Document:

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                                                                   EXHIBIT 10.50

                           CHANGE IN CONTROL AGREEMENT

         THIS AGREEMENT, made as of the 16th day of January 2004, by and between
Bowater Incorporated, a Delaware corporation having a mailing address of 55 East
Camperdown Way, Greenville, South Carolina 29601 (the "Corporation"), and Ronald
T. Lindsay of 1214 Belgrave Place, Charlotte, NC 28203 (the "Executive").

         WHEREAS, the Corporation considers it essential to the best interests
of its stockholders to foster the continued employment of key management
personnel; and

         WHEREAS, the uncertainty attendant to a change in control of the
Corporation may result in the departure or distraction of management personnel
to the detriment of the Corporation and its stockholders; and

         WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Corporation's management,
including Executive, to their assigned duties in the event of a change in
control of the Corporation.

         NOW THEREFORE, it is hereby agreed as follows:

1.       DEFINITIONS

         The following terms when used herein shall have the meanings assigned
         to them below. Whenever applicable throughout this Agreement, the
         masculine pronoun shall include the feminine pronoun and the singular
         shall include the plural.

         (a)      "Acquiring Person" means the Beneficial Owner, directly or
                  indirectly, of Common Stock representing 20% or more of the
                  combined voting power of the Corporation's then outstanding
                  securities, not including (except as provided in Clause (i) of
                  the next sentence) securities of such Beneficial Owner
                  acquired pursuant to an agreement allowing the acquisition of
                  up to and including 50% of such voting power approved by
                  two-thirds of the members of the Board who are Board members
                  before the Person becomes Beneficial Owner, directly or
                  indirectly, of Common Stock representing 5% or more of the
                  combined voting power of the Corporation's then

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                                      -2-

                  outstanding securities. Notwithstanding the foregoing, (i)
                  securities acquired pursuant to an agreement described in the
                  preceding sentence will be included in determining whether a
                  Beneficial Owner is an Acquiring Person if, subsequent to the
                  approved acquisition, the Beneficial Owner acquires 5% or more
                  of such voting power other than pursuant to such an agreement
                  so approved and (ii) a Person shall not be an Acquiring Person
                  if such Person is eligible to and files a Schedule 13G with
                  respect to such Person's status as a Beneficial Owner of all
                  Common Stock of the Corporation of which the Person is a
                  Beneficial Owner.

         (b)      "Affiliate" and "Associate" shall have the respective meanings
                  ascribed to such terms in Rule 12b-2 of the General Rules and
                  Regulations under the Securities Exchange Act of 1934 (the
                  "Act").

         (c)      A "Beneficial Owner" of Common Stock means (i) a Person who
                  beneficially owns such Common Stock, directly or indirectly,
                  or (ii) a Person who has the right to acquire such Common
                  Stock (whether such right is exercisable immediately or only
                  with the passage of time) pursuant to any agreement,
                  arrangement or understanding (whether or not in writing or
                  upon the exercise of conversion rights, exchange rights,
                  warrants, options or otherwise.

         (d)      "Cause" shall mean and be limited to the Executive's gross
                  negligence, willful misconduct or conviction of a felony,
                  which negligence, misconduct or conviction has a demonstrable
                  and material adverse effect upon the Corporation, provided
                  that, to the extent that the Corporation contends that Cause
                  exists by virtue of Executive's gross negligence or willful
                  misconduct, and such gross negligence or willful misconduct is
                  capable of being cured, the Corporation shall have given the
                  Executive written notice of the alleged negligence or
                  misconduct and the Executive shall have failed to cure such
                  negligence or misconduct within thirty (30) days after his
                  receipt of such notice. The Executive shall be deemed to have
                  been terminated for Cause effective upon the effective date
                  stated in a written notice of such termination delivered by
                  the Corporation to the Executive (which notice shall not be
                  delivered before the end of the thirty (30) day period
                  described in the preceding sentence, if applicable) and
                  accompanied by a resolution duly adopted by the affirmative
                  vote of not less than three-quarters (3/4) of the entire
                  membership of the Board at a meeting of the Board (after
                  reasonable notice to the Executive and an opportunity for the
                  Executive, with his counsel present, to be heard before the
                  Board) finding that, in the good faith opinion of the Board,
                  the Executive was guilty of conduct constituting Cause
                  hereunder and setting forth in reasonable detail the facts and
                  circumstances claimed to provide the basis for the Executive's
                  termination, provided that the effective date shall not be
                  less than thirty (30) days from the date such notice is given.

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                                      -3-

         (e)      "Change in Control" shall be deemed to have occurred upon:

                  (i)      The date that any Person is or becomes an Acquiring
                           Person.

                  (ii)     The date that the Corporation's shareholders approve
                           a merger, consolidation or reorganization of the
                           Corporation with another corporation or other Person,
                           unless, immediately following such merger,
                           consolidation or reorganization, (A) at least 50% of
                           the combined voting power of the outstanding
                           securities of the resulting entity would be held in
                           the aggregate by the shareholders of the Corporation
                           as of the record date for such approval (provided
                           that securities held by any individual or entity that
                           is an Acquiring Person, or who would be an Acquiring
                           Person if 5% were substituted for 20% in the
                           definition of such term, shall not be counted as
                           securities held by the shareholders of the
                           Corporation, but shall be counted as outstanding
                           securities for purposes of this determination), or
                           (B) at least 50% of the board of directors or similar
                           body of the resulting entity are Continuing
                           Directors.

