Document:

exv10w4

EXHIBIT 10.4

AbitibiBowater

2010 Canadian DB Supplemental Executive Retirement Plan

Effective December 9, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE 1 INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	1.1 Plan Introduction
	 	 	1	 
	1.2 Plan Purpose
	 	 	1	 
	1.3 409A Compliance
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2 DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2.1 “Actuarial Equivalent Value”
	 	 	2	 
	2.2 “Active Participant”
	 	 	2	 
	2.3 “Additional Voluntary Contribution”
	 	 	2	 
	2.4 “Average Pensionable Earnings”
	 	 	2	 
	2.5 “Basic Pension”
	 	 	3	 
	2.6 “Beneficiary”
	 	 	4	 
	2.7 “Company”
	 	 	5	 
	2.8 “Continuous Service”
	 	 	5	 
	2.9 “Credited Service”
	 	 	5	 
	2.10 “Creditor Protection Proceedings”
	 	 	5	 
	2.11 “Deferred Vested Participant”
	 	 	5	 
	2.12 “Disability”
	 	 	5	 
	2.13 “Early Retirement Date”
	 	 	6	 
	2.14 “Effective Date”
	 	 	6	 
	2.15 “Emergence”
	 	 	6	 
	2.16 “Employer”
	 	 	6	 
	2.17 “Final Accrual Date”
	 	 	6	 
	2.18 “Legacy Participant”
	 	 	6	 
	2.19 “MSBA”
	 	 	6	 
	2.20 “Normal Retirement Date”
	 	 	6	 
	2.21 “Participant”
	 	 	6	 
	2.22 “Plan”
	 	 	6	 
	2.23 “Plan Administrator”
	 	 	6	 
	2.24 “Prior Plan”
	 	 	6	 
	2.25 “Reorganization Plan”
	 	 	6	 
	2.26 “Registered Pension Plan”
	 	 	6	 
	2.27 “Retirement Benefit”
	 	 	6	 
	2.28 “Spouse”
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 3 ELIGIBILITY AND PARTICIPATION
	 	 	8	 
	 
	 	 	 	 
	3.1 Eligibility for Participation
	 	 	8	 
	3.2 Participation
	 	 	8	 
	 
	 	 	 	 
	ARTICLE 4 RETIREMENT BENEFITS
	 	 	10	 
	 
	 	 	 	 
	4.1 Status of Retirement Benefits
	 	 	10	 
	4.2 Payment of Plan Benefits
	 	 	10	 
	4.3 Amount of Retirement Benefits
	 	 	10	 

i

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	4.4 Normal Retirement Benefits
	 	 	12	 
	4.5 Early Retirement Benefits
	 	 	12	 
	4.6 Disability Payments
	 	 	13	 
	4.7 Form of Pension
	 	 	13	 
	4.8 Death Before Retirement
	 	 	15	 
	4.9 Termination of Employment
	 	 	16	 
	4.10 Increase in Benefits
	 	 	18	 
	4.11 Commutation of Benefits
	 	 	18	 
	4.12 Service Outside Canada
	 	 	18	 
	4.13 Conditions for Payment
	 	 	19	 
	4.14 Right of Offset
	 	 	20	 
	4.15 Taxes; Compliance with §409A
	 	 	21	 
	 
	 	 	 	 
	ARTICLE 5 PLAN ADMINISTRATION
	 	 	23	 
	 
	 	 	 	 
	5.1 Plan Administration and Interpretation
	 	 	23	 
	5.2 Powers, Duties, Procedures
	 	 	23	 
	5.3 Information
	 	 	23	 
	5.4 Indemnification of Plan Administrator
	 	 	23	 
	5.5 Claims Procedure
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 6 AMENDMENT AND TERMINATION
	 	 	26	 
	 
	 	 	 	 
	6.1 Authority to Amend and Terminate
	 	 	26	 
	6.2 Existing Rights
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 7 MISCELLANEOUS
	 	 	27	 
	 
	 	 	 	 
	7.1 Funding
	 	 	27	 
	7.2 General Creditor Status
	 	 	27	 
	7.3 No Assignment
	 	 	27	 
	7.4 Notices and Communications
	 	 	27	 
	7.5 Limitation of Participant’s Rights
	 	 	27	 
	7.6 Participants Bound
	 	 	28	 
	7.7 Receipt and Release
	 	 	28	 
	7.8 Governing Law and Severability
	 	 	28	 
	7.9 Headings
	 	 	28	 

ii

 

AbitibiBowater

2010 Canadian DB Supplemental Executive Retirement Plan

Effective December 9, 2010

ARTICLE 1

INTRODUCTION

     1.1 Plan Introduction.

     (a) In April 2009, AbitibiBowater Inc. (the “Company”) and its U.S. and Canadian subsidiaries
(the “AbitibiBowater Entities”) filed voluntary petitions seeking relief pursuant to Chapter 11 of
the United States Bankruptcy Code and/or applied for protection from their creditors under Canada’s
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C36, as amended (collectively, the “Creditor
Protection Proceedings”). The Company and/or certain of its subsidiaries later filed proposed plans
of reorganization in the Creditor Protection Proceedings (collectively, the “Reorganization Plan”).
The Reorganization Plan was approved by the creditors of the AbitibiBowater Entities and the
Canadian and U.S. courts. As a result, the AbitibiBowater Entities have emerged from the Creditor
Protection Proceedings on December 9, 2010 (the “Emergence”).

     (b) Pursuant to the Reorganization Plan, the Prior Plan was terminated coincident with
Emergence. On December 9, 2010, the Company adopted and established the AbitibiBowater 2010
Canadian DB Supplemental Executive Retirement Plan (the “Plan”), as may be amended from time to
time. Further and pursuant to the Reorganization Plan, the Plan reinstates certain benefits on
behalf of certain eligible employees and former employees of the Employer, and their Beneficiaries,
if the requirements of Section 3.1(a) are met. The reinstated benefits are substantially similar
to the retirement benefits eliminated with the termination of the Prior Plan, subject to reductions
and limitations as set forth in the Reorganization Plan and incorporated herein.

     1.2 Plan Purpose. The purpose of the Prior Plan was to provide certain eligible
employees of the Employer with an enhanced retirement benefit that supplemented the retirement
benefits provided to such eligible employees under the Registered Pension Plan of the Employer.
The purpose of the Plan is to reinstate a portion of the benefits of the Prior Plan to certain
Participants and Beneficiaries, as provided in the Reorganization Plan and described herein. For
the avoidance of doubt, no retirement benefits accrued under any plan other than the Prior Plan are
reinstated under, or shall be paid pursuant to, this Plan.

     1.3 409A Compliance. The portions of the Plan governing Participants who are subject
to Section 409A of the Internal Revenue Code of 1986 and any regulations issued thereunder (the
“Code”) are intended to comply with the provisions of Code Section 409A with respect to all amounts
credited to and deferred under the Plan on behalf of such Participants on and after the Effective
Date. The Plan shall be interpreted, administered and operated as necessary to comply with the
requirements of Code Section 409A and applicable Treasury Regulations. The Company reserves the
right to amend or modify the Plan in order to comply with regulations promulgated by the Department
of Treasury under Code Section 409A.

 

 

ARTICLE 2

DEFINITIONS

     Wherever used herein, the following terms have the meanings set forth below, unless a
different meaning is clearly required by the context:

     2.1 “Actuarial Equivalent Value” means a value deemed to be equal to another value, as
determined on a basis of the Plan provisions in effect on the date such determination is being
made. The Actuarial Equivalent Value of a benefit of a Participant under this Plan shall be
determined in the same manner and using the same assumptions as those used or that would be used
for purposes of calculating the commuted value of termination of employment benefits under the
Registered Pension Plan under which the Participant is entitled to receive benefits following his
termination of employment or retirement from the Employer. For greater certainty, in determining
the Actuarial Equivalent Value of a benefit, account shall not be taken of the income tax
consequences that would arise to the recipient of the benefit.

     2.2 “Active Participant” means an individual who meets the requirements of Section 3.1(b) for
participation in the Plan and who maintains an accrued benefit under the Plan.

     2.3 “Additional Voluntary Contribution” means a contribution, other than a required
contribution, which may be made by a Participant under a Registered Pension Plan.

     2.4 “Average Pensionable Earnings” means, in respect of a Participant:

     (a) For years of Continuous Service before January 1, 2009, the sum of:

     (i) the average of the Participant’s monthly Earnings (as defined in subsection
2.4(c)(i)) during the 60 consecutive months within the 120 months of Continuous Service
immediately preceding the earliest of his retirement, his termination of employment or the
Final Accrual Date during which such Earnings were the highest, multiplied by 12; plus

     (ii) the average of the Participant’s annual Incentive Award (as defined in subsection
2.4(c)(ii)) earned in the five years, whether consecutive or not, within the 10 years of
continuous employment immediately preceding the earliest of his retirement, disability, his
termination of employment or the Final Accrual Date, during which such annual Incentive
Award was the highest.

     (b) For years of Continuous Service on and after January 1, 2009, the average of the
Participant’s Earnings plus Incentive Award, during the five consecutive calendar years within the
10 years of Continuous Service immediately preceding the earliest of his retirement, his
termination of employment or the Final Accrual Date, during which such Earnings plus Incentive
Award were the highest. The Incentive Award taken into consideration is the one paid during the
year and is capped at 125% of the Participant’s target incentive award for the year in question.

     For purposes of this Section 2.4, if at the time the calculation of Average Pensionable
Earnings is made, a Participant has less than five years of Continuous Service, his Average

2

 

Pensionable Earnings shall be the average Earnings calculated over the actual number of years
of his Continuous Service plus the average of his Incentive Award during such period.

     (c) For purposes of this Section 2.4:

     (i) “Earnings” means the Participant’s base salary on which is based his remuneration
received from the Company. With respect to periods of Credited Service during which the
Participant does not actually receive remuneration from the Company, Earnings mean the
Participant’s base salary on which such remuneration would have been based. However, such
deemed Earnings shall not exceed the amount of compensation that is prescribed for this
purpose under Section 8507 of the Regulations under the Income Tax Act.

     (ii) “Incentive Award” means the incentive award paid to a Participant under the
Employer’s regular incentive plans or programs adopted by the Company from time to time or
the incentive award paid under the 2010 Short Term Incentive Plan while employed with an
Employer, regardless of whether a Participant is eligible for and exercises any right to
defer an Incentive Award under any plan or program of the Company. Incentive Award does not
include any other cash incentive, non-recurring (including any restructuring awards under
the Emergence Recognition Plan) or multi-year incentive award, unless authorized by the Plan
Administrator.

     2.5 “Basic Pension” means the lifetime annual pension which the Participant would otherwise be
entitled to receive from time to time pursuant to the Registered Pension Plan, in regards to the
period of Credited Service recognized for purposes of this Plan or that would be so recognized for
purposes of this Plan in absence of the 35 year limit on Credited Service (as set forth in the
definition of Credited Service), but limited to the period of Credited Service actually recognized
in the Registered Pension Plan. It shall be assumed that such annual pension is payable from the
same date as supplementary benefits commence to be paid under this Plan and is calculated on the
basis of the following assumptions:

     (i) where the Registered Pension Plan is a defined benefit pension plan:

	 	(A)	 	the annual pension is in the form of a pension
payable under the normal form provided for under the Registered Pension
Plan, or if the Participant elected an optional form in accordance with
Section 4.7(c), the annual pension payable under such optional form;
	 
	 	(B)	 	the Participant has made no Additional
Voluntary Contribution;
	 
	 	(C)	 	the additional pension that is or would be
provided by any excess contributions shall be included regardless of
whether the Participant elected to receive payment of the excess
contribution in cash; and
	 
	 	(D)	 	the amount of the Basic Pension shall be
determined according to the formula under the Registered Pension Plan
regardless of any

3

 

	 	 	 	reduction in benefits that may be applied, by
operation of statute or
otherwise, as a result of the funded status of such Registered
Pension Plan on the date of such determination (it being understood
that, where the Registered Pension Plan is a defined benefit pension
plan, the foregoing assumption shall also be applicable to the
determination of the amount of survivor pension payable to the Spouse
under the Registered Pension Plan following the death of the
Participant (or any survivor pension that would have been payable had
the benefits under the Registered Pension Plan not been commuted) as
referred to in Section 4.7(a)(ii), and any amount payable under the
Registered Pension Plan to the Participant’s estate or any designated
Beneficiary following the death of the Participant (or any amount
that would have been payable had the benefits under the Registered
Pension Plan not been commuted) as referred to in Section
4.7(a)(ii)); and

     (ii) where the Registered Plan is a defined contribution pension plan, and subject to
clause (iii), an annual pension which is the Actuarial Equivalent Value, based on the
assumptions and the normal form of pension described in clause (i), of the amount
accumulated by the Participant under the Registered Pension Plan, excluding his Additional
Voluntary Contributions, as of the date of his retirement, death or termination of
employment with the Employer (for greater certainty, the normal form shall be a lifetime
joint and 60% survivor pension for a Participant with a Spouse and the normal form shall be
a lifetime pension with a guarantee of a minimum of 120 monthly payments for a Participant
without a Spouse); and

     (iii) in the case of a Participant who is a former Abitibi-Price Inc. employee who held
a MSBA and who elected to convert his defined benefit entitlement under Abitibi-Price Inc.’s
Registered Pension Plan to a defined contribution entitlement, a list of such Participants
being attached hereto as Appendix B, the Basic Pension in respect of such Participant shall
be determined as if the Participant had elected to not convert his defined benefit
entitlement under Abitibi-Price Inc.’s Registered Pension Plan and such defined benefit
entitlement has been determined in accordance with the provisions in effect on January 1,
1996 of the Abitibi-Price Inc.’s Registered Pension Plan and in accordance with the
assumptions and the form of pension described in clause (i); and

     (iv) in all cases, where a Participant’s entitlement under the Registered Pension Plan
has been divided between the Participant and his Spouse or former Spouse as a result of
divorce, separation or annulment of marriage, his Basic Pension shall be determined as if no
such division of his entitlement had occurred.

     2.6 “Beneficiary” means (i) for a Legacy Participant, the individual or entity identified as
the Legacy Participant’s Beneficiary at the time the Legacy Participant’s retirement benefit under
the Prior Plan went into pay status, which payment of benefit was suspended as a result of the
Creditor Protection Proceedings, and (ii) for a Deferred Vested Participant or an Active
Participant, any individual or entity designated as the Participant’s Beneficiary under the Plan.
If there is no Beneficiary designated under this Plan, then the Participant’s Beneficiary

4

 

shall be
the Participant’s Beneficiary designated under the Prior Plan. If there is no Beneficiary
designated under the Prior Plan, then the Participant’s Beneficiary shall be the Participant’s
Spouse, if then living at the time of the Participant’s death, and if none, then the Participant’s
estate.

     2.7 “Company” means AbitibiBowater Inc., a Delaware corporation, or any successor corporation
thereto. The Company may also mean a predecessor corporation thereto where the context so
requires.

     2.8 “Continuous Service” means a Participant’s uninterrupted period of employment, with the
Employer or with a predecessor company, deemed to have commenced on the first day of the month
coinciding with or immediately following the Participant’s hiring date by the Employer, or deemed
to have commenced on the Participant’s hiring date by such predecessor company, as the case may be.
For such purpose, a predecessor company means Donohue Inc. or any other company considered to be a
predecessor company for such purpose. The Continuous Service of a Participant shall not be
interrupted as a result of any absence due to disability, which was approved by the Employer, or
due to temporary absence other than as a result of disability, which was approved by the Employer.
For Participants hired on or after January 1, 2002, Continuous Service means a Participant’s
uninterrupted period of employment with the Employer deemed to have commenced on the Participant’s
hiring date. Continuous Service shall be measured in years with proportional allowance for
non-completed years.

