Document:

exv10w27

EXHIBIT 10.27

CHANGE IN CONTROL AGREEMENT

THIS AGREEMENT, made as of the 1st day of January, 2011, by and between AbitibiBowater
Inc., a Delaware corporation having a mailing address of 1155 Metcalfe Street, Suite 800, Montreal,
Quebec H3B 5H2 (the “Corporation”), and Richard Garneau (the “Executive”).

     WHEREAS, the Executive is the President and Chief Executive Officer of the Corporation; and

     WHEREAS the Corporation and the Executive have entered into an Executive Employment Agreement
as of the 1st day of January 2011 setting forth the terms of the Executive’s employment
(the “Employment Agreement”); and

     WHEREAS, the Executive is considered by the Board of Directors of the Corporation (the
“Board”) to be a valued member of management of the Corporation who has outstanding skills and
abilities and an extensive background in the Corporation’s business; and

     WHEREAS, the uncertainty attendant to a Change in Control of the Corporation may result in the
departure or distraction of management personnel, including the Executive, to the detriment of the
Corporation; and

     WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Corporation’s management,
including the Executive, to their assigned duties in the event of a Change in Control of the
Corporation; and

     WHEREAS, this Agreement is entered into as part of the Executive’s compensation as provided in
the Employment Agreement and to maintain or increase the profitability of the Corporation; and

     WHEREAS except where otherwise provided herein, defined terms as used herein have the meanings
set forth in the Employment Agreement.

     NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the parties hereto agree as follows:

1. DEFINITIONS

     The following terms shall have the meanings assigned to them below:

	 	(a)	 	“Base Amount” shall mean the Executive’s Annual Base Salary at the rate in
effect on the Termination Date.
	 
	 	(b)	 	“Beneficial Owner” of securities shall mean (i) a Person who beneficially owns
such securities, directly or indirectly, or (ii) a Person who has the right to acquire
such securities (whether such right is exercisable immediately or only with the passage
of time) pursuant to any agreement, arrangement or understanding

 

- 2 -

	 	 	 	(whether or not in writing) or upon the exercise of conversion rights, exchange
rights, warrants, options or otherwise.

	 	(c)	 	“Incentive Amount” shall mean an amount equal to the lesser of (i) the average
of the last two Incentive Awards paid to the Executive prior to the Termination Date,
or (ii) 125% of the Executive’s target incentive (expressed in dollars) for the year in
which the Termination Date occurs.
	 
	 	(d)	 	“Change in Control” means any of the following:

	 	(i)	 	the acquisition, directly or indirectly and by any
means whatsoever, by any person, or by a group of persons acting jointly or
in concert, of that number of Voting Shares which is equal to or greater
than 50% of the total issued and outstanding Voting Shares immediately
after such acquisition;
	 
	 	(ii)	 	the election or appointment by any holder of Voting
Shares, or by any group of holders of Voting Shares acting jointly or in
concert, of a number of members of the Board of Directors of the
Corporation equal to or greater than one half (50%) of the members of the
Board of Directors;
	 
	 	(iii)	 	any transaction or series of transactions, whether by
way of reconstruction, reorganization, consolidation, amalgamation,
arrangement, merger, transfer, sale or otherwise, whereby assets of the
Corporation become the property of any other person (other than a
subsidiary of the Corporation) if such assets which become the property of
any other person have a fair market value (net of the fair market value of
any then existing liabilities of the Corporation assumed by such other
person as part of the same transaction) equal to 50% or more of the Market
Capitalization of the Corporation immediately before such transaction; or
	 
	 	(iv)	 	the completion of any transaction or the first of a
series of transactions which would have the same or similar effect as any
transaction or series of transactions referred to in paragraphs (i), (ii)
and (iii) above.

	 	(e)	 	“Disability” shall mean a physical or mental condition that is defined as a
disability in the Corporation’s long term disability insurance plan covering the
Executive immediately prior to the Change in Control.
	 
