<PAGE>   1

                                                                    EXHIBIT 10.2




                              AMENDED AND RESTATED

                              BOWATER INCORPORATED

                  OUTSIDE DIRECTORS BENEFIT PLAN GRANTOR TRUST

                            Effective April 15, 1998


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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
ARTICLE I

     Title-Purpose-Policy-Effect.............................................  1
          1.1 Name...........................................................  1
          1.2 Definitions....................................................  1
          1.3 Purpose........................................................  5
          1.4 Effect.........................................................  6

ARTICLE II

     Valuation...............................................................  6
          2.1 Valuation of Trust Fund........................................  6

ARTICLE III

     Administration of the Plans.............................................  6
          3.1 Payments From Trust Fund.......................................  6
          3.2 Participant Data...............................................  7
          3.3 Creditors......................................................  8
          3.4 Reliance on Company............................................  8
          3.5 Responsibility for Plan Administration.........................  8
          3.6 Trustee Not Responsible for Administration of Judgments........  9

ARTICLE IV

     Investment of Trust Assets..............................................  9
          4.1 Asset Managers.................................................  9
          4.2 Investment Discretion.......................................... 10
          4.3 Limitations on Investment Discretion........................... 10
          4.4 Responsibility for Diversification............................. 10

ARTICLE V

     Responsibility for Directed Funds....................................... 10
          5.1 Responsibility for Selection of Agents......................... 10
          5.2 Trustee Not Responsible for Investments in Directed Funds...... 11
          5.3 Investment Vehicles............................................ 11
          5.4 Reliance on Asset Manager...................................... 11
          5.5 Merger of Funds................................................ 11
          5.6 Notification of Company in Event of Breach..................... 12
          5.7 Definition of Knowledge........................................ 12
          5.8 Duty to Enforce Claims......................................... 12
</TABLE>


                                       i
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<TABLE>
<S>                                                                           <C>
          5.9  Restrictions on Transfer...................................... 12
          5.10 Section 4.1(b) Controlling.................................... 12

ARTICLE VI

     Powers of Asset Managers................................................ 13
          6.1  General Powers................................................ 13
          6.2  Additional Powers of Trustee.................................. 14
          6.3  Annuity and Insurance Contracts............................... 15
          6.4  Letters of Credit............................................. 17

ARTICLE VII

     Records and Accounts of Trustees........................................ 17
          7.1  Records....................................................... 17
          7.2  Annual Account................................................ 17
          7.3  Account Stated................................................ 17
          7.4  Judicial Accountings.......................................... 17
          7.5  Necessary Parties............................................. 17

ARTICLE VIII 

     Compensation, Taxes and Expenses........................................ 18
          8.1  Compensation and Expenses..................................... 18
          8.2  Taxes......................................................... 18

ARTICLE IX

     Resignation or Removal of Trustee....................................... 19
          9.1  Resignation or Removal........................................ 19
          9.2  Designation of a Successor.................................... 19
          9.3  Reserve for Expenses.......................................... 19

ARTICLE X

     Amendment or Termination................................................ 20
          10.1 Amendment of Agreement........................................ 20
          10.2 Termination of Plan........................................... 20
          10.3 Distribution of Residual Assets............................... 21
          10.4 Distribution of Excess Assets................................. 21

ARTICLE XI

     Prohibition Against Diversion........................................... 21
          11.1 No Right of Alienation or Employment.......................... 21
</TABLE>


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<TABLE>
<S>                                                                           <C>
ARTICLE XII

     Sufficiency of Trust Fund............................................... 22
          12.1  Payment of Benefits.......................................... 22
          12.2  Contribution to Fund......................................... 22

ARTICLE XIII

     Authorities............................................................. 23
          13.1  Company...................................................... 23
          13.2  Investment Manager........................................... 23
          13.3  Form of Communications....................................... 23
          13.4  Continuation of Authority.................................... 24
          13.5  No Obligation to Act on Unsatisfactory Notice................ 24

ARTICLE XIV

     General Provisions...................................................... 24
          14.1  Governing Law................................................ 24
          14.2  Entire Agreement............................................. 24
          14.3  Mistake...................................................... 24
          14.4  Reliance on Experts.......................................... 24
          14.5  Successor to the Trustee..................................... 24
          14.6  Notices...................................................... 25
          14.7  Plan Documents............................................... 25
          14.8  No Waiver; Reservation of Rights............................. 25
          14.9  Descriptive Headings......................................... 25
          14.10 Counterparts................................................. 25

ARTICLE XV

     Undertaking by Company.................................................. 25
          15.1  Undertaking.................................................. 25
          15.2  Limitation on Undertaking.................................... 26
          15.3  Survival of Undertakings..................................... 26

LIST A....................................................................... 27

LIST B....................................................................... 28
</TABLE>


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         THIS GRANTOR TRUST AGREEMENT was initially made and entered into as of
the 5th day of September, 1989, by and between BOWATER INCORPORATED, a Delaware
corporation (the "Company"), and WACHOVIA BANK, N.A., a national banking
association organized and existing under the laws of the United States (the
"Trustee").

                             W I T N E S S E T H :

         WHEREAS, the Company established this Grantor Trust to serve as a
funding vehicle for certain designated non-qualified benefit plans, agreements
or arrangements and as a medium for holding amounts payable to eligible
participants under the Bowater Incorporated Retirement Plan for Outside
Directors and the Deferred Compensation Plan for Outside Directors of Bowater
Incorporated (the "Plans"), and any plans, agreements or arrangements hereafter
adopted by Bowater Incorporated and designated for participation in this Trust;
and

         WHEREAS, the Trustee has agreed to hold and administer all sums of
money and such other property acceptable to the Trustee as shall from time to
time be contributed, paid or delivered to it hereunder, IN TRUST, upon all of
the terms and conditions of the Grantor Trust Agreement (the "Agreement"), and

         WHEREAS, the Company and the Trustee desire to amend and restate the
Agreement governing this Grantor Trust.

         NOW THEREFORE, the Company and the Trustee hereby agree to continue the
Bowater Incorporated Outside Directors Grantor Trust on the following terms and
conditions as of April 15, 1998:

                                    ARTICLE I

                           Title-Purpose-Policy-Effect

         1.1 Name. The trust established hereunder shall be known as the Bowater
Incorporated Outside Directors Benefit Plan Grantor Trust and is sometimes
hereinafter referred to as the "Trust".

         1.2 Definitions. Where used in this Agreement, unless the context
otherwise requires or unless otherwise expressly provided:

         (a) "Account Party" shall mean an officer of the Company designated to
represent the Company for this purpose and any Person to whom the Trustee shall
be instructed by the Company to deliver its annual account under Section 7.2.

         (b) "Accounting Period" shall mean the twelve consecutive month period
coincident with the calendar year or the shorter period in any year in which the
Trustee accepts appointment as Trustee hereunder or ceases to act as Trustee for
any reason.


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         (c) "Agreement" shall mean all of the provisions of this instrument and
of all other instruments amendatory hereof.

         (d) "Asset Manager" shall mean the Trustee (other than for purposes of
Article V), Company or Investment Manager, individually or collectively as the
context shall require, but only with respect to those assets held in an
Investment Account over which it exercises, or to the extent it is authorized to
exercise, discretionary investment authority or control.

         (e) "Bank Business Day" shall mean a day on which the Trustee is open
for business.

         (f) An individual or entity is a "beneficiary" if such individual or
entity is receiving benefits, or entitled to receive benefits solely upon the
lapse of time under any of the Plans in respect of a deceased participant.

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

         (h) A "Change in Control" shall be deemed to have occurred upon:

                  (a)      The date that any Person is or becomes an Acquiring
                           Person.

                  (b)      The date that the Corporation's shareholders approve
                           a merger, consolidation or reorganization of the
                           Corporation 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 Corporation
                           as of the record date for such approval (provided
                           that securities held by any individual or entity that
                           is an Acquiring Person, or who would be an Acquiring
                           Person if 5% were substituted for 20% in the
                           definition of such term, shall not be counted as
                           securities held by the shareholders of the
                           Corporation, 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.

                  (c)      The date the Corporation 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 Corporation'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 


                                       2
<PAGE>   7

                           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
                           Corporation, 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.

                  (d)      The date on which less than two-thirds (2/3) of the
                           total membership of the Board consists of Continuing
                           Directors.

For purposes of this Section:

                  (i)      "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 (the "Act").

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

                  (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.


