Document:

Exhibit 10.9

Exhibit 10.9

CATALYST PAPER CORPORATION

AMENDED AND RESTATED STOCK OPTION PLAN

	1.	 	NAME AND PURPOSE OF PLAN

	1.1.	 	This stock option plan shall be known as the Catalyst Paper Stock Option Plan.

	1.2.	 	The purpose of the Plan is to align the financial interests of management with those of the
shareholders and to encourage a focus on strategies and results that enhance shareholder value
in the longer term.

	2.	 	INTERPRETATION

	 
	 	 	In this Plan, unless the context otherwise requires:

	 
	2.1.	 	“Board of Directors” or “Board” means the Board of Directors of the Corporation.

	2.2.	 	“Committee” means the Governance and Human Resources Committee of the Board of Directors or
another committee appointed by the Board of Directors as contemplated in subsection 4.2.

	2.3.	 	“Corporation” means Catalyst Paper Corporation and any successor or continuing company
resulting from the amalgamation of the Corporation and any other company or resulting from any
other form of corporate reorganization.

	2.4.	 	“Director” means a director of the Corporation.

	2.5.	 	“Employee” means an individual who is an officer or a bona fide full-time salaried employee
of the Corporation or any of its Subsidiaries or of any combination or partnership of such
corporations or companies.

	2.6.	 	“Market Price” means the price per Share equal to the weighted average price per Share for
all sales of the Shares on The Toronto Stock Exchange during the five consecutive trading days
preceding the date on which a determination of Market Price is required under the Plan
provided however that for Optionees who are subject to United States federal taxation Market
Price means the greater of:

	 	(i)	 	the price per Share equal to the weighted average price per Share for all sales
of the Shares on The Toronto Stock Exchange during the five consecutive trading days
preceding the date on which a determination of Market Price is required under the Plan;
and

	 
	 	(ii)	 	the weighted average price per Share for all sales of the Shares on the Toronto
Stock Exchange on the day preceding the day on which a determination of Market Price is
required under the Plan.

 

 

 

	2.7.	 	“Option” means any option granted pursuant to the Plan and evidenced by an agreement in such
form and not inconsistent with the Plan as the President of the Corporation shall approve from
time to time.

	 
	2.8.	 	“Optionee” means an Employee or Director who has been granted an Option.

	2.9.	 	“Option Price” means the price per Share at which Optioned Shares may be subscribed for
pursuant to an Option as determined pursuant to section 6 (Option Price) subject to adjustment
in accordance with the provisions of section 14 (Changes in Capitalization or Number of
Outstanding Shares).

	 
	2.10.	 	“Optioned Shares” means the Shares subject to an Option or Options, as the case may be.

	2.11.	 	“Plan” means this Stock Option Plan as embodied herein and as from time to time amended in
accordance with the provisions hereof, and the guidelines, rules and regulations from time to
time in effect hereunder.

	2.12.	 	“Shares” means Common Shares without par value in the capital of the Corporation, as
constituted at the effective date hereof.

	2.13.	 	“Subsidiary” means any corporation or company of which outstanding securities to which are
attached more than 50% of the votes that may be cast to elect directors thereof are held
(provided that such votes are sufficient to elect a majority of such directors), other than by
way of security only, by or for the benefit of the Corporation and/or by or for the benefit of
any other corporation or company in like relation to the Corporation, and includes any
corporation or company in like relation to a Subsidiary.

	2.14.	 	If at any time when the Market Price is required to be determined under the Plan the Shares
are not then listed and posted for trading on The Toronto Stock Exchange, such determinations
shall be made on the basis of trading on such stock exchange on which the Shares are then
listed as may be selected by the Committee or if not then listed on any stock exchange, in the
over-the-counter market as determined by the Committee (in any such case, if expressed in
other than Canadian funds, then converted to Canadian funds at the noon rate of exchange
reported by the Bank of Canada for the most recently preceding day for which the rate of
exchange between Canadian currency and the currency in which such price is expressed is
available).

	2.15.	 	The masculine gender shall include the feminine gender and the singular shall include the
plural and vice versa.

	2.16.	 	A reference to a section includes all subsections in that section.

 

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	3.	 	SHARES SUBJECT TO THE PLAN

	3.1.	 	Subject to adjustment in accordance with the provisions of section 14 (Changes in
Capitalization or Number of Outstanding Shares), the maximum number of Shares which may be
reserved for issuance pursuant to Options shall be 12,000,000.

	4.	 	GRANT OF OPTIONS AND ADMINISTRATION OF THE PLAN

	4.1.	 	Persons eligible to receive Options under the Plan shall be limited to Employees and
Directors.

	4.2.	 	This Plan will be administered by the Committee or, if the Board so determines, by another
committee of the Board duly appointed for this purpose by the Board and consisting of not less
than three directors, a majority of whom shall not be Employees.

	4.3.	 	Subject only to the express provisions of the Plan, the Committee shall have, and hereby is
specifically granted, the sole authority:

	 	4.3.1.	 	to grant Options to Employees and Directors and to determine the Option Price and
other terms of, and the limitations, restrictions and conditions upon, such grants;

	 
	 	4.3.2.	 	to authorize any officer or officers to execute and deliver any Option agreement,
notice or document and to do any other act as contemplated by the terms of the Plan for
and on behalf of the Corporation;

	 
	 	4.3.3.	 	to interpret the Plan and to adopt, amend and rescind such administrative guidelines
and other rules and regulations relating to the Plan as it may from time to time deem
advisable; and

	 
	 	4.3.4.	 	to make all other determinations and perform all such other actions as the Committee
deems necessary or advisable to implement and administer the Plan.

	4.4.	 	The determinations of the Committee under the Plan (including, without limitation,
determinations of the Employees and Directors who are to receive Options, the number of
Optioned Shares and timing of Options), need not be uniform and may be made by it selectively
among Employees and Directors who receive, or are eligible to receive, Options under the Plan,
whether or not such Employees and Directors are similarly situated as to office, length of
service, salary or any other factor. The Committee may, in its discretion, authorize the
granting of additional Options to an Optionee before an existing Option has terminated.

	4.5.	 	All guidelines, rules, regulations, decisions and interpretations of the Committee respecting
the Plan or Options shall be binding and conclusive on the Corporation and on all Optionees
and their respective legal personal representatives, heirs and legatees and on all Employees
and Directors.

