Document:

Exhibit 10.18

Exhibit 10.18

NINTH AMENDMENT AND WAIVER

     This Ninth Amendment and Waiver (the “Agreement”) to the Credit Agreement referred to
below is dated as of August 7, 2008 and effective in accordance with Section 4 below, by
and among BOWATER CANADIAN FOREST PRODUCTS INC., a company organized under the laws of Canada, in
its capacity as Borrower under the Credit Agreement referred to below (the “Borrower”),
BOWATER INCORPORATED, a corporation organized under the laws of Delaware (“BI”), BOWATER
ALABAMA LLC (formerly known as Bowater Alabama Inc.), a limited liability company organized under
the laws of Alabama (“BA”), BOWATER NEWSPRINT SOUTH LLC, a limited liability company
organized under the laws of Delaware (“BNS”), BOWATER NEWSPRINT SOUTH OPERATIONS LLC
(formerly known as Bowater Newsprint South Inc.), a limited liability company organized under the
laws of Delaware and the successor by merger to Bowater Mississippi LLC (“BNSO”), each in
its capacity as a Guarantor under the Credit Agreement referred to below (BI, BA, BNS and BNSO are
collectively referred to herein as the “U.S. Borrower”), certain Subsidiaries and
Affiliates of the U.S. Borrower party hereto (the “Grantors”), ABITIBIBOWATER INC., a
corporation organized under the laws of Delaware (the “Parent”), the Lenders and the U.S.
Lenders party hereto (collectively, the “Consenting Lenders”) pursuant to an authorization
(in the form attached hereto as Exhibit A, each a “Lender Authorization”) and THE
BANK OF NOVA SCOTIA, as administrative agent (the “Administrative Agent”) for the Lenders
party to the Credit Agreement referred to below.

STATEMENT OF PURPOSE:

     The Borrower, the Original U.S. Borrower, the Lenders, certain other financial institutions
and the Administrative Agent are parties to the Credit Agreement dated as of May 31, 2006 (as
amended by that certain First Amendment dated as of July 20, 2007, that certain Second Amendment
dated as of October 31, 2007, that certain Third Amendment and Waiver dated as of February 25,
2008, that certain Fourth Amendment dated as of March 31, 2008, that certain Fifth Amendment dated
as of April 30, 2008, that certain Sixth Amendment dated as of May 28, 2008, that certain Seventh
Amendment dated as of June 6, 2008, that certain Eighth Amendment dated as of June 30, 2008, as
amended hereby and as further amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”).

     The Borrower has requested that the Administrative Agent, the Lenders and the U.S. Lenders
agree to amend the Credit Agreement and waive certain requirements of the Collateral Assignment of
Bonds and Indenture of Trust and Subordination dated as of May 30, 2008 by and between BA and the
U.S. Administrative Agent (as amended, restated supplemented or otherwise modified from time to
time, the “Collateral Assignment”), in each case as more specifically set forth herein.
Subject to the terms and conditions set forth herein, the Administrative Agent and each of the
Consenting Lenders have agreed to grant such requests of the Borrower.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

     1. Capitalized Terms. Except as otherwise provided herein, all capitalized undefined
terms used in this Agreement (including, without limitation, in the introductory paragraph and the

1

 

statement of purpose hereto) shall have the meanings assigned thereto in the Credit Agreement
(as amended by this Agreement).

     2. Waiver of Bond Delivery Requirement. Pursuant to Section 14.2 of the
Credit Agreement and subject to the terms and conditions hereof, including, without limitation, the
conditions to effectiveness set forth in Section 4 hereof, the Consenting Lenders hereby
waive the provisions of Section 10 of the Collateral Assignment requiring BA to deliver original
Assigned Bonds (as defined in the Collateral Assignment) or original Replacement Bonds (as defined
in the Collateral Assignment) to the U.S. Administrative Agent.