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<PAGE>   8

                  (iv)     "Continuing Directors" 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.

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

         Notice to the Trustee from the Company that a Change in Control has
occurred shall be binding and conclusive on the Trustee. The Trustee shall have
no independent duty to investigate whether or not a Change in Control has
occurred. In performing any of its obligations or taking any discretionary
action under this Agreement which is dependent upon a Change in Control having
occurred, the Trustee may rely on such notice and such notice shall be binding
and conclusive on all Plan participants and beneficiaries.

         (i) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and Regulations issued thereunder.

         (j) "Company" shall mean Bowater Incorporated or successor thereto.

         (k) "Directed Fund" shall mean an Investment Account, or part thereof,
subject to the discretionary management and control of the Company or any
Investment Manager.

         (l) "Discretionary Fund" shall mean any Investment Account, or part
thereof, subject to the discretionary management and control of the Trustee.

         (m) "Investment Account" shall mean each pool of assets in the Trust in
which the Plans have an interest during an Accounting Period.

         (n) "Investment Manager" shall mean a bank, as defined under the
Investment Advisers Act of 1940, insurance company or investment adviser
registered under the Investment Advisers Act of 1940.

         (o) "Investment Vehicle" shall mean any common, collective or
commingled trust, mutual fund, investment company, corporation functioning as an
investment intermediary, insurance contract, letter of credit, partnership,
joint venture or other entity or arrangement to which, or pursuant to which,
assets of the Trust have been transferred or in which the Trust has an interest,
beneficial or otherwise.


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<PAGE>   9

         (p) "Participant Data" shall mean certain information regarding the
participants (or beneficiaries) under each Plan and the determination of the
benefits under each Plan, including the following information: (i) name,
address, date of birth, date of election as a Director (when applicable) and
social security number; (ii) a schedule of the estimated payments under each
Plan; and (iii) any other information regarding each Plan which the Trustee may
reasonably request or which the Company may deem necessary.

         (q) "Person" shall mean a natural person, trust, estate, corporation of
any kind or purpose, mutual company, joint-stock company, unincorporated
organization, association, partnership, joint venture, employee organization,
committee, board, participant, beneficiary, trustee, partner, or venturer acting
in an individual, fiduciary, or representative capacity, as the context may
require.

         (r) "Plan" or "Plans" shall mean, collectively, the Plans, and such
other plans, agreements or arrangements maintained by the Company or to which
the Company is a party and which have been designated by the Board of Directors
for participation in this Trust, as are set forth on List A hereto.

         (s) "Trust Fund" shall mean all cash and other property contributed,
paid or delivered to the Trustee hereunder, all investments made therewith and
proceeds thereof and all earnings and profits thereon, less payments, transfers
or other distributions which, at the time of reference, shall have been made by
the Trustee, as authorized herein. The Trust Fund shall include all evidences of
ownership, interest or participation in an Investment Vehicle, but shall not,
solely by reason of the Trust Fund's investment therein, be deemed to include
any assets of such Investment Vehicle.

         (t) "Trust" shall mean the grantor trust established under this
Agreement.

         (u) "Trustee" shall mean Wachovia Bank, N.A., as Trustee of the Trust
and its successors.

         (v) "Valuation Date" shall mean the last day of the Accounting Period,
calendar quarter or any more frequent reporting date determined by the Company
and agreed to by the Trustee.

         (w) "Wachovia" shall mean Wachovia Bank, N.A.

         The plural of any term shall have a meaning corresponding to the
singular thereof as so defined and any neuter or masculine pronoun used herein
shall include the masculine or feminine, as the context may require.

         1.3 Purpose. The Trust is established as a grantor trust within the
meaning of Sections 671 through 677 of the Code, to hold the interests of
participants and their beneficiaries in the Plans. Except as may otherwise be
permitted by law and the terms of the Plans or pursuant to the terms of this
Agreement, at no time prior to the satisfaction of all liabilities with respect
to 


                                       5
<PAGE>   10

participants and their beneficiaries under the Plans shall any portion of the
Trust Fund be used for, or diverted to, any purposes other than for the
exclusive benefit of such participants and their beneficiaries, and for
defraying the reasonable expenses of administering each such Plan. The
establishment of the Trust is intended to provide a funding vehicle for the
payment of benefits under the Plans and is not intended to relieve the Company
of its duties under the Plans to the participants therein.

         1.4 Effect. All Persons at any time interested in the Plans shall be
bound by the provisions of this Agreement and, in the event of any conflict
between this Agreement and the provisions of the Plans or any other instrument
or agreement forming part of each such Plan, the provisions of this Agreement
shall control.


                                   ARTICLE II

                                    Valuation

         2.1 Valuation of Trust Fund. The Trustee shall determine the value of
the assets of the Trust Fund as of each Valuation Date. In addition, prior to a
Change in Control and for the convenience of the Company and without imposing
any obligation on the Trustee, the Company may request the Trustee to include in
its periodic reports under this Article II or its annual account under Section
7.2 assets which do not constitute part of the Trust Fund. Assets will be valued
at their market values at the close of business on the Valuation Date, or, in
the absence of readily ascertainable market values, at such values as the
Trustee shall determine in accordance with methods consistently followed and
uniformly applied. Anything in this Agreement to the contrary notwithstanding,
with respect to assets constituting part of a Directed Fund or assets included
at the request of the Company as hereinabove provided, the Trustee may rely, for
all purposes of this Agreement, on the latest valuation and transaction
information submitted to it by the Persons responsible for the investment of
such assets even if such information predates the Valuation Date. The Company
will cause such Persons to provide the Trustee with all information needed by
the Trustee to discharge its obligations to value such assets and to account
under this Agreement.


                                   ARTICLE III

                           Administration of the Plans

         3.1 Payments From Trust Fund. (a) Subject to Sections 3.2, 3.3 and
6.3(b), the Trustee, upon receipt of direction from the Company prior to a
Change in Control, shall pay moneys directly to or for the benefit of
participants and their beneficiaries, or to a paying or disbursing agent (which
may be the Company) for the benefit of participants and their beneficiaries.
Prior to a Change in Control, the Company may direct that moneys be paid to the
Company or an affiliate or subsidiary thereof, however, only if and only to the
extent that such payment is for the reimbursement of moneys paid under the Plan
to a participant or beneficiary 


                                       6
<PAGE>   11

which could have been paid from the Trust Fund. After a Change in Control, the
Trustee may follow the directions of the Company as noted in the preceding
sentence only upon receipt of evidence that such amounts have been paid to a
participant or beneficiary in lieu of a payment from the Trust Fund. Any such
payment to the Company or an affiliate or subsidiary thereof shall be deemed a
payment for the benefit of a participant or beneficiary. Any assets disbursed or
paid over by the Trustee pursuant to the foregoing provisions of this Section
3.1, or pursuant to Section 3.3 hereof, shall no longer be part of the Trust
Fund.

         (b)(1) In the event it shall be determined prior to a Change in Control
that the participants in the Plans and/or beneficiaries of the Trust Fund, prior
to the payment of benefits hereunder, are subject to any tax under the terms of
the trust created hereunder, then the Trustee, upon a receipt of written
direction from the Company, shall make payments from the Trust Fund to such
persons, in such manner and in such amounts as the Company shall direct, for the
purpose of paying the amount of Federal, State and Local tax and interest and
any penalties thereon which such participants and/or beneficiaries may incur
arising out of such determination. In the event such a determination is made
after a Change in Control occurs, then each participant or beneficiary who is
subject to such tax, may direct the Trustee, in writing, to make payments from
the Trust Fund for the purpose set forth in the preceding sentence and shall
deliver to the Trustee evidence of such determination. In the event a final
judicial determination is made after a Change in Control occurs that a
participant or beneficiary, prior to the payment of benefits hereunder, is
subject to any tax under the terms of the trust created hereunder and a
governmental agency authorized to execute such determination directs the Trustee
to pay such tax from the Trust Fund, then the Trustee may make such payment and
shall incur no liability hereunder because of the Trustee's compliance with such
direction. The Trustee's decision as to whether the final judicial determination
referenced in the preceding sentence has occurred shall be binding and
conclusive on all participants and beneficiaries.

         (b)(2) Any payment from the Trust Fund pursuant to paragraph (b)(1) of
this Section 3.1 attributable to a Plan shall actuarially reduce the benefits of
those participants and/or beneficiaries to whom such a distribution is made
under the Plans.

