Document:

Exhibit

                                             Exhibit 10.3

RESTRICTED STOCK UNIT AWARD AGREEMENT
(2018 Performance-Based Award - Investment Results)

This Agreement (“Agreement”) is made this <Grant Date> by and between <Participant Name> (“Participant”) and The Progressive Corporation (the “Company”).  

1.    Definitions.  Unless otherwise defined or expressly given a different meaning in this 
Agreement, each capitalized term in this Agreement shall have the meaning given to it in The Progressive Corporation 2015 Equity Incentive Plan (the “Plan”).  References herein to performance results of the 
Company mean the applicable results achieved by the Subsidiaries and mutual company and other 
affiliates of the Company in the portfolio(s) to the extent directly managed by Progressive Capital 
Management Corp. during the Evaluation Period (“Managed Portfolios”).

2.    Award of Restricted Stock Units.  The Company grants to Participant an award (the
“Award”) of performance-based restricted stock units (“Restricted Stock Units” or “Units”), pursuant to,
and subject to, the terms of the Plan.  The Award is based on a target award value of <# of Units> Units 
(the “Target Award Units”).  The number of Restricted Stock Units that are ultimately earned pursuant to 
the Award (if any) will be determined based on the Target Award Units and the procedures and
 calculations set forth in this Agreement.  Under the calculations set forth below, the maximum potential
Award is a number of Units equal to two (2.0) times the Target Award Units (the “Maximum Award 
Units”) plus any related Dividend Equivalents.

3.    Condition to Participant’s Rights under this Agreement. This Agreement shall not
 become effective, and Participant shall have no rights with respect to the Award or any Restricted Stock
Units, unless and until Participant has fully executed this Agreement and delivered it to the Company. In
the Company’s sole discretion, such execution and delivery may be accomplished through electronic means. 

4.    Restrictions; Vesting.  Subject to the terms and conditions of the Plan and this Agreement, including the provisions of Paragraph 8 below, Participant’s rights in and to Restricted Stock Units shall vest, if at all, as follows: 

a.    Evaluation Period.  The “Evaluation Period” shall be the three-year period
 comprised of the calendar years 2018, 2019 and 2020.

b.    Certification.  The Award shall vest (if at all) only if, to the extent, and when the Committee certifies: 

i.     the Performance Ranking of the Company’s Fixed-Income Portfolio (as
 each of those terms are defined in Subparagraph c. below); and 

ii.     the Performance Factor (rounded to the nearest one-hundredth) to be 
applied to the Target Award Units (and any related Dividend Equivalent Units) to
determine the number of Restricted Stock Units (if any) that have vested as a result of
such performance. 

Such certification shall occur as soon as practicable after the end of the Evaluation Period (the
date of such certification, the “Certification Date”).   If the Committee certifies the vesting of a
number of Units that is less than the Maximum Award Units, then with respect to all other Units

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that could have been earned under this Agreement, the Award will terminate and be forfeited
automatically.

c.    Number of Units Vesting.  The number of Restricted Stock Units (if any) that vest
in connection with the Award will be determined by application of the following formula:

Number of Units Vesting = Target Award Units x Performance Factor

i.    The Performance Factor will be determined after the expiration of the 
Evaluation Period based on the fully taxable equivalent total return of the segment(s) of
the Company’s fixed-income investment portfolio that constitute(s) Managed Portfolios 
(the “Fixed-Income Portfolio” or “Portfolio”), in comparison to the total returns of the 
group of comparable investment firms identified by the Independent Data Source (the 
“Investment Benchmark”), each calculated for the three calendar years comprising the 
Evaluation Period.  For purposes of this Agreement, the “Independent Data Source” shall 
be a third party independent data source determined by the Committee and, initially and
 until further action of the Committee, shall be Investment Metrics. After the end of the 
Evaluation Period, the Independent Data Source will determine the firms that are 
included in the Investment Benchmark in accordance with the criteria specified on 
Exhibit I hereto.  The Independent Data Source will also supply to the Company the 
monthly total return data for each of the Investment Benchmark firms for the three-year
 period ending on the last day of the Evaluation Period.  

Investment results for the Fixed-Income Portfolio will be marked to market, including the
benefit of any state premium tax abatements for municipal securities held in the Portfolio 
that are realized by the Company during the Evaluation Period, in order to calculate the 
Portfolio’s fully taxable equivalent total return, compounded on a monthly basis, for the
Evaluation Period.  The investment performance achieved by the Fixed-Income Portfolio 
for the Evaluation Period will then be compared against the total returns of the firms
included in the Investment Benchmark for the same period, also compounded on a 
monthly basis, as determined by the Company from the monthly performance data
supplied by the Independent Data Source for each firm in the Investment Benchmark, to
determine where the Fixed-Income Portfolio’s performance falls on a percentile basis
when compared to the firms in the Investment Benchmark, as further described in Exhibit 
II hereto (“Performance Ranking”).  

The Portfolio’s Performance Ranking will be used to determine a performance score of
between 0.00 and 2.00 for the Evaluation Period, based on the following schedule:

	
			
	Score = 0.00
Rank at or below
	Score = 1.00
Rank equal to
	Score = 2.00
Rank at or above

	

25th Percentile
	

50th Percentile
	

75th Percentile

  
A Performance Ranking between the values identified in the schedule will be interpolated
 on a straight-line basis to generate the Performance Factor, as further described on
 Exhibit II.  

ii.    The Company will work with the Independent Data Source to ensure, to
 the extent practicable, that the list of firms comprising the Investment Benchmark and all

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data necessary to calculate the Performance Ranking and the Performance Factor are
received by March 1st of the year immediately following the Evaluation Period.  In all
events, distributions under this Agreement must be made on or before March 15th of the
year immediately following the Evaluation Period.  

iii.    In the event that the Independent Data Source (or its successors or 
assigns) ceases to provide or publish the information required to calculate the
Performance Factor, or modifies the information in such a way as to render the
comparisons required by this Agreement to be not meaningful, in the Committee’s sole
judgment, the determinations required above shall be made using such comparable 
Company and other investment data as may be available from another recognized 
provider of investment industry data as the Committee may approve in its sole discretion.

d.    Committee Discretion.  Notwithstanding anything to the contrary contained in 
this Agreement, at or prior to the time of vesting, the Committee, in its sole discretion, may 
reduce the number of Restricted Stock Units that otherwise would vest according to this
Agreement, or eliminate the Award in full.  The Committee, in its sole discretion, may treat 
Participant differently than other individuals for these purposes.  Any such determination by
the Committee shall be final and binding on Participant.  Under no circumstances shall the
Committee have discretion to increase the award to Participant in excess of the number of Units
that would have been awarded at vesting based on this Paragraph 4 (excluding adjustments
required by Section 3(c) and/or Section 11 of the Plan).

The Award shall vest in accordance with and subject to the foregoing except to the extent that, prior to the Certification Date, the Award has been forfeited under the terms and conditions of the Plan or this Agreement.   

5.    Dividend Equivalents.   Subject to this Paragraph 5, with respect to dividends for which a 
record date occurs during the Restriction Period, Participant shall be credited with a Dividend Equivalent 
with respect to each outstanding Restricted Stock Unit, and with respect to any related Dividend
Equivalent Unit (defined below) resulting from prior reinvestments of Dividend Equivalents as provided
in this Paragraph.  All Dividend Equivalents so credited will be deemed to be reinvested in Restricted
Stock Units on the date that the applicable dividend or distribution is made to the Company’s 
shareholders, based on the Target Award Units and any Dividend Equivalent Units resulting from prior reinvestments of Dividend Equivalents, in the number of Units determined by dividing the aggregate
value of the Dividend Equivalents by the Fair Market Value of the Stock on such date (rounded to the 
nearest thousandth of a whole Unit or as otherwise reasonably determined by the Company); provided,
however, that if Dividend Equivalents cannot be reinvested in Units due to the operation of Section 3(a) 
of the Plan, such Dividend Equivalents will be credited to Participant as a cash value based on the Target
Award Units and any Dividend Equivalent Units resulting from prior reinvestments of Dividend
Equivalents, which cash value shall be held by the Company (without interest) subject to this Agreement. 
Any Units resulting from the deemed reinvestment of dividends in accordance with this Paragraph 5 are 
referred to herein as “Dividend Equivalent Units.”  Dividend Equivalents shall be subject to the same
terms and conditions, and shall vest or be forfeited (as applicable) at the same time, upon the same 
conditions, and in the same proportion, as the Target Award Units set forth in this Award; provided,
however, that if the Award vests after the record date for, but before the payment date of, a dividend, then 
the Dividend Equivalents related to such dividend and to Units vesting on the vesting date will be paid in
cash or in Stock, in the sole discretion of the Company, as soon as practicable following the payment date
for such dividend.

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6.    Units Non-Transferable.  No Restricted Stock Units (and no Dividend Equivalents) shall be transferable by Participant other than by will or by the laws of descent and distribution.  In the event all or any portion of the Award is transferred or assigned pursuant to a court order, such transfer or assignment shall be without liability to the Company, and the Company shall have the right to offset against the Award any expenses (including attorneys’ fees) incurred by the Company, or any of its Subsidiaries or Affiliates, in connection with such attempted transfer or assignment.  

7.    Executive Deferred Compensation Plan.  If Participant is eligible, and has made the appropriate election, to defer the Award into The Progressive Corporation Executive Deferred Compensation Plan (the “Deferral Plan”), and the Award is eligible for deferral under the Deferral Plan, then at the time of vesting, the Restricted Stock Units that would otherwise vest under this Agreement (but not any Dividend Equivalents, which shall be delivered to Participant in accordance with Paragraph 10), instead of being delivered to Participant shall be credited to Participant’s account under the Deferral Plan, subject to and in accordance with the terms and conditions of the Deferral Plan and any related deferral agreement.