     2.9 “Credited Service” means the Participant’s period of Continuous Service following the
Participant’s hiring date by the Employer. For greater certainty, Credited Service shall not
include any period of service recognized as credited service under any other unregistered pension
plan sponsored by the Employer other than this Plan. Credited Service shall not include any period
of service after the Final Accrual Date.

     Before the Effective Date, the Employer also recognized, for certain Participants who were
previously employed by Donohue Inc., certain newly hired Participants or any short service
Participants, additional service for purposes of calculating the Participant’s Continuous and
Credited Service, such additional service being as described in Appendix A hereto, with such
additional service to be vested only on the dates specified in Appendix A.

     Credited Service shall be measured in years with proportional allowance for non-completed
years. Total years of Credited Service under this Plan and under all other unregistered or
nonqualified pension plans sponsored by the Employer shall not exceed 35.

     2.10 “Creditor Protection Proceedings” is defined in Section 1.1(a).

     2.11 “Deferred Vested Participant” means an individual who meets the requirements of Section
3.1(c) for participation in the Plan and who maintains an accrued benefit under the Plan, or the
Beneficiary of such an individual who died before the Effective Date.

     2.12 “Disability” means the Participant is eligible to receive disability benefits under the
short-term or long-term disability plan maintained by the Employer, as more fully described in
Section 4.6.

5

 

     2.13 “Early Retirement Date” means the first day of the month coincident with or next
following the date on which the Participant elects to retire early in accordance with Section 4.5,
provided he has met the age and service requirements set forth in Section 4.5.

     2.14 “Effective Date” means December 9, 2010, the date of Emergence.

     2.15 “Emergence” is defined in Section 1.1(a).

     2.16 “Employer” means AbiBow Canada Inc. and each other entity affiliated with the Company
that is a participating employer under the Plan, and their successors.

     2.17 “Final Accrual Date” means December 31, 2010.

     2.18 “Legacy Participant” means an individual who meets the requirements of Section 3.1(d)(i)
for participation in the Plan, or the Beneficiary of a former employee described in Section
3.1(d)(ii), and in either case who maintains an accrued benefit under the Plan.

     2.19 “MSBA” means a Management Supplementary Benefit Agreement, which is an individual
supplementary benefits agreement with an Executive Employee who was a former employee of
Abitibi-Price Inc.

     2.20 “Normal Retirement Date” means the first day of the month coincident with or next
following the month in which a Participant attains age 65.

     2.21 “Participant” means each of an Active Participant, a Deferred Vested Participant or a
Legacy Participant.

     2.22 “Plan” means this AbitibiBowater 2010 Canadian DB Supplemental Executive Retirement Plan.

     2.23 “Plan Administrator” means the Human Resources and Compensation/Nominating and Governance
Committee of the Board of Directors of the Company (the “HRC/NGC”) or its delegate.

     2.24 “Prior Plan” means the Canadian Supplemental Executive Retirement Plan (SERP) for
Executive Employees of Abitibi-Consolidated Inc.

     2.25 “Reorganization Plan” is defined in Section 1.1(a).

     2.26 “Registered Pension Plan” means any one or more pension plans sponsored by the Employer
or its affiliates and registered with Canada Revenue Agency. When used in respect of a
Participant, this expression shall refer to the one or more Registered Pension Plans under which
such Participant is entitled to receive benefits following his termination of employment, death or
retirement from the Employer with regards to the period of Credited Service which is recognized
under this Plan.

     2.27 “Retirement Benefit” means the retirement benefit payable to a Participant or Beneficiary
under the Plan.

6

 

     2.28 “Spouse” means the person who satisfies the definition of spouse as defined under the
Registered Pension Plan of which the Participant is a member at the time the spousal status needs
to be determined, or would have been a member had his benefits not been commuted or paid in a lump
sum. Spousal status shall be determined on the day preceding the date of death of the Participant
or on the day when the Participant commences receiving his Retirement Benefit hereunder (or, for a
Legacy Participant, first began receiving his retirement benefits under the Prior Plan), whichever
occurs first.

7

 

ARTICLE 3

ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility for Participation.

     (a) An employee or former employee of the Employer, or Beneficiary of a deceased former
employee, shall be eligible to participate in the Plan as an Active Participant, a Deferred Vested
Participant or a Legacy Participant as set forth in this Section 3.1 if such individual:

     (i) was a participant in and had accrued a retirement benefit under the Prior Plan, or
a Beneficiary of a deceased participant who had accrued such a benefit, as of the Effective
Date, which retirement benefit was not paid under the Prior Plan before its termination; and

     (ii) waived and forfeited any and all claims he had or may have had in the Creditor
Protection Proceedings in respect of the Prior Plan or any other Terminated Retirement Plan
as defined in the Reorganization Plan.

     (b) An individual shall be an Active Participant if such individual meets the requirements of
paragraph (a), such individual is an active employee of the Employer on the Effective Date and
maintained a retirement benefit under the Prior Plan as of the Effective Date.

     (c) An individual shall be a Deferred Vested Participant if such individual meets the
requirements of paragraph (a), such individual is a former employee of the Employer on the
Effective Date and earned a deferred vested retirement benefit under the Prior Plan as of the
Effective Date.

     (d) An individual shall be a Legacy Participant if such individual either:

     (i) meets the requirements of paragraph (a) and such individual is a former employee of
the Employer who was in pay status and receiving a retirement benefit under the Prior Plan
when the Creditor Protection Proceedings commenced; or

     (ii) is the Beneficiary of a former employee who died before the Effective Date, and
either such Beneficiary was receiving survivorship benefits under the Prior Plan when the
Creditor Protection Proceedings commenced, or would have begun receiving survivorship
benefits on or after the date the Creditor Protection Proceedings commenced but for the
Creditor Protection Proceedings.

     (e) Notwithstanding anything in the Plan to the contrary, Plan participation shall be frozen
and no Employees shall be first eligible to participate in the Plan on or after the Effective Date.

     3.2 Participation. An individual described in Section 3.1 shall participate in the
Plan as an Active Participant, a Deferred Vested Participant or a Legacy Participant as of the
Effective Date and shall have the retirement benefit he accrued under the Prior Plan reinstated
under the Plan as of the Effective Date, subject to any reductions described in Article 4. A
Participant (or

8

 

Beneficiary) shall cease to be a Participant (or Beneficiary) in the Plan when the individual
has received a complete distribution of his Retirement Benefits payable under the Plan.

9

 

ARTICLE 4

RETIREMENT BENEFITS

     4.1 Status of Retirement Benefits.

     (a) Pursuant to the Reorganization Plan, all Deferred Vested Participants and Legacy
Participants (and Beneficiaries) shall have a Retirement Benefit payable under the Plan. All
Deferred Vested Participants and Legacy Participants are identified in Exhibit A.

     (b) Pursuant to the Reorganization Plan, all Active Participants shall have a Retirement
Benefit payable under the Plan. All Active Participants are identified in Exhibit B. Retirement
Benefit amounts for such actively employed Participants shall be determined using Average
Pensionable Earnings and Credited Service as of the Final Accrual Date. No further benefits shall
accrue with compensation increases or service earned after the Final Accrual Date.

     4.2 Payment of Plan Benefits.

     (a) Retirement Benefit payments to a Participant or Beneficiary under the Plan shall be made
in accordance with the terms of the Reorganization Plan, as set forth below.

     (b) Retirement benefit payments made to a Participant under the Prior Plan and which were
suspended pursuant to the Creditor Protection Proceedings, or payments that should have begun to a
Participant under the Prior Plan which did not begin as a result of the Creditor Protection
Proceedings (whether as monthly benefit payments or a lump sum benefit payment), shall resume or
begin to be paid as soon as administratively feasible to such Participant in accordance with the
Plan and the Reorganization Plan; provided, that such benefits shall be reduced and/or limited in
accordance with the Reorganization Plan as set forth in the Plan. No adjustment shall be made for
any monthly benefit payments that were suspended or missed during the Creditor Protection
Proceedings No interest shall be paid with respect to any benefit payments (whether as monthly
benefit payments or a lump sum benefit payment) that were suspended, missed or delayed as a result
of the Creditor Protection Proceedings.

     (c) All Retirement Benefits shall be calculated and paid in Canadian dollars.

     4.3 Amount of Retirement Benefits.

     (a) An Active Participant shall be entitled to a Retirement Benefit under this Plan based upon
the Participant’s Average Pensionable Earnings and years of Credited Service determined as of the
Final Accrual Date and calculated in accordance with Section 4.4 or 4.5.

     (b) A Deferred Vested Participant shall be entitled to a Retirement Benefit under this Plan
based upon the Participant’s Average Pensionable Earnings and years of Credited Service determined
as of the date of the Participant’s termination of employment with the Employer and calculated as
follows:

     (i) the Retirement Benefit shall be initially calculated in accordance with Section 4.4
or 4.5;

10

 

     (ii) the amount determined in clause (i) shall be reduced in each year as described in
Section 4.3(d).

     (c) A Legacy Participant shall be entitled to payment of a Retirement Benefit under the Plan,
which benefit shall be calculated as follows:

     (i) the Retirement Benefit shall be initially calculated as equal to the monthly
retirement benefit payment the Participant was receiving (or would have been receiving)
under the Prior Plan that was suspended pursuant to the Creditor Protection Proceedings;

     (ii) the amount determined in clause (i) shall be reduced in each year as described in
Section 4.3(d).

     (d) The reduction referred to in subsections 4.3(b)(ii) and 4.3(c)(ii) shall be calculated as
follows:

     (i) First, calculate the sum of the annual benefit payable to the Participant for the
year under this Plan plus the annual benefit payable to the Participant under all other
unregistered (in Canada) or non-qualified (in the United States) retirement plans maintained
by any Debtor or Reorganized Debtor as defined for purposes of Supplement 7A-2 to the Plan
of Reorganization approved in the Creditor Protection Proceedings (the “Other Plans”).

     (ii) Second, calculate the lesser of (A) the total annual benefit determined in clause
(i) multiplied by 90% or (B) Canadian $50,000.

     (iii) Third, subtract from the amount determined in clause (ii) the total amount of
benefits payable under each of the Other Plans that is or was funded or secured in whole or
part by a trust fund, letter of credit, or similar method, multiplied by the percentage of
such Other Plan that was so funded or secured (the “Secured Benefits”).

     (iv) Fourth, the total benefit payable under this Plan, and all benefits payable under
all Other Plans that are not Secured Benefits (the “Unsecured Benefits”), shall be reduced
proportionately until the total sum of the Unsecured Benefits is equal to the amount
determined in clause (iii).

     (v) The limitation of this Section 4.3(d) shall be applied separately to each year
based upon the amount of benefits actually payable to the Participant under this Plan and
all Other Plans in such year; provided that if any benefit is paid in the form of a lump
sum, such benefit shall be taken into account in the form of the annual amount that would
have been paid in each year if it had not been paid as a lump sum. The Plan Administrator
may make such adjustments as it may determine to be appropriate to accomplish the purposes
of the Plan of Reorganization.

     (e) The Plan Administrator shall calculate the Retirement Benefits payable to each Participant
pursuant to this Section 4.3 and shall include such amounts in Exhibit A or Exhibit B, as
applicable, and shall adjust such amounts as required, including but not limited to any

11

 

adjustments required by the Reorganization Plan, or to reflect differences between the amounts
expected to be paid in settlement of any Secured Benefits and the amount actually paid.

     4.4 Normal Retirement Benefits.

     (a) A Participant who retires on his Normal Retirement Date shall be entitled to receive a
Retirement Benefit payable in equal monthly installments commencing on his Normal Retirement Date
in an amount equal to the excess, if any, of (i) over (ii):

     (i) 2% of the Participant’s Average Pensionable Earnings multiplied by his number of
years of Credited Service; and

     (ii) his Basic Pension from the Registered Pension Plan, or where such Basic Pension
has been commuted, the Basic Pension he would have received if such commutation had not
taken place.

     (b) In the event a Participant remains in the employ of the Employer after his Normal
Retirement Date, he shall be entitled to receive a Retirement Benefit payable in equal monthly
installments and commencing on the first day of the month following his actual termination date,
equal to the amount determined in accordance with paragraph (a), and based on his Credited Service
and Average Pensionable Earnings as of the earlier of his Normal Retirement Date or the Final
Accrual Date, and his Basic Pension as of the earlier of his actual retirement date or the Final
Accrual Date.

     4.5 Early Retirement Benefits.

     (a) A Participant may elect to retire before his Normal Retirement Date provided he is then at
least 55 years of age and has completed at least two years of Continuous or Credited Service.
Retirement Benefits will begin as of his elected Early Retirement Date.

     (b) If a Participant is at least 58 years of age and the sum of his age and years of
Continuous or Credited Service totals at least 80, the Participant shall be entitled to an annual
Retirement Benefit, payable in equal monthly installments, determined in accordance with Section
4.4 and commencing on his Early Retirement Date.

     (c) A Participant other than a Participant referred to in paragraph (b) who retires under this
Section shall be entitled to receive an annual Retirement Benefit payable in equal monthly
installments and commencing on his elected Early Retirement Date in an amount equal to the excess,
if any, of (i) over (ii) below:

     (i) 2% of his Average Pensionable Earnings multiplied by his number of years of
Credited Service, such amount to be reduced by 0.5% multiplied by the number of months that
his elected Early Retirement Date precedes:

	 	(A)	 	if the Participant has completed at least 20
years of Continuous or Credited Service, the date at which the
Participant would first have qualified for an unreduced Retirement
Benefit in accordance with paragraph (b) had he continued in the Plan;
or

12

 

	 	(B)	 	if the Participant has not completed 20 years
of Continuous or Credited Service, age 65.

     (ii) his Basic Pension from the Registered Pension Plan, or where such Basic Pension
has been commuted or paid in a lump sum, the Basic Pension he would have received if such
commutation or lump sum payment had not taken place.

     (d) Where in addition to his Basic Pension, the Participant is entitled to receive a bridging
benefit under the Registered Pension Plan, the amount of his Retirement Benefit shall be further
reduced by the annual amount of such bridging benefit during the period for which such bridging
benefit continues to be paid.

     4.6 Disability Payments.

     (a) During a period of disability entitling the Participant to either receive disability
benefits under the short-term or long-term disability plan maintained by his Employer from time to
time in which he participates, such Participant shall continue to accrue Credited Service for the
purpose of this Plan through the Final Accrual Date. During such period, the Participant shall be
deemed to receive a base salary equal to the annual rate of base salary he was receiving
immediately before his becoming disabled.

     (b) If the Participant for any reason ceases to be eligible to receive benefits under the
short-term or long-term disability plan maintained by the Employer before his Normal Retirement
Date and within such period as determined by the Company:

     (i) the Participant returns to active employment with the Employer, then at the date of
his subsequent termination, death or retirement, the Participant shall be entitled to
Retirement Benefits calculated in accordance with the provisions of this Plan, taking into
account the provisions of paragraph (a) above, or

     (ii) the Participant does not return to active employment with the Employer, then he
will be deemed to have terminated his employment or retired for the purposes of the Plan as
of the day he ceases to be eligible to receive benefits from the disability plans maintained
by the Employer and his Retirement Benefits shall be calculated based on the provisions of
this Plan, taking into account the provisions of paragraph (a) above.

     (c) A Participant whose period of disability continues until his Normal Retirement Date shall
be deemed to have retired on his Normal Retirement Date for the purpose of this Plan.

     (d) In the event of the death of a Participant while in receipt of disability benefits as
provided in this Section, the benefits payable under this Plan shall be determined in accordance
with the terms of Section 4.8 as if the Participant died while in service of the Employer.