         3.2 Participant Data. The Company has heretofore submitted Participant
Data to the Trustee and may, from time to time hereafter, furnish the Trustee
with updated Participant Data. In addition, the Company shall provide
information concerning participants and beneficiaries to the Company's actuarial
consultants on a quarterly basis sufficient to permit such consultants to assist
the Company in determining Participant Data and the contributions to be made
hereunder upon a Change in Control, and to discharge the Company's duties under
Section 12.2(b). The Company shall keep the Trustee informed of the identity of
the actuarial consultants responsible for such information, and such consultants
shall be formally retained on an ongoing basis to provide these services. The
Company shall, upon a Change in Control, furnish the Trustee with Participant
Data and, after a Change in Control, furnish the Trustee with Participant Data
at least once each Accounting Period. After a Change in Control, all expenses of
the actuarial consultants may be paid from the Trust Assets to the extent not
paid by the Company.


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<PAGE>   12

         The Company shall maintain and provide to the Trustee at least annually
a current list (List B) of participants in each Plan. After a Change in Control,
participants and beneficiaries shall have the right to receive from the Company
or the Trustee (i) a copy of the most recent Participant Data that has been
supplied to the Trustee on his or her behalf, and (ii) a list of the names and
addresses of all participants and beneficiaries in each Plan, within thirty (30)
days after a request for such information is made.

         In the event of a Change in Control and notwithstanding any other
provision of this Agreement, the Trustee shall, without direction from the
Company, make payments to participants or beneficiaries in such manner and in
such amounts as the Trustee shall determine they are entitled to be paid under
each Plan based upon the most recent Participant Data furnished to the Trustee
by the Company prior to or upon such Change in Control and any supplemental
information furnished to the Trustee by a participant, a beneficiary thereof,
the Company or its actuarial consultants upon which the Trustee may reasonably
rely in making such a determination. The Trustee's determination as to the
amount of such payments after a Change in Control occurs shall be binding and
conclusive on all participants and beneficiaries thereof and the Trustee shall
be fully protected under the terms of the trust created hereunder in making such
determination but the Trustee's determination shall not relieve the Company of
its obligations to such participants and beneficiaries.

         3.3 Creditors. The Company has the duty to inform the Trustee of the
Company's insolvency (i.e., its inability to pay debts as they mature) or
bankruptcy (i.e., the Company is subject to a pending proceeding under the
federal Bankruptcy Code). The insolvency or bankruptcy of a subsidiary of the
Company shall not be deemed to be the insolvency or bankruptcy of the Company or
any other subsidiary. When the Trustee is in receipt of a copy of a bankruptcy
petition relating to the Company or a notification from the Company that it is
insolvent, the Trustee will suspend payments to the participants and their
beneficiaries under the Trust and will hold assets of the Trust for the benefit
of the Company's general creditors. Thereafter, the Trustee will deliver assets
of the Trust to satisfy claims of the Company's general creditors as directed by
a court of competent jurisdiction. However, if the Trustee makes a good faith
determination that the Company is solvent, it shall continue to make or resume
making payments under the Plans until a final order to the contrary is received
by the Trustee.

         3.4 Reliance on Company. Any directions pursuant to Section 3.1 may,
but need not, specify the application to be made of moneys so ordered. Each
direction to the Trustee under Section 3.1 or Section 3.3 shall constitute a
certification by the Company, as the case may be, that such direction is in
accordance with applicable law, or with the terms of each Plan, and with the
terms of this Agreement. The Trustee shall have no duty to make any independent
inquiry or investigation as to any of the foregoing before acting upon such
direction.

         3.5 Responsibility for Plan Administration. Subject to Section 3.2 or
subject to any delegation by the Company and assumption by the Trustee of the
duties of administering the Plans, the Trustee shall not be responsible in any
way respecting the determination, 


                                       8
<PAGE>   13

computation, payment or application of any payment (other than the execution of
any documents incidental thereto and transfer or receipt of funds thereunder on
the directions of the Company), or for any other matter affecting the
administration of the Plans by the Company or any other Person to whom such
responsibility is allocated or delegated pursuant to the terms of each Plan.

         3.6 Trustee Not Responsible for Administration of Judgments. The
Trustee shall not be responsible in any way respecting the administration,
computation, payment or application of any payment, satisfaction, or for any
other matter affecting the response of the Company to any creditor in the event
of insolvency, other than for the execution of any documents incidental thereto
and transfer or receipt of funds thereunder on the directions of the Company.


                                   ARTICLE IV

                           Investment of Trust Assets

         4.1 Asset Managers. (a) Prior to a Change in Control, discretionary
authority for the management and control of assets from time to time held in the
Trust Fund may be retained, allocated or delegated, as the case may be, for one
or more purposes, to and among the Asset Managers by the Company, in its
absolute discretion. To the extent an Asset Manager is the Trustee, the assets
shall be part of the Discretionary Fund; to the extent an Asset Manager is
either the Company or an Investment Manager, the assets shall be part of a
Directed Fund. Prior to a Change in Control, the terms and conditions of
appointment, authority and retention of any Asset Manager shall be the sole
responsibility of the Company. The Company shall promptly notify the Trustee in
writing of the appointment or removal of an Asset Manager. Any notice of
appointment pursuant to this Section 4.1 shall constitute a representation and
warranty that the Asset Manager has been appointed in accordance with the
provisions of each Plan and that any Asset Manager (other than the Trustee or
the Company) is an Investment Manager.

         (b) After a Change in Control, discretionary authority for the
management and control of assets from time to time held in the Trust Fund shall
be in the Trustee. After a Change in Control occurs and subject to paragraph (g)
of Section 6.3 and Section 6.4 the Trustee shall continue to manage the assets
of the Trust in accordance with Section 4.1(a). The Trustee may appoint,
terminate or continue the appointment of Asset Managers for all permissible
types of securities, until such time as at least fifty-one (51) percent in
number of the participants and beneficiaries thereof request that the assets of
the Trust be invested and reinvested, without distinction between principal and
income, in an immunized or dedicated portfolio of bonds, debentures, equipment
or collateral trust certificates, notes or other evidences of indebtedness,
unsecured or secured by mortgages on real or personal property wherever situated
(including any part interest in a bond and mortgage or note and mortgage whether
insured or uninsured) and any portfolio of other property, or part interest in
property, real or personal, foreign or domestic in which such event the Trustee
shall have the power to appoint Asset Manager(s) solely for such specified
investments. The rates of return and maturity dates of the instruments of such
portfolio 


                                       9
<PAGE>   14

shall reasonably be expected to yield assets of the Trust Fund sufficient to
discharge the Company's obligations under each Plan as set forth in the most
recent Participant Data furnished to the Trustee prior to or upon such Change in
Control.

         (c) After a Change in Control, the Trustee, subject to Section 4.1(b),
shall have full discretion and responsibility for investment of Trust assets,
including responsibility for the appointment of Asset Managers and for
formulation of funding, investment and diversification policies and shall have
all the duties and responsibilities of the Company set forth in Sections 4.1(a),
4.3 and 4.4.

         4.2 Investment Discretion. Subject to Section 4.1(b), the Trust Fund
shall be invested and reinvested, without distinction between principal and
income, at such time or times in such investments and pursuant to such
investment strategies or courses of action and in such shares and proportions,
as the Asset Managers, in their sole discretion, shall deem advisable.

         4.3 Limitations on Investment Discretion. Prior to a Change in Control,
the Company may limit, restrict or impose guidelines affecting the exercise of
the discretion hereinabove conferred in Section 4.2 on any Asset Manager. Any
limitations, restrictions or guidelines applicable to the Trustee, as Asset
Manager, shall be communicated in writing to the Trustee. Prior to a Change in
Control, the Trustee shall have no responsibility with respect to the
formulation of any funding policy or any investment or diversification policies
embodied therein. Prior to a Change in Control, the Company shall be responsible
for communicating, and monitoring adherence to, any limitations or guidelines
imposed on any other Asset Manager.

         4.4 Responsibility for Diversification. Prior to a Change in Control,
the Company shall be responsible for determining the diversification policy of
the Trust Fund, for monitoring adherence by the Asset Managers to such policy,
and for advising the Asset Managers with respect to limitations on employer or
other securities or property contained in each Plan or imposed on each Plan by
applicable statute.