                  (iii)    The date the Corporation sells or otherwise transfers
                           all or substantially all of its assets to another
                           corporation or other Person, unless, immediately
                           after such sale or transfer, (A) at least 50% of the
                           combined voting power of the then-outstanding
                           securities of the resulting entity immediately
                           following such transaction is held in the aggregate
                           by the Corporation's shareholders as determined
                           immediately prior to such transaction (provided that
                           securities held by any individual or entity that is
                           an Acquiring Person, or who would be an Acquiring
                           Person if 5% were substituted for 20% in the
                           definition of such term, shall not be counted as
                           securities held by the shareholders of the
                           Corporation, but shall be counted as outstanding
                           securities for purposes of this determination), or
                           (B) at least 50% of the board of directors or similar
                           body of the resulting entity are Continuing
                           Directors.

                  (iv)     The date on which less than 50% of the total
                           membership of the Board consists of Continuing
                           Directors.

         (f)      "Commencement Date" shall mean the date of this Agreement,
                  which shall be the beginning date of the term of this
                  Agreement.

         (g)      "Continuing Directors" shall mean any member of the Board who
                  (i) was a member of the Board prior to the date of the event
                  that would constitute a Change in Control, and any successor
                  of a Continuing Director while such successor is a

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                                      -4-

                  member of the Board, (ii) is not an Acquiring Person or an
                  Affiliate or Associate of an Acquiring Person, and (iii) is
                  recommended or elected to succeed the Continuing Director by a
                  majority of the Continuing Directors.

         (h)      "Disability" shall mean the Executive's total and permanent
                  disability as defined in the Corporation's long term
                  disability insurance policy covering the Executive immediately
                  prior to the Change in Control.

         (i)      "Exchange Act" shall mean the Securities Exchange Act of 1934
                  as amended.

         (j)      "Good Reason" shall mean:

                  (i)      an adverse change in the Executive's status, duties
                           or responsibilities as an executive of the
                           Corporation as in effect immediately prior to the
                           Change in Control, provided that the Executive shall
                           have given the Corporation written notice of the
                           alleged adverse change and the Corporation shall have
                           failed to cure such change within thirty (30) days
                           after its receipt of such notice;

                  (ii)     failure of the Corporation to pay or provide the
                           Executive in a timely fashion the salary or benefits
                           to which he is entitled under any Employment
                           Agreement between the Corporation and the Executive
                           in effect on the date of the Change in Control, or
                           under any benefit plans or policies in which the
                           Executive was participating at the time of the Change
                           in Control (including, without limitation, any
                           incentive, bonus, stock option, restricted stock,
                           health, accident, disability, life insurance, thrift,
                           vacation pay, deferred compensation and retirement
                           plans or policies);

                  (iii)    the reduction of the Executive's salary as in effect
                           on the date of the Change in Control;

                  (iv)     the taking of any action by the Corporation
                           (including the elimination of a plan without
                           providing substitutes therefor, the reduction of the
                           Executive's awards thereunder or failure to continue
                           the Executive's participation therein) that would
                           substantially diminish the aggregate projected value
                           of the Executive's awards or benefits under the
                           Corporation's benefit plans or policies described in
                           Section 1(j)(ii) in which the Executive was
                           participating at the time of the Change in Control;

                  (v)      a failure by the Corporation to obtain from any
                           successor the assent to this Agreement contemplated
                           by Section 5 hereof; or

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                  (vi)     the relocation of the principal office at which the
                           Executive is to perform his services on behalf of the
                           Corporation to a location more than thirty-five (35)
                           miles from its location immediately prior to the
                           Change in Control or a substantial increase in the
                           Executive's business travel obligations subsequent to
                           the Change in Control.

                  Any circumstance described in this Section 1(j) shall
                  constitute Good Reason even if such circumstance would not
                  constitute a breach by the Corporation of the terms of the
                  Employment Agreement between the Corporation and the Executive
                  in effect on the date of the Change in Control. The Executive
                  shall be deemed to have terminated his employment for Good
                  Reason effective upon the effective date stated in a written
                  notice of such termination given by him to the Corporation
                  (which notice shall not be given, in circumstances described
                  in Section 1(j)(i), before the end of the thirty (30) day
                  period described therein) setting forth in reasonable detail
                  the facts and circumstances claimed to provide the basis for
                  termination, provided that the effective date may not precede,
                  nor be more than sixty (60) days from, the date such notice is
                  given. The Executive's continued employment shall not
                  constitute consent to, or a waiver of rights with respect to,
                  any circumstances constituting Good Reason hereunder.

         (k)      "Normal Retirement Date" shall have the meaning given to such
                  term in the Corporation's basic qualified pension plan in
                  which the Executive is a participant as in effect on the date
                  hereof or any successor or substitute plan adopted prior to a
                  Change in Control.

         (l)      "Person" means any individual, firm, corporation, partnership,
                  trust or other entity.

 2.      TERM OF AGREEMENT

         (a)      The term of this Agreement shall initially be for the period
                  beginning on the Commencement Date and ending on the day
                  before the third anniversary of the Commencement Date. The
                  term of this Agreement shall automatically be extended on the
                  first anniversary of the Commencement Date until the day
                  before the fourth anniversary of the Commencement Date without
                  further action by the parties, and shall be automatically
                  extended by an additional year on each succeeding anniversary
                  of the Commencement Date, unless either the Corporation or the
                  Executive shall have served notice upon the other party prior
                  to such anniversary of its or his intention either that the
                  term of this Agreement shall not be extended, or that the
                  Executive's Employment Agreement is terminated, provided,
                  however, that if a Change in Control of the Corporation shall
                  occur during the term of this Agreement, this Agreement shall
                  continue in effect until it expires in accordance with the
                  foregoing, but in any event for a period of not less than
                  three (3) years from the date of the Change in Control.

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                                      -6-

          (b)     Notwithstanding Section 2(a), the term of this Agreement shall
                  end upon the termination of the Executive's employment if,
                  prior to a Change in Control of the Corporation, the
                  Executive's employment with the Corporation shall have
                  terminated under the provisions of any Employment Agreement
                  between the Corporation and the Executive then in effect.