 

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	4.6.	 	Notwithstanding any other provisions of the Plan and except as otherwise may be permitted
under the applicable rules of The Toronto Stock Exchange at any time while the Shares are
listed on The Toronto Stock Exchange:

	4.6.1.	 	No Option shall be granted if the aggregate number of Shares reserved for issuance pursuant
to Options and any other security based compensation arrangement of the Corporation:

	 	4.6.1.1.	 	to any one person would exceed 5%, or

	 
	 	4.6.1.2.	 	to insiders would exceed 10%, of the total issued and outstanding Shares.

	4.6.2.	 	No Shares shall be issued pursuant to the exercise of an Option to the extent that:

	 	4.6.2.1.	 	the aggregate number of Shares issued to insiders within a one-year period pursuant
to Options and any other security based compensation arrangement would exceed 10%, or

	 	4.6.2.2.	 	the aggregate number of Shares issued to any one insider and that insider’s
associates within a one-year period pursuant to Options and any other security based
compensation arrangement

	 
	 	would exceed 5% of the Shares outstanding on a non-diluted basis immediately prior to the
proposed Share issuance excluding Shares issued pursuant to Options and any other security
based compensation arrangement over the preceding one-year period.

	4.6.3.	 	For the purposes of subsections 4.6.1.2 and 4.6.2, an entitlement granted prior to the
grantee becoming an insider shall be excluded in determining the numbers of Shares reserved
for issuance to or issued to insiders.

	4.6.4.	 	For the purposes of this subsection 4.6, the expressions “insider”, “reserved for issuance”,
“security based compensation arrangement” and “stock option” shall have the meanings ascribed
to them under the rules of The Toronto Stock Exchange.

	5.	 	TERM OF OPTIONS

	5.1.	 	Each Option shall be for the term determined by the Committee, but in no case shall an Option
be granted by the Committee for a term of longer than ten years from the date of the granting
of the Option, provided that in the circumstance where the end of the term of an Option falls
within, or within two business days after the end of, a “black out” or similar period imposed
under any insider trading policy or similar policy of the Corporation (but not, for greater
certainty, a restrictive period resulting from the Corporation or its insiders being the
subject of a cease trade order of a securities regulatory authority). In such circumstances,
the end of the term of such Option shall be the tenth business day after the earlier of the
end of such black out period or, provided the black out period has ended, the expiry date.

 

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	6.	 	OPTION PRICE

	6.1.	 	The Option Price for any Option shall be determined by the Committee, but shall not be less
than the Market Price on the date on which the Option is granted and may be subject to
escalation as determined by the Committee on or prior to the date of grant and specified in
the Option agreement.

	7.	 	EXERCISE OF OPTIONS

	7.1.	 	Subject to the provisions of subsection 7.5 and of sections 10 (No Fractional Shares), 11
(Death or Retirement of Optionee), 12 (Termination of Employment of Optionee) and 14 (Changes
in Capitalization or Number of Outstanding Shares), each Option shall be exercisable as
follows:

	 	7.1.1.	 	within each year after the date of grant of the Option, the Optionee may exercise his
rights as to such percentage of the Optioned Shares or any part thereof as may be
determined by the Committee and specified in the Option agreement;

	 	7.1.2.	 	the Optionee may also exercise his rights to all or any part of that number of Shares
which he could have but did not purchase upon exercise of his Option in the preceding
year or years of the term of his Option.

	7.2.	 	An Option may be exercised by the Optionee or his personal representatives, heirs or legatees
at the applicable times and in the applicable amounts by giving to the Corporation at its
principal executive office written notice of exercise specifying the number of Shares to be
subscribed for. Such notice must be accompanied by full payment for the Shares to be
subscribed for. Upon any such exercise of an Option, the Corporation shall forthwith cause the
transfer agent and the registrar of the Corporation for the time being to deliver to the
Optionee or his personal representatives, heirs or legatees (or as the Optionee or his
personal representatives, heirs or legatees may otherwise direct in the written notice of
exercise) a certificate or certificates in the name of the Optionee or his personal
representatives, heirs or legatees (or as otherwise directed in the written notice of
exercise) representing in the aggregate such number of Shares as the Optionee or his personal
representatives, heirs or legatees shall have then paid for.

	7.3.	 	All Shares subscribed for under an Option shall be paid for in full in cash at the time of
subscription.

	7.4.	 	Except as contemplated by sections 9 (Non-Transferability of Options), 11 (Death or
Retirement of Optionee) and 12 (Termination of Employment of Optionee), no Option may be
exercised in whole or in part at any time unless at the time of such exercise the Optionee is
an Employee or a Director.

 

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	7.5.	 	Notwithstanding any other provision of the Plan or of any Option, the Committee may at any
time, by notice in writing to all Optionees under the Plan in connection with (i) any proposed
sale or conveyance of all or substantially all of the property and assets of the Corporation,
(ii) any proposed consolidation, amalgamation or other form of corporate reorganization of the
Corporation, or (iii) any proposed offer by any person to acquire or redeem all the
outstanding voting or equity securities of any class of the Corporation (in
each case, a “Proposed Transaction”), require each Optionee to elect either to, within such
period as the Committee shall prescribe,

	 	7.5.1.	 	subscribe and pay for a part or the whole of the Optioned Shares then remaining
unsubscribed for under his Option (whether or not such Option would otherwise then be
exercisable), and accept termination of his Option in the event of his failing within
such period to either subscribe and pay for all such remaining Optioned Shares or elect
to accept payment under subsection 7.5.2 or subsection 7.5.3, as the case may be;

	 	7.5.2.	 	subject to subsection 7.6, accept payment in cash in respect of a part or the whole
of the Optioned Shares then remaining unsubscribed for under his Option (whether or not
such Option would otherwise then be exercisable) of an amount equal to the result
obtained by multiplying the excess, if any, of the higher of (i) the Market Price of
the Shares on the date notice is given under this subsection 7.5 or (ii) the Market
Price of the Shares on the date of completion of the Proposed Transaction, over the
Option Price, by the number of Optioned Shares then remaining unsubscribed for under
such Option (whether or not such Option would otherwise then be exercisable); or

	 	7.5.3.	 	subject to subsection 7.6, if the Option Price for a part or the whole of the
Optioned Shares exceeds the Market Price of the Shares on both the date notice is given
under this subsection 7.5 and on the date of completion of the Proposed Transaction,
accept payment of a total of $1 in respect of all rights to such Optioned Shares,

provided that if a Proposed Transaction in respect of which a notice has been given under
this subsection 7.5 has not been completed (in the case of an offer, completed by taking up
and paying for the securities tendered) within six months after the date of such notice, any
rights in respect of Optioned Shares under such Options which have not been exercised as
contemplated in subsection 7.5.1 and in respect of which payment has not been made as
contemplated in subsections 7.5.2 or 7.5.3 shall continue in effect, exercisable in
accordance with the terms thereof as at the time immediately preceding the giving of such
notice.