8.    Termination of Employment.  Except as otherwise provided in the Plan, including
 Section 11 (Change in Control Provisions) and Section 14(d) thereof, or in this Paragraph 8, or as
otherwise determined by the Committee, if Participant’s employment with the Company or any
Subsidiary or Affiliate terminates for any reason, the Award and all Restricted Stock Units (and any
related Dividend Equivalents) held by Participant that are unvested or subject to restriction at the time of 
such termination shall be forfeited automatically immediately after such termination.  Notwithstanding
the foregoing:

a.    In the event that Participant’s employment terminates as a result of Participant’s
 death prior to Participant’s Qualified Retirement Eligibility Date, then this Agreement will 
remain effective for up to one year after the date of Participant’s death and the Restricted Stock 
Units (and Dividend Equivalents) will vest if, when and to the extent, that the performance
measures identified in Paragraph 4 above are achieved and certified by the Committee pursuant to Paragraph 4 prior to the expiration of such one (1) year period.  The balance of the Award, if any, 
shall be forfeited;

b.    In the event that any such termination of employment occurs, for any reason other than for Cause, after the end of the Evaluation Period but prior to the Certification Date, the Award shall not be forfeited at the time of Participant’s termination and Participant shall be eligible to participate in the vesting of Restricted Stock Units (and any related Dividend Equivalents) under this Agreement to the extent certified by the Committee; and

c.    In the event that any such termination of employment occurs as a result of Participant’s Qualified Retirement before the end of the Evaluation Period, the Award (A) shall remain in effect with respect to fifty percent (50%) of the Award, which shall vest after the Committee’s certification that, and the extent to which,  performance measures identified in paragraph 4 have been achieved and (B) shall terminate, effective as of the date of and immediately after the Qualified Retirement, with respect to the remaining fifty percent (50%) of the Award; provided that, with respect to any member of the Company’s Senior Management Group, and any other Participant specified in writing by the Compensation Committee (if the Participant is, at the time of such specification, an executive officer of the Company) or by the Company’s Chief Executive Officer and Chief Human Resource Officer (for all other Participants), if such individual (i) becomes eligible, after such individual’s Qualified Retirement Eligibility Date, to receive benefits under the Company’s long-term disability benefits plan provided to its employees, or (ii)  has given the Company’s Chief Executive Officer (or 

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Chairperson of the Board, if such individual is the Chief Executive Officer) written notice of his or her intended retirement date at least twelve months but not more than eighteen months prior to such date and if such individual in fact terminates on such intended retirement date (or such earlier or later date as the Company’s Chief Executive Officer and such individual (or the Company’s Chairperson of the Board and such individual, if such individual is the Company’s Chief Executive Officer) may agree in writing and with such conditions as the Company may deem appropriate and state in such writing), then upon any Qualified Retirement of such individual consistent with such document(s), no portion of the Award will terminate on such termination date, but the Award will remain in effect in full and shall vest after the Committee certifies that, and to the extent that, the  performance measures identified in paragraph 4 have been achieved (unless such performance measures are not achieved prior to the Expiration Date, in which event the Award will terminate and be forfeited, as of the Expiration Date).

d.    For purposes of this Paragraph 8:

		
	i.
	the term “Senior Management Group” means those individuals holding the following titles or positions at the time that written notice of retirement is given by such individual in accordance with Section 8(c) of this Agreement:  Chief Executive Officer, and executive officers who are members of the Chief Executive Officer’s Direct Reporting Group;

		
	ii.
	the term “Qualified Retirement” means any termination of a Participant’s employment with the Company or its Subsidiaries or Affiliates for any reason (including death, but excluding an involuntary termination for Cause) that (x) qualifies as a “separation from service” within the meaning of Section 409A, and (y) occurs on or after the first day of the calendar month in which either of the following conditions are scheduled to be satisfied:

        
		
	(A)
	the Participant is 55 years of age or older and has completed at least fifteen (15) years of service as an employee of the Company or one or more of its Subsidiaries or Affiliates; or

		
	(B)
	the Participant is 60 years of age or older and has completed at least ten (10) years of service as an employee of the Company or one or more of its Subsidiaries or Affiliates;

provided, however, that if Participant provided any service as an employee to any entity (or one or more of its subsidiaries or affiliates) that became a Subsidiary or Affiliate of the Company as a result of the Company’s acquisition, directly or indirectly, of the assets of such entity (and/or of one or more of its subsidiaries or affiliates) or all or a controlling interest in such entity’s capital stock or other equity interests (such entity being the “Acquired Entity), then Participant’s service as an employee of the Acquired Entity (or one or more subsidiaries or affiliates of the Acquired Entity) prior to the date of such acquisition by the Company shall not be treated as “service as an employee of the Company or one or more of its Subsidiaries or Affiliates” for purposes of this Paragraph 8(d)(ii); and

		
	iii.
	the term “Qualified Retirement Eligibility Date” means the first day of the earliest calendar month in which the Participant is scheduled to satisfy either of the age and years-of-service requirements for a Qualified Retirement as defined in Paragraph 8(d)(ii) of this Agreement. 

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9.    Disqualifying Activity.  Notwithstanding any other provision of this Agreement, if the Committee determines that Participant is engaging in, or has engaged in, a Disqualifying Activity, the provisions of Section 10(b) of the Plan will apply. 

10.    Delivery at Vesting. Subject to the provisions of the Plan and this Agreement, upon vesting of all or part of the Award, the Company shall deliver to Participant one share of Stock in exchange for each such vested Restricted Stock Unit and for each Dividend Equivalent Unit related thereto and cash in the amount of any other related Dividend Equivalents, and all Restricted Stock Units and Dividend Equivalents) shall be cancelled.  Unless determined otherwise by the Company at any time prior to the applicable delivery, each fractional Restricted Stock Unit (and related Dividend Equivalent Unit) shall vest and be settled in an equal fraction of a share of Stock.  The delivery of such shares of Stock shall be on or as soon as practicable following the Certification Date, but in no event later than March 15 of the calendar year following the year in which the Certification Date occurred.

11.    Taxes.  No later than the date as of which an amount relating to the Award first becomes taxable, Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any Taxes and other items of any kind required by law to be withheld with respect to such amount. The obligations of the Company under the Plan and this Agreement shall be conditioned on such payment or arrangements and the Company and its Subsidiaries and Affiliates, to the extent permitted by law, shall have the right to deduct any such Taxes from any payment of any kind otherwise due to Participant.  At vesting, Restricted Stock Units and related Dividend Equivalent Units will be valued at the Fair Market Value of the Company’s Stock on such date.  

Unless otherwise determined by the Committee, Participant must satisfy the minimum statutory tax withholding obligations resulting from the vesting of Restricted Stock Units and related Dividend Equivalents (“Minimum Withholding Obligations”) by surrendering to the Company Restricted Stock Units and/or Dividend Equivalents that are then vesting (or shares of Stock issuable as a result of the vesting) with a value sufficient to satisfy the Minimum Withholding Obligations.   

Under no circumstances will Participant be entitled to satisfy any Minimum Withholding Obligations by surrendering Restricted Stock Units that are not then vesting or any Restricted Stock Units that Participant has elected to defer under Paragraph 7 above.  Any request by Participant to satisfy Minimum Withholding Obligations by surrendering shares of Stock owned by Participant prior to the date of such satisfaction must be specifically approved in advance by the Committee.  All surrenders of Units or shares of Stock and any requests for approval of alternative payment arrangements must be made by Participant in accordance with such procedures as may be adopted by the Company in connection therewith, and subject to such rules as have been or may be adopted by the Committee.  

12.    Non-Solicitation.  In consideration of the Award made to Participant under this Agreement, starting on the Grant Date and ending on the date that is exactly twelve (12) months after Participant's “Separation Date” (defined below), Participant shall not directly or indirectly recruit or solicit for hire, or hire, or assist in any manner in the recruitment, solicitation for hire or hiring, of any employee or officer of the Company or any of its Subsidiaries or Affiliates, in each case involving employment by any individual, business or entity other than the Company or one of its Subsidiaries or Affiliates, or in any way induce any such employee or officer to terminate his or her employment with the Company or any of its Subsidiaries or Affiliates.  For purposes of this Paragraph 12, "Separation Date" means the date on which Participant's employment with the Company or one of its Subsidiaries or Affiliates terminates for any reason.  A violation of this Paragraph 12 by Participant shall constitute a “material violation” of an “agreement between the Participant and the Company” within the meaning of clause (iii) of the definition of Disqualifying Activity.  The provisions of this Paragraph 12 shall be in 

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addition to, and shall not supersede or replace, the provisions of any employment or other agreement between Participant and the Company or any of its Subsidiaries or Affiliates that contains similar or additional restrictions on Participant.

13.    Recoupment.  If the Securities and Exchange Commission adopts final rules under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that require, as a condition to the Company’s continued listing on a national securities exchange (“Exchange”), that the Company develop and implement a policy requiring the recovery of erroneously awarded compensation, and such regulations are applicable to Participant and the Award granted pursuant to this Agreement, then the Award shall be subject to recoupment pursuant to the terms of the rules of the Securities and Exchange Commission and any applicable Exchange and any policy of the Company adopted in response to such rules.  The provisions of this Paragraph 13 are in addition to the rights of the Company as set forth in Section 14(h) of the Plan.

14.    Entire Agreement.  This Agreement constitutes the entire agreement between the parties with respect to the Award and, except as provided in Paragraph 12, supersedes and cancels any other agreement, representation or communication, whether oral or in writing, between the parties relating to the Award, provided that the Agreement shall be at all times subject to the Plan. 

15.    Amendment.   The Committee may amend the terms of this Award to the fullest extent permitted by Section 12 of the Plan.

16.     Acknowledgments.  Participant: (a) acknowledges receiving a copy of the Plan Description relating to the Plan, and represents that he or she is familiar with all of the material provisions of the Plan, as set forth in such Plan Description; (b) accepts this Agreement and the Award subject to all provisions of the Plan and this Agreement; and (c) agrees to accept as binding, conclusive and final all decisions and interpretations of the Committee relating to the Plan, this Agreement or the Award.

Participant evidences his or her agreement with the terms and conditions of this Agreement, and his or her intention to be bound by this Agreement, by electronically accepting the Award pursuant to the procedures adopted by the Company.  Upon such acceptance by Participant, this Agreement will be immediately binding and enforceable against Participant and the Company.

THE PROGRESSIVE CORPORATION

By:  /s/     Daniel P. Mascaro 
Vice President & Secretary

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EXHIBIT I

INVESTMENT BENCHMARK CRITERIA

After the end of the Evaluation Period, the Independent Data Source will determine the firms comprising the Investment Benchmark for the Plan year from its records and will supply to the Company the monthly total returns and any other relevant data for each of those firms for the Evaluation Period.  