     3. Credit Agreement Amendment. The table in Section 9.2 of the Credit Agreement is
hereby amended and restated as follows:

	 	 	 	 	 
	Applicable Period	 	Minimum Ratio
	Third Amendment Effective Date to March 31, 2008
	 	 	0.75 to 1.00	 
	 
	April 1, 2008 through and including June 30, 2008
	 	 	1.00 to 1.00	 
	 
	July 1, 2008 through and including September 30, 2008
	 	 	1.40 to 1.00	 
	 
	October 1, 2008 through and including December 31, 2008
	 	 	1.75 to 1.00	 
	 
	January 1, 2009 and thereafter
	 	 	2.00 to 1.00	 

     4. Conditions to Effectiveness. Upon the satisfaction of each of the following
conditions, this Agreement shall be deemed effective as of June 29, 2008:

     (a) the Administrative Agent shall have received counterparts of this Agreement executed by
the Administrative Agent (on behalf of itself and each of the Consenting Lenders by virtue of each
Consenting Lender’s execution of a Lender Authorization), the Borrower, the U.S. Borrower, the
Parent and each of the Grantors;

     (b) the Administrative Agent shall have received executed Lender Authorizations from the
requisite Consenting Lenders;

     (c) the Administrative Agent shall have been reimbursed for all fees and out-of-pocket charges
and other expenses incurred in connection with this Agreement, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent;

     (d) the U.S. Borrower shall have paid to the U.S. Administrative Agent (or its applicable
affiliates), for the account of each Consenting Lender (including the Administrative Agent and the
U.S. Administrative Agent) that executes and delivers this Agreement or a Lender Authorization to
the U.S. Administrative Agent (or its counsel) on or prior to 5:00 p.m. (Eastern Time) on August 6,

2

 

2008, an amendment fee in an amount equal to (a) 10 basis points times the principal
amount of such Consenting Lender’s Commitment plus (b) 10 basis points times the
principal amount of such Consenting Lender’s “Commitment” (as defined in the U.S. Credit
Agreement);

     (e) the Administrative Agent shall have received a corresponding amendment to the U.S. Credit
Agreement, in form and substance substantially consistent with this Agreement (with such changes as
are applicable only to the U.S. Credit Agreement), duly executed by the U.S. Administrative Agent,
the U.S. Borrower, the Parent, each U.S. Guarantor and the requisite Consenting Lenders (whether
directly or through a lender authorization); and

     (f) the Administrative Agent shall have received such other instruments, documents and
certificates as the Administrative Agent shall reasonably request in connection with the execution
of this Agreement.

     5. Effect of the Agreement. Except as expressly provided herein, the Credit
Agreement, the Collateral Assignment and the other Loan Documents shall remain unmodified and in
full force and effect. Except as expressly set forth herein, this Agreement shall not be deemed
(a) to be a waiver of, or consent to, a modification or amendment of, any other term or condition
of the Credit Agreement, the Collateral Assignment or any other Loan Document, (b) to prejudice any
other right or rights which the Administrative Agent or the Lenders may now have or may have in the
future under or in connection with the Credit Agreement, the Collateral Assignment or the other
Loan Documents or any of the instruments or agreements referred to therein, as the same may be
amended, restated, supplemented or otherwise modified from time to time, (c) to be a commitment or
any other undertaking or expression of any willingness to engage in any further discussion with the
Borrower or any other Person with respect to any waiver, amendment, modification or any other
change to the Credit Agreement, the Collateral Assignment or the Loan Documents or any rights or
remedies arising in favor of the Lenders or the Administrative Agent, or any of them, under or with
respect to any such documents or (d) to be a waiver of, or consent to or a modification or
amendment of, any other term or condition of any other agreement by and among the Borrower, on the
one hand, and the Administrative Agent or any other Lender, on the other hand. References in the
Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”,
“herein”, and “hereof”) and in any Loan Document to the Credit Agreement shall be deemed to be
references to the Credit Agreement as modified hereby. References in the Collateral Assignment to
“this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof”)
and in any Loan Document to the Collateral Assignment shall be deemed to be references to the
Collateral Assignment as modified hereby.

