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                                                                    EXHIBIT 10.6




                              BOWATER INCORPORATED
                           COMPENSATORY BENEFITS PLAN


                             AS AMENDED AND RESTATED
                           EFFECTIVE FEBRUARY 26, 1999

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                                TABLE OF CONTENTS

1.  Purpose of the Plan........................................................1
2.  Definitions................................................................1
3.  Eligibility and Participation..............................................1
4.  Benefits...................................................................1
5.  Deemed Investment of Book Account Balances.................................3
6.  Maintenance and Valuation of Book Account..................................3
7.  Benefits Upon Retirement, Death, Disability or Termination of Employment...4
8.  Administration.............................................................7
9.  Claims and Review..........................................................7
10. Amendment or Discontinuance................................................8
11. Plan Unfunded..............................................................9
12. No Contract of Employment..................................................9
13. Inalienability of Benefits.................................................9
14. Governing Law..............................................................9
15. Effective Date.............................................................9


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                              BOWATER INCORPORATED
                           COMPENSATORY BENEFITS PLAN

                             As Amended and Restated
                           Effective February 26, 1999

         1. Purpose of the Plan. The purpose of the Bowater Incorporated
Compensatory Benefits Plan (the "Plan") is to provide benefits payable out of
the general assets of Bowater Incorporated (the "Company") to employees
participating in the Bowater Incorporated Salaried Employees' Savings Plan (the
"Savings Plan") whose benefits under the Savings Plan are limited by the
application of Section 415, Section 401(a)(17) and/or Section 401(k)(3) of the
Internal Revenue Code of 1986. The Plan was adopted on January 1, 1985, and was
subsequently amended and restated as of April 30, 1991. It is now being amended
and restated as of February 26, 1999, to incorporate all amendments that have
been adopted as of such date.

         The Plan shall consist of two separate plans, one that is maintained
solely for the purpose of providing benefits for employees in excess of the
limitations on contributions imposed by Section 415 of the Internal Revenue Code
of 1986 (an "Excess Benefit Plan"), and one which is maintained primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees (a "Top-Hat Plan").

         2. Definitions. Except as otherwise specified herein, all capitalized
terms and phrases used herein shall have the same meanings ascribed to such
terms and phrases in the Savings Plan.

         3. Eligibility and Participation. All Participants in the Savings Plan
("Eligible Employees") shall be eligible to participate in the Plan. An Eligible
Employee who is not a member of a select group of management or highly
compensated employees, within the contemplation of the Employee Retirement
Income Security Act of 1974 (as determined by the Plan Administrator), shall be
eligible to participate only in the portion of the Plan that is an "Excess
Benefit Plan," and shall not be eligible to participate in the portion of the
Plan that is a "Top-Hat Plan."

         4. Benefits.

         (a)      A book account ("Book Account") shall be established for each
                  Eligible Employee at such time as an amount becomes creditable
                  thereto hereunder. There shall be credited to each Eligible
                  Employee's Book Account the amount, if any, by which the
                  Employer regular contributions and additional contributions
                  that would have been made to the Savings Plan on behalf of the
                  Eligible Employee pursuant to Sections 4.01 and 4.02 of the
                  Savings Plan without regard to:



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                  (i)      if the Eligible Employee participates in the portion
                           of the Plan that is a Top-Hat Plan, the dollar
                           limitation on compensation in Section 1.14 of the
                           Savings Plan,

                  (ii)     if the Eligible Employee participates in the portion
                           of the Plan that is a Top-Hat Plan, the statutory
                           limitation on additions in Section 4.07 of the
                           Savings Plan, or

                  (iii)    the combined plan limitation in Section 4.08 of the
                           Savings Plan

                  exceeds the Employer regular and additional contributions
                  actually contributed to the Savings Plan on the Eligible
                  Employee's behalf; provided, however, that any amount credited
                  to the Book Account of an Eligible Employee which is also
                  credited to a suspense account maintained by the Trustee of
                  the Savings Plan pursuant to the provisions of Section 4.07
                  thereof (or such other section thereof as shall be adopted or
                  incorporated to conform to the requirements of Section 415 of
                  the Code and the regulations thereunder) shall be
                  provisionally credited. Whenever, in subsequent Plan Years
                  under the Savings Plan, an Eligible Employee receives an
                  allocation from such a suspense account of an amount which
                  also gave rise to a provisional credit to the Book Account
                  maintained for his or her benefit under this Plan, the
                  provisional credit shall be reduced (but not below zero).
                  Subject to the limitation in the preceding sentence, the
                  amount of the reduction shall be the amount by which such
                  allocation under the Savings Plan in such subsequent Plan Year
                  exceeds the amount that the Company would have been obligated
                  (by provisions of the Savings Plan or by its actions pursuant
                  thereto) to contribute to the Savings Plan for the Eligible
                  Employee in such subsequent Plan Year but for the availability
                  of funds from the suspense account. Any amount remaining
                  provisionally credited to the Book Account of an Eligible
                  Employee subsequent to the later of (1) the Eligible
                  Employee's termination of Employment with the Company or (2)
                  the total depletion of the suspense account through the
                  process of allocation and re-allocation, shall no longer be
                  provisionally credited, but shall be fully and finally
                  credited to the Eligible Employee's Book Account. Earnings
                  (including amounts deemed earned by reason of reference to
                  realized gains and losses) attributable to provisionally
                  credited amounts (but not unrealized appreciation or
                  depreciation in the value of assets deemed to be held) shall
                  be fully and finally credited hereunder when and as earned or
                  realized by the Trust maintained under the Savings Plan. An
                  Eligible Employee's right to amounts "fully and finally",
                  credited to his or her Book Account shall remain subject to
                  this Plan's vesting provisions.



