Document:

Amendment to Appleton Papers Employee Stock Ownership Plan

 Exhibit 10.1 
 

 
 MEMORANDUM 
  

			
	 To:
	  	Board of Directors
	 From:
	  	Angela M. Tyczkowski
	 Date:
	  	May 10, 2007
	 Subject:
	  	ESOP Amendments

 I will be requesting a resolution accepting the following amendments to the Appleton Papers Inc. Employee
Retirement Savings and Stock Ownership Plan. The effective date of such amendments will be conditioned upon our obtaining required lender consent, if any. 
  

	 	6.2	Investment Funds in the Non-ESOP Component and the ESOP Component 

  

	 	(e)	Participants shall designate the portion of their Savings Percentage to be invested in the ESOP Component or the Non-ESOP Component. To the extent a Participant fails to make such a
designation, he shall be deemed to have invested his Savings Percentage in the Non-ESOP Component. Further, if a Participant’s Savings Percentage (i) exceeds 6% of Covered Compensation and (ii) is invested partially
under the ESOP Component of the Plan and partially under the Non-ESOP Component of the Plan, for purposes of determining the Matching Contribution to which the Participant is entitled under Section 3.2, contributions to the ESOP Component shall
be counted first in determining the amount of the Participant’s contributions eligible to receive a Matching Contribution. 

  

	 	7.7	Participant’s Right to Consent to Distributions 

  

	 	(b)	For the period commencing on the Date of Severance and ending on the date a Participant attains normal retirement age (determined in the same manner as the determination of whether
a Participant has retired), if a Participant’s vested Combined Account balance is $5,000 or less as of a Valuation Date, the Participant will receive a distribution of the value of the entire vested portion of such Combined Account balance and
the nonvested portion will be treated as a forfeiture; provided, however, that this provision shall not be used to accelerate the final installment payment(s) of a series of installment payments. For this
purpose, if the value of a Participant’s vested Combined Account balance is zero, the Participant shall be deemed to have received a distribution of such vested Combined Account balance immediately upon his Date of Severance.

  

	 	7.8	Time When Distributions Must Commence 

  

	 	(b)	 The requirements of this Section 7.8(b) shall take precedence over any inconsistent provisions of the Plan. All distributions required under this
Section 7.8(b) shall be determined and made in accordance with Treasury Regulations under Code Section 401(a)(9). Notwithstanding the other provisions of this Section, distributions may be 

	 	 
made under a designation made before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act
(“TEFRA”) and the provisions of the Plan that relate (or did relate) to section 242(b)(2) of TEFRA. 

  

	 	(1)	The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s required beginning date, as set forth
in Section 7.8(b)(6)(E). A Participant’s distribution under this Section 7.8(b) shall come from the Non-ESOP Component first and then only to the extent necessary from the ESOP Component. To the extent made from the Non-ESOP
Component, such distributions shall be taken from the Investment Funds in which the Participant’s Elective Account is invested on a pro rata basis. Distributions under this Section 7.8(b) from the ESOP Component are subject to the approval
of the ESOP Committee, pursuant to its uniform, nondiscrimination policy for processing distributions from the ESOP Component. 

  

	 	7.12	Direct Rollovers 

  

	 	(b)	The following terms shall have the following meanings when used in this Section 7.12: 

  

	 	(1)	Eligible Rollover Distribution. An “Eligible Rollover Distribution” is any distribution of all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives
(or life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code;
Hardship Distributions; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). Notwithstanding the foregoing,
effective January 1, 2007, a distribution to a Distributee who is a non-spouse beneficiary shall only be treated as an Eligible Rollover Distribution to the extent that the distribution is made in the form of a direct rollover to an individual
retirement plan described in Code Section 402(c)(8)(B)(i) or (ii) established for the purpose of receiving the distribution on behalf of such eligible Distributee. 

  

	 	(3)	Distributee. A “Distributee” includes an Employee, or a former Employee. In addition, the Employee’s or former Employee’s surviving spouse and the
Employee’s or former Employee’s spouse who is the alternate payee, under a qualified domestic relations order, as defined in Section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse.
In addition, effective January 1, 2007, a deceased Participant’s non-spouse beneficiary is a Distributee with regard to the interest of the Participant. 

