Document:

Severance Program for Management Committee Members

 Exhibit 10.43 

 

			
	
 

  
	  	 SEVERANCE PROGRAM FOR MANAGEMENT COMMITTEE MEMBERS

 

 Purpose 

 

	1.1	This severance program is designed to provide eligible executives with guidelines relative to the benefits they would receive upon an involuntary termination of
employment for business reasons whether or not in connection with the occurrence of a Change in Control in order to allow for equitable, objective and uniform treatment of similar situations. 

Key Elements 
  

	2.1	This severance program is composed of the following key elements which will be offered in whole or in part by Domtar Corporation or its subsidiaries (the
“Corporation”), depending on each situation: 

  

	 	•	 	 Severance allowance; 

  

	 	•	 	 Maintenance of medical and dental benefits; 

  

	 	•	 	 Outplacement services. 

 Any entitlement to payments or benefits other than those specifically addressed in this severance policy shall be determined in accordance with the applicable plan or policy. 

Eligible Executives 
  

	3.1	An executive is eligible for this severance program if he or she is a member of the Management Committee of the Corporation (as duly appointed by the Board of Directors
of the Corporation (the “Board”) upon recommendation of the Corporation’s Chief Executive Officer), if the executive’s employment (a) is involuntarily terminated for business reasons by the Corporation or (b) in
connection with a Change in Control is involuntarily terminated by the Corporation without Cause or is terminated by the executive due to Good Reason, and in all cases the executive executes, delivers and does not revoke within the applicable
statutory time period, a written release in a form satisfactory to the Human Resources Committee of the Board (such committee, the “HR Committee” and any such release, a “Release”); provided that this program does not apply to
those executives for whom another program, agreement or arrangement is applicable or has been approved. An executive will no longer be eligible for this severance program upon cessation of his or her service as a member of the Management Committee
for reasons other than those listed in this paragraph. 

  

	3.2	This severance program will not be offered if the executive: 

  

	 	•	 	 is dismissed for cause; 

  

	 	•	 	 terminates employment voluntarily (other than for Good Reason in connection with a Change in Control as contemplated by Section 7.5); or

  

	 	•	 	 is offered continuous employment in a position with comparable terms and conditions of employment by a purchaser of a business from the Corporation.

 Effective Date of Program 
  

	4.1	This severance program will take effect March 7, 2007. 

  
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 Restriction 

 

	5.1	If on the date an executive’s employment is terminated the executive is receiving benefits under the Corporation’s Short-Term or Long-Term Disability Plans,
the executive will not be entitled to a severance allowance under this program. However, if the executive ceases to be eligible for those benefits for reasons other than retirement, the executive will be entitled to the severance program if he or
she regains the ability to carry out his or her duties prior to the effective date of his or her termination of employment. 

 Administration 
  

	6.1	This program will be administered by the HR Committee, whose actions and decisions will be conclusive and binding on the executive and on the Corporation.

  

	6.2	Domtar reserves the right to terminate, delete, amend or add to this policy or any of its provisions at any time and from time to time. 

Severance Allowance 
  

	7.1	An eligible executive shall be entitled to a severance allowance of 12 months of base salary, plus an additional 3 months of base salary for each full year of
continuous service as a member of the Management Committee, up to a maximum of 24 months of base salary (the “Severance Period”), unless otherwise determined by the HR Committee, upon recommendation of the Corporation’s Chief
Executive Officer. 

  

	7.2	The base salary used to calculate an executive’s severance allowance will be the executive’s base salary on the date his or her employment is terminated. The
minimum payments as outlined by the different provincial legislations will be paid within the time limit prescribed by the applicable legislation. The remaining balance will be paid in a lump sum or in accordance with our normal payroll practices
during the Severance Period, as decided upon by the person responsible for the termination, except if the executive’s severance allowance is subject to Section 409A, the remaining balance shall be paid as described below under the heading
“Provisions Applicable to U.S. Taxpayers.” 

  

	7.3	The severance allowance pursuant to this program shall not be less than that required by the applicable legislation. However, this severance program shall not be
interpreted or applied as a minimum severance allowance. 

  

	7.4	The severance allowance pursuant to this program includes any pay in lieu of notice and severance pay required by law. 

