Document:

exv10w57

EXHIBIT 10.57

CHANGE IN CONTROL AGREEMENT

     THIS AGREEMENT, made as of the ___ day of                     , 2008, 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                                          (the “Executive”).

     WHEREAS, the Executive is a senior officer of the Corporation and a management employee of a
subsidiary company (“Subsidiary”) wholly owned by the Corporation and the Corporation intends to
charge any amounts paid pursuant to this Agreement to the Subsidiary employing the Executive at the
time of such payment; 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 Subsidiary and 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 Executive, to the detriment of the
Subsidiary and 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 and the
Subsidiary’s management, including 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 and to
maintain or increase the profitability of the Subsidiary and the Corporation.

     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)	 	“Affiliate” and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date hereof.
	 
	 	(b)	 	“Base Amount” shall mean the Executive’s annual base salary at the rate in
effect on the Termination Date.
	 
	 	(c)	 	“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 (whether or
not in writing) or upon the exercise of conversion rights, exchange rights,
warrants, options or otherwise.

	 	(d)	 	“Bonus Amount” shall mean an amount equal to the lesser of (i) the average of
the last two paid bonuses paid to the Executive prior to the Termination Date under the
Corporation’s annual cash incentive plan, or (ii) 125% of the Executive’s target bonus
amount in effect on the Termination Date.
	 
	 	(e)	 	“Cause” shall mean and be limited to the Executive’s gross negligence, willful
misconduct or conviction of a felony, which has a demonstrable and material adverse
effect upon the Corporation; provided that if Cause exists by virtue of the Executive’s
gross negligence or willful misconduct that is capable of being cured, the Corporation
shall give the Executive written notice of the alleged negligence or misconduct and if
the Executive cures the negligence or misconduct within thirty (30) days after receipt
of the notice, such Cause shall cease to exist and the Corporation shall not terminate
the Executive’s employment therefor. The Executive shall be deemed to have been
terminated for Cause as of the effective date stated in a Notice of Termination
delivered by the Corporation to the Executive, which shall not be delivered before the
end of the thirty (30) day period described in the preceding sentence, if applicable.
The Notice of Termination must be accompanied by a certified copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters (3/4) of the membership
of the Board after reasonable notice to the Executive and an opportunity for the
Executive, with the Executive’s counsel present, to be heard before the Board, finding
that, in the good faith opinion of the Board, the Executive was guilty of conduct
constituting Cause hereunder and setting forth in reasonable detail the facts and
circumstances claimed to provide the basis for the Executive’s termination.
	 
	 	(f)	 	“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

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	 	 	 	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.

	 	(g)	 	“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
	 
	 	(h)	 	“Corporation” shall mean AbitibiBowater Inc.; provided that, if the Executive
is employed by a subsidiary of the Corporation, “Corporation” shall mean such
subsidiary of the Corporation for purposes of references to the Executive’s
compensation and benefits, and the plans, programs and arrangements pursuant to which
compensation and benefits are provided.
	 
	 	(i)	 	“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.
	 
	 	(j)	 	“Employer Contributions” shall mean an amount equal to the maximum
contributions (including any employer match and additional company contributions) the
Corporation could have made (regardless of actual circumstances) on the Executive’s
behalf to the Corporation’s Statutory and non-Statutory defined contribution plans for
the fiscal year in which the Executive’s Termination Date occurs. Elective deferrals
of amounts included in the Base Amount or Bonus Amount shall not be included in
Employer Contributions, but the amount of matching contributions shall be calculated as
if the Executive made the maximum amount of elective deferrals permitted.
	 
	 	(k)	 	“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as
amended.
	 
	 	(l)	 	“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
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

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	 	 	 	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 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 14 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.

	 	(m)	 	“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.
	 
	 	(n)	 	“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.
	 
	 	(o)	 	“Pension Make-up” shall mean an amount equal to the value of three times the
normal and supplementary pension benefits in effect on the Termination Date according
to the terms of the Corporation’s (or its Subsidiary’s) registered pension plans and
its supplemental plans or according to similar provisions of any successor plans, of
which the Executive is a member at the Termination Date (the “Retirement Plans”). The
Executive’s total pension entitlement and retirement options will be determined on the
basis that the Executive had three years of credited service and age under the
Retirement Plans at his Termination Date (over and above his actual years of credited
service as otherwise determined). In addition, such additional years of service shall
be included for the purpose of determining final or best average earnings assuming that
the Executive’s monthly rate of salary at the Termination Date would have continued
unchanged during the

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	 	 	 	period of additional service. For Retirement Plans that include performance bonuses
in the definition of pensionable earnings, the average of the highest three
pensionnable bonuses earned in the five years immediately prior to the Termination
Date shall be used for calculating the bonuses for each year during the severance
period used for the purpose of determining final or best average earnings. Any
portion of the total Pension Make-up of the Executive not eligible to be paid under
provisions of the registered pension plans of the Corporation shall be payable as
supplementary payments. The Pension Make-up is only applicable to Executives who
were previously covered by a Prior Abitibi Agreement.

	 	(p)	 	“Person” shall mean any individual, corporation, partnership, group,
association or other “person” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act.
	 
	 	(q)	 	“Prior Abitibi Agreement” shall mean a Severance Compensation Agreement granted
by Abitibi-Consolidated Inc. and assumed by the Corporation.
	 
	 	(r)	 	“Statutory Plan” shall mean a retirement plan that is intended to be qualified
(for purposes of United States tax law) or registered (for purposes of Canadian tax
law), as the case may be.
	 
	 	(s)	 	“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.
	 
	 	(t)	 	“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
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).
	 
	 	(u)	 	“Voting Shares” means any securities of the Corporation ordinarily carrying the
right to vote at elections of directors.

	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

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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 of Control or more than two years after the immediately preceding Change
of Control; (vi) termination of this Agreement by the Corporation in accordance with Section
17; 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 of Control
until the Agreement has been terminated. In addition, with respect to a particular Change
of Control, Section 4 expires twenty-four (24) months following such Change of 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 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, 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 Company, or an event constituting the
basis for the Executive’s resignation for Good Reason occurs (and is not

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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 [one, two or three];
	 
	 	(ii)	 	an amount equal to the Bonus Amount multiplied
by [one, two or three];
	 
	 	(iii)	 	either an amount equal to (i) the Employer
Contributions multiplied by [one, two or three]; or (ii) the Pension
Make-up (only applicable to Executives formerly covered by a Prior
Abitibi Agreement), and
	 
	 	(iv)	 	a cash payment of $20,000 in lieu of individual
outplacement services.

