Document:

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THIS AGREEMENT IS made as of the 29th day of August, 2001,

BETWEEN:

          NORSKE SKOG CANADA LIMITED, a corporation continued under the laws of
          Canada,

          (the "Company")

                                                              OF THE FIRST PART,

AND

          RUSSELL J. HORNER

          (the "Executive"),

                                                             OF THE SECOND PART.

WHEREAS:

A.   The Company recognizes the valuable services that the Executive has
     provided and is continuing to provide to the Company and its subsidiaries
     and believes that it is reasonable and fair to the Company that the
     Executive receive fair treatment in the event of a Control Change (as
     hereinafter defined);

B.   The Company further recognizes that the Executive has acquired special
     skills relating to and extensive familiarity with the business of the
     Company and its subsidiaries;

C.   In the event of a Control Change, there is a possibility that the
     employment of the Executive would be terminated without cause or adversely
     modified and the Executive has expressed concern in that regard to the
     Company;

D.   The directors of the Company determined on July 26, 2001 that it would be
     in the best interests of the Company to induce the Executive to remain in
     the employ of the Company and its subsidiaries by indicating that in the
     event of a Control Change, the Executive would have certain automatic and
     guaranteed rights and by providing an incentive to the Executive to assist
     the Company in managing any Control Change which may be proposed;

E.   Both the Company and the Executive wish formally to agree as to the
     terms and conditions that will govern the termination or modification of
     the employment of, and payments to be made to, the Executive following a
     Control Change;

NOW THEREFORE in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties agree as follows:

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                                       2

1.   RECITALS

1.1. The parties agree, and represent and warrant to each other, that the above
     recitals are true and accurate.

2.   INTERPRETATION

2.1. The headings of the sections, subsections and clauses herein are inserted
     for convenience of reference only and shall not affect the meaning or
     construction hereof.

2.2. This Agreement shall be construed and interpreted in accordance with the
     laws of the Province of British Columbia and the federal laws of Canada
     applicable therein. Each of the parties hereby irrevocably attorns to the
     jurisdiction of the courts of the Province of British Columbia with respect
     to any matters arising out of this Agreement.

2.3. For the purposes of this Agreement, the following terms shall have the
     following meanings, respectively:

     (a)  "Annual Salary" shall mean the sum of:

          (i)  the annual salary of the Executive, payable to the Executive by
               the Company and its subsidiaries as at the end of the month
               immediately preceding the month in which a Control Change occurs
               (the "Prior Month") and if an annual salary has not been
               established, it shall be calculated by multiplying the monthly
               salary of the Executive in effect for the Prior Month by 12; and

          (ii) an amount equal to the target bonus of the Executive (currently
               62% of base salary) under the Short Term Incentive Plan of the
               Company for the fiscal year of the Company in which the Control
               Change occurs;

     (b)  "Approved Control Change" shall mean a Control Change wherein the
          actions causing the Control Change shall have been approved by the
          affirmative votes of at least a majority of the Incumbent Directors,
          it being understood that this Agreement in no way delimits a period of
          time during which the Incumbent Directors must decide whether to so
          approve any Control Change;

     (c)  "Control Change" shall mean:

          (i)  any change in ownership, direct or indirect, of shares of the
               Company and/or securities ("Convertible Securities") convertible
               into, exchangeable for or representing the right to acquire
               shares of the Company, as a result of or following which Norske
               Skogindustrier ASA ("NSI") beneficially owns, directly or
               indirectly, or exercises control or direction over, shares of the
               Company and/or Convertible Securities such that, assuming only
               the conversion, exchange or exercise of Convertible Securities
               beneficially owned by NSI, NSI would beneficially own, directly
               or indirectly, or exercise control or direction over, shares of
               the Company that would entitle the holders thereof to cast more
               than 50% of the votes attaching to

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                                       3

               all shares of the Company that may be cast to elect directors of
               the Company;

          (ii) any change in ownership, direct or indirect, of shares of the
               Company and/or Convertible Securities, as a result of or
               following which an Acquiror (as defined in paragraph (v) below)
               beneficially owns, directly or indirectly, or exercises control
               or direction over, shares of the Company and/or Convertible
               Securities such that, assuming only the conversion, exchange or
               exercise of Convertible Securities beneficially owned by the
               Acquiror,

               A.   the Acquiror would beneficially own, directly or indirectly,
                    or exercise control or direction over, shares of the Company
                    that would entitle the holders thereof to cast more than 35%
                    of the votes attaching to all shares of the Company that may
                    be cast to elect directors of the Company, and

               B.   if NSI then beneficially owns, directly or indirectly, or
                    exercises control or direction over, shares of the Company
                    that would entitle holders thereof to cast more than 35% of
                    the votes attaching to all shares of the Company that may be
                    cast to elect directors of the Company, the Acquiror would
                    beneficially own, directly or indirectly, or exercise
                    control or direction over, shares of the Company that would
                    entitle the holders thereof to cast more of the votes
                    attaching to all shares of the Company that may be cast to
                    elect directors of the Company than may be cast by holders
                    of shares of the Company beneficially owned, directly or
                    indirectly, or over which control or direction is exercised,
                    by NSI; or

         (iii) the acquisition by NSI or an Acquiror of all or substantially
               all of the assets of the Company resulting in a realization by
               the holders of shares of the Company of all or a substantial part
               of their investment;

          and for the purposes of this clause2.3(c)

          (iv) the expression "NSI" shall include any group of persons which
               includes NSI, any persons acting jointly or in concert with NSI
               and any persons associated or affiliated within the meaning of
               the Securities Act (British Columbia) with NSI, or any such group
               of persons or persons acting jointly or in concert;

          (v)  the expression "Acquiror" shall mean a person, group of persons
               or persons acting jointly or in concert, or persons associated or
               affiliated within the meaning of the SECURITIES ACT (British
               Columbia) with any such person, group of persons or persons
               acting jointly or in concert, but shall not include an Acquiror
               as so defined which consists of or includes NSI; and

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                                       4

          (vi) the terms "change in ownership" and "acquisition" include a
               transaction or series of transactions by way of takeover bid,
               purchase, amalgamation, merger, reorganization, arrangement,
               recapitalization, liquidation or other business combination;

     (d)  "Control Change Period" shall mean the period commencing on the date
          of a Control Change and ending on the earlier of: (i) the second
          anniversary of the date of the Control Change; and (ii) the
          Executive's Normal Retirement Date;

     (e)  "Date of Termination" shall mean the date of termination of the
          Executive's employment, whether by death of the Executive, by the
          Executive or by the Company;

     (f)  "Disability" shall mean the physical or mental illness of the
          Executive resulting in the Executive's failure to substantially
          perform his duties on a full-time basis;

     (g)  "Good Reason" shall include, without limitation, the occurrence of any
          of the following without the Executive's written consent (except in
          connection with the termination of the employment of the Executive for
          Just Cause or Disability);

          (i)  a change (other than those that are clearly consistent with a
               promotion) in the Executive's position or duties,
               responsibilities (including, without limitation, to whom the
               Executive reports and who reports to the Executive), title or
               office in effect immediately prior to the Control Change, which
               includes any removal of the Executive from or any failure to
               re-elect or re-appoint the Executive to any such positions or
               offices;

          (ii) a reduction by the Company or any of its subsidiaries of the
               Executive's salary, benefits or any other form of remuneration or
               any change in the basis upon which the Executive's salary,
               benefits or any other form of remuneration payable by the Company
               or its subsidiaries is determined or any failure by the Company
               to increase the Executive's salary, benefits or any other forms
               of remuneration payable by the Company or its subsidiaries in a
               manner consistent (both as to frequency and percentage increase)
               with practices in effect immediately prior to the Control Change
               or with practices implemented subsequent to the Control Change
               with respect to the senior executives of the Company and its
               subsidiaries, whichever is more favourable to the Executive; or