 

	7.5	Notwithstanding the allowance amounts described above, if, within 3 months prior to or 24 months following the occurrence of a Change in Control, an executive’s
employment is involuntarily terminated without Cause or the executive voluntarily terminates his or her employment for Good Reason, the severance allowance will be equal to the sum of (A) 24 months of base salary and (B) two (2) times
the executive’s target bonus award under the Domtar Corporation Annual Incentive Plan (“AIP), regardless of the employee’s actual continuous service as a member of the Management Committee. For this purpose, the Severance Period will
be equal to 24 months, and base salary and target bonus award shall be as of the date of termination or the occurrence of the Change in Control, whichever is greater. 

The following definitions apply: 
  

	 	(1)	“Cause” will have the same definition as in the Domtar Corporation 2007 Omnibus Incentive Plan (“Omnibus Plan”). 

 

	 	(2)	“Change in Control” will have the same definition as in the Omnibus Plan. 

  
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	 	(3)	“Good Reason” means the occurrence of any of the following after a Change in Control: 

(a) a material reduction by the Corporation in the executive’s base salary or target annual bonus, as in effect immediately prior to
the Change in Control or as increased from time to time. Executive shall not have a basis to resign for Good Reason if (i) such reduction is part of an across-the-board reduction in base salary rate or target annual incentive opportunity
similarly affecting other Management Committee members or (ii) no bonus is paid, or the amount of the bonus is reduced as a result of the failure of the executive or the Corporation to achieve the applicable performance goals; 

(b) a material diminution in the executive’s position, duties or responsibilities (including due to the assignment to the executive
of duties materially inconsistent with his or her position, duties or responsibilities as in effect immediately prior to Change in Control), excluding for this purpose (i) a change in title or reporting relationship alone, and (ii) an
isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Corporation promptly after receipt of notice thereof given by the executive; 
 (c) a requirement that the executive move his or her principal place of business to a location that is (i) more than 50 miles from the location at which the executive was stationed immediately
prior to a Change in Control, and (ii) farther from the executive’s primary residence than was the location at which the executive was stationed immediately prior to the Change in Control; and 

(d) a material breach by the Corporation of any agreement under which the executive provides services: 

in each case, provided that the executive provides written notice to the Corporation of the condition giving rise to good Reason within
90 days of the initial existence of the condition, such condition is not remedied within 30 days of receipt of such notice, and the executive terminates employment within two years of the occurrence of the Change in Control. 

 

	 	(4)	The term “Corporation” as used in this severance program shall mean the Corporation as hereinbefore defined and any successor or assignee to the business or
assets which by reason hereof becomes bound by this severance program. 

 Annual Incentive Plan 

 

	8.1	An executive who has been involuntarily terminated by the Corporation for business reasons, whether or not in connection with a Change in Control, or who in the three
months prior to or 24 months following a Change in Control has terminated his or her employment for Good Reason or has been terminated by the Corporation without Cause will be eligible for a prorated bonus under the Domtar Corporation Annual
Incentive Plan (“AIP”) for the year in which the termination of employment occurrred. Payment will be based on the pre-established goals under the AIP for the applicable plan year and the executive’s performance. It will be calculated
prorated on base salary earned during the year of termination. Payment will be made the year following termination at the same time as payment is made to all other employees and in any event no later than March 15 of such calendar year. In
situations where an executive is terminated prior to the payment of the previous year’s AIP, he/she will also be eligible for payment of the previous year’s AIP, which will also be paid at the same time payment is made to all other
employees under the AIP and in any event no later than March 15 of the year following the year in which the related services were performed. 

 Other Benefits 
  

	9.1	A terminated executive’s coverage under the Corporation’s medical and dental insurance policies will remain in effect until the last day of the Severance
Period, except if the executive’s benefits are subject to taxation in the United States, as described below under the heading “Provisions Applicable to U.S. Taxpayers.” In the event that the executive obtains equivalent or better
coverage elsewhere, this coverage will terminate. 

  
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	9.2	Notwithstanding section 9.1 above, the group insurance coverage to which the executive was subject immediately prior to his/her termination will be maintained, to the
extent provided by applicable law. 

  

	9.3	A terminated executive will be entitled to reasonable outplacement services. This benefit will terminate in the event the executive obtains new employment. In no event
will this benefit continue beyond December 31 of the second year beginning after the date of termination. 

Successors 
  

	10.1	Any successor of or to the Corporation, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), shall assume the
obligations under this severance program in the same manner and to the same extent that the Corporation would be obligated under this severance program if no succession had taken place. In the case of any transaction in which a successor would not
by the foregoing provision or by operation of law be bound by this severance program, the Corporation shall require such successor expressly and unconditionally to assume and agree to perform the Corporation’s obligations under this severance
program, in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place. 