A firm will be included in the Investment Benchmark if the Independent Data Source is able to determine from its records that:
    
		
	1.
	The firm has provided monthly data  regarding its holdings and investment return, as necessary to determine or calculate such firm’s monthly total return, and to evaluate such firm’s compliance with each of the criteria set forth below, for the entire Evaluation Period; and 

		
	2.
	At all times during the Evaluation Period, the information provided by the firm shows, or the Independent Data Source is able to calculate, that such firm’s investment portfolio satisfies each of the following criteria:

Duration:             Effective Duration between 1.5 years and 5.0 years
Credit Quality Average         = A, or = AA, or = AAA, or = AAA+
Convexity (%)             >= -1
Sector Allocation:         U.S. High-Yield Corporate Debt <= 10%
Sector Allocation:         Mortgages <= 60%
Sector Allocation:         U.S. Investment-Grade Corporate Debt <= 60%
Sector Allocation:         CMBS <= 60%
Sector Allocation:         ABS <= 60%
Sector Allocation:         Emerging Markets Debt <= 5%

		
	3.
	The Company will have no discretion to alter the Investment Benchmark list after it is finalized by the Independent Data Source.

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EXHIBIT II

DETERMINATION OF PERFORMANCE RANKING 
AND PERFORMANCE FACTOR

Once all the total returns are calculated, the data is sorted in descending order from highest to lowest total return. From here, the process to compute the Performance Factor is as follows:

INTERPOLATED VALUES FOR SETTING TOP AND BOTTOM 25% LEVELS 
The top 25% and bottom 25% total return rankings are computed based on the total number of firms in the Investment Benchmark, excluding the PCM Fixed-Income Portfolio return. For example, if there were 279 participants, the return required to earn a 2.00 portfolio performance factor would be determined by interpolating between the sixty-ninth and seventieth firm’s returns, since 25% of 279 = 69.75. The same procedure would be used to determine the 0.00 portfolio performance factor. 

The total returns, computed by Investment Accounting, for the interpolated positions are calculated as follows (continuing to use an example of 279 survey firms):

Interpolated Value = Firm 69 return - ((Firm 69 Return - Firm 70 Return)*0.75) 
Firm 69 = 18.35%
Firm 70 = 18.23%

Firm 69.75 (Interpolated Value) = 18.35% - ((18.35%-18.23%)*0.75) = 18.26%.

In this case, the PCM Performance Factor will equal 2.00 if its total return equals the interpolated value for Firm 69.75 or 18.26%.  A similar calculation is then used to determine the bottom 25% group and interpolated value for a 0.00 performance score.  

Once the two groups are computed, top and bottom 25%, the remainder of the performance scores are calculated as follows:

Performance score variance =  (2.00) / Number of positions from first participant after the top 25% ranking to the 1st participant in the bottom 25% ranking. In the case of 279 participants, the number of positions to divide the 2.00 performance factors by would be 142. 

The calculation for the performance score variance from 2.00 - 0.00 would be:

2.00 / 142 = .014085 per position for 279 firms

In the case of a tie in total returns between firms, each firm will have the same performance score, one step under the next higher position. The next lowest position would then be stepped down by a factor based on the number of participants who tie. In the case of a tie between two firms, the step down will be twice the performance score variance to maintain the proper stepping to the 0.00 performance score level. 

Example: If firms 70 and 71 each had the same total return in the 279 firm example, then firms 70 and 71 would each have a Performance Factor of 1.985915, which is 2.00 - .014085. The number 72 position in this example would have a performance score of 1.957746, which is the required step down from 70 to 72. 

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In addition, if the returns are tied between the interpolated value set for the 2.00 performance score and any position below the 2.00 level, those lower positions will also be set to a 2.00 performance score. The step down factor in the performance score will work similarly as noted in the example above. For the last 25% group, all firms with total returns equaling the last interpolated total return value would have the same performance score as the last interpolated value (.014085), and all others in the last 25% group would have a 0.00 Portfolio Performance Factor. 

Once all the performance scores have been created, from 2.00 to 0.00, PCM’s return is compared to the rankings to determine its Performance Factor. If the PCM return is not in the top or bottom 25% and does not match the return of any participant, then PCM’s Performance Factor is an interpolated value between the firms with the next highest and next lowest returns.

The interpolation computation for the Performance Factor based on PCM’s return is as follows:

Performance score of firm below PCM return + (PCM’s Return - Return below PCM) / (Return above PCM - Return below PCM) * (Performance score of firm above PCM - Performance score of firm below PCM)

Assuming the following data, using the 279 firm example:

	
			
	Firm
	Performance score
	Total return

	Firm above PCM
	.90
	13.61

	PCM
	 
	13.39

	Firm below PCM
	.89
	13.34

The calculation of PCM’s Performance Factor is:

0.89 + (13.39-13.34) / (13.61-13.34) * (0.90-0.89) = 0.89 
    
The performance scores and the final Performance Factor are rounded to the nearest one-hundredth, if necessary.

 

10EX-10.1

 Exhibit 10.1 

SETTLEMENT AGREEMENT 

THIS SETTLEMENT AGREEMENT (the “Agreement”) is entered into by and between Verso Corporation (as the sole member of the Coalition
for Fair Paper Imports) (hereinafter referred to as “Petitioner”) and (1) Port Hawkesbury Paper Limited Partnership, Port Hawkesbury Paper Inc., Pacific West Commercial Corporation, Port Hawkesbury Paper Holdings Ltd., Port Hawkesbury
Investments Ltd., 6879900 Canada Inc., Port Hawkesbury Paper GP Ltd., and PHP Sales Services (US) LLC (collectively, “Port Hawkesbury”); and (2) Irving Paper Limited (“Irving”). Port Hawkesbury and Irving are hereinafter
referred to as a group as “Respondents” or individually by name or as “each Respondent” or “individual Respondent.” Also, Petitioner and Respondents are hereinafter referred to as a group as “the Parties” or
as individuals as “such Party.” 
 WHEREAS, the U.S. Department of Commerce (“Commerce”) initiated a countervailing duty
investigation involving Supercalendered Paper from Canada on March 26, 2015 (80 Fed. 15,981); published an affirmative preliminary determination on August 3, 2015 (80 Fed. Reg. 45,951); and published an affirmative final determination on
October 20, 2015 (80 Fed. Reg. 63,535); 
 WHEREAS, upon issuing the affirmative preliminary determination, Commerce ordered suspension
of liquidation and the imposition of cash deposits on all entries of Supercalendered Paper from Canada on or after August 3, 2015, and the suspension of liquidation remains in effect; 

WHEREAS, Port Hawkesbury, Irving, and other interested parties requested review of Commerce’s final countervailing duty determination (80
Fed. Reg. 63,535) by a NAFTA binational Panel (USA-CDA-2015-1904-01), and this review is ongoing. 

 WHEREAS, Commerce issued a final countervailing duty order (“CVD Order”) on
December 10, 2015 that continued suspension of liquidation and the requirement of cash deposits (80 Fed. Reg. 76,668). 
 WHEREAS,
Commerce initiated an expedited review involving Irving on February 8, 2016 (81 Fed. Reg. 6,506), and published preliminary results on November 28, 2016 (81 Fed. Reg. 85,520) and final results on April 24, 2017 (82 Fed. Reg. 18,896).

 WHEREAS, Irving appealed the final results of the expedited review (82 Fed. Reg. 18,896) to the United States Court of International
Trade (“USCIT”) on May 24, 2017, and June 9, 2017, and these actions (Court Nos. 17-128 and 17-141) are ongoing. 

WHEREAS, Commerce initiated the first administrative review involving the Respondents on February 13, 2017 (82 Fed. Reg. 10,457); and
issued a preliminary determination on January 3, 2018 (83 Fed. Reg. 354). 
 WHEREAS, Commerce initiated the second administrative
review involving Respondents on February 23, 2018 (83 Fed. Reg. 3,403) but has not yet issued a preliminary determination. 
 WHEREAS,
Commerce has not yet completed an administrative review related to any time period; 
 WHEREAS, Petitioner and Respondents wish to avoid the
uncertainties and risks related to the final results of the expedited and administrative reviews and the many complex issues addressed in any related litigation, and desire to instead amicably resolve the differences between the two sides through
agreement; 
 WHEREAS, Petitioner has independently determined that the continued enforcement of the CVD Order is no longer in its
independent self interest; 

  
 2 

 NOW THEREFORE, in consideration of certain payments, promises contained herein, and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound, agree as follows: 

PART 1: 

PETITIONER’S OBLIGATIONS 
  

	 	1.	Within 3 days of the signing of this Agreement, the Petitioner agrees to file with Commerce a request for a “no interest” changed circumstances review of the CVD Order on Supercalendered Paper from Canada
substantially in the form set forth in Attachment A, wherein Petitioner will express a lack of interest in the CVD Order dating back to August 3, 2015, and specifically request that the effective date of the notice of revocation of the CVD
Order shall be August 3, 2015. 

  

	 	2.	Petitioner agrees to include in the request for changed circumstances review a certified statement and relevant supporting documentation to confirm the basis for Petitioner’s belief that Petitioner represents
“substantially all” (or at least 85%) of U.S. production of Supercalendered Paper. 

  

	 	3.	Petitioner agrees to include in the request for a changed circumstances review a request that Commerce initiate and complete the “no interest” changed circumstances review as soon as possible and that Commerce
also issue at the same time a preliminary determination to revoke the CVD Order which: (1) states that the effective date of revocation shall be August 3, 2015; and (2) instructs U.S. Customs and Border Protection
(“CBP”) to cease the collection of cash deposits, liquidate all unliquidated entries that were entered on or after August 3, 2015 without regard to countervailing duties, and refund all countervailing duty deposits on all such
merchandise, with applicable interest. 