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         (b)      Credits to the Eligible Employee's Book Account pursuant to
                  Section 4(a) shall be made as of the date the Employer regular
                  or additional contributions would have been allocated to the
                  Eligible Employee's Account pursuant to Section 4.01 or 4.02
                  of the Savings Plan had such amounts been contributed to the
                  Savings Plan on the Eligible Employee's behalf.

         5. Deemed Investment of Book Account Balances.

         (a)      Subject to Section 5(c) hereof, the deemed investment of all
                  amounts credited to an Eligible Employee's Book Account prior
                  to January 1, 1989, shall be the same as provided by this Plan
                  as of such date.

         (b)      All amounts credited to an Eligible Employee's Book Account
                  pursuant to Section 4(a) hereof on or after January 1, 1989,
                  shall be deemed to be invested initially in the Bowater Stock
                  Fund offered as an investment under the Savings Plan. The
                  number of shares of Company Stock in which such amounts will
                  be deemed to be invested shall be determined in the same
                  manner as is provided in Section 4.03 of the Savings Plan for
                  determining the number of shares of Company Stock contributed
                  to the Savings Plan, except that (i) the Valuation Date shall
                  be the date determined in accordance with Section 4(b) hereof,
                  and (ii) the Book Account shall be deemed to be invested in
                  fractional shares (computed to the nearest one-one hundredth
                  of a share).

         (c)      As of the last business day prior to the last day of any
                  month, but not more frequently than once in any twelve-month
                  period, an Eligible Employee who has attained age fifty-five
                  may direct that all, or part, in multiples of 25%, of the
                  value of his or her Book Account balance be deemed to be
                  transferred to and invested in the Fixed Income Fund. The
                  procedures to be followed by such Eligible Employee in
                  directing the deemed investment of his or her Book Account
                  balance pursuant to this Section 5(c) shall be the same as the
                  procedure set forth in Section 5.04 of the Savings Plan for
                  directing investment of a Participant's Account Balance.

         6. Maintenance and Valuation of Book Account.

         (a)      Not less often than quarterly, and in any event, as of the
                  date as of which a distribution is to be made to an Eligible
                  Employee pursuant to the terms hereof, an Eligible Employee's
                  Book Account will be adjusted to reflect increases or
                  decreases in the fair market value of the assets in which such
                  Book Account balances are deemed to be invested and income
                  earned by such assets and to reflect any distribution to such
                  Eligible Employee. To the greatest extent practicable, the
                  same valuation and accounting methods shall be used as are
                  used to recalculate Account balances under the Savings Plan.



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         (b)      As promptly as practicable after the end of each calendar
                  quarter, the Plan Administrator shall furnish to each Eligible
                  Employee a statement indicating the total amount allocated to
                  such Eligible Employee's Book Account.

         7. Benefits Upon Retirement, Death Disability or Termination of
Employment.

         (a)      Upon the Retirement or Disability of an Eligible Employee, the
                  value of such Eligible Employee's Book Account shall be
                  distributed to the Eligible Employee either as a lump sum
                  payment in cash or, in the discretion of the Plan
                  Administrator, in substantially equal annual installments over
                  a period not to exceed ten years.

         (b)      Upon the death of an Eligible Employee prior to complete
                  distribution of the value of such Eligible Employee's Book
                  Account, the undistributed value of such Eligible Employee's
                  Book Account shall be distributed to the Eligible Employee's
                  Beneficiary in a lump sum payment in cash.