     4.7 Form of Pension.

     (a) The Retirement Benefit payable to a Participant under this Plan shall be paid during the
lifetime of the Participant. Following the death of the Participant while in receipt of such
Retirement Benefit, the Participant’s Spouse shall be entitled to receive during his lifetime

13

 

an annual supplementary survivor allowance, payable in equal monthly installments, and
commencing on the first day of the month following the month in which the Participant dies, equal
to the excess of (i) over (ii) below:

     (i) 50% of the Retirement Benefit that would have been payable to the Participant under
this Plan at the time of his death, if such Retirement Benefit had not been reduced by the
Participant’s Basic Pension;

     (ii) any survivor pension payable to the Spouse under the Registered Pension Plan
following the death of the Participant, or any survivor pension that would have been payable
had the benefits under the Registered Pension Plan not been commuted or paid in a lump sum.
Where the Registered Pension Plan is a defined contribution pension plan, and subject to
Section 2.5(iii), the survivor pension payable to the Spouse shall be equal to 60% of the
Participant’s Basic Pension.

     (b) If a Participant does not have a Spouse at the start of his Retirement Benefits and dies
before 120 monthly payments of his Retirement Benefits have been paid to him, his Beneficiary or,
if there is no Beneficiary, his estate shall receive a lump sum which is the Actuarial Equivalent
of the excess of (i) over (ii) below:

     (i) the balance of the 120 monthly payments of the Retirement Benefits that would have
been payable to the Participant under this Plan at the time of his death if such
supplementary allowance had not been reduced by the Participant’s Basic Pension;

     (ii) any amount payable under the Registered Pension Plan to his estate or any
designated Beneficiary following the death of the Participant, or any amount that would have
been payable had the benefits under the Registered Pension Plan not been commuted or paid in
a lump sum. Where the Registered Pension Plan is a defined contribution pension plan and
subject to Section 2.5(iii), the amount that would have been payable to his estate or any
designated Beneficiary following the death of the Participant, had the Participant elected
to receive his Basic Pension as a life annuity with 120 payments guaranteed.

     (c) Instead of receiving his Retirement Benefit in accordance with the normal form of payment
described in paragraphs (a) and (b), a Participant may elect to receive his Retirement Benefits
payable under this Plan under one of the optional forms of payment determined by the Company as
eligible for the purpose of this Plan. In such a case, the Participant must elect the same
optional form of payment for purpose of his benefits under the Registered Pension Plan. However,
in the case where the Registered Pension Plan is a defined contributions pension plan, and subject
to Section 2.5(iii), the Participant will be deemed to have elected the same form of payment that
is elected for purposes of this Plan. If the Participant elects an optional form of payment, then
the amount of his Retirement Benefit, before applying the offset for his Basic Pension, shall be
adjusted on an Actuarial Equivalent Value basis.

     (d) Notwithstanding any provision in the Plan to the contrary, the Retirement Benefit payable
to a Legacy Participant shall be paid in the same form it was being paid before commencement of the
Creditor Protection Proceedings, and the Retirement Benefit paid to a

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Deferred Vested Participant whose Retirement Benefit would have commenced during the Creditor
Protection Proceedings shall be paid in the same form it would have been paid had it so commenced.

     4.8 Death Before Retirement.

     (a) Death after Age 55 but Before Retirement.

     (i) In the event that a Participant dies while actively employed with the Employer
after having reached age 55 and having completed at least two years of Continuous or
Credited Service, his Spouse shall be entitled to receive an annual supplementary survivor
allowance determined in accordance with Section 4.7(a) as if the Participant had retired
immediately before the date of his death and, in the case of a Legacy Participant who
retired before January 1, 2005, had not elected an optional form of pension in accordance
with Section 4.7(c). However, with respect to Section 4.7(a)(ii), where the survivor
benefit under the Registered Pension Plan is payable in a lump sum, the survivor pension
payable to the Spouse shall be equal to the pension that could be provided by such lump sum,
calculated on an Actuarial Equivalent Value basis over the survivor’s lifetime.

     (ii) In the event of there being no Spouse at the time of death of a Participant
referred to in clause (i), his Beneficiary shall receive a lump sum equal to the lump sum
that would otherwise have been payable under this Plan to the Participant’s estate as would
be determined under Section 4.7(b) if the Participant had retired immediately before the
date of his death. However, with respect to Section 4.7(b)(ii), where the benefit payable
to the designated Beneficiary or estate under the Registered Pension Plan is payable in a
lump sum, any amount payable to the Beneficiary shall be equal to such lump sum.

     (iii) In the event that a Participant who has terminated his employment and who is
entitled to a deferred Retirement Benefit in accordance with Section 4.9 dies after having
reached age 55 and before payment of the deferred Retirement Benefit begins, his Spouse
shall be entitled to receive an annual supplementary survivor allowance determined in
accordance with the Section 4.7(a) as if the Participant requested payment his deferred
Retirement Benefit to commence on the first day of the calendar month immediately preceding
or coinciding with his date of death. In the event there is no Spouse at the time of death,
his estate shall receive a lump sum equal to the lump sum that would otherwise have been
payable under the Plan to the Participant’s estate as would be determined under Section
4.7(b) as if the Participant had requested payment commencement of his deferred Retirement
Benefit on the first day of the calendar month immediately preceding or coinciding with his
date of death.

     (b) Death Before Age 55

     (i) In the event that a Participant dies while in service of the Employer before having
reached age 55 but after having completed at least two years of Continuous or Credited
Service, his Spouse or, in the absence of a Spouse, his estate, shall receive a

15

 

lump sum payment that is the Actuarial Equivalent of the deferred Retirement Benefit
that would otherwise have been payable under the Plan to the Participant, determined under
Section 4.9(a) as if the Participant had voluntarily terminated his employment with the
Employer.

     (ii) In the event that a Participant who has terminated his employment and who is
entitled to a deferred Retirement Benefit in accordance with the applicable provision in
Section 4.9 dies before having reached age 55, his Spouse or, in the absence of a Spouse,
his estate, shall receive a lump sum payment of the deferred Retirement Benefit.

     (c) No benefit shall be payable under this Plan following the death of a Participant before
having reached age 55 if he has not completed at least two years of Continuous or Credited Service.

     4.9 Termination of Employment.

	 	(a)	 	Voluntary Termination after Two Years of Continuous or Credited Service.
	 
	 	 	 	A Participant who terminates his service with the Employer on a voluntary basis
before his 55th birthday and after he has completed at least two years of Continuous
or Credited Service shall be entitled to receive a deferred Retirement Benefit, the
amount of which shall be determined as provided hereunder.
	 
	 	 	 	The Participant may request that payment commencement of his deferred Retirement
Benefit start on the first day of any calendar month during the period between his
attainment of age 55 and his Normal Retirement Date. The amount of the deferred
Retirement Benefit payable, shall be established based on the elected payment
commencement date as follows:

          (i) if the payment commencement date is the Participant’s Normal Retirement Date:

	 	(A)	 	2% of his Average Pensionable Earnings
multiplied by his number of years of Credited Service; less
	 
	 	(B)	 	his Basic Pension from the Registered Pension
Plan, or where such Basic Pension has been commuted, the Basic Pension
he would have received if such commutation had not taken place.

          (ii) If the payment commencement date is before the Participant’s Normal Retirement
Date:

	 	(A)	 	2% of his Average Pensionable Earnings
multiplied by his number of years of Credited Service, such amount to
be reduced by 0.5% multiplied by the number of months the payment
commencement date precedes the Participant’s Normal Retirement Date;
less

16

 

	 	(B)	 	his Basic Pension from the Registered Pension
Plan, or where such Basic Pension has been commuted, the Basic Pension
he would have received if such commutation had not taken place.

	 		 	The deferred Retirement Benefit shall be paid in the same form and in the same
manner as the Retirement Benefit that would have been payable if the Participant had
retired on his Normal Retirement Date.

	 	(b)	 	
Involuntary Termination after Two Years of Continuous or Credited Service.

	 	 	 	
A Participant who, before his 55th birthday and provided he has then completed at
least 2 years of Continuous or Credited Service, ceases to be employed by the
Employer as a result of the termination of his employment initiated by the Employer
for any reason other than for cause, shall be entitled to receive a deferred
Retirement Benefit the amount of which shall be determined as provided hereunder.

	 	 	 	
The Participant may request that payment commencement of his deferred Retirement
Benefit start the first day of any calendar month during the period between his
attainment of age 55 and his “Unreduced Early Retirement Date.” For such purpose,
the Participant’s Unreduced Early Retirement Date shall correspond to the earliest
date he could have been entitled to an unreduced early Retirement Benefit as
provided in Section 4.5(b), established as if his termination of employment had not
occurred.

	 	 	 	
The amount of the deferred Retirement Benefit payable, shall be established based on
the payment commencement date as follows:

	 	 	 	
(i) if the payment commencement date is the Participant’s Unreduced Early Retirement
Date:

	 	(A)	 	2% of his Average Pensionable Earnings
multiplied by his number of years of Credited Service; less
	 
	 	(B)	 	his Basic Pension from the Registered Pension
Plan, or where such Basic Pension has been commuted, the Basic Pension
he would have received if such commutation had not taken place.

	 	 	 	
(ii) If the payment commencement date is before the Participant’s Unreduced Early
Retirement Date:

	 	(A)	 	2% of his Average Pensionable Earnings
multiplied by his number of years of Credited Service, such amount to
be reduced by 0.5% multiplied by the number of months the payment
commencement date precedes the Participant’s Unreduced Early Retirement
Date; less

17

 

	 	(B)	 	his Basic Pension from the Registered Pension
Plan, or where such Basic Pension has been commuted, the Basic Pension
he would have received if such commutation had not taken place.

	 	 	 	The deferred Retirement Benefit shall be paid in the same form and in the same
manner as the Retirement Benefit that would have been payable if the Participant had
retired on his Normal Retirement Date.

     
(c) No benefit shall be payable under this Plan to a Participant who ceases to be in the
employ of the Employer before his 55th birthday:

     (i) as a result of the termination of his employment by the Employer for cause, or

     (ii) as a result of the termination of his employment for any reason before having
completed at least two years of Continuous or Credited Service.

     4.10 Increase in Benefits.

     (a) Any ad hoc increases in the pension payments made under the Registered Pension Plan to a
retired Participant, or in the case of his death, to his surviving Spouse, will not have the effect
of reducing benefits otherwise payable under this Plan.

     (b) Any automatic annual increases in the pension payments made under the Registered Pension
Plan, or deemed to have been made if the benefits have been commuted, to a retired Participant, or
in the case of his death, to his surviving Spouse, will have the effect of reducing benefits
otherwise payable under this Plan. In the case of a Deferred Vested or Legacy Participant, the
amount of the reduction shall be calculated by taking into account the provisions of Section
4.3(d).

     4.11 Commutation of Benefits.

     (a) Any Retirement Benefit or deferred Retirement Benefit payable under this Plan in the form
of monthly payments may, at the discretion of the Plan Administrator and subject to the approval of
the Participant or, following his death, of his Spouse, may be paid in a lump sum or installments
calculated in accordance with the Company’s policy.

     (b) Notwithstanding paragraph (a), Retirement Benefits that do not exceed a specified amount
may be paid in a lump sum or installments without the Participant’s consent, which amount shall be
determined by the Plan Administrator from time to time in a manner that is consistent with practice
under the Registered Pension Plans.

     (c) Except as otherwise provided herein, the Retirement Benefits provided under this Plan
shall not be capable of surrender or commutation.

     4.12 Service Outside Canada. In the event that a Participant’s employment includes
periods of service with the Employer in Canada (“Canadian Service”) and periods of service in
another country with any affiliated company, any subsidiary or associated company of the

18

 

Company (“Non Canadian Service”), for the determination of the Participant’s Retirement
Benefits hereunder, the following provisions shall apply:

     (a) The Participant’s Credited Service shall include his periods of Non Canadian Services
during which he continued to accrue credited service under the Registered Pension Plan plus any
other period of Non Canadian Service through the Final Accrual Date as approved by the Company.

     (b) For purposes of calculating the Participant’s Average Pensionable Earnings, the
Participant’s Earnings and Incentive Award for his Non Canadian Service shall be established in
accordance with the administrative policies and practices of the Company.

     4.13 Conditions for Payment.

     (a) Notwithstanding anything herein contained to the contrary, for Participants who are Grade
40 or above upon their date of termination of employment, no amount of benefit shall be payable or
continued to be paid pursuant to this Plan in the event that during his employment with the
Employer or during a period of 12 months following his termination of employment or retirement, the
Participant, directly or indirectly, without the consent of AbitibiBowater Inc.:

     (i) engages in or becomes interested, whether on his own account or in conjunction with
or on behalf of any other person, and whether as an employee, director, officer, partner,
principal, agent, advisor, financial backer, shareholder (except as a passive investor in a
public company), or in any other capacity whatsoever, in a North American business which may
fairly be regarded as being in competition with the Business of AbitibiBowater (as defined
below); or

     (ii) assists financially or in any manner whatsoever any person, firm, association or
company, whether as principal, agent, officer, employee, manager, advisor, financial backer,
shareholder (except as a passive investor in a public company), or in any capacity
whatsoever to enter into, develop, carry on or maintain a North American business which may
fairly be regarded as being in competition with the Business of AbitibiBowater.

For the purposes of this Plan, “Business of AbitibiBowater” means the manufacture, sale and/or
dealing in newsprint, commercial printing papers, market pulp and wood products, as well as
research into, development, production, manufacture, sale, supply, import, export or marketing of
any product which is the same or similar to or competitive with any product researched, developed,
produced, manufactured, sold, supplied, imported, exported or marketed by AbitibiBowater or by any
of its subsidiaries and affiliates in the context of the above described activities as of the date
of the Participant’s termination of employment.

     (b) Notwithstanding anything herein contained to the contrary, no amount of benefit shall be
payable or continued to be paid pursuant to this Plan in the event that during his employment with
the Employer or at any time thereafter, the Participant discloses any trade secrets or other
Confidential Information (as defined below) with regard to the Business of AbitibiBowater at any
time, directly or indirectly, to any third party or otherwise use such Confidential Information for
his or their own benefit or the benefit of others for a period of 5

19

 

years following the date of the Participant’s termination of employment. “Confidential
Information” means all valuable and/or proprietary information in any form belonging to or
pertaining to AbitibiBowater and its subsidiaries, affiliates, customers and vendors, that would be
useful to AbitibiBowater’s competitors or otherwise damaging to AbitibiBowater (or its subsidiaries
or affiliates) if disclosed. Confidential Information may include, but is not necessarily limited
to: (i) the identity of AbitibiBowater’s (or subsidiaries or affiliates) customers or potential
customers, their purchasing histories, and the terms or proposed terms upon which it or they offer
or may offer its products and services to such customers, (ii) the identity of any of
AbitibiBowater’s or its subsidiaries’ or affiliates’ vendors or potential vendors, and the terms or
proposed terms upon which it or they may purchase products and services from such vendors, (iii)
technology and methods used their products and services or planned products and services, (iv) the
terms and conditions upon which AbitibiBowater (or its subsidiaries and affiliates) employs its
employees and contracts with independent contractors, (v) marketing and/or business plans and
strategies, and (vi) financial reports and analyses regarding AbitibiBowater’s revenues, expenses,
profitability and operations. However, Confidential Information does not include information which
is or becomes generally available to the public other than as a result of disclosure by the
Participant.

     (c) Notwithstanding anything herein contained to the contrary, no amount of benefit shall be
payable or continued to be paid pursuant to this Plan in the event that during his employment with
the Employer or for a period of 12 months following the date of the Participant’s termination of
employment, except with the Company’s prior written consent, the Participant, on his own or in
conjunction with or on behalf of any other person, directly or indirectly, solicits, assists in
soliciting, accepts, or facilitates the acceptance of business (which may fairly be regarded as
being in competition with the Business of AbitibiBowater) of any person (i) to whom AbitibiBowater
or its subsidiaries or affiliates has supplied goods or services at any time prior to the date of
termination of employment or (ii) with whom AbitibiBowater or its subsidiaries or affiliates has
had any negotiations or discussions regarding the possible supply of goods or services prior to the
date of termination of employment.