         (iii) any failure by the Company or its subsidiaries to continue in
               effect any benefit, bonus, profit sharing, incentive,
               remuneration or compensation plan, stock ownership or purchase
               plan, pension plan or retirement plan in which the Executive is
               participating or entitled to participate immediately prior to the
               Control Change, or the Company or its subsidiaries taking any
               action or failing to take any action that would adversely affect
               the Executive's participation in or reduce his rights or benefits
               under or pursuant to any such plan, or the Company or its
               subsidiaries failing to increase or improve such rights or
               benefits on a basis consistent with

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                                       5

               practices in effect immediately prior to the Control Change or
               with practices implemented subsequent to the Control Change with
               respect to the senior executives of the Company and its
               subsidiaries, whichever is more favourable to the Executive; or

          (iv) the Company or its subsidiaries relocating the Executive to any
               place other than the location at which he reported for work on a
               regular basis immediately prior to the Control Change or a place
               within 50 kilometres of that location; or

          (v)  any failure by the Company or its subsidiaries to provide the
               Executive with the number of paid vacation days to which he was
               entitled immediately prior to the Control Change or the Company
               or its subsidiaries failing to increase such paid vacation on a
               basis consistent with practices in effect immediately prior to
               the Control Change or with practices implemented subsequent to
               the Control Change with respect to the senior executives of the
               Company and its subsidiaries, whichever is more favourable to the
               to the Executive; or

          (vi) the Company or its subsidiaries taking any action to deprive the
               Executive of any material fringe benefit not hereinbefore
               mentioned and enjoyed by him immediately prior to the Control
               Change, or the Company or its subsidiaries failing to increase or
               improve such material fringe benefits on a basis consistent with
               practices in effect immediately prior to the Control Change or
               with practices implemented subsequent to the Control Change with
               respect to the senior executives of the Company and its
               subsidiaries, whichever is more favourable to the Executive; or

         (vii) any breach by the Company of any provision of this Agreement; or

        (viii) the good faith determination by the Executive that, as a result
               of the Control Change or any action or event thereafter, the
               Executive's status or responsibility in the Company or its
               subsidiaries have been diminished or the Executive is being
               effectively prevented from carrying out his duties and
               responsibilities as they existed immediately prior to the Control
               Change.

     (h)  "Incumbent Director" shall mean any member of the board of directors
          of the Company who was a member of the board of directors of the
          Company immediately prior to a Control Change and any successor to an
          Incumbent Director who was recommended or elected or appointed to
          succeed any Incumbent Director by the affirmative vote of the
          directors when that affirmative vote includes the affirmative vote of
          a majority of the Incumbent Directors then on the board of directors
          of the Company;

     (i)  "Just Cause" shall mean:

          (i)  the continued failure by the Executive to substantially perform
               his duties according to the terms of his employment (other than
               those: (A) that

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                                       6

               follow a change (other than those clearly consistent with a
               promotion) in his position or duties; or (B) resulting from the
               Executive's Disability) after the Company has given the Executive
               reasonable notice of such failure and a reasonable opportunity to
               correct it;

          (ii) the engaging by the Executive in any act that is materially
               injurious to the business or reputation of the Company,
               monetarily or otherwise, but not including, following a Control
               Change, the expression of opinions contrary to those of directors
               of the Company who are not Incumbent Directors or those of the
               Control Group; or

         (iii) the engaging by the Executive in any criminal or dishonest act
               resulting or intended to result directly or indirectly in
               personal gain of the Executive or any other person at the
               Company's expense;

     (j)  "Normal Retirement Date" shall mean the date as of which the Executive
          would be required to retire, determined in accordance with the
          Company's practices and policies relating to retirement generally
          applicable to its senior executives and in effect immediately prior to
          the Control Change or at the Date of Termination, whichever is more
          favourable to the Executive and in the absence of any such practices
          and policies, the date when the Executive attains the age of 65;

     (k)  "Resignation" shall mean, if there is a Control Change, the Executive
          giving the Company not less than 30 days prior written notice of his
          resignation, provided that such notice is given to the Company not
          later than 90 days after the Executive learns of the Control Change
          and makes express reference to the Control Change; and

     (l)  "Retirement" shall mean the Executive's retirement from employment on
          the Normal Retirement Date.

2.4. Unless otherwise specified, all dollar amounts referred to in this
     Agreement are expressed in Canadian dollars.

3.   APPLICATION OF AGREEMENT AND TERM

3.1. This Agreement shall apply if a Control Change occurs within the term of
     two years after the date hereof or such longer period as the Company may
     from time to time specify by notice to the Executive. The obligations of
     the Company under section 5 shall survive the expiration of this Agreement
     if there is a Control Change prior to the end of the term of this
     Agreement.

3.2. The terms set out in this Agreement are in lieu of (and not in addition to)
     and in full satisfaction of any and all other claims or entitlements which
     the Executive has or may have upon the termination of his employment after
     a Control Change and during the Control Change Period. As a precondition to
     receiving any payments or benefits pursuant to this Agreement, the
     Executive agrees to execute and deliver to the Company a release document
     of all claims which the Executive may then have for whatever reason or
     cause in connection with the Executive's employment and in respect of such

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                                       7

     termination (except for any claims arising in connection with the
     performance by the Company of its obligations under this Agreement).

4.   OBLIGATIONS OF THE EXECUTIVE

4.1. From and after the date of this Agreement:

     (a)  The Executive shall not solicit, initiate or encourage proposals or
          offers from, or provide information relating to the Company to, any
          person, entity or group in connection with or relating to any
          acquisition or disposition or all or any material part of the
          Company's issued and outstanding shares, any amalgamation, merger,
          arrangement, sale of all or any material part of the assets of the
          Company or any subsidiary thereof, take-over bid, reorganization,
          recapitalization, liquidation, winding-up of, or other business
          combination or any similar transaction involving the Company or any of
          its subsidiaries, without in each case the approval of the board of
          directors of the Company.

     (b)  The provisions of clause 4.1(a) shall not apply to the sale by the
          Executive of any shares of the Company owned by him.

     (c)  This Agreement shall automatically terminate if the Executive breaches
          the provisions of clause 4.1(a).

4.2. If the Executive's employment is terminated by the Executive by Resignation
     after the occurrence of a Control Change which is an Approved Control
     Change, the Company may require the Executive to continue to provide his
     services for a period of up to 90 days after the Control Change, in which
     case the Company may require that the Executive's termination of employment
     by Resignation be effective on a date which is acceptable to the Company,
     provided that such date is not more than 90 days after the date of the
     Control Change. Prior to the effective termination of the Executive's
     employment by Resignation, the Executive will assist as reasonably required
     to accomplish an orderly transition in the management of the business and
     affairs of the Company, but nothing in this subsection 4.2 shall limit the
     rights of the Executive under any other provisions of this Agreement and
     the Date of Termination for purposes of clause 5.1(e) shall be the date
     specified in the written notice of Resignation given by the Executive.

5.   OBLIGATIONS OF THE COMPANY

5.1. The Company shall have the following obligations in the event that the
     Executive's employment is terminated subsequent to a Control Change during
     the Control Change Period:

     (a)  DEATH.  If the Executive's employment is terminated by reason of the
          Executive's death, the Executive's family shall receive benefits in a
          manner consistent with and at least equal in amount to those provided
          by the Company and its subsidiaries to surviving families of the
          senior executives of the Company and its subsidiaries under such
          plans, programs and policies relating to family death benefits, if
          any, as are in effect at the date of the Executive's death.