         (c)      Upon termination of Employment of an Eligible Employee other
                  than by Retirement, death or Disability, and other than by
                  transfer to an Affiliated Company, the vested value of such
                  Eligible Employee's Book Account shall be paid to him or her
                  in a lump sum. The vested value of an Eligible Employee's Book
                  Account shall include the entire value of such Eligible
                  Employee's Book Account if he or she has completed at least
                  three Years of Service upon such termination of Employment. An
                  Eligible Employee who has completed less than three Years of
                  Service as of such termination of Employment shall forfeit his
                  entire Book Account; provided, however that the Forfeiture
                  shall be reinstated if the Eligible Employee is reemployed by
                  the Company, at any time before he or she has five years of
                  Break in Service. For purposes of this Section 7(c), a change
                  in control of the Company shall be deemed to have occurred on
                  the occurrence of any event(s) which constitute(s) a "change
                  in control" of the Company as defined herein.

                  Anything in this Plan to the contrary notwithstanding, upon
                  and following a Change in Control, the vested value of an
                  Eligible Employee's Book Account shall be the value of the
                  Eligible Employee's Book Account. The following definitions
                  apply for purposes of this Section 7(c):

                  (i)      "Acquiring Person" means the Beneficial Owner,
                           directly or indirectly, of Common Stock representing
                           20% or more of the combined voting power of the
                           Company's then outstanding securities, not including
                           (except as provided in clause (A) 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 Common
                           Stock representing



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                           5% or more of the combined voting power of the
                           Company's then outstanding securities.
                           Notwithstanding the foregoing, (A) 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 (B) a Person shall not be an Acquiring
                           Person if such Person is eligible to and files a
                           Schedule 13G with respect to such Person's status as
                           a Beneficial Owner of all Common Stock of the Company
                           of which the Person is a Beneficial Owner.

                  (ii)     "Affiliate" and "Associate" shall have the respective
                           meanings ascribed to such terms in Rule 12b-2 of the
                           General Rules and Regulations under the Securities
                           Exchange Act of 1934.

                  (iii)    A "Beneficial Owner" of Common Stock means (A) a
                           Person who beneficially owns such Common Stock,
                           directly or indirectly, or (B) a Person who has the
                           right to acquire such Common 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.

                  (iv)     "Board" shall mean the Board of Directors of the
                           Company.

                  (v)      A "Change in Control" shall occur upon:

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

                           (B)      the date that the Company's shareholders
                                    approve a merger, consolidation or
                                    reorganization of the Company with another
                                    corporation or other Person, unless,
                                    immediately following such merger,
                                    consolidation or reorganization, (I) 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 such
                                    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 (II) at
                                    least 50% of the board of directors or
                                    similar body of the resulting entity are
                                    Continuing Directors;



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                           (C)      the date the Company sells or otherwise
                                    transfers all or substantially all of its
                                    assets to another corporation or other
                                    Person, unless, immediately after such sale
                                    or transfer, (I) 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 (II) at
                                    least 50% of the board of directors or
                                    similar body of the resulting entity are
                                    Continuing Directors; or

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

                  (vi)     "Continuing Director" means any member of the Board
                           who (A) 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, (B) is
                           not an Acquiring Person or an Affiliate or Associate
                           of an Acquiring Person, and (C) is recommended or
                           elected to succeed the Continuing Director by a
                           majority of the Continuing Directors.

                  (vii)    "Person" means any individual, firm, corporation,
                           partnership, trust or other entity.

The provisions of this Section 7(c) related to a Change in Control shall not be
amended upon or following a Change in Control in any manner that might have the
effect of reducing the vested value of an Eligible Employee's Book Account under
the Plan. Nothing in this Section 7(c) shall be construed to prohibit, prior to
a Change in Control, any amendment to the Plan, including to this Section 7(c),
or any termination of the Plan pursuant to its terms.

An Eligible Employee who transfers to an Affiliated Company and subsequently
terminates his Employment with that Affiliated Company shall be deemed to have
terminated his or her Employment under this Section at the time of termination
of employment with the Affiliated Company unless he or she transfers without
intervening employment to employment with the Company or another Affiliated
Company.

         (d)      Distribution shall be paid or made available under the Plan
                  upon the direction of the Plan Administrator as soon as
                  practicable after the event triggering distribution occurs.



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         8. Administration.

         (a)      The Company shall be the "named fiduciary" and the Human
                  Resources and Compensation Committee of the Board of Directors
                  of the Company shall be the Plan Administrator with authority
                  to control and manage the operation and administration of the
                  Plan, including the appointment of other fiduciaries.

         (b)      The Plan Administrator shall have such powers as may be
                  necessary to discharge its duties under the Plan, including
                  the power:

                  (i)      To interpret the Plan and to make all determinations
                           as to the right of any person to a benefit under the
                           Plan and to cause the Company to pay such benefits
                           accordingly;

                  (ii)     To appoint or employ individuals to assist in the
                           Administration of the Plan and any other agents it
                           deems advisable, including legal and actuarial
                           counsel; and

                  (iii)    To delegate to others any administrative procedures
                           which are necessary for the administration of the
                           Plan.

         (c)      Decisions of the Plan Administrator with respect to the Plan
                  shall be conclusive and binding on all persons.