3.       COMPENSATION UPON CHANGE IN CONTROL FOLLOWED BY A TERMINATION

         If a Change in Control of the Corporation shall have occurred and,
         thereafter and during the term of this Agreement, the Executive's
         employment by the Corporation is terminated for any reason other than
         his death, his Disability, his retirement on his Normal Retirement
         Date, by the Corporation for Cause, or by the Executive without Good
         Reason, the Executive shall be under no further obligation to perform
         services for the Corporation and shall be entitled to receive the
         following payments:

         (a)      The Corporation shall pay to the Executive his full base
                  salary through the effective date of the termination within
                  five (5) business days thereafter and all benefits and awards
                  (including both the cash and stock components) to which the
                  Executive is entitled under any benefit plans or policies in
                  which the Executive was a participant prior to the Change in
                  Control (or, if more favorable, at the effective date of
                  termination), at the time such payments are due pursuant to
                  the terms of such benefit plans or policies as in effect
                  immediately prior to the Change in Control (or, if more
                  favorable, at the effective date of termination).

         (b)      At the election of the Executive, in addition to the
                  entitlements set forth in Section 3(a) but in lieu of any
                  payment to the Executive of any salary or severance payments
                  or benefits to which the Executive would be entitled under the
                  provisions of any Employment Agreement between the Corporation
                  and the Executive then in effect (if any), the Corporation
                  shall pay to the Executive, in a lump sum not later than ten
                  (10) business days following the effective date of the
                  termination:

                  (i)      an amount equal to three (3) times the Executive's
                           annual base salary on the effective date of the
                           termination or, if higher, immediately prior to the
                           Change in Control;

                  (ii)     an amount equal to three (3) times the greater of (x)
                           the highest amount of the actual bonus awarded to the
                           Executive in the five (5) fiscal years immediately
                           preceding the year in which the Change in Control
                           occurred and (y) an amount equal to the amount the
                           Executive would have been awarded under the
                           Corporation's bonus plan in effect immediately prior
                           to the Change in Control for the fiscal year in which
                           the Change in Control occurred had the Executive
                           continued to render services to the Corporation at
                           the same level of performance, at the same level of
                           salary, and in the

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                           same position as immediately prior to the Change in
                           Control;

                  (iii)    an amount equal to three (3) times the greater of (x)
                           the largest annual contribution made by the
                           Corporation to the Corporation's Savings Plan on the
                           Executive's behalf during the five (5) fiscal years
                           immediately preceding the year in which the Change in
                           Control occurred and (y) an amount equal to the
                           contribution the Corporation would have made to said
                           Plan on the Executive's behalf for the fiscal year in
                           which the Change in Control occurred had he
                           participated in said Plan for the entire fiscal year,
                           received a base salary equal to the salary he was
                           receiving immediately prior to the Change in Control
                           and had he elected to contribute to the Plan the same
                           percentage of his base salary as he was contributing
                           on said date;

                  (iv)     an amount equal to thirty percent (30%) of the
                           Executive's annual base salary on the effective date
                           of the termination or, if higher, immediately prior
                           to the Change in Control (as compensation for
                           medical, life insurance and other benefits lost as a
                           result of termination of the Executive's employment);
                           and

                  (v)      For each full or partial month in the period
                           beginning on January 1st of the year in which the
                           date of the termination occurs and ending on the date
                           of the termination, one-twelfth of the greater of (x)
                           the highest amount of the actual bonus awarded to the
                           Executive in the five (5) fiscal years immediately
                           preceding the year in which the Change in Control
                           occurred and (y) an amount equal to the amount the
                           Executive would have been awarded under the
                           Corporation's annual bonus plan in effect immediately
                           prior to the Change in Control for the fiscal year in
                           which the Change in Control occurred had the
                           Executive continued to render

                           services to the Corporation at the same level of
                           performance, at the same level of salary, and in the
                           same position as immediately prior to the Change in
                           Control.

                  (vi)     If a payment may be increased by reference to an
                           alternate calculation which cannot be made by the
                           time the payment is due, payment of the lesser, known
                           amount shall be made when due, and if any additional
                           amount becomes due, such additional amount shall be
                           paid within ten (10) days after the information upon
                           which calculation of such payment is dependent first
                           becomes available.

                  The amount of all payments due to the Executive pursuant to
                  this Section 3(b) shall be reduced by 1/36 for each full
                  calendar month by which the date which is three (3) years from
                  the effective date of the Executive's termination extends
                  beyond the Executive's Normal Retirement Date.

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                                      -8-

                  Upon entering into this Agreement and for a period of fourteen
                  (14) days following each anniversary of the date hereof (the
                  "Election Period"), the Executive may, in writing, direct the
                  Corporation to pay any amounts to which he is entitled under
                  this Section 3(b) in equal annual installments (not to exceed
                  ten (10) annual installments), with the first such installment
                  payable within ten (10) business days of the effective date of
                  the termination and each successive installment payable on the
                  anniversary of the effective date of the termination or the
                  next following business day if such date is not a business day
                  (the "Deferred Payment Election"). A Deferred Payment
                  Election, once made, cannot be revoked except during an
                  Election Period; provided, however, no Deferred Payment
                  Election can be made or revoked by the Executive during an
                  Election Period that occurs after a Change in Control or at a
                  time when, in the judgment of the Corporation, a Change in
                  Control may occur within sixty (60) days of such Election
                  Period.

