Document:

exv10w6

EXHIBIT 10.6

ABITIBIBOWATER

OUTSIDE DIRECTOR DEFERRED COMPENSATION PLAN

Effective as of April 1, 2011

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	1. Purpose
	 	 	1	 
	 
	 	 	 	 
	2. Definitions
	 	 	1	 
	 
	 	 	 	 
	3. Eligibility
	 	 	4	 
	 
	 	 	 	 
	4. Administration
	 	 	4	 
	 
	 	 	 	 
	5. Deferral Election
	 	 	4	 
	 
	 	 	 	 
	6. Accounts
	 	 	5	 
	 
	 	 	 	 
	7. Vesting
	 	 	7	 
	 
	 	 	 	 
	8. Distributions
	 	 	7	 
	 
	 	 	 	 
	9. Designation of Beneficiary
	 	 	8	 
	 
	 	 	 	 
	10. No Rights as Stockholder
	 	 	8	 
	 
	 	 	 	 
	11. Transferability
	 	 	8	 
	 
	 	 	 	 
	12. Covenants of Director
	 	 	8	 
	 
	 	 	 	 
	13. Remedies of the Company
	 	 	9	 
	 
	 	 	 	 
	14. Notices and Communications
	 	 	9	 
	 
	 	 	 	 
	15. Limitation of Rights of the Director
	 	 	9	 
	 
	 	 	 	 
	16. Payments To Incompetents
	 	 	9	 
	 
	 	 	 	 
	17. Construction
	 	 	10	 
	 
	 	 	 	 
	18. Amendment or Termination
	 	 	10	 
	 
	 	 	 	 
	19. Funding
	 	 	10	 
	 
	 	 	 	 
	20. Governing Law
	 	 	11	 
	 
	 	 	 	 
	21. Currency
	 	 	11	 
	 
	 	 	 	 
	22. Headings
	 	 	11	 

 

 

AbitibiBowater Outside Director Deferred Compensation Plan

	1.	 	Purpose. AbitibiBowater established this AbitibiBowater Outside Director Deferred
Compensation Plan (the “Plan”) effective as of April 1, 2011 (the “Effective Date”) to enhance
the Company’s ability to attract and retain talented individuals to serve as members of the
Board and to promote a greater alignment of interests between non-employee members of the
Board and the shareholders of the Company. All non-employee directors serving on the Board on
the Effective Date are eligible to participate in the Plan and enjoy the benefits of the Plan
as set forth below. Non-employee directors elected or appointed to the Board after the
Effective Date are eligible to participate in the Plan on the date of election or appointment.
For reference, AbitibiBowater previously maintained the AbitibiBowater Inc. Outside Director
Deferred Compensation Plan, which plan was terminated and liquidated pursuant to approved
plans of reorganization effective upon the Company’s emergence on December 9, 2010 from
creditor protection proceedings and in accordance with US Department of Treasury Regulation
Section 1.409A-3(j)(4)(ix)(A).
	 
	2.	 	Definitions. The following words and phrases, when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the following
meanings, or the meanings as set forth elsewhere in this Plan. Wherever applicable, the
masculine pronoun shall include the feminine pronoun and the singular shall include the
plural.

	 	(a)	 	“Account” means a bookkeeping account established for the benefit of a Director
used to record (i) amounts deferred pursuant to Section 5 and (ii) any credits on and
adjustments of such amounts pursuant to Section 6. A Director’s Account may include
sub-accounts consisting of a Deferred Stock Unit Account and a Restricted Stock Unit
Account, or such other sub-accounts as determined by the Administrator.
	 
	 	(b)	 	“Administrator” means the Senior Vice President, Human Resources and Public
Affairs, of the Company.
	 
	 	(c)	 	“Affiliate” has the meaning ascribed to it in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended.
	 
	 	(d)	 	“Beneficiary” means the person or persons (including, without limitation, any
trustee) last designated by a Director in accordance with Section 9 to receive the
balance of his Account in the event of the Director’s death. If there is no effective
designated Beneficiary on file or surviving Beneficiary, the Director’s estate shall be
the Director’s Beneficiary.
	 
	 	(e)	 	“Board” means the Board of Directors of the Company.
	 
	 	(f)	 	“Canadian Director” means a Director who is subject to taxation under the
Income Tax Act (Canada) (the “Canadian Tax Act”).

 

 

	 	(g)	 	“Cause” means (i) the Director’s commission of a felony or a crime involving
moral turpitude, or other material act or omission involving dishonesty or fraud, (ii)
the Director’s engaging in conduct that would bring or is reasonably likely to bring
the Company or any of its Affiliates or Subsidiaries into public disgrace or disrepute
or that would affect the Company’s or any Affiliate’s or Subsidiary’s business in any
material way, (iii) the Director’s failure to perform duties as reasonably directed by
the Board (which, if reasonably curable, is not cured within 10 days after notice
thereof is provided to the Director) or (iv) the Director’s gross negligence, willful
malfeasance or material act of disloyalty or other breach of fiduciary duty with
respect to the Company or its Affiliates or Subsidiaries (which, if reasonably curable,
is not cured within 10 days after notice thereof is provided to the Director). Any
determination of whether Cause exists shall be made by the Committee in its sole
discretion.
	 