For the purposes of this subsection 7.5, the term “date of completion” means the date on
which the sale, conveyance, corporate reorganization, acquisition or redemption contemplated
by the subsection takes effect with respect to the Shares. In the event that the Market
Price of the Shares is not for any reason available at the date of completion, the Committee
shall, in good faith and in such manner as it considers appropriate, determine the current
market value of the Shares at that date, which shall be deemed to be the Market Price of the
Shares for the purpose of part (ii) of subsection 7.5.2 and for subsection 7.5.3. If a
Proposed Transaction is completed, the Market Price for purposes of part (ii) of subsection
7.5.2 and for subsection 7.5.3 shall be the same as the value of the consideration paid for
Shares under the Proposed Transaction.

 

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	7.6.	 	The Committee may require that an Optionee who has elected to accept payment in cash in
accordance with subsection 7.5.2 or subsection 7.5.3 in consideration for the
cancellation of the Optionee’s rights in respect of the Optioned Shares remaining
unsubscribed for under his Option (whether or not such Option would otherwise then be
exercisable) accept such payment on a date prior to the date of completion of the Proposed
Transaction and based on the Market Price on the date notice is given under subsection 7.5,
provided that the Corporation shall forthwith after completion of the Proposed Transaction
pay to each such Optionee an amount equal to the result obtained by multiplying the excess,
if any, between (i) the Market Price of the Shares at the date of completion of the Proposed
Transaction; and (ii) the Market Price of the Shares on the date notice is given under
subsection 7.5 by the number of Optioned Shares in respect of which that Optionee previously
received payment under subsection 7.5.2 or 7.5.3.

	7.7.	 	The provisions of subsection 7.5 requiring Optionees to make an election to exercise their
Options or to accept payment in satisfaction of their Options, shall only be invoked with
respect to Optionees generally and not with respect to one Optionee and not other Optionees.

	8.	 	RELATED RIGHTS AND OTHER BENEFIT PLANS

	8.1.	 	No Optionee shall have any of the rights of a shareholder of the Corporation with respect to
any Optioned Shares until such Optioned Shares have been issued to him upon exercise of the
Option and full payment therefor has been made by him to the Corporation.

	8.2.	 	Participation in the Plan shall not affect an Optionee’s eligibility to participate in any
other benefit or incentive plan of the Corporation, its Subsidiaries or any combination or
partnership thereof.

	8.3.	 	Any Option granted pursuant to this Plan shall not obligate the Corporation to make any
benefit available to an Optionee under any other plan of the Corporation unless otherwise
specifically provided therein.

	8.4.	 	Nothing contained in this Plan will prevent the Corporation, any Subsidiary or any
combination or partnership thereof from adopting other or additional compensation arrangements
for the benefit of any Employee or Director, subject to any required shareholder or regulatory
approval.

	9.	 	NON-TRANSFERABILITY OF OPTIONS

	9.1.	 	No Option shall be assignable or transferable by the Optionee and any purported assignment or
transfer of an Option shall be void and shall render the Option void; provided that in the
event of the termination of employment of the Optionee by reason of death, an Optionee’s legal
personal representative or representatives may exercise the Option in accordance with section
11 (Death or Retirement of Optionee).

 

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	10.	 	NO FRACTIONAL SHARES

Under no circumstances shall the Corporation be obliged to issue any fractional Shares upon
the exercise of an Option. To the extent that an Optionee would otherwise have been entitled
to receive on the exercise or partial exercise of an Option a fraction of a
Share in any year, that fraction of a Share shall be added to and become available to the
Optionee upon exercise of the Option in the next succeeding year following the anniversary
of the date of grant of the Option. To the extent that an Optionee would otherwise have been
entitled to receive on an exercise or partial exercise of an Option a fraction of a Share or
any other kind of share or obligation as a result of a change in capitalization or number of
outstanding Shares as described in section 14 (Change in Capitalization or Number of
Outstanding Shares), the Corporation shall pay to the Optionee the current market value of
such fraction computed in a manner which the Committee considers appropriate.

	11.	 	DEATH OR RETIREMENT OF OPTIONEE

	11.1.	 	In the event of the termination of employment of an Optionee by reason of death at any time
during the term of an Option, the Option may be exercised by the Optionee’s legal personal
representative or representatives only to the extent and subject to the limitations,
restrictions and conditions determined by the Committee on or prior to the date of grant and
specified in the Option agreement.

	11.2.	 	In the event of the termination of employment of an Optionee at any time during the term of
an Option by reason of retirement, the Option may be exercised by the Optionee (or by the
Optionee’s legal personal representative or representatives if the Optionee dies before the
last date for exercise of the Option) only to the extent and subject to the limitations,
restrictions and conditions determined by the Committee on or prior to the date of grant and
specified in the Option agreement, but in no event shall the Option be exercisable beyond the
expiration date set forth in the Option agreement.

	12.	 	TERMINATION OF EMPLOYMENT OF OPTIONEE

	12.1.	 	In the event of the termination of employment of an Optionee for any reason other than as
specified in section 11 (Death or Retirement of Optionee), the Option may be exercised by the
Optionee only to the extent and subject to the limitations, restrictions and conditions
determined by the Committee on or prior to the date of grant and specified in the Option
agreement, but, except as otherwise provided in section 5 (Term of Options) in no event shall
the Option be exercisable later than the expiration date set forth in the Option agreement.

	12.2.	 	Nothing contained in the Plan or any Option shall confer on any Optionee any right to, or
guarantee of, continued employment by the Corporation or any Subsidiary or any combination or
partnership thereof, or in any way limit the right of the Corporation or a Subsidiary or any
combination or partnership thereof to terminate the employment of the Optionee at any time.