  
 3 

	 	4.	Petitioner also agrees to: 

  

	 	a.	take all reasonable actions that its external legal counsel advises are necessary to ensure that Commerce initiates the changed circumstances review promptly; 

 

	 	b.	actively participate in the review (to the extent its external legal counsel advises is necessary) to advocate for revocation of the CVD Order with retroactive effect and refund of all cash deposits on entries made on
or after August 3, 2015; and 

  

	 	c.	take all other reasonable actions that its external legal counsel advises are necessary and consider other actions requested by Respondents to achieve the revocation of the CVD Order with retroactive effect and refund
of all cash deposits, plus applicable interest, on entries dating back to August 3, 2015. 

  

	 	5.	If, for any reason, Commerce determines not to revoke the CVD Order with retroactive effect to August 3, 2015, the Respondents and Petitioner will consult with each other and independently evaluate and determine in
good faith, exercising reasonable discretion, whether to file an appeal seeking revocation of the CVD Order with retroactive effect to August 3, 2015 and refund of all cash deposits, plus applicable interest, on entries on or after that date.
Notwithstanding the foregoing sentence, in no event will Petitioner file an appeal if advised by its external counsel that there are not meritorious grounds for appeal. If Respondents file an appeal and request Petitioner’s support, Petitioner
will reasonably cooperate with their appeal by acknowledging support of revocation of the CVD Order with retroactive effect to August 3, 2015, through submissions that its external legal counsel advises it are consistent with the intent of this
Agreement. The costs of appeals will be paid by the Respondents, unless otherwise agreed in writing by Respondents and Petitioner. 

  
 4 

	 	6.	Petitioner confirms, to the best of its knowledge and belief, that it now represents at least 85% of U.S. production of Supercalendered Paper and, that to the best of its knowledge and belief based on current
information available to it, expects to continue to represent at least 85% of U.S. production at the time of the filing of the request for a changed circumstances review and through the date of publication of the notice of revocation of the CVD
Order, understanding that this is an important requirement to such revocation. 

  

	 	7.	Except as otherwise provided in this Agreement, Petitioner agrees not to initiate any new court or NAFTA appeals related to any segment of the Supercalendered Paper Countervailing Duty proceeding on or after the date of
the signing of this Agreement. 

 PART 2: 

RESPONDENTS’ OBLIGATIONS 
  

	 	8.	In consideration for achieving the retroactive revocation of the CVD Order and the refund of all cash deposits (including applicable interest) on entries made on or after August 3, 2015 through Petitioner’s
actions described in paragraphs 1-7, each Respondent agrees to pay Petitioner an amount equal to its pro rata share of forty-two million dollars (US) (“Settlement
Payment”), as calculated by multiplying forty-two million dollars (US) by the “Individual Respondent’s Share” agreed to by Respondents, due and payable in accordance with an escrow
agreement that will be entered into by the Parties with a selected escrow agent. Attachment B includes a draft escrow agreement. The Parties agree that the final escrow agreement will be substantially consistent with the draft in Attachment B, and
only those additions, deletions or edits required by the escrow agent will be included in the final escrow agreement if all Parties hereto agree to any such modifications. 

 

	 	9.	 If, for any reason, Commerce determines that the effective date of revocation is a date after
August 3, 2015, the total “Settlement Payment” will be reduced by the ratio of: (1) the 

  
 5 

	 	
number of days from (and including) August 3, 2015 and until the day immediately prior to the retroactive date of revocation; and (2) the total number of days from (and including)
August 3, 2015 and the date of publication of the notice of revocation of the CVD order. 

  

	 	10.	The “Settlement Payment” shall be paid in the appropriate amount from the receipt of refunds of countervailing duty cash deposits and interest related to the retroactive revocation of the CVD Order of
Supercalendered Paper from Canada on entries made on or after August 3, 2015. 

  

	 	11.	In order to ensure that relevant refunds of countervailing duty deposits and interest are paid to Petitioner, as agreed in paragraphs 8-10, Respondents agree to take the following
actions: 

  

	 	a.	Within 10 days of this Agreement, each Respondent will provide to a designated agent a list of all relevant entries of Supercalendered Paper from Canada entered on or after August 3, 2015, together with the amount
of countervailing duty deposited on each entry on the basis that the designated agent agrees to hold all such information in confidence. 

  

	 	b.	Within 30 days of this Agreement, each Respondent will file an appropriate notification with CBP (i.e., the Special Address Notification – CBP Form 4811) to transfer and pay any and all refunds of countervailing
duty deposits and interest with respect to the entries made from August 3, 2015 to the date of publication of the notice of revocation of the CVD Order to the interest bearing escrow account of a designated agent - 

Agent Name 
 Address 

Account Name 
 Account Number

  
 6 

	 	c.	Subject to the obligations of this Agreement, all refunds of countervailing duty deposits and interest will be received and held in escrow by the agent in favor of, and title to such payment shall remain with, the
individual Respondent to which such deposits relate until all conditions included in the escrow agreement (Attachment B) are met. 

  

	 	d.	If all conditions have been met, then for an amount up to each Respondent’s obligation as specified in paragraphs 8-10 above, the agent shall release that amount to the
Petitioner. The release to the Petitioner will occur on a monthly basis on the third day of each month in an amount equal to: 

  

	 	i.	with respect to each Respondent, sixty six and 2/3 percent (66.66%) of the total refunds received into the individual account held for such individual Respondent in the prior month until the Petitioner has received
an amount equal to each Respondent’s pro rata share of ten million dollars (US) (“Total Threshold Amount”), as calculated by multiplying ten million dollars (US) by the “Individual Respondent’s Share” agreed to by
Irving and PHP, as the case may be. 

  

	 	ii.	once an individual Respondent’s pro rata share of the Total Threshold Amount has been reached, fifty percent (50%) of the total refunds received into the individual account held by that individual Respondent in the
prior month until such time as Petitioner has received a total amount from such individual Respondent’s account as specified in paragraphs 8-10 above. 

The remaining amount received during the prior month (i.e., thirty three and 1/3 percent until the individual Respondent Threshold Amount
has been paid to Petitioner and fifty percent thereafter) shall be disbursed to such individual Respondent on the same date. 

  
 7 

	 	e.	After the amount due from an individual Respondent as specified in paragraphs 8-10 above has been transferred to the Petitioner, any remaining amounts received by the agent for
that Respondent shall be transferred promptly to that Respondent. In no circumstance shall an amount greater than the individual Respondent’s obligation as specified in paragraphs 8-10 above be
transferred to the Petitioner from the refunds owed to that individual Respondent. 

  

	 	f.	“Individual Respondent’s Share” in the context of paragraph 8 and paragraph 11d, agreed to by Irving and PHP, will be confirmed by a separate letter signed on the date of the Settlement Agreement
(“Individual Respondent’s Share Letter”). 

  

	 	12.	Respondents agree to actively support the Petitioner’s “no interest” changed circumstances review request with effective revocation date of August 3, 2015, including filing statements of support and
taking any other necessary actions. Respondents will consult and coordinate any such actions with Petitioner to the extent reasonably practicable. If, for any reason, consultation and coordination is not reasonably practicable, Respondent will
notify Petitioner of any such action as soon as possible. 

  

	 	13.	If, for any reason, Commerce determines not to revoke the CVD Order with effective revocation date of August 3, 2015, Respondents maintain the right to appeal and actively participate in any relevant court or NAFTA
litigation in order to obtain revocation of the CVD Order with retroactive effect to August 3, 2015 and refund of all cash deposits, plus applicable interest, on entries made on or after that date. 

  
 8 

 PART 3: 

REPRESENTATIONS AND WARRANTIES 
  

	 	14.	Representations and Warranties. Each Party represents and warrants as follows: 

  

	 	a.	Organization and Standing. Such Party is duly organized and validly exists in good standing under the laws of the federal (or national), state (or provincial), and local jurisdictions of its respective
organization. 

  

	 	b.	Authority. Such Party has the corporate or limited partnership power and authority, as applicable, to enter into and perform this Agreement and all agreements and transactions contemplated hereby. The execution,
delivery, and performance by such Party of this Agreement and all agreements and transactions contemplated hereby have been duly authorized by all requisite corporate, partnership or shareholder actions on the part of such Party and such Party has
duly appointed its undersigned signatory and otherwise empowered its signatory to execute this Agreement. 

  

	 	c.	Validity of Agreement. This Agreement on this date is a legal, valid, and binding obligation of such Party and is enforceable against such Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors’ rights in general, and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

  

	 	d.	 No Violation. The execution, delivery, and performance of this Agreement by such Party does not:
(i) conflict with or result in a violation of the corporate or organizational documents of such Party; (ii) conflict with, result in a violation of, or constitute a default (or an event that, with notice or lapse of time or both, would

  
 9 

	 	
constitute a default) under, or result in the termination of, or accelerate the performance required by, or cause the acceleration of the maturity of, an obligation arising under the terms of any
agreement to which such Party is a party, or by which such Party may be subject; (iii) violate any law; or (iv) result in the creation or imposition of (or the obligation to create or impose) any lien. 

 

	 	e.	No Consent Required. Except as otherwise provided for in this Agreement, no consent, waiver, approval, authority, or other action, or filing with, any government body, is required in connection with the
execution, delivery, and performance by such Party of this Agreement or the agreements and transactions contemplated hereby, and no consent, waiver, approval, authorization or other action by any Person (other than government bodies) is required in
connection with the execution, delivery, and performance of such Party of this Agreement or the agreements or transactions contemplated hereby. 

  

	 	f.	Statement of Good Faith. Such Party warrants its cooperation in ensuring that the terms of this Agreement are fulfilled expeditiously. 

 

	 	g.	No Assignment or Transfer of Rights or Claims. Such Party represents that it has not assigned or transferred any rights, obligations and claims that it has relating to the CVD Order. 

 

	 	h.	No Challenge to Revocation of the Supercalendered Paper CVD Order. Such Party, including each of its affiliates, covenants and warrants that it will not challenge, or cause to be challenged,
Commerce’s final revocation of the CVD Order with retroactive effect to August 3, 2015, either administratively or before any court of competent jurisdiction. 