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                                       8

     (b)  DISABILITY.  Unless otherwise determined by the Chairman of the Board
          of the Company, the employment of the Executive shall automatically
          terminate in the event of Disability for a period of six months out of
          any 18 month period. If the Executive's employment is terminated by
          reason of Disability , the Executive and/or the Executive's family
          shall be entitled thereafter to receive reasonable termination and
          severance payments and allowances and disability and other benefits in
          a manner consistent with and at least equal in amount to those
          provided by the Company to disabled senior executives of the Company
          and/or their families in accordance with such plans, programs and
          policies relating to disability, if any, as are in effect at the Date
          of Termination.

     (c)  RETIREMENT.  If the Executive's employment is terminated by reason of
          Retirement, the Executive shall be entitled thereafter to receive
          reasonable retirement benefits at least equal to those provided by the
          Company to senior executives in accordance with such plans, programs
          and policies relating to retirement, if any, as are in effect at the
          Date of Termination.

     (d)  TERMINATION BY THE COMPANY FOR JUST CAUSE AND TERMINATION BY THE
          EXECUTIVE OTHER THAN FOR GOOD REASON OR BY RESIGNATION.  If the
          Executive's employment is terminated by the Company for Just Cause, or
          is terminated by the Executive other than for Good Reason or by
          Resignation, the Company shall pay to the Executive, if not
          theretofore paid, the fraction of the Annual Salary earned by or
          payable to the Executive by the Company or its subsidiaries during the
          then current fiscal year of the Company for the period to and
          including the Date of Termination, and neither the Company nor its
          subsidiaries shall have any further obligations to the Executive under
          this Agreement.

     (e)  TERMINATION BY THE COMPANY OTHER THAN FOR JUST CAUSE, DISABILITY OR
          DEATH AND TERMINATION BY THE EXECUTIVE FOR GOOD REASON OR BY
          RESIGNATION.  If the Executive's employment is terminated by the
          Company other than for Just Cause, Disability or death or is
          terminated by the Executive for Good Reason or by Resignation:

          (i)  the Company shall pay to or to the order of the Executive by no
               more than two lump sum payments in cash or certified cheque
               within ten days after the Date of Termination, the aggregate of
               the following amounts (less any deductions required by law):

               A.   if not theretofore paid, the Executive's Annual Salary for
                    the then current fiscal year of the Company for the period
                    to and including the Date of Termination; and

               B.   as partial compensation for the Executive's loss of
                    employment, an amount equal to the lesser of: (1) three
                    times the Annual Salary; and (2) an amount equal to the
                    result obtained when the Annual Salary is multiplied by a
                    fraction, the numerator of which is the number of days
                    between the Date of Termination and the

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                                       9

                    Executive's Normal Retirement Date and the denominator of
                    which is 365;

          (ii) if the Executive holds any options, rights, warrants or other
               entitlements for the purchase or acquisition of shares in the
               capital of the Company or any affiliate thereof (collectively,
               "Rights"), regardless of whether such Rights may then be
               exercised, such Rights shall then be deemed to be available for
               exercise and, if the Executive so elects by notice in writing to
               the Company, such Rights shall be deemed to have been exercised
               at the price provided for in such Rights and the Executive shall
               be deemed to have immediately sold the securities arising from
               such exercise to the Company for the fair market value thereof
               (which in the event of dispute shall be determined within 30 days
               of the delivery of such notice at the Company's expense by a
               valuator satisfactory to both the Company and the Executive using
               such assumptions or methods as such valuator may think in its
               absolute discretion best reflect the intention of this paragraph
               5.1(e)(ii) and such determination shall be final and binding) and
               the Company shall pay to the Executive, in the manner and at the
               time contemplated by paragraph 5.1(e)(i) the difference between
               the aggregate price for such securities and their deemed
               acquisition price to the Company;

         (iii) all employment benefit and perquisites to which the Executive is
               entitled immediately prior to the Date of Termination will
               terminate on the Date of Termination, except that the Company
               will provide to, continue or maintain for the Executive, as
               applicable, the employment benefits and perquisites described in
               Schedule A;

          (iv) the Executive shall be entitled to receive benefits from the
               Norske Skog Canada Limited Retirement Plan for Salaried Employees
               (the "RPP") and the Norske Skog Canada Limited Supplemental
               Retirement Plan for Senior Executives (the "Supplemental Plan")
               on the following terms:

               A.   if on the Date of Termination the Executive has not
                    satisfied a vesting condition under the RPP or the
                    Supplemental Plan, the Executive will be deemed to have
                    satisfied such vesting condition;

               B.   if on the Date of Termination the Executive is required to
                    have any form of consent from the Company to immediately
                    receive benefits under the Supplemental Plan, the Executive
                    will be deemed to have received such a consent;

               C.   subject to paragraph 5.1(e)(iv)A, the Executive will be
                    entitled to receive benefits from the RPP in accordance with
                    its terms on the basis of the Executive's earnings and
                    service with the Company to the Date of Termination;

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                                       10

               D.   the Executive will be entitled to have a notional
                    contribution made to the Supplemental Plan equal to the
                    present value (determined by an actuary acceptable to the
                    Company and the Executive) of the amounts that would have
                    been notionally contributed to the Supplemental Plan on the
                    Executive's behalf in respect of the five year period
                    following the Date of Termination, and for the purpose of
                    determining the amount of such notional contributions, the
                    Company shall be deemed, despite the Supplemental Plan's
                    terms, to make annual notional contributions to the
                    Supplemental Plan on the Executive's behalf in an amount
                    equal to the product of X and Y where:

                    X =  the percentage rate at which notional contributions
                         are made to the Supplemental Plan, as determined by the
                         Supplemental Plan's terms in effect on the date of
                         Control Change or the Date of Termination, whichever is
                         more favourable to the Executive (it being acknowledged
                         that as of the date hereof the Supplemental Plan
                         requires such contributions to be made at a rate of
                         12%); and

                    Y =  despite the definition of Earnings in the
                         Supplemental Plan, an amount equal to the amount
                         specified in clause 2.3(a)(i) plus 50% of the amount
                         specified in clause 2.3(a)(ii), both determined at the
                         Date of Termination.

                    For greater certainty, it is confirmed that the Company will
                    make no contributions to the RPP on the Executive's behalf
                    in respect of the 5 year period, with the result that the
                    deduction which would normally be applied to the Company's
                    notional contributions to the Supplemental Plan on the
                    Executive's behalf on account of such contributions will not
                    apply;

               E.   subject to subparagraphs 5.1(e)(iv)A, B and D, the Executive
                    will be entitled to receive benefits from the Supplemental
                    Plan on the basis of the Executive's earnings and service
                    with the Company to the Date of Termination in accordance
                    with the terms of the Supplemental Plan in effect on the
                    date of Control Change or the Date of Termination, whichever
                    is more favourable to the Executive;

          (v)  the Company shall provide the Executive for a period of up to one
               year from the Date of Termination with the job relocation
               counseling services of a firm chosen from time to time by the
               Executive, at a cost to the Company not to exceed $25,000.

5.2. The benefits payable under this section 5 shall not be reduced in any
     respect in the event that the Executive shall secure or shall not
     reasonably pursue alternative employment following the termination of the
     Executive's employment.