         (c)      The Corporation shall pay or provide to the Executive or his
                  surviving spouse or children, as the case may be, such amounts
                  and benefits as may be required so that the pension and other
                  post-retirement benefits paid or made available to the
                  Executive, his surviving spouse, and his children are equal to
                  those, if any, which would have been paid under the
                  Corporation's Basic and Supplemental Pension (Benefit) Plans
                  in effect immediately prior to the Change in Control, assuming
                  the Executive continued in the employ of the Corporation at
                  the same compensation until the third anniversary of the
                  effective date of the termination of the Executive's
                  employment or until his Normal Retirement Date, whichever is
                  earlier. Notwithstanding any conflicting restrictions in the
                  Plans or the fact of the termination of the Executive's
                  employment, until the Executive's Normal Retirement Date, the
                  Executive or his surviving spouse and his children shall
                  maintain a continuing right to receive the pension and other
                  benefits under the above Plans with payments to begin upon
                  retirement and to elect an imputed retirement on the
                  Executive's 50th birthdate or any of his birthdates thereafter
                  until his Normal Retirement Date, such election to be made by
                  so notifying the Corporation within one (1) year after
                  termination of his employment.

         (d)      The Corporation shall pay for or provide the Executive
                  individual out-placement assistance as offered by a member
                  firm of the Association of Out-Placement Consulting Firms.

         (e)      If any payment or benefit to or for the benefit of the
                  Executive in connection with a Change in Control of the
                  Corporation or termination of the Executive's employment
                  following a Change in Control of the Corporation (whether
                  pursuant to the terms of this Agreement, or any other plan or
                  arrangement or agreement with the Corporation, any Person
                  whose actions result in a Change in Control of the Corporation
                  or any Affiliate or Associate of the Corporation or any such
                  Person) is subject to the Excise Tax (as hereinafter defined),
                  the Corporation shall pay to the Executive an additional
                  amount such that the total amount of all such

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                  payments and benefits (including payments made pursuant to
                  this Section 3(e) net of the Excise Tax and all other
                  applicable federal, state and local taxes) shall equal the
                  total amount of all such payments and benefits to which the
                  Executive would have been entitled, but for this Section 3(e),
                  net of all applicable federal, state and local taxes except
                  the Excise Tax. For purposes of this Section 3(e), the term
                  "Excise Tax" shall mean the tax imposed by Section 4999 of the
                  Internal Revenue Code of 1986 (the "Code") and any similar tax
                  that may hereafter be imposed.

                  The amount of the payment to the Executive under this Section
                  3(e) shall be estimated by a nationally recognized firm of
                  certified public accountants, which firm may not have provided
                  services to the Corporation or any Affiliate of the
                  Corporation within the previous three years and shall not
                  provide services thereto in the following three years, based
                  upon the following assumptions:

                  (i)      all payments and benefits to or for the benefit of
                           the Executive in connection with a Change in Control
                           of the Corporation or termination of the Executive's
                           employment following a Change in Control of the
                           Corporation shall be deemed to be "parachute
                           payments" within the meaning of Section 280G(b)(2) of
                           the Code, and all "excess parachute payments" shall
                           be deemed to be subject to the Excise Tax except to
                           the extent that, in the opinion of tax counsel
                           selected by the firm of certified public accountants
                           charged with estimating the payment to the Executive
                           under this Section 3(e), such payments or benefits
                           are not subject to the Excise Tax; and

                  (ii)     the Executive shall be deemed to pay federal, state
                           and local taxes at the highest marginal rate of
                           taxation for the applicable calendar year.

                  The estimated amount of the payment due the Executive pursuant
                  to this Section 3(e) shall be paid to the Executive in a lump
                  sum not later than thirty (30) business days following the
                  effective date of the termination. In the event that the
                  amount of the estimated payment is less than the amount
                  actually due to the Executive under this Section 3(e), the
                  amount of any such shortfall shall be paid to the Executive
                  within ten (10) days after the existence of the shortfall is
                  discovered.

         (f)      The Executive shall not be required to mitigate the amount of
                  any payment provided in this Section 3, nor shall any payment
                  or benefit provided for in this Section 3 be offset by any
                  compensation earned by the Executive as the result of
                  employment by another employer, by retirement benefits, or by
                  offset against any amount claimed to be owed by the Executive
                  to the Corporation, or otherwise.

         (g)      If any payment to the Executive required by this Section 3 is
                  not made within the

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                  time for such payment specified herein, the Corporation shall
                  pay to the Executive interest on such payment at the legal
                  rate payable from time to time upon judgments in the State of
                  Delaware from the date such payment is payable under terms
                  hereof until paid.

4.       EXECUTIVE'S EXPENSES

         The Corporation shall pay or reimburse the Executive for all costs,
         including reasonable attorney's fees and expenses of either litigation
         or arbitration, incurred by the Executive in contesting or disputing
         any termination of his employment following a Change in Control or in
         seeking to obtain or enforce any right or benefit provided by this
         Agreement.

 5.      BINDING AGREEMENT

         This Agreement shall inure to the benefit of and be enforceable by the
         Executive, his heirs, executors, administrators, successors and
         assigns. This Agreement shall be binding upon the Corporation, its
         successors and assigns. The Corporation shall require any successor
         (whether direct or indirect, by purchase, merger, consolidation or
         otherwise) to all or substantially all of the business and/or assets of
         the Corporation expressly to assume and agree to perform this Agreement
         in accordance with its terms. The Corporation shall obtain such
         assumption and agreement prior to the effectiveness of any such
         succession.

6.       NOTICE

         Any notices and all other communications provided for herein shall be
         in writing and shall be deemed to have been duly given when delivered
         or mailed, by certified or registered mail, return receipt requested,
         postage prepaid addressed to the respective addresses set forth on the
         first page of this Agreement or to such other address as either party
         may have furnished to the other in writing in accordance herewith,
         except that notices of change of address shall be effective only upon
         receipt. All notices to the Corporation shall be addressed to the
         attention of the Board with a copy to each of the General Counsel, the
         Vice President-Human Resources and the Secretary of the Corporation.