	 	(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 [twelve (12), twenty-four (24) or 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 (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. Anything else
contained herein to the contrary notwithstanding, any amount payable to the
executive as reimbursement for any health care expense shall be paid not later
than the end of the year following the year in which such expense is incurred;
provided that the foregoing is included

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	 	 	 	solely to satisfy the requirements of Code Section 409A and shall not be
construed to justify paying such reimbursement at a time later than it would
otherwise have been paid.

	5.	 	EQUITY AWARDS

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 Section 10 hereof, (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.	 	LOANS

If on the Termination Date the Executive owes any money to the Corporation pursuant to loans
to the Executive, such loans shall, notwithstanding the terms of any other agreement between
the Corporation and the Executive respecting these loans, be offset against amounts owed to
the Executive pursuant to Section 4.

	7.	 	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 7,
the Executive shall be entitled to all benefits provided under the disability and pension
plans of the Corporation applicable to the Executive at the date of Disability.

	8.	 	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 (provided that the foregoing shall not cause Section 4 to result in a
duplication of benefits provided under any retirement plan), or otherwise, other than
pursuant to Section 6.

	9.	 	INTEREST

If any payment to the Executive required by this Agreement is not made within the time for
such payment specified herein, the Corporation shall pay to the Executive interest on such
payment at the rate of the Lipper Money Market Fund Index from the date such payment is
payable under the terms hereof until paid.

	10.	 	NON-COMPETE

	 	(a)	 	If the Executive receives the payments and benefits described in Section 4,
then the Executive will not for a period of two (2) years beginning on the Termination
Date (the “Noncompete Period”), without written approval of the Chief Executive

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	 	 	 	Officer or, in the case of the Chief Executive Officer, the Board of Directors,
undertake or carry on, either alone or in partnership, or either on his own account
or on behalf of or as agent or employee or director of any person or persons, firm
or corporation (other than the Corporation), or be employed or interested or engaged
(other than as a holder of securities of not more than five percent (5%) of the
stock or equity of any corporation the capital stock of which is publicly traded) in
any business in competition with that carried on by the Corporation or any
Subsidiary at the Termination Date, or any business in which the Corporation or any
Subsidiary has invested significant start-up expenses, including research and
development, at the Termination Date.

	 	(b)	 	During the Noncompete Period, Executive shall not, directly or indirectly
through another person, (i) induce or attempt to induce any employee of the Corporation
or any Subsidiary to leave the employ of such person, or in any way interfere with the
relationship between the Corporation or any Subsidiary and any employee thereof, (ii)
hire any person who was an employee of the Corporation or any Subsidiary at any time
during the Term or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Corporation or any Subsidiary to
cease doing business with any such entity, or in any way interfere with the
relationship between any such customer, supplier, licensee, licensor, franchisee or
business relation and the Corporation or any Subsidiary (including, without limitation,
making any statement which is intended or reasonably calculated to disparage or
discredit the Corporation or any Subsidiary).
	 
	 	(c)	 	If, at the time of enforcement of this Section 10, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under circumstances
then existing, the parties agree that the maximum duration, scope or area reasonable
under such circumstances shall be reduced and substituted for the stated duration,
scope or area and that the court shall be allowed to revise the restrictions contained
herein to reduce the maximum period, scope and area to that permitted by law.
Executive acknowledges that the restrictions contained in this Section 10 are
reasonable and that he has reviewed the provisions of this Agreement with his legal
counsel.
	 
	 	(d)	 	In the event of the breach or a threatened breach by Executive of any of the
provisions of this Section 10, the Corporation, in addition and supplementary to other
rights and remedies existing in its favor, shall be entitled to specific performance
and/or injunctive or other equitable relief from a court of competent jurisdiction in
order to enforce or prevent any violations of the provisions hereof (without posting a
bond or other security). In addition, in the event of a breach or violation by
Executive of this Section 10, the Noncompete Period shall be tolled until such breach
or violation has been cured.
	 
	 	(e)	 	For purposes of this Section 10, the term “Subsidiary” shall mean any
corporation or other entity of which the equity securities or other ownership interests
having the voting power to elect a majority of the board of directors or

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other governing body are, at the time of determination, owned by the Corporation,
directly or through one or more Subsidiaries.

	 	(f)	 	The parties stipulate and agree that the amount to be paid to the Executive
pursuant to Section 4 may constitute, in whole or in part, consideration for his
agreement not to compete.

	11.	 	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.

	12.	 	CODE SECTION 409A

Any amounts payable under this Agreement that are determined to be vested deferred
compensation under Code Section 409A shall be paid in a lump sum as of the first day of the
seventh month following the Executive’s Termination Date. In the event that the Corporation
reasonably determines that all or a portion of any payment to be paid to the Executive
pursuant to this Agreement constitutes a substitute for purposes of Section 409A of the Code
for any payment under any other agreement that is a form of deferred compensation subject to
Section 409A, such amount shall be paid at the same time and in the same form as the payment
of deferred compensation for which it is a substitute.

	13.	 	CODE SECTION 280G

Notwithstanding any other provision of this Agreement, if any payment to or for the benefit
of the Executive under this Agreement either alone or together with other payments to or for
the benefit of the Executive would constitute a “parachute payment” (as defined in Section
280G of the Code), the payments under this Agreement shall be reduced to the largest amount
that will eliminate both the imposition of the excise tax imposed by Section 4999 of the
Code and the disallowance of deductions to the Corporation or its Subsidiaries under Section
280G of the Code for any such payments. The amount and method of any reduction in the
payments under this Agreement pursuant to this Section 13 shall be as reasonably determined
by the Board or a committee thereof.

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	14.	 	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.

	15.	 	NOTICE

Any notices and all other communications provided for herein shall be in writing and shall
be delivered personally or sent by facsimile transmission (with written confirmation sent at
the same time), prepaid air courier or prepaid certified or registered mail. Any such
notice shall be deemed to have been given (a) when received, if delivered in person, sent by
facsimile transmission, or sent by prepaid air courier, or (b) three (3) business days
following the mailing thereof, if mailed by prepaid certified or registered mail, return
receipt requested, addressed to the respective addresses set forth on the first page of this
Agreement or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall be effective
only upon receipt. All notices to the Corporation shall be addressed to the attention of the
Board with a copy to the Corporate Secretary.

	16.	 	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. This Agreement
supercedes any prior agreement previously in effect between the Executive and the
Corporation or its predecessors providing for any payments to Executive following a change
in control (however defined) except as provided in the following sentence. Any Prior
Abitibi Agreements shall continue to be in effect until October 29, 2009, only as they apply
to the combination transaction of Abitibi-Consolidated Inc. and Bowater Incorporated.

	17.	 	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

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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 Section 409A of the Code or any other applicable 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.