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                                       11

6.   GENERAL

6.1. The Executive shall not be prohibited in any manner whatsoever from
     obtaining employment with or otherwise forming or participating in a
     business competitive to the business of the Company after termination of
     his employment by the Company without Just Cause or for Disability or
     termination by the Executive of his employment for Good Reason or by
     Resignation; provided that nothing in this subsection 6.1 shall release the
     Executive from any obligation to keep confidential and not make use of any
     information relating to the business and affairs of the Company.

6.2. The Executive agrees that after termination of his employment by him, he
     will tender his resignation from any position he may hold as an officer or
     director of the Company or any of its affiliated or associated companies.
     Doing so will not reduce the obligations of the Company described herein
     where the Executive terminates his employment for Good Reason.

6.3. The Company agrees to pay, without requiring the Executive first to pay
     such fees and expenses, all legal fees and expenses that the Executive or
     the Executive's legal representatives may reasonably incur or face arising
     out of or in connection with this Agreement (but this Agreement only),
     including any litigation concerning the validity or enforceability of, or
     liability under, any provision of this Agreement or any action by the
     Executive or the Executive's legal representatives to enforce his or their
     rights under this Agreement (but this Agreement only), provided that the
     Executive or the Executive's legal representatives shall reimburse the
     Company for such legal fees and expenses paid by the Company in respect of
     any such litigation in which the Company is the successful party, and the
     Company agrees to pay interest, compounded quarterly, on the total unpaid
     amount payable under this Agreement, such interest to be calculated at a
     rate equal to 2% in excess of the prime commercial annual lending rate for
     Canadian dollar demand loans announced from time to time by The Royal Bank
     of Canada during the period of such nonpayment.

6.4. Any notice required or permitted to be given under this Agreement shall be
     in writing and shall be properly given if delivered by hand or mailed by
     prepaid registered mail addressed as follows:

     (a)  in the case of the Company to:

          Norske Skog Canada Limited
          9th Floor, 700 W. Georgia Street
          Vancouver, B.C.
          V7Y 1J7

          ATTENTION: Chairman of the Board

     (b)  in the case of the Executive, to:

          the last address of the Executive in the records of the Company and
          its subsidiaries

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                                       12

         or to such other address as the parties may from time to time specify
         by notice given in accordance herewith. Any notice so given shall be
         conclusively deemed to have been given or made on the day of delivery,
         if delivered, or if mailed by registered mail, upon the date shown on
         the postal return receipt as the date upon which the envelope
         containing such notice was actually received by the addressee.

6.5. This Agreement shall enure to the benefit of and be binding upon the
     Executive and his heirs, executors and administrators and upon the Company
     and its successors and assigns.

6.6. Nothing herein derogates from any rights the Executive may have under
     applicable law, except as set out in this section. The parties agree that
     the rights, entitlements and benefits set out in this Agreement to be paid
     to the Executive are in full satisfaction of all rights of the Executive
     under the Employment Standards Act (British Columbia) or any successor
     legislation from time to time and any rights or entitlements the Executive
     may have as against subsidiaries of the Company as a result of the
     termination of his employment with such subsidiaries.

6.7. This Agreement may be amended only by an instrument in writing signed by
     both parties.

6.8. Neither party may waive or shall be deemed to have waived any right it has
     under this Agreement (including under this section) except to the extent
     that such waiver is in writing.

IN WITNESS WHEREOF, the parties have executed this Agreement.

                                        NORSKE SKOG CANADA LIMITED

                                        by: /s/ Harold N. Kvisle
                                            -------------------------------
                                            Director

                                            /s/ Jan A. Reinas
                                            -------------------------------
                                            Director

                                            /s/ Russell J. Horner
                                            -------------------------------
                                            RUSSELL J. HORNER

<PAGE>

                                   SCHEDULE A

                      TREATMENT OF BENEFITS AND PERQUISITES

All benefits, privileges and perquisites the Executive might formerly have
received as a result of employment with the Company will cease as of the Date of
Termination except as expressly set out below:

1.   Provincial Medical Services Plan (MSP): coverage for Executive and
     dependants will cease at the end of the month in which the Date of
     Termination occurs and the Company will reimburse the Executive for the
     cost of coverage for the Executive and his dependents for an additional 12
     months.

2.   Life Insurance: the current level of coverage (up to 3 times annual salary)
     will continue until the Date of Termination, and the Executive will have 31
     days from the Date of Termination to convert this coverage to an individual
     life insurance policy, to a maximum of $200,000.

3.   Optional Life Insurance: any executive, spousal, or child optional life
     insurance coverage the Executive had by reason of employment with the
     Company will cease on the Date of Termination. The Executive may convert
     all or part of any optional executive and/or spousal insurance, up to a
     maximum of $200,000 each, within 31 days of this date, to individual life
     insurance policies at prevailing individual, as opposed to group insurance
     rates and without medical examination.

4.   Accidental Death and Dismemberment Insurance ("AD&D"):

     (a)  coverage under AD&D will cease on the Date of Termination; and

     (b)  any executive, spousal, or child optional AD&D coverage the Executive
          had by reason of employment will cease on the Date of Termination; the
          Executive may elect to convert all or part of any optional executive
          and/or spousal insurance, up to a maximum of $200,000 each, within 31
          days after the Date of Termination.

5.   Health Spending Account: contributions by the Executive will cease on the
     Date of Termination. The Executive may submit claims against the balance
     accrued to the Date of Termination, until the end of the calendar year in
     which the Date of Termination occurs.

6.   Disability Benefits: short term and long term disability coverage will
     cease at the Date of Termination.

7.   Vacation: all accrued regular and extended vacation entitlement, including
     pro-rated regular and, if applicable, extended entitlement to the Date of
     Termination, will be paid to the Executive at the Date of Termination.

8.   Share Purchase Plan: participation and/or contributions through payroll
     deduction will cease on the Date of Termination. All amounts in the
     Executive's account must be withdrawn within 30 days of the Date of
     Termination.

<PAGE>
                                       ii

9.   Group RRSP: participation and/or contributions by way of payroll deduction
     by the Executive will cease at the Date of Termination. Treatment of the
     Executive's fund balances will be as per the terms of the Plan.

10.  Leased Automobile: the Executive is entitled to elect to purchase the
     automobile leased by the Company, and designated for his use, at the Date
     of Termination for the then current residual option price of the
     automobile. The Executive will bear all sales and other tax costs and any
     other costs and taxes which may be associated with any such transfer.

11.  Club Memberships:

     (a)  the payment by the Company of any personal club memberships held by
          the Executive will cease on the Date of Termination; and

     (b)  the payment of any corporate club membership dues in respect of the
          Executive will cease on the Date of Termination, and the membership
          will remain with the Company.

12.  Company Loans, i.e. housing, auto insurance, leased vehicle driver option,
     computer purchase, etc.: the balance outstanding on any and all company
     loans granted to the Executive will become due and payable in full on the
     Date of Termination; provided that the Executive's interest free housing
     loan, if any, shall not be repayable in full until the earlier of the date
     of commencement of alternate employment which is comparable as to annual
     compensation and authorities, duties and responsibilities to the position
     held by the Executive immediately prior to the Date of Termination and the
     third anniversary of the date of drawing of funds.

13.  Canada Savings Bonds: if the Executive was purchasing Canada Savings Bonds
     through payroll deductions, he may elect to receive a refund for the amount
     already paid, or purchase the bond in full within 5 days after the Date of
     Termination.