	 	(f)	 	“Employer Contributions” shall mean an amount equal to the maximum
contributions the Corporation could have made (regardless of actual circumstances) on
the Executive’s behalf under the DC Program for the fiscal year in which the
Executive’s Termination Date occurs.
	 
	 	(g)	 	“Good Reason” shall mean:

	 	(i)	 	a material change in the Executive’s status, title,
position or responsibilities (including in reporting line relationships)
that represents a substantial adverse change from the Executive’s status,
title, position or

 

- 3 -

	 	 	 	responsibilities as in effect immediately preceding the date of a Change in
Control or at any time within twenty-four (24) months thereafter; the
assignment to the Executive of any duties or responsibilities that are
materially inconsistent with the Executive’s status, title, position or
responsibilities as in effect immediately preceding the date of a Change in
Control or at any time within twenty-four (24) months thereafter; or any
removal of the Executive from or failure to reappoint or reelect the
Executive to any material office or position held immediately preceding the
date of a Change in Control; or at any time within twenty-four (24) months
thereafter.

	 	(ii)	 	a material reduction in compensation and benefits, in
the aggregate, (in terms of benefit levels and/or reward opportunities
which opportunities will be evaluated in light of the performance
requirements therefor) to those provided for under the employee
compensation and benefit plans, programs and practices in which the
Executive was participating immediately preceding the date of the Change in
Control or at any time within twenty-four (24) months thereafter;
	 
	 	(iii)	 	a material reduction of the Executive’s Annual Base
Salary as in effect immediately preceding the date of the Change in Control
or any time within twenty-four (24) months thereafter;
	 
	 	(iv)	 	a failure by the Corporation to obtain from any
Successor its assent to this Agreement contemplated by Section 10 hereof;
or
	 
	 	(v)	 	a material change in the geographic location at which
the Executive is to perform services on behalf of the Corporation from the
location immediately prior to the Change in Control.

	 	(h)	 	“Market Capitalization of the Corporation” at any time means the product of (i)
the number of outstanding Common Shares of the Corporation at that time, and (ii) the
average of the closing prices for the Common Shares of the Corporation on the principal
securities exchange (in terms of volume of trading) on which the Common Shares of the
Corporation are listed at that time for each of the last 10 business days prior to such
time on which the Common Shares of the Corporation traded on such securities exchange.
	 
	 	(i)	 	“Notice of Termination” shall mean a notice sent by either the Executive or the
Corporation to the other party terminating the Executive’s employment as of a certain
date and setting forth the reasons therefor.
	 
	 	(j)	 	“Successor” shall mean the direct or indirect successor by purchase, merger,
consolidation or otherwise, to all or substantially all of the business and/or assets
of the Corporation.
	 
	 	(k)	 	“Termination Date” shall mean (i) in the case of the Executive’s death, the
date of death, (ii) in the case of a termination by the Executive in accordance with

 

- 4 -

	 	 	 	Section 3, the last day of employment as set forth in the Notice of Termination
given by the Executive, (iii) in the case of a termination by the Corporation for
Cause, a date not less than thirty (30) days after receipt of the Notice of
Termination by the Executive, (iv) in the case of a termination by the Corporation
due to the Executive’s Disability, the date not less than thirty (30) days after
receipt of the Notice of Termination by the Executive, provided that the Executive
shall not have returned to the full-time performance of duties within thirty (30)
days after such receipt, and (v) in all other cases, the date specified in the
Notice of Termination or if no Notice of Termination is sent, the last day of the
Executive’s active employment (an Executive receiving periodic severance pay is no
longer considered employed for the purposes of this Agreement).

2. TERM OF AGREEMENT

     This Agreement shall commence as of the date hereof and terminate on the occurrence of any of
the following events: (i) the date of death of the Executive; (ii) voluntary resignation by the
Executive from the Corporation otherwise than in response to a Good Reason; (iii) the giving of
notice by the Corporation in the event of Disability; (iv) termination for Cause; (v) termination
of employment of the Executive at any time when there has been no Change in Control or more than
two years after the immediately preceding Change in Control; (vi) termination of this Agreement by
the Corporation in accordance with Section 12 or (vii) satisfaction by the Corporation of its
obligations under Section 4 of this Agreement in the event of termination of the Executive in the
circumstances contemplated by Section 4. The specific date of termination shall be as set forth in
the definition of Termination Date.