7.       AMENDMENTS; WAIVERS

         No provision of this Agreement may be modified, waived or discharged
         except in a writing specifically referring to such provision and signed
         by the party against which enforcement of such modification, waiver or
         discharge is sought. No waiver by either party hereto of the breach of
         any condition or provision of this Agreement shall be deemed a waiver
         of any other condition or provision at the same or any other time.

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 8.      GOVERNING LAW

         The validity, interpretation, construction and performance of this
         Agreement shall be governed by the substantive laws of the State of
         Delaware.

 9       VALIDITY

         The invalidity or unenforceability of any provision of this Agreement
         shall not affect the validity or enforceability of any other provision
         of this Agreement, which shall remain in full force and effect.

 10.     ARBITRATION

         If the Executive so elects, any dispute or controversy arising under or
         in connection with this Agreement shall be settled exclusively by
         arbitration in the city nearest to the Executive's principal residence
         (or, at the Executive's election, in the city within the state in which
         the Executive's principal residence is located nearest to such
         principal residence) which has an office of the American Arbitration
         Association by one arbitrator in accordance with the rules of the
         American Arbitration Association then in effect. Judgment may be
         entered on the arbitrator's award in any court having jurisdiction. The
         Corporation hereby waives its right to contest the personal
         jurisdiction or venue of any court, federal or state, in an action
         brought to enforce this Agreement or any award of an arbitrator
         hereunder which action is brought in the jurisdiction in which such
         arbitration was conducted, or, if no arbitration was elected, in which
         arbitration could have been conducted pursuant to this provision.

 11.     COUNTERPARTS

         This Agreement may be executed in one or more counterparts, each of
         which shall be deemed to be an original but all of which together will
         constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

executed as of the day and year first above written.

BOWATER INCORPORATED

By /s/ Arnold M. Nemirow                     /s/ Ronald T. Lindsay
   ---------------------------------         -----------------------------------
       Arnold M. Nemirow                         Ronald T. Lindsay
Its: Chairman, President and
     Chief Executive Officer<PAGE>
                                                                   Exhibit 10.51

                              BOWATER INCORPORATED
                             MID-TERM INCENTIVE PLAN

                        (Effective as of January 1, 2003)

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                   Page No.
                                                                   --------

Section 1.  Establishment of Plan......................................1

Section 2.  Definitions................................................1

Section 3.  Administration.............................................6

Section 4.  Eligibility and Participation..............................7

Section 5.  Award Determination........................................7

Section 6.  Termination of Employment..................................9

Section 7.  Change in Control..........................................9

Section 8.  Amendment and Modification................................10

Section 9.  Miscellaneous.............................................10

                                       i

<PAGE>
SECTION 1. ESTABLISHMENT OF PLAN

         Effective January 1, 2003, Bowater Incorporated, a Delaware corporation
(the "Company"), hereby establishes an incentive compensation plan to be known
as the "Bowater Incorporated Mid-Term Incentive Plan" (the "Plan") as set forth
in this document.

SECTION 2. DEFINITIONS

         Whenever used in the Plan, the following terms shall have the meanings
indicated:

         "Acquiring Person" shall mean the Beneficial Owner, directly or
indirectly, of Stock representing 20% or more of the combined voting power of
the Company's then outstanding securities, not including (except as provided in
clause (i) of the next sentence) securities of such Beneficial Owner acquired
pursuant to an agreement allowing the acquisition of up to and including 50% of
such voting power approved by two-thirds of the members of the Board who are
Board members before the Person becomes Beneficial Owner, directly or
indirectly, of Stock representing 5% or more of the combined voting power of the
Company's then outstanding securities. Notwithstanding the foregoing, (i)
securities acquired pursuant to an agreement described in the preceding sentence
will be included in determining whether a Beneficial Owner is an Acquiring
Person if, subsequent to the approved acquisition, the Beneficial Owner acquires
5% or more of such voting power other than pursuant to such an agreement so
approved; and (ii) a Person shall not be an Acquiring Person if such Person is
eligible to and files a Schedule 13G under the Exchange Act with respect to such
Person's status as a Beneficial Owner of all Stock of the Company of which the
Person is a Beneficial Owner.

         "Active Employee" means an Employee who is providing services to the
Company or a subsidiary and does not include an individual who is receiving
periodic severance payments. Notwithstanding any provision herein, or in any
policy or plan of the Company, to the contrary, an individual will not be an
Active Employee for any period that such individual is on an authorized or
unauthorized leave of absence from the Company, except to the extent otherwise
required by law.

         "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the Effective Date.

         "Awards" may be made under Section 5.2, Section 5.3 and/or Section 7 of
the Plan. The form of payment of the Awards may be determined by the Committee
in its discretion at any time prior to payment. The Awards may be paid in cash,
Stock or other form of equity compensation, or in any other form, or in any
combination thereof. The form of an Award need not be the same for all
Participants. Any Awards paid in the form of Stock, or any other form of equity
compensation, shall only be paid by means of the grant of such Award pursuant to
and in accordance with the terms of the applicable plan governing the issuance
of the equity

                                       2
<PAGE>

compensation. The determination of the number of shares or amount of other
equity to be issued for any Award payable in the form of Stock or other equity
compensation shall be made by the Committee using any generally accepted
valuation method or model selected by the Committee in its sole discretion.

         "Beneficial Owner" of Stock means (i) a Person who beneficially owns
such Stock, directly or indirectly, or (ii) a Person who has the right to
acquire such Stock (whether such right is exercisable immediately or only with
the passage of time) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of conversion rights, exchange
rights, warrants, options or otherwise.