	13.	 	SHARES RELEASED FROM OPTIONS

	13.1.	 	Any Shares released from an Option by the provisions of sections 11 (Death or Retirement of
Optionee) or 12 (Termination of Employment of Optionee) or by expiration may be made the
subject of a further Option or Options.

 

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	14.	 	CHANGE IN CAPITALIZATION OR NUMBER OF OUTSTANDING SHARES

	14.1.	 	If, and whenever, the Shares are from time to time consolidated into a lesser number of
Shares or subdivided into a greater number of Shares:

	 	14.1.1.	 	the number of Shares which remain available under section 3 (Shares Subject to the
Plan), including Shares referred to in section 13 (Shares Released from Options) shall
be decreased or increased proportionately; and

	 	14.1.2.	 	if such consolidation or subdivision occurs prior to the issuance by the Corporation
of all the Optioned Shares under an Option, the number of Optioned Shares remaining
unissued under the Option shall be decreased or increased proportionately, as the case
may be, and the subscription price to be paid by the Optionee for each such Share shall
be adjusted accordingly.

	14.2.	 	Subject to subsection 7.5, if the Corporation enters into, and is continued or survives as a
result of, any amalgamation or merger with one or more other companies or corporations whether
by way of arrangement, by the sale of its assets and undertaking or otherwise, then and in
each such case each Option shall extend to and cover the number, class and kind of shares or
other obligations to which the Optionee would have been entitled had the Option been fully
exercised immediately prior to the date such amalgamation or merger becomes effective (whether
or not such Option would otherwise then have been fully exercisable) and the then prevailing
subscription price of the shares or other obligations so covered shall be correspondingly
adjusted if and to the extent that the Committee considers it to be equitable and appropriate.

	14.3.	 	Except as expressly provided in this section 14, the grant of any Option shall not in any
way limit or affect the rights or powers of the Corporation or its directors or shareholders
to make any changes or deal in any manner with the authorized, issued or unissued shares or
any other securities of the Corporation and no such change or dealing shall give any right or
entitlement to the holder of any Option in respect or as a result thereof.

	14.4.	 	Any Option may be made subject to such anti-dilution provisions as may be determined by the
Committee on or prior to the date of grant and specified in the Option agreement, with the
intent that the holder of the Option not be detrimentally affected or unduly benefited by
other dilutive or anti-dilutive transactions that may be undertaken during the term of the
Option.

	15.	 	AMENDMENT AND TERMINATION OF THE PLAN

	15.1.	 	Subject to applicable legislation, any required regulatory or shareholder approval and the
rules of any stock exchange on which shares in the capital of the Corporation are listed, the
Committee may at any time terminate the Plan as it shall deem advisable provided that, except
as otherwise specifically provided by section 14 (Change in Capitalization or Number of
Outstanding Shares) and subsection 7.5, no such termination shall adversely affect the rights
of any Optionee under any Option previously granted except with the consent of such Optionee.

 

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	15.2.	 	If the Plan is terminated, the provisions of the Plan and any administrative guidelines and
other rules and regulations adopted by the Committee and in force on the date of termination
will continue in effect as long as any Option or any rights pursuant thereto remain
outstanding and, notwithstanding the termination of the Plan, the Board of Directors shall
remain able to make such amendments to the Plan or the Options as they would have been
entitled to make if the Plan were still in effect.

	15.3.	 	The Board of Directors may, without notice, at any time and from time to time, amend the
Plan or any provisions thereof in such manner as the Board, in its sole discretion, determines
appropriate

	 	15.3.1.	 	for the purposes of making formal minor or technical modifications to any of the
provisions of the Plan,

	 	15.3.2.	 	to correct any ambiguity, defective provision, error or omission in the provisions
of the Plan,

	 	15.3.3.	 	to change the vesting provisions of Options or the Plan,

	 	15.3.4.	 	to change the termination provisions of Options or the Plan which does not entail an
extension beyond the original expiry date of the Options,

	 	15.3.5.	 	to add a cashless exercise feature to the Plan, providing for the payment in cash or
securities on exercise of Options and which provides for a full deduction of the number
of underlying Shares from the Plan reserve in such case, and

	 	15.3.6.	 	to add or change provisions relating to any form of financial assistance provided by
the Company to Optionees that would facilitate the purchase of securities under the
Plan;

provided, however, that:

	 	15.3.7.	 	no such amendment of the Plan may be made without the consent of each affected
Optionees if such amendment would adversely affect the rights of such affected
Optionees under the Plan; and

	 	15.3.8.	 	shareholder approval shall be obtained in accordance with the requirements of the
Toronto Stock Exchange for any amendment that results in

	 	15.3.8.1.	 	an increase in the number of Shares issuable under Options granted
pursuant to the Plan;

	 	15.3.8.2.	 	a reduction in the exercise price of an Option;

	 	15.3.8.3.	 	the cancellation and reissue of any Option;

 

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	 	15.3.8.4.	 	an extension of the term of an Option granted under the Plan
benefiting an insider (within the meaning of the rules of the Toronto
Stock Exchange) of the Corporation; or

	 	15.3.8.5.	 	Options becoming transferable or assignable other than for estate
settlement purposes as described in section 9.1.

	16.	 	GENERAL REQUIREMENTS

	16.1.	 	Each grant of an Option under the Plan shall be subject to the requirement that if at any
time the Committee shall determine that any agreement, undertaking or other action or
cooperation on the part of an Optionee, including in respect to a disposition of the Shares,
is necessary or desirable as a condition of, or in connection with (i) the listing,
registration or qualification of the Shares subject to the Plan upon any stock exchange or
under the laws of any applicable jurisdiction, or (ii) obtaining a consent or approval of any
governmental or other regulatory body, the exercise of such Option and the issue of Shares
thereunder may be deferred in whole or in part by the Committee until such time as the
agreement, undertaking or other action or cooperation shall have been obtained in a form and
on terms acceptable to the Committee.

	17.	 	RIGHT TO OPTIONS

	17.1.	 	Nothing contained herein or in any resolution previously or hereafter adopted by the Board
of Directors or by the Committee shall vest the right in any person whomsoever to receive any
Option. No person shall acquire any of the rights of any Optionee unless and until a written
Option agreement, in form satisfactory to the President of the Corporation, shall have been
duly executed on behalf of the Corporation and delivered to the Optionee and executed and
delivered by the Optionee to the Corporation. Any agreement purporting to be an Option shall,
to the extent it may be contrary to the express provisions of the Plan, be unenforceable by
the Optionee against the Corporation.