14.  Charitable donations and social club fees: deductions will cease at the
     Date of Termination.

15.  Post Retirement Medical and Dental Benefits: the Executive will become
     eligible on the later of the first of the month following the Date of
     Termination or the first of the month following his 55th birth date, to
     apply for medical, extended health and dental benefits on the basis of
     treatment equivalent to that being received by an employee of the Company
     who retired on the Date of Termination.<PAGE>

THIS AGREEMENT IS made as of the 29th day of August, 2001,

BETWEEN:

          NORSKE SKOG CANADA LIMITED, a corporation continued under the laws of
          Canada,

          (the "Company")

                                                              OF THE FIRST PART,

AND

          RALPH LEVERTON

          (the "Executive"),

                                                             OF THE SECOND PART.

WHEREAS:

A.   The Company recognizes the valuable services that the Executive has
     provided and is continuing to provide to the Company and its subsidiaries
     and believes that it is reasonable and fair to the Company that the
     Executive receive fair treatment in the event of a Control Change (as
     hereinafter defined);

B.   The Company further recognizes that the Executive has acquired special
     skills relating to and extensive familiarity with the business of the
     Company and its subsidiaries;

C.   In the event of a Control Change, there is a possibility that the
     employment of the Executive would be terminated without cause or adversely
     modified and the Executive has expressed concern in that regard to the
     Company;

D.   The directors of the Company determined on July 26, 2001 that it would be
     in the best interests of the Company to induce the Executive to remain in
     the employ of the Company and its subsidiaries by indicating that in the
     event of a Control Change, the Executive would have certain automatic and
     guaranteed rights and by providing an incentive to the Executive to assist
     the Company in managing any Control Change which may be proposed;

E.   Both the Company and the Executive wish formally to agree as to the terms
     and conditions that will govern the termination or modification of the
     employment of, and payments to be made to, the Executive following a
     Control Change;

NOW THEREFORE in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties agree as follows:

<PAGE>
                                       2

1.   RECITALS

1.1. The parties agree, and represent and warrant to each other, that the above
     recitals are true and accurate.

2.   INTERPRETATION

2.1. The headings of the sections, subsections and clauses herein are inserted
     for convenience of reference only and shall not affect the meaning or
     construction hereof.

2.2. This Agreement shall be construed and interpreted in accordance with the
     laws of the Province of British Columbia and the federal laws of Canada
     applicable therein. Each of the parties hereby irrevocably attorns to the
     jurisdiction of the courts of the Province of British Columbia with respect
     to any matters arising out of this Agreement.

2.3. For the purposes of this Agreement, the following terms shall have the
     following meanings, respectively:

     (a)  "Annual Salary" shall mean the sum of:

          (i)  the annual salary of the Executive, payable to the Executive by
               the Company and its subsidiaries as at the end of the month
               immediately preceding the month in which a Control Change occurs
               (the "Prior Month") and if an annual salary has not been
               established, it shall be calculated by multiplying the monthly
               salary of the Executive in effect for the Prior Month by 12; and

          (ii) an amount equal to the target bonus of the Executive (currently
               40% of base salary) under the Short Term Incentive Plan of the
               Company for the fiscal year of the Company in which the Control
               Change occurs;

     (b)  "Approved Control Change" shall mean a Control Change wherein the
          actions causing the Control Change shall have been approved by the
          affirmative votes of at least a majority of the Incumbent Directors,
          it being understood that this Agreement in no way delimits a period of
          time during which the Incumbent Directors must decide whether to so
          approve any Control Change;

     (c)  "Control Change" shall mean:

          (i)  any change in ownership, direct or indirect, of shares of the
               Company and/or securities ("Convertible Securities") convertible
               into, exchangeable for or representing the right to acquire
               shares of the Company, as a result of or following which Norske
               Skogindustrier ASA ("NSI") beneficially owns, directly or
               indirectly, or exercises control or direction over, shares of the
               Company and/or Convertible Securities such that, assuming only
               the conversion, exchange or exercise of Convertible Securities
               beneficially owned by NSI, NSI would beneficially own, directly
               or indirectly, or exercise control or direction over, shares of
               the Company that would entitle the holders thereof to cast more
               than 50% of the votes attaching to

<PAGE>
                                       3

               all shares of the Company that may be cast to elect directors of
               the Company;

          (ii) any change in ownership, direct or indirect, of shares of the
               Company and/or Convertible Securities, as a result of or
               following which an Acquiror (as defined in paragraph (v) below)
               beneficially owns, directly or indirectly, or exercises control
               or direction over, shares of the Company and/or Convertible
               Securities such that, assuming only the conversion, exchange or
               exercise of Convertible Securities beneficially owned by the
               Acquiror,

               A.   the Acquiror would beneficially own, directly or indirectly,
                    or exercise control or direction over, shares of the Company
                    that would entitle the holders thereof to cast more than 35%
                    of the votes attaching to all shares of the Company that may
                    be cast to elect directors of the Company, and

               B.   if NSI then beneficially owns, directly or indirectly, or
                    exercises control or direction over, shares of the Company
                    that would entitle holders thereof to cast more than 35% of
                    the votes attaching to all shares of the Company that may be
                    cast to elect directors of the Company, the Acquiror would
                    beneficially own, directly or indirectly, or exercise
                    control or direction over, shares of the Company that would
                    entitle the holders thereof to cast more of the votes
                    attaching to all shares of the Company that may be cast to
                    elect directors of the Company than may be cast by holders
                    of shares of the Company beneficially owned, directly or
                    indirectly, or over which control or direction is exercised,
                    by NSI; or

         (iii) the acquisition by NSI or an Acquiror of all or substantially
               all of the assets of the Company resulting in a realization by
               the holders of shares of the Company of all or a substantial part
               of their investment;

          and for the purposes of this clause 2.3(c)

          (iv) the expression "NSI" shall include any group of persons which
               includes NSI, any persons acting jointly or in concert with NSI
               and any persons associated or affiliated within the meaning of
               the Securities Act (British Columbia) with NSI, or any such group
               of persons or persons acting jointly or in concert;

          (v)  the expression "Acquiror" shall mean a person, group of persons
               or persons acting jointly or in concert, or persons associated or
               affiliated within the meaning of the SECURITIES ACT (British
               Columbia) with any such person, group of persons or persons
               acting jointly or in concert, but shall not include an Acquiror
               as so defined which consists of or includes NSI; and

<PAGE>
                                       4

          (vi) the terms "change in ownership" and "acquisition" include a
               transaction or series of transactions by way of takeover bid,
               purchase, amalgamation, merger, reorganization, arrangement,
               recapitalization, liquidation or other business combination;

     (d)  "Control Change Period" shall mean the period commencing on the date
          of a Control Change and ending on the earlier of: (i) the second
          anniversary of the date of the Control Change; and (ii) the
          Executive's Normal Retirement Date;

     (e)  "Date of Termination" shall mean the date of termination of the
          Executive's employment, whether by death of the Executive, by the
          Executive or by the Company;

     (f)  "Disability" shall mean the physical or mental illness of the
          Executive resulting in the Executive's failure to substantially
          perform his duties on a full-time basis;

     (g)  "Good Reason" shall include, without limitation, the occurrence of any
          of the following without the Executive's written consent (except in
          connection with the termination of the employment of the Executive for
          Just Cause or Disability);

          (i)  a change (other than those that are clearly consistent with a
               promotion) in the Executive's position or duties,
               responsibilities (including, without limitation, to whom the
               Executive reports and who reports to the Executive), title or
               office in effect immediately prior to the Control Change, which
               includes any removal of the Executive from or any failure to
               re-elect or re-appoint the Executive to any such positions or
               offices;