                                    ARTICLE V

                        Responsibility for Directed Funds

         5.1 Responsibility for Selection of Agents. Prior to a Change in
Control, all transactions of any kind or nature in or from a Directed Fund shall
be made upon such terms and conditions and from or through such principals and
agents as the responsible Asset Manager shall direct. No such transactions shall
be executed through the facilities of the Trustee except where the Trustee shall
make available its facilities solely for the purpose of temporary investment of
cash reserves of a Directed Fund. (However, nothing in the preceding sentence
shall confer any authority upon the Trustee to invest the cash balances of any
Directed Fund unless and until it receives directions from the responsible Asset
Manager.)


                                       10
<PAGE>   15

         5.2 Trustee Not Responsible for Investments in Directed Funds. Prior to
a Change in Control, and except as provided in Section 5.6, the Trustee shall be
under no duty or obligation to review or to question any direction of any Asset
Manager, or to review securities or any other property held in any Directed Fund
with respect to prudence or proper diversification or compliance with any
limitation on the Asset Manager's authority under the terms of each Plan, any
agreement entered into between the Company and the Asset Manager or imposed by
applicable law, or to make any suggestions or recommendations to the Company or
the Asset Manager with respect to the retention or investment of any assets of
any Directed Fund, and shall have no authority to take any action or to refrain
from taking any action with respect to any asset of a Directed Fund unless and
until it is directed to do so by the Asset Manager.

         5.3 Investment Vehicles. Any Investment Vehicle, or interest therein,
acquired by or transferred to the Trustee upon the directions of the Asset
Manager shall be allocated to the appropriate Directed Fund, and the Trustee's
duties and responsibilities under this Agreement shall not be increased or
otherwise affected thereby. The Trustee shall be responsible solely for the
safekeeping of the evidence of the Trust's ownership of or interest or
participation in such Investment Vehicle.

         5.4 Reliance on Asset Manager. The Trustee shall be required under this
Agreement to execute documents, to settle transactions, to take action on behalf
of or in the name of the Trust and to make and receive payments on the direction
of the Asset Manager. Any direction of the Asset Manager shall constitute a
certification to the Trustee (i) that the investment is authorized under the
terms of this Agreement and any other agreement or law affecting the Asset
Manager's authority to deal with the Directed Fund, (ii) that any contract,
agency, joinder, adoption, participation or partnership agreement, deed,
assignment or other document of any kind which the Trustee is required to
execute to effectuate the transaction has been reviewed by the Asset Manager
and, to the extent it deems advisable and prudent, its counsel, (iii) that such
instrument or document is in proper form for execution by the Trustee, (iv)
that, where appropriate, insurance protecting the Trust against loss or
liability has been or will be maintained in the name of or for the benefit of
the Trustee, and (v) that all other acts to perfect and protect the Trust's
rights have been taken, and the Trustee shall have no duty to make any
independent inquiry or investigation as to any of the foregoing before acting
upon such direction. In addition, the Trustee shall not be liable for the
default of any Person with respect to any investment in a Directed Fund or for
the form, genuineness, validity, sufficiency or effect of any document executed
by, delivered to or held by it for any Directed Fund on account of such
investment, or if, for any reason (other than the negligence or willful
misconduct of the Trustee) any rights of the Trust therein shall lapse or shall
become unenforceable or worthless.

         5.5 Merger of Funds. Except pursuant to Section 4.1(b), the Trustee
shall not have any discretionary responsibility or authority to manage or
control any asset held in a Directed Fund upon the resignation or removal of an
Asset Manager unless and until it has been notified in writing by the Company
that the Asset Manager's authority has terminated and that such Directed Fund's
assets are to be integrated with the Discretionary Fund. Such notice shall not
be deemed effective until two Bank Business Days after it has been received by
the Trustee unless the Trustee shall agree otherwise. The Trustee shall not be
liable for any losses to the 


                                       11
<PAGE>   16

Trust Fund resulting from the disposition of any investment made by the Asset
Manager or for the retention of any illiquid or unmarketable investment or any
investments which are not actively traded publicly held securities or for the
holding of any other investment acquired by the Asset Manager if the Trustee is
unable to dispose of such investment because of any restrictions imposed by the
Securities Act of 1933 or other federal or state law, or if an orderly
liquidation of such investment is impractical under prevailing conditions
imposed pursuant to Section 4.2, or for any other violation of the terms of this
Agreement, the Plans or applicable law as a result of the addition of Directed
Fund assets to the Discretionary Fund.

         5.6 Notification of Company in Event of Breach. Prior to a Change in
Control, if the Trustee has knowledge of a breach committed by an Asset Manager,
it shall notify the Company thereof, and the Company shall thereafter assume
full responsibility to all Persons interested in each Plan to remedy such
breach. After a Change in Control, if the Trustee has knowledge of a breach
committed by an Asset Manager, it shall thereafter assume full responsibility to
all Persons interested in each Plan to remedy such breach.

         5.7 Definition of Knowledge. While the Trustee will perform certain
duties (such as custodial, reporting, recording, valuation and bookkeeping
functions) with respect to Directed Funds, such duties will not involve the
exercise of any discretionary aucertain duties will be the responsibility of
officers or other employees of the Trustee who are not familiar with and have no
responsibility for investment management. Therefore, the Company agrees that in
the event that knowledge of the Trustee shall be a prerequisite to imposing a
duty upon or to determining liability of the Trustee under this Agreement or any
statute regulating the conduct of the Trustee with respect to such Directed
Funds or relieving the Company of its undertakings under Section 15.2, the
Trustee will not be deemed to have knowledge of, or to have participated in, any
act or omission of an Asset Manager involving the investment of assets allocated
to the Directed Funds solely as a result of the receipt and processing of
information in the course of performing such duties.

         5.8 Duty to Enforce Claims. Prior to a Change in Control, the Trustee
shall have no duty to commence or maintain any action, suit or legal proceeding
on behalf of the Trust on account of or growing out of any investment made in or
for a Directed Fund unless the Trustee has been directed to do so by the Asset
Manager and unless the Trustee is either in possession of funds sufficient for
such purpose or unless it has been indemnified by the Company or the Investment
Manager, to its satisfaction, for counsel fees, costs and other expenses and
liabilities to which it, in its sole judgment, may be subject by beginning or
maintaining such action, suit or legal proceeding.

         5.9 Restrictions on Transfer. Nothing herein shall be deemed to empower
any Asset Manager to direct the Trustee to transfer any asset of a Directed Fund
to itself except for purposes enumerated in Section 6.1(a).

         5.10 Section 4.1(b) Controlling. All provisions of this Article V are
subject to Section 4.1(b).


                                       12
<PAGE>   17

                                   ARTICLE VI

                            Powers of Asset Managers

         6.1 General Powers. Subject to Section 4.1(b) hereof and without in any
way limiting the powers and discretions conferred upon any Asset Manager by the
other provisions of this Agreement or by law, each Asset Manager, including the
Trustee, shall be vested with the following powers and discretions with respect
to the assets of the Trust subject to its management and control, and, upon the
directions of the Asset Manager of a Directed Fund, the Trustee shall make,
execute, acknowledge and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate to enable such Asset Manager to carry out such powers and
discretions:

            (a) to hold marketable securities subject to appropriate objectives
and guidelines set by the Company, including stocks, bonds and money market
instruments. However, the Trustee shall have no responsibility or obligation to
monitor objectives and guidelines set forth by the Company;

            (b) to sell, exchange, convey, transfer or otherwise dispose of any
property by private contract or at public auction, and no person dealing with
the Asset Manager shall be bound to see to the application of the purchase money
or to inquire into the validity, expediency or propriety of any such sale or
other disposition;

            (c) to enter into contracts or to make commitments either alone or
in company with others to sell or acquire property;

            (d) to delegate to a manager or holder or holders of a majority
interest in any real property, the management and operation of any part interest
in such property or properties (including the authority to sell such part
interests or otherwise carry out the decision of such manager or the holder or
holders of such majority interest);

            (e) to lease to others for any term without regard to the duration
of the Trust any real property or part interest in real property;

            (f) to vote upon any stocks, bonds or other securities (but subject
to the suspension of any voting rights as a result of any broker loan or similar
agreement); to give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion privileges,
subscription rights or other options and to make any payments incidental
thereto; to consent to or otherwise participate in corporate reorganizations or
other changes affecting corporate securities and to delegate discretionary
powers and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities or other property;


                                       13
<PAGE>   18

            (g) to organize corporations under the laws of any state for the
purpose of acquiring or holding title to property (or to direct the Trustee to
organize such corporations or to appoint any ancillary trustee acceptable to the
Trustee for such purpose);

            (h) to invest in a fund consisting of securities issued by
corporations and selected and retained solely because of their inclusion in, and
in accordance with, one or more commonly used indices of such securities, with
the objective of providing investment results for the fund which approximate the
overall performance of such designated index;

            (i) to enter into any partnership, as a general or limited partner,
or joint venture;

            (j) to purchase units or certificates issued by an investment
company or pooled trust or comparable entity;

            (k) to transfer money or other property to an insurance company
issuing an insurance contract; and

            (l) to be reimbursed for the expenses incurred in exercising any of
the foregoing powers or for paying the reasonable expenses incurred by any
agent, manager or trustee appointed pursuant hereto.