	 	(h)	 	“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time. A reference to any provision of the Code shall be deemed to include any
regulations or other interpretative guidance under such section, and any amendments or
successor provisions to such section, regulation or guidance.
	 
	 	(i)	 	“Committee” means the Human Resources and Compensation/Nominating and
Governance Committee of the Board or such members of the Board as are selected by the
Board from time to time to administer the Plan.
	 
	 	(j)	 	“Company” means AbitibiBowater Inc.
	 
	 	(k)	 	“Conversion Date” means, unless otherwise determined by the Committee, the last
business day of the calendar quarter.
	 
	 	(l)	 	“Deferred Stock Unit” or “DSU” means a Stock Unit which, when vested, shall be
settled pursuant to Section 8(a)(i).
	 
	 	(m)	 	“Deferred Stock Unit Account” or “DSU Account” means the sub-account used to
record (i) deferrals of cash compensation designated as DSUs and (ii) any credits on
and adjustments of such amounts pursuant to Section 6.
	 
	 	(n)	 	“Director” means any individual qualified to serve as a member of the Board who
is elected or appointed and who is not an employee or a full-time officer of the
Company or any Affiliate.
	 
	 	(o)	 	“Effective Date” means April 1, 2011, the date the Company established the
Plan.
	 
	 	(p)	 	“Fair Market Value” means, on a given date, (i) if the Stock is listed on a
national securities exchange, the simple arithmetic mean between the highest and lowest
prices per share at which the Stock is traded as reported for the national securities
exchange for the trading day immediately preceding that date, or if not so traded, the
simple arithmetic mean between the closing bid-and-asked prices thereof as reported for
such national securities exchange for the trading day immediately preceding that date,
rounded to the nearest number within two decimal places; (ii)

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	 	 	 	if the Stock is not listed on any national securities exchange but is quoted in an
inter-dealer quotation system on a last sale basis, the simple arithmetic mean
between the closing bid-and-asked prices thereof as reported for such quotation
system for the applicable date of determination, rounded to the nearest number
within two decimal places; or (iii) if the Stock is not listed on a national
securities exchange or quoted in an inter-dealer quotation system on a last sale
basis, the amount determined by the Committee in good faith to be the fair market
value of the Stock.
	 
	 	(q)	 	“Plan” means the AbitibiBowater Outside Director Deferred Compensation Plan, as
provided herein and as may be amended from time to time.
	 
	 	(r)	 	“Premium Stock Units” means the number of Stock Units that represents a number
of Stock Units determined by dividing 10% of the compensation deferred on the
Conversion Date by the Fair Market Value for a share of Stock on the Conversion Date.
Premium Stock Units shall be credited as Premium DSUs with respect to a DSU election
and Premium RSUs with respect to an RSU election.
	 
	 	(s)	 	“Restricted Stock Unit” or “RSU” means a Stock Unit which, when vested, shall
be settled pursuant to Section 8(a)(ii).
	 
	 	(t)	 	“Restricted Stock Unit Account” or “RSU Account” means the sub-account used to
record (i) deferrals of compensation designated as RSUs and (ii) any credits on and
adjustments of such amounts pursuant to Section 6.
	 
	 	(u)	 	“Separation from Service” means a separation from service with the Company and
other entities affiliated with the Company. For U.S. Directors, such Separation from
Service shall be determined and interpreted in accordance with Code Section 409A. For
purposes of interpreting Code Section 409A, whether an entity is affiliated with the
Company shall be determined pursuant to the controlled group rules of Code Section 414,
as modified by Code Section 409A.
	 
	 	(v)	 	“Stock” means the common stock of the Company, par value $.001.
	 
	 	(w)	 	“Stock Unit” means the right to receive payment in cash in an amount equal to
the Fair Market Value of one share of Stock, determined as of the Valuation Date with
respect to that Stock Unit. Stock Units under the Plan are designated as DSUs for
Canadian Directors and RSUs for U.S. Directors. Unless otherwise provided or if the
context requires otherwise, the reference to DSUs includes Premium DSUs, and the
reference to RSUs includes Premium RSUs.
	 
	 	(x)	 	“Subsidiary” means any corporation, partnership, joint venture or other entity
during any period in which at least a fifty percent voting or profits interest is
owned, directly or indirectly, by the Company (or by any entity that is a successor to
the Company), and any other business venture designated by the Committee in which the
Company (or any entity that is a successor to the Company) has a significant interest,
as determined in the discretion of the Committee.

3

 

	 	(y)	 	“U.S. Director” means a Director who is subject to taxation under the U.S.
Internal Revenue Code.
	 