          (ii) a reduction by the Company or any of its subsidiaries of the
               Executive's salary, benefits or any other form of remuneration or
               any change in the basis upon which the Executive's salary,
               benefits or any other form of remuneration payable by the Company
               or its subsidiaries is determined or any failure by the Company
               to increase the Executive's salary, benefits or any other forms
               of remuneration payable by the Company or its subsidiaries in a
               manner consistent (both as to frequency and percentage increase)
               with practices in effect immediately prior to the Control Change
               or with practices implemented subsequent to the Control Change
               with respect to the senior executives of the Company and its
               subsidiaries, whichever is more favourable to the Executive; or

         (iii) any failure by the Company or its subsidiaries to continue in
               effect any benefit, bonus, profit sharing, incentive,
               remuneration or compensation plan, stock ownership or purchase
               plan, pension plan or retirement plan in which the Executive is
               participating or entitled to participate immediately prior to the
               Control Change, or the Company or its subsidiaries taking any
               action or failing to take any action that would adversely affect
               the Executive's participation in or reduce his rights or benefits
               under or pursuant to any such plan, or the Company or its
               subsidiaries failing to increase or improve such rights or
               benefits on a basis consistent with

<PAGE>
                                       5

               practices in effect immediately prior to the Control Change or
               with practices implemented subsequent to the Control Change with
               respect to the senior executives of the Company and its
               subsidiaries, whichever is more favourable to the Executive; or

          (iv) the Company or its subsidiaries relocating the Executive to any
               place other than the location at which he reported for work on a
               regular basis immediately prior to the Control Change or a place
               within 50 kilometres of that location; or

          (v)  any failure by the Company or its subsidiaries to provide the
               Executive with the number of paid vacation days to which he was
               entitled immediately prior to the Control Change or the Company
               or its subsidiaries failing to increase such paid vacation on a
               basis consistent with practices in effect immediately prior to
               the Control Change or with practices implemented subsequent to
               the Control Change with respect to the senior executives of the
               Company and its subsidiaries, whichever is more favourable to the
               to the Executive; or

          (vi) the Company or its subsidiaries taking any action to deprive the
               Executive of any material fringe benefit not hereinbefore
               mentioned and enjoyed by him immediately prior to the Control
               Change, or the Company or its subsidiaries failing to increase or
               improve such material fringe benefits on a basis consistent with
               practices in effect immediately prior to the Control Change or
               with practices implemented subsequent to the Control Change with
               respect to the senior executives of the Company and its
               subsidiaries, whichever is more favourable to the Executive; or

         (vii) any breach by the Company of any provision of this Agreement; or

        (viii) the good faith determination by the Executive that, as a result
               of the Control Change or any action or event thereafter, the
               Executive's status or responsibility in the Company or its
               subsidiaries have been diminished or the Executive is being
               effectively prevented from carrying out his duties and
               responsibilities as they existed immediately prior to the Control
               Change.

     (h)  "Incumbent Director" shall mean any member of the board of directors
          of the Company who was a member of the board of directors of the
          Company immediately prior to a Control Change and any successor to an
          Incumbent Director who was recommended or elected or appointed to
          succeed any Incumbent Director by the affirmative vote of the
          directors when that affirmative vote includes the affirmative vote of
          a majority of the Incumbent Directors then on the board of directors
          of the Company;

     (i)  "Just Cause" shall mean:

          (i)  the continued failure by the Executive to substantially perform
               his duties according to the terms of his employment (other than
               those: (A) that

<PAGE>
                                       6

               follow a change (other than those clearly consistent with a
               promotion) in his position or duties; or (B) resulting from the
               Executive's Disability) after the Company has given the Executive
               reasonable notice of such failure and a reasonable opportunity to
               correct it;

          (ii) the engaging by the Executive in any act that is materially
               injurious to the business or reputation of the Company,
               monetarily or otherwise, but not including, following a Control
               Change, the expression of opinions contrary to those of directors
               of the Company who are not Incumbent Directors or those of the
               Control Group; or

         (iii) the engaging by the Executive in any criminal or dishonest act
               resulting or intended to result directly or indirectly in
               personal gain of the Executive or any other person at the
               Company's expense;

     (j)  "Normal Retirement Date" shall mean the date as of which the Executive
          would be required to retire, determined in accordance with the
          Company's practices and policies relating to retirement generally
          applicable to its senior executives and in effect immediately prior to
          the Control Change or at the Date of Termination, whichever is more
          favourable to the Executive and in the absence of any such practices
          and policies, the date when the Executive attains the age of 65;

     (k)  "Resignation" shall mean, if there is a Control Change, the Executive
          giving the Company not less than 30 days prior written notice of his
          resignation, provided that such notice is given to the Company not
          later than 90 days after the Executive learns of the Control Change
          and makes express reference to the Control Change; and

     (l)  "Retirement" shall mean the Executive's retirement from employment on
          the Normal Retirement Date.

2.4. Unless otherwise specified, all dollar amounts referred to in this
     Agreement are expressed in Canadian dollars.

3.   APPLICATION OF AGREEMENT AND TERM

3.1. This Agreement shall apply if a Control Change occurs within the term of
     two years after the date hereof or such longer period as the Company may
     from time to time specify by notice to the Executive. The obligations of
     the Company under section 5 shall survive the expiration of this Agreement
     if there is a Control Change prior to the end of the term of this
     Agreement.

3.2. The terms set out in this Agreement are in lieu of (and not in addition to)
     and in full satisfaction of any and all other claims or entitlements which
     the Executive has or may have upon the termination of his employment after
     a Control Change and during the Control Change Period. As a precondition to
     receiving any payments or benefits pursuant to this Agreement, the
     Executive agrees to execute and deliver to the Company a release document
     of all claims which the Executive may then have for whatever reason or
     cause in connection with the Executive's employment and in respect of such

<PAGE>
                                       7

     termination (except for any claims arising in connection with the
     performance by the Company of its obligations under this Agreement).

4.   OBLIGATIONS OF THE EXECUTIVE

4.1. From and after the date of this Agreement:

     (a)  The Executive shall not solicit, initiate or encourage proposals or
          offers from, or provide information relating to the Company to, any
          person, entity or group in connection with or relating to any
          acquisition or disposition or all or any material part of the
          Company's issued and outstanding shares, any amalgamation, merger,
          arrangement, sale of all or any material part of the assets of the
          Company or any subsidiary thereof, take-over bid, reorganization,
          recapitalization, liquidation, winding-up of, or other business
          combination or any similar transaction involving the Company or any of
          its subsidiaries, without in each case the approval of the board of
          directors of the Company.

     (b)  The provisions of clause 4.1(a) shall not apply to the sale by the
          Executive of any shares of the Company owned by him.

     (c)  This Agreement shall automatically terminate if the Executive breaches
          the provisions of clause 4.1(a).

4.2. If the Executive's employment is terminated by the Executive by Resignation
     after the occurrence of a Control Change which is an Approved Control
     Change, the Company may require the Executive to continue to provide his
     services for a period of up to 90 days after the Control Change, in which
     case the Company may require that the Executive's termination of employment
     by Resignation be effective on a date which is acceptable to the Company,
     provided that such date is not more than 90 days after the date of the
     Control Change. Prior to the effective termination of the Executive's
     employment by Resignation, the Executive will assist as reasonably required
     to accomplish an orderly transition in the management of the business and
     affairs of the Company, but nothing in this subsection 4.2 shall limit the
     rights of the Executive under any other provisions of this Agreement and
     the Date of Termination for purposes of clause 5.1(e) shall be the date
     specified in the written notice of Resignation given by the Executive.