 Provisions Applicable to U.S. Taxpayers 
  

	11.1	Any payment or benefit provided under this program that is subject to U.S. taxation and section 409A of the U.S. Internal Revenue Code of 1986, as amended (the
“Code”) and the applicable rules, regulations and guidance promulgated thereunder (“Section 409A”), will only be paid or provided if the termination of an executive’s employment for business reasons by the Corporation or
other termination entitling the executive to benefits under this severance program constitutes a “Separation from Service” within the meaning of Section 409A. 

 

	11.2	Payments or benefits subject to Section 409A shall be administered and paid as follows: 

Subject to the execution and delivery by the executive of a Release within 45 days of the date of his or her Separation from Service and
such Release becoming irrevocable (such execution and revocation period, the “Release Period”): 
  

	 	•	 	 the portion of the executive’s severance allowance that is subject to Section 409A (after taking into account all exclusions applicable to
the executive’s severance allowance under Section 409A) will be paid in a lump sum within 90 days of the date of the executive’s Separation from Service, but in no event later than March 15 of the calendar year following the
calendar year in which the executive’s Separation from Service takes place provided that, if the Release Period spans more than one calendar year, the payment shall be made in the second calendar year. 

 

	 	•	 	 If the executive would otherwise be eligible to elect continued health coverage under Section 4980B of the Internal Revenue Code of 1986, as
amended (the “Code”) (COBRA) (i) if permitted by the applicable plan and applicable law, the executive’s coverage under the applicable health insurance policies maintained by the Corporation will remain in effect or (ii) if
not so permitted, the Corporation shall pay or reimburse the executive for the excess of the cost of COBRA coverage over what would have been the executive’s cost for continued coverage under the applicable health insurance policies had he or
she been permitted to continue coverage, in each case until the earlier to occur of the last day of the Severance Period and the last day on which the executive would otherwise be eligible for COBRA coverage if he or she had elected such coverage
and paid the applicable premiums. In the event that the executive obtains equivalent or better coverage elsewhere, this coverage will terminate. 

 

  
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	 	•	 	 If the executive would not otherwise be eligible to elect COBRA coverage, the executive’s coverage under the applicable health insurance policies
maintained by the Corporation will remain in effect until the earlier to occur of the last day of the Severance Period and the 18-month anniversary of the date of the executive’s Separation from Service. In the event that the executive obtains
equivalent or better coverage elsewhere, this coverage will terminate. 

  

	11.3	The amount of any reimbursement or in-kind benefit provided under this program in one taxable year shall not affect the amount of any reimbursement or in-kind benefit
provided in any other taxable year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid). Any reimbursement shall be paid to the executive on or before the last
day of the taxable year following the taxable year in which the expense was incurred. No entitlement to any reimbursement or in-kind benefit provided under this program shall be subject to liquidation or exchange for any other benefit.

  

	11.4	Notwithstanding anything to the contrary contained herein, if an executive is a “specified employee” within the meaning of any specified employee policy of
the Corporation or, if no such policy is in effect at the time of termination, Section 409A, (i) any portion of an executive’s severance allowance under this policy that is subject to Section 409A (after taking into account all
exclusions applicable to the executive’s severance allowance under Section 409A) and that would otherwise be payable or provided within six months following the date of the executive’s Separation from Service will be accumulated and
paid on the first payroll date following the six-month anniversary of the date of the executive’s Separation from Service and (ii) the executive will pay the full cost of any non-COBRA health care benefits provided to him or her under
Section 9.1 that are subject to Section 409A for the six-month period following the date of his or her Separation from Service, with the full amount of such costs to be reimbursed to the executive on the first payroll date following the
six-month anniversary of the date of his or her Separation from Service, in each case to the extent necessary to comply with Section 409A. 

  

	11.5	Neither the Corporation nor any of its directors, officers or employees shall have any liability to an executive in the event Section 409A applies to any benefit
provided pursuant to this policy in a manner that results in adverse tax consequences for such executive or any of his or her beneficiaries or transferees. The HR Committee may unilaterally amend, modify or terminate any benefit provided under this
policy if it determines, in its sole discretion, that such amendment, modification or termination is necessary or advisable to comply with applicable U.S. law as a result of changes in law or regulation or to avoid the imposition of an additional
tax, interest or penalty under Section 409A. 