         9. Claims and Review. All inquiries and claims respecting the Plan
shall be submitted in writing and directed to the Plan Administrator or a person
designated by the Plan Administrator for this purpose.

         (a)      In the case of a claim respecting a benefit, a written
                  determination allowing or denying the claim shall be furnished
                  to the claimant promptly upon receipt of the claim. A denial
                  or partial denial of a claim shall be dated (the
                  "Determination Date") and signed by the Plan Administrator and
                  shall clearly set forth the following information:

                  (i)      the specific reason or reasons for the denial;

                  (ii)     a specific reference to pertinent Plan provisions on
                           which the denial is based;

                  (iii)    a description of any additional material or
                           information necessary for the claimant to perfect the
                           claim and an explanation of why such material or
                           information is necessary; and

                  (iv)     an explanation of the claim review procedures.



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                  If no written determination is furnished to the claimant
                  within thirty (30) days after receipt of the claim, then the
                  claim shall be deemed denied and the 30th day after such
                  receipt shall be the Determination Date.

         (b)      A claimant may obtain review of an adverse determination by
                  filing a written notice of appeal with the Plan Administrator
                  within sixty (60) days after the Determination Date or, if
                  later, within sixty (60) days after the receipt of a written
                  notice denying the claim. The Plan Administrator shall then
                  appoint one or more persons who shall conduct a full and fair
                  review. As part of such review, the claimant shall have the
                  right:

                  (i)      to be represented by a spokesman;

                  (ii)     to present a written statement of facts and of the
                           claimant's interpretation of any pertinent document,
                           statute or regulation; and

                  (iii)    to receive a prompt written decision clearly setting
                           forth findings of fact and the specific reasons for
                           the decision written in a manner calculated to be
                           understood by the claimant and containing specific
                           reference to pertinent Plan provisions on which the
                           decision is based.

                  A decision shall be rendered no more than thirty (30) days
                  after the request for review, except that such period may be
                  extended for an additional thirty (30) days if the person or
                  persons reviewing the claim determine that special
                  circumstances, including the advisability of a hearing,
                  require such extension. The Plan Administrator may appoint any
                  person or persons, whether or not connected with the Company,
                  to review a claim. All applicable governmental regulations
                  regarding claims and review shall be observed by the Plan
                  Administrator in connection with its administration of the
                  Plan.

         10. Amendment or Discontinuance.

         (a)      The Human Resources and Compensation Committee of the Company
                  reserves the right to amend, suspend or discontinue the Plan
                  at any time for whatever reasons it may deem appropriate. No
                  such amendment, suspension or termination, however, may reduce
                  the balance in the Book Account established for an Eligible
                  Employee or the Eligible Employee's right to have such
                  benefits distributed to him or her in accordance with the
                  terms hereof, which rights are fully vested and
                  non-forfeitable. The Company hereby makes a contractual
                  commitment on behalf of itself and its successors to pay the
                  benefits accrued under the Plan to the extent it is
                  financially capable of meeting such obligation.



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         (b)      Upon complete or partial termination of the Savings Plan, or a
                  complete discontinuance of contributions thereunder, the value
                  of an Eligible Employee's Book Account shall be nonforfeitable
                  and shall be distributed to such Eligible Employee in
                  accordance with the election of the Plan Administrator under
                  Section 11.03 of the Savings Plan except that the reference
                  therein to Section 7.06 of the Savings Plan shall be deemed to
                  be a reference to Section 7 hereof.

         11. Plan Unfunded. The benefits payable under the Plan shall not be
funded for purposes of the Internal Revenue Code of 1986 or the Employee
Retirement Income Security Act of 1974, but shall be payable out of the general
funds of the Company or its Benefit Plan Grantor Trust, when and as benefits
become payable.

         12. No Contract of Employment. Nothing contained in the Plan shall be
construed as a contract of employment between the Company and an Employee or as
a right of any Employee to be continued in the employment of the Company or as a
limitation on the right of the Company to discharge any Employee, with or
without cause.

         13. Inalienability of Benefits. To the maximum extent permitted by law,
benefits under the Plan may not be assigned or hypothecated, and no such
benefits shall be subject to legal process or attachment for the payment of any
claims against any person entitled to receive the same.

         14. Governing Law. The Plan shall be interpreted and enforced in
accordance with the laws of the State of Delaware.

         15. Effective Date. The Effective Date of this Amended and Restated
Plan shall be February 26, 1999.

         IN WITNESS WHEREOF, the Company has caused this Plan document to be
executed by its duly authorized officer as of February 26, 1999.

                                         BOWATER INCORPORATED


                                         By: /s/ James T. Wright
                                             -----------------------------------
                                         Name:  James T. Wright
                                         Title: Vice President - Human Resources
                                         Date Signed: June 2, 1999


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