	18.	 	GOVERNING LAW

The validity, interpretation, construction and performance of this Agreement shall be
governed by the substantive laws of the State of Delaware if the Executive is a United
States resident for tax purposes or the Province of Quebec if the Executive is a Canadian
resident for tax purposes, without regard to the choice of law provisions thereof. The
present agreement has been drafted in English at the request of the Executive. La présente
entente a été rédigée en anglais à la demande de l’employé.

	19.	 	CONFIDENTIAL INFORMATION

In the event of termination of employment of the Executive, the Executive agrees to keep
confidential all information of a confidential or proprietary nature concerning the
Corporation, its subsidiaries and affiliates and their respective operations, assets,
finances, business and affairs and further agrees not to use such information for personal
advantage, provided that nothing herein shall prevent disclosure of information which is
publicly available or which is required to be disclosed under appropriate statutes, rules or
law or legal process.

	20.	 	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.

	21.	 	ARBITRATION

To the extent that any disagreement, claim or litigation involving this agreement, between
the parties is not settled by the parties involved, it shall be submitted for final, binding
arbitration in the city nearest to the Executive’s residence. If the Executive resides in
the United States, arbitration must take place at an office of the American Arbitration
Association by one arbitrator in accordance with the rules of the American Arbitration
Association for the resolution of employment disputes then in effect. If the Executive
resides in Canada, then arbitration must be in accordance with the arbitration provisions

12

 

contained in the Quebec Code of Civil Procedure; and if the parties so agree, they may
appoint a single arbitrator instead of three arbitrators as set forth in the Code of Civil
Procedure. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction. The Corporation hereby waives its right to contest the personal jurisdiction
or venue of any court, federal, state or provincial in an action brought to enforce this
Agreement or any award of an arbitrator hereunder which action is brought in the
jurisdiction in which such arbitration was conducted, or, if no arbitration was elected, in
which arbitration could have been conducted pursuant to this Section 21.

The reasonable fees and expenses of the arbitrator or arbitrators and those of the lawyers
retained by the Executive shall be advanced and defrayed by the Corporation. However, if the
final arbitration decision or award is rendered in favor of the Corporation, the Executive
shall repay to the Company, within thirty (30) days following a documented, written request
to this effect, the fees and expenses paid to the lawyers of the Executive and half of the
fees and expenses paid to the arbitrator or arbitrators.

	22.	 	COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.

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

	 	 	 	 	 	 	 
	 	 	ABITIBIBOWATER INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 

13exv10w79

EXHIBIT 10.79

Your

retirement

program

Defined contribution program

Executive employees in Canada

Effective January 1, 2009

 

 

INTRODUCTION

This booklet summarizes the defined contribution retirement program for executive employees of
AbitibiBowater in Canada, effective January 1, 2009.

The defined contribution retirement program (or “retirement program”) is a competitive program that
enables you to save for retirement. It is comprised of two plans: the defined contribution plan (or
“DC Plan”) and the defined contribution supplemental executive retirement plan (or “DC SERP”). The
DC Plan is subject to a tax limit while the supplemental plan allows you to receive the pension
benefits you accrue based on your entire earnings.

The DC Plan is a registered plan, which means that it is funded and follows pension legislation. In
fact, the Company sponsors two defined contribution plans: the Defined Contribution Pension Plan
for Non-Unionized Employees of Abitibi-Consolidated Inc., which originally came into effect on
January 1, 2002, and the DC Retirement Plan (2003) for Non-Unionized Employees of Bowater, which
originally came into effect on January 1, 2003. The provisions of both plans have been harmonized
as of January 1, 2009, and are referred to in this booklet as “the DC Plan”.

Under the DC Plan, your contributions, along with the Company’s matching contributions, accumulate
in an account in your name, and are allocated among the investment funds of your choice. The
account balance varies over time with these contributions and the related investment return
(positive or negative). The plan offers a range of investment funds to meet your needs and your
financial goals.

The DC SERP is an unfunded plan that is paid through the Company’s operating expenses, and is not
governed by pension legislation. The goal of the DC SERP is to provide benefits to highly
compensated employees whose retirement savings would otherwise be limited in the DC Plan by the
Canadian Income Tax Act maximum. In other words, it supplements your benefit under the DC Plan.

For a quick overview of the program’s provisions, you can consult page 3 of this booklet. More
detailed explanations are provided in the sections that follow. However, please note that the
official documents and applicable legislation prevail at all times.

For information on your retirement benefits for your years of service before January 1, 2009,
please refer to your previous communication materials on the program.

If you have any questions, please contact the head of the Pension and Benefits Department located
at the head office.

 

 

WHAT’S INSIDE

	 	 	 	 	 
	Overview
	 	 	3	 
	 
	 	 	 	 
	Eligibility
	 	 	5	 
	 
	 	 	 	 
	Contributions
	 	 	5	 
	 
	 	 	 	 
	Eligible Earnings
	 	 	6	 
	Tax limits
	 	 	6	 
	Contributions: Example 1
	 	 	6	 
	Contributions: Example 2
	 	 	6	 
	Withdrawal of contributions
	 	 	7	 
	 
	 	 	 	 
	Vesting
	 	 	7	 
	 
	 	 	 	 
	DC Plan
	 	 	7	 
	DC SERP
	 	 	7	 
	 
	 	 	 	 
	How your money grows
	 	 	8	 
	 
	 	 	 	 
	DC Plan
	 	 	8	 
	DC SERP
	 	 	9	 
	 
	 	 	 	 
	Termination or retirement
	 	 	10	 
	 
	 	 	 	 
	DC Plan
	 	 	10	 
	DC SERP
	 	 	11	 
	 
	 	 	 	 
	Death benefits
	 	 	12	 
	 
	 	 	 	 
	DC Plan
	 	 	12	 
	DC SERP
	 	 	12	 
	 
	 	 	 	 
	Other key events
	 	 	13	 
	 
	 	 	 	 
	Disability
	 	 	13	 
	Maternity, paternity or parental leave (including adoption)
	 	 	13	 
	Marriage breakdown
	 	 	13	 
	 
	 	 	 	 
	Non-compete / confidentiality provisions
	 	 	14	 
	DC SERP
	 	 	14	 
	 
	 	 	 	 
	Plan administration
	 	 	14	 
	 
	 	 	 	 
	DC Plan
	 	 	14	 
	DC SERP
	 	 	15	 
	Consulting the plan text
	 	 	16	 
	 
	 	 	 	 
	Other information
	 	 	17	 
	 
	 	 	 	 
	Beneficiary designation
	 	 	17	 
	Benefits from other Company pension plans
	 	 	17	 
	DC SERP funding
	 	 	17	 
	Fiscal year
	 	 	18	 
	Reimbursements for special cases
	 	 	18	 
	Transfers from other plans
	 	 	18	 
	 
	 	 	 	 
	Appendix — Definitions
	 	 	19	 

 

 

OVERVIEW

Here is an overview of the provisions of the retirement program (DC Plan and DC SERP) for
service starting January 1, 2009. Please refer to the corresponding sections of this booklet for
details.