  

	 	7.13	Qualified Domestic Relations Orders 

 Distributions
may not be made to an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, from the ESOP Component before the earliest of the Participant’s (i) attainment of age fifty (50) or
(ii) termination of employment. Distributions will be made in a manner consistent with Section 7.3(a)(2)(A). If the Plan Administrator receives a domestic relations order that otherwise qualifies as a qualified domestic
relations order under Section 414(p) of the Code, and such order provides for a distribution or series of distributions from the Non-ESOP Component that may commence to 

 
an alternate payee before the Participant attains the earliest retirement age under the Plan, or for an immediate lump-sum distribution, the Plan
Administrator shall recognize the domestic relations order as a qualified domestic relations order and authorize payment of said distribution or distributions from the Non-ESOP Component.Employment Agreement with Mr. Raymond Royer

 Exhibit 10.1 
  

					
		 		 	Domtar Corporation
		 		 	Head Office
		 		 	395 de Maisonneuve Blvd. West
		 		 	Montreal, QC H3A 1L6
			
		 		 	Operations Center
		 		 	100 Kingsley Park Dr.
		 		 	Fort Mill, SC 29715-6476
		 		 	

  

					
	August 9, 2007	  	 	  	STRICTLY CONFIDENTIAL

 Mr. Raymond Royer 
 President and Chief Executive Officer 
 Domtar Corporation 
 395 de Maisonneuve Blvd West 
 Montreal, Quebec H3A 1L6 
 Canada 
 Dear Raymond, 
 We are
pleased to confirm the terms of your employment with Domtar Corporation (the “Company”). As of March 7, 2007, your employment with the Company will continue on the terms set forth herein. 
 1. Duties. You will serve as President and Chief Executive Officer of the Company, with such duties and responsibilities as are customarily
assigned to individuals holding such positions and such other duties and responsibilities consistent with the positions of President and Chief Executive Officer as may be specified by the Board of Directors of the Company (the
“Board”). You will report directly to the Board and will devote all of your skill, knowledge and full working time solely and exclusively to the conscientious performance of your duties hereunder, other than authorized vacation time
and absence for sickness or disability. 
 2. Term. The terms of this letter agreement shall apply to your employment with the Company
from the date hereof through and including the date of the Company’s annual shareholders meeting held in 2009 (such meeting, the “2009 AGM” and such employment term, the “Employment Term”) or until earlier
terminated in accordance with Section 11. 
 3. Base Salary. Your base salary while you are employed during the Employment Term
will be at an annualized rate of CDN$1,100,000 (the “Base Salary”), which amount may be increased from time to time by the Board in its sole discretion. Your Base Salary shall be payable at the same time as the Company pays salary
to its other senior executives. 

 4. Annual Incentive Bonus. While you are employed during the Employment Term, you will be eligible
to participate in the Domtar Corporation Annual Incentive Plan (the “Annual Incentive Plan”). Your target annual bonus under the Annual Incentive Plan will be 75% of Base Salary, and your maximum annual bonus will be 150% of Base
Salary. Actual bonus payments will be determined based on performance results versus the applicable targets established by the Board. Any annual bonus with respect to a particular year will be payable promptly following the receipt of the
Company’s audited financial statements for such year and in any event within two and a half months of the end of such year. 
 5.
Long Term Incentive Awards. The Company will grant to you the long-term incentive awards set forth in Sections 5(i), (ii) and (iii) below at the same time as long-term incentives are granted to other senior executives in 2007 as
long as you remain employed through that date. The awards will be granted pursuant to, and will be subject to, the terms and conditions of the Domtar Corporation 2007 Omnibus Incentive Plan (the “Omnibus Plan”) and the applicable
award agreement between you and the Company. Capitalized terms used in this Section 5 without definition shall have the meanings set forth in the applicable award agreement, or if not defined in the applicable award agreement, in the Omnibus
Plan. 
 (i) Time-vested Restricted Stock Units with a fair market value on the date of grant equal to CDN$3,125,000 
 (ii) Synergy Performance-vested Restricted Stock Units with a fair market value on the date of grant equal to CDN$3,125,000 
 (iii) 378,200 Non-statutory Stock Options 
 You hereby acknowledge and agree that the grants of Restricted Stock Units and Non-statutory Stock Options made to you on June 27, 2007 satisfy the Company’s obligations under this Section 5 and that, notwithstanding anything
to the contrary contained in the applicable award agreement between you and the Company dated as of such date (i) in connection with the termination of your employment due to Retirement with prior approval of the Board or by the Company for
reasons other than death, Disability or Cause, in each case on or prior to the 2009 AGM, none of your Time-vested Restricted Stock Units or Non-statutory Stock Options will vest until the date of the 2009 AGM (at which time such awards will vest in
full and without proration), (ii) in connection with the termination of your employment due to Retirement with prior approval of the Board or by the Company for reasons other than death, Disability or Cause, in each case on or prior to the
earlier of the Vesting Date and the 2009 AGM, your Synergy Performance-vested Restricted Stock Units shall be deemed vested on the Vesting Date to the same extent as if your Service had continued until such date, subject to achievement of the Goals,
provided that nothing contained herein shall accelerate the time of settlement of any Restricted Stock Units, (iii) the Company shall deliver to you 