  
 10 

	 	i.	No Trade Remedy Filings. All Parties agree that for the period commencing with the signing of this Agreement and ending ten years after the date of publication of the notice of revocation of the CVD Order, they
will not file, initiate or support, and will affirmatively oppose by filing a letter of opposition, to the extent they have standing to oppose, any trade remedy investigation or other action against imports of Supercalendered Paper from Canada to
the United States, including (but not limited to) the following: 

  

	 	i.	a countervailing duty investigation or an antidumping duty investigation under Title VII of the Tariff Act of 1930, as amended, or any successor law, 

 

	 	ii.	an investigation under Sections 201 to 204, inclusive, of the Trade Act of 1974, as amended, or any successor law; 

  

	 	iii.	an investigation under Section 337 of the Tariff Act of 1930, as amended, or any successor law; 

  

	 	iv.	an investigation under Sections 301 to 307, inclusive, of the Trade Act of 1974, as amended, or any successor law; or 

  

	 	v.	any similar investigations or actions whose purpose and/or effect is to restrain imports of Supercalendered Paper from Canada. 

  

	 	j.	Withdrawal of all NAFTA claims and USCIT appeals. Petitioner and Respondents agree that if Commerce revokes the CVD Order with retroactive effect to August 3, 2015 and issues instructions to CBP to refund
all deposits, with applicable interest, (and that decision becomes final) they will file applicable documents with the NAFTA Panel, withdrawing all their claims related to the NAFTA Panel Proceeding and withdraw from the proceeding (NAFTA
Secretariat File No. USA-CDA-2015-1904-01). Irving also agrees to withdraw, at the same time, the USCIT appeals (Court Nos. 17-128 and 17-141) related to the expedited review. 

  
 11 

	 	k.	Conditional Right to Pursue Administrative Reviews and Litigation. If, for any reason, Commerce does not revoke the CVD Order and instruct CBP to refund deposits with interest on all unliquidated entries made on
or after August 3, 2015, Respondents retain the right to pursue administrative reviews and appeals to the courts or NAFTA related to those unliquidated entries. 

 

	 	l.	Disclosure. No representation or warranty by such Party in this Agreement contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained
herein or therein not misleading. 

 PART 4: 

MISCELLANEOUS 
  

	 	15.	Miscellaneous 

  

	 	a.	Severable Liability. Respondents’ obligations under this Agreement, including, but not limited to, each Respondent’s obligation to pay its pro rata share of the Settlement Payment under paragraphs 8-10, shall be severable and not joint, and no Respondent shall have any obligation hereunder to pay more than its pro rata share of the Settlement Payment, nor shall there be any right to indemnification against
either Respondent for obligations of the other Respondent under this Agreement. 

  

	 	b.	 Notices. All notices, consents, requests, demands, and other communications hereunder shall be in writing
and shall be deemed to have been duly given or delivered if: (i) delivered by hand; (ii) delivered by a recognized overnight commercial courier (receipt requested); or (iii) sent by telecopier (with receipt

  
 12 

	 	
confirmed), provided that a copy is promptly thereafter mailed by first-class postage prepaid mail, to the Party as follows (or to such other addresses as any Party shall have last designated by
fifteen (15) days’ notice to the other Parties). 

 If to Petitioner, to: 

Stephen A. Jones, Esq. 

King & Spalding LLP 

1700 Pennsylvania Avenue, NW 

Washington, DC 20006-4706 
 If
to any of the Respondents, to: 
 On behalf of Irving, to 

Walter J. Spak, Esq. 

White & Case, LLP 
 701
Thirteenth Street, NW 
 Washington, DC 20005 

On behalf of Port Hawkesbury, to 

Peggy A. Clarke, Esq. 
 Law
Offices of Peggy A. Clarke 
 1325 G Street, NW 

Washington, DC 20005 
  

	 	c.	Modification. This Agreement shall not be modified except by an instrument in writing signed by or on behalf of all of the Parties. 

 

	 	d.	Governing Law and Forum. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, United States of America, without regard to the conflict of
laws principles and the Parties agree that the exclusive forum for all disputes arising under or related to this Agreement shall be the Federal and State courts located in New York County in the State of New York. 

  
 13 

	 	e.	Benefit of Agreement; Assignment. This Agreement shall be binding upon and inure to the benefit of, and be enforceable by, the respective successors and assigns of the Parties hereto, provided that neither
Petitioner on the one hand, nor any Respondent on the other hand, may assign or transfer any of its interest hereunder, directly or indirectly, to any other person or entity without the consent of the other which shall not be unreasonably withheld,
such assignments being null and void and of no force and effect. This paragraph shall not in any way restrict any Party from selling all or substantially all of its assets or otherwise participating in a merger or change of control transaction,
provided that in any such transaction such Party will require the acquiring or merger counterparty as a condition to such transaction to agree to be bound by this Agreement. 

 

	 	f.	Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 

 

	 	g.	Invalidity. If any of the provisions of this Agreement is held invalid or unenforceable, such invalidity or unenforceability shall not affect in any way the validity or enforceability of any other provision of
this Agreement. In the event any provision is held invalid or unenforceable, the Parties shall attempt to agree on a valid or enforceable provision that shall be a reasonable substitute for such invalid or unenforceable provision in light of the
tenor of this Agreement and, on so agreeing, shall incorporate such substitute provision in this Agreement. 

  

	 	h.	 Entire Agreement and Construction. Unless otherwise provided, this Agreement, the agreements referenced
herein, and the “Individual Respondent’s Share Letter” 

  
 14 

	 	
contain the entire agreement between the Parties hereto with respect to the agreements and transactions contemplated herein and all prior understandings and agreements shall merge herein. There
are no additional terms, whether consistent or inconsistent, oral or written, that are intended to be part of the Parties’ understandings that have not been incorporated into this Agreement. The Parties agree that they have jointly participated
in the drafting and preparation of this Agreement, that each Party has had the opportunity to have this Agreement reviewed and commented upon by its legal counsel and that the language of this Agreement shall be construed as a whole according to its
fair meaning and not strictly for or against any of the Parties hereto. 

  

	 	i.	Survival. The releases, covenants, agreements, representations, and warranties contained in the Agreement and in any covenants, agreements, representations, and warranties shall survive the closing of the
Agreement, remain in full force and effect, shall not merge, and shall inure to the benefit of the Parties and their respective successors and assigns. 

  

	 	j.	Expenses. Except as otherwise expressly provided herein, each Party shall bear its fees, costs, and expenses in connection with the transactions contemplated herein, including, without limitation, all legal and
accounting fees and disbursements and fees and expenses of other advisors retained by such Party. 

  

	 	k.	 Waivers. Any Party may by written instrument: (i) waive any inaccuracies in any of the
representations or waivers made to it by any other Party contained in this Agreement or in any instruments and documents delivered to it pursuant to this Agreement; or (ii) waive compliance or performance by any other Party with or of

  
 15 

	 	
any of the covenants or agreements made to it by any other Party contained in this Agreement. The delay or failure on the part of any Party to insist, in any one instance or more, upon strict
performance of any of the terms or conditions of this Agreement, or to exercise any right or privilege herein conferred shall not be construed as a waiver of any such terms, conditions, rights or privileges but the same shall continue and remain in
full force and effect. All rights and remedies are cumulative. 

  

	 	l.	Headings. The section headings in this Agreement are for convenience of reference only and shall not be deemed to alter or affect the interpretation of any provision thereof. 

 

	 	16.	Confidentiality. 

  

	 	a.	The Parties acknowledge that Petitioner will file this Agreement with the United States Securities and Exchange Commission (“SEC”), which will publicly disclose this Agreement. Prior to such filing, the
Parties agree to treat this Agreement as confidential pursuant to the following terms: 

  

	 	i.	Each Party shall hold the terms, conditions, and existence of the agreement itself and actions contemplated thereby (the “Confidential Information”) confidential and it shall not be disclosed by such Party,
any affiliate of such party, or any of its representatives as defined in Part 1 of this Agreement, in any manner whatsoever, in whole or in part, directly or indirectly. 

 

	 	ii.	Each Party agrees to transmit the Confidential Information only to those representatives whose duties in such Party’s reasonable opinion, give rise to the need to know the Confidential Information, and who are
informed by such 

  
 16 

	 	Party of the confidential nature of the Confidential Information, and who agree to abide by the terms of this Section. It is understood that for purposes of this Agreement, a potential acquirer or merger partner should
be considered a “representative,” to the extent that Confidential Information has been shared under the terms of this Agreement. 

  

	 	iii.	Each Party agrees to be responsible for any breach of this Section by any of such Party’s representatives. 

  

	 	iv.	Each Party shall make all reasonable, necessary, and appropriate efforts to safeguard the Confidential Information from disclosure to anyone other than as permitted hereby. 

 

	 	v.	The term “Confidential Information” shall not include such portions of the Confidential Information that: (i) are or become generally available to the public other than as a result of a disclosure by such
Party or such Party’s representatives; (ii) become available to such Party on a non-confidential basis from a source other than the other Parties or their representatives, provided that such source
is not bound by a confidentiality agreement with the other Parties or their Representatives or otherwise prohibited from transmitting the information to such Party by a contractual, legal, or fiduciary obligation; or (iii) were known to such
Party on a non-confidential basis prior to their disclosure to such Party by the other Parties or their Representatives. 

  

	 	vi.	 In the event that a Party or anyone to whom such Party transmits the Confidential Information pursuant to this
Section becomes legally or regulatorily compelled or required (by oral questions, interrogatories, request 

  
 17 

	 	
for information or documents, subpoena, civil investigative demand or similar process or accounting principles or securities laws) to disclose any of the Confidential Information, such Party may
furnish such Confidential Information if it obtains reliable assurance that confidential treatment will be accorded to such Confidential Information. If such Party does not obtain reliable assurance that confidential treatment will be accorded to
such Confidential Information, such Party will provide the other Parties with prompt written notice so that the other Parties may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Section. In the
event that such protective order or other remedy is not obtained, or that the other Parties waive compliance with the provisions of this Section, such Party or such Party’s representatives will furnish only that portion of the Confidential
Information that is legally required and such Party shall exercise such Party’s best efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information. In addition, a party may disclose any of the
Confidential Information for purposes of complying with United States Securities and Exchange Commission and stock exchange listing requirements to the extent advised by its external counsel that such disclosure is legally required.

  

	 	vii.	The Parties agree that a Party can inform relevant Federal and Provincial Government officials in Canada and the relevant Commerce officials, as necessary, of the existence of the Agreement and the general terms, based
on assurances that the information will not be disclosed publicly until Petitioner has filed this Agreement with the SEC. The Parties shall coordinate the timing of any disclosure to any government official. 