5.   OBLIGATIONS OF THE COMPANY

5.1. The Company shall have the following obligations in the event that the
     Executive's employment is terminated subsequent to a Control Change during
     the Control Change Period:

     (a)  DEATH.  If the Executive's employment is terminated by reason of the
          Executive's death, the Executive's family shall receive benefits in a
          manner consistent with and at least equal in amount to those provided
          by the Company and its subsidiaries to surviving families of the
          senior executives of the Company and its subsidiaries under such
          plans, programs and policies relating to family death benefits, if
          any, as are in effect at the date of the Executive's death.

<PAGE>
                                       8

     (b)  DISABILITY.  Unless otherwise determined by the Chairman of the Board
          of the Company, the employment of the Executive shall automatically
          terminate in the event of Disability for a period of six months out of
          any 18 month period. If the Executive's employment is terminated by
          reason of Disability , the Executive and/or the Executive's family
          shall be entitled thereafter to receive reasonable termination and
          severance payments and allowances and disability and other benefits in
          a manner consistent with and at least equal in amount to those
          provided by the Company to disabled senior executives of the Company
          and/or their families in accordance with such plans, programs and
          policies relating to disability, if any, as are in effect at the Date
          of Termination.

     (c)  RETIREMENT.  If the Executive's employment is terminated by reason of
          Retirement, the Executive shall be entitled thereafter to receive
          reasonable retirement benefits at least equal to those provided by the
          Company to senior executives in accordance with such plans, programs
          and policies relating to retirement, if any, as are in effect at the
          Date of Termination.

     (d)  TERMINATION BY THE COMPANY FOR JUST CAUSE AND TERMINATION BY THE
          EXECUTIVE OTHER THAN FOR GOOD REASON OR BY RESIGNATION.  If the
          Executive's employment is terminated by the Company for Just Cause, or
          is terminated by the Executive other than for Good Reason or by
          Resignation, the Company shall pay to the Executive, if not
          theretofore paid, the fraction of the Annual Salary earned by or
          payable to the Executive by the Company or its subsidiaries during the
          then current fiscal year of the Company for the period to and
          including the Date of Termination, and neither the Company nor its
          subsidiaries shall have any further obligations to the Executive under
          this Agreement.

     (e)  TERMINATION BY THE COMPANY OTHER THAN FOR JUST CAUSE, DISABILITY OR
          DEATH AND TERMINATION BY THE EXECUTIVE FOR GOOD REASON OR BY
          RESIGNATION.  If the Executive's employment is terminated by the
          Company other than for Just Cause, Disability or death or is
          terminated by the Executive for Good Reason or by Resignation:

          (i)  the Company shall pay to or to the order of the Executive by no
               more than two lump sum payments in cash or certified cheque
               within ten days after the Date of Termination, the aggregate of
               the following amounts (less any deductions required by law):

               A.   if not theretofore paid, the Executive's Annual Salary for
                    the then current fiscal year of the Company for the period
                    to and including the Date of Termination; and

               B.   as partial compensation for the Executive's loss of
                    employment, an amount equal to the lesser of: (1) three
                    times the Annual Salary; and (2) an amount equal to the
                    result obtained when the Annual Salary is multiplied by a
                    fraction, the numerator of which is the number of days
                    between the Date of Termination and the

<PAGE>
                                       9

                    Executive's Normal Retirement Date and the denominator of
                    which is 365;

          (ii) if the Executive holds any options, rights, warrants or other
               entitlements for the purchase or acquisition of shares in the
               capital of the Company or any affiliate thereof (collectively,
               "Rights"), regardless of whether such Rights may then be
               exercised, such Rights shall then be deemed to be available for
               exercise and, if the Executive so elects by notice in writing to
               the Company, such Rights shall be deemed to have been exercised
               at the price provided for in such Rights and the Executive shall
               be deemed to have immediately sold the securities arising from
               such exercise to the Company for the fair market value thereof
               (which in the event of dispute shall be determined within 30 days
               of the delivery of such notice at the Company's expense by a
               valuator satisfactory to both the Company and the Executive using
               such assumptions or methods as such valuator may think in its
               absolute discretion best reflect the intention of this paragraph
               5.1(e)(ii), and such determination shall be final and binding)
               and the Company shall pay to the Executive, in the manner and at
               the time contemplated by paragraph 5.1(e)(i), the difference
               between the aggregate price for such securities and their deemed
               acquisition price to the Company;

         (iii) all employment benefit and perquisites to which the Executive is
               entitled immediately prior to the Date of Termination will
               terminate on the Date of Termination, except that the Company
               will provide to, continue or maintain for the Executive, as
               applicable, the employment benefits and perquisites described in
               Schedule A;

          (iv) the Executive shall be entitled to receive benefits from the
               Norske Skog Canada Limited Retirement Plan for Salaried Employees
               (the "RPP") and the Norske Skog Canada Limited Supplemental
               Retirement Plan for Senior Executives (the "Supplemental Plan")
               on the following terms:

               A.   if on the Date of Termination the Executive has not
                    satisfied a vesting condition under the RPP or the
                    Supplemental Plan, the Executive will be deemed to have
                    satisfied such vesting condition;

               B.   if on the Date of Termination the Executive is required to
                    have any form of consent from the Company to immediately
                    receive benefits under the Supplemental Plan, the Executive
                    will be deemed to have received such a consent;

               C.   subject to paragraph 5.1(e)(iv)A, the Executive will be
                    entitled to receive benefits from the RPP in accordance with
                    its terms on the basis of the Executive's earnings and
                    service with the Company to the Date of Termination;

<PAGE>
                                       10

               D.   the Executive will be entitled to have a notional
                    contribution made to the Supplemental Plan equal to the
                    present value (determined by an actuary acceptable to the
                    Company and the Executive) of the amounts that would have
                    been notionally contributed to the Supplemental Plan on the
                    Executive's behalf in respect of the five year period
                    following the Date of Termination, and for the purpose of
                    determining the amount of such notional contributions, the
                    Company shall be deemed, despite the Supplemental Plan's
                    terms, to make annual notional contributions to the
                    Supplemental Plan on the Executive's behalf in an amount
                    equal to the product of X and Y where:

                    X =  the percentage rate at which notional contributions
                         are made to the Supplemental Plan, as determined by the
                         Supplemental Plan's terms in effect on the date of
                         Control Change or the Date of Termination, whichever is
                         more favourable to the Executive (it being acknowledged
                         that as of the date hereof the Supplemental Plan
                         requires such contributions to be made at a rate of
                         12%); and

                    Y =  despite the definition of Earnings in the
                         Supplemental Plan, an amount equal to the amount
                         specified in clause 2.3(a)(i) plus 50% of the amount
                         specified in clause 2.3(a)(ii), both determined at the
                         Date of Termination.

                    For greater certainty, it is confirmed that the Company will
                    make no contributions to the RPP on the Executive's behalf
                    in respect of the 5 year period, with the result that the
                    deduction which would normally be applied to the Company's
                    notional contributions to the Supplemental Plan on the
                    Executive's behalf on account of such contributions will not
                    apply;

               E.   subject to subparagraphs 5.1(e)(iv)A, B and D, the Executive
                    will be entitled to receive benefits from the Supplemental
                    Plan on the basis of the Executive's earnings and service
                    with the Company to the Date of Termination in accordance
                    with the terms of the Supplemental Plan in effect on the
                    date of Control Change or the Date of Termination, whichever
                    is more favourable to the Executive;

          (v)  the Company shall provide the Executive for a period of up to one
               year from the Date of Termination with the job relocation
               counseling services of a firm chosen from time to time by the
               Executive, at a cost to the Company not to exceed $25,000.

5.2. The benefits payable under this section 5 shall not be reduced in any
     respect in the event that the Executive shall secure or shall not
     reasonably pursue alternative employment following the termination of the
     Executive's employment.