  
 52011-2013 Executive Performance Plan

 Exhibit 10.1 
 2011 – 2013 
 Executive Performance Plan 

Terms and Conditions 

Awards: The Performance Shares will be earned on the Vesting Date (as defined below) only to the extent that the performance goal
thresholds for the Performance Period are exceeded, with any unearned Performance Shares being forfeited without notice on the Vesting Date. The performance measures are internal growth for sales and operating profit over a three year period as
described in the 2011-2013 Executive Performance Plan Overview (the “Overview”). 
 Grant Date: February 18,
2011 
 Performance Period: The Company’s 2011-2013 fiscal years. 
 Vesting: Performance Shares are earned and vest on the Board meeting that occurs closest to the third anniversary of the grant date, which Board meeting shall occur in the same calendar year
as the third anniversary of the grant date, provided the Recipient remains continuously employed from the grant through such date (the “Vesting Date”), except as otherwise provided herein. Upon the death, Disability or Retirement of
a Participant prior to the Vesting Date, Performance Shares will continue to vest and such Participant will be eligible for a full un-prorated award upon vesting. Recipients will forfeit, without further notice and effective as of their date of
termination any unvested Performance Shares if their employment terminates prior to the Vesting Date for any reason other than death, Disability or Retirement. 
 Change in Control: Notwithstanding the above, in the event of a Change in Control, all Performance Shares will fully vest immediately as of the Change in Control and will be considered fully
earned and will be payable at target promptly as practicable following the Change in Control if the awards have not been assumed or replaced by a Substitute Award, as defined below. The Compensation Committee may adjust the Performance Shares
earned to the extent the internal growth for sales and operating profit performance at that date exceeds the target specified in the Overview, but in no case will the Performance Shares earned be less than the target. 

An award will qualify as a Substitute Award (“Substitute Award”) if it is assumed by any successor corporation, affiliate thereof, person or
other entity, or replaced with awards that, solely in the discretionary judgment of the Company’s Compensation Committee preserves the existing value of the outstanding Performance Shares at the time of the Change in Control and provide
vesting, payout terms, performance goals and performance period, as applicable, that are at least as favorable to Participants as vesting, payout terms, performance goals and performance period applicable to the Performance Shares (including the
terms and conditions that would apply in the event of a subsequent Change in Control). 
 If and to the extent that Performance Shares are
assumed by the successor corporation (or affiliate, person or other entity thereto) or are replaced with Substitute Awards, then all such Substitute Awards thereof shall remain outstanding and be governed by their respective terms and the provisions
of the applicable plan. 

 If the Performance Shares are assumed or replaced with a Substitute Award and the participant’s
employment with the Company is thereafter terminated by (i) the Company or successor, as the case may be, for any reason other than cause; or (ii) a participant eligible to participate in the Kellogg Company Change of Control Severance
Policy for Key Executives, for Good Reason (as defined in that Policy), in each case, within the two year period commencing on the date of the Change in Control, then all Substitute Awards for that participant will fully vest immediately as of the
date of such participant’s termination and will be considered fully earned and will be payable at target promptly as practicable following the Change in Control. 
 Dividends: Dividends are not paid on Performance Shares. After the Performance Shares are vested and shares of the Company’s Common Stock are deposited in a Merrill Lynch account for
the Participant (net of taxes) soon after the Vesting Date, dividends will be paid prospectively on all shares of such Company’s Common Stock if and when declared by the Board of Directors. 

Voting: Performance Shares are not entitled to any voting rights. After the Performance Shares are vested and shares of the Company’s
Common Stock are deposited in a Merrill Lynch account for the Participant (net of taxes) soon after the Vesting Date, the Participant will be entitled to voting rights on such shares of the Company’s Common Stock. 

Taxes: Prior to the delivery of any shares of Company Common Stock in settlement of Performance Shares, the Company shall have the power
and right to deduct or withhold or require the Participant to remit to the Company an amount sufficient to satisfy any federal, state, local, or foreign taxes of any kind which the Company in its sole discretion deems necessary to be withheld or
remitted to comply with any applicable law, rule, or regulation. Participants will be deemed to have elected to pay the withholding taxes owed by allowing the Company to withhold shares on the Vesting Date (and delivering to the Participant the net
shares of the Company’s common stock) having a Fair Market Value equal to the amount sufficient to satisfy the Company’s minimum statutory withholding obligations. The Participant is responsible for paying Participant’s taxes that
result from the granting or vesting of the Performance Shares. Taxes include Federal taxes, social insurance or FICA taxes, and state and local taxes, or any other tax, if applicable. 
 Administration: Soon after the Vesting Date, or the Change in Control, whichever is applicable, but in any event within the same calendar year as the Vesting Date or the Change in Control,
the number of net shares of the Company’s common stock earned will be deposited into a Merrill Lynch account. After the shares of common stock are deposited following the Vesting Date, Participants can contact Merrill Lynch at 1-866-866-4050 or
1-609-818-8669 (outside of the U.S., Canada or Puerto Rico), or the Merrill Lynch Grand Rapids Office at 1-877-884-4371 or 1-616-774-4252 (outside the U.S., Canada or Puerto Rico) for customer service. 