     (d) Further, notwithstanding anything herein contained to the contrary, no amount of benefit
shall be payable or continued to be paid pursuant to this Plan in the event that during his
employment with the Employer or at any time thereafter the Participant, directly or indirectly,
disparages, defames or speaks negatively about AbitibiBowater or any of its subsidiaries,
affiliates, customers or related entities, or its products and services, or if the Participant
disparages, subverts, discloses or discusses any detail or aspect of the professional careers or
personal lives of any director, officer or employee of AbitibiBowater or its subsidiaries or
affiliates for any reason whatsoever, except as may be required by law.

     4.14 Right of Offset. The Company and any Employer shall have the right to offset any
amounts payable to a Participant under the Plan to reimburse the Company, or any of its
subsidiaries or affiliates, for liabilities or obligations of the Participant to the Company or
such subsidiary or affiliate, including any amounts misappropriated by the Participant.

20

 

     4.15 Taxes; Compliance with §409A.

     (a) All Retirement Benefits under this Plan are expressed on a pre-tax basis and shall be
subject to applicable withholding tax and reporting pursuant to the Income Tax Act (Canada) and any
other applicable law.

     (b) In the case of a Participant who is a citizen or resident of the United States for federal
income tax purposes (a “US Taxpayer”) during any year in which he has a vested right to a
Retirement Benefit under this Plan, the provisions of this Section 4.15(b) shall apply for purposes
of satisfying §409A of the United States Internal Revenue Code (“§409A”).

     (i) For purposes of this Section 4.15(b), a “§409A Benefit” shall mean any Retirement
Benefit payable to a US Taxpayer except to the extent such Retirement Benefit (A) was
accrued and vested on December 31, 2004, under the Prior Plan (and was not materially
modified after October 3, 2004), (B) if paid to the Participant in the year in which the
Retirement Benefit vested, would have been excluded from his taxable income under any of the
provisions listed in Treasury Regulation §1.409A-1(b)(8)(ii), or (C) is otherwise determined
by the Plan Administrator to not be subject to §409A. If only a portion of the
Participant’s Retirement Benefit constitutes a §409A Benefit, the remaining portion of his
Retirement Benefit shall be paid in accordance with the terms of the Plan without regard to
this Section 4.15(b).

     (ii) The §409A Benefit of a Participant who terminates employment prior to his Normal
Retirement Date shall commence on the first day of the month following his termination of
employment in accordance with Section 4.5 if he had attained the age of 55 and completed at
least two years of Continuous Service on the date of termination, and otherwise shall
commence on the first day of the month following the later of his fifty-fifth birthday or
date of termination in accordance with Section 4.9. The Participant shall not be eligible
to elect any other commencement date. If as a result of this Section 4.15(b)(ii) payment
commences on a date other than the date on which payment of his Registered Pension Plan
benefit commences, the amount of his benefit shall be calculated as if payment of the
Registered Pension Plan had commenced on the same date.

     (iii) A Participant may elect payment of his §409A Benefit in an optional form pursuant
to Section 4.7(c) only if the optional form is an actuarially equivalent life annuity as
defined in Treasury Regulation §1.409A-2(b)(2)(ii).

     (iv) In the case of a pre-retirement death benefit payable pursuant to Section 4.8, to
the extent such death benefit is based on a §409A Benefit, the following rules shall apply:

	 	(A)	 	if the benefit is payable to the Participant’s
surviving Spouse (or if subparagraph (C) applies), such benefit shall
be paid as an annuity if the Participant had attained the age of 55
prior to his death, and otherwise shall be paid in a lump sum,
regardless of whether it is paid pursuant to Section 4.8(a) or 4.8(b);

21

 

	 	(B)	 	if the individual receiving the benefit was the
Participant’s Spouse for less than one year on the date of the
Participant’s death, any benefit that would otherwise be payable to his
surviving Spouse as an annuity shall be paid in a lump sum; and
	 
	 	(C)	 	if the Participant’s Spouse stopped being the
Participant’s Spouse less than one year before the Participant’s death,
the benefit that would otherwise have been paid in a lump sum to the
Participant’s estate shall be paid in a life annuity to the person who
is the residuary legatee of the Participant’s estate.

     (v) A §409A Benefit shall be commutated and paid in a lump sum (but not installments)
only if all §409A Benefits payable to the Participant under nonqualified defined benefit
plans maintained by the Company and any member of its controlled group (as defined in
Treasury Regulation §1.409A-1(g)) are simultaneously paid in a lump sum, the total amount so
paid does not exceed the limit then in effect under §402(g)(1)(B) of the Internal Revenue
Code, and the payment otherwise satisfies the requirements of Treasury Regulation
§1.409A-3(j)(4)(v).

     (vi) Whenever any payment is conditioned upon a termination of employment, the term
“termination of employment” (or any variation) shall be interpreted to mean a separation
from service as defined in §409A. If a Participant incurs a termination of employment that
does not constitute a separation from service, payment of the Participant’s §409A Benefit
shall be deferred until the Participant incurs a separation from service (or six months
thereafter if Section 4.15(b)(viii) applies).

     (vii) If on the date on which a Participant incurs a separation from service the
Participant is a “specified employee” as defined in §409A, payment of any §409A Benefit that
becomes payable by reason of such separation from service shall commence not earlier than
the first day of the seventh month following the month in which the separation from service
occurs, and any §409A Benefit payments that would otherwise have been paid prior to such
date shall be accumulated and paid on such date, without interest or other adjustment.

     (viii) The Plan Administrator shall use its best efforts to interpret and administer
the Plan in accordance with §409A to the extent applicable, and to the maximum extent
permitted by law the applicable provisions of §409A shall be deemed incorporated herein and
shall control over any contrary provision of the Plan. Notwithstanding the foregoing, in no
event shall the Company, any Employer, or any other person have any liability to any
Participant by reason of any penalty or additional tax that may be imposed on such
Participant by reason of §409A.

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ARTICLE 5

PLAN ADMINISTRATION

     5.1 Plan Administration and Interpretation. The Plan Administrator shall oversee the
administration of the Plan. The Plan Administrator shall have complete control and authority to
determine the rights and benefits and all claims, demands and actions arising out of the provisions
of the Plan of any Participant, Beneficiary, deceased Participant or other person having or
claiming to have any interest under the Plan. Benefits under the Plan shall be paid only if the
Plan Administrator decides in its discretion that the Eligible Employee, Participant or Beneficiary
is entitled to them. Notwithstanding any other provision of the Plan to the contrary, the Plan
Administrator shall have complete discretion to interpret the Plan and to decide all matters under
the Plan. Such interpretation and decision shall be final, conclusive and binding on all
Participants and any person claiming under or through any Participant, in the absence of clear and
convincing evidence that the Plan Administrator acted arbitrarily and capriciously. Any individual
serving as Plan Administrator who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the Plan Administrator
shall be entitled to rely on information furnished by a Participant, a Beneficiary, the Company,
the Employer or a trustee (if any).

     5.2 Powers, Duties, Procedures. The Plan Administrator shall have such powers and
duties, may adopt such rules, may act in accordance with such procedures, may appoint such officers
or agents, may delegate such powers and duties and shall follow such claims and appeal procedures
with respect to the Plan (subject to the requirements of Section 5.5) as the Plan Administrator may
establish. The Plan Administrator or individuals acting on its behalf shall receive reimbursement
for any reasonable business expense incurred in the performance of the foregoing duties.

     5.3 Information. To enable the Plan Administrator to perform its functions, the
Company and Employer shall supply full and timely information to the Plan Administrator on all
matters relating to the compensation of Participants, their employment, retirement, death,
termination or employment, Disability, and such other pertinent facts as the Plan Administrator may
require. Any Participant or Spouse entitled to benefits hereunder shall, upon request, furnish
proof of age satisfactory to the Plan Administrator. In the case that the age of the Participant
or his Spouse is found to be inexact, the Plan Administrator is authorized to adjust benefits.

     5.4 Indemnification of Plan Administrator. The Company agrees to indemnify and to
defend to the fullest extent permitted by law any officer or employee who serves as Plan
Administrator (including any such individual who will have served as Plan Administrator of the
Plan) against all liabilities, damages, costs and expenses (including reasonable attorneys’ fees
and amounts paid in settlement of any claims approved by the Company in writing in advance)
occasioned by any act or omission to act in connection with the Plan, if such act or omission is in
good faith.

     5.5 Claims Procedure. A Participant or Beneficiary shall have the right to file a
claim, inquire if he has any right to benefits and the amounts thereof or appeal the denial of a
claim.

23

 

     (a) Initial Claim. A claim shall be considered as having been filed when a written
communication is made by the Participant, Beneficiary or his authorized representative to the
attention of the Plan Administrator (the “claimant”). The Plan Administrator shall notify the
claimant in writing within 90 days after receipt of the claim if the claim is wholly or partially
denied. If an extension of time beyond the initial 90-day period for processing the claim is
required, written notice of the extension shall be provided to the claimant before the expiration
of the initial 90-day period. In no event shall the period, as extended, exceed 180 days. The
extension notice shall indicate the special circumstances requiring an extension of time and the
date by which the Plan Administrator expects to render a final decision. Written claims for
benefit payments must be made within twelve months of the later of the Participant’s retirement or
termination of employment for any reason or the Effective Date of the Plan. A claim shall be
considered untimely filed and denied if received more than twelve months from such later date.

     (b) Content of Denial. Notice of a wholly or partially denied claim for benefits
shall be in writing in a manner calculated to be understood by the claimant and shall include:

     (i) the reason or reasons for denial;

     (ii) specific reference to the Plan provisions on which the denial is based;

     (iii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or information is
necessary; and

     (iv) an explanation of the Plan’s claim appeal procedure.

     (c) Right to Review. If a claim is wholly or partially denied, the claimant may file
an appeal requesting the Plan Administrator to conduct a full and fair review of his claim. An
appeal must be made in writing no more than 60 days after the claimant receives written notice of
the denial. The claimant may review or receive copies, upon request and free of charge, any
documents, records or other information determined by the Plan Administrator to be relevant to the
claimant’s claim. The claimant may also submit written comments, documents, records and other
information relating to his claim. The Plan Administrator shall take into account all comments,
documents, records and other information submitted by the claimant relating to the claim, without
regard to whether such information was submitted or considered in the initial review of the claim.
The decision of the Plan Administrator regarding the appeal shall be given to the claimant in
writing no later than 60 days following receipt of the appeal. However, if the Plan Administrator,
in its sole discretion, grants a hearing, or there are special circumstances involved, the decision
shall be given no later than 120 days after receiving the appeal. If such an extension of time for
review is required, written notice of the extension shall be furnished to the claimant before the
commencement of the extension. The decision shall be written in a manner calculated to be
understood by the claimant and include:

     (i) specific reasons for the decision;

     (ii) specific references to the pertinent Plan provisions on which the decision is
based; and

24

 

     (iii) a statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records or other information
relevant to the claimant’s claim.

     (d) Form of Notice and Decision. Any notice or decision by the Plan Administrator
under this Section may be furnished electronically.

     (e) Exhaustion of Administrative Remedy. Notwithstanding any provision in the Plan to
the contrary, no employee, Participant or Beneficiary may bring any legal or administrative claim
or cause of action against the Plan, the Plan Administrator or the Employer in court or any other
venue until the employee, Participant or Beneficiary has exhausted its administrative remedies
under this Section.

     (f) Statute of Limitations. Notwithstanding any provision in the Plan to the
contrary, a Participant, Spouse or other Beneficiary must file any written claim for benefits with
the Plan Administrator within one year from the date on which the Participant, Spouse or other
Beneficiary knows, or with the exercise of reasonable diligence would know, of the basis for the
claim, but, in the case of a claim based upon an alleged error in the amount of benefits, in no
event later than one year from the date on which the first allegedly mistaken payment is made. Any
written claim submitted to the Plan Administrator after such date shall be void and denied as
untimely. Further, in order for a claimant to initiate any action for any benefit under the Plan
before any court or before any administrative agency or quasi-judicial tribunal, such claimant must
have first filed a claim for such benefit and requested review of any adverse decision on such
claim in accordance with this Section and any procedures established by the Plan Administrator
pursuant to this Section. Any such action must be initiated not more than 180 days after receipt
of an adverse claim decision on review, except as otherwise required by applicable law.

     (g) Suspension of Payment. If the Plan Administrator is in doubt concerning the
entitlement of any person to any payment claimed under the Plan, the Employer may suspend payment
until satisfied as to the person’s entitlement to the payment. Notwithstanding the foregoing, no
Participant or Beneficiary may bring a claim for Plan benefits to arbitration, court or through any
other legal action or process until the administrative claims process of this Section has been
exhausted.

25

 

ARTICLE 6

AMENDMENT AND TERMINATION

     6.1 Authority to Amend and Terminate.

     (a) The Plan reserves to the Plan Administrator the right to amend or terminate the Plan at
any time, without notice, subject to Section 6.2. Any amendment or termination of the Plan shall
be effected by resolution of the Plan Administrator or its authorized delegate. Except as provided
in paragraph (b), retirement benefits shall continue to be paid under the Plan as such amounts
would otherwise have been distributed in accordance with the terms of the Plan.

     (b) Upon termination of the Plan, the following provisions shall apply:

     (i) an Active Participant who has reached 55 years of age shall be deemed, for the
purpose of this Plan, to have retired on the date of termination of the Plan (the
“Termination Date”), and shall be entitled to Retirement Benefits determined in accordance
with Section 4.4 or 4.5, as the case may be;

     (ii) an Active Participant who has not yet reached age 55 shall be deemed, for the
purpose of this Plan, to have terminated his employment on the Termination Date as a result
of an Employer initiated termination of employment and shall be entitled to Retirement
Benefits determined in accordance with Section 4.9(b);

     (iii) the Retirement Benefits to which a Participant is entitled to, or deemed to be
entitled to, under clause (i) or (ii), as the case may be, shall be paid in a lump sum
amount equal to the Actuarial Equivalent Value of such Retirement Benefits; and

     (iv) the obligations of the Participant pursuant to Section 4.13 shall be waived as of
the Termination Date.

     6.2 Existing Rights. No amendment or termination of the Plan shall materially
adversely affect the rights of any Participant with respect to retirement benefits payable under
the Plan in accordance with the Reorganization Plan. Notwithstanding the foregoing, the Plan
Administrator may amend the Plan as necessary to address changes in applicable law.

26

 

ARTICLE 7

MISCELLANEOUS

     7.1 Funding. As provided in the Reorganization Plan, Retirement Benefits under the
Plan shall not be funded or secured by a trust fund, letter of credit, or any other method,
notwithstanding the practice under the Prior Plan. The Company or Employer may in the future, but
shall in no event be required to, secure Retirement Benefits, except for Participants who have
elected in writing to be excluded for tax purpose. The full cost of the Retirement Benefits shall
be paid by the Employer or the Company, and no contributions shall be required from a Participant.

     7.2 General Creditor Status. The Plan constitutes a mere promise by the Company and
an Active Participant’s respective Employer to make payments in accordance with the terms of the
Plan and Participants and Beneficiaries shall have the status of general unsecured creditors solely
of the Employer employing the Participant. An Active Participant’s Employer shall be principally
liable for payment of the Active Participant’s Retirement Benefits under the Plan, and
AbitibiBowater Inc. shall be secondarily liable for payment. AbiBow Canada Inc. shall be
principally liable for payment of the Retirement Benefits for Deferred Vested Participants and
Legacy Participants, and AbitibiBowater Inc. shall be secondarily liable for payment. Nothing in
the Plan shall be construed to give any employee or any other person rights to any specific assets
of the Employer, the Company or of any other person.