         "Board" means the Board of Directors of the Company.

         "Cash from Operations" is defined in Section 5.1.

         "Change in Control" shall be deemed to have occurred upon:

         (i)      the date that any Person is or becomes an Acquiring Person;

         (ii)     the date that the Company's shareholders approve a merger,
                  consolidation or reorganization of the Company with another
                  Company or other Person, unless, immediately following such
                  merger, consolidation or reorganization, (A) at least 50% of
                  the combined voting power of the outstanding securities of the
                  resulting entity would be held in the aggregate by the
                  shareholders of the Company as of the record date for such
                  approval (provided that securities held by any individual or
                  entity that is an Acquiring Person, or who would be an
                  Acquiring Person if 5% were substituted for 20% in the
                  definition of such term, shall not be counted as securities
                  held by the shareholders of the Company, but shall be counted
                  as outstanding securities for purposes of this determination),
                  or (B) at least 50% of the board of directors or similar body
                  of the resulting entity are Continuing Directors;

         (iii)    the date the Company sells or otherwise transfers all or
                  substantially all of its assets to another Company or other
                  Person, unless, immediately after such sale or transfer, (A)
                  at least 50% of the combined voting power of the
                  then-outstanding securities of the resulting entity
                  immediately following such transaction is held in the
                  aggregate by the Company's shareholders as determined
                  immediately prior to such transaction (provided that
                  securities held by any individual or entity that is an
                  Acquiring Person, or who would be an Acquiring Person if 5%
                  were substituted for 20% in the definition of such term, shall
                  not be counted as securities held by the shareholders of the
                  Company, but shall be counted as outstanding securities for
                  purposes of this determination), or (B) at least 50% of the
                  board of directors or similar body of the resulting entity are
                  Continuing Directors; or

                                       3
<PAGE>

         (iv)     the date on which less than 50% of the total membership of the
                  Board consists of Continuing Directors.

         "Committee" means, as determined by the Board, the Human Resources and
Compensation Committee of the Board, another committee appointed by the Board to
administer the Plan, or the Board itself.

         "Company" means Bowater Incorporated, a Delaware corporation, and any
successor thereto.

         "Company Rank" is defined in Section 5.2.

         "Continuing Director" means any member of the Board who (i) was a
member of the Board prior to the date of the event that would constitute a
Change in Control, and any successor of a Continuing Director while such
successor is a member of the Board, (ii) is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, and (iii) is recommended or
elected to succeed the Continuing Director by a majority of the Continuing
Directors.

         "Disability" shall have the meaning contained in the Company's
long-term disability plan.

         "Discretionary Award" means an Award made to a Participant pursuant to
Section 5.3.

         "Effective Date" means January 1, 2003.

         "Employee" means a full-time, salaried employee of the Company or a
subsidiary that, directly or indirectly, is at least 50% owned by the Company.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Maximum Payout Percentage" means the maximum payout percentage set for
each Plan Cycle for Discretionary and Performance Awards, separately and
combined, by the Committee. For the first Plan Cycle, the Maximum Payout
Percentage for (i) Performance Awards shall be 135% and (ii) Discretionary
Awards shall be 135%, and the overall Maximum Payout Percentage for both
Performance and Discretionary Awards combined shall be 270%. For subsequent Plan
Cycles, the overall Maximum Payout Percentage for both Performance and
Discretionary Awards combined shall be 90%. Subject to such overall Maximum
Payout Percentage, the Committee shall allocate the Maximum Payout Percentage
between Performance Awards and Discretionary Awards as of the beginning of each
Plan Cycle.

         "Net Cash from Operating Activities" is defined in Section 5.1.

                                       4
<PAGE>

         "Normal Dividends" are regular periodic dividends declared by a company
and do not include special one-time dividends declared for a particular purpose,
e.g., in lieu of stock buy-backs. The Committee has the discretion to determine
whether a particular dividend is a "Normal Dividend."

         "Normal Retirement Date" means the date defined as the "Normal
Retirement Date" in the qualified (or registered, if a Canadian plan) pension
plan applicable to the particular Participant in question.

         "Participant" means an Active Employee who is eligible to participate
in the Plan.

         "Payout percentage" is defined in Sections 5.2 and 5.3.

         "Peer Companies" means certain companies in the paper and wood products
industry. As of the Effective Date, Peer Companies shall include the following:

-   Abitibi-Consolidated Inc.             -    Norske Skog Canada Inc.
-   Boise Cascade Corporation             -    Potlatch Corporation
-   Georgia Pacific Corp.                 -    Rayonier Inc.
-   Glatfelter P. H. Co.                  -    Stora Enso Corporation
-   International Paper Company           -    UPM Kymmene Corporation
-   Louisiana-Pacific Corp.               -    Wausau-Mosinee Paper Company
-   MeadWestvaco Corporation              -    Weyerhaeuser Company

         The Committee shall review the companies designated as a Peer Company
from time to time and add or delete Peer Companies as it deems appropriate. Any
change to the list of Peer Companies shall be effective with respect to payments
made under the Plan on and after the date such change is made.

         "Peer Group Average" means the average of the Total Shareholder Return
for the Peer Companies as of the end of each Plan Cycle. The Total Shareholder
Return for the Peer Companies will be computed based on the Total Shareholder
Return for each individual Peer Company and the Peer Group Average will be
computed on a market capitalization weighted basis. If a Peer Company is
eliminated either through acquisition or dissolution, or because of any other
reason, during a Plan Cycle, it shall not be included in the computation of Peer
Group Average for that Plan Cycle. Further, if two or more Peer Companies are
combined, either through merger, consolidation, purchase and sale of assets, or
because of any other reason, they shall not be included in the computation of
Peer Group Average for that Plan Cycle.