Communication: Target awards will be communicated to Participants during the salary planning communication in late February and early
March, when other pay decisions such as market and performance adjustment, bonus and stock option award are communicated. Participants will receive confirmation of the actual number of Performance Shares earned during the first quarter of the 2014
calendar year. 

 Registration: Upon the depositing of the shares in the Merrill Lynch account, shares of the
Company’s common stock will be registered in the Participant’s name. Participants can change the registration of the shares by calling Merrill Lynch. 
 Disposition at Vesting: After the shares of the Company’s common stock are deposited, Participants can leave the shares with Merrill Lynch, ask Merrill Lynch to sell the shares, have a
certificate issued to the Participant or have the shares electronically transferred to another broker. 
 Benefits: Income from
the Executive Performance Plan will not be included in earnings for the purposes of determining benefits, including pension, S&I, disability, life insurance and other survivor benefits. 
 Insiders: After the Performance Shares vest and the net shares of Company Common Stock are deposited, insiders cannot dispose of the shares of common stock without prior approval of the
Legal Department. 
 Clawback: If at any time (including after the vesting date but prior to payment) the Committee, including any
person authorized pursuant to Section 3.2 of the 2009 Long-Term Incentive Plan (the “Plan”) (any such person, an “Authorized Officer”), reasonably believes that you have committed an act of misconduct as described in this
Section, the Committee or an Authorized Officer may suspend your right to participate in the Executive Performance Plan pending a determination of whether an act of misconduct has been committed. If the Committee or an Authorized Officer determines
you have engaged in any activity that is contrary or harmful to the interest of the Company or any of its subsidiaries, including, but not limited to, (i) conduct relating to your employment for which either criminal or civil penalties against
you may be sought, (ii) breaching your fiduciary duty or deliberately disregarding any of the Company’s (or any of its subsidiaries’) policies or code of conduct, (iii) violating the Company’s insider trading policy,
(iv) accepting employment with or serving as a consultant, advisor, or in any other capacity to an entity or person that is in competition with or acting against the interests of the Company or any of its subsidiaries, (v) directly or
indirectly soliciting, hiring, or otherwise encouraging any present, former, or future employee of the Company or any of its subsidiaries to leave the Company or any of its subsidiaries, (vi) disclosing or misusing any confidential information
or material concerning the Company or any of its subsidiaries, or (vii) participating in a hostile takeover attempt of the Company, then the grant of performance shares under the Plan and all rights thereunder shall terminate immediately
without notice effective the date on which you perform such act of misconduct, unless terminated sooner by operation of another term or condition of this award or the Plan. In addition, if the Committee determines that you engaged in an act of fraud
or intentional misconduct during your employment that caused the Company to restate all or a portion of the Company’s financial statements (“Misconduct”), you may be required to repay to the Company, in cash and upon demand, any
payment in shares under the EPP made during the plan year of the misstatement. The return of EPP payment is in addition to and separate from any other relief available to the Company due to your Misconduct. For anyone who is an executive officer for
purposes of Section 16 of the Exchange Act, the determination of the Committee shall be subject to the approval of the Board of Directors. 

The rights contained in this section shall be in addition to, and shall not limit, any other rights or remedies that the Company may have under law or in
equity, including, without limitation, (i) any right that the Company may have under any other Company recoupment policy or other agreement or arrangement with a Participant, or (ii) any right or obligation that the Company may have
regarding the clawback of “incentive-based compensation” under Section 10D of the Securities Exchange Act of 1934, as amended (as determined by the applicable rules and regulations promulgated thereunder from time to time by the U.S.
Securities and Exchange Commission). 

 Other Plan Provisions: The 2011-2013 Executive Performance Plan was adopted under the Plan and
is subject to all the provisions of the Plan, including those related to the ability of the Board of Directors to amend the Plan, the Executive Performance Plan or any awards thereunder. Nothing in this summary, the Overview, or the Plan shall
confer upon the Participant any right of continued employment. Capitalized terms not defined herein shall have the meaning given such term in the Plan. 
 This plan summary is subject to the actual plan document and any additional terms and conditions as determined by the Compensation Committee of the Board of Directors. 

Issued February 2011

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