	 	(z)	 	“Valuation Date” means the date on which Stock Units are to be settled in
accordance with Section 8(a).
	 
	 	(aa)	 	“Vesting Date” means the date on which all or a portion of a Director’s Premium
Stock Units become nonforfeitable.

	3.	 	Eligibility. All Directors are eligible to participate in the Plan.
	 
	4.	 	Administration. The Committee shall administer the Plan, provided that the Committee
may delegate responsibility for administration to such person or persons as it deems
appropriate from time to time. The Committee shall have all the discretion and authority to
take any action that it may deem necessary or desirable in connection with the administration
of the Plan, including without limitation:

	 	(a)	 	to establish, modify and revoke rules relating to the Plan;
	 
	 	(b)	 	to interpret and construe the terms of the Plan and any rules under the Plan;
	 
	 	(c)	 	to approve the form and content of any documentation relating to deferrals of
compensation or benefits under the Plan or Plan administration; and
	 
	 	(d)	 	consistent with the express provisions of the Plan, to approve, establish and
amend the terms governing a benefit under the Plan.

	 	 	All determinations, interpretations and decisions made by the Committee under or with
respect to the Plan shall be final, conclusive and binding on the Company, and Directors and
any Beneficiary. No member of the Committee shall be liable for any action taken in good
faith with respect to the Plan. Notwithstanding the foregoing, the Administrator shall have
the authority to approve the form and content of any election or beneficiary forms for the
efficient administration of the Plan.
	 
	5.	 	Deferral Election. A Director may elect to defer 50% or 100% of his cash
compensation including, without limitation, his annual retainer and/or other fees for service
as a Director (for example, for serving as chair), if he completes and timely delivers to the
Administrator (or his designee) a written election. To be considered timely, a Director must
deliver the written election as follows and as determined by the Administrator:

	 	(a)	 	Election.

	 	(i)	 	A Canadian Director’s written election must designate the
portion of his cash compensation to be deferred under the Plan and credited in
DSUs. A deferral by a Canadian director cannot be credited in RSUs.

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	 	(ii)	 	A U.S. Director’s written election must designate the portion
of his cash compensation to be deferred under the Plan and credited in RSUs. A
deferral by a U.S. director cannot be credited in DSUs.

	 	(b)	 	Time for Filing Election. To be considered timely, a Director must deliver the
written deferral election as follows.

	 	(i)	 	For Directors in office on the Effective Date, the deferral
election must be completed and filed with the Administrator before May 1, 2011
and will only be effective to defer cash compensation earned on and after May
1, 2011 under the Plan.
	 
	 	(ii)	 	With respect to any calendar year beginning after the Effective
Date, the deferral election must be made before the commencement of that
calendar year. Notwithstanding the foregoing, an individual who first becomes
elected or appointed as a Director must complete and file an election with the
Administrator within 30 days after such individual is first elected or
appointed.

	 	 	An election made in accordance with the foregoing shall be effective for the calendar year
for which it was made but shall only be effective with regard to compensation earned on and
after January 1 of the year to which the election relates (May 1 in the case of the 2011
calendar year) or after the expiration of the 30-day election period for newly-elected or
appointed Directors, as the case may be. Once an election is made, it is irrevocable for
the calendar year (or portion thereof for newly-elected or appointed Directors) for which
the election relates and will continue in effect for subsequent calendar years until
revoked or changed by the Director. An election may be revoked or changed only with
respect to a calendar year subsequent to the date of the revocation or change. If no
election to defer is made or a prior election is revoked, the Director shall be deemed to
have elected to be paid compensation for his duties as a Director entirely in cash. A
Director’s written election shall constitute the Director’s acceptance of the benefits and
terms of the Plan.
	 
	6.	 	Accounts.

	 	(a)	 	Establishment of Accounts. As of May 1, 2011 or, if later, the date a Director
elects to defer compensation to the Plan, the Administrator or its delegate shall
establish an Account for each Director to reflect the deferrals of amounts made for the
Director’s benefit, together with any income adjustments thereto. The Accounts shall
not be used to segregate assets for payment of any amounts deferred or allocated under
the Plan, and shall not constitute or be treated as a trust fund of any kind. The
Director shall, at all times, have a nonforfeitable right to all amounts credited to
his Account.
	 
	 	(b)	 	Crediting of Accounts. An amount will be credited to a Director’s DSU Account
or RSU Account, as the case may be, pursuant to the Director’s deferral election on
each Conversion Date. The amount credited as DSUs or RSUs, as applicable,

5

 

	 	 	 	shall be a number of Stock Units (including fractional Stock Units) determined by
dividing (i) 110% of the amount of compensation elected for deferral by (ii) the
Fair Market Value of the Stock as of the Conversion Date.
	 
	 	(c)	 	Earnings and Adjustments.