  

 2 

 
one share of Stock or the cash value thereof, as elected by you, in settlement of each outstanding Restricted Stock Unit that has vested in accordance with
the terms of the applicable award agreement, as amended by this agreement and (iv) settlement of your Time-vested Restricted Stock Units will not occur earlier than the 2009 AGM. 
 6. SERP. As of March 7, 2007, you ceased accumulating benefits under the Supplementary Pension Plan for Designated Management Employees of
Domtar Inc. (the “SERP”). Payment of the benefits accumulated under the SERP will begin in accordance with the terms of the SERP upon the later of (i) termination of your employment with the Company and (ii) the 2009 AGM,
in either case subject to the requirements of Section 11(b) hereunder. You acknowledge and agree that your SERP payments shall equal CDN$720,000 per annum. 
 7. Housing. While you are employed during the Employment Term, to facilitate the fulfillment of your duties and responsibilities with respect to the Company’s Operations Center in Fort Mill, South Carolina
(the “Fort Mill Operations Center”), in lieu of hotel accommodations the Company will make available for your use during periods when your presence is required at the Fort Mill Operations Center a furnished two-bedroom condominium in the
local area. 
 8. Company Plane. While you are employed during the Employment Term, you will use the Company plane for business
travel, when necessary, subject to quarterly review by the Human Resources Committee of the Board; provided that you will be required to reimburse the Company in an amount equivalent to a first class commercial fare for any passengers
traveling with you on the Company plane for reasons other than business. You will be entitled to use the Company plane for personal reasons for up to 24 hours per year during the Employment Term, and hereby acknowledge and agree that you will be
solely responsible for any taxes incurred by you with respect to this benefit. 
 9. Employee Benefits. While you are employed during
the Employment Term, you will be eligible to participate in the employee benefit plans and programs (other than retirement plans) generally available to the Company’s employees as in effect from time to time, on the same basis as the
Company’s other employees, subject to the terms and provisions of such plans and programs. You will receive four weeks paid vacation per year. 
 10. Expenses. The Company will reimburse you for all reasonable expenses incurred by you in connection with your performance of services under this letter agreement in accordance with the Company’s policies, practices and
procedures. 
  

 3 

 11. Termination of Employment. 
 (a) If the Company terminates your employment during the Employment Term for any reason other than Cause or if you retire with the approval of the Board
during the Employment Term, the Company will pay you severance benefits in an aggregate amount equal to your Base Salary for the remainder of the Employment Term, payable at the same time as the Company pays salary to its other employees through the
remainder of the Employment Term and your annual incentive bonus (calculated on the basis of actual performance criteria for, and as if you had remained employed through the end of, the applicable year(s)) remaining in the Employment Term), if any,
payable at the same time as annual incentive bonuses are paid to other Company employees. 
 (b) Notwithstanding anything else contained in
this letter agreement to the contrary, in the event any payments to which you become entitled upon or following the date of termination of your employment pursuant to this letter agreement are subject to section 409A (“Section
409A”) of the Internal Revenue Code of 1986, as amended, such payments will not commence until (i) in the case of the SERP payments referenced in Section 6, the later of (x) the first payroll date after the 2009 AGM and
(y) the first payroll date on or after the later of the first day of the calendar month following, and 28 days after, your separation from service within the meaning of Section 409A and the regulations promulgated thereunder (a
“Separation from Service”), (ii) in the case of the salary continuation payments in Section 11(a), the first payroll date on or after the later of the first day of the calendar month following, and 28 days after, your
Separation from Service and (iii) in the case of the annual incentive bonus payments referenced in Section 11(a), with respect to each such bonus payment, on the later of the date that annual incentive bonuses are paid to other Company
employees and 28 days after your Separation from Service. 
 Notwithstanding anything else contained in this letter agreement to the
contrary, if you are a “specified employee” within the meaning of Section 409A, any payment required to be made to you hereunder upon or following the date of termination of your employment that is subject to Section 409A shall
be delayed until after the six month anniversary of your Separation from Service to the extent necessary to comply with, and avoid imposition on you of any tax penalty imposed under, Section 409A. Should payments be delayed in accordance with
the preceding sentence, the accumulated payment that would have been made but for the period of the delay shall be paid in a single lump sum during the 10 day period following the six month anniversary of the date of termination of your employment.