     For greater certainty, Section 4 applies with respect to each separate Change in Control until
the Agreement has been terminated. In addition, with respect to a particular Change in Control,
Section 4 expires twenty-four (24) months following such Change in Control unless this Agreement is
otherwise terminated.

3. EXECUTIVE’S RIGHT OF TERMINATION

     After a Change in Control and for twenty-four (24) months thereafter, the Executive shall have
the right to terminate employment for Good Reason as set forth below. If the Executive’s
employment is terminated in accordance with the provision of this Section 3, the Executive shall be
entitled to the compensation and benefits described in Section 4 below. In order to resign for
Good Reason, the Executive must notify the Corporation in writing not more than thirty (30) days
after the occurrence of one or more events asserted to constitute Good Reason, describing such
event or events in reasonable detail (a “Good Reason Notice”). If the Corporation fails to cure
all events identified in the Good Reason Notice within thirty (30) days after receiving the Good
Reason Notice by restoring the Executive to the position he would have been in had the event not
occurred (including payment of any lost compensation or benefits), the Executive may resign for
Good Reason by submitting a Notice of Termination not more than one hundred eighty (180) days after
the end of such thirty (30) day period. For avoidance of doubt, the failure of the Executive to
notify the Corporation of an event constituting Good Reason, or to resign as a result of such event
having occurred and not having been cured, shall not constitute a waiver of any of the Executive’s
other rights with respect to such event, including without limitation the right to

 

- 5 -

maintain an action for breach of contract, or preclude the Executive from resigning for Good
Reason upon the subsequent occurrence of any of the events described above, including an event of
the same type.

4. COMPENSATION UPON CHANGE IN CONTROL FOLLOWED BY CERTAIN TERMINATIONS

     If the Executive’s employment with the Corporation shall be terminated within twenty-four (24)
months following a Change in Control (i) by the Corporation for any reason other than for Cause or
Disability, or (ii) by the Executive for Good Reason pursuant to Section 3 (each, a “Qualifying
Termination”), the Executive shall be entitled to the compensation and benefits set forth in this
Section 4. If either a Notice of Termination is given by the Corporation, or an event constituting
the basis for the Executive’s resignation for Good Reason occurs (and is not subsequently cured
within thirty (30) days as described above) prior to the end of such twenty-four (24) month period,
the Executive’s termination shall be considered to have terminated within such twenty-four (24)
month period regardless of the actual Termination Date.

     If a Qualifying Termination occurs, the Executive shall be entitled to the following as of the
applicable Termination Date:

	 	(a)	 	A single lump sum, paid as soon as practicable, but in no event later than
sixty (60) days after the Executive’s Termination Date, equal to the sum of the
following less applicable withholding taxes:

	 	(i)	 	an amount equal to the Base Amount multiplied by three;
	 
	 	(ii)	 	an amount equal to the Incentive Amount multiplied by
three;
	 
	 	(iii)	 	an amount equal to the Employer Contributions
multiplied by three; and
	 
	 	(iv)	 	a cash payment of $20,000 in lieu of individual
outplacement services.

	 	 	 	The payment of severance hereunder is intended to meet the short-term deferral
exception under Section 409A of the US Internal Revenue Code of 1986, as amended
(the “Code”), and shall be interpreted and administered consistent with this intent,
to the extent applicable.
	 