     7.3 No Assignment. Plan benefits, payments or proceeds shall not be subject to any
claim of any creditor of any Participant or Beneficiary and shall not be subject to attachment or
garnishment or other legal process. Retirement benefits payable may not be assigned, pledged or
encumbered in any manner, and any attempt to do so shall be void. Notwithstanding the above, a
Participant, Spouse or Beneficiary can waive his entitlement under this Plan, and Retirement
Benefits are subject to offset as provided in Section 4.13.

     7.4 Notices and Communications. All notices, statements, reports and other
communications from the Plan Administrator to any employee, Participant, Beneficiary or other
person required or permitted under the Plan shall be deemed to have been duly given when personally
delivered to, when transmitted via facsimile or other electronic media or when mailed overnight or
by first-class mail, postage prepaid and addressed to, such employee, Participant, Beneficiary or
other person at his last known address on the Employer’s or Company’s records. All elections,
designations, requests, notices, instructions and other communications from a Participant,
Beneficiary or other person to the Plan Administrator required or permitted under the Plan shall be
in such form as is prescribed from time to time by the Plan Administrator, and shall be mailed by
first-class mail, transmitted via facsimile or other electronic media or delivered to such location
as shall be specified by the Plan Administrator. Such communication shall be deemed to have been
given and delivered only upon actual receipt by the Plan Administrator at such location.

     7.5 Limitation of Participant’s Rights. Nothing contained in the Plan shall confer
upon any person a right to be employed or to continue in the employ of the Employer, or to
interfere, in any way, either with the Employer’s right to terminate the employment of an

27

 

Eligible Employee at any time, with or without cause, or to modify the compensation or
benefits of any Eligible Employee.

     7.6 Participants Bound. Any action with respect to the Plan taken by the Plan
Administrator or a trustee (if any) or any action authorized by or taken at the direction of the
Plan Administrator, the Employer or a trustee (if any) shall be conclusive upon all Participants
and Beneficiaries entitled to benefits under the Plan.

     7.7 Receipt and Release. Any payment to any Participant or Beneficiary in accordance
with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims
against the Employer, the Plan Administrator and a trustee (if any) under the Plan, and the Plan
Administrator may require such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect. If any Participant or Beneficiary is
determined by the Plan Administrator to be incompetent by reason of physical or mental disability
(including minority) to give a valid receipt and release, the Plan Administrator may cause the
payment or payments becoming due to such person to be made to another person for his benefit
without responsibility on the part of the Plan Administrator, the Employer or a trustee (if any) to
follow the application of such funds.

     7.8 Governing Law and Severability. The Plan shall be construed, administered and
governed in all respects under and by the Province of Quebec. If any provision is held by a court
of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective.

     7.9 Headings. Headings and subheading in the Plan are inserted for convenience only
and are not to be considered in the construction of the provisions hereof.

* * *

IN WITNESS WHEREOF, the undersigned officer of AbitibiBowater Inc. has executed this document
pursuant to Resolutions adopted by AbitibiBowater Inc. on December 9, 2010.

	 	 	 	 	 
	 	ABITIBIBOWATER INC.

 	 
	 	By:  	/s/  Richard Garneau
 	 
	 	 	Richard Garneau; President 	 
	 	 	and Chief Executive Officer 	 

28

 

Appendix A

Additional Service

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Additional Years of Service	 	 
	Participants	 	Continuous Service	 	Credited Service	 	Vesting Date
	Gilbert Demers
	 	 	—	 	 	 	14.21	 	 	July 1, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Christian Gélinas
	 	 	—	 	 	 	4.97	 	 	July 1, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Yves Laflamme
	 	 	—	 	 	 	17.10	 	 	July 1, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	André Piché
	 	 	—	 	 	 	9.70	 	 	July 1, 2002
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Pierre Rougeau
	 	 	5.00	 	 	 	5.00	 	 	September 4, 2009(1)(2)

 

			
	(1)	 	  Gradual Vesting of one year for each year of employment. Vesting date
represents date from which additional years of service will be fully vested.
	 
	(2)	 	  For purposes of gradual vesting, years of employment are only counted from September
4, 2004 and onward.

29

 

Appendix B

Executive Employee who held an MSBA and elected to convert his defined benefit
 entitlement under
the prior Abitibi-Price Inc. Registered Pension Plan to a defined
 contribution entitlement on January 1, 1996

Allen Dea

Alain Grandmont

30

 

EXHIBIT A

     The following individuals are former employees of the Employer and Beneficiaries of deceased
employees on the Effective Date who satisfy the requirements of Section 3.1.

31

 

EXHIBIT B

     The following individuals are active employees of the Employer on the Effective Date who
satisfy the requirements of Section 3.1.

32exv10w5

EXHIBIT 10.5

AbitibiBowater

2010 DC Supplemental Executive Retirement Plan

Effective December 9, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	Article 1 INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	1.1 Plan Introduction
	 	 	1	 
	1.2 Plan Purpose
	 	 	1	 
	1.3 409A Compliance and ERISA
	 	 	1	 
	 
	 	 	 	 
	Article 2 DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2.1 “Account”
	 	 	2	 
	2.2 “Base Salary”
	 	 	2	 
	2.3 “Beneficiary”
	 	 	2	 
	2.4 “Canadian Participant”
	 	 	2	 
	2.5 “Code”
	 	 	2	 
	2.6 “Company”
	 	 	2	 
	2.7 “Compensation”
	 	 	2	 
	2.8 “Disability” or “Disabled”
	 	 	3	 
	2.9 “Effective Date”
	 	 	3	 
	2.10 “Eligible Canadian Employee”
	 	 	3	 
	2.11 “Eligible Employee”
	 	 	3	 
	2.12 “Eligible U.S. Employee”
	 	 	3	 
	2.13 “Employer”
	 	 	3	 
	2.14 “Employer Contribution”
	 	 	3	 
	2.15 “ERISA”
	 	 	3	 
	2.16 “Excess Canadian Contributions”
	 	 	3	 
	2.17 “Excess U.S. Automatic Company Contribution”
	 	 	3	 
	2.18 “Excess U.S. Contributions”
	 	 	3	 
	2.19 “Excess U.S. Matching Contribution”
	 	 	3	 
	2.20 “Incentive Award”
	 	 	4	 
	2.21 “Interest”
	 	 	4	 
	2.22 “Participant”
	 	 	4	 
	2.23 “Plan”
	 	 	4	 
	2.24 “Plan Administrator”
	 	 	4	 
	2.25 “Plan Year”
	 	 	4	 
	2.26 “Prior Plans”
	 	 	4	 
	2.27 “Reinstated Amounts”
	 	 	4	 
	2.28 “Separation from Service”
	 	 	5	 
	2.29 “Tax Qualified Plan”
	 	 	5	 
	2.30 “U.S. Participant”
	 	 	5	 
	2.31 “Year of Service”
	 	 	5	 
	 
	 	 	 	 
	Article 3 ELIGIBILITY AND PARTICIPATION
	 	 	6	 
	 
	 	 	 	 
	3.1 Eligibility for Participation
	 	 	6	 
	3.2 Participation
	 	 	6	 
	3.3 Cessation of Participation
	 	 	7	 
	 
	 	 	 	 
	Article 4 CONTRIBUTIONS AND DEFERRALS
	 	 	7	 
	 
	 	 	 	 
	4.1 Reinstated Amounts
	 	 	7	 
	4.2 Excess Canadian Contributions
	 	 	8	 

i

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	4.3 Excess U.S. Matching Contributions
	 	 	8	 
	4.4 Excess U.S. Automatic Company Contributions
	 	 	8	 
	4.5 Employer Contributions
	 	 	8	 
	4.6 Contributions During Period of Disability
	 	 	8	 
	 
	 	 	 	 
	Article 5 ACCOUNTS
	 	 	9	 
	 
	 	 	 	 
	5.1 Accounts
	 	 	9	 
	5.2 Interest
	 	 	9	 
	5.3 Investment
	 	 	10	 
	5.4 Statements
	 	 	10	 
	 
	 	 	 	 
	Article 6 VESTING
	 	 	10	 
	 
	 	 	 	 
	6.1 Vesting Schedules
	 	 	10	 
	6.2 Accelerated Vesting
	 	 	11	 
	6.3 Forfeitures
	 	 	12	 
	 
	 	 	 	 
	Article 7 DISTRIBUTION OF ACCOUNTS
	 	 	12	 
	 
	 	 	 	 
	7.1 Timing of Distribution
	 	 	12	 
	7.2 Benefits Upon Separation from Service
	 	 	12	 
	7.3 Benefits Upon Death
	 	 	13	 
	7.4 Benefits Upon Disability
	 	 	13	 
	7.5 Right of Offset
	 	 	13	 
	7.6 Taxes
	 	 	14	 
	7.7 Additional Discretion to Accelerate Distribution
	 	 	14	 
	 
	 	 	 	 
	Article 8 NON-COMPETE AND CONFIDENTIALITY PROVISIONS
	 	 	15	 
	 
	 	 	 	 
	8.1 Non-Competition
	 	 	15	 
	8.2 Confidentiality
	 	 	15	 
	8.3 Non-Solicitation
	 	 	16	 
	8.4 Non-Disparagement
	 	 	16	 
	 
	 	 	 	 
	Article 9 PLAN ADMINISTRATION
	 	 	16	 
	 
	 	 	 	 
	9.1 Plan Administration and Interpretation
	 	 	16	 
	9.2 Powers, Duties, Procedures
	 	 	17	 
	9.3 Information
	 	 	17	 
	9.4 Indemnification of Plan Administrator
	 	 	17	 
	9.5 Claims Procedure
	 	 	17	 
	 
	 	 	 	 
	Article 10 AMENDMENT AND TERMINATION
	 	 	19	 
	 
	 	 	 	 
	10.1 Authority to Amend and Terminate
	 	 	19	 
	10.2 Existing Rights
	 	 	19	 
	 
	 	 	 	 
	Article 11 MISCELLANEOUS
	 	 	20	 
	 
	 	 	 	 
	11.1 No Funding
	 	 	20	 
	11.2 General Creditor Status
	 	 	20	 
	11.3 No Assignment
	 	 	20	 
	11.4 Notices and Communications
	 	 	20	 
	11.5 Limitation of Participant’s Rights
	 	 	20	 
	11.6 Participants Bound
	 	 	20	 

ii

 

TABLE OF CONTENTS
 (continued)

	 	 	 	 	 
	 	 	Page
	11.7 Receipt and Release
	 	 	21	 
	11.8 Governing Law and Severability
	 	 	21	 
	11.9 Currency
	 	 	21	 
	11.10 Headings
	 	 	21	 

iii

 

AbitibiBowater

2010 DC Supplemental Executive Retirement Plan

Effective December 9, 2010

ARTICLE 1

INTRODUCTION

     1.1 Plan Introduction.

     (a) In April 2009, AbitibiBowater Inc. (the “Company”) and its U.S. and Canadian subsidiaries
(the “AbitibiBowater Entities”) filed voluntary petitions seeking relief pursuant to Chapter 11 of
the United States Bankruptcy Code and/or applied for protection from their creditors under Canada’s
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C36, as amended (collectively, the “Creditor
Protection Proceedings”). The Company and/or certain of its subsidiaries later filed proposed plans
of reorganization in the Creditor Protection Proceedings (collectively, the “Reorganization Plan”).
The Reorganization Plan was approved by the creditors of the AbitibiBowater Entities and the
Canadian and U.S. courts. As a result, the AbitibiBowater Entities have emerged from the Creditor
Protection Proceedings on December 9, 2010 (the “Emergence”).

     (b) Pursuant to the Reorganization Plan, each of the Prior Plans was terminated coincident
with Emergence. On December 9, 2010, the Company adopted and established the AbitibiBowater 2010
DC Supplemental Executive Retirement Plan (the “Plan”), as may be amended from time to time.
Further and pursuant to the Reorganization Plan, the Plan reinstates certain benefits on behalf of
certain eligible Canadian and U.S. employees and former employees of the Employer, and their
Beneficiaries, if any, if the requirements of Section 3.1(a) are met. The reinstated benefits are
substantially similar to the retirement benefits eliminated with the termination of the Prior
Plans, subject to reductions and limitations as set forth in the Reorganization Plan and
incorporated herein.

     1.2 Plan Purpose. The purpose of the Plan is to provide certain eligible employees of
the Employer with an enhanced retirement benefit that supplements the retirement benefits provided
to such eligible employees under the Canadian registered defined contribution plans and U.S.
qualified defined contribution plans of the Employer as well as to reinstate a portion of the
benefits of the Prior Plan to certain Participants and Beneficiaries, as provided in the
Reorganization Plan and described herein. For the avoidance of doubt, no retirement benefits
accrued under any plan other than the Prior Plans are reinstated under, or shall be paid pursuant
to, this Plan.

     1.3 409A Compliance and ERISA. The portions of the Plan governing Participants who
are subject to Section 409A of the Internal Revenue Code of 1986 and any regulations issued
thereunder (the “Code”) are intended to comply with the provisions of Code Section 409A with
respect to all amounts credited to and deferred under the Plan on behalf of such Participants on
and after the Effective Date. The Plan shall be interpreted, administered and operated as
necessary to comply with the requirements of Code Section 409A and applicable Treasury Regulations.
The Company reserves the right to amend or modify the Plan in order to comply with regulations
promulgated by the Department of Treasury under Code Section 409A. In

 

 

addition, for purposes of coverage by the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), the Plan is an unfunded plan maintained by the Company primarily for the purpose
of providing deferred compensation for highly compensated employees and a select group of
management or highly compensated employees within the meaning of Sections 201, 301 and 401 of
ERISA.

ARTICLE 2

DEFINITIONS

     Wherever used herein, the following terms have the meanings set forth below, unless a
different meaning is clearly required by the context:

     2.1 “Account”means a notional account established for the benefit of a Participant under
Section 5.1, which may include one or more sub-accounts.

     2.2 “Base Salary”means the annual base salary paid by the Employer to an Eligible Employee for
services performed during any Plan Year (for an Eligible U.S. Employee, this includes any amounts
deducted from his annual base salary and contributed to the Tax Qualified Plan or any other plan
maintained by the Employer permitting pre-tax contributions). Base Salary does not include income
from stock option exercises, restricted stock or restricted stock units, other equity awards, the
Eligible Employee’s Incentive Award or any other type of incentive award or payments, contributions
to group insurance and other employee benefit plans maintained by the Employer, or any severance
received as salary continuation.

     2.3 “Beneficiary”means the individual or entity designated as the Participant’s Beneficiary
under the Tax Qualified Plan. If there is no Beneficiary designated under the Tax Qualified Plan,
then the rules under such plan shall control for determining the Participant’s Beneficiary for
purposes of the Plan.

     2.4 “Canadian Participant”means a current or former Eligible Canadian Employee who
participates in the Plan in accordance with Article 3 and for whom an Account balance is maintained
hereunder.

     2.5 “Code”means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations and rulings issued thereunder. Reference to any section or subsection of the Code
includes reference to any comparable or succeeding provisions of any legislation that amends,
supplements or replaces that section or subsection.

     2.6 “Company”means AbitibiBowater Inc., a Delaware corporation, or any successor corporation
thereto.

     2.7 “Compensation”means the Base Salary plus Incentive Award of a Participant for a Plan Year,
provided that, when determining any Excess U.S. Automatic Company Contributions and Excess U.S.
Matching Contributions to be credited on behalf of a U.S. Participant, Compensation means
compensation as defined under the Tax Qualified Plan, without regard to the application of the
limitation under Code Section 401(a)(17).

2

 

     2.8 “Disability” or “Disabled”

     (a) with respect to a U.S. Participant, that the U.S. Participant is determined totally
disabled by the Social Security Administration.

     (b) with respect to a Canadian Participant, that the Canadian Participant is entitled to
benefits under a short-term or long-term disability plan of the Employer.

     2.9 “Effective Date”means December 9, 2010, the date of Emergence.