         "Performance Award" means an Award made to a Participant pursuant to
Section 5.2.

         "Person" means any individual, firm, company, partnership, trust or
other entity.

                                       5
<PAGE>

         "Plan" means the Bowater Incorporated Mid-Term Incentive Plan.

         "Plan Cycle" means the period over which the Company's performance
shall be measured for purposes of determining Participants' Awards under
Sections 5.2 and 5.3. The first Plan Cycle shall commence on January 1, 2003,
and end on December 31, 2005. New Plan Cycles shall begin as of each successive
January 1st and shall extend for three-year terms.

         "Price" on a particular date means the publicly reported closing price
per share on the New York Stock Exchange for that date.

         "Prorated" under Sections 4.2 and 6.1 shall mean the number of months a
Participant participates in a Plan Cycle, rounded to the nearest month, divided
by thirty-six, multiplied by the Awards under Sections 5.2 and 5.3, if any, or
Section 7, if applicable.

         "Retirement" means a Participant's termination of employment in a
retirement status entitling him to the immediate payment of benefits under the
qualified (or registered, if a Canadian plan) pension plan of the Participant's
employer in which he is participating.

         "Section" means the indicated provision of the Plan.

         "Stock" means the common stock of the Company, par value, $1.00 per
share.

         "Total Normal Dividends Paid" is defined in Section 5.1.

         "Total Shareholder Return" or "TSR" is equal to (A) the difference in
the average common stock (or common stock equivalent) price for the month of
January in the first year of a Plan Cycle, and the average common stock (or
common stock equivalent) price for the month of December in the last year of a
Plan Cycle, plus (B) all Normal Dividends paid per share during the Plan Cycle,
divided by (C) the average common stock (or common stock equivalent) price for
the month of January in the first year of a Plan Cycle. This formula shall be
adjusted as appropriate to reflect stock splits or stock dividends.

         Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the
singular, and the singular shall include the plural.

SECTION 3. ADMINISTRATION

         The Plan shall be administered by the Committee. The Committee has
delegated to the Senior Vice President - Human Resources of the Company and
other appropriate officers and employees of the Company responsibility for
day-to-day administration of the Plan.

         The Committee shall: (i) correct any defect or omission or reconcile
any inconsistency in this Plan or in any Award granted hereunder, (ii) make all
other necessary determinations, (iii)

                                       6
<PAGE>

make any adjustments that are necessary or desirable in light of previously
unforeseen circumstances, and (iv) take all other actions necessary or advisable
for the implementation and administration of the Plan. The Committee's
determinations shall be conclusive and binding upon all parties.

SECTION 4. ELIGIBILITY AND PARTICIPATION

         4.1 General. Active Employees who are in United States salary grades 31
(or its equivalent at locations other than the United States) and above at any
time during a Plan Cycle shall be Participants in the Plan, subject to the
limitations of Sections 4.2, 6.1 and 6.2 herein. An Active Employee who is
eligible to participate in the Plan shall be so notified in writing and apprised
of the manner of determining Awards.

         4.2 Partial Plan Cycle Participation. Subject to Section 6.2 and, if
applicable, Section 6.1, in the event that an Active Employee becomes eligible
or ineligible to participate in the Plan subsequent to the commencement of a
Plan Cycle, such Participant's Awards under Sections 5.2 and 5.3 for that Plan
Cycle, if any, shall be prorated, so long as the Active Employee has
participated in the Plan Cycle for at least one year.

         4.3 No Right to Participate. Except as specifically provided in
Sections 4.1, no Employee shall at any time have a right to be selected for
participation in the Plan despite having previously participated in an incentive
plan of the Company.

SECTION 5. AWARD DETERMINATION

         5.1 Threshold Determination. No Awards shall be made for a Plan Cycle
unless the Company generates sufficient "Cash from Operations" cumulatively over
the Plan Cycle to fund the Normal Dividends paid during the Plan Cycle ("Total
Normal Dividends Paid") on the Company's common and exchangeable stock. "Cash
from Operations" is defined as "Net Cash from Operating Activities" as set forth
on the Company's annual audited "Consolidated Statement of Cash Flows." Awards
paid for a Plan Cycle shall not exceed the excess of Cash from Operations over
Total Normal Dividends Paid for that Plan Cycle. If the excess of Cash from
Operations over Total Normal Dividends Paid does not equal the value of the
Awards for a Plan Cycle, then the values of the Awards shall be limited to such
excess amount and reduced proportionately.

          5.2 Performance Awards. Subject to the conditions described in
Sections 5.1 and 6.2, at the end of a Plan Cycle, Performance Awards will be
determined for all Participants by multiplying each Participant's annual base
salary rate as of December 31st of the final year of the Plan Cycle by a payout
percentage determined based on a ranking of the Company's TSR as compared with
the Peer Group Average. The same payout percentage shall be used for all
Participants.

          For the first Plan Cycle, the following formula will apply:

                                       7
<PAGE>

          No Performance Awards shall be granted if the Company's TSR is below
the Peer Group Average. The payout percentage shall equal 50% if the Company's
TSR is equal to the Peer Group Average and the Maximum Payout Percentage shall
be 135%. If the Company's TSR is above the Peer Group Average, then the
calculation of the payout percentage is as follows:

          First, the Company's Rank is determined by the following formula:

                Company Rank = (Company TSR - Peer Group Average)
                                   Divided by
              [(Highest Peer Company TSR - Peer Group Average)/50]
                                     Plus 50

         Then Company Rank will be used to determine the payout percentage
         according to the chart below.