	 	(i)	 	Dividend Equivalents. With respect to dividend record
dates occurring during the period in which Stock Units are credited to a
Director’s Account, the Director’s Account will be credited with additional
Stock Units (including a fractional Stock Unit), the number of which will be
determined by dividing: (A) the product obtained by multiplying the amount of
each dividend (including extraordinary dividend if so determined by the
Company) declared and paid by the Company on the Stock on a per share basis by
the number of Stock Units credited to a Director’s Account on the record date
for payment of any such dividend, by (B) the Fair Market Value of one share of
Stock on the dividend payment date for such dividend. The additional Stock
Units shall be payable at the same time and in the same proportion as the Stock
Units to which the dividend equivalents relate. Dividend equivalents that
relate to Premium Stock Units shall vest at the same time and in the same
proportion as the Premium Stock Units to which they relate. No additional
Stock Units shall be accrued for the benefit of a Director pursuant to this
paragraph with respect to (A) any Stock Units settled pursuant to Section 8 or
(B) any Premium Stock Units forfeited pursuant to Section 7(c), as of the
dividend record date.
	 
	 	(ii)	 	Adjustments. In the event of (A) a corporate
transaction involving the Company (including, without limitation, any dividend
(other than regular cash dividends or other distribution (whether in the form
of cash, shares of Stock, other securities or other property), stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, sale of assets or subsidiaries, combination
or exchange of shares, issuance of warrants or other rights to acquire Stock or
other securities of the Company), (B) other similar corporate transaction or
event that affects the shares of Stock, or (C) unusual or nonrecurring events
affecting the Company, any Affiliate or Subsidiary, or the financial statements
of the Company, any Affiliate or Subsidiary, or changes in applicable rules,
rulings, regulations or other requirements of any governmental body or
securities exchange or inter-dealer quotation system, accounting principles or
law, then the Committee shall make an adjustment to the amount payable with
respect to the Stock Units that the Committee determines to be equitable to
prevent undue dilution or enlargement of the intended benefits or potential
benefits of the Stock Units credited to a Director’s Account consistent with
the purposes of the Plan. The Company shall give each Participant notice of
any adjustment. Any such adjustment shall be conclusive and binding for all
purposes.

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	7.	 	Vesting.

	 	(a)	 	A Director shall, at all times, have a nonforfeitable right to non-Premium
Stock Units, which are (i) the number of Stock Units determined by dividing 100% of the
amount of cash compensation elected for deferral by the Fair Market Value of a share of
Stock on the Conversion Date) and (ii) any additional Stock Units credited as dividend
equivalents that relate to such non-Premium Stock Units.
	 
	 	(b)	 	Subject to continued service as a Director, one third of the Premium Stock
Units shall vest on March 31 of each of the first three calendar years following the
calendar year in which the Premium Stock Units were credited on behalf of the
Directors.
	 
	 	(c)	 	In the event of a Separation from Service for any reason other than Cause
(including termination of service as a Director without Cause or due to disability, or
retirement) or death, the Director shall become vested in all non-vested Premium Stock
Units. In the event of a Separation from Service due to Cause, the Director shall
forfeit any vested, but not settled, and non-vested Premium Stock Units.

	8.	 	Distributions.

	 	(a)	 	Time of Payment. All amounts credited to a Director’s Account shall be settled
in a single lump sum cash payment on the following dates.

	 	(i)	 	DSU Account. All non-Premium DSUs and vested Premium
DSUs credited to a Canadian Director’s DSU Account shall be settled upon the
earlier of (as applicable):

	 	(A)	 	for a Canadian Director who is not subject to
Code Section 409A, December 15 of the calendar year following the
calendar year of the Canadian Director’s Separation from Service,
unless the Canadian Director provides advance written notice of at
least five business days to the Administrator specifying an earlier
settlement date (but no earlier than the Separation from Service),
	 
	 	(B)	 	for a Canadian Director who is subject to Code
Section 409A, as soon as administratively feasible following the
Canadian Director’s Separation from Service, or
	 
	 	(C)	 	the Director’s death.

	 	 	 	For Canadian Directors subject to Code Section 409A, payment shall be made no later
than the last day of the calendar year in which the payment event occurs, or if
later, the 15th day of the third month following such event. The latest
payment date set forth in the preceding sentence has been specified for purposes of
complying with the provisions of Section 409A of the Code.

7

 

	 	(ii)	 	RSU Account. One third of the non-Premium RSUs and all
vested Premium RSUs credited to a U.S. Director’s RSU Account shall be settled
as soon as administratively feasible after the applicable Vesting Date
described in Section 7(b); provided, however, all non-Premium RSUs and vested
Premium RSUs shall be settled as soon as administratively feasible after any
Vesting Date described in Section 7(c).

	 	 	 	For U.S. Directors, payment shall be made no later than the last day of the calendar
year in which the payment event occurs, or if later, the 15th day of the
third month following such event. The latest payment date set forth in the
preceding sentence has been specified for purposes of complying with the provisions
of Section 409A of the Code.
	 