	18.	 	WITHHOLDING

	18.1.	 	Whenever the Corporation proposes or is required to issue or transfer Shares pursuant to an
Option, the Corporation shall have the right to withhold from salary payments or to require
the recipient of such Shares to remit to the Corporation an amount sufficient to satisfy any
federal, provincial, state and/or local withholding tax requirements prior to the delivery of
any certificate or certificates for such Shares. Whenever under the Plan payments are to be
made in cash, such payments shall be net of an amount sufficient to satisfy any federal,
provincial, state and/or local withholding tax requirements.

	19.	 	DURATION OF THE PLAN

	19.1.	 	Subject to the provisions of section 15 (Amendment and Termination of the Plan) the Plan
shall remain in effect until all grants of Options under the Plan have been terminated
pursuant to the provisions of the Plan or satisfied by the issuance of Shares or the payment
of cash.

 

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	20.	 	INTERPRETATION

Any question or interpretation of the Plan or any Option shall be determined by the
Committee and such determination shall be final and binding upon all persons.

IN WITNESS WHEREOF the Corporation has caused this Plan to be executed by authority of its Board of
Directors as of this 28th day of March, 2007.

CATALYST PAPER CORPORATION

	 	 	 	 	 
	 

	 	 
	 
	 	 	 	 
	By: 
	 	 	 	 
	 

	 

	 	 
	 	Its: 
	 	 	 
	 

	 	 	 	 

 

12Exhibit 10.10

Exhibit 10.10

CATALYST PAPER CORPORATION

  

2007 RESTRICTED SHARE UNIT PLAN

  

March 28, 2007, as amended April 29, 2009

 

 

 

CATALYST PAPER CORPORATION

2007 RESTRICTED SHARE UNIT PLAN

	1.	 	PURPOSE

	 
	1.1	 	This Plan has been established by the Corporation to provide long-term incentives to
executives of the Corporation and its Subsidiaries for the success of the Corporation and its
Subsidiaries, to support the objectives of employee ownership, to foster a responsible balance
between short term and long term results, and to build and maintain a strong spirit of
performance and entrepreneurship.

	 
	2.	 	PLAN DEFINITIONS AND INTERPRETATIONS

In this Plan, the following terms have the following meanings:

	 	(a)	 	“Account” means the bookkeeping account established and maintained by the
Corporation for each Participant in which the number of Share Units of the Participant
are recorded;

	 	(b)	 	“Applicable Law” means any applicable provision of law, domestic or foreign,
including, without limitation, applicable securities legislation, together with all
regulations, rules, policy statements, rulings, notices, orders or other instruments
promulgated thereunder and Stock Exchange Rules;

	 	(c)	 	“Beneficiary” means any person designated by the Participant as his or her
beneficiary under the Plan in accordance with Section 13.1 or, failing any such
effective designation, the Participant’s estate;

	 	(d)	 	“Board” mean the Board of Directors of the Corporation;

	 	(e)	 	“Committee” means the Governance and Human Resources Committee of the Board or
any other committee or person designated by the Board to administer the Plan;

	 	(f)	 	“Corporation” means Catalyst Paper Corporation and its respective successors
and assigns, and any reference in the Plan to action by the Corporation means action by
or under the authority of the Board or any person or committee that has been designated
for the purpose by the Board including, without limitation, the Committee;

	 	(g)	 	“Director” means a director of the Corporation;

 

- 2 -

 

	 	(h)	 	“Disability” means, with respect to a Participant, any physical or mental state
of the Participant such that as a result of illness, disease, mental or physical
disability or similar cause, the Participant is unable to fulfill the Participant’s
obligations as a director of the Corporation or under the Participant’s employment
agreement with the Participant’s Employer, either for any consecutive six month
period or for any six month period (whether or not consecutive) in any consecutive
twenty-four (24) month period;

	 	(i)	 	“Employee” means an employee of the Corporation or any of its Subsidiaries or
any combination or partnership of such corporations;

	 	(j)	 	“Employer” means, with respect to a Participant who is a Director, the
Corporation, and with respect to a Participant who is an Employee, the Corporation, the
Subsidiary or the combination or partnership of such corporations that employs the
Participant or that employed the Participant immediately prior to the Participant’s
Termination Date;

	 	(k)	 	“Expiry Date” means, with respect to Share Units granted to a Participant, the
date which is two years after the Participant’s Termination Date;

	 	(l)	 	“Fiscal Year” means a fiscal year of the Corporation;

	 	(m)	 	“Grant Agreement” means an agreement between the Corporation and a Participant
under which Share Units are granted, together with such amendments, deletions or
changes thereto as are permitted under the Plan;

	 	(n)	 	“Grant Date” of a Share Unit means the date a Share Unit is granted to a
Participant under the Plan;

	 	(o)	 	“Insider” has the meaning provided for purposes of the TSX relating to Security
Based Compensation Arrangements;

	 	(p)	 	“Market Value” with respect to a Share as at any date means the arithmetic
average of the closing price of the Shares traded on the TSX for the five (5) trading
days on which a board lot was traded immediately preceding such date (or, if the Shares
are not then listed and posted for trading on the TSX, on such stock exchange on which
the Shares are then listed and posted for trading as may be selected for such purpose
by the Corporation). In the event that the Shares are not listed and posted for
trading on any stock exchange, the Market Value shall be the Market Value of the Shares
as determined by the Board in its discretion, acting reasonably and in good faith;

	 	(q)	 	“Participant” means a Director of the Corporation or an individual who is a
bona fide full time Employee who has been designated by the Corporation for
participation in the Plan;

	 	(r)	 	“Payout Date” means a date selected by the Corporation, in accordance with and
as contemplated by Section 3.3 and Section 6.1;

	 	(s)	 	“Plan” means this Catalyst Paper Corporation 2007 Restricted Share Unit Plan;

 

- 3 -

 

