EXHIBIT 10.10
Fourth Amendment to the
Supplemental Benefit Plan for Designated Employees of
Bowater Incorporated and Affiliated Companies
As Amended and Restated Effective February 26, 1999
WHEREAS, Bowater Incorporated (the "Company") previously amended and
restated the Supplemental Benefit Plan for Designated Employees of Bowater
Incorporated and Affiliated Companies as of February 26, 1999 (the "Plan");
WHEREAS, Section 7.02 of the Plan permits the Human Resources and
Compensation Committee of the Board of Directors of the Company (the "HRCC") to
amend the Plan; and
WHEREAS, the HRCC desires to amend the Plan to: (1) provide that amounts
earned, deferred and vested under the Plan as of December 31, 2004 are
grandfathered, within the meaning of, and as determined under, regulations
issued by the Department of the Treasury under Internal Revenue Code (the
"Code") Section 409A, (2) include the value of restricted stock units awarded to
participants in lieu of the annual cash bonus payable for 2005 as an item of
compensation for purposes of calculating the participants' 2006 benefit accrual
under the Plan, subject to the award's vesting and forfeiture provisions,
effective as of January 1, 2006, (3) provide that the Company's President and
Chief Executive Officer shall not be eligible to participate in the Plan
effective as of May 1, 2006 pursuant to his Employment Agreement dated April 4,
2006, (4) provide that the distribution of any portion of the Plan's benefits
subject to Code Section 409A shall be distributed in a lump sum upon a
participant's separation from service, subject to a six-month delay in payment
for participants determined to be "key employees," effective as of January 1,
2005, and (5) provide that the interest rate used to calculate such lump sum
payments shall be the rate in effect on the date the participant separates from
service, even if the payment is made in a different year (due to the six-month
delay in payment) than the grandfathered amounts, effective as of January 1,
2005.
NOW, THEREFORE, the Plan is amended, effective as of the dates set forth
below, in the following respects:
1. The Preamble is amended, effective as of January 1, 2005, by adding a
new paragraph at the end thereto to read as follows:
"Code Section 409A
Notwithstanding any other provision of the Plan