	 	(b)	 	Amount of Payment. A Director shall be entitled to receive an amount equal to
the Fair Market Value of a share of Stock multiplied by the number of non-Premium Stock
Units and vested Premium Stock Units to be settled. Any amount paid to a Director
shall be less any required taxes.

	9.	 	Designation of Beneficiary.

	 	(a)	 	Each Director other than a Director residing in the Province of Québec shall
designate on forms provided by the Administrator, signed by the Director and delivered
to the Administrator, the Beneficiary or Beneficiaries to receive the balance credited
to the Director’s Account in the event of his death. A Director may, from time to
time, change the designated Beneficiary or Beneficiaries, without the consent of such
Beneficiary or Beneficiaries, by delivering to the Administrator a new written and
signed designation of Beneficiary. The Director’s spouse, if any, shall not be
required to consent in writing to any non-spouse designation. The Director may
designate primary or contingent Beneficiaries. The written designation last delivered
and signed by the Director shall be effective and supersede all prior designations on
file with the Administrator.
	 
	 	(b)	 	Each Director residing in the Province of Québec may only designate a
beneficiary by will. Upon the death of a Director residing in the Province of Québec,
the Director’s Account shall be distributed to the liquidator, administrator or
executor of his estate.

	10.	 	No Rights as Stockholder. A Director shall not be a shareholder of record with
respect to Stock Units and shall have no voting rights with respect to the Stock Units.
	 
	11.	 	Transferability. Unless otherwise provided by the Committee in writing, the RSUs
shall not be transferable by the Director other than by will or the laws of descent and
distribution.
	 
	12.	 	Covenants of Director. As a condition of participation in this Plan, each
participating Director agrees to devote his best efforts and undivided loyalty to the Company
and

8

 

	 	 	devote such time to his tasks as a Director as shall be required to discharge his
obligations to the best of his abilities.

	13.	 	Remedies of the Company. Upon the occurrence of any one or more of the following
circumstances:

	 	(a)	 	if the Director is at any time removed from incumbency as a Director for
reasons deriving from his gross negligence or misconduct detrimental to the business
interests of the Company, or for criminal conduct of any type (regardless of the effect
thereof on the business interest of the Company); or
	 
	 	(b)	 	if the Director at any time materially fails to comply with the requirements of
Section 12;

	 	 	then, and in any such event, the Company’s obligation to pay or provide benefits hereunder
to such Director shall automatically cease and terminate, and neither the Director nor any
other person claiming any benefit pursuant to the Director’s participation in this Plan
shall have any rights, claims or causes of action hereunder against the Board, the Company
or any person acting on their behalf. The Company’s sole remedy for breach by the Director
of the provisions of Section 12 shall be to cease paying or providing benefits pursuant to
the provisions of Section 7 or receive from the Director repayment of any amounts paid.
Such remedy shall not preclude the Company from recovering from a Director damages inflicted
on the Company or its Affiliates by conduct of a Director which renders the Director liable
to the Company independently of the fact that such conduct constitutes a breach of the
Director’s covenants in Section 12.
	 
	14.	 	Notices and Communications. All notices, statements, reports and other
communications from the Administrator to any Director, Beneficiary or other person required or
permitted under the Plan shall be deemed to have been duly given when personally delivered to,
when transmitted via facsimile or other electronic media or when mailed overnight or by
first-class mail, postage prepaid and addressed to, such Director, Beneficiary or other person
at his last known address on the Company’s records. All elections, designations, requests,
notices, instructions and other communications from a Director, Beneficiary or other person to
the Administrator required or permitted under the Plan shall be in such form as is prescribed
from time to time by the Administrator, and shall be mailed by first-class mail, transmitted
via facsimile or other electronic media or delivered to such location as shall be specified by
the Administrator. Such communication shall be deemed to have been given and delivered only
upon actual receipt by the Administrator at such location.
	 
	15.	 	Limitation of Rights of the Director. Inclusion under the Plan shall not give a
Director any right or claim to a benefit, except as specifically defined in this Plan. The
establishment of the Plan shall not be construed as giving any Director a right to be
continued in service as a Director of the Company.
	 
	16.	 	Payments To Incompetents. In the event that any payment hereunder becomes payable to
a person adjudicated to be incompetent, payment thereof to the guardian or legal

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	 	 	representative of such person shall constitute full and complete compliance herewith and
entitle the Company to discharge with respect thereto.
	 
	17.	 	Construction.

	 	(a)	 	The decision of the Committee on all matters concerning the interpretation and
administration of this Plan shall be final. Each Director agrees, as a condition to
participation herein, to be bound by all actions and interpretations regarding this
Plan by the Committee. Neither the Board, the Committee, any individual Director nor
any persons acting on their behalf shall be subject to any liability to any Director or
other person in the construction and administration of this Plan.
	 