     2.10 “Eligible Canadian Employee”means an employee of the Employer on the Canadian payroll who
is an eligible employee within the meaning of the Tax Qualified Plan.

     2.11 “Eligible Employee”means an Eligible Canadian Employee and an Eligible U.S. Employee.

     2.12 “Eligible U.S. Employee”means an employee of the Employer on the U.S. payroll who is (i)
an eligible employee within the meaning of the Tax Qualified Plan and (ii) a member of a select
group of management or highly compensated employees within the meaning of ERISA. In addition, any
employee of the Employer who is on the Canadian payroll, but is otherwise subject to Code Section
409A, shall be treated as an Eligible U.S. Employee for purposes of applying the Plan provisions
required by Code Section 409A, which primarily include the provisions relating to the time and form
of payment.

     2.13 “Employer”means the Company and each other entity affiliated with the Company that is a
participating employer under the Tax Qualified Plan.

     2.14 “Employer Contribution”means an Employer contribution equal to a specified percentage of
a Participant’s Compensation, as described in Section 4.5.

     2.15 “ERISA”means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations and rulings issued thereunder.

     2.16 “Excess Canadian Contributions”means an Employer contribution credited to a Canadian
Participant’s Account under Section 4.2 that, when added to the amount contributed on the Canadian
Participant’s behalf under the Tax Qualified Plan as a company contribution for a Plan Year, is
equal to 10.5% of Compensation for such Plan Year.

     2.17 “Excess U.S. Automatic Company Contribution”means an Employer contribution credited to a
U.S. Participant’s Account under Section 4.4 that, when added to the amount contributed on the U.S.
Participant’s behalf under the Tax Qualified Plan as an automatic company contribution for a Plan
Year, is equal to 6.5% of Compensation for such Plan Year.

     2.18 “Excess U.S. Contributions”means Employer contributions that are Excess U.S. Matching
Contributions and/or Excess U.S. Automatic Company Contributions.

     2.19 “Excess U.S. Matching Contribution”means an Employer contribution credited to a U.S.
Participant’s Account under Section 4.3 that would have been contributed to the U.S.

3

 

Participant’s account as a matching contribution under the Tax Qualified Plan pursuant to its
terms, but which could not be contributed due to the application of Code limitations.

     2.20 “Incentive Award”means the incentive award paid to a Participant under the Employer’s
regular incentive plans or programs adopted by the Company from time to time or the incentive award
paid under the 2010 Short Term Incentive Plan while employed with an Employer, regardless of
whether a Participant is eligible for and exercises any right to defer an Incentive Award under any
plan or program of the Company. Incentive Award does not include any other cash incentive,
non-recurring (including any restructuring awards under the Emergence Recognition Plan) or
multi-year incentive award, unless authorized by the Plan Administrator.

     2.21 “Interest”means the rate at which interest is credited to the Account of a Canadian
Participant under Section 5.2.

     2.22 “Participant”means a Canadian Participant or U.S. Participant.

     2.23 “Plan”means the AbitibiBowater 2010 DC Supplemental Executive Retirement Plan, as
provided herein and as may be amended from time to time.

     2.24 “Plan Administrator”means the Human Resources and Compensation/ Nominating and Governance
Committee of the Board (the “HRC/NG Committee”) or its delegate.

     2.25 “Plan Year”means the calendar year.

     2.26 “Prior Plans”means each of the following nonqualified supplemental defined contribution
plans or programs:

     (a) Canadian Defined Contribution Retirement Program for Executive Employees of
AbitibiBowater, sponsored by AbitibiBowater Inc;

     (b) Supplemental Defined Contribution Benefit Plan (2003) for Employees of Bowater Canadian
Forest Products Inc. and Bowater Mersey Paper Company Limited, sponsored by Bowater Canadian Forest
Products Inc. with respect to its employees. For the avoidance of doubt, the portion of this plan
as sponsored by Bowater Mersey Paper Company Limited with respect to its employees is not a Prior
Plan; and

     (c) AbitibiBowater Inc. Supplemental Retirement Savings Plan, sponsored by AbitibiBowater Inc.

     2.27 “Reinstated Amounts”means, for an individual described in Section 3.1(a) who becomes a
Participant, the amount of the Participant’s account balance under the Prior Plan as of the date on
which the Prior Plan terminated, reduced as provided by the Reorganization Plan for individuals who
are former employees of the Employers or Beneficiaries as of the Effective Date.

4

 

     2.28 “Separation from Service”means:

     (a) For a U.S. Participant, the termination of the Participant’s employment relationship
(within the meaning of Code Section 409A and Department of Treasury in regulations promulgated
thereunder) with the Company and all related entities of the Company and any other service
relationship defined in such regulations, other than by reason of death. For purposes of the
foregoing, whether an entity is related with the Company shall be determined pursuant to the
controlled group rules of Code Section 414, as modified by Code Section 409A. Notwithstanding the
foregoing, the Participant’s employment relationship with the Company and all related entities of
the Company is treated as continuing intact while the individual is on a military leave, sick leave
or other bona fide leave of absence if the period of such leave does not exceed six months (or
longer, if required by statute or contract). If the period of the leave exceeds six months and the
Participant’s right to reemployment is not provided either by statute or contract, the employment
relationship is deemed to terminate on the first date immediately following such six-month period
for purposes of Code Section 409A only.

     (b) For a Canadian Participant, the termination of the Participant’s employment relationship
with the Company and all related entities of the Company and any other service relationship, other
than by reason of death. For purposes of the Plan, the Participant’s employment relationship with
the Company and all related entities of the Company is treated as continuing intact while the
individual is on a military leave, sick leave or other bona fide leave of absence, including any
period of Disability.

     2.29 “Tax Qualified Plan”means as follows and as the context requires:

     (a) with respect to a Canadian Participant, the Defined Contribution Pension Plan for
Non-Unionized Employees of Abitibi-Consolidated Inc., effective as of January 1, 2002, as amended
from time to time or the DC Retirement Plan (2003) for Non-Unionized Employees of Bowater,
effective as of January 1, 2003, as amended from time to time, or any successor plan or plans;

     (b) with respect to a U.S. Participant, the AbitibiBowater Inc. Retirement Savings Plan, as
amended and restated effective as of January 1, 2007, and as further amended from time to time,
which plan was renamed the AbiBow US Savings Plan, effective December 9, 2010 and further amended
and restated January 1, 2011.

     2.30 “U.S. Participant”means a current or former Eligible U.S. Employee who participates in
the Plan in accordance with Article 3 and for whom an Account balance is maintained hereunder.

     2.31 “Year of Service”means a Participant’s year of service with the Employer within the
meaning of the Tax Qualified Plan.

5

 

ARTICLE 3

ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility for Participation.

     (a) An employee or former employee of the Employer or Beneficiary of a deceased former
employee shall be eligible to participate in the Plan and have his Reinstated Amount recognized
under the Plan if such individual:

     (i) had an account balance under one or more of the Prior Plans as of the date on which
the Prior Plans terminated, which balance was not paid under the Prior Plan before its
termination; and

     (ii) waived and forfeited any and all claims he had or may have had in the Creditor
Protection Proceedings in respect of the Prior Plan or any other Terminated Retirement Plan
as defined in the Reorganization Plan.

     (b) An Eligible Canadian Employee shall be eligible to participate in the Plan and have Excess
Canadian Contributions credited on his behalf under Section 4.2 if the Eligible Canadian Employee
is employed by the Employer in Salary Grade 29 or higher.

     (c) An Eligible U.S. Employee shall be eligible to participate in the Plan and have Excess
U.S. Contributions credited on his behalf under Sections 4.3 and 4.4 if the Eligible U.S. Employee
is employed by the Employer in Salary Grade 29 or higher.

     (d) An Eligible Employee shall be eligible to participate in the Plan and have Employer
Contributions credited on his behalf under Section 4.5 if the Eligible Employee:

     (i) is the Chief Executive Officer of the Company, or

     (ii) is employed by the Employer in Salary Grade 43 or higher and directly reports to
the Chief Executive Officer of the Company.

     3.2 Participation.

     (a) An individual described in Section 3.1(a) shall become a Participant in the Plan on the
Effective Date and have his Reinstated Amount recognized pursuant to the Plan. Exhibit A
identifies the Participants who are active employees of an Employer on the Effective Date, and
Exhibit B identifies the former employees of an Employer and Beneficiaries who met the requirements
of Section 3.1(a) as of the Effective Date.

     (b) An Eligible Canadian Employee described in Section 3.1(b) shall participate in the Plan
and have Excess Canadian Contributions credited on his behalf under Section 4.2 for any Plan Year
(or portion thereof) during which he meets the requirements of Section 3.1(b).

     (c) An Eligible U.S. Employee described in Section 3.1(c) shall participate in the Plan and
have Excess U.S. Contributions credited on his behalf under Sections 4.3 and 4.4 for any Plan Year
(or portion thereof) during which he meets the requirements of Section 3.1(c).

6

 

     (d) An Eligible Employee described in Section 3.1(d) shall participate in the Plan and have
Employer Contributions credited on his behalf under Section 4.5 for any Plan Year (or portion
thereof) during which he meets the requirements of Section 3.1(d).

     3.3 Cessation of Participation.

     (a) Each Participant shall cease to be eligible for Excess Canadian Contributions, Excess U.S.
Contributions and/or Employer Contributions, as applicable, for any Plan Year (or portion thereof)
for which the Participant fails to meet the applicable requirements of Section 3.1. Such
Participant shall remain an inactive participant in the Plan until his Account has been paid in
full in accordance with Article 7.

     (b) Each Participant shall cease to be an active participant in the Plan upon his Separation
from Service. No Excess U.S. Contributions, Excess Canadian Contributions or Employer
Contributions, as applicable, shall be made to the Plan with respect to Base Salary or Incentive
Award paid to the Participant after such Separation from Service. Upon Separation from Service,
each Participant shall remain an inactive participant in the Plan until his Account has been paid
in full in accordance with Article 7. In addition, a U.S. Participant who incurs a Disability
shall become an inactive participant in the Plan and remain an inactive participant until his
Account has been paid in full in accordance with Article 7.

ARTICLE 4

CONTRIBUTIONS AND DEFERRALS

     4.1 Reinstated Amounts.

     (a) A former employee of an Employer as of the Effective Date who becomes a Participant
pursuant to Section 3.2(a) shall receive payment of his Reinstated Amount as provided in Article 7.
The reduction applied pursuant to the Reorganization Plan to determine the Reinstated Amount for
such former employee is as follows:

     (i) For U.S. Participants, the Reinstated Amount is 65% of the U.S. Participant’s
account balance under the Prior Plan as of the date the Prior Plan terminated.

     (ii) For Canadian Participants, the Reinstated Amount is 90% of the Canadian
Participant’s account balance under the Prior Plan as of the date the Prior Plan terminated.

     For clarification, before applying the reduction, the Reinstated Amount shall include interest
on the Participant’s account balance under the Prior Plan for the period between the former
employee’s Separation from Service and the date or dates, as the case may be, on which the account
balance (or portion thereof) should have been made, but for the Creditor Protection Proceedings.
However, no interest shall be paid, with respect to any benefit payments that were suspended,
missed or delayed as a result of the Creditor Protection Proceedings.

     (b) An individual who is employed with an Employer on the Effective Date and who becomes a
Participant pursuant to Section 3.2(a) shall have the Reinstated Amount credited to

7

 

his Account as an opening balance. The Reinstated Amount for such employed Participant shall
receive Interest or adjustments as provided in Article 5.

     4.2 Excess Canadian Contributions. Each Plan Year, the Employer shall credit Excess
Canadian Contributions to the Account of each Eligible Canadian Employee described in Section
3.1(b) in an amount equal to the difference between (i) 10.5% of the Canadian Participant’s
Compensation, and (ii) the amount contributed to the Canadian Participant’s account under the Tax
Qualified Plan for such Plan Year as a company contribution. The intent of the foregoing is to
provide such Eligible Canadian Employee with a total such contribution equal to 10.5% of the
Canadian Participant’s Compensation between the Tax Qualified Plan and this Plan.

     4.3 Excess U.S. Matching Contributions. Each Plan Year, the Employer shall credit
Excess U.S. Matching Contributions to the Account of each Eligible U.S. Employee described in
Section 3.1(c) in an amount that would have been contributed to the U.S. Participant’s account
under the Tax Qualified Plan pursuant to its terms, but which could not be contributed to the U.S.
Participant’s account in the Tax Qualified Plan due to the application of Code limitations. Excess
U.S. Matching Contributions shall be credited for a Plan Year only if the U.S. Participant elected
to make salary deferrals under the Tax Qualified Plan for such Plan Year and is receiving a
matching contribution thereunder. For such Plan Year, Excess U.S. Matching Contributions shall be
credited to the U.S. Participant’s Account after he receives the maximum match to which he could
receive under the Tax Qualified Plan based on his salary deferral elections thereunder and subject
to such other limitations set forth in the Tax Qualified Plan. In the event that matching
contributions are not made available under the Tax Qualified Plan, then no Excess U.S. Matching
Contributions shall be credited under the Plan.

     4.4 Excess U.S. Automatic Company Contributions. Each Plan Year, the Employer shall
credit Excess U.S. Automatic Company Contributions to the Account of each Eligible U.S. Employee
described in Section 3.1(c) in an amount equal to the difference between (i) 6.5% of the U.S.
Participant’s Compensation and (ii) the amount contributed to the U.S. Participant’s account under
the Tax Qualified Plan for such Plan Year as an automatic company contribution. The intent of the
foregoing is to provide such Eligible U.S. Employee with a total such contribution equal to 6.5% of
the U.S. Participant’s Compensation between the Tax Qualified Plan and this Plan.

     4.5 Employer Contributions. Each Plan Year, the Employer shall credit Employer
Contributions to the Account of each Eligible Employee described in Section 3.1(d) as follows: (i)
for the Chief Executive Officer of the Company, in an amount equal to 12% of his Compensation; and
(ii) for all other eligible Participants, in an amount equal to 10% of their Compensation.

     4.6 Contributions During Period of Disability.

     (a) With respect to a Canadian Participant who becomes eligible for short-term and/or
long-term disability benefits under his Employer’s plan, the Employer shall continue to credit
Excess Canadian Contributions and/or Employer Contributions, as applicable, under the Plan on
behalf of the Canadian Participant for his period of disability. All such contributions

8

 

shall be based on the Canadian Participant’s Compensation immediately before the Canadian
Participant’s entitlement to benefits under the short-term or long-term disability plan.

     (b) With respect to a U.S. Participant who becomes eligible for short-term disability benefits
under his Employer’s plan, the Employer shall continue to credit Excess U.S. Contributions and/or
Employer Contributions, as applicable, under the Plan on behalf of the U.S. Participant for his
period of short-term disability. If such U.S. Participant (i) becomes eligible for long-term
disability benefits under his Employer’s plan, (ii) is not Disabled within the meaning of the Plan,
(iii) has not incurred a Separation from Service and (iv) continues to be eligible for and receives
automatic company contributions under the Tax-Qualified Plan, the Employer shall continue to credit
Excess U.S. Automatic Company Contributions under the Plan. All such contributions shall be based
on the U.S. Participant’s Compensation immediately before the U.S. Participant’s entitlement to
benefits under the short-term or long-term disability plan. If such U.S. Participant becomes (i)
eligible for long-term disability benefits, (ii) is not Disabled within the meaning of the Plan,
(iii) has not incurred a Separation from Service and (iv) is not eligible for automatic company
contributions under the Tax-Qualified Plan, then no further Excess U.S. Automatic Company
Contributions shall be credited under the Plan on such Participant’s behalf. In the event the U.S.
Participant becomes Disabled or incurs a Separation from Service, then distribution shall be made
as described in Article 7, regardless of whether the U.S. Participant continues to be eligible for
automatic company contributions under the Tax Qualified Plan.