	 	 	 
	ELIGIBILITY

	 	You participate in the retirement program if you are employed in a position corresponding to salary
grade 29 (Level 29) or above, you are listed on the Canadian payroll, and you are not accumulating
benefits in the defined benefit SERP sponsored by the Company.
	 
	 	 
	CONTRIBUTIONS

	 	You are required to make contributions of 5% of your eligible earnings, up to the US Compensation Limit.
	 
	 	 
	 

	 	The Company makes contributions of 10.5% of your eligible earnings, and an additional contribution
(based on your salary grade), that is equal to:
	 
	 	 
	 

	 	v   10% for salary grade 33 and above and direct reports to the CEO (for a total of 20.5%); or

	 
	 

	 	v   12% for the CEO (for a total of 22.5%).

	 
	 	 
	 

	 	Your eligible earnings include your base salary as well as your paid bonus under the annual incentive
plan. Your paid bonus excludes any special bonuses unless authorized by the Company.
	 
	 	 
	VESTING

	 	DC Plan
	 
	 	 
	 

	 	You are immediately fully vested in your DC account.
	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	Vesting is gradual and depends on your age. You become fully vested upon an involuntary termination
without cause or upon death.
	 
	 	 
	NON-COMPETE / CONFIDENTIALITY
PROVISIONS

	 	Your right to receive any money from the DC SERP is subject to the respect of the terms of the
non-compete / confidentiality provisions stipulated under the DC SERP plan text.
	 
	 	 
	HOW YOUR MONEY GROWS

	 	DC Plan

Contributions in the DC Plan accumulate in an account in your name, and are allocated among the
investment funds of your choice. The account balance varies over time with these contributions and the
related investment return (positive or negative). The DC Plan offers a range of investment funds to
meet your needs and your financial goals.
	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	You do not have investment options for the DC SERP. Each year, the Company will credit your DC SERP
account with interest at a rate equal to the average rate of return on the balanced funds offered in
the DC Plan during the year. However, in the year of termination of employment, interest will be
credited as if the contributions for the year were made at mid-year.

 

 

	 	 	 
	TERMINATION OF
EMPLOYMENT OR
RETIREMENT

	 	DC Plan

v   If your employment terminates, you can transfer your account
balance to a locked-in retirement savings vehicle on a tax-sheltered
basis.

	 
	 	 
	 

	 	v   Upon retirement, your income will depend on the following
factors:

   -  Your account balance at retirement (your contributions, the Company’s
contributions and your investment income);

   -  Your age when you start receiving your retirement income; and

   -  The authorized retirement income vehicle chosen, which could be a life
annuity, a life income fund (LIF) or a locked-in retirement income fund
(LRIF). LIFs and LRIFs are similar to investment accounts from which you
make withdrawals each year, subject to minimums and maximums established
by law.

	 
	 	 
	 

	 	If you choose to purchase an annuity with your account balance, the
interest rates prevailing on the market at the time you buy the annuity
will affect the amount of retirement income that the annuity will
provide for you.

	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	After you leave the Company, your vested DC SERP is paid in cash, less
applicable taxes. It is paid out in two equal payments after you leave
the company (after six months and 12 months respectively).
	 
	 	 
	DEATH BENEFITS

	 	DC Plan
	 
	 	 
	 

	 	v   If you die before transferring your DC account out of the Plan,
your spouse or beneficiary will receive your account balance.

	 
	 	 
	 

	 	v   If you die after transferring your DC account out of the Plan,
your spouse or beneficiary will receive the amounts payable under the
terms of the locked-in retirement savings vehicle or authorized
retirement income vehicle that you chose.

	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	v   If you die before leaving the Company, your spouse or
beneficiary will receive a lump-sum payment equal to 100% of your DC
SERP account in cash, less applicable taxes.

	 
	 	 
	 

	 	v   If you die after leaving the Company, but before having received
the amount to which you were entitled when you left the Company, your
spouse or beneficiary will receive any remaining payment that you would
have been entitled to receive had you not died. This amount is paid in
cash, less applicable taxes.

 

 

ELIGIBILITY

You participate in the retirement program as of January 1, 2009, if you are employed in a
position corresponding to salary grade 29 (Level 29) or above, you are listed on the Canadian
payroll,, and are not accruing benefits in the defined benefit SERP sponsored by the Company. Any
executive who is hired into or appointed to a position corresponding to salary grade 29 or above
after January 1, 2009, will automatically become a participant in the retirement program.

You will cease to be eligible for any contributions as of the date you are no longer actively
employed in a position corresponding to salary grade 29 or above. If you move to a position
corresponding to salary grade 28 or below, you will be covered under the plan for non-unionized
employees in Canada.

CONTRIBUTIONS

Contributions are allocated to two plans under the retirement program:

	v	 	the DC Plan (for total employee and Company contributions up to Canadian Income Tax Act limits); and
	 
	v	 	the DC SERP (for Company contributions in excess of Canadian Income Tax Act limits).

Your contributions to the retirement program are equal to 5% of your eligible earnings, up to the
US Compensation Limit. The US Compensation Limit is set by the US Internal Revenue Service and is
equal to $245,000 for the year 2009; it is expected to rise annually in future years. These
contributions are allocated to the DC Plan. Your contributions are made by payroll deductions and
are deposited in your DC Plan according to the timeframes required by law.

The contributions are shown in the following table:

	 	 	 	 	 
	 	 	 	 	THE COMPANY
	CONTRIBUTIONS	 	YOU CONTRIBUTE	 	CONTRIBUTES
	BASIC

	 	5% of your
eligible earnings*
	 	10.5% of your
eligible earnings
	 
	 	 	 	 
	ADDITIONAL
	 	 	 	 
	v   For executives
at salary grade 33 and
above and direct reports
to the CEO

	 	None
	 	10% of your
eligible earnings
	 
	 	 	 	 
	v   For the CEO

	 	None
	 	12% of your
eligible earnings

 

			
	*	 	Up to the US Compensation Limit

Company contributions are first deposited in the DC Plan, up to Canadian Income Tax Act
limits. Any amount that exceeds Canadian Income Tax Act limits is then allocated to the DC SERP in
a personal notional account set up by the Company.

 

 

Eligible earnings

Your eligible earnings include your base salary as well as your paid bonus under the annual
incentive plan. Your paid bonus excludes any special bonuses unless authorized by the Company.

Tax limits

The sum of your contributions and the Company’s contributions to the DC Plan is subject to the
limit prescribed under the Canadian Income Tax Act. In 2009, contributions to the DC Plan are
limited to $22,000. This amount is expected to rise annually after 2009.