	 	(b)	 	Notwithstanding any other provision of this Plan, it is intended that all Stock
Units granted under this Plan which are considered to be deferred compensation subject
to Code Section 409A shall be provided and paid in a manner, and at such time,
including without limitation payment only in connection with a permissible payment
event contained in Code Section 409A (e.g., separation from service from the Company
and its affiliates as defined for purposes of Code Section 409A), and in such form, as
complies with the applicable requirements of Code Section 409A, to avoid the
unfavorable tax consequences provided therein for non-compliance. In addition, it is
intended that all Stock Units granted to Canadian Directors under this Plan shall be
provided and paid in a manner, and at such time, and in such form, as complies with the
applicable requirements of paragraph 6801(d) of the regulations to the Canadian Tax
Act, to avoid the unfavorable tax consequences provided therein for non-compliance.
Notwithstanding the foregoing, none of the Company or its affiliates or the Committee
shall be liable to any person if such person is subject to any additional tax, penalty
or interest as a result of failure to comply with Code Section 409A or paragraph
6801(d) of the regulations to the Canadian Tax Act.

	18.	 	Amendment or Termination. The Company reserves the right at any time, and from time
to time, by action of a majority of the Board at a meeting at which all members thereof are
present and voting or the required notice of which contained an accurate summary of the action
proposed for vote, to amend, in whole or in part, any or all of the provisions of this Plan.
The Company reserves the right to terminate the Plan at any time. Notwithstanding the
foregoing, no such amendment or termination shall adversely affect benefits under this Plan
already being paid or having become unconditionally payable pursuant to the terms hereof.
Upon termination of the Plan, the Company reserves the discretion to accelerate distribution
of Directors’ Accounts in accordance with regulations promulgated by the Department of the
Treasury under Code Section 409A.
	 
	19.	 	Funding. The Company’s obligations under this Plan shall be unfunded and the Company
shall not be obligated under any circumstances to fund its obligations under this Plan.
Notwithstanding the foregoing, the Company may, but shall have no obligation to, authorize the
creation of one or more trusts and deposit therein cash or property, or make other
arrangements to meet the payment obligations under the Plan; provided that such trusts or
other arrangements, if established, shall be consistent with the unfunded

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	 	 	status of the Plan. The rights of a Director to the payment of benefits under the Plan
shall be no greater than the rights of an unsecured creditor of the Company, and nothing in
the Plan shall be construed to give any Director or any other person rights to any specific
assets of the Company, any of its subsidiaries or affiliates, or any other person.
	 
	20.	 	Governing Law. This Plan shall be governed by and interpreted in accordance with the
laws of the State of Delaware and, subject to Section 17 above, shall be binding upon the
Company and its successors, including any successor which acquires all or substantially all of
the assets of the Company.
	 
	21.	 	Currency. Payments made under the Plan shall be determined in the same currency in
which a Director receives his cash compensation.
	 
	22.	 	Headings. Headings and subheadings in the Plan are inserted for convenience only and
are not to be considered in the construction of the provisions hereof.

 * * *

     IN WITNESS WHEREOF, the following authorized officer of the Company has executed the Plan to
evidence its adoption by the Company as of the date set forth below.

	 	 	 	 	 
	 	ABITIBIBOWATER INC.

 	 
	 	By:  	/s/  Richard Garneau
 	 
	 	 	Richard Garneau 	 
	 	Its: 	                 President and Chief Executive Officer	 
	 	Dated:  	March 30, 2011	 

11exv10w11

EXHIBIT 10.11

ABITIBIBOWATER INC. 2010 EQUITY INCENTIVE PLAN

DIRECTOR DEFERRED STOCK UNIT AGREEMENT

     THIS DEFERRED STOCK UNIT AGREEMENT, dated as of the third trading day after the date the
Company’s 2010 Form 10-K is filed with the Securities and Exchange Commission (the “Date of
Grant”) is made by and between AbitibiBowater Inc., a Delaware corporation (the
“Company”), and _______________ (“Participant”).

     WHEREAS, the Company has adopted the AbitibiBowater Inc. 2010 Equity Incentive Plan (the
“Plan”) pursuant to which deferred stock units (“DSUs”) may be granted in respect
of shares of the Company’s common stock, par value $0.001 per share (“Stock”); and

     WHEREAS, the Participant serves as a member of the Board of Directors of the Company
(“Director”) and the Board of Directors has determined that, subject to the terms set forth
herein, a portion of each Director’s compensation should be made in the form of a DSU award to more
closely align their interests with those of the Company and its stockholders.

     NOW, THEREFORE, for and in consideration of the premises and the covenants of the parties
contained in this Agreement, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree
as follows:

     1. Grant of Deferred Stock Unit.

     (a) Grant.
The Company hereby grants to Participant                  DSUs, on the terms and conditions
set forth in this Agreement and as otherwise provided in the Plan (the “Initial Grant”).
Each DSU represents the right to receive payment in respect of one share of Stock as of the
Settlement Date (defined in Section 2(b)) to the extent the Participant is vested in such DSU as of
the Settlement Date, subject to the terms of this Agreement and the Plan.