ARTICLE 5

ACCOUNTS

     5.1 Accounts. An Account shall be established for each Participant to reflect any
Reinstated Amounts, Excess U.S. Contributions, Excess Canadian Contributions and Employer
Contributions, as applicable, together with any Interest in accordance with Section 5.2 or any
adjustments for gains or losses due to investment experience in accordance with Section 5.3, as
applicable. Separate sub-accounts may be established for each type of contribution under the Plan.
Excess U.S. Contributions, Excess Canadian Contributions and Employer Contributions shall be
credited to a Participant’s Account as of the end of each payroll period. Following the close of
each Plan Year, the Plan Administrator shall perform an annual reconciliation of each Participant’s
Account and make any necessary adjustments to a Participant’s Account. The Accounts are
established solely for bookkeeping purposes to track contributions and any income adjustments
thereto that are credited on the Participant’s behalf. The Accounts shall not be used to segregate
assets for payment of any amounts contributed or allocated under the Plan and no Employer shall be
obligated to make any actual contributions to the Accounts or actual investment on behalf of a
Participant.

     5.2 Interest. Each Canadian Participant’s Account shall be credited with Interest (i)
on the value of the Account as of the end of the prior Plan Year at a rate equal to the average
rate of return on the balanced funds offered in the Tax Qualified Plan during the Plan Year and (2)
on the Excess Canadian Contributions made during the Plan Year at such rate divided by two, unless
the Plan Administrator, in its discretion, determines an alternative rate. For the Plan Year in
which the Canadian Participant incurs a Separation from Service, his Account shall be credited with
Interest on the value of the Account as of his Separation from Service date at a rate

9

 

equal to the average rate of return on the balanced funds offered in the Tax Qualified Plan
for the period beginning on the first day of such Plan Year through his Separation from Service
date. U.S. Participants shall not be eligible for Interest under the Plan.

     5.3 Investment. The Plan Administrator shall make available one or more investment
funds in which amounts credited to each U.S. Participant’s Account shall be deemed invested, in
accordance with the U.S. Participant’s directions. The investment funds shall be the same as those
offered under the Tax Qualified Plan, except for any self-directed brokerage option that is or may
be made available under the Tax Qualified Plan. The Plan Administrator may offer any other
investment options in its discretion. Any such directions shall be effective only in accordance
with such rules as the Plan Administrator may establish and applicable federal and state law. If a
U.S. Participant does not make investment elections with respect to amounts credited to his
Account, such amounts shall be deemed invested in such investment fund as the Plan Administrator
may direct. Canadian Participants shall not have investment options under the Plan.

     (a) A U.S. Participant shall make his investment fund selections at such time and in such
manner as permitted by the Plan Administrator, which may include telephone or electronic delivery.
Investments must be made in whole percentages. A U.S. Participant may change his investment
elections at any time, or may reallocate amounts invested among the investment funds available
under the Plan.

     (b) Any account maintenance fees and expense charges for transactions performed for each U.S.
Participant’s Account shall be charged to the U.S. Participant’s Account. Other Plan charges and
administrative expenses shall be paid by the Employer.

     5.4 Statements. At least annually, the Plan Administrator (or its designee) shall
provide the Participant with a statement of such Participant’s Account reflecting the Interest or
income, gains and losses (realized and unrealized), as applicable, and distributions with respect
to such Account, since the prior statement.

ARTICLE 6

VESTING

     6.1 Vesting Schedules

     (a) Canadian Participants. Subject to Section 6.2 and the Participant’s continued
employment with the Employer, a Canadian Participant shall become fully vested and have a
nonforfeitable right to any amounts credited to the Canadian Participant’s Account, adjusted for
Interest, as provided below:

	 	 	 	 	 
	Vested Percentage	 	Age
	50%
	 	Younger than 55
	 
	 	 	 	 
	70%
	 	 	55	 
	 
	 	 	 	 
	80%
	 	 	56	 
	 
	 	 	 	 
	90%
	 	 	57	 
	 
	 	 	 	 
	100%
	 	 	58	 
	 
	 	 	 	 

10

 

     If a Canadian Participant incurs a Separation from Service with the Employer after
attaining age 55 but before attaining age 58, the specific vesting percentage will be interpolated
and rounded to the closest month of age. Subject to Section 6.2, if the Participant incurs a
Separation from Service before attaining age 58, all unvested amounts credited to the Participant’s
Account, and any Interest credited thereon, shall be forfeited.

     (b) U.S. Participants. Subject to Section 6.2 and the Participant’s continued
employment with the Employer, a U.S. Participant shall become fully vested and have a
nonforfeitable right to any amounts credited to the U.S. Participant’s Account, adjusted for
income, gains and losses attributable thereto, upon the completion of three Years of Service.
Notwithstanding any other provisions of the Plan to the contrary, if a U.S. Participant has any
Reinstated Amounts that were contributed as excess matching contributions under the Prior Plans
before January 1, 2009, the U.S. Participant has a fully vested and nonforfeitable right to such
Reinstated Amounts.

     Subject to Section 6.2, if the U.S. Participant incurs a Separation from Service before
completing three Years of Service with the Employer, all amounts credited to the U.S. Participant’s
Account as an Excess U.S. Contribution and/or Employer Contribution, and any income or gain
attributable thereto, shall be forfeited.

     6.2 Accelerated Vesting. Under certain circumstances, a Participant shall become
vested and have a nonforfeitable right to all or a portion of any Reinstated Amounts, Excess
Canadian Contributions, Excess U.S. Contributions and Employer Contributions credited to the
Participant’s Account, adjusted for Interest Credits or income, gains and losses attributable
thereto, as applicable, pursuant to an accelerated vesting schedule, as provided below. Except as
otherwise provided in a Participant’s employment or other individual agreement, if any, “cause” for
purposes of this Section 6.2 shall be determined by the Company in its sole discretion.

     (a) Canadian Participants. A Canadian Participant shall become fully vested in any
Reinstated Amounts, Excess Canadian Contributions and Employer Contributions credited to the
Canadian Participant’s Account, including any Interest Credits added thereto, to the extent not
already fully vested, if the Canadian Participant incurs a Separation from Service due to death or
to an involuntary termination by the Employer without cause.

     (b) U.S. Participants. For any Reinstated Amounts, Excess U.S. Contributions and
Employer Contributions credited to a U.S. Participant’s Account, if a U.S. Participant incurs a
Separation from Service due to an involuntary termination by the Employer without cause, death or
Disability before the U.S. Participant becomes vested in any such contributions, then the U.S.
Participant shall become vested in a prorata portion of such contributions, if any, adjusted for
income, gains and losses attributable thereto. Such prorata portion shall be determined by
multiplying any such contributions by a fraction, the numerator of which is the U.S. Participant’s
number of completed months of service with the Employer, and the denominator of which is 36.

11

 

     6.3 Forfeitures. Notwithstanding any provision in the Plan to the contrary, the
following shall apply:

     (a) If a Canadian Participant is terminated for “cause,” then any Excess Canadian
Contributions and Employer Contributions credited to his Account (and any Interest credited
thereon) shall be forfeited, regardless of the extent to which such contributions are vested before
the date of his Separation from Service.

     (b) If a U.S. Participant voluntarily Separates from Service with the Employer before
attaining age 55, 50% of the aggregate amount of any Reinstated Amounts, Excess U.S. Contributions
and Employer Contributions credited to his Account (and any income or gain attributable thereto)
shall be forfeited, regardless of whether he completed three Years of Service with the Employer
before the date of his Separation from Service. The foregoing shall not apply to any Reinstated
Amounts that were credited as excess matching contributions under the Prior Plans before January 1,
2009.

ARTICLE 7

DISTRIBUTION OF ACCOUNTS

     7.1 Timing of Distribution.

     (a) If a Participant is a former employee described in Section 3.2(a) whose Account is only
credited with Reinstated Amounts, such Reinstated Amounts shall be paid as soon as administratively
possible following Emergence.

     (b) Subject to Article 8, distribution of the vested portion of an Account shall be made on
the earliest to occur of:

     (i) the date set forth in Section 7.2 with respect to the Participant’s Separation from
Service;

     (ii) the date set forth in Section 7.3 with respect to the Participant’s death; or

     (iii) the date set forth in Section 7.4 with respect to the U.S. Participant’s
Disability.

     Notwithstanding any other provision of the Plan to the contrary, in no event shall the
distribution of a U.S. Participant’s Account be accelerated to a time earlier than it would
otherwise have been paid, whether by amendment of the Plan, exercise of the Plan Administrator’s
discretion or otherwise, except as permitted by the Treasury Regulations issued pursuant to Code
Section 409A.

     7.2 Benefits Upon Separation from Service. Upon a Participant’s Separation from
Service for any reason other than death or Disability, the balance of the Participant’s Account
shall be paid in two installments as follows, subject to any reasonable administrative delays in
the processing of payment:

12

 

     (a) One-half of the Participant’s Account (determined as of his Separation from Service) shall
be paid as of the first day of the seventh month following the Participant’s Separation from
Service; and

     (b) The remaining portion of the Participant’s Account shall be paid the first day of the
month coincident with or following the one-year anniversary date of the Participant’s Separation
from Service.

If the Participant is a Canadian Participant, following the crediting of Interest for the Plan Year
in which his Separation from Service occurs (as described in Section 5.2), Interest as described in
5.2 shall cease to be credited upon his Separation from Service. In lieu thereof, interest at the
one-year Canadian Deposit Offered Rate (or other rate in Canada that is equivalent to the LIBOR
rate as described below for U.S. Participants) as in effect on the last day of the month preceding
the Canadian Participant’s Separation from Service date shall be credited to the Canadian
Participant’s Account from the Separation from Service date to the date of payment.

If the Participant is a U.S. Participant, the right to invest the balance of his Account shall
cease upon his Separation from Service. In lieu thereof, interest at the one-year LIBOR rate
published in the Wall Street Journal and in effect as in effect on the last day of the month
preceding the U.S. Participant’s Separation from Service date shall be credited to the U.S.
Participant’s Account from the Separation from Service date to the date of payment.

     7.3 Benefits Upon Death. Upon the Participant’s death, the Participant’s Beneficiary
shall be paid a benefit equal to the remaining balance in the Participant’s Account as of his date
of death in a lump sum payment. Payment shall be made following the date of the Participant’s
death; provided, however, that payment shall not be made later than the end of the calendar year in
which the Participant’s death occurs or, if later, the 15th day of the third month
following the date of the Participant’s death.

     7.4 Benefits Upon Disability. A U.S. Participant shall receive the balance of his
Account in a lump sum payment upon incurrence of a Disability. The U.S. Participant’s Account
shall be valued as of the date of Disability as determined by the Social Security Administration,
and payment shall be made following such date, but no later than the end of the calendar year
following the date of Disability or, if later, the 15th day of the third month following
the date of Disability.

     7.5 Right of Offset.

     (a) Canadian Participants. The Company and any Employer shall have the right to
offset any amounts payable to a Canadian Participant under the Plan to reimburse the Company, or
any of its subsidiaries or affiliates, for liabilities or obligations of the Canadian Participant
to the Company or such subsidiary or affiliate, including any amounts misappropriated by the
Canadian Participant.

     (b) U.S. Participants. The Company and any Employer shall have the right to offset
any amounts payable to a U.S. Participant under the Plan to reimburse the Company, or any of its
subsidiaries or affiliates, for liabilities or obligations of the U.S. Participant to the Company
or such subsidiary or affiliate if the following conditions are met:

13

 

     (i) the liabilities or obligations of the Participant to the Employer were incurred in
the ordinary course of the service relationship between the Participant and the Employer;

     (ii) the entire amount to be offset does not exceed $5,000 in any taxable year of the
Participant; and

     (iii) the offset is made at the same time and in the same amount as the liabilities or
obligations otherwise would have been due and collected from the Participant.

     7.6 Taxes. Income taxes and other taxes payable with respect to an Account shall be
deducted from amounts paid under the Plan. All taxes that the Plan Administrator determines are
required to be withheld from any payments made pursuant to this Article 7 shall be withheld. With
respect to U.S. Participants, the Plan Administrator shall have the discretion to make a
distribution, or accelerate the time or schedule of payment, from a U.S. Participant’s Account if
payment is required for:

     (a) FICA, FUTA and/or the corresponding withholding provisions of applicable state and local
taxes with respect to compensation deferred under the Plan. Any such distribution shall not exceed
the aggregate of such tax withholding and shall reduce the U.S. Participant’s Account balance to
the extent of such distributions; or

     (b) payment of state, local or foreign tax obligations arising from participation in the Plan
that apply to an amount deferred under the Plan and FUTA resulting from such payment. Any such
payment shall not exceed the amount of such taxes due as a result of Plan participation.

     7.7 Additional Discretion to Accelerate Distribution.

     (a) With respect to Canadian Participants, the Plan Administrator shall have the discretion to
accelerate the time or schedule of payment under the Plan, subject to any restrictions or
requirements under applicable Canadian law.

     (b) With respect to U.S. Participants only, the Plan Administrator shall have the discretion
to accelerate the time or schedule of payment under the Plan if the Plan fails to meet the
requirements of Code Section 409A and regulations promulgated thereunder, provided that any such
payment does not exceed the amount required to be included in income as a result of such failure.

     (c) With respect to U.S. Participants only, the Plan Administrator shall have the discretion
to require a mandatory lump sum payment of a U.S. Participant’s Account balance up to the Code
Section 402(g)(1)(B) limit in effect at the time of payment provided that the payment results in
the termination and liquidation of the entirety of the U.S. Participant’s interest under the Plan
(as determined in accordance with plan aggregation rules set forth in Code Section 409A and
Treasury Regulations promulgated thereunder).

14

 

ARTICLE 8

NON-COMPETE AND CONFIDENTIALITY PROVISIONS

     8.1 Non-Competition. Notwithstanding anything herein contained to the contrary, for
Participants who are Grade 40 or above upon their date of Separation from Service, no amount of
benefit shall be payable or continued to be paid pursuant to this Plan in the event that during his
employment with the Employer or during a period of 12 months following his termination of
employment or retirement, the Participant, directly or indirectly, without the consent of
AbitibiBowater Inc.:

     (a) engages in or becomes interested, whether on his own account or in conjunction with or on
behalf of any other person, and whether as an employee, director, officer, partner, principal,
agent, advisor, financial backer, shareholder (except as a passive investor in a public company),
or in any other capacity whatsoever, in a North American business which may fairly be regarded as
being in competition with the Business of AbitibiBowater (as defined below); or

     (b) assists financially or in any manner whatsoever any person, firm, association or company,
whether as principal, agent, officer, employee, manager, advisor, financial backer, shareholder
(except as a passive investor in a public company), or in any capacity whatsoever to enter into,
develop, carry on or maintain a North American business, which may fairly be regarded as being in
competition with the Business of AbitibiBowater.

     For the purposes of this Plan, “Business of AbitibiBowater” means the manufacture, sale and/or
dealing in newsprint, commercial printing papers, market pulp and wood products, as well as
research into, development, production, manufacture, sale, supply, import, export or marketing of
any product which is the same or similar to or competitive with any product researched, developed,
produced, manufactured, sold, supplied, imported, exported or marketed by AbitibiBowater or by any
of its subsidiaries and affiliates in the context of the above described activities as of the date
of the Participant’s Separation from Service.