	 	(b)	 	As of the Executive’s Termination Date, the Executive (and the Executive’s
spouse or surviving spouse and dependents) will be provided health care (including
medical, prescription drug and dental) and life insurance coverage provided by the
Corporation to executives as of the date of the Change in Control for the earlier of
thirty-six (36) months after the Termination Date or the date on which the Executive is
covered by a subsequent employers’ health care and life insurance programs. The amount
of premiums that the Executive is required to pay for such coverage shall not exceed
the amount paid by executives who are active employees on the Termination Date and
thereafter. If and to the extent that the benefits described in this paragraph cannot
be provided under the Corporation’s plans or programs, the lump sum payment described
in subsection

 

- 6 -

	 	 	 	(a) shall be increased by an amount calculated so that the amount of such payment,
after payment of all applicable income taxes, equals the present value of the
difference between the full premium cost without employer subsidy of the lost
benefits and the amount of premium the Executive would have been required to pay.

5. EQUITY AWARDS

     Notwithstanding anything in the applicable equity plan or any award agreement to the contrary,
if, upon a Change in Control, the Executive holds options for the purchase of shares, or restricted
shares or restricted share units (“Equity Awards”), all Equity Awards so held shall, unless the
Executive breaches the terms of Article 6 of the Employment Agreement (as qualified by Section 14
of this Agreement in the event of a Qualifying Termination), (i) immediately vest to the extent
they have not already vested at such date and (ii) continue to be held, in all cases,
notwithstanding the terms of the Equity Award plans, on the same terms and conditions as if the
Executive continued to be employed by the Corporation.

6. DISABILITY

     In the event of Disability of the Executive, the Agreement may be terminated by the
Corporation on thirty days’ notice. Notwithstanding anything contained in this Section 6, the
Executive shall be entitled to all benefits provided under any disability and pension plans of the
Corporation applicable to the Executive at the date of Disability.

7. NO MITIGATION REQUIRED

     The Executive shall not be required to mitigate the amount of any payment provided for in this
Agreement, nor shall any payment or benefit provided for in this Agreement be offset by any
compensation earned by the Executive as the result of employment by another employer, by retirement
benefits, or otherwise.

8. EXECUTIVE’S EXPENSES

     The Corporation shall pay or reimburse the Executive for all costs, including reasonable
attorney’s, accountants’ and actuary’s fees and expenses, incurred by the Executive (i) to confirm
the Executive’s rights to and amounts of payments hereunder, (ii) to contest or dispute any
termination of the Executive’s employment following a Change in Control or seek to obtain or
enforce any right or benefit provided by this Agreement in litigation or arbitration, or (iii) in
connection with any audit by a taxing authority related to any payment or benefit hereunder, or any
subsequent contest or litigation relating to the tax treatment of such payment or benefit.
Notwithstanding the foregoing, if the Executive does not prevail in a lawsuit or arbitration
pertaining to this Agreement, the Executive shall repay to the Corporation all fees and expenses
relating to such proceeding that have been previously paid by the Corporation.

9. CODE SECTION 280G

     Notwithstanding anything in this Agreement to the contrary, if the aggregate amount of the
benefits and payments under this Agreement, and other payments and benefits which the

 

- 7 -

Executive has the right to receive from the Corporation (including the value of any equity
rights which become vested upon a Change in Control) (the “Total Payments”) would constitute a
“parachute payment” as defined in Section 280G of the US Internal Revenue Code of 1986, as amended,
such that the Executive would be subject to the excise tax under Code Section 4999 of the Code,
then the Accounting Firm (defined below in this Section 9) shall determine which of the following
has a greater aggregate value for the Executive, which greater value shall be paid to the
Executive:

	 	(a)	 	The after-tax amount that would be retained by the Executive (after taking into
account all required income taxes payable by the Executive and the amount of any excise
taxes that would be payable by the Executive under Code Section 4999 (the “Excise
Taxes”)) if the Executive were to receive the Total Payments, or
	 
	 	(b)	 	The after-tax amount that would be retained by the Executive (after taking into
account all federal, state and local income taxes payable by the Executive) if the
Executive were to receive the Total Payments reduced to the largest amount that would
result in no portion of the Total Payments being subject to Excise Taxes (the “Reduced
Payments”).