	 	(t)	 	“Reorganization” means any (i) capital reorganization, (ii) merger,
(iii) amalgamation, (iv) offer for Shares of the Corporation which if successful would
entitle the offeror to acquire all of the Shares of the Corporation or all of one or
more particular class(es) of securities of the Corporation to which the offer relates,
(v) sale of a material portion of the assets of the Corporation, or (vi) arrangement or
other scheme of reorganization;

	 	(u)	 	“Retirement” means the retirement of a Participant from employment with his or
her Employer in accordance with the normal retirement policy of his or her Employer;

	 	(v)	 	“Security Based Compensation Arrangement” has the meaning defined in the
provisions of the TSX Company Manual relating to security based compensation
arrangements;

	 	(w)	 	“Shareholders” means the holders of Shares;

	 	(x)	 	“Shares” mean Common Shares of the Corporation and includes any securities of
the Corporation into which such units may be converted, reclassified, redesignated,
subdivided, consolidated, exchanged or otherwise changed, pursuant to a Reorganization
or otherwise;

	 	(y)	 	“Share Unit” means a unit credited by means of an entry on the books of the
Corporation to a Participant pursuant to the Plan, representing the right to receive,
subject to and in accordance with the Plan, for each Vested Share Unit one Share, at
the time, in the manner, and subject to the terms, set forth in the Plan and the
applicable Grant Agreement;

	 	(z)	 	“Stock Exchange Rules” means the applicable rules of any stock exchange upon
which Shares are listed;

	 	(aa)	 	“Subsidiary” means an entity (including a partnership) in which the Corporation
holds, directly or indirectly, a majority voting interest;

	 	(bb)	 	“Termination Date” means the date on which a Participant ceases, for any
reason, to be an active Director or an active Employee, and, in the case of a
Participant who is a Director and who ceases to be a Director as a result of any action
taken by the Board of Directors or the Shareholders of the Corporation, such date shall
be the date the Director ceases to be a Director; and in the case of a Participant who
is an Employee, where the employment is terminated by the Employer, whether wrongful or
for cause or otherwise, such date shall be the date notice of termination is provided;

	 	(cc)	 	“TSX” means the Toronto Stock Exchange; and

	 	(dd)	 	“Vested Share Units” shall mean Shares in respect of which all vesting terms
and conditions set forth in the Plan and the applicable Grant Agreement have been
either satisfied or waived in accordance with the Plan.

 

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	2.2	 	In this Plan, unless the context requires otherwise, words importing the singular number may
be construed to extend to and include the plural number, and words importing the plural number
may be construed to extend to and include the singular number.

	3.	 	GRANT OF SHARE UNITS AND TERMS

	3.1	 	The Corporation may grant Share Units to such Participant or Participants in such number and
at such times as the Corporation may, in its sole discretion, determine, as a bonus or similar
payment in respect of services rendered by the Participant for a Fiscal Year or otherwise as
compensation.

	3.2	 	At the option of the Participant, the amount payable to the Participant under any bonus,
profit sharing or gain-sharing program by the Corporation, or a Subsidiary in respect of a
Fiscal Year, or a portion thereof, may be provided in the form of Share Units in lieu thereof,
provided the Participant so elects prior to the completion of the relevant Fiscal Year.

	3.3	 	In granting any Share Units pursuant to Section 3.1 or Section 3.2, the Corporation shall
designate:

	 	(a)	 	the number of Share Units which are being granted to the Participant;

	 	(b)	 	any time or performance based or other conditions as to vesting of the Share
Units to become Vested Share Units; and

	 	(c)	 	the Payout Date, which shall in no event be later than the Expiry Date and,
unless otherwise determined on the Grant Date, shall be the third anniversary of the
Grant Date.

which shall be set out in the Grant Agreement.

	3.4	 	Subject to the terms of the Plan, the Corporation may determine any other terms or conditions
with respect to the vesting of Share Units granted pursuant to Section 3.1, in whole or in
part, to become Vested Share Units or the provision of Shares under the Plan, including
without limitation:

(a) length of time of service to the Employer by a Participant;

(b) the market price of the Shares;

	 	(c)	 	the return to Shareholders, with or without reference to other comparable
businesses;

 

- 5 -

 

	 	(d)	 	the financial performance or results of the Corporation, a Subsidiary, or
business share thereof;

	 	(e)	 	other performance criteria relating to the Corporation, a Subsidiary, or
business share thereof;

	 	(f)	 	ownership of Shares by a Participant;

	 	(g)	 	restrictions on the re-sale of Shares acquired under the Plan including escrow
arrangements; and

	 	(h)	 	any other terms and conditions the Corporation may in its discretion determine
with respect to vesting;

which shall be set out in the Grant Agreement.

The conditions may relate to all or a portion of the Share Units in a grant and may be
graduated such that different percentages (which may be greater or lesser than 100%) of the
Share Units in a grant will become Vested Share Units depending on the extent of
satisfaction of one or more such conditions.

The Corporation may, in its discretion, subsequent to the Grant Date of a Share Unit, waive
any such terms or conditions or determine that they have been satisfied.

	4.	 	GRANT AGREEMENT

	4.1	 	Each grant of a Share Unit will be set forth in a Grant Agreement containing terms and
conditions required under the Plan and such other terms and conditions not inconsistent
herewith as the Corporation may, in its sole discretion, deem appropriate.

	5.	 	SHARE UNIT GRANTS AND ACCOUNTS

	5.1	 	An Account shall be maintained by the Corporation for each Participant. On the Grant Date,
the Account will be credited with the Share Units granted to a Participant on that date.

	5.2	 	A Participant’s Account shall, unless otherwise determined by the Corporation, from time to
time until the Participant’s Termination Date, be credited with additional Share Units, the
number of which shall be the quotient determined by dividing: one hundred per cent (100%) of
the cash distributions that would have been paid to the Participant if the Share Units in his
or her Account on the relevant record date for a cash distribution on the Shares had been
Shares by the Market Value of a Share on the payment date of such cash distribution, with
fractions computed to three decimal places. Share Units credited to a Participant’s Account
pursuant to this Section 5.2 shall vest, and be payable, in accordance with Section 6.1 to the
extent that they are in respect of Share Units granted to the Participant that have become
Vested Share Units.

 

- 6 -

 

	6.	 	PAYOUTS

	6.1	 	On each Payout Date, the Participant shall be entitled to receive, and the Corporation shall
issue, Shares equal in number to the Vested Share Units in the Participant’s Account to which
the Payout Date relates.