     8.2 Confidentiality. Notwithstanding anything herein contained to the contrary, no
amount of benefit shall be payable or continued to be paid pursuant to this Plan in the event that
during his employment with the Employer or at any time thereafter, the Participant discloses any
trade secrets or other Confidential Information (as defined below) with regard to the Business of
AbitibiBowater at any time, directly or indirectly, to any third party or otherwise use such
Confidential Information for his or their own benefit or the benefit of others for a period of 5
years following the date of the Participant’s Separation from Service. “Confidential Information”
means all valuable and/or proprietary information in any form belonging to or pertaining to
AbitibiBowater and its subsidiaries, affiliates, customers and vendors, that would be useful to
AbitibiBowater’s competitors or otherwise damaging to AbitibiBowater (or its subsidiaries or
affiliates) if disclosed. Confidential Information may include, but is not necessarily limited to:
(i) the identity of AbitibiBowater’s (or subsidiaries or affiliates) customers or potential
customers, their purchasing histories, and the terms or proposed terms upon which it or they offer
or may offer its products and services to such customers, (ii) the identity of any of
AbitibiBowater’s or its subsidiaries’ or affiliates’ vendors or potential vendors, and the terms or
proposed terms upon which it or they may purchase products and services from such vendors, (iii)
technology and methods used their products and services or planned products and services,

15

 

(iv) the terms and conditions upon which AbitibiBowater (or its subsidiaries and affiliates)
employs its employees and contracts with independent contractors, (v) marketing and/or business
plans and strategies, and (vi) financial reports and analyses regarding AbitibiBowater’s revenues,
expenses, profitability and operations. However, Confidential Information does not include
information which is or becomes generally available to the public other than as a result of
disclosure by the Participant.

     8.3 Non-Solicitation. Notwithstanding anything herein contained to the contrary, no amount of
benefit shall be payable or continued to be paid pursuant to this Plan in the event that during his
employment with the Employer or for a period of 12 months following the date of the Participant’s
Separation from Service, except with the Company’s prior written consent, the Participant, on his
own or in conjunction with or on behalf of any other person, directly or indirectly, solicits,
assists in soliciting, accepts, or facilitates the acceptance of business (which may fairly be
regarded as being in competition with the Business of AbitibiBowater) of any person (i) to whom
AbitibiBowater or its subsidiaries or affiliates has supplied goods or services at any time before
the date of Separation from Service or (ii) with whom AbitibiBowater or its subsidiaries or
affiliates has had any negotiations or discussions regarding the possible supply of goods or
services before the date of Separation from Service.

     8.4 Non-Disparagement. Further, notwithstanding anything herein contained to the contrary, no
amount of benefit shall be payable or continued to be paid pursuant to this Plan in the event that
during his employment with the Employer or at any time thereafter the Participant, directly or
indirectly, disparages, defames or speaks negatively about AbitibiBowater or any of its
subsidiaries, affiliates, customers or related entities, or its products and services, or if the
Participant disparages, subverts, discloses or discusses any detail or aspect of the professional
careers or personal lives of any director, officer or employee of AbitibiBowater or its
subsidiaries or affiliates for any reason whatsoever, except as may be required by law.

ARTICLE 9

PLAN ADMINISTRATION

     9.1 Plan Administration and Interpretation. The Plan Administrator shall oversee the
administration of the Plan. The Plan Administrator shall have complete control and authority to
determine the rights and benefits and all claims, demands and actions arising out of the provisions
of the Plan of any Participant, Beneficiary, deceased Participant or other person having or
claiming to have any interest under the Plan. Benefits under the Plan shall be paid only if the
Plan Administrator decides in its discretion that the Eligible Employee, Participant or Beneficiary
is entitled to them. Notwithstanding any other provision of the Plan to the contrary, the Plan
Administrator shall have complete discretion to interpret the Plan and to decide all matters under
the Plan. Such interpretation and decision shall be final, conclusive and binding on all
Participants and any person claiming under or through any Participant, in the absence of clear and
convincing evidence that the Plan Administrator acted arbitrarily and capriciously. Any individual
serving as Plan Administrator who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the Plan Administrator
shall be entitled to rely on information furnished by a Participant, a Beneficiary, the Company,
the Employer or a trustee (if any).

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     9.2 Powers, Duties, Procedures. The Plan Administrator shall have such powers and
duties, may adopt such rules, may act in accordance with such procedures, may appoint such officers
or agents, may delegate such powers and duties and shall follow such claims and appeal procedures
with respect to the Plan (subject to the requirements of Section 9.5) as the Plan Administrator may
establish. The Plan Administrator or individuals acting on its behalf shall receive reimbursement
for any reasonable business expense incurred in the performance of the foregoing duties.

     9.3 Information. To enable the Plan Administrator to perform its functions, the
Company and the Employer shall supply full and timely information to the Plan Administrator on all
matters relating to the compensation of Participants, their employment, retirement, death,
Separation from Service, Disability and such other pertinent facts as the Plan Administrator may
require.

     9.4 Indemnification of Plan Administrator. The Company agrees to indemnify and to
defend to the fullest extent permitted by law any officer or employee who serves as Plan
Administrator (including any such individual who will have served as Plan Administrator of the
Plan) against all liabilities, damages, costs and expenses (including reasonable attorneys’ fees
and amounts paid in settlement of any claims approved by the Company in writing in advance)
occasioned by any act or omission to act in connection with the Plan, if such act or omission is in
good faith.

     9.5 Claims Procedure. A Participant or Beneficiary shall have the right to file a
claim, inquire if he has any right to benefits and the amounts thereof or appeal the denial of a
claim.

     (a) Initial Claim. A claim shall be considered as having been filed when a written
communication is made by the Participant, Beneficiary or his authorized representative to the
attention of the Plan Administrator (the “claimant”). The Plan Administrator shall notify the
claimant in writing within 90 days after receipt of the claim if the claim is wholly or partially
denied. If an extension of time beyond the initial 90-day period for processing the claim is
required, written notice of the extension shall be provided to the claimant before the expiration
of the initial 90-day period. In no event shall the period, as extended, exceed 180 days. The
extension notice shall indicate the special circumstances requiring an extension of time and the
date by which the Plan Administrator expects to render a final decision. Written claims for
benefit payments must be made within twelve months of the later of the Participant’s retirement or
termination of employment for any reason or the Effective Date of the Plan. A claim shall be
considered untimely filed and denied if received more than twelve months from such later date.

     (b) Content of Denial. Notice of a wholly or partially denied claim for benefits shall be in
writing in a manner calculated to be understood by the claimant and shall include:

     (i) the reason or reasons for denial;

     (ii) specific reference to the Plan provisions on which the denial is based;

17

 

     (iii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or information is
necessary; and

     (iv) an explanation of the Plan’s claim appeal procedure, including a statement of the
claimant’s right, if applicable, to bring a civil action under Section 502(a) of ERISA
following a denial of the claim upon review.

     (c) Right to Review. If a claim is wholly or partially denied, the claimant may file an
appeal requesting the Plan Administrator to conduct a full and fair review of his claim. An appeal
must be made in writing no more than 60 days after the claimant receives written notice of the
denial. The claimant may review or receive copies, upon request and free of charge, any documents,
records or other information that the Plan Administrator determines relevant; provided that, for a
claimant who is a U.S. Participant, “relevant” has the meaning set forth in U.S. Department of
Labor Regulation Section 2560.503-1(m)(8). The claimant may also submit written comments,
documents, records and other information relating to his claim. The Plan Administrator shall take
into account all comments, documents, records and other information submitted by the claimant
relating to the claim, without regard to whether such information was submitted or considered in
the initial review of the claim. The decision of the Plan Administrator regarding the appeal shall
be given to the claimant in writing no later than 60 days following receipt of the appeal.
However, if the Plan Administrator, in its sole discretion, grants a hearing, or there are special
circumstances involved, the decision shall be given no later than 120 days after receiving the
appeal. If such an extension of time for review is required, written notice of the extension shall
be furnished to the claimant before the commencement of the extension. The decision shall be
written in a manner calculated to be understood by the claimant and include:

     (i) specific reasons for the decision;

     (ii) specific references to the pertinent Plan provisions on which the decision is
based;

     (iii) a statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records or other information
relevant to the claimant’s claim; and

     (iv) if applicable, a statement of the claimant’s right, if applicable, to bring a
civil action under Section 502(a) of ERISA following a wholly or partially denied claim for
benefits.

     (d) Form of Notice and Decision. Any notice or decision by the Plan Administrator under this
Section 9.5 may be furnished electronically, and for U.S. Participants, in accordance with U.S.
Department of Labor Regulation Section 2520.104b-1(c)(i), (iii) and (iv).

     (e) Exhaustion of Administrative Remedy. Notwithstanding any provision in the Plan to the
contrary, no employee, Participant or Beneficiary may bring any legal or administrative claim or
cause of action against the Plan, the Plan Administrator or the Employer

18

 

in court or any other venue until the employee, Participant or Beneficiary has exhausted its
administrative remedies under this Section 9.5.

     (f) Statute of Limitations. Notwithstanding any provision in the Plan to the contrary, a
Participant, Spouse or other beneficiary must file any written claim for benefits with the Plan
Administrator within one year from the date on which the Participant, Spouse or other beneficiary
knows, or with the exercise of reasonable diligence would know, of the basis for the claim, but, in
the case of a claim based upon an alleged error in the amount of benefits, in no event later than
one year from the date on which the first allegedly mistaken payment is made. Any written claim
submitted to the Plan Administrator after such date shall be void and denied as untimely. Further,
in order for a claimant to initiate any action for any benefit under the Plan before any court or
before any administrative agency or quasi-judicial tribunal, such claimant must have first filed a
claim for such benefit and requested review of any adverse decision on such claim in accordance
with this Section and any procedures established by the Plan Administrator pursuant to this
Section. Any such action must be initiated not more than 180 days after receipt of an adverse
claim decision on review, except as otherwise required by applicable law.

     (g) Suspension of Payment. If the Plan Administrator is in doubt concerning the entitlement
of any person to any payment claimed under the Plan, the Employer may suspend payment until
satisfied as to the person’s entitlement to the payment. Notwithstanding the foregoing, no
Participant or Beneficiary may bring a claim for Plan benefits to arbitration, court or through any
other legal action or process until the administrative claims process of this Section 9.5 has been
exhausted.

ARTICLE 10

AMENDMENT AND TERMINATION

     10.1 Authority to Amend and Terminate.

     (a) The Plan reserves to the Plan Administrator the right to amend or terminate the Plan at
any time, without notice, subject to Section 10.2. Any amendment or termination of the Plan shall
be effected by resolution of the Plan Administrator. Except as provided in paragraph (b), Account
balances shall be maintained under the Plan until such amounts would otherwise have been
distributed in accordance with the terms of the Plan.

     (b) Upon termination of the Plan, the Plan Administrator reserves the discretion to accelerate
distribution of the Accounts of Participants, provided that any acceleration of distribution for
U.S. Participants must be in accordance with regulations promulgated by the Department of Treasury
under Code Section 409A.

     10.2 Existing Rights. No amendment or termination of the Plan shall materially
adversely affect the rights of any Participant with respect to amounts that have been credited to
his Account and are vested before the effective date of such amendment or termination.
Notwithstanding the foregoing, the Plan Administrator may amend the Plan as necessary to address
changes in applicable law in order to assure that amounts contributed to the Plan are not subject
to federal income tax before distribution or withdrawal.

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ARTICLE 11

MISCELLANEOUS

     11.1 No Funding. The Company intends that the Plan constitute an “unfunded” plan for
tax purposes. The Company may, but shall have no obligation to, authorize the creation of trusts
and deposit therein cash or other property, or make other arrangements to meet the payment
obligations under the Plan. Such trusts or other arrangements, if established, shall be consistent
with the unfunded status of the Plan.

     11.2 General Creditor Status. The Plan constitutes a mere promise by the Company and
an Active Participant’s respective Employer to make payments in accordance with the terms of the
Plan and Participants and Beneficiaries shall have the status of general unsecured creditors solely
of the Employer employing the Participant. An Active Participant’s Employer shall be principally
liable for payment of the Active Participant’s Retirement Benefits under the Plan, and
AbitibiBowater Inc. shall be secondarily liable for payment. AbiBow US Inc. or AbiBow Canada Inc.
shall be respectively principally liable for payment of the Reinstated Amounts payable to former
U.S. and Canadian employees, and AbitibiBowater Inc. shall be secondarily liable for payment.
Nothing in the Plan shall be construed to give any employee or any other person rights to any
specific assets of the Employer, the Company or of any other person.

     11.3 No Assignment. Plan benefits, payments or proceeds shall not be subject to any
claim of any creditor of any Participant or Beneficiary and shall not be subject to attachment or
garnishment or other legal process. Participant Accounts or benefits payable may not be assigned,
pledged or encumbered in any manner, and any attempt to do so shall be void.

     11.4 Notices and Communications. All notices, statements, reports and other
communications from the Plan Administrator to any employee, Participant, Beneficiary or other
person required or permitted under the Plan shall be deemed to have been duly given when personally
delivered to, when transmitted via facsimile or other electronic media or when mailed overnight or
by first-class mail, postage prepaid and addressed to, such employee, Participant, Beneficiary or
other person at his last known address on the Employer’s or Company’s records. All elections,
designations, requests, notices, instructions and other communications from a Participant,
Beneficiary or other person to the Plan Administrator required or permitted under the Plan shall be
in such form as is prescribed from time to time by the Plan Administrator, and shall be mailed by
first-class mail, transmitted via facsimile or other electronic media or delivered to such location
as shall be specified by the Plan Administrator. Such communication shall be deemed to have been
given and delivered only upon actual receipt by the Plan Administrator at such location.

     11.5 Limitation of Participant’s Rights. Nothing contained in the Plan shall confer
upon any person a right to be employed or to continue in the employ of the Employer, or to
interfere, in any way, either with the Employer’s right to terminate the employment of an Eligible
Employee at any time, with or without cause, or to modify the Base Salary or Incentive Award of any
Eligible Employee.

     11.6 Participants Bound. Any action with respect to the Plan taken by the Plan
Administrator or a trustee (if any) or any action authorized by or taken at the direction of the

20

 

Plan Administrator, the Employer or a trustee (if any) shall be conclusive upon all
Participants and Beneficiaries entitled to benefits under the Plan.

     11.7 Receipt and Release. Any payment to any Participant or Beneficiary in accordance
with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims
against the Employer, the Plan Administrator and a trustee (if any) under the Plan, and the Plan
Administrator may require such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect. If any Participant or Beneficiary is
determined by the Plan Administrator to be incompetent by reason of physical or mental disability
(including minority) to give a valid receipt and release, the Plan Administrator may cause the
payment or payments becoming due to such person to be made to another person for his benefit
without responsibility on the part of the Plan Administrator, the Employer or a trustee (if any) to
follow the application of such funds.

     11.8 Governing Law and Severability. With respect to U.S. Participants, the Plan
shall be construed, administered and governed in all respects under and by the laws of the State of
Delaware to the extent not preempted by ERISA. With respect to Canadian Participants, the Plan
shall be construed, administered and governed in all respects under and by the laws of Quebec. If
any provision is held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.

     11.9 Currency. Contributions credited to and payments made under the Plan shall be
determined in the same currency in which a Participant’s receives his Base Salary.

     11.10 Headings. Headings and subheading in the Plan are inserted for convenience only
and are not to be considered in the construction of the provisions hereof.

* * *

IN WITNESS WHEREOF, the undersigned officer of AbitibiBowater Inc. has executed this document
pursuant to Resolutions adopted by AbitibiBowater Inc. on December 9, 2010.

	 	 	 	 	 
	 	ABITIBIBOWATER INC.

 	 
	 	By:  	/s/  Richard Garneau
 	 
	 	 	Richard Garneau 	 
	 	Its: 	                President and Chief Executive Officer 	 

21

 

	 	 	 	 	 

EXHIBIT A

     The following individuals are active employees of the Employer on the Effective Date who
satisfy the requirements of Section 3.1(a) and are entitled to payment of Reinstated Amounts, as
identified below.

22

 

EXHIBIT B

     The following individuals are former employees of the Employer and beneficiaries of
deceased employees on the Effective Date who satisfy the requirements of Section 3.1(a) and are
entitled to payment of Reinstated Amounts, as identified below.

23

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