     If the Total Payments are payable to the Executive, the Corporation shall not reimburse the
Executive for any Excise Taxes imposed on the Executive or provide any such other compensation
(whether through a tax gross-up or otherwise) to mitigate the effects of the Excise Taxes. If the
Executive is to receive Reduced Payments, the Total Payments payable will be reduced or eliminated
in the following order: (1) cash payments, (2) taxable benefits, (3) nontaxable benefits and (4)
accelerated vesting of equity awards.

     The determination of whether the Executive will receive the Total Payments or the Reduced
Payments, and the calculation of the amount of the Reduced Payments, if applicable, shall be
performed by a nationally recognized certified public accounting firm selected by the Corporation
(the “Accounting Firm”). In the event that the Accounting Firm is serving as accountant or auditor
for the individual, entity or group effecting the Change of Control, the Corporation may appoint
another nationally recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses
of the Accounting Firm shall be borne solely by the Corporation.

10. BINDING AGREEMENT

     This Agreement shall inure to the benefit of and be enforceable by the Executive, and the
Executive’s heirs, executors, administrators, successors and assigns. This Agreement shall be
binding upon the Corporation, its Successors and assigns. The Corporation shall require any
Successor to assume and agree to perform this Agreement in accordance with its terms. The
Corporation shall obtain such assumption and agreement prior to the effectiveness of any such
succession.

 

- 8 -

11. SOLE SEVERANCE; OTHER BENEFITS

     If the Executive receives the payments and benefits due under Section 4, such payments and
benefits shall be in lieu of any other severance amounts to which the Executive may be entitled
under any other severance arrangement, including under any employment agreement, severance pay
plan, or applicable legislation entitling the Executive to severance benefits. For greater
certainty, the payments under Section 4 are in satisfaction of the Executive’s entitlement to a
retiring allowance. However, the parties acknowledge that the benefits paid hereunder are only
exclusive as to other severance payments and that the Executive may be entitled to other benefits
or payments triggered by a Change in Control under certain other of the Corporation’s benefit or
compensation arrangements, including, without limitation, any long term incentive plans or equity
incentive award plans.

12. AMENDMENTS; WAIVERS

     Except as otherwise provided below, no provision of this Agreement may be modified, waived or
discharged, except in a writing specifically referring to such provision and signed by the party
against which enforcement of such modification, waiver or discharge is sought. No waiver by either
party hereto of the breach of any condition or provision of this Agreement shall be deemed a waiver
of any other condition or provision at the same or any other time. Notwithstanding the foregoing,
the Board or a committee thereof may amend (or terminate) this Agreement if (a) the Board or such
committee reasonably and in good faith determines that such amendment is necessary either (i) to
comply with the requirements of any law or regulation applicable to the Corporation or (ii) to
conform the Agreement to prevailing corporate practices for companies comparable to the
Corporation, provided any such amendment or termination is not adopted less than ninety (90) days
prior to or after a Change in Control, (b) the same amendment is made to all other Change in
Control Agreements between the Corporation and similarly situated executives, and (c) the Executive
is notified in writing of the amendment and the reason for its adoption not more than thirty (30)
days after it is adopted.

13. VALIDITY

     The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall remain in full
force and effect.

14. CONTINUANCE IN EFFECT

     In the event of a Qualifying Termination, the Executive’s covenants pursuant to Sections 6.3
(Non-Competition), 6.4 (Non-Solicitation of Customers), 6.5 (Non-Solicitation of Employees), 6.6
(Non-Interference with Suppliers) and 6.10 (Merger Transactions) of the Employment Agreement shall
extinguish on the Date of Termination. Except as expressly provided for in the preceding sentence
and for greater certainty, notwithstanding any Termination of the Executive, the provisions of the
Employment Agreement shall continue in full force and effect in accordance with their terms,
including, without limitation, (i) the provisions of Article 6, (ii) rights to indemnification and
insurance under the Indemnification Agreement, Charter, By-Laws and directors’ and officers’
insurance policies maintained by

 

- 9 -

the Corporation and (iii) rights to which the Executive is entitled by virtue of his participation
in the employee benefits plans, policies and arrangements of the Corporation, all in accordance
with the terms of the relevant plans and agreements.