Contributions: Example 1

Let’s say that Richard is a Grade 31 executive and receives $300,000 in eligible earnings
(base salary and eligible bonuses) in 2009. This is how his retirement program contributions would
be allocated for that year:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	HOW THE CONTRIBUTIONS ARE	 
	 	 	TOTAL	 	 	ALLOCATED	 
	 	 	CONTRIBUTIONS	 	 	DC PLAN	 	 	DC SERP	 
	Richard’s contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	5% x $245,000
(earnings, up to US
Compensation Limit)
	 = 	$	12,250	 	 	$	12,250	 	 	$	0	 
	Company contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	10.5% x $300,000
	 = 	$	31,500	 	 	$	9,750	 	 	$	21,750	 
	TOTAL CONTRIBUTIONS
	 = 	$	43,750	 	 	$	22,000	*	 	$	21,750	 

 

			
	*	 	Canadian Income Tax Act limit (this amount is expected to rise annually after 2009).

Contributions: Example 2

Let’s say that John is a Grade 29 executive and receives $200,000 in eligible earnings (base
salary and eligible bonuses) in 2009. This is how his retirement program contributions would be
allocated for that year:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	HOW THE CONTRIBUTIONS ARE
	 	 	TOTAL	 	 	ALLOCATED
	 	 	CONTRIBUTIONS	 	 	DC PLAN	 	 	DC SERP	 
	John’s contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	5% x $200,000
	 = 	$	10,000	 	 	$	10,000	 	 	$	0	 
	Company contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	10.5% x $200,000
	 = 	$	21,000	 	 	$	12,000	 	 	$	9,000	 
	TOTAL CONTRIBUTIONS
	 = 	$	31,000	 	 	$	22,000	*	 	$	9,000	 

 

			
	*	 	Canadian Income Tax Act limit (this amount is expected to rise annually after 2009).

 

 

Withdrawal of contributions

No amount can be withdrawn from your DC account or received from the DC SERP as long as you
are employed by the Company.

VESTING 

DC Plan

You are immediately 100% vested in your DC Plan account. In other words, your DC Plan account
balance belongs to you entirely as of your first day of membership in the plan.

DC SERP

If you leave the Company voluntarily, the amount you receive from the DC SERP will depend on
your age when you leave. The vesting schedule for the DC SERP is as follows:

	 	 	 	 	 	 
	VESTED %	 	ATTAINED AGE	 
	50
	%	 	Prior to 55
	70
	%	 	55
	80
	%	 	56
	90
	%	 	57
	100
	%	 	58

If you terminate employment after age 55 but before age 58, the specific vesting percentage
will be interpolated and rounded to the closest month of age.

Accelerated vesting

Immediate vesting upon termination without cause

If you are involuntarily terminated for any reason other than “with cause,” you will
immediately become 100% vested in your DC SERP balance. For purposes of the DC SERP, “cause” means
the definition, if any, in your employment agreement or other individual agreement you may have
with the Company. If you do not have an agreement, “cause” will be determined by the Company in
its sole discretion.

If your employment is terminated with cause by the Company, you will lose your DC SERP balance.

Immediate vesting upon death

If your employment terminates due to death, you will be fully vested in your DC SERP balance.

 

 

HOW YOUR MONEY GROWS

DC Plan

The DC Plan offers a variety of investment funds through Sun Life Financial, the DC plan
service provider. A range of funds has been pre-selected in terms of their risk-return balance.
However, you choose how to allocate your and the Company’s contributions among these funds.

You make your own decisions on how to invest your contributions and those of the Company. There are
several factors to consider when determining which investments are right for you. Some of these
factors are your age, investment horizon, retirement goals, level of risk tolerance, investment
knowledge, personal situation, net worth and liquidity requirements.

The gains and losses generated by your investment choices are reflected on your account balance.
They have a direct impact on the amount that you will have at your disposal when you retire.
Therefore, it is important to determine your investment strategy carefully and review it from time
to time to meet your changing needs over the years.

To plan your retirement, it is important to familiarize yourself with these investment funds and
choose those that are consistent with your goals. Please refer to the information kit from Sun Life
Financial for more detailed information on the investment funds and the tools available to you. To
make informed decisions, you may also want to seek independent financial advice.

Investment gains (or losses) are not taxable while the funds remain in the plan.

Investment decision responsibility

The Company assumes no responsibility for the investment decisions made by plan members, or
the resulting investment return (positive or negative). However, the pension committees (see Plan
Administration for more details) will monitor the investment funds offered under the DC Plan to
assess their general performance and their risk-return ratio.

Making changes to your investment allocations

You can change your investment instructions at any time for future contributions. You can
transfer amounts between funds anytime at no cost to you, subject to a market value adjustment in
the case of guaranteed funds, where applicable.

Please note that to prevent short-term trading, Sun Life Financial may charge a 2% fee to plan
members who initiate an inter-fund transfer into a fund followed by a subsequent inter-fund
transfer out of the same fund within 30 calendar days.

 

 

Information on your DC account

You can access your DC account balance through Sun Life Financial’s automated telephone
system, Customer Care Service Centre, or through its Plan Member Services web site. By entering
your personal Access ID, you can obtain the following information:

	 	v	 	your account balance;
	 
	 	v	 	interest rates and fund performance information;
	 
	 	v	 	accumulated contributions in your account;
	 
	 	v	 	information on investment options.

In addition, Sun Life Financial will send you a statement of account specifying the transactions
entered since the last statement, your investments and your account balance.

You can access the Sun Life Financial web site and customer care centre at:

	 	v	 	www.sunlife.ca/member (to access your accounts, you will need a personal Access ID and Password);
	 
	 	v	 	1-866-733-8612.

Administration and investment fees

The funds offered under the DC Plan are managed by professional institutional investment
managers. As with any other investment fund, you pay investment management fees based on the type
of fund you select. Investment fees are charged for the work investment managers do on your behalf.
However, these fees are generally lower than those you may incur when investing on an individual
basis.

In addition, Sun Life Financial charges a small fund-operating expense based on the overall assets
held in each fund.

The Company will pay a portion of the applicable administration fees. Details on administrative and
investment management fees can be found on Sun Life Financial’s web site.

DC SERP

The plan administrator (see Plan Administration) will establish a notional account to reflect
your DC SERP balance. The accounts are established solely for the purpose of tracking contributions
and adjustments for income or losses. The accounts will not be used to segregate actual assets.
Unlike your DC Plan account, your account under the DC SERP does not entitle you to ownership of
any actual assets until funds are ultimately distributed to you.

Company contributions will be credited to your account. Your account balance from the previous
year, if any, will be credited with interest each year at a rate equal to the average rate of
return on the balanced funds offered in the DC Plan during the year. Interest on contributions will
be allocated to your account on an annual basis.