     (b) Incorporation by Reference, Etc. The provisions of the Plan are hereby
incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement
shall be construed in accordance with the provisions of the Plan and any interpretations,
amendments, rules and regulations promulgated by the Human Resources and Compensation/Nominating
and Governance Committee (the “Committee”) from time to time pursuant to the Plan. Any
capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in
the Plan. The Committee shall have final authority to interpret and construe the Plan and this
Agreement and to make any and all determinations under them, and its decision shall be binding and
conclusive upon the Participant and his legal representative in respect of any questions arising
under the Plan or this Agreement.

     (c) Acceptance of Agreement. Unless the Participant notifies the Director, Corporate
Compensation in writing within 14 days after the Date of Grant that the Participant does not wish
to accept this Agreement, the Participant will be deemed to have accepted this Agreement and will
be bound by the terms of the Agreement and the Plan. Any such notice may be given to the Director,
Corporate Compensation at the Company’s principal executive office.

 

 

     2. Terms and Conditions.

     (a) Vesting. Subject to the Participant’s continued service as a Director, twenty
five percent (25%) of the DSUs (rounded to the nearest whole DSU) shall vest on the last day of
each calendar quarter of the year of the Date of Grant (each such date, a “Vesting Date”).

     (b) Settlement. The obligation to make payments and distributions with respect to
DSUs (the “settlement”) shall be satisfied through the issuance of one share of Stock for
each vested DSU, and the settlement of the DSUs may be subject to such conditions, restrictions and
contingencies as the Committee shall determine. Vested DSUs shall be settled as soon as
practicable after the earliest of the Participant’s (i) termination of service as a Director, (ii)
death or (iii) Disability (the “Settlement Date”). If vested DSUs are settled upon the
Participant’s termination of service as a Director, the Settlement Date will be December 15 (or, if
necessary, the next business day) of the calendar year following the calendar year in which the
Participant’s termination occurs, unless the Participant provides advance written notice of at
least five business days to the Director, Corporate Compensation specifying an earlier Settlement
Date (but no earlier than the termination of service date). The foregoing election shall only
apply if the Participant is not subject to Section 409A of the Internal Revenue Code (“Section
409A”). For a Participant who is subject to Section 409A, if vested DSUs are settled upon the
Participant’s termination of service as a Director, the Settlement Date will be as soon as
administratively feasible following the Director’s termination of service. For Participants
subject to Code Section 409A, in no event shall settlement occur no later than the last day of the
calendar year in which the Settlement Date occurs, or if later, the 15th day of the third month
following the Settlement Date. For purposes of this Agreement and the extent applicable to the
Participant, the term “termination of service” shall be interpreted to comply with Section 409A.
To the extent payments are made during the periods permitted under Section 409A (including any
applicable periods before or after the specified payment dates set forth in this Section 2(b)), the
Company shall be deemed to have satisfied its obligations under the Plan and shall be deemed not to
be in breach of its payment obligations hereunder.

     (c) Dividend Equivalents and Voting Rights. The Participant will from time to time be
credited with additional DSUs (including a fractional DSU), the number of which will be determined
by dividing:

          (i) The product obtained by multiplying the amount of each dividend (including extraordinary
dividend if so determined by the Company) declared and paid by the Company on the Stock on a per
share basis on or after the Date of Grant and before the Settlement Date by the number of DSUs
recorded in Participant’s account on the record date for payment of any such dividend, by

          (ii) The Fair Market Value of one (1) share of Stock on the dividend payment date for such
dividend.

     Subject to the Participant’s continued service as a Director, the additional DSUs shall vest
and be settled at the same time and on the same proportion as the Initial Grant. No additional
DSUs shall be accrued for the benefit of Participant with respect to record dates

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occurring prior to, or with respect to record dates occurring on or after the date, if any, on
which Participant has forfeited the DSUs.

     3. Termination of Service with Company. Notwithstanding any provision of Section 2 to
the contrary, the following vesting and forfeiture provisions shall apply to the Participant’s
vested but unsettled and unvested DSUs.

     (a) Retirement and Involuntary Termination. If the Participant’s service as a
Director terminates as a result of “Retirement” or a failure to be re-elected as a Director (other
than due to death or Disability), then the Participant shall become vested in a prorated number of
DSUs. For purposes of the preceding, the prorated portion of the DSUs that is vested as of the
Participant’s date of termination, including the portion of the DSUs then already vested, shall be
the total number of granted and credited DSUs multiplied by a fraction, the numerator of which
shall be the number of full months elapsed from January 1 of the calendar year of the Date of Grant
through the date of the Participant’s termination of service as a Director and the denominator of
which shall be 12. The term “Retirement” shall mean mandatory retirement at age 72 (or such other
age as required by Company’s By-Laws and/or Board of Directors Corporate Governance Principles).