	6.2	 	The number of Shares to be issued or provided shall be equal to the whole number of Vested
Share Units. Where the number of Share Units would result in the issue of a fractional Share
Unit in the form of a fractional Share, the number of Share Units to be issued in the form of
Shares shall be rounded down to the next whole number of Share Units. No fractional Shares
shall be issued or provided nor shall cash be paid at any time in lieu of any such fractional
interest. Any such fractional interests of a Share Unit which, together with other fractional
interests, form a whole Share Unit, shall be issued or provided in the form of a Share as part
of the Share Units to be issued or provided to the Participant on the next applicable Payout
Date, if any.

	6.3	 	Shares issued by the Corporation from treasury under this Plan shall be considered fully paid
in consideration of past service that is no less in value than the fair equivalent of the
money the Corporation would have received if the Shares had been issued for money.

	6.4	 	Subject to and in accordance with any Applicable Law, the Corporation may, but is not
obligated to, acquire issued and outstanding Shares in the market for the purposes of
providing Shares to Participants under the Plan. The Shares acquired for this purpose shall
not be included for the purpose of the determining the maximum number of Shares to be issued
under the Plan in accordance with Section 10.1.

	6.5	 	If so determined by the Corporation, in lieu of the issue or provision of Shares, the
Corporation may satisfy the issuance or provision of Shares under the Plan, in whole or in
part, by the payment of a cash amount to a Participant on the Payout Date. The amount of such
payment shall be equal to the number of Shares in respect of which the Corporation makes such
a determination, multiplied by the Market Price on the Payout Date, subject to any applicable
withholding tax.

	7.	 	TERMINATION OF EMPLOYMENT AND FORFEITURES

	7.1	 	Unless otherwise determined by the Corporation at any time, on a Participant’s Termination
Date, any Share Units in a Participant’s Account which are not Vested Share Units shall
terminate and be forfeited.

	7.2	 	Notwithstanding section 8.1, where a Participant ceases to be a Director or Employee by
reason of Retirement, death or Disability or a Director ceases to be a Director at the request
of the Board or as a result of a vote of Shareholders, then in respect of each grant of Share
Units made to such Participant pursuant to Section 3.1, that number of Share Units equal to
the product of (i) the number of Share Units relating to that grant multiplied by (ii) a
fraction, the numerator of which shall be the number of months between the applicable Grant
Date and the Participant’s Termination Date (rounded up to the nearest whole number of months)
and the denominator of which shall be the total
number of months between the Grant Date and the date that all the Share Units relating to
that grant would have become fully Vested Share Units, assuming any applicable terms or
conditions under Section 3.4 had been satisfied, shall become Vested Share Units, and not
terminate nor be forfeited on the Participant’s Retirement, death, or termination of
employment or directorship by reason of Disability.

 

- 7 -

 

	7.3	 	Notwithstanding Section 8.1, where a Participant ceases to be an Employee as a result of the
termination of his or her employment without cause, then in respect of each grant of Share
Units made to such Participant, at the Corporation’s discretion, all or a portion of such
Participant’s Share Units may be made fully Vested Share Units or may be permitted to continue
to vest, in accordance with their terms, during any statutory or common law severance period
or any period of reasonable notice required by law or as otherwise may be determined by the
Corporation in its sole discretion.

	8.	 	FORFEITED UNITS

	8.1	 	Notwithstanding any other provision of the Plan or a Grant Agreement, Share Units granted
hereunder shall terminate on, if not redeemed or previously terminated and forfeited in
accordance with the Plan, and be of no further force and effect after, the Expiry Date.

	9.	 	ALTERATION OF NUMBER OF SHARES SUBJECT TO THE PLAN

	9.1	 	In the event that the Shares shall be subdivided or consolidated into a different number of
Shares or a distribution shall be declared upon the Shares payable in Shares, the number of
Share Shares then recorded in the Participant’s Account shall be adjusted by replacing such
number by a number equal to the number of Shares which would be held by the Participant
immediately after the distribution, subdivision or consolidation, should the Participant have
held a number of Shares equal to the number of Share Shares recorded in the Participant’s
Account on the record date fixed for such distribution, subdivision or consolidation.

	9.2	 	In the event there shall be any change, other than as specified in Section 9.1, in the number
or kind of outstanding Shares or of any shares or other securities into which such Shares
shall have been changed or for which they shall have been exchanged, pursuant to a
Reorganization or otherwise, then there shall be substituted for each Share referred to in the
Plan or for each share into which such Share shall have been so changed or exchanged, the kind
of securities into which each outstanding Share shall be so changed or exchanged and an
equitable adjustment shall be made, if required, in the number of Share Units then recorded in
the Participant’s Account, such adjustment, if any, to be reasonably determined by the
Committee and to be effective and binding for all purposes.

	9.3	 	In the case of any such substitution, change or adjustment as provided for in this Section 9,
the variation shall generally require that the aggregate Market Value of the Share Units then
recorded in the Participant’s Account prior to such substitution, change or adjustment will be
proportionately and appropriately varied so that it be equal to such aggregate Market Value
after the variation.

 

- 8 -

 

	10.	 	MAXIMUM NUMBER OF SHARES TO BE ISSUED

	10.1	 	Subject to adjustment, the maximum number of Shares issuable under the Plan shall
be 7,000,000 Shares.

	10.2	 	The maximum number of Shares issuable to Insiders pursuant to the Plan, together with any
Shares issuable pursuant to any other Security Based Compensation Arrangement, at any time,
shall not exceed 10% of the total number of outstanding Shares. The maximum number of Shares
issued to Insiders pursuant to the Plan, together with any Shares issued pursuant to any other
Security Based Compensation Arrangement, within any one year period, shall not exceed 10% of
the total number of outstanding Shares.