15. GENERAL

     The provisions of Sections 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9 and 7.10 of the Employment
Agreement are hereby incorporated by reference as if herein recited at length.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and
year first above written.

	 	 	 	 	 	 	 

	ABITIBIBOWATER INC.	 	THE EXECUTIVE
	Per:

	 	 	 	Per:	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Sarah Nash
	 	 	 	/s/ Richard Garneau
	 

	 	 
	 	 	 	 
	 

	 	Sarah Nash
	 	 	 	Richard Garneau
	 

	 	Chair of the Human
Resources and
Compensation/Nominating
and Governance Committeeexv10w28

EXHIBIT 10.28

[LETTERHEAD OF ABITIBIBOWATER INC.]

February 7, 2011

Alain Boivin

Re: Employment agreement between Alain Boivin and AbitibiBowater Inc.

Dear Alain,

This letter will serve to confirm your position of Senior Vice President, Pulp and Paper Operations
in the post-emergence AbitibiBowater Inc.

The terms and conditions of your employment are as follows

	 	 	 

	Location:

	 	Montreal, Quebec, Canada
	 
	 	 
	Effective date:

	 	March 4, 2011
	 
	 	 
	Compensation:

	 	Your annual base salary will be US$375,000.
	 
	 	 
	Short-Term Incentive Plan (STIP):

	 	You will be eligible to participate in a
short-term incentive plan for the year
2011 with a target level of 100% of base
salary. Please refer to the
documentation enclosed.
	 
	 	 
	Long-Term Incentive Plan (LTIP):

	 	You will be eligible to participate in
the Company’s long-term incentive plan
and to receive grants under such plan,
as determined by the Board of Directors
from time to time, at its discretion.
For 2011, you will be eligible to an
annual grant equivalent to 125% of your
annual base salary. The LTIP plan will
be available shortly.

Other benefits:

As per policy, you will be eligible to participate in the AbitibiBowater benefits program (see
attached document for an overview) and you will be entitled to 5 weeks of vacation per year as of
the 2011 calendar year.

 

 

Defined contributions (DC) retirement program for executive employees:

As regards pension benefits, you will be eligible to participate in the new Company’s defined
contributions (DC) retirement program for executive employees comprised of a registered DC plan and
a supplemental retirement executive plan (DC SERP) at the following levels of contribution:

	 	 	 
	Employee	 	 
	Contributions	 	Company Contributions
	5% of eligible earnings*
	 	20.5% of eligible earnings

 

			
	*	 	Up to the US compensation limit

	Please refer to the documentation enclosed.

			
	Perquisite allowance:	 	You will be eligible for a perquisite allowance of US$12,000 per year as well
as a complete annual medical examination.

Severance:

You will be covered by the Company’s severance policy for the Chief Executive Officer and his
direct reports. Pursuant to this policy, you will be entitled to six weeks of eligible pay per
year of continuous service, with a minimum of 52 weeks and up to a maximum of 104 weeks. For a
period of 12 months following a “change in control”, the severance pay is available in the event of
involuntary termination or voluntary termination for a “good reason”. Please refer to the
documentation enclosed.

At your first week of employment, Julie McMahon from Human Resources will schedule a meeting with
you to cover the details of those plans and proceed with your enrolment.

 

 

We are excited about the outlook of the newly emerged company and look forward to your involvement.

/s/ Richard Garneau

Richard Garneau

President and Chief Executive Officer

To indicate your acceptance of this employment offer, please sign in the space provided below and
return an original to Julie McMahon by February 14, 2011.

I have read the present employment agreement and hereby accept the terms and conditions of my
employment contract with AbitibiBowater Inc. as described herein.

	 	 	 

	/s/ Alain Boivin
	 	February 22, 2011
	 

Alain Boivin
	 	 

Enclosures

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}]]