            Company Rank                           Payout Percentage
            ------------                           -----------------

         50 through 89.999                  50% + [2.125 X (Company Rank - 50)]%

         90 through 100                     135%

                                    [GRAPH]

<TABLE>
<CAPTION>

                      Company
                        Rank           TSR
                      -------        ------
<S>                    <C>           <C>

       Highest TSR     100
90% of Highest TSR      90               135%
                        80            113.75%
                        70              92.5%
                        60             71.25%
      Peer Average      50                50%

</TABLE>

         The above formula may be revised for Plan Cycles beginning after the
first Plan Cycle.

         The Performance Awards shall be made to Participants as soon as
practicable after the determination of such Awards at the end of a Plan Cycle.

         5.3 Discretionary Awards. The Committee may grant Participants a
Discretionary Award for each Plan Cycle. Discretionary Awards shall be computed
by multiplying a percentage, determined by the Committee in its discretion,
between 0% and the Maximum Payout Percentage for Discretionary Awards, times
each Participant's annual base salary rate as

                                       8
<PAGE>

of December 31st of the final year of a Plan Cycle. The same payout percentage
shall be used for all Participants. Discretionary Awards for a Plan Cycle may be
made by the Committee irrespective of whether any Performance Awards are earned
or paid for that Plan Cycle.

         Any Discretionary Awards shall be made to Participants as soon as
practicable after the computation of such Awards at the end of a Plan Cycle.

SECTION 6. TERMINATION OF EMPLOYMENT

         6.1 Termination of Employment Due to Death, Disability, Retirement or
Sale of Business Unit. In the event a Participant's employment is terminated by
reason of death, Disability, Retirement, or sale by the Company of the
subsidiary or unit employing the Participant (unless such sale is a Change in
Control, in which case Section 7 shall supersede the provisions of this
Section), Awards determined in accordance with Sections 5.2 and 5.3 or Section 7
herein shall be (i) prorated based upon the portion of the Plan Cycles occurring
prior to termination during which the Participant was an Active Employee
(provided that the Participant must have been an Active Employee for at least
one year during an applicable Plan cycle in order to receive an Award for that
Plan Cycle) and (ii) based upon the Participant's annual base salary rate as of
the date of termination.

         Awards under this Section 6.1 shall be made as soon as practicable
after the end of each applicable Plan Cycle. As with other Awards, Awards under
this Section 6.1 may be made in any form, as determined by the Committee in its
discretion.

         6.2 Continuation of Employment as Condition for Awards. As a condition
to be entitled to any Award under this Plan (except pursuant to Section 7), a
Participant must be an Active Employee as of the end of a Plan Cycle unless the
Participant's employment is terminated by reason of death, Disability,
Retirement, or sale by the Company of the subsidiary or unit employing the
Participant. However, the Committee, in its sole discretion, may grant an Award
(or a portion of an Award) for the portion of a Plan Cycle that the Participant
was a Participant, computed as determined by the Committee as soon as
practicable after the end of the Plan Cycle, even if the Participant was not an
Active Employee as of the end of the Plan Cycle, provided that in no event may
such an Award entitle the Participant to an Award amount in excess of the amount
that the Participant could have earned had he or she remained an Active Employee
for the duration of the Plan Cycle.

SECTION 7. CHANGE IN CONTROL

         Notwithstanding any other provision of the Plan, if a Change in Control
of the Company shall have occurred, the Company shall pay each Participant an
Award which equals his annual base salary rate as of the date of the Change in
Control times the Maximum Payout Percentage Award for each Plan Cycle that has
begun, subject to proration in the manner provided under provisions of Section
6.1 for Participants whose employment terminated before the Change in Control
under the circumstances described in Section 6.1, but not to the proration
provisions of

                                       9
<PAGE>

Section 4.2. All Awards will be paid in cash within thirty (30) days of the
Change in Control. Once Awards under this Section 7 have been paid, the Plan
shall be terminated and the Participants shall have no further rights under the
Plan.

SECTION 8. AMENDMENT AND MODIFICATION

         The Committee, in its sole discretion, with notice to Participants, at
any time and from time to time, may modify or amend, in whole or in part, any or
all of the provisions of the Plan, or suspend or terminate it entirely;
provided, however, that in the event of a Change in Control no such
modification, amendment, suspension, or termination may adversely affect
Participants' rights under Section 7.

SECTION 9. MISCELLANEOUS

         9.1 Governing Law. The Plan, and all agreements hereunder, shall be
governed by and construed in accordance with the laws of the State of Delaware.

         9.2 Withholding Taxes. The Company shall have the right to deduct from
all Awards under the Plan any federal, state, provincial, or local taxes
required by law to be withheld with respect to such payments. With respect to
any Awards paid in the form of equity compensation, withholding of taxes shall
occur as provided under the applicable plan governing the issue of such equity
compensation.

         9.3 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

         9.4 Costs of the Plan. All costs of implementing and administering the
Plan shall be borne by the Company.

         9.5 Successors. All obligations of the Company under the Plan shall be
binding upon and inure to the benefit of any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

         9.6 Employment Status. The Plan does not constitute a contract of
employment or continued service, and selection as a Participant will not give
the Participant the right to be retained in the employ of the Company or any
subsidiary.

         9.7 Unsecured General Creditor. Participants and their heirs,
successors and assigns shall have no legal or equitable rights, interest or
claims in any property or assets of the Company by virtue of participation in
the Plan. The Company's obligations under the Plan shall be that of an unfunded
and unsecured promise of the Company to pay money in the future.

                                       10
<PAGE>

          9.8 Nonassignability. No Participant or any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt, the Awards, if any, granted hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the Awards granted shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgment,
alimony or separate maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.

         EXECUTED on behalf of the Company as of January 1, 2003.

                           BOWATER INCORPORATED

                           By: /s/ James T. Wright
                               ---------------------------------------------
                                    James T. Wright
                                    Senior Vice President - Human Resources

                                       11

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