  
 18 

	 	viii.	Each Party acknowledges and agrees that the other Parties would not have an adequate remedy at law and would be irreparably harmed in the event that any of the provisions of this Section were not performed in accordance
with their specific terms or were otherwise breached. Accordingly, each Party agrees that the other Parties shall be entitled to injunctive relief to prevent breaches of this Section and to specifically enforce the terms and provisions hereof, in
addition to any other remedy to which the other Parties may be entitled, at law or in equity. 

  

	 	b.	Notwithstanding the foregoing, a Party may disclose the Confidential Information in order to enforce the obligations of any other Party or to implement the terms of this Agreement. 

  
 19 

 IN WITNESS WHEREOF, each of the Parties has fully executed this Agreement as of the 20th day of
March 2018. 
  

			
	On behalf of Verso Corporation
		
	By:	 	     /s/ B. Christopher DiSantis

	
	On behalf of Port Hawkesbury Paper Limited Partnership, Port Hawkesbury Paper Inc., Pacific West Commercial Corporation, Port Hawkesbury Paper Holdings Ltd., Port Hawkesbury Investments Ltd., 6879900 Canada Inc., Port
Hawkesbury Paper GP Ltd., and PHP Sales Services (US) LLC
		
	By:	 	     /s/ Ronald N. Stern

	
	On behalf of Irving Paper Limited
		
	By:	 	     /s/ James D. Irving

		
	By:	 	     /s/ M. Ross Langley

  
 20 

 SETTLEMENT AGREEMENT ATTACHMENTS 

Attachment A                Draft “No Interest” Letter 

Attachment B                Escrow Agreement 

 ATTACHMENT A 

Draft “No Interest” Letter 

 [DATE] 

Case No. C-122-854 

Total Pages:      

Changed Circumstances Review 

Enforcement and Compliance, AD/CVD Operations 

PUBLIC DOCUMENT 
 BY ELECTRONIC FILING 

The Honorable Wilbur L. Ross, Jr. 
 Secretary of Commerce 

Attention Enforcement and Compliance 
 APO/Dockets Unit, Room
18022 
 U.S. Department of Commerce 
 14th Street and
Constitution Avenue, NW 
 Washington, DC 20230 
 Re:
Supercalendered Paper from Canada 
 Dear Secretary Ross: 

In accordance with 19 U.S.C. § 1677m(h)(2) and 19 C.F.R. § 351.222(g)(1)(i), {Verso} hereby requests a changed circumstances review
of the countervailing duty order on Supercalendered Paper from Canada. Verso has no interest in the enforcement or existence of the countervailing duty order as to the period from August 3, 2015, onward. Verso requests the retroactive
revocation of the order back to August 3, 2015. Verso believes that Verso represents “substantially all” (or at least 85%) of U.S. production of Supercalendered Paper.1 Supporting
documents demonstrating that Verso represents “substantially all” of U.S. production are attached. 
 Verso requests that the
Department initiate and complete this “no interest” changed circumstances review as soon as possible. In accordance with 19 C.F.R. § 351.221(c)(3)(ii), Verso also requests that the Department issue at the same time a 

 

	1 	See, e.g., Certain Corrosion-Resistant Carbon Steel Flat Products from Japan, 70 Fed. Reg. 35618, 35624 (June 21, 2005) (prelim. results, unchanged in final) (stating “substantially all” means at least
85% of U.S. production); Certain Hot-Rolled Lead and Bismuth Carbon Steel Flat Products from the United Kingdom, 65 Fed. Reg. 13713, 13714 (Mar. 14, 2000) (final results) (same). 

 
preliminary determination to revoke the CVD order, with the effective date of revocation August 3, 2015, and that the Department instruct U.S. Customs and Border Protection (i) to cease
the collection of cash deposits, liquidate all unliquidated entries that were entered on or after August 3, 2015, without regard to countervailing duties, and (ii) to refund all countervailing duty deposits on all such merchandise, with
applicable interest. 
 We appreciate the Department’s attention to this matter. 

Sincerely, 
 {COUNSEL} 

 ATTACHMENT B 

Escrow Agreement 

 Escrow Agreement 

This ESCROW AGREEMENT (“Escrow Agreement”), dated as of {DATE}, is made and entered into by Verso Corporation (Verso
or the “U.S. Producer” or “Petitioner”), the U.S. importers of record for each of Irving Paper Limited (“Irving Paper”) and Port Hawkesbury Paper Limited Partnership, Port Hawkesbury Paper Inc.,
Pacific West Commercial Corporation, Port Hawkesbury Paper Holdings Ltd., Port Hawkesbury Investments Ltd., 6879900 Canada Inc. and Port Hawkesbury Paper Ltd., and PHP Sales Services (US) LLC (collectively, “PHP” and, collectively
with Irving Paper, the “Canadian Producers” or “Respondents”), as set forth on Exhibit 1 hereto (the “U.S. Importers”), and
                     (the “Escrow Agent”), solely in its capacity as Escrow Agent hereunder. The U.S. Producer, the U.S. Importers
and the Escrow Agent are sometimes individually referred to as a “Party” and collectively as the “Parties.” Capitalized terms used but not defined herein shall have the meanings given to them in the Settlement
Agreement (as hereafter defined). 
 W I T N E S S E T H: 

WHEREAS, the U.S. Department of Commerce (“Commerce”) initiated a countervailing duty investigation involving Supercalendered
Paper from Canada on March 26, 2015 (80 Fed. 15,981); published an affirmative preliminary determination on August 3, 2015 (80 Fed. Reg. 45,951); and published an affirmative final determination on October 20, 2015 (80 Fed. Reg.
63,535); 
 WHEREAS, Commerce ordered suspension of liquidation and the imposition of cash deposits on all entries of Supercalendered
Paper from Canada made on or after August 3, 2015 and the suspension of liquidation remains in effect; 
 WHEREAS, Commerce
issued a final countervailing duty order (“CVD Order”) on December 10, 2015 that continued suspension of liquidation and the requirement of cash deposits (80 Fed. Reg. 76,668); 

WHEREAS, Commerce initiated an expedited review involving Irving Paper on February 8, 2016 (81 Fed. Reg. 6,506), and published
preliminary results on November 28, 2016 (81 Fed. Reg. 85,520), and final results on April 24, 2017 (82 Fed. Reg. 18,896); 

WHEREAS, Commerce initiated the first administrative review involving the Respondents on February 13, 2017 (82 Fed. Reg. 10457);
and issued a preliminary determination on January 3, 2018 (83 Fed. Reg. 354). 
 WHEREAS, Commerce initiated the second
administrative review involving the Respondents on February 23, 2018 (83 Fed. Reg. 3,403); 
 WHEREAS, Commerce has not yet
completed an administrative review related to any time period; 

 WHEREAS, Petitioner and Respondents wish to avoid the uncertainties and risks related to
the final results of the expedited and administrative reviews and the many complex issues addressed in any related litigation, and, therefore, executed an agreement on
                     to amicably resolve the differences between the two sides through agreement (“Settlement Agreement”); 

NOW THEREFORE, in furtherance of the Settlement Agreement and the, promises contained therein, the parties hereto intending to be
legally bound, agree as follows: 
 Section 1. Establishment of Accounts. 

(a) The U.S. Producer and each of the U.S. Importers hereby appoints and designates
                     as the Escrow Agent for the purposes set forth in this Escrow Agreement, and
                     hereby accepts such appointment and agrees to act as Escrow Agent under this Escrow Agreement and to perform those obligations
as are to be performed by the Escrow Agent in accordance with the terms of this Escrow Agreement. In accordance with paragraph 11.b of the Settlement Agreement, each of the U.S. Importers has filed with the U.S. Government the Forms 4811 attached
hereto as Exhibit 2, designating the Escrow Agent as its agent to receive any and all refunds of countervailing duty deposits and interest with respect to imports of Supercalendered Paper exported and/or manufactured by Irving Paper or PHP
that were entered on or after August 3, 2015 (“Fund Contributions”), and directing the U.S. Government to deliver the Fund Contributions to the Escrow Agent. The Escrow Agent has completed the Forms 5106 attached hereto as Exhibit
3 in accordance with the instructions given to the Escrow Agent by the U.S. Importers and the U.S. Producer and, at the direction of the U.S. Importers and the U.S. Producer, the U.S. Importers have filed such Forms with the U.S. Government.
Each of the U.S. Importers also has granted the Escrow Agent an irrevocable power of attorney, attached hereto as Exhibit 4, to receive, endorse and deposit all Fund Contributions into the appropriate escrow account. 

(b) In accordance with the terms and conditions of this Escrow Agreement, there are hereby established two independent, segregated and
irrevocable escrow accounts at the Escrow Agent’s office in                     . One account is hereby established to hold, on behalf of and
for the benefit of the U.S. Producer and the U.S. Importers for Irving Paper, and into which the Escrow Agent shall deposit upon receipt, only those Fund Contributions otherwise payable to Irving Paper’s U.S. Importers as identified on Exhibit
1 hereto (the “Irving Paper Account”), and one account is hereby established to hold, on behalf of and for the benefit of the U.S. Producer and the U.S. Importers for PHP, and into which the Escrow Agent shall deposit upon receipt,
only those Fund Contributions otherwise payable to PHP’s U.S. Importers as identified on Exhibit 1 hereto (the “PHP Account” and, together with the Irving Paper Account, the “Accounts”); provided that the
Escrow Agent shall have no responsibility for any of the Fund Contributions until such monies are actually received and clear through normal banking channels. The Fund Contributions shall be disbursed by the Escrow Agent only in accordance with the
terms and conditions set forth in this Escrow Agreement. 

  
 2 

 (c) The Escrow Agent shall receive and hold in escrow Fund Contributions delivered to the Escrow
Agent, as contemplated by this Escrow Agreement; provided, however, that the Escrow Agent shall have no duty or responsibility with respect to the collection of such funds (other than as a result of the endorsement of checks and the deposit of the
Fund Contributions in the Accounts) or enforcing the payment thereof or with respect to enforcing or otherwise taking any action under or by virtue of any agreement or undertaking, including but not limited to the Settlement Agreement, except this
Escrow Agreement. 
 Section 2. Disbursement. 