     6. Representations and Warranties/No Default/Covenant Regarding Bonds. By their
execution hereof,

     (a) the Borrower, the U.S. Borrower, the Parent and each of the Grantors hereby certifies,
represents and warrants to the Administrative Agent and the Lenders that after giving effect to the
waiver set forth in Section 2 and the amendment set forth in Section 3, each of the
representations and warranties set forth in the Credit Agreement and the other Loan Documents is
true and correct in all material respects as of the date hereof (except to the extent that (i) any
such representation or warranty that is qualified by materiality or by reference to Material
Adverse Effect, in which case

3

 

such representation or warranty is true and correct in all respects as of the date hereof or
(ii) any such representation or warranty relates only to an earlier date, in which case such
representation or warranty shall remain true and correct as of such earlier date) and that no
Default or Event of Default has occurred or is continuing;

     (b) the Borrower, the U.S. Borrower, the Parent and each of the Grantors hereby certifies,
represents and warrants to the Administrative Agent and the Lenders that:

     (i) it has the right, power and authority and has taken all necessary corporate and
other action to authorize the execution, delivery and performance of this Agreement and each
of the other documents executed in connection herewith to which it is a party in accordance
with their respective terms and the transactions contemplated hereby; and

     (ii) this Agreement and each other document executed in connection herewith has been
duly executed and delivered by the duly authorized officers of the Borrower, the U.S.
Borrower, the Parent and each of the Grantors, and each such document constitutes the legal,
valid and binding obligation of the Borrower, the U.S. Borrower, the Parent and each of the
Grantors, enforceable in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors’ rights in general and the
availability of equitable remedies;

     (c) the Borrower, the U.S. Borrower, the Parent and each Grantor covenants and agrees, that,
if at any time, after the date hereof, the Assigned Bonds (as defined in the Collateral Assignment)
or any Replacement Bonds (as defined in the Collateral Assignment) or any other certificate,
document or instrument evidencing the right of the Bondholder (as defined in the Collateral
Assignment) shall come into its possession or be held by it, then it will immediately deliver and
pledge such Assigned Bonds, Replacement Bonds or other certificate, document or instrument to the
U.S. Administrative Agent for the ratable benefit of the Secured Parties (as defined in the
Collateral Assignment) together with an executed endorsement in form and substance satisfactory to
the Administrative Agent; and

     (d) no later than September 5, 2008, or such later date as the Administrative Agent and the
U.S. Administrative Agent may approve in their sole discretion (the “Deadline”), the
Administrative Agent shall have received documentation in form and substance satisfactory to the
Administrative Agent and the U.S. Administrative Agent duly executed by BA and U.S. Bank, National
Association, as trustee under the Assigned Indenture (as defined in the Collateral Assignment),
confirming, among other things, the registration of all bonds issued pursuant to the Assigned
Indenture as of the date thereof and such other matters as the Administrative Agent and the U.S.
Administrative Agent may request (such satisfactory documentation, the “Assigned Indenture
Documentation”). To the extent that the Administrative Agent has not received the Assigned
Indenture Documentation by the Deadline, the Borrower, the U.S. Borrower, the Parent and each
Grantor covenants and agrees, that upon the request of the Required Lenders (or the Administrative
Agent and the U.S. Administrative Agent, at the request of the Required Lenders), it will,
promptly, but in no event later than thirty (30) days after such request, take all actions as are
necessary to have Replacement Bonds (as defined in the Collateral Assignment) issued and delivered
to the U.S. Administrative Agent, for the ratable benefit of the Secured Parties (as defined in the
Collateral Assignment), together with an executed endorsement in form and substance satisfactory to
the

4

 

Administrative Agent and the U.S. Administrative Agent.   It is hereby agreed and acknowledged
that any failure by the Borrower, the U.S. Borrower, the Parent or any Grantor to comply with
the requirements set forth in the foregoing sentence shall constitute an immediate Event of
Default. 

