the business of the Corporation.  (g) Perquisites. The Corporation shall make available to the Executive allperquisites to which he is entitled by virtue of his position.
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     6. Nondisclosure. During and after the term of this Agreement, the Executive shallnot, without the written consent of the Board of Directors of the Corporation, disclose or usedirectly or indirectly (except in the course of employment hereunder and in furtherance of thebusiness of the Corporation or any of its subsidiaries and affiliates) any of the trade secrets orother confidential information or proprietary data of the Corporation or its subsidiaries oraffiliates; provided, however, that confidential information shall not include any informationknown generally to the public (other than as a result of unauthorized disclosure by the Executive)or any information of a type not otherwise considered confidential by persons engaged in the sameor similar businesses.     7. Noncompetition. During the term of this Agreement and for a period of one (1) yearafter the date the Executive’s employment terminates, the Executive shall not, without the priorapproval of the Board of Directors of the Corporation or its delegate, in the same or a similarcapacity engage in or invest in, or aid or assist anyone else in the conduct of any business (otherthan the businesses of the Corporation and its subsidiaries and affiliates) which directly competeswith the business of the Corporation and its subsidiaries and affiliates as conducted during theterm hereof. If any court of competent jurisdiction shall determine that any of the provisions ofthis Section 7 shall not be enforceable because of the duration or scope thereof, the partieshereto agree that said court shall have the power to reduce the duration and scope of suchprovision to the extent necessary to make it enforceable and this Agreement in its reduced formshall be valid and enforceable to the extent permitted by law. The Executive acknowledges that theCorporation’s remedy at law for a breach by the Executive of the provisions of this Section 7 willbe inadequate. Accordingly, in the event of the breach or threatened breach by the Executive ofthis Section 7, the Corporation shall be entitled to injunctive relief in addition to any otherremedy it may have.     8. Severance Pay. (a) If the Executive’s employment hereunder is involuntarily terminated for anyreason other than those set forth in Section 2(c) hereof, then unless the Corporationshall have terminated the Executive for Cause, the Corporation shall pay the Executiveseverance pay in an amount equal to twenty-four (24) months of the Executive’s basesalary on the effective date of the termination, plus 1/12 of the amount of the lastbonus paid to the Executive under the Corporation’s annual incentive plan as applicableto the Executive, for each month in the period beginning on January 1 of the year inwhich the date of the termination occurs and ending on the date of the termination andfor each months’ base salary to which the Executive is entitled under this Section 8;provided, that any amount paid to the Executive by the Corporation for servicesrendered subsequent to the thirtieth (30th) day following the communication to theExecutive of notice of termination shall be deducted from the severance pay otherwisedue hereunder.  (b) The severance pay shall be paid in a lump sum as soon as administrativelyfeasible following the Executive’s effective date of termination, but in no event shallpayment be made later than March 15 following the calendar year of the Executive’stermination from employment, unless otherwise required by Internal 
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   Revenue CodeSection 409A or guidance issued thereunder. (c) The severance pay shall be in lieu of all other compensation or payments of anykind relating to the termination of the Executive’s employment hereunder; provided,that the Executive’s entitlement to compensation or payments under the Corporation’sretirement plans, stock option or stock-based incentive plans, savings plans, or bonusplans attributable to service rendered prior to the effective date of the terminationshall not be affected by this clause and shall continue to be governed by theapplicable provisions of such plans; and provided further, that in lieu hereof, at hiselection, the Executive shall be entitled to the benefits of the Change in ControlAgreement between the Corporation and the Executive, if termination occurs in a mannerand at a time when such Change in Control Agreement is applicable.     9. Notices. Any notices required or permitted to be given under this Agreement shallbe in writing and shall be deemed to have been given when delivered or mailed, by registered orcertified mail, return receipt requested to the respective addresses of the parties set forthabove, or to such other address as any party hereto shall designate to the other party in writingpursuant to the terms of this Section 9.     10. Severability. The provisions of this Agreement are severable, and the invalidityor unenforceability of any provision shall not affect the validity or enforceability of any otherprovision.     11. Governing Law. This Agreement shall be governed by and interpreted in accordancewith the substantive laws of the State of Delaware.     12. Agreement Supersedes. This Agreement shall cancel and supersede all prioragreements relating to employment between the Executive and the Corporation.     13. Waiver of Breach. The waiver by a party of a breach of any provision of thisAgreement shall not operate or be construed as a waiver of any prior or subsequent breach by any ofthe parties hereto.     14. Binding Effect. The terms of this Agreement shall be binding upon and inure tothe benefit of the successors and assigns of the Corporation and the heirs, executors,
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administrators and successors of the Executive, but this Agreement may not be assigned by theExecutive.     IN WITNESS WHEREOF, the Corporation and the Executive have executed thisAgreement as of the day and year first above written.       **BOWATER INCORPORATED**   **EXECUTIVE**       By /s/ David J. Paterson   /s/ Ronald T. Lindsay         David J. Paterson   Ronald T. Lindsay  Chief Executive Officer    
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