     (b) Death. If the Participant dies during his period of service as a Director, then,
in addition to the DSUs vested as of the date of death under Section 2(a), the DSUs scheduled to
vest on the next scheduled Vesting Date shall also vest on the date of death.

     (c) Disability. If the Participant becomes Disabled, then, in addition to the DSUs
then vested under Section 2(a), the DSUs scheduled to vest on the next scheduled Vesting Date shall
also vest upon the Participant’s Disability.

     (d) Termination by the Company for Cause. If the Participant’s service as a Director
terminates for Cause, then all outstanding DSUs, whether vested but unsettled or unvested, shall
immediately terminate.

     (e) Other Termination. If the Participant’s service as a Director terminates other
than as described in the foregoing provisions of this Section 3, including resignation from the
Board of Directors before Retirement, then the Participant shall remain vested in all previously
vested DSUs, whether settled or unsettled, but all unvested DSUs shall immediately terminate.

     Notwithstanding anything contained to the contrary in this Section 3, in no event shall any
DSUs be settled prior to the applicable Vesting Date except if otherwise determined by the Board of
Directors and if permitted under Code Section 409A (to the extent applicable to the Participant).

     4. Compliance with Legal Requirements. The granting and settlement of the DSUs, and
any other obligations of the Company under this Agreement, shall be subject to all applicable
federal, provincial, state, local and foreign laws, rules and regulations and to such approvals by
any regulatory or governmental agency as may be required.

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     (a) Transferability. Unless otherwise provided by the Committee in writing, the DSUs
shall not be transferable by Participant other than by will or the laws of descent and
distribution.

     (b) No Rights as Stockholder. The Participant shall not be deemed for any purpose to
be the owner of any shares of Stock subject to DSUs and shall have no voting rights with respect to
the DSUs.

     (c) Tax Withholding. All distributions under the Plan are subject to withholding of
all applicable federal, state, provincial, local and foreign taxes, which obligations shall be
satisfied through (i) the issuance by the Company of net shares of Stock, or (ii) the sale by the
Company of the number of shares of Stock necessary satisfy such obligations.

     5. Miscellaneous.

     (a) Waiver. Any right of the Company contained in this Agreement may be waived in
writing by the Committee. No waiver of any right hereunder by any party shall operate as a waiver
of any other right, or as a waiver of the same right with respect to any subsequent occasion for
its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this
Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation
of the same breach.

     (b) Notices. Any written notices provided for in this Agreement or the Plan shall be
in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or
overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed
received three business days after mailing but in no event later than the date of actual receipt.
Notices shall be directed, if to the Participant, at the Participant’s address indicated by the
Company’s records, or if to the Company, to the attention of the Director, Corporate Compensation
at the Company’s principal executive office.

     (c) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to the extent
permitted by law.

     (d) No Rights to Continued Service. Nothing contained in this Agreement shall be
construed as giving the Participant any right to be retained in any position as a consultant or
director of the Company or its Affiliates or shall interfere with or restrict in any way the right
of the Company or its Affiliates, which is hereby expressly reserved, to remove, terminate or
discharge the Participant at any time for any reason whatsoever.

     (e) Beneficiary of Non-Québec Participant. The Participant, other than a Participant
residing in the Province of Québec, may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or
revoke such designation. Any notice should be made to the attention of the Director, Corporate
Compensation at the Company’s principal executive office. If no designated beneficiary survives
the Participant, the Participant’s estate shall be deemed to be Participant’s beneficiary.

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     (f) Beneficiary of Québec Participant. The Participant residing in the Province of
Québec may only designate a beneficiary by will. Upon the death of the Participant residing in the
Province of Québec, the Company shall settle the DSUs pursuant to Section 2(b) of this Agreement to
the liquidator, administrator or executor of the estate of the Participant.

     (g) Successors. The terms of this Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and of the Participant and the
beneficiaries, executors, administrators, heirs and successors of the Participant.

     (h) Entire Agreement. This Agreement and the Plan contain the entire agreement and
understanding of the parties hereto with respect to the subject matter contained herein and
supersede all prior communications, representations and negotiations in respect thereto. No
change, modification or waiver of any provision of this Agreement shall be valid unless the same be
in writing and signed by the parties hereto, except for any changes permitted without consent under
Section 9 of the Plan.

     (i) Governing Law. This Agreement shall be construed and interpreted in accordance
with the laws of the State of Delaware without regard to principles of conflicts of law thereof, or
principles of conflicts of laws of any other jurisdiction which could cause the application of the
laws of any jurisdiction other than the State of Delaware.

     (j) Headings. The headings of the Sections hereof are provided for convenience only
and are not to serve as a basis for interpretation or construction, and shall not constitute a
part, of this Agreement.

          IN WITNESS WHEREOF, the Company has executed this Agreement as of the day first written above.

	 	 	 	 	 	 	 

	 	 	ABITIBIBOWATER, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

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