     7. Reaffirmations. Each Credit Party (a) agrees that the transactions contemplated by
this Agreement shall not limit or diminish the obligations of such Person under, or release such
Person from any obligations under, the Credit Agreement, the applicable Guaranty Agreement, the
Collateral Agreement, the Collateral Assignment (other than as expressly set forth in Section 2
above) and each other Security Document to which it is a party, (b) confirms and reaffirms its
obligations under the Credit Agreement, the applicable Guaranty Agreement, the Collateral
Agreement, the Collateral Assignment (other than as expressly set forth in Section 2 above) and
each other Security Document to which it is a party and (c) agrees that the Credit Agreement, the
applicable Guaranty Agreement, the Collateral Agreement, the Collateral Assignment and each other
Security Document to which it is a party remain in full force and effect and are hereby ratified
and confirmed.

     8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

     9. Counterparts. This Agreement may be executed by one or more of the parties hereto
in any number of separate counterparts and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.

     10. Electronic Transmission. A facsimile, telecopy, pdf or other reproduction of this
Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may
be delivered by one or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original of this Agreement
as well as any facsimile, telecopy, pdf or other reproduction hereof.

[Signature Pages Follow]

5

 

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

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	BOWATER CANADIAN FOREST PRODUCTS
INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:

	 

	 	 	 	Title:

	 
	 	 	 	 
	 	 	U.S. BORROWER:
	 
	 	 	 	 
	 	 	BOWATER INCORPORATED
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BOWATER ALABAMA LLC
	 
	 	 	 	 
	 

	 	By: Bowater Newsprint South LLC, its member
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BOWATER NEWSPRINT SOUTH
LLC
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BOWATER NEWSPRINT SOUTH OPERATIONS LLC
	 
	 	 	 	 
	 

	 	By: Bowater Newsprint South LLC, its manager
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

[Ninth
Amendment – Bowater Canada]

 

 

	 	 	 	 	 
	 	 	PARENT:
	 
	 	 	 	 
	 	 	ABITIBIBOWATER INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

[Signature Pages Continue]

[Ninth Amendment – Bowater Canada]

 

 

	 	 	 	 	 
	 	 	GRANTORS:
	 
	 	 	 	 
	 	 	BOWATER CANADIAN
HOLDINGS INCORPORATED
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BOWATER CANADA FINANCE
LIMITED PARTNERSHIP
	 
	 	 	 	 
	 

	 	By:
	 	BOWATER CANADA TREASURY CORPORATION, its general partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BOWATER SHELBURNE CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BOWATER LAHAVE CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

[Signature Pages Continue]

[Ninth
Amendment – Bowater Canada]

 

 

	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA, as Administrative Agent (on
	 	 	behalf of itself and the Consenting Lenders who have
	 	 	executed a Lender Authorization) and as Issuing
	 	 	Lender and Lender
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

[Ninth
Amendment – Bowater Canada]

 

 

Exhibit A

Form of Lender Authorization

[Ninth
Amendment – Bowater Canada]

 

 

LENDER AUTHORIZATION

Bowater Incorporated

Bowater Canadian Forest Products Inc.

Seventh Amendment to U.S. Credit Agreement

Ninth Amendment to Canadian Credit Agreement

August 7, 2008

Wachovia Bank, National Association

NC0680

1525 West W.T. Harris Blvd.

Charlotte, North Carolina 28262

Attention: Syndication Agency Services

The Bank of Nova Scotia

40 King Street West

Scotia Plaza, 62nd Floor

Toronto, Ontario M5W 2X6

Attention: Corporate Banking Loan Syndication

	 	 	 	 	 
	 

	 	Re:
	 	(a) The Seventh Amendment dated as of August 7, 2008 (the “U.S.
Agreement”) to that certain Credit Agreement dated as of May 31, 2006 (as amended,
the “U.S. Credit Agreement”) among Bowater Incorporated and the other New
Borrowers party thereto (collectively, the “U.S. Borrower”), the lenders party
thereto (the “U.S. Lenders”), and Wachovia Bank, National Association, as
administrative agent (the “U.S. Administrative Agent”) for the U.S. Lenders and
(b) the Ninth Amendment dated as of August 7, 2008 (the “Canadian Agreement”
and, together with the U.S. Agreement, the “Agreements”) to that certain Credit
Agreement dated as of May 31, 2006 (as amended, the “Canadian Credit
Agreement”) among Bowater Canadian Forest Products Inc. (the “Canadian
Borrower”), the U.S. Borrower, the lenders party thereto (the “Canadian
Lenders”), and The Bank of Nova Scotia, as administrative agent (the “Canadian
Administrative Agent”) for the Canadian Lenders.