Each year, you will receive a statement of your notional account reflecting all contributions and
investment returns (positive or negative) accrued during the prior year.

 

 

TERMINATION OR RETIREMENT

DC Plan

Termination

If your employment terminates, you are entitled to your full DC account balance, which
includes your contributions, the Company’s contributions and your investment income.

When you leave the Company, your contributions, those made by the Company and your investment
income can be transferred to a locked-in retirement savings vehicle on a tax-sheltered basis. You
can also keep your account in the Company plan. You will, however, need to transfer it to an
authorized retirement income vehicle when you want to receive a retirement income.

You will not be able to make withdrawals from your DC account (your account is locked in), except
for special situations prescribed by pension legislation (see Other information — Reimbursements
for special cases). The locked-in retirement account (LIRA) is the most common locked-in retirement
savings vehicle.

Retirement

To receive a retirement income, you must transfer your account balance to an authorized
retirement income vehicle. The most common vehicles are a lifetime annuity purchased from an
insurance company of your choice and a life income fund (LIF) established with a financial
institution of your choice.

The amount of your retirement income will depend on the following factors:

	 	v	 	The total amount of your contributions and the Company’s contributions;
	 
	 	v	 	Your investment return (positive or negative). The higher your investment
return, the higher your capital will be to provide for a retirement income;
	 
	 	v	 	Your age when you start receiving your retirement income.

If you opt for an annuity, the following factors also apply:

	 	v	 	The annuity purchase price, including interest rates in effect when you
purchase the annuity. The higher the interest rates, the higher your annuity will be;
	 
	 	v	 	The form of annuity payment. If you have a spouse when you buy an annuity, you
are required by law to purchase a 60% joint and survivor annuity. Under this form of
payment, 60% of your annuity continues to your spouse for life upon your death. If your
spouse waives the survivor annuity in writing, you may opt for another form of payment,
such as a lifetime annuity with a 10-year or 15-year guarantee.

 

 

Authorized retirement income vehicles

According to current laws, you have the following retirement income options:

	 	v	 	A life income fund (LIF) with a financial institution;
	 
	 	v	 	A locked-in retirement income fund (LRIF) with a financial institution (in
Newfoundland and Labrador only); and
	 
	 	v	 	A life annuity purchased from an insurance company.

If you are under age 71 and you do not wish to start receiving your retirement income immediately,
you can transfer your account balance to a locked-in retirement account (LIRA).

These retirement income vehicles are described in more detail in the Appendix. Note that this
decision only needs to be made at retirement.

DC SERP

After you leave the Company, your vested DC SERP account (see Vesting) is paid in cash, less
applicable taxes. It is paid out in two equal payments after you leave the Company (after six
months and 12 months respectively). If you die before payment is completed, any remaining payment
will be made to your spouse or beneficiary in a lump sum, less applicable taxes.

Right of offset

The Company will have the right to offset any amounts payable to you under the DC SERP by any
amount necessary to reimburse the Company for liabilities or obligations you have to the Company,
including any amounts misappropriated by you.

 

 

DEATH BENEFITS

DC Plan

Death BEFORE retirement

If you die before retirement, your spouse or beneficiary will receive your DC account balance.
Payment of the death benefit varies by province and depends on whether the payment is made to your
spouse or another beneficiary.

Death benefit payable to your spouse

          In Newfoundland and Labrador, your spouse has the following options:

	 	v	 	If you die before age 55: tax-free transfer to an RRSP or cash payment,
less applicable income taxes;
	 
	 	v	 	If you die at age 55 or after: transfer to a locked-in retirement savings
vehicle.

In New Brunswick, Nova Scotia, Ontario and Quebec, your spouse may transfer the value of
your account to an RRSP (on a tax-free basis) or receive a cash payment, less applicable
income taxes.

Death benefit payable to another beneficiary

          The account balance is paid in cash, less applicable income taxes.

Death DURING retirement

If you die during retirement, your spouse, at the time you retire, or your beneficiary, will
receive the sums payable under the authorized retirement income vehicle you chose. If such vehicle
is an annuity, death benefits will be paid according to the form of payment provided by the annuity
contract.

DC SERP

Death BEFORE termination of employment

If you die before leaving the Company, your spouse or beneficiary will receive 100% of your DC
SERP account in cash, less applicable taxes.

Death AFTER termination of employment

If you die after leaving the Company, but before having received the amount to which you were
entitled when you left the Company, your spouse or beneficiary will receive any remaining payment
that you would have been entitled to receive had you not died. This amount is paid in cash, less
applicable taxes.

Your DC SERP beneficiary is the same person designated as your DC Plan beneficiary.

 

 

OTHER KEY EVENTS 

Disability

If you become disabled after December 31, 2008, and are entitled to benefits under the
Company’s short-term disability plan, you and the Company will continue to contribute to the DC
Plan and DC SERP during this period. Contributions will be based on your eligible earnings before
the start of your disability leave.

If you become disabled after December 31, 2008, and are entitled to benefits under the Company’s
long-term disability plan, the Company will continue to make contributions to your plans, as well
as the contributions you were making the day before the start of your disability leave.
Contributions will be based on your eligible earnings before the start of your disability leave.

Maternity, paternity or parental leave (including adoption)

You may continue to contribute to the DC Plan during a maternity, paternity or parental leave
based on your earnings before the start of your leave. If you contribute to the plans during your
leave, the Company will also contribute.

Marriage breakdown

DC Plan

In the event of marriage breakdown, your DC account balance may be split between you and your
spouse, depending on the legislation in your province. We recommend you seek legal advice in such
situations.

DC SERP

The notional account accrued in the DC SERP is not split between spouses. At retirement, the
notional account is paid as if no split of the DC plan has occurred.

 

 

NON-COMPETE / CONFIDENTIALITY PROVISIONS

DC SERP

You will lose your right to receive any money from the DC SERP if it is found that you have
not respected the terms of the non-compete provisions (for two years following termination of
employment) or confidentiality provisions (no limit) stipulated under the DC SERP plan text. The
Company also reserves the right to seek reimbursement (with interest) of any amount paid under the
DC SERP if it is found that you have not respected the above conditions.

Non-compete provision

During your employment with the Company or during a period of two years following your
termination of employment or retirement, you must not, directly or indirectly, without the consent
of the Company:

	v	 	Engage in or become interested as a principal, agent,
officer, employee, manager, advisor, financial backer,
shareholder (except as a passive investor in a public
corporation) or in any other capacity whatsoever in a North
American business that may be fairly regarded as being in
competition with the business of the Company;
	 
	v	 	Assist financially or in any manner whatsoever any
person, firm, association or corporation, whether as
principal, agent, officer, employee, manager, advisor,
financial backer, shareholder (except as a passive investor
in a public corporation) or in any capacity whatsoever to
enter into, develop, carry on or maintain a North American
business that may fairly be regarded as being in competition
with the business of the Company.