(a) Each Fund Contribution and all investment income relating thereto shall be held for the benefit of the U.S. Producer and the applicable
U.S. Importers in the Irving Paper Account or the PHP Account, as applicable, and disbursed from each Account by the Escrow Agent on a monthly basis as set forth in this Escrow Agreement. 

(b) For each month in which the Escrow Agent receives one or more Fund Contributions in either the Irving Paper Account or the PHP Account, on
the third business day of the following calendar month the Escrow Agent shall disburse such Fund Contribution(s), together with any earnings on investments made with monies in the Account(s) into which such Fund Contributions were made in accordance
with Section 3 hereof, as follows: 
  

	(i)	with respect to each Respondent, sixty six and 2/3 percent (66.66%) of the total refunds received into the individual account held for such individual Respondent in the prior month until the Petitioner has received
an amount equal to each Respondent’s pro rata share of ten million dollars (US) (“Total Threshold Amount”), as calculated by multiplying ten million dollars (US) by the “Individual Respondent’s Share” agreed to by
Irving and PHP, as the case may be. 

  

	(ii)	once an individual Respondent’s pro rata share of the Total Threshold Amount has been reached, fifty percent (50%) of the total refunds received into the individual account held by that individual Respondent in the
prior month until such time as Petitioner has received a total amount from such individual Respondent’s account as specified in paragraphs 8-10 of the settlement agreement. 

The remaining amount received during the prior month (i.e., thirty three and 1/3 percent until the individual Respondent Threshold Amount
has been paid to Petitioner and fifty percent thereafter) shall be disbursed to such individual Respondent on the same date. Each disbursement shall be accompanied by a 

  
 3 

 
written statement of the aggregate amount of Fund Contributions received by the Escrow Agent for each Account during the immediately preceding month and a calculation of the investment income
thereon. On the date of each disbursement, the Escrow Agent shall distribute to counsel for the Parties compact discs containing images of each check received by the Escrow Agent for deposit into the Accounts during the immediately preceding month
and images of each Courtesy Notice of Liquidation received by the Escrow Agent during the immediately preceding month. Each U.S. Importer hereby consents and agrees to the distribution in confidence by the Escrow Agent of such Courtesy Notices of
Liquidation to counsel for the other Parties hereto. 
 (c) After the amount due from an individual Canadian Producer as specified in
paragraphs 8-10 of the Settlement Agreement has been transferred to the U.S. Producer, any remaining amounts received by the Escrow Agent for that Canadian Producer shall be transferred promptly to the U.S.
Importers of that producer. In no circumstance shall an amount greater than the individual Canadian Producer’s obligation as specified in paragraphs 8-10 of the Settlement Agreement be transferred to the
U.S. Producer from the refunds owed to that individual Canadian Producer. 
 (d) All disbursements by the Escrow Agent shall be made by wire
transfer of immediately available funds in accordance with the wire transfer instructions, in the case of disbursements to the U.S. Importers, set forth in Exhibit 1 and, in the case of disbursements to the U.S. Producer, set forth in Exhibit 5, as
applicable. 
 (e) The Escrow Agent shall provide a Form 1099 in a timely manner to the U.S. Producer and each U.S. Importer who receives a
disbursement of earnings on investments during any calendar year in which this Escrow Agreement shall be in effect. In connection therewith, the U.S. Producer and each U.S. Importer has provided its taxpayer identification number on the signature
pages attached hereto and provided the Escrow Agent with an executed IRS Form W-9. Except for the delivery of Form 1099s, the Escrow Agent shall have no duty to prepare or file any Federal, state or other tax
return or report with respect to the Accounts or any earnings thereon. 
 Section 3. Investment. 

(a) Fund Contributions shall be invested by the Escrow Agent within two business days of receipt in a money market account designated by the
Canadian Producers. 
 (b) Earnings on investments made with monies in the Escrow Account shall constitute part of the Escrow Account and
shall be disbursed by the Escrow Agent in accordance with Section 2 hereof. 

  
 4 

 Section 4. Fees and Indemnification. 

(a) The U.S. Producer and U.S. Importers jointly and severally agree to pay the Escrow Agent the fee specified in
                     in connection with the execution, delivery and performance of this Escrow Agreement by the Escrow Agent and the establishment
and maintenance of the Escrow Account. All such escrow fees and costs will be split one third (33.33%) to Petitioner, one third (33.33%) to Irving Paper, and one third (33.33%) to PHP. 

(b) The U.S. Producer and U.S. Importers also jointly and severally agree to indemnify the Escrow Agent and its officers, directors, employees
and agents (each an “Indemnified Party”) and save the Indemnified Parties harmless from and against any and all Claims (as hereinafter defined) and Losses (as hereinafter defined) which may be incurred by the Indemnified Parties as a
result of Claims asserted against the Indemnified Parties as a result of or in connection with the Escrow Agent’s capacity as such under this Escrow Agreement by any person or entity not a Party, except to the extent and only to the extent such
Claims or Losses arise out of or are related to gross negligence or willful misconduct of the Escrow Agent. For the purposes hereof: 
  

	(i)	the term “Claims” shall mean all claims, lawsuits, causes of action or other legal actions and proceedings of whatever nature brought against (whether by way of direct action, counterclaim, cross action or
joinder) the Indemnified Parties, even if groundless, false or fraudulent, so long as the claim, lawsuit, cause of action or other legal action or proceeding is alleged or determined, directly or indirectly, to arise out of, result from, relate to
or be based upon, in whole or in part: (A) the acts or omissions of any of the U.S. Producer or U.S. Importers (B) the appointment of the Escrow Agent as escrow agent under this Escrow Agreement, or (C) the performance by the Escrow
Agent of its powers and duties under this Escrow Agreement; and 

  

	(ii)	the term “Losses” shall mean losses, costs, damages, reasonable expenses, judgments and liabilities of whatever nature (including but not limited to attorneys’, accountants’ and other
professionals’ costs and reasonable expenses and amounts paid in settlement, provided that the U.S. Producer and U.S. Importers shall have given their prior written consent to such settlement, such consent not to be unreasonably withheld,
delayed or conditioned), directly or indirectly resulting from, arising out of or relating to one or more Claims. 

 Upon the written request
of an Indemnified Party, the U.S. Producer and U.S. Importers jointly and severally agree to assume the investigation and defense of any Claim, including the employment of counsel reasonably acceptable to the applicable Indemnified Party and the
payment of all expenses related thereto and, notwithstanding any such assumption, the Indemnified Party shall have the right, and the U.S. Producer and U.S. Importers jointly and severally agree to pay the reasonably documented cost and expense
thereof, to employ separate counsel with respect to any such Claim and participate in the investigation and defense thereof in 

  
 5 

 
the event that such Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to such Indemnified Party which are different from or additional to
those available to any of the U.S. Producer and U.S. Importers. The U.S. Producer and U.S. Importers hereby agree that the indemnifications and protections afforded the Escrow Agent in this Section 4 shall survive the termination of the
Agreement. 
 (c) The Escrow Agent waives any and all rights of set-off or counterclaim with respect
to amounts standing to the credit of the Escrow Account other than for the payment of amounts due and payable to the Escrow Agent under this Escrow Agreement, and all payments made by the Escrow Agent under this Escrow Agreement shall be made
without any deduction, withholding, set-off or counterclaim of any kind (other than for the payment of such amounts). 

Section 5. Resignation and Removal. 

(a) The Escrow Agent may resign at any time from its obligations under this Escrow Agreement by providing written notice to the other Parties
hereto. Such resignation shall be effective on the date set forth in such written notice, which shall be no earlier than 60 days after such written notice has been given, provided that such resignation shall not take effect until the appointment of
a successor escrow agent and its assumption of the obligations of the Escrow Agent under this Escrow Agreement. The Escrow Agent shall have no responsibility for the appointment of a successor escrow agent. 

(b) The U.S. Producer and U.S. Importers also may remove the Escrow Agent by providing written notice signed by the U.S. Producer and U.S.
Importers. Such removal shall be effective on the date set forth in such written notice which shall be no earlier than 60 days after such written notice has been given, provided that such removal shall not take effect until the appointment of a
successor escrow agent and its assumption of the obligations of the Escrow Agent under this Escrow Agreement. 

Section 6. Term. This Escrow Agreement shall be effective beginning on the date hereof and
shall remain in effect until receipt by the Escrow Agent of written notice signed by all of the other Parties hereto of their mutual agreement to terminate this Escrow Agreement. Upon termination of this Escrow Agreement, the Escrow Agent shall
disburse any amounts remaining on deposit in each Escrow Account in accordance with this Escrow Agreement. 
 Section 7.
Governing Law and Dispute Resolution. 
 (a) This Escrow Agreement shall be governed and construed exclusively according to the
laws of the State of New York (without regard to its conflict or choice of laws rules or principles). 
 (b) Except as provided below in
Section 7(g), any dispute, controversy or claim, of any and every kind or type, whether based on contract, tort, 

  
 6 

 
statute, regulation, law, equity or otherwise, arising out of, connected with, or relating in any way whatsoever to this Escrow Agreement or the Settlement Agreement, the relationship of the
Parties, the obligations of the Parties or the operations carried out under this Escrow Agreement or the Settlement Agreement, including without limitation, any dispute as to the existence, validity, construction, interpretation, negotiation, fraud-in-the-inducement, performance, non-performance, breach, termination or enforceability of
this Escrow Agreement or the Settlement Agreement, as well as any dispute regarding jurisdiction or arbitrability, shall be resolved exclusively through final and binding arbitration regardless of the type of claim or remedy or relief sought, it
being the intention of the Parties that this is a broad form arbitration agreement designed to encompass all possible disputes among the Parties relating to the subject matter of this Escrow Agreement or the Settlement Agreement. This right to
arbitrate, and proceed by consolidated arbitration, the disputes, claims or controversies under this Escrow Agreement or the Settlement Agreement shall survive the termination of this Escrow Agreement and the Settlement Agreement. 