<PAGE>
                                       11

6.   GENERAL

6.1. The Executive shall not be prohibited in any manner whatsoever from
     obtaining employment with or otherwise forming or participating in a
     business competitive to the business of the Company after termination of
     his employment by the Company without Just Cause or for Disability or
     termination by the Executive of his employment for Good Reason or by
     Resignation; provided that nothing in this subsection 6.1 shall release the
     Executive from any obligation to keep confidential and not make use of any
     information relating to the business and affairs of the Company.

6.2. The Executive agrees that after termination of his employment by him, he
     will tender his resignation from any position he may hold as an officer or
     director of the Company or any of its affiliated or associated companies.
     Doing so will not reduce the obligations of the Company described herein
     where the Executive terminates his employment for Good Reason.

6.3. The Company agrees to pay, without requiring the Executive first to pay
     such fees and expenses, all legal fees and expenses that the Executive or
     the Executive's legal representatives may reasonably incur or face arising
     out of or in connection with this Agreement (but this Agreement only),
     including any litigation concerning the validity or enforceability of, or
     liability under, any provision of this Agreement or any action by the
     Executive or the Executive's legal representatives to enforce his or their
     rights under this Agreement (but this Agreement only), provided that the
     Executive or the Executive's legal representatives shall reimburse the
     Company for such legal fees and expenses paid by the Company in respect of
     any such litigation in which the Company is the successful party, and the
     Company agrees to pay interest, compounded quarterly, on the total unpaid
     amount payable under this Agreement, such interest to be calculated at a
     rate equal to 2% in excess of the prime commercial annual lending rate for
     Canadian dollar demand loans announced from time to time by The Royal Bank
     of Canada during the period of such nonpayment.

6.4. Any notice required or permitted to be given under this Agreement shall be
     in writing and shall be properly given if delivered by hand or mailed by
     prepaid registered mail addressed as follows:

     (a)  in the case of the Company to:

          Norske Skog Canada Limited
          9th Floor, 700 W. Georgia Street
          Vancouver, B.C.
          V7Y 1J7

          ATTENTION: Chairman of the Board

     (b)  in the case of the Executive, to:

          the last address of the Executive in the records of the Company and
          its subsidiaries

<PAGE>
                                       12

     or to such other address as the parties may from time to time specify by
     notice given in accordance herewith. Any notice so given shall be
     conclusively deemed to have been given or made on the day of delivery, if
     delivered, or if mailed by registered mail, upon the date shown on the
     postal return receipt as the date upon which the envelope containing such
     notice was actually received by the addressee.

6.5. This Agreement shall enure to the benefit of and be binding upon the
     Executive and his heirs, executors and administrators and upon the Company
     and its successors and assigns.

6.6. Nothing herein derogates from any rights the Executive may have under
     applicable law, except as set out in this section. The parties agree that
     the rights, entitlements and benefits set out in this Agreement to be paid
     to the Executive are in full satisfaction of all rights of the Executive
     under the Employment Standards Act (British Columbia) or any successor
     legislation from time to time and any rights or entitlements the Executive
     may have as against subsidiaries of the Company as a result of the
     termination of his employment with such subsidiaries.

6.7. This Agreement may be amended only by an instrument in writing signed by
     both parties.

6.8. Neither party may waive or shall be deemed to have waived any right it has
     under this Agreement (including under this section) except to the extent
     that such waiver is in writing.

IN WITNESS WHEREOF, the parties have executed this Agreement.

                                        NORSKE SKOG CANADA LIMITED

                                        by: /s/ Russell J. Horner
                                            -------------------------------
                                            Director

                                            /s/ William P. Rosenfeld
                                            -------------------------------
                                            Director

                                            /s/ Ralph Leverton
                                            -------------------------------
                                            RALPH LEVERTON

<PAGE>

                                   SCHEDULE A

                      TREATMENT OF BENEFITS AND PERQUISITES

All benefits, privileges and perquisites the Executive might formerly have
received as a result of employment with the Company will cease as of the Date of
Termination except as expressly set out below:

1.   Provincial Medical Services Plan (MSP): coverage for Executive and
     dependants will cease at the end of the month in which the Date of
     Termination occurs and the Company will reimburse the Executive for the
     cost of coverage for the Executive and his dependents for an additional 12
     months.

2.   Life Insurance: the current level of coverage (up to 3 times annual salary)
     will continue until the Date of Termination, and the Executive will have 31
     days from the Date of Termination to convert this coverage to an individual
     life insurance policy, to a maximum of $200,000.

3.   Optional Life Insurance: any executive, spousal, or child optional life
     insurance coverage the Executive had by reason of employment with the
     Company will cease on the Date of Termination. The Executive may convert
     all or part of any optional executive and/or spousal insurance, up to a
     maximum of $200,000 each, within 31 days of this date, to individual life
     insurance policies at prevailing individual, as opposed to group insurance
     rates and without medical examination.

4.   Accidental Death and Dismemberment Insurance ("AD&D"):

     (a)  coverage under AD&D will cease on the Date of Termination; and

     (b)  any executive, spousal, or child optional AD&D coverage the Executive
          had by reason of employment will cease on the Date of Termination; the
          Executive may elect to convert all or part of any optional executive
          and/or spousal insurance, up to a maximum of $200,000 each, within 31
          days after the Date of Termination.

5.   Health Spending Account: contributions by the Executive will cease on the
     Date of Termination. The Executive may submit claims against the balance
     accrued to the Date of Termination, until the end of the calendar year in
     which the Date of Termination occurs.

6.   Disability Benefits: short term and long term disability coverage will
     cease at the Date of Termination.

7.   Vacation: all accrued regular and extended vacation entitlement, including
     pro-rated regular and, if applicable, extended entitlement to the Date of
     Termination, will be paid to the Executive at the Date of Termination.

8.   Share Purchase Plan: participation and/or contributions through payroll
     deduction will cease on the Date of Termination. All amounts in the
     Executive's account must be withdrawn within 30 days of the Date of
     Termination.

<PAGE>
                                       ii

9.   Group RRSP: participation and/or contributions by way of payroll deduction
     by the Executive will cease at the Date of Termination. Treatment of the
     Executive's fund balances will be as per the terms of the Plan.

10.  Leased Automobile: the Executive is entitled to elect to purchase the
     automobile leased by the Company, and designated for his use, at the Date
     of Termination for the then current residual option price of the
     automobile. The Executive will bear all sales and other tax costs and any
     other costs and taxes which may be associated with any such transfer.

11.  Club Memberships:

     (a)  the payment by the Company of any personal club memberships held by
          the Executive will cease on the Date of Termination; and

     (b)  the payment of any corporate club membership dues in respect of the
          Executive will cease on the Date of Termination, and the membership
          will remain with the Company.

12.  Company Loans, i.e. housing, auto insurance, leased vehicle driver option,
     computer purchase, etc.: the balance outstanding on any and all company
     loans granted to the Executive will become due and payable in full on the
     Date of Termination.

13.  Canada Savings Bonds: if the Executive was purchasing Canada Savings Bonds
     through payroll deductions, he may elect to receive a refund for the amount
     already paid, or purchase the bond in full within 5 days after the Date of
     Termination.

14.  Charitable donations and social club fees: deductions will cease at the
     Date of Termination.

15.  Post Retirement Medical and Dental Benefits: the Executive will become
     eligible on the later of the first of the month following the Date of
     Termination or the first of the month following his 55th birth date, to
     apply for medical, extended health and dental benefits on the basis of
     treatment equivalent to that being received by an employee of the Company
     who retired on the Date of Termination.

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