Confidentiality provision

During your employment with the Company or at any time thereafter, you must not disclose any
information of a confidential or proprietary nature concerning the Company, its subsidiaries and
affiliates and their respective operations, assets, finances, business and affairs, or use such
information for personal advantage. However, nothing in this provision prevents you from disclosing
information that is publicly available or that is required to be disclosed under appropriate
statutes, rules or law or legal process. In the event of doubt regarding the confidentiality of any
information, you must verify the confidential nature of the information with the Company.

PLAN ADMINISTRATION

DC Plan

The Company sponsors two defined contribution plans: the Defined Contribution Pension Plan for
Non-Unionized Employees of Abitibi-Consolidated Inc. and the DC Retirement Plan (2003) for
Non-Unionized Employees of Bowater. Each of these plans is administered by a pension committee.

 

 

Each pension committee is made up of a number of individuals who have the right to vote, and are
nominated as follows:

	 	v	 	Up to 5 individuals are designated by the Company;
	 
	 	v	 	1 individual is designated by active members at the annual meeting (or,
failing such designation, by the Company);
	 
	 	v	 	1 individual is designated by non-active members at the annual meeting (or,
failing such designation, by the Company); and
	 
	 	v	 	1 independent individual, who is neither a plan member nor Company
representative, is designated by the Company.

The group formed by the active members and the group formed by the non-active members may also each
designate an additional non-voting pension committee member at the annual meeting.

The committees delegate the administrative duties of the plans to experts.

The following employers participate in the DC Plan:

	 	v	 	For the Defined Contribution Pension Plan for Non-Unionized Employees of
Abitibi-Consolidated Inc.:

	 	–	 	Abitibi Consolidated Inc.; and
	 
	 	–	 	Abitibi-Consolidated Company of Canada.

	 	v	 	For the DC Retirement Plan (2003) for Non-Unionized Employees of Bowater:

	 	–	 	Bowater Canadian Forest Products Inc.;
	 
	 	–	 	Bowater Maritimes Inc.; and
	 
	 	–	 	Bowater Mersey Paper Company Ltd.

DC SERP

Except with respect to certain portions of claims administration and amendment authority, the
Company has appointed the Senior Vice President – Human Resources to serve as the plan
administrator until the Company decides that another individual or committee should serve as plan
administrator. The plan administrator oversees the administration of the DC SERP and has complete
authority to determine the rights and benefits and all claims, demands and actions arising out of
the provisions of the DC SERP document.

Among other duties and responsibilities, the plan administrator, in its discretion, interprets and
construes the DC SERP document’s terms, identifies the class of eligible individuals, and decides
any matters brought under the DC SERP. The plan administrator’s interpretation of the DC SERP
document’s terms and its decisions under the DC SERP are final, conclusive and binding on all
participants and any beneficiary or other person claiming under or through any participant, in the
absence of clear and convincing evidence that the plan administrator acted arbitrarily or
capriciously. Benefits under the DC SERP will be paid only if the plan administrator decides that
the individual is entitled to them. When making a determination or calculation, the plan
administrator will rely on information furnished by you, your beneficiary and the Company.

 

 

The plan administrator may establish rules and procedures to administer the DC SERP. In addition,
the plan administrator may appoint such officers or agents, and may delegate such powers and duties
and shall follow such claims and appeal procedures with respect to the DC SERP as it may establish.
The plan administrator or individuals acting on its behalf shall receive reimbursement for any
reasonable business expense incurred in the performance of his or her duties.

If the plan administrator is a participant in the DC SERP, the plan administrator will not vote or
act on any matter relating solely to himself or herself.

Consulting the text of the retirement program

The official text of the retirement program for your participating employer may be examined at
the following address: Pension and Benefits Department, 1155 Metcalfe Street, Suite 800, Montreal,
Quebec, H3B 5H2. If you are not located in the Montreal area, a copy of the plan text may be
obtained, at no charge, upon written request to the same address.

 

 

OTHER INFORMATION

Beneficiary designation

For the DC Plan, provincial pension laws provide that your spouse is the sole beneficiary of
the benefits payable upon your death. However, your spouse can waive this right, except in New
Brunswick, Newfoundland and Labrador and Nova Scotia (with respect to pre-retirement death
benefits), before the payment of your death benefits. To do so, your spouse must complete a waiver
form and forward it to your pension committee.

If your spouse waives this right, you can designate any other beneficiary of your choice. Note that
waiving rights to death benefits does not reduce a spouse’s rights to an eventual split of benefits
upon a marriage breakdown.

The spouse can also cancel the waiver before your death (for pre-retirement death benefits) or
before the payment of your retirement benefits (post-retirement death benefits). In such a case,
any beneficiary designation you may have made would be without effect.

Please refer to the definition of spouse in each province for more information (see Appendix).

If you do not have a spouse, you can designate the beneficiary of your choice. If you make no
designation, benefits payable upon your death will be paid to your estate.

Benefits from other Company pension plans

If you have accrued benefits under other pension plans of the Company for prior service, these
benefits will be paid according to the provisions of those plans.

DC SERP funding

The DC SERP is considered “unfunded” for tax purposes and constitutes a promise by the Company
to make payments as provided under the DC SERP. As such, you and your beneficiaries will have the
status of general unsecured creditors of the Company. Nothing in the DC SERP or this booklet shall
be construed to give you or any other person rights to any specific assets of the Company or of any
other person.

The Company may authorize a trust to hold the assets on behalf of the DC SERP. Even in such a case,
the assets will remain subject to the claims of creditors of the Company and the DC SERP will
retain its status as an unfunded plan for tax purposes.

Restriction against assignment

DC SERP benefits, payments or proceeds will not be subject to any claim of any creditor of you
or your beneficiary and will not be subject to attachment or garnishment or other legal process.
You may not assign, pledge or encumber your account or any benefits payable to you under the DC
SERP.

 

 

Receipt and release

Any distribution made from the DC SERP will be in full satisfaction of all claims against the
Company, the plan administrator and a trustee (if any) under the DC SERP. The plan administrator
may require you to execute a receipt or release to such effect as a condition to your distribution.

No right of employment

Nothing in the DC SERP gives you any right to be employed or to continue in the employ of the
Company, or to limit the Company’s right to terminate your employment at any time, or to modify any
of your compensation.

Fiscal year

The fiscal year of the retirement program runs from January 1 to December 31.

Reimbursements for special cases

Small amounts

For the DC Plan, if the amount payable upon your termination of employment or retirement is
small, it is not locked in. In that case, you can receive it in cash, less applicable income taxes,
or transfer it to a personal RRSP.