(c)    The arbitration shall be conducted in accordance with the Arbitration Rules of the International Chamber of
Commerce (the “ICC”) as in effect on the date of commencement of the arbitration proceeding (the“ICC Rules”). Any Party may initiate a claim for arbitration by filing a demand for arbitration pursuant to the ICC Rules (an
“Arbitration Demand”). That Party also shall send a copy of the Arbitration Demand to the other Parties. Upon any Arbitration Demand, and unless the Parties promptly agree to another method of appointing the arbitrators, three arbitrators
shall be appointed by the ICC, which shall nominate one of the arbitrators to be the chairman. 
 (d)    If the Parties
to this Escrow Agreement initiate multiple arbitration proceedings, the Parties hereby agree that all such proceedings shall be consolidated into a single arbitral proceeding. Such consolidation applies to any Arbitration Demand filed subsequent to
any prior Arbitration Demand as long as the arbitration tribunal under the arbitration provisions of this Escrow Agreement or the Settlement Agreement shall be constituted. If any Arbitration Demand is filed after the arbitration tribunal under the
arbitration provisions of this Escrow Agreement or the Settlement Agreement has finally decided all Arbitration Demands before the tribunal and the tribunal is no longer constituted for any other purpose, the ICC shall appoint a tribunal in
accordance with Section 7(c) above and any other subsequently or contemporaneously filed Arbitration Demand shall be consolidated into that tribunal such that at no time shall more than one arbitration panel be constituted for any Arbitration
Demands under this Escrow Agreement or the Settlement Agreement. The Parties hereby irrevocably waive any challenge or other objection to the consolidated arbitration provisions of this Escrow Agreement or the Settlement Agreement or the effects
thereof as well as any challenge or other objection to any arbitration tribunal so constituted on any ground concerning consolidation. The Parties do not intend or agree by this provision to authorize a class action or a mass action. 

  
 7 

 (e)    The situs of the arbitration under this Escrow Agreement shall be New
York, New York. The arbitration proceedings shall be conducted in the English language. The arbitrators shall resolve the dispute within a reasonably expedited time from the commencement of arbitration and issue a reasoned written opinion of their
decision to all Parties. Judgment on the award of the arbitral tribunal may be entered by any court of competent jurisdiction. Any up-front or other costs of arbitration shall be paid equally by the U.S. Producers and the U.S. Importers engaged in
such proceedings; provided, however, that the non-prevailing Party or Parties or group in any such arbitration shall pay or reimburse, as applicable, the prevailing Party or Parties for the fees, costs and
expenses of the arbitration (including any fees paid to the ICC and the arbitrators), as well as all reasonable fees, costs and expenses of the prevailing Party or Parties incurred or paid in connection with the arbitration proceeding (including
reasonable attorneys’ fees). Nothing in this clause shall be taken to supersede the Escrow Agent’s rights to indemnification and exculpation provided in Section 4 of this Escrow Agreement. 

(f)    Except to the extent necessary to enforce the arbitration agreement or award, to enforce other rights of any Party
under this Escrow Agreement or the Settlement Agreement, or as decided by a final written decision issued by the arbitrators or as required by law, the Parties, their employees, officers, directors, counsel, consultants and expert witnesses, shall
maintain as confidential the fact and existence of the arbitration proceeding, the arbitral award, contemporaneous or historical documents exchanged or produced during the arbitration proceeding and memorials, briefs or other documents prepared for
the arbitration. 
 (g)    Notwithstanding anything to the contrary herein, the provisions of subparagraphs
(b) through (f) of this Section 7 shall not be applicable to the Escrow Agent, and the Escrow Agent shall not be required to appear or participate in any arbitration proceedings, with respect to (i) disputes regarding fees payable to
the Escrow Agent in accordance with this Escrow Agreement, (ii) claims for indemnification pursuant to Section 4 hereof, and (iii) disputes regarding the Escrow Agent’s rights and/or obligations under this Escrow Agreement;
provided, however, that the Escrow Agent shall carry out the terms of any written arbitral decision resulting from any arbitration proceedings commenced by the other Parties hereto in accordance with this Section 7 or the Settlement Agreement.

 Section 8. Miscellaneous. 

(a) The invalidity, illegality or unenforceability of one or more provisions of this Escrow Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Escrow Agreement in such jurisdiction or the validity, legality or enforceability of this Escrow Agreement, including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the Parties under this Escrow Agreement shall be enforceable to the fullest extent permitted by law. 

  
 8 

 (b) All notices and other communications provided for or permitted under this Escrow Agreement
shall be made in writing and shall be sent by first-class mail, facsimile, recognized overnight courier service or personal delivery to the address of the respective Party or Parties listed on the signature pages of this Escrow Agreement, or to such
other address or facsimile number and with such other copies as such Party may hereafter specify for such purpose by notice to the other Parties, in each case with a copy to the Escrow Agent. Each such notice, request or other communication shall be
effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified by the appropriate Party on the signature pages hereto and evidence of receipt is received or (ii) if given by any other means, upon
delivery or refusal of delivery at the address specified in signature pages hereto. 
 (c) This Escrow Agreement may be executed in any
number of counterparts, by telecopy or otherwise, each of which will be deemed to be an original and which together will constitute one and the same instrument. 

(d) This Escrow Agreement may not be amended, modified or supplemented unless consented to in writing by all of the Parties hereto and no
waiver or consent to departure from the provisions of this Escrow Agreement shall be effective unless in writing by the Party whose waiver or consent is necessary. No failure or delay by any Party in exercising any right, power or privilege under
this Escrow Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 

(e) This Escrow Agreement constitutes the entire agreement and understanding of the Parties hereto in respect of the subject matter contained
in this Escrow Agreement, and there are no restrictions, promises, representations, warranties, covenants or undertakings with respect to the subject matter of this Escrow Agreement other than those expressly set forth or referred to in this Escrow
Agreement. This Escrow Agreement supersedes all prior agreements and understandings among the Parties with respect to such subject matter of this Escrow Agreement. No provision of this Escrow Agreement is intended to confer upon any person other
than the Parties hereto (and their successors and permitted assigns) any rights or remedies hereunder. 
 (f) The provisions of this Escrow
Agreement will be binding upon and inure to the benefits of the Parties hereto and will be automatically assumed by and binding upon a Party resulting from the merger, consolidation, sale of assets or other comparable transaction involving one of
the Parties hereto. Except as otherwise contemplated by the preceding sentence, this Escrow Agreement may not be assigned without the express written consent of each of the Parties hereto. 

(g) Notwithstanding anything to the contrary under the laws of the State of New York, Escrow Agent may rely upon facsimile copies of any
certificate or notice and may treat such facsimiles as originally executed documents. 

  
 9 

 EXHIBIT 1 

U.S. Importers of Record 
 U.S.
Importers of Record for Irving Paper 
  

	 	•	 	 

  

	 	•	 	 

 U.S. Importers of Record for PHP 

 

	 	•	 	 

  

	 	•	 	 

 EXHIBIT 2 

Signed CBP Form 4811 

 EXHIBIT 3 

Signed CBP Form 5106 

 EXHIBIT 4 

Irrevocable Power of Attorney 

 IRREVOCABLE POWER OF ATTORNEY 

In furtherance of the Settlement Agreement, the U.S. Producer (Verso Corporation), the Canadian Producers (Port Hawkesbury Paper Limited
Partnership, Port Hawkesbury Paper Inc., Pacific West Commercial Corporation, Port Hawkesbury Paper Holdings Ltd., Port Hawkesbury Investments Ltd., 6879900 Canada Inc., Port Hawkesbury Paper Ltd., and PHP Sales Services (US) LLC (collectively,
“Port Hawkesbury”); and Irving Paper Limited (“Irving Paper”)), the Canadian parent companies of the U.S. Importers named herein and the U.S. Importers entered into a settlement agreement (the “Settlement
Agreement”) pursuant to which the U.S. Producers and U.S. Importers will share the Refund in accordance with the terms of the escrow agreement by and among the U.S. Producers, the U.S. Importers and
                    , as Escrow Agent (the “Escrow Agreement”). Pursuant to the Settlement Agreement, the U.S. Importers have
instructed the U.S. Government to deliver the Refund in care of                     . For the purpose of implementing the provisions of the
Settlement Agreement and the Escrow Agreement, the undersigned hereby covenant and agree as follows: 
 1    By
executing and delivering this Irrevocable Power of Attorney, the undersigned hereby irrevocably make, constitute and appoint                     , as
Escrow Agent under the terms of the Escrow Agreement, the true and lawful agent and attorney-in-fact (the
“Attorney-in-Fact”) of the undersigned, with full power and authority to act hereunder, all as hereinafter provided, in the name of and for and on behalf of the undersigned, as fully as could the
undersigned if present and acting in person, with respect to all matters arising in connection with the receipt, endorsement and deposit of the Refund into the escrow accounts established in accordance with the terms of the Escrow Agreement,
including, without limitation, the power and authority to take any and all of the following actions: 
 (a)    arrange
for, prepare for and accept the delivery by the U.S. Government of the Refund; and 
 (b)    endorse any check
representing the Refund as Attorney-in-Fact for the U.S. Importers and deposit the Refund into the escrow accounts in accordance with the Escrow Agreement. 

2.    The undersigned hereby acknowledge and agree that this Irrevocable Power of Attorney and all authority conferred
hereby are granted and conferred for the benefit of the U.S. Importers and U.S. Producers under the Escrow Agreement. This Irrevocable Power of Attorney and all authority conferred hereby shall be irrevocable and shall not be terminated by the
undersigned or by operation of law, by the dissolution or liquidation of any corporation or partnership or by the occurrence of any other event. 

3.    The undersigned hereby ratify all actions taken or to be taken by the Attorney-in-Fact pursuant to paragraphs l(a) and l(b) of this Irrevocable Power of Attorney. 

 4.    The undersigned agree to indemnify and hold the Attorney-in-Fact free and harmless from any and all loss, damage or liability that it may sustain, directly or indirectly, as a result of any action taken in good faith
hereunder. 
 5.    This Power of Attorney shall be governed by, and construed in accordance with, the laws of the State
of New York (without regard to principles of conflicts of laws) and any dispute, controversy or claim hereunder shall be resolved in accordance with the Escrow Agreement. 

 EXHIBIT 5 

Wire Transfer Number for U.S. Producer

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