	11.	 	AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN 

	11.1	 	The Board may, without notice and without Shareholder approval, at any time and from time to
time, amend the Plan or any provisions thereof in such manner as the Corporation, in its sole
discretion, determines appropriate

	 	(a)	 	for the purposes of making formal minor or technical modifications to any of
the provisions of the Plan,

	 	(b)	 	to correct any ambiguity, defective provision, error or omission in the
provisions of the Plan,

(c) to change the vesting provisions of Share Units or the Plan; and

	 	(d)	 	to change the termination provisions of Share Units or the Plan which does not
entail an extension beyond the original expiry date of the Share Units;

provided, however, that:

	 	(e)	 	no such amendment of the Plan may be made without the consent of each affected
Participant in the Plan if such amendment would adversely affect the rights of such
affected Participant(s) under the Plan; and

	 	(f)	 	shareholder approval shall be obtained in accordance with the requirements of
the Toronto Stock Exchange for any amendment that results in:

	 	(i)	 	an increase in the maximum number of Shares issuable pursuant
to the Plan;

	 	(ii)	 	an extension of the Expiry Date for Share Units granted to
Insiders under the Plan;

(iii) other types of compensation through Share issuance;

	 	(iv)	 	an expansion of the rights of a Participant to assign Share
Units other than as set forth in Section 14.2; or

	 	(v)	 	the addition of additional categories of participants, other
than as contemplated by Section 9, requires the approval of Shareholders by a
majority of the votes cast at a meeting of Shareholders.

 

- 9 -

 

	11.2	 	If the Corporation terminates the Plan, Share Units previously credited shall, at the
discretion of the Corporation, either (a) be settled immediately in accordance with the terms
of the Plan in effect at such time, or (b) remain outstanding and in effect and settled in due
course in accordance with the applicable terms and conditions.

	12.	 	ADMINISTRATION

	12.1	 	Unless otherwise determined by the Board, the Plan shall be administered by the Committee
subject to Applicable Laws. The Committee shall have full and complete authority to interpret
the Plan, to prescribe such rules and regulations and to make such other determinations as it
deems necessary or desirable for the administration of the Plan. All actions taken and
decisions made by the Committee shall be final, conclusive and binding on all parties
concerned, including, but not limited to, the Participants and their beneficiaries and legal
representatives, each Subsidiary and the Corporation. All expenses of administration of the
Plan shall be borne by the Corporation.

	12.2	 	The Corporation shall keep or cause to be kept such records and accounts as may be necessary
or appropriate in connection with the administration of the Plan and the discharge of its
duties. At such times as the Corporation shall determine, the Corporation shall furnish the
Participant with a statement setting forth the details of his or her Share Units including the
Grant Date and the Vested Share Units and unvested Share Units held by each Participant. Such
statement shall be deemed to have been accepted by the Participant as correct unless written
notice to the contrary is given to the Corporation within 30 days after such statement is
given to the Participant.

	13.	 	BENEFICIARIES AND CLAIMS FOR BENEFITS

	13.1	 	Subject to the requirements of Applicable Law, a Participant may designate in writing a
Beneficiary to receive any benefits that are payable under the Plan upon the death of such
Participant. The Participant may, subject to Applicable Law, change such designation from
time to time. Such designation or change shall be in such form and executed and filed in such
manner as the Corporation may from time to time determine.

	14.	 	GENERAL

	14.1	 	The transfer of an employee from the Corporation to a Subsidiary, from a Subsidiary to the
Corporation or from a Subsidiary to another Subsidiary, shall not be considered a termination
of employment for the purposes of the Plan, nor shall it be considered a termination of
employment if a Participant is placed on such other leave of absence which is considered by
the Corporation as continuing intact the employment relationship.

	14.2	 	The Plan shall enure to the benefit of and be binding upon the Corporation, its successors
and assigns. The interest of any Participant under the Plan or in any Share Unit shall not
be transferable or assignable other than by operation of law, except, if and on such terms
as the Corporation may permit, to a spouse or minor children or grandchildren or a personal
holding company or family trust controlled by a Participant, the shareholders or
beneficiaries of which, as the case may be, are any combination of the Participant, the
Participant’s spouse, the Participant’s minor children or the Participant’s minor
grandchildren, and after his or her lifetime shall enure to the benefit of and be binding
upon the Participant’s Beneficiary.

 

- 10 -

 

	14.3	 	The Corporation’s grant of any Share Units or issuance of any Shares hereunder is subject to
compliance with Applicable Law applicable thereto. As a condition of participating in the
Plan, each Participant agrees to comply with all Applicable Law and agrees to furnish to the
Corporation all information and undertakings as may be required to permit compliance with
Applicable Law.

	 
	14.4	 	The Corporation or a Subsidiary may withhold from any amount payable to a Participant, either
under this Plan, or otherwise, such amount as may be necessary so as to ensure that the
Corporation or the Subsidiary will be able to comply with the applicable provisions of any
federal, provincial, state or local law relating to the withholding of tax or other required
deductions, including on the amount, if any, includable in the income of a Participant. The
Corporation shall also have the right in its discretion to satisfy any such withholding tax
liability by retaining, acquiring or selling on behalf of a Participant any Shares which would
otherwise be issued or provided to a Participant hereunder.

	 
	14.5	 	A Participant shall not have the right or be entitled to exercise any voting rights, receive
any distribution or have or be entitled to any other rights as a Shareholder in respect of any
Share Units.

	 
	14.6	 	Neither designation of an employee as a Participant nor the grant of any Share Units to any
Participant entitles any Participant to the grant, or any additional grant, as the case may
be, of any Share Units under the Plan. Neither the Plan nor any action taken thereunder shall
interfere with the right of an Employer of a Participant to terminate a Participant’s
employment at any time. Neither any period of notice, if any, nor any payment in lieu
thereof, upon termination of employment, wrongful or otherwise, shall be considered as
extending the period of employment for the purposes of the Plan.

	 
	14.7	 	Participation in the Plan shall be entirely voluntary and any decision not to participate
shall not affect any employee’s employment with the Corporation or a Subsidiary.

	 
	14.8	 	The Plan shall be an unfunded obligation of the Corporation. Neither the establishment of
the Plan nor the grant of any Share Units or the setting aside of assets by the Corporation
(if, in its sole discretion, it chooses to do so) shall be deemed to create a trust. The
right of the Participant or Beneficiary to receive payment pursuant to the Plan shall be no
greater than the right of other unsecured creditors of the Corporation.

	 
	14.9	 	This Plan is established under the laws of the Province of British Columbia and the rights of
all parties and the construction of each and every provision of the Plan and any Share
Units granted hereunder shall be construed according to the laws of the Province of British
Columbia.

	 
	14.10	 	This Plan is hereby instituted this 28th day of March, 2007 and amended this
29th day of April, 2009.

 

- 11 -

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