         6.2 Additional Powers of Trustee. In addition, the Trustee is hereby 
authorized:

            (a) to register any securities held in the Trust Fund in its own
name or in the name of a nominee and to hold any securities in bearer form, and
to combine certificates representing such securities with certificates of the
same issue held by the Trustee in other fiduciary or representative capacities
or as agent for customers, or to deposit or to arrange for the deposit of such
securities in any qualified central depository even though, when so deposited,
such securities may be merged and held in bulk in the name of the nominee of
such depository with other securities deposited therein by other depositors, or
to deposit or arrange for the deposit of any securities issued by the United
States Government, or any agency or instrumentality thereof, with a Federal
Reserve Bank, but the books and records of the Trustee shall at all times show
that all such investments are part of the Trust Fund;

            (b) to employ suitable agents, depositories and counsel, domestic or
foreign, and to charge their reasonable expenses and compensation against the
Trust Fund, and to confer upon any such depository the powers conferred upon the
Trustee by paragraph (a) of this Section 6.2 as well as the power to appoint
subagents and depositories, wherever situated, in connection with the retention
of securities or other property;

            (c) to borrow money from any source as may be necessary or advisable
to effectuate the purposes of the Trust on such terms and conditions as the
Trustee, in its absolute discretion, may deem advisable;


                                       14
<PAGE>   19

            (d) to deposit funds in interest bearing account deposits maintained
by or savings certificates issued by Wachovia, in its separate corporate
capacity, or in any other banking institution;

            (e) to compromise or otherwise adjust all claims in favor of or
against the Trust Fund other than claims solely affecting the right of any
Person to benefits under each Plan;

            (f) to make any distribution or transfer of assets authorized under
the terms of this Agreement in cash or in kind as the Trustee, in its absolute
discretion, shall determine and, in furtherance thereof, to value such assets,
which valuation shall be conclusive and binding on all Persons;

            (g) upon the direction of the Company, to maintain and operate one
or more market inventory funds as a vehicle to exchange securities among
Discretionary and Directed Funds without alienating the property from the Trust;
and

            (h) to hold uninvested cash awaiting investment and such additional
cash balances as it shall deem reasonable or necessary, without incurring any
liability for the payment of interest thereon.

         6.3 Annuity and Insurance Contracts. (a) The Trustee, upon written 
direction of the Company prior to a Change in Control, shall pay from the Trust
Fund sums (including periodic premiums) to such insurance company or companies
as the Company may direct for the purpose of procuring individual or group
annuity or life insurance contracts for each Plan (hereinafter in this Article
referred to as "Contracts"). The Trustee may reimburse the Company from the
Trust Fund any sums paid by the Company to such insurance company or companies
in connection with procuring or maintaining such Contracts. The Company shall
prepare, or cause to be prepared in such form as it shall prescribe, the
application for any Contract to be applied for. The Trustee shall receive and
hold in the Fund, subject to the provisions hereinafter set forth in this
Article, all Contracts so obtained.

            (b) The Trustee shall be the owner of Contracts held in the Trust
Fund and, upon written direction of the Company prior to a Change in Control,
shall have power, without the consent of any other person, to exercise any and
all of the rights, options and privileges that belong to the absolute owner of
any Contract held in the Trust Fund or that are granted by the terms of any such
Contract or by the terms of this Agreement. The Trustee shall have no discretion
with respect to the exercise of any of the foregoing powers or to take any other
action permitted by any Contract held in the Trust Fund, but shall exercise such
powers or take such action only upon the written direction of the Company prior
to a Change in Control; the Trustee shall have no duty to exercise any of such
powers or to take any such action unless and until it shall have received such
direction. The Trustee, upon the written direction of the Company prior to a
Change in Control, shall deliver any Contract held in the Trust Fund to such
person or persons as may be specified in the direction.


                                       15
<PAGE>   20

            (c) The Trustee shall hold in the Trust Fund the proceeds of any
sale, assignment or surrender of any Contract held in the Trust Fund and any and
all dividends and other payments of any kind received in respect of any Contract
held in the Trust Fund.

            (d) Upon the written direction of the Company prior to a Change in
Control, the Trustee shall pay from the Trust Fund premiums, assessments, dues,
charges and interest, if any, upon any Contract held in the Trust Fund. The
Trustee shall have no duty to make any such payment unless and until it shall
have received such direction. After a Change in Control occurs, the Trustee
shall pay from the Trust Fund premiums, assessments, dues, charges and interest,
if any, upon any Contract held in the Trust Fund, without direction from the
Company.

            (e) No insurance company that may issue any Contract or Contracts
held in the Trust Fund shall be deemed to be a party to this Agreement for any
purpose, or to be responsible in any way for the validity of this Agreement or
to have any liability under this Agreement other than as stated in each Contract
that it may issue. Any insurance company may deal with the Trustee as sole owner
of any Contract issued by it and held in the Fund, without inquiry as to the
authority of the Trustee to act, and may accept and rely upon any written
notice, instruction, direction, certificate or other communication from the
Trustee believed by it to be genuine and to be signed by an officer of the
Trustee and shall incur no liability or responsibility for so doing. Any sums
paid out by any insurance company under any of the terms of a Contract issued by
it and held in the Trust Fund either to the Trustee, or, in accordance with its
direction, to any other person or persons designated as payees in such Contract
shall be a full and compete discharge of the liability to pay such sums, and the
insurance company shall have no obligation to look to the disposition of any
sums so paid. No insurance company shall be required to look into the terms of
this Agreement, to question any action of the Trustee or to see that any action
of the Trustee is authorized by the terms of this Agreement.

            (f) Anything contained herein to the contrary notwithstanding,
neither the Company nor the Trustee shall be liable for the refusal of any
insurance company to issue or change any Contract or Contracts or to take any
other action requested by the Trustee; nor for the form, genuineness, validity,
sufficiency or effect of any Contract or Contracts held in the Trust Fund; nor
for the act of any person or persons that may render any such Contract or
Contracts null and void; nor for the failure of any insurance company to pay the
proceeds and avails of any such Contract or Contracts as and when the same shall
become due and payable; nor for any delay in payment resulting from any
provision contained in any such Contract or Contracts; nor for the fact that for
any reason whatsoever (other than their own negligence or willful misconduct)
any Contract or Contracts shall lapse or otherwise become uncollectible.

            (g) After a Change in Control occurs, the Trustee may exercise any
of the powers set forth in paragraphs (a) through (f) of this Section 6.3
without direction from the Company to purchase Contracts the rates of return and
maturity dates of which may reasonably be expected to yield assets of the Trust
Fund sufficient to discharge the Company's obligations under the Plans as set
forth in the most recent Participant Data furnished to the Trustee prior to or
upon such Change in Control and to pay all expenses and fund all reserves
anticipated under this Agreement. In making its decision to purchase Contracts,
the Trustee shall, in good faith, 


                                       16
<PAGE>   21

determine whether the investment policy of the Fund at such time will, in its
judgment, discharge the Company's obligations under the Plans and this Agreement
without undue risk to the Trust. The Trustee, in exercising the powers set forth
in the preceding sentence, shall incur no liability under the terms of this
Agreement, except for the Trustee's gross negligence or willful misconduct.

         6.4 Letters of Credit. The Trustee, upon written direction of the
Company prior to a Change in Control, shall pay from the Trust Fund sums to such
banking company or companies as the Company may direct for purposes of
establishing a letter of credit to fund the Company's obligations under the
Plans. The Trustee shall receive and hold in the Fund all letters of credit so
obtained.


                                   ARTICLE VII

                        Records and Accounts of Trustees

         7.1 Records. The Trustee shall keep accurate and detailed accounts of
all investments, receipts, disbursements and other transactions in the Trust
Fund and all accounts, books and records relating thereto shall be open to
inspection and audit at all reasonable times during normal business hours by any
Person designated by the Company.