 For purposes of this agreement, if, as of September 30, 2009, the 2009 AGM has not occurred, it shall be deemed to have occurred on
such date. 
 (c) Any benefits payable to you pursuant to this section will be in full satisfaction of all liabilities to you under this
letter agreement and with respect to any other claim you may have in conjunction with your termination of employment. These benefits will not be subject to any offset, mitigation or other reduction as a result of your receiving salary or other
benefits by reason of your securing other employment, but payment of such amounts shall be subject to a general release in form and substance reasonably satisfactory to the Company, which release must be executed by you and returned to the Company
no later than 21 days after your Separation from Service. 
  

 4 

 (d) For these purposes, “Cause” means (i) your willful failure to perform
substantially your duties as an officer and employee of the Company (other than due to physical or mental illness), (ii) your engaging in serious misconduct that is injurious to the Company, (iii) your having been convicted of a crime that
constitutes a felony under U.S. law or the equivalent under Canadian law, (iv) your unauthorized disclosure of Confidential Information or (v) your material breach of any other provision of this letter agreement. 
 12. Unauthorized Disclosure. During your employment with the Company and at all times thereafter, you will not, except with the express consent of
the Board of Directors or its authorized representative, disclose any confidential or proprietary trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans,
management organization information, operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information (a) relating to the Company or any of its
affiliates or (b) that the Company or any of its affiliates may receive belonging to suppliers, customers or others who do business with the Company or any of their respective affiliates (collectively, “Confidential
Information”) to any third person unless such Confidential Information has been previously disclosed to the public or is in the public domain (other than by reason of your breach of this letter agreement). 
 13. General Provisions. 
 (a) No
provisions of this letter agreement may be modified, waived or discharged unless such modification, waiver or discharge is approved by the Company’s Board of Directors and is agreed to in a writing signed by you and such Company officer as may
be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this letter agreement to be performed by such other party will be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 
 (b) No agreements or
representations, oral or otherwise, express or implied, with respect to the subject matter hereof, have been made by either party, other than as set forth expressly in this letter agreement. This letter agreement codifies all of your entitlements
following a termination of your employment with the Company (including, without limitation, your accrued pension benefits under the SERP or otherwise) and supersedes and replaces any and all prior agreements or understandings, whether written or
oral, which may have existed in relation to your employment with the Company. The invalidity or unenforceability of any one or more provisions of this letter agreement will not affect the validity or enforceability of any other provision of this
letter agreement, 

  

 5 

 
which will remain in full force and effect. This letter agreement may be executed in one or more counterparts, each of which will be deemed to be an original
but all of which together will constitute one and the same instrument. 
 (c) All amounts payable to you hereunder will be paid net of any
and all applicable income or employment taxes required to be withheld therefrom under applicable Canadian or foreign, provincial or local laws or regulations. 
 (d) The validity, interpretation, construction and performance of this letter agreement will be governed by the laws of the province of Quebec, without giving effect to its conflict of laws provisions. 
 (e) The parties have expressly requested that this agreement be drafted in English. Les parties ont expresément requis que cette entente soit
rédigée en anglais. 
 If the foregoing accurately sets forth the terms of your employment with the Company, please so indicate
by signing below and returning one signed copy of this letter agreement to me. 
 Sincerely, 
  

					
			
	/s/ Harold H. MacKay	 		 	/s/ Brian M. Levitt
	Harold H. MacKay	 		 	Brian M. Levitt
	Chairman of the Board of Directors	 		 	Chairman of the Human Resources Committee

  

	
	 ACCEPTED AND AGREED
 as of this 9th day of August, 2007

	
	/s/ Raymond Royer
	Raymond Royer

  

 6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]