This Lender Authorization acknowledges our receipt and review of the execution copy of the
Agreements, each in the form posted on SyndTrak Online or otherwise distributed to us by the U.S.
Administrative Agent or the Canadian Administrative Agent. By executing this Lender Authorization,
we hereby approve the Agreements and authorize the U.S. Administrative Agent or the Canadian
Administrative Agent (as applicable) to execute and deliver the Agreements on our behalf.

Each financial institution purporting to be a U.S. Lender and executing this Lender
Authorization agrees or reaffirms that it shall be a party to the Agreements and the other Loan
Documents (as defined in the U.S. Credit Agreement) to which U.S. Lenders are parties and shall
have the rights and obligations of a “Lender” (as defined in the U.S. Credit Agreement), and agrees
to be bound by the terms and provisions applicable to a “Lender” under each such agreement. Each
financial institution purporting to be a Canadian Lender and executing this Lender Authorization
agrees or reaffirms that it shall be a party to the Agreements and the other Loan Documents (as

 

 

defined in the Canadian Credit Agreement) to which Canadian Lenders are parties and shall have
the rights and obligations of a “Lender” (as defined in the Canadian Credit Agreement), and agrees
to be bound by the terms and provisions applicable to a “Lender” under each such agreement. In
furtherance of the foregoing, each financial institution executing this Lender Authorization agrees
to execute any additional documents reasonably requested by the U.S. Administrative Agent or the
Canadian Administrative Agent, as applicable, to evidence such financial institution’s rights and
obligations under the U.S. Credit Agreement or the Canadian Credit Agreement, as applicable.

A facsimile, telecopy, pdf or other reproduction of this Lender Authorization may be executed
by one or more parties hereto, and an executed copy of this Lender Authorization may be delivered
by one or more parties hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes.

	 	 	 	 	 
	 	 	 
	 	 	[Insert name of applicable financial institution]
	 
	 	 	 	 
	 
 	 	By:	 	 
	 
 	 	 	 	 
	 
 	 	Name:	 	 
	 
 	 	 	 	 
	 
 	 	Title:	 	 
	 
 	 	 	 	 

[Ninth
Amendment – Bowater Canada]Exhibit 10.19

Exhibit 10.19

July 14, 2008

Mr. Thor Thorsteinson

3401 Brantley Oaks Drive

Fort Myers, FL 33905

Dear Thor:

     In accordance with our discussions, your employment is being terminated as of July 31, 2008
(the “Termination Date”) in circumstances entitling you to the benefits described in your Severance
Compensation Agreement dated April 1, 2002 (“Severance Agreement”). I have described below the
separation arrangements we have discussed.

     Severance Payments. In accordance with the terms of your Severance Agreement, you are
entitled to severance payments equal to US$ 136,140. This amount is payable on February 1, 2009.

     Noncompete Payment. In addition, you are entitled to a payment of US$ 916,140 in
exchange for the non-compete obligations described in Section 13 of the Severance Agreement. The
non-compete period described in the Severance Agreement starts on August 1, 2008 and extends for
two years.

     Consulting Agreement. The Company has offered to retain you to provide consulting
services pursuant to the terms of the attached draft agreement for consideration not to exceed US$
380,000. In addition, under the terms of that agreement, you would agree to extend your
non-compete obligations by one year, beginning on August 1, 2010, and ending on July 31, 2011, for
a payment of US$ 400,000 . The noncompete payments for the entire three-year period, will be paid
in two equal installments, US$ 658,070 on February 1, 2009, and US$ 658,070 on August 1, 2009.