         7.2 Annual Account. Within ninety (90) days following the close of each
Accounting Period, the Trustee shall file with the Account Party a written
account setting forth the receipts and disbursements of the Trust Fund and the
investments and other transactions effected by it upon its own authority or
pursuant to the directions of any Person as herein provided during the
Accounting Period.

         7.3 Account Stated. Upon the expiration of ninety (90) days from the
date of filing its annual account with the Account Party, the Trustee shall be
forever released and discharged from all liability and further accountability to
the Company, the Account Party or any other Person with respect to the accuracy
of such accounting and the-propriety of all acts and failures to act of the
Trustee reflected in such account, except with respect to any such acts or
transactions as to which the Account Party shall, within such ninety (90) day
period, file with the Trustee specific written objections.

         7.4 Judicial Accountings. Nothing herein shall in any way limit the
Trustee's right to bring any action or proceeding in a court of competent
jurisdiction to settle its account or for such other relief as it may deem
appropriate.

         7.5 Necessary Parties. In order to protect the Trust Fund from the
expense of litigation, no Person other than the Company shall be a necessary
party in any proceeding under Section 7.4 or may require the Trustee to account
or may institute any other action or proceeding against the Trustee or the
Trust.


                                       17
<PAGE>   22

                                  ARTICLE VIII

                        Compensation, Taxes and Expenses

         8.1 Compensation and Expenses. (a) Prior to a Change in Control, the
Trustee shall, upon receipt of written direction from the Company, pay out of
the Trust Fund any expenses incurred by the Trustee in connection with its
administration of the Trust including, but not limited to, fees for legal
services rendered to the Trustee (whether or not rendered in connection with a
judicial or administrative proceeding), such compensation to the Trustee as
shall be agreed upon from time to time between the Trustee and the Company, and
all other proper charges and disbursements of the Trustee.

         (b) After a Change in Control occurs, (i) the Trustee shall, without
any direction from the Company, pay out of the Trust Fund any reasonable
expenses incurred by the Trustee including, but not limited to, amounts assessed
against the Trustee in connection with liability incurred by the Trustee as a
result of any discretionary action which the Trustee may take under the Trust
after such Change in Control occurs, fees for legal services rendered to the
Trustee (whether or not rendered in connection with a judicial or administrative
proceeding), fees for actuarial and/or accounting services rendered to the
Trustee for purposes of determining benefits under each Plan, such compensation
to the Trustee as was agreed upon between the Trustee and the Company prior to
such Change in Control or as shall be agreed upon from time to time between the
Trustee and the Company after such Change in Control occurs, and all other
proper charges and disbursements of the Trustee, and (ii) such expenses shall be
paid prior to any other payments required to be made under the terms of the
trust created hereunder.

         (c) In accordance with Section 9.3, the Trustee shall be authorized
after a Change in Control occurs to reserve such amount as it may deem advisable
for payments of its fees and expenses as set forth in paragraph (b) of this
Section 8.1.

         (d) Anything in preceding paragraphs (a), (b) or (c) of this Section
8.1 to the contrary notwithstanding, the Company shall reimburse the Trustee for
any such reasonable expenses if for any reason such expenses are not paid out of
the Trust Fund. The Trustee's entitlement to reimbursement hereunder shall not
be affected by the resignation or removal of the Trustee or by the termination
of the Trust.

         8.2 Taxes. The Company shall from its own assets pay any Federal,
State, Local or other taxes imposed or levied with respect to the corpus and/or
income of the Trust Fund or any part thereof under existing or future laws and
the Company, in its discretion, or the Trustee, in its discretion, may contest
the validity or amount of any tax, assessment, claim or demand respecting the
Trust Fund or any part thereof.


                                       18
<PAGE>   23

                                   ARTICLE IX

                        Removal or Resignation of Trustee

         9.1 Removal or Resignation. Prior to a Change in Control, the Trustee
may be removed by the Company at any time upon sixty (60) days' notice in
writing to the Trustee. After a Change in Control occurs, (i) the Trustee may be
removed by the Company, through action of its Board of Directors, at any time
upon sixty (60) days notice in writing to the Trustee except that the Trustee
may be not so removed by the Company except with the consent of seventy-five
(75) percent in number of the participants of the Plans, or (ii) the Trustee may
be removed by the participants upon sixty (60) days' notice in writing to the
Trustee, provided such notice is executed by at least fifty-one (51) percent in
number of the participants of the Plans. The Trustee may resign at any time upon
sixty (60) days' notice in writing to the Company.

         9.2 Designation of a Successor. Upon the removal or resignation of the
Trustee, the Company, by action of its Board of Directors, shall appoint a
successor trustee which shall be a bank as defined under the Investment Advisers
Act of 1940, having a net worth in excess of $100,000,000 or having assets in
excess of $2,000,000,000 to act hereunder after the effective date of such
removal or resignation. Each successor trustee shall have the same powers and
duties as those conferred upon the Trustee hereunder, and upon acceptance of
such appointment by the successor trustee, the Trustee shall assign, transfer
and pay over the Trust Fund to such successor trustee. If, for any reason, the
Company cannot or does not act promptly to appoint a successor trustee in the
event of the resignation or removal of the Trustee, the Trustee may apply to a
court of competent jurisdiction for the appointment of a successor trustee. Any
expenses incurred by the Trustee in connection therewith shall be charged to and
paid from the Trust Fund as an expense of administration.

         9.3 Reserve for Expenses. Prior to a Change in Control, the Trustee is
authorized to reserve such amount as is agreed by the Company for payment of its
fees and expenses in connection with the settlement of its account or otherwise,
and any balance of such reserve remaining after payment of its fees and expenses
shall be paid over in accordance with the directions of the Company. After a
Change in Control occurs, the Trustee is authorized to reserve such amount as it
may deem advisable and reasonable at any time for payment of its fees and
expenses in connection with the settlement of its account or otherwise, and any
balance of such reserve remaining after payment of such fees and expenses shall
be paid over in accordance with the directions of the Company under the last
sentence of Section 10.4. The Trustee is authorized to invest such reserve in
any investment authorized under the terms of this Agreement appropriate for the
temporary investment of cash reserves of trusts, the earnings on which are to be
credited to each Plan and the participants' accounts. After a Change in Control,
the Company agrees to keep the Trust sufficiently funded at all times to allow
for a reserve for the Trustee's fees and expenses and to enable the Trustee to
reimburse itself in accordance with the terms of this section and the terms of
Article XV hereof.


                                       19
<PAGE>   24

                                    ARTICLE X

                            Amendment or Termination

         10.1 Amendment of Agreement. (a) This Agreement is irrevocable by the
Company. Subject to paragraph (b) hereof, the Company expressly reserves the
right at any time to amend this Agreement and the trust created thereby by
action of its Board of Directors to any extent that it may deem advisable. No
such amendment shall be made that affects the duties or responsibilities of the
Trustee without its consent thereto in writing; and provided further, that no
amendment may be made unless the Company, in its reasonable judgment, believes
that such amendment would have no material adverse impact on participants or
their beneficiaries or that such amendment is necessary to avoid a greater
adverse impact on the participants or their beneficiaries. Such amendment shall
become effective upon delivery to the Trustee of a written instrument of
amendment, duly executed and acknowledged by the Company and accompanied by a
certified copy of a resolution of the Board of Directors of the Company
authorizing such amendment.

         (b) Notwithstanding any other provisions of this Agreement, the
provisions of this Agreement and the trust created thereby may not be amended
after the date a Change in Control occurs without the written consent of
seventy-five (75) percent in number of the participants and beneficiaries. The
Trustee may request that the Company furnish evidence to establish that such a
percentage of participants and beneficiaries have granted written consent to
such an amendment. The Company reserves the right to amend or eliminate this
paragraph (b) prior to the date of a Change in Control.