Quebec members who stopped residing in Canada

You can receive the value of your benefits from the DC Plan in cash, less applicable income taxes, if:

	 	v	 	You are considered a Quebec member; and
	 
	 	v	 	Your employment ended or you are retired; and
	 
	 	v	 	You stopped residing in Canada at least two years before the reimbursement date.

Transfers from other plans

If you have transferred locked-in funds into the DC Plan from another plan, these funds will
continue to grow according to your investment instructions. No transfers are allowed to the DC
SERP.

While the Company intends to continue the retirement program,

it reserves the right to modify or terminate this arrangement at any time.

 

 

APPENDIX – DEFINITIONS

Life annuity

A life annuity purchased from an insurance company provides a monthly amount payable for the
rest of your life. Once you have purchased an annuity, you generally cannot transfer it to another
insurer, nor convert it into another authorized retirement income vehicle.

The amount of your annuity will depend, among other things, on the following factors:

	 	v	 	The funds at your disposal to purchase an annuity;
	 
	 	v	 	Your age at the time you purchase the annuity and the date payments begin,
because the insurance company estimates your life expectancy, that is, the number of years
during which the annuity may be paid to you; and
	 
	 	v	 	The annuity purchase rates prevailing on the market at the time you buy the
annuity.

Your annuity may include various guarantees. The following table presents some examples. However,
note that the provincial laws require that all annuities purchased with locked-in funds (like your
DC Plan) must allow for the payment of part of the annuity to the spouse upon the retiree’s death.
This is what is called a joint and survivor annuity. A written waiver will be required if you wish
to provide a survivor benefit to someone other than your spouse.

	 	 	 
	LIFE ANNUITY

	 	The annuity is payable for the rest of your life. No benefits are payable upon your death.
	 
	 	 
	GUARANTEED LIFE ANNUITY

	 	The annuity is payable for the rest of your life. A minimum number of payments are guaranteed, for
example 60 or 120 monthly payments. If you die before the end of the guarantee period, your spouse, or
beneficiary, as provided under the annuity contract, receives the balance of the payments. No benefits
are payable to your spouse or beneficiary if you die after the guarantee period. Please note that if
you have a spouse and wish to elect a guaranteed life annuity, you must obtain a waiver from your
spouse.
	 
	 	 
	JOINT AND SURVIVOR ANNUITY

	 	After your death, your spouse receives a life annuity equal to a percentage of yours, for example, 60%.

An indexed annuity may be combined with any of these options. This annuity increases by a
specific percentage each year and provides a certain degree of inflation protection during your
retirement.

Other combinations of these options are also possible. Your decision only needs to be made at
retirement.

 

 

Life income fund (LIF)

A LIF is an authorized retirement income vehicle from which you make withdrawals each year,
subject to a minimum and a maximum established by law. The purpose of this legal requirement is to
ensure that you will continue to receive a retirement income for the rest of your life.

You may transfer your LIF to another financial institution, according to the terms of the LIF.

In the event of your death, the balance of your LIF is payable to your spouse or beneficiary.

Locked-in retirement account (LIRA)

A LIRA is a locked-in retirement savings vehicle similar to an RRSP but from which you cannot
make withdrawals. You can however transfer your LIRA from one financial institution to another, in
compliance with the terms of the LIRA.

In the event of your death, the balance of your LIRA is payable to your spouse or beneficiary.

Locked-in retirement income fund (LRIF)

A LRIF is only available in Newfoundland and Labrador. A LRIF is similar to a LIF but offers
more flexibility. Members are not required to convert the LRIF into a life annuity.

Spouse

The definition of spouse under a registered pension plan, such as the DC Plan, varies by
province. Your spouse is the person who meets the definition at the time of your retirement (or
death, if before retirement). Detailed definitions are provided below.

New Brunswick

          The person of the opposite sex who:

	 	v	 	Is married to you; or
	 
	 	v	 	Is married to you by a marriage that is voidable and has not been avoided
by a declaration of nullity; or
	 
	 	v	 	Has gone with you, in good faith, through a form of marriage that is void
and who has cohabited with you within the preceding year; or
	 
	 	v	 	Without being married to you, has cohabited with you in a conjugal
relationship continuously for at least three years, and part of this three year period
was within the preceding year, provided that one of you has been substantially
dependent upon the other for support; or
	 
	 	v	 	Without being married to you, has cohabited with you in a relationship of
some permanence within the preceding year, if you jointly are the natural parents of a
child.

 

 

Newfoundland and Labrador

          The person who:

	 	v	 	Is not married to you and:

	 	–	 	if you are not married to someone else, has cohabited continuously with
you in a conjugal relationship for a period of at least one year; or
	 
	 	–	 	if you are married to someone else, has cohabited continuously with you
in a conjugal relationship for a period of at least three years,

	 	v	 	And is cohabiting, or has cohabited with you within the preceding year; or

          If there is no person that qualifies as a spouse under the above definition, the person who:

	 	v	 	Is married to you; or
	 
	 	v	 	Is married to you by a marriage that is voidable, which has not been
voided by a judgment of nullity; or
	 
	 	v	 	Has, in good faith, gone through a form of marriage with you that is void
and is cohabiting or has cohabited with you within the preceding year.

Nova Scotia

          The person who:

	 	v	 	Is not living separate and apart from you and:

	 	–	 	Is married to you;
	 
	 	–	 	Is married to you by a marriage that is voidable and has not been
annulled by a declaration of nullity;
	 
	 	–	 	With whom you have gone through a form of marriage, in good faith, that
is void and who is cohabiting with you or, if you have ceased to cohabit, has
cohabited with you within the immediately preceding 12-month period;
	 
	 	–	 	Is your “registered domestic partner” under the Nova Scotia Vital
Statistics Act; or

	 	v	 	If there is no person to whom the above definitions apply, the person who
has cohabited with you in a conjugal relationship for at least two years, provided that
neither of you is the spouse of another person as defined in the points mentioned
above.

Ontario

          The person who:

	 	v	 	Is married to you and is living with you; or
	 
	 	v	 	Is not married to you and has been living with you,

	 	–	 	In a conjugal relationship continuously for a period of at least three years; or
	 
	 	–	 	In a conjugal relationship of some permanence if you both are the
natural or adoptive parents of a child.

 

 

Quebec

	 	v	 	The person who is married to you and is not legally separated from bed and
board from you or is in a civil union with you; or
	 
	 	v	 	If you are neither married nor in a civil union with anyone, a person of the
opposite sex or the same sex who has been living in a conjugal relationship with you for a
period of at least three years, or for a period of at least one year if:

	 	–	 	At least one child is born, or to be born, of your union;
	 
	 	–	 	You have jointly adopted at least one child; or
	 
	 	–	 	One of you has adopted at least one child of the other.

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