Exhibit 10.7
SEVERANCE PROGRAM FOR MANAGEMENT COMMITTEE MEMBERS |
•Maintenance of medical and dental benefits;
Any entitlement to payments or benefits other than those specifically addressed in this severance policy shall be determined in accordance with the applicable plan or policy.
| • | terminates employment voluntarily (other than for Good Reason in connection with a Change in Control as contemplated by Section 7.5); or |
| • | is offered continuous employment in a position with comparable terms and conditions of employment by a purchaser of a business from the Corporation. |
6.1 | This program will be administered by the HR Committee, whose actions and decisions will be conclusive and binding on the executive and on the Corporation. |
6.2 | Domtar reserves the right to terminate, delete, amend or add to this policy or any of its provisions at any time and from time to time. |
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7.4 | The severance allowance pursuant to this program includes any pay in lieu of notice and severance pay required by law. |
The following definitions apply:
| (1) | “Cause” will have the same definition as in the Domtar Corporation 2007 Omnibus Incentive Plan (“Omnibus Plan”). |
(3) “Good Reason” means the occurrence of any of the following after a Change in Control:
(a) a material reduction by the Corporation in the executive’s base salary or target annual bonus, as in effect immediately prior to the Change in Control or as increased from time to time. Executive shall not have a basis to resign for Good Reason if (i) such reduction is part of an across-the-board reduction in base salary rate or target annual incentive opportunity similarly affecting other Management Committee members or (ii) no bonus is paid, or the amount of the bonus is reduced as a result of the failure of the executive or the Corporation to achieve the applicable performance goals;
(b) a material diminution in the executive’s position, duties or responsibilities (including due to the assignment to the executive of duties materially inconsistent with his or her position, duties or responsibilities as in effect immediately prior to Change in Control), excluding for this purpose (i) a change in title or reporting relationship alone, and (ii) an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Corporation promptly after receipt of notice thereof given by the executive;
(c) a requirement that the executive move his or her principal place of business to a location that is (i) more than 50 miles from the location at which the executive was stationed immediately prior to a Change in Control, and (ii) farther from the executive’s primary residence than was the location at which the executive was stationed immediately prior to the Change in Control; and
(d) a material breach by the Corporation of any agreement under which the executive provides services:
in each case, provided that the executive provides written notice to the Corporation of the condition giving rise to good Reason within 90 days of the initial existence of the condition, such condition is not remedied within 30 days of receipt of such notice, and the executive terminates employment within two years of the occurrence of the Change in Control.
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Provisions Applicable to U.S. Taxpayers
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