         10.2 Termination of Plan. In the event a Plan is terminated in whole or
in part prior to a Change in Control, the Trustee (subject to the provisions of
Articles XI and XII hereof and reserving such sums as the Trustee shall deem
reasonably necessary in settling its accounts and to discharge any obligation of
the Trust Fund for which the Trustee may be liable) shall apply or distribute
the Trust Fund attributable to such Plan in accordance with the written
directions of the Company. After the date a Change in Control occurs, a Plan may
not be terminated without the written consent of seventy-five (75) percent in
number of the participants of such Plan and their beneficiaries. In case a Plan
is terminated in whole or in part after a Change in Control occurs, then the
Trustee (subject to the provisions of Articles XI and XII hereof and reserving
such sums as the Trustee shall deem reasonably necessary in settling its
accounts and to discharge any obligation of the Trust Fund for which the Trustee
may be liable) shall apply or distribute a portion of the Trust Fund
attributable to such Plan in such manner and in such amounts as the Trustee
shall determine based upon the most recent Participant Data with respect to such
Plan forwarded by the Company to the Trustee prior to or upon such Change in
Control and any supplemental information furnished to the Trustee by a
participant, beneficiary, the Company or its actuaries upon which the Trustee
may reasonably rely in making such a determination. Upon such termination of a
Plan in whole or in part, the Trustee shall have a right to have its accounts
settled with respect to such Plan as provided in Article VII hereof. When the
Trust Fund shall have been so applied or distributed and the accounts of the
Trustee shall have been so settled, the Trustee shall be released and discharged
from all further accountability or 


                                       20
<PAGE>   25

liability respecting the Trust Fund with respect to such Plan (or that part of
the Trust Fund so applied or distributed, if a Plan is terminated only in part)
and shall not be responsible in any way for the further disposition of the Trust
Fund with respect to such Plan (or that part of the Trust Fund so applied or
distributed, if such Plan is terminated only in part). Notwithstanding the
above, no distribution shall be made from the Trust to a participant or
beneficiary attributable to the termination of a Plan during the ninety (90) day
period following such termination of each Plan. Any distribution made thereafter
shall be subject to the provisions of Section 3.3 hereof.

         10.3 Distribution of Residual Assets. In the event of the termination
of a Plan prior to a Change in Control, any residual assets with respect to such
Plan shall be distributed to the Company if all liabilities of the Plan to
participants and their beneficiaries have been satisfied and the distribution
does not contravene any provision of law.

         10.4 Distribution of Excess Assets. In the event that the fair market
value of the assets of the Trust, determined as of the close of each calendar
year by an actuary chosen by the Company, exceeds one-hundred ten percent (110%)
of the present value of the aggregate benefits payable to participants under
each Plan, the Company may, in its sole discretion, prior to a Change in
Control, direct the Trustee to distribute such excess assets, in whole or in
part, to the Company provided such distribution does not contravene any
provisions of law. After a Change in Control, subject to Section 3.3 no assets
may be distributed to the Company until (i) all obligations as to participants
in all the Plans, or their beneficiaries, have been satisfied and (ii) provision
has been made for (A) the payment of expenses incurred or reasonably projected
by the Trustee to be incurred under the terms of this Agreement and (B) the
establishment and maintenance of reserves as contemplated hereunder.


                                   ARTICLE XI

                          Prohibition Against Diversion

         11.1 No Right of Alienation or Employment. The assets of the Trust Fund
shall not be subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge by any participant or beneficiary. The
participants and beneficiaries have no beneficial ownership in or preferred
claim on the assets of the Trust. Amounts payable under the Plans consist of the
Company's unsecured promise to pay such amounts and, with respect to such
amounts, the participants have the status of unsecured creditors. Participation
in a Plan does not give any employee a right to continued employment with the
Company or any subsidiary or affiliate or to interfere with the right of the
Company or any subsidiary or affiliate to discharge any employee at any time for
any reason without prior notice and to treat him without regard to the effect
which such treatment might have upon him as a participant in a Plan.
Participation in a Plan does not give any director a right to continue as a
director or be renominated for election as a director.


                                       21
<PAGE>   26

                                   ARTICLE XII

                            Sufficiency of Trust Fund

         12.1 Payment of Benefits. (a) Prior to a Change in Control if the
assets of the Trust Fund are, as of any Valuation Date, including, without
limitation, at the time of termination of a Plan or as a result of the payment
of expenses as set forth in paragraph (b) of Section 8.1, insufficient to
fulfill the Company's obligations under the Plan to participants or
beneficiaries, then (i) the Trustee shall apply the Trust Fund to pay a portion
of the accrued benefits of each participant or beneficiary under the Plan which
shall be determined by multiplying each participant's or beneficiary's accrued
benefit by a fraction, the numerator of which shall be the current value of
assets in the Trust, and the denominator of which shall be the aggregate present
value of the accrued benefits payable to participants under the Plan as
determined by an actuary chosen by the Company; and (ii) the Company shall pay
to such participants or beneficiaries the remaining amounts owed at such time as
provided pursuant to the Plan.

         (b) At least annually, after a Change in Control occurs, if the assets
of the Trust Fund are, as of any Valuation Date, including, without limitation,
at the time of termination of a Plan or as a result of the payment of expenses
as set forth in paragraph (b) of Section 8.1, insufficient to fulfill the
Company's accrued obligations as of such date under the Plan to participants or
beneficiaries and to pay the expenses previously incurred or reasonably
projected by the Trustee to be incurred under this Agreement, then the Trustee
shall so notify the Company, setting forth the additional aggregate amount
required and the Company shall, within ten (10) days of the receipt of such
notice pay to the Trustee the amount set forth in such notice.

         12.2 Contribution to Fund. (a) After the execution of this Agreement
and prior to a Change in Control, the Company may, but is not required to, make
a single contribution of a sinking fund of actuarially determined contributions
in an amount as shall be necessary, as determined by the Company, to ensure that
the assets of the Fund shall be sufficient to discharge the Company's
obligations under the Plans.

         During a calendar year, the Company may, but is not required to, make
contributions to the Trust to insure that the assets of the Trust exceed as a
minimum the present value of accrued benefits as of the end of that year for all
participants who have retired or are eligible for retirement or early retirement
during the year. The present value shall be determined by using the interest
rate used for funding purposes in the Bowater Incorporated Employees' Retirement
Plan's most recent actuarial valuation ("Plan Valuation"). In lieu of the
foregoing, the Company may make such provisions for the funding of the Trust as
it deems appropriate.

         (b) After a Change in Control occurs, the Company shall make such
contributions within ten (10) days of the Change in Control, and thereafter as
of the first day of each calendar month, to the trust created hereunder as shall
be necessary to ensure that the assets of the Trust shall at all times be
sufficient to discharge the Company's obligations under the Plans and under the
terms of this Agreement. Notwithstanding the foregoing however, the Company
shall have no obligation to fund the Trust to the extent that a participant or
beneficiary waives the 


                                       22
<PAGE>   27

funding obligation for the benefits attributable to such participant or
beneficiary. The Company's obligations under the Plans shall be equal to the
aggregate present value of the future benefits payable to the participants under
the Plans as determined by using the 1983 Group Annuity Mortality Table
(weighted 50% male), and the lower of (i) the "applicable interest rate" under
Section 417(e)(3)(A)(ii)(II) of the Code which would be used for purposes of
such Section for the last full month before the month for which such present
value is being calculated, and (ii) the interest rate used in the most recent
Plan valuation for funding purposes.

         Anything herein to the contrary notwithstanding, the Trustee shall
under no circumstances be responsible for the adequacy of the Trust, whether
before or after a Change in Control, as the result of the distribution of excess
Trust assets to the Company, the payment of claims of judgment creditors of the
Company, the payment of taxes of the Trust or of the participants and/or
beneficiaries, the payment of expenses of the Trust or the Trustee or otherwise
to fulfill the obligations of the Company under the Plan to participants and
beneficiaries.

         (c) For purposes of calculating the contribution that the Company may
or is required to make under this Section12.2, the Company shall make reasonable
projections of (i) increases in the obligations under the Plans, including but
not limited to those caused by increases in compensation, increases in tax
rates, increases in the number of participants included in the Plans, and the
likelihood that increased or accelerated amounts will be payable pursuant to
provisions of such Plans as a result of a Change in Control, and (ii) potential
future expenses or reserves that may be payable or required to be maintained
under the terms of this Agreement.


                                  ARTICLE XIII

                                   Authorities

         13.1 Company. Whenever the provisions of this Agreement specifically
require or permit any action to be taken by "the Company", such action must be
authorized by an officer of the Company, who has been duly authorized by the
Board of Directors to act on the Company's behalf. The Company shall furnish the
Trustee from time to time with a list of the names and signatures of all
individual officers authorized to act for the Company hereunder and certified by
the Secretary or an Assistant Secretary of the Company, and the Trustee shall be
fully protected in acting upon any notices or directions received from any of
them.