     Waiver and Release Agreement. In exchange for the severance arrangements described
above, you will be required to sign a Waiver and Release Agreement. A proposed Waiver and Release
Agreement is enclosed for your review. This Agreement should be signed on or after your last day
of employment (July 31, 2008). You have forty-five days after your Termination Date to decide
whether to sign it. After you sign it, you have a seven-day revocation period. Any revocation
must be made in writing and submitted within the seven-day period to Jim Wright. You will not be
entitled to the

 

 

Mr. Thor Thorsteinson

Page 2

June  , 2008

benefits described above until the seven-day period has expired. We recommend that you review
the Waiver and Release Agreement with an attorney (at your own expense).

     Benefit Continuation. You are also entitled to continue to receive all group benefits
(other than disability insurance benefits), until the earlier of (i) three years after the
Termination Date, or (ii) receipt of equivalent benefits from a new employer. At the end of the
three (3) year period contained in (i), if you are not covered by an other plan, you will be
eligible to the benefit plan in effect as if you retired at that time. Since Company policy no
longer provides car allowances to non-sales executives, you will not receive a car allowance.

     Pension Benefits. Your pension benefits are provided under a qualified pension plan,
the Alabama River Retirement Plan (the “Qualified Plan”), which provides a cash balance benefit for
Abitibi US salaried employees, a Canadian registered plan (the “Registered Plan”) and a
supplemental plan (the “SERP”). Your SERP benefit will be calculated in accordance with Section
5(c) of your Severance Agreement and your benefits under the Qualified Plan and the Registered Plan
will be treated as an offset to those benefits. Because you are considered a key employee for
purposes of Section 409A of the U.S. Internal Revenue Code, your SERP payments cannot be started
until six months after your Termination Date. The value of the SERP benefit, as recently approved
by the Human Resources Compensation Committee (HRCC) will be paid in a lump sum, 50% six (6) months
after your retirement date and the remaining 50%, twelve (12) months after your retirement date.
Your benefits under the Qualified and Registered Plans may be started by following the applicable
plan notice requirements.

     Stock Options. Pursuant to Section 5(e) of the Severance Agreement, all of your
unvested stock options will immediately vest. You will be treated as an active employee until the
expiration date applicable to each stock option grant. Your preclearance and filing obligations
continue until six months after you cease serving as an officer.

     Deferred Stock Unit Awards. You currently hold 3,941.62 Deferred Stock Units. For
the DSUs received prior to 2005 ( 1,787.06 units), you have until December 15, 2009 to request
payment by filing a notice of redemption. The remaining units will be distributed to you in cash
as of January 31, 2009, in accordance with your previous election.

     Restricted Stock Unit (RSUs) Awards. The vesting of all RSUs will continue as if you
were actively at work and will be paid according to the original payout schedule.

     Savings Plan. Your Savings Plan account will be transferred to Fidelity Investment
Company on July 1, 2008. You may rollover your Savings Plan account to an individual IRA account
immediately after your Termination Date or at any time thereafter Rollover directions should be
coordinated directly with Fidelity. You may

 

 

Mr. Thor Thorsteinson

Page 3

June  , 2008

check your balance at any time after the transfer using the Fidelity website at www.401k.fidelity.com or
telephone 1-800-835-5093.

     Vacation Pay. You will be paid for all unused vacation for 2008 and any accrued
vacation for 2009.

     2008 Annual Incentive Plan. You will be entitled to a prorated award based on the
average of your last two bonuses. That amount is 

US$ 126,960.

     The above summary is merely an overview of your benefits. More details are contained in the
applicable plan documents which are the controlling documents and are available upon request. The
Company reserves the right to change, terminate or amend the terms of the group benefit plans at
any time.

     If you agree to the terms described above, and return it to me. If we do not receive your
acceptance by September 15, 2008, this offer will be deemed to be withdrawn.

Sincerely,

Jim Wright

Senior Vice President – Human Resources

Accepted and Agreed:

                                        

Date Signed:

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