Exhibit 10.1

                              EMPLOYMENT AGREEMENT


         THIS AGREEMENT, is made as of this 21st day of May, 1997, by and
between BOWATER INCORPORATED, a Delaware corporation having a mailing address of
55 East Camperdown Way, Greenville, South Carolina 29602 (the "Corporation"),
and Wendy C. Shiba, of 65 Latour Way, Greer, South Carolina 29650 (the
"Executive").
         WHEREAS, the Corporation desires to employ the Executive as Vice
President, Secretary and Assistant General Counsel; and

         WHEREAS, the Executive is desirous of serving the Corporation in such
capacity;

         NOW, THEREFORE, the parties hereto agree as follows:


         1.       Employment.  During the term of this Agreement the Corporation
agrees to continue to employ the Executive, and the Executive agrees to continue
in the employ of the Corporation, in accordance with and subject to the
provisions of this Agreement.


         2.       Term.

                  (a)      Subject to the provisions of subparagraphs (b) and
                           (c) of this Section 2, the term of this Agreement
                           shall begin on the Date hereof and shall continue
                           thereafter until terminated by either party by
                           written notice given to the other party at least
                           thirty (30) days prior to the effective date of any
                           such termination. The effective date of the
                           termination shall be the date stated in such notice,
                           provided that if the Corporation specifies an
                           effective date that is more than (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 such termination.

                  (b)      Notwithstanding Section 2(a), upon the occurrence of
                           a Change in Control as defined in the Change in
                           Control Agreement of even date herewith between the
                           Corporation and the Executive (the "Change

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                           in Control Agreement"), the term of this Agreement
                           shall be deemed to continue 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 at the Executive=s
                           election for other than "Good Reason" as that term is
                           defined in the Change in Control Agreement.


                  (c)      Notwithstanding Section 2(a), the term of this
                           Agreement shall end upon:

                           (i)      the death of the Executive;

                           (ii)     the inability of the Executive to perform
                                    her duties properly, whether by reason of
                                    ill-health, accident or other cause, for a
                                    period of one hundred and eighty (180)
                                    consecutive days or for periods totaling one
                                    hundred and eighty (180) days occurring
                                    within any twelve (12) consecutive calendar
                                    months; or

                           (iii)    the Executive's retirement on her early or
                                    normal retirement date.


         3. Position and Duties. Throughout the term hereof, the Executive shall
be employed as Vice President, Secretary and Assistant General Counsel, with the
duties and responsibilities customarily attendant to that office, provided that
the Executive shall undertake such other and further assignments and
responsibilities of at least comparable status as the Board of Directors may
direct. The Executive shall diligently and faithfully devote her full working
time and best efforts to the performance of the services under this Agreement
and to the furtherance of the best interests of the Corporation.


         4. Place of Employment. The Executive will be employed at the
Corporation=s offices in Greenville, South Carolina or at such other place as
the Corporation shall designate from time to time, provided, however, that if
the Executive is transferred to another place of employment, necessitating a
change in her residence, the Executive shall be entitled to financial assistance
in accordance with the terms of the Corporation's relocation policy then in
effect.
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         5.       Compensation and Benefits.

                  (a)      Base Salary. The Corporation shall pay to the
                           Executive a base salary of $149,188.00 (Salary Grade
                           31) payable in substantially equal periodic
                           installments on the Corporation's regular payroll
                           dates. The Executive's base salary shall be reviewed
                           at least annually and from time to time may be
                           increased (or reduced, if such reduction is effected
                           pursuant to across-the-board salary reductions
                           similarly affecting all management personnel of the
                           Corporation).

                  (b)      Bonus Plan. In addition to her base salary, the
                           Executive shall be entitled to receive a bonus under
                           the Corporation's bonus plan in effect from time to
                           time determined in the manner, at the time, and in
                           the amounts set forth under such plan.

                  (c)      Benefit Plans. The Corporation shall make
                           contributions on the Executive's behalf to the
                           various benefit plans and programs of the Corporation
                           in which the Executive is eligible to participate in
                           accordance with the provisions thereof as in effect
                           from time to time.

                  (d)      Vacations. The Executive shall be entitled to paid
                           vacation, in keeping with the Corporate policy as in
                           effect from time to time, to be taken at such time or
                           times as may be approved by the Corporation.

                  (e)      Expenses. The Corporation shall reimburse the
                           Executive for all reasonable expenses properly
                           incurred, and appropriately documented, by the
                           Executive in connection with the business of the
                           Corporation.

                  (f)      Perquisites. The Corporation shall make available to
                           the Executive all perquisites to which she is
                           entitled by virtue of her position.