         13.2 Investment Manager. The Company shall cause each Investment
Manager to furnish the Trustee from time to time with the names and signatures
of those persons authorized to direct the Trustee on its behalf hereunder.

         13.3 Form of Communications. Any agreement between the Company and any
Person (including an Investment Manager) or any other provision of this
Agreement to the contrary notwithstanding other than Section 14.6, all notices,
directions and other communications to the Trustee shall be in writing or in
such other form, including transmission 


                                       23
<PAGE>   28

by electronic means through the facilities of third parties or otherwise,
specifically agreed to in writing by the Trustee, and the Trustee shall be fully
protected in acting in accordance therewith. Notice of a Change in Control shall
be communicated to the Trustee in a writing signed by an officer of the Company,
which notice shall be conclusive and binding on the Trustee and on which the
Trustee shall be entitled to rely.

         13.4 Continuation of Authority. The Trustee shall have the right to
assume, in the absence of written notice to the contrary, that no event
constituting a change in the Company's officers or terminating the authority of
any Person, including any Investment Manager, has occurred.

         13.5 No Obligation to Act on Unsatisfactory Notice. The Trustee shall
incur no liability under this Agreement for any failure to act pursuant to any
notice, direction or any other communication from any Asset Manager, the Company
or any other Person or the designee of any of them unless and until it shall
have received instructions in form satisfactory to it.


                                   ARTICLE XIV

                               General Provisions

         14.1 Governing Law. This Agreement shall be administered, construed and
enforced according to the laws of the State of Delaware. Nothing in this
Agreement shall be construed to subject either the Trust or the Plans to ERISA
other than Part 1 of Title I thereof.

         14.2 Entire Agreement. The Trustee's duties and responsibilities to the
Plans or any Person interested therein shall be limited to those specifically
set forth in this Agreement.

         14.3 Mistake. No mistake made in good faith and in the exercise of due
care in connection with the administration of the Trust Fund shall be deemed to
be a breach of the Trustee's duties if, promptly after discovery of the mistake,
the Trustee takes whatever action may be practicable in the circumstances to
remedy the mistake.

         14.4 Reliance on Experts. The Trustee and the Company may consult with
experts (who may be experts employed by the Company), including legal counsel,
appraisers, pricing services, accountants or actuaries, selected by them with
due care with respect to the meaning and construction of this Agreement or any
provision hereof, or concerning their powers and duties hereunder, and shall be
protected for any action taken or omitted by them in good faith pursuant to or
on the basis of the opinion of any such expert.

         14.5 Successor to the Trustee. Any successor, by merger or otherwise,
to substantially all of the trust business of Wachovia shall automatically and
without further action become the Trustee hereunder if and only if such
successor meets the requirements of Section 9.2. If the successor does not meet
such requirements, then the Trustee shall be deemed to have 


                                       24
<PAGE>   29

resigned as of the date of such merger or other event and the provisions of
Section 9.2 shall apply. Any successor shall be subject to all the terms and
conditions and entitled to all the benefits and immunities hereof.

         14.6 Notices. All notices, reports, annual accounts and other
communications to the Company, Investment Manager, or any other Person shall be
deemed to have been duly given if mailed, postage prepaid, electronically
delivered or delivered in hand to such Person at its address appearing on the
records of the Trustee, which address shall be filed with the Trustee at the
time of the establishment of the Trust and shall be kept current hereafter by
the Company. All directions, notices, statements, objections and other
communications to the Trustee shall be deemed to have been given when received
by the Trustee at its offices.

         14.7 Plan Documents. The Company shall provide the Trustee with a
complete, current copy of each Plan. The Company also shall deliver to the
Trustee a copy of any modifications or amendments to a Plan. The Trustee shall
be entitled to rely upon the Company's attention to this obligation and shall be
under no duty to inquire of any Person as to the existence of any documents not
provided hereunder.

         14.8 No Waiver; Reservation of Rights. The rights, remedies, privileges
and immunities expressed herein are cumulative and are not exclusive, and the
Trustee shall be entitled to claim all other rights, remedies, privileges and
immunities to which it may be entitled under applicable law.

         14.9 Descriptive Headings. The captions in this Agreement are solely
for convenience of reference and shall not define or limit the provisions
hereof.

         14.10 Counterparts. This Agreement may be executed in two counterparts,
each of which shall be an original and both of which shall constitute together
but one and the same document.


                                   ARTICLE XV

                             Undertaking by Company

         15.1 Undertaking. In consideration of Wachovia's agreeing to enter into
this Agreement, the Company hereby agrees to hold harmless Wachovia,
individually and as Trustee ("Wachovia" or "Trustee" within this Section 15.1
shall include any parent or subsidiary of Wachovia and any corporation the stock
of which is wholly owned by Wachovia Corporation as well as any successor
corporation to those previously described) and Wachovia's directors, officers,
and employees, from and against all amounts, including without limitation taxes,
expenses (including reasonable counsel fees), liabilities, claims, damages,
actions, suits or other charges, incurred by or assessed against Wachovia,
individually or as Trustee, or its directors, officers or employees, (i) as a
result of any act or omission of any predecessor trustee appointed under a Plan;
(ii) as a result of anything done in good faith, or alleged to have been done,
by or 


                                       25
<PAGE>   30

on behalf of Wachovia in reliance upon the directions of any Investment Manager
or the Company or anything omitted to be done in good faith, or alleged to have
been omitted, in the absence of such directions; (iii) as a result of the
failure of the Company, directly or indirectly, to adequately, carefully and
diligently discharge its fiduciary responsibilities with respect to a Plan; (iv)
as a result of any other event or occurrence beyond the Trustee's control,
including, but not limited to, claims, actions, or suits which challenge the
authority of the Company to enter into this Agreement, which challenge the
validity of a Plan and the liabilities of the Company thereunder, or which make
other similar challenges or allegations; or (v) as a result of any discretionary
action taken by the Trustee after a Change in Control occurs pursuant to the
terms of the Trust, except for the Trustee's negligence or willful misconduct.

         15.2 Limitation on Undertaking. Anything hereinabove to the contrary
notwithstanding, the Company shall have no responsibility to Wachovia under
Section 15.1 if Wachovia knowingly participated in or knowingly concealed any
act or omission of any Person described in such Section knowing that such act or
omission constituted a breach of such Person's fiduciary responsibilities, or if
Wachovia fails to perform any of the duties specifically undertaken by it under
the provisions of this Agreement, or if Wachovia fails to act in conformity with
duly given and authorized directions hereunder.

         15.3 Survival of Undertakings. The Company further agrees that the
undertakings made in this Article XV shall be binding on its successors or
assigns and shall survive termination, amendment or restatement of this
Agreement, or the resignation or removal of the Trustee, and that this Article
shall be construed as a contract between the Company and the Trustee according
to the laws of the State of Delaware in effect from time to time.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the 15th
day of April, 1998.

                     BOWATER INCOPORATED

                          By:     /s/ David G. Maffucci
                                  ----------------------------------------------
                          Name:   David G. Maffucci
                                  ----------------------------------------------
                          Title:  Sr. Vice President and Chief Financial Officer
                                  ----------------------------------------------
                          Date signed:  May 7, 1998
                                        ----------------------------------------


                          WACHOVIA BANK, N.A.

                          By:     /s/ Beverly H. Wood
                                  ----------------------------------------------
                          Name:   Beverly H. Wood
                                  ----------------------------------------------
                          Title:  Senior Vice President
                                  ----------------------------------------------
                          Date signed:  May 14, 1998
                                        ----------------------------------------


                                       26
<PAGE>   31

                                     LIST A

                 PARTICIPATING PLANS, AGREEMENTS OR ARRANGEMENTS

Bowater Incorporated Retirement Plan for Outside Directors

Deferred Compensation Plan for Outside Directors of Bowater Incorporated


                                       27
<PAGE>   32

                                     List B

                Participants In The Plans (As of January 1, 1998)

Bowater Incorporated Retirement Plan for Outside Directors:

         F. J. Aguilar              J. A. Rolls

         H. D. Aycock               K. M. Curtis

         R. Laster                  R. Barth

         H. G. MacNeill             J. L. Pate

         D. R. Melville             C. J. Howard

Deferred Compensation Plan for Outside Directors of Bowater Incorporated:

         H. D. Aycock               F. J. Aguilar

         R. Barth                   J. A. Rolls

         D. R. Melville             J. L. Pate


                                       28