         6. Nondisclosure. During and after the term of this Agreement, the
Executive shall not, without the written consent of the Board of Directors of
the Corporation, disclose or use directly or indirectly, (except in the course
of employment hereunder and in furtherance of the business of the Corporation or
any of its subsidiaries and affiliates) any of the trade secrets or other
confidential information or proprietary data of the Corporation or its
subsidiaries or affiliates; provided, however, that confidential information
shall not include any information known generally to the public (other than as
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a result of unauthorized disclosure by the Executive) or any information of a
type not otherwise considered confidential by persons engaged in the same or
similar businesses.


         7. Noncompetition. During the term of this Agreement, and for a period
of one (1) year after the date the Executive's employment terminates, the
Executive shall not, without the prior approval of the Board of Directors of the
Corporation in the same or a similar capacity engage in or invest in, or aid or
assist anyone else in the conduct of any business (other than the businesses of
the Corporation and its subsidiaries and affiliates) which directly competes
with the business of the Corporation and its subsidiaries and affiliates as
conducted during the term hereof. If any court of competent jurisdiction shall
determine that any of the provisions of this Section 7 shall not be enforceable
because of the duration or scope thereof, the parties hereto agree that said
court shall have the power to reduce the duration and scope of such provision to
the extent necessary to make it enforceable and this Agreement in its reduced
form shall be valid and enforceable to the extent permitted by law. The
Executive acknowledges that the Corporation's remedy at law for a breach by the
Executive of the provisions of this Section 7 will be inadequate. Accordingly,
in the event of the breach or threatened breach by the Executive of this Section
7, the Corporation shall be entitled to injunctive relief in addition to any
other remedy it may have.

         8. Severance Pay. If the Executive's employment hereunder is
involuntarily terminated for any reason other than those set forth in Section
2(c) hereof, then unless the Corporation shall have terminated the Executive for
"Cause", the Corporation shall pay the Executive severance pay in an amount
equal to twelve (12) months of the Executive's base salary on the effective date
of the termination, plus 1/12 of the amount of the last bonus paid to the
Executive under the Corporation's bonus plan applicable to the Executive for
each month in the period beginning on January 1 of the year in which the date of
the termination occurs and ending on the date of the termination and for each
months' base salary to which the Executive is entitled under this Section 8,
provided, however, that any amount paid to the Executive by the Corporation for
services rendered subsequent to the thirtieth (30th) day following the
communication to the Executive of notice of termination shall be deducted from
the severance pay otherwise due hereunder. Such payment shall be made in a lump
sum within ten (10) business days following the effective date of the
termination. The severance pay shall be in lieu of all other compensation or
payments of any kind relating to the termination of the Executive's employment
hereunder; provided that the Executive's entitlement to compensation or payments
under the Corporation's retirement plans, stock option or incentive plans,
savings plans or bonus plans attributable to service rendered prior to the
effective date of the termination shall not be affected by this clause and shall
continue to be governed by 
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the applicable provisions of such plans; and further provided that in lieu
hereof, at her election, the Executive shall be entitled to the benefits of the
Change in Control Agreement of even date hereof between the Corporation and the
Executive, if termination occurs in a manner and at a time when such Change in
Control Agreement is applicable. For purposes of this Agreement, the term for
"Cause" shall mean because of gross negligence or willful misconduct by the
Executive either in the course of her employment hereunder or which has a
material adverse effect on the Corporation or the Executive's ability to perform
adequately and effectively her duties hereunder.



         9. Notices. Any notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered or mailed, by registered or certified mail, return receipt requested
to the respective addresses of the parties set forth above, or to such other
address as any party hereto shall designate to the other party in writing
pursuant to the terms of this Section 9.


         10. Severability. The provisions of this Agreement are severable, and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of any other provision.


         11. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the substantive laws of the State of Delaware.


         12. Supersedure. This Agreement shall cancel and supersede all prior
agreements relating to employment between the Executive and the Corporation
(except the Change in Control Agreement which has been signed as of the date of
this Agreement and the Indemnification Agreement dated as of July 24, 1996).


         13. Waiver of Breach. The waiver by a party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
prior or subsequent breach by any of the parties hereto.


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         14. Binding Effect. The terms of this Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the Corporation and
the heirs, executors, administrators and successors of the Executive, but this
Agreement may not be assigned by the Executive.



         IN WITNESS WHEREOF, the Corporation and the Executive have executed
this Agreement as of the day and year first above written.


BOWATER INCORPORATED


By /s/  Richard F. Frisch                          /s/ Wendy C. Shiba
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        Richard F. Frisch,                           Wendy C. Shiba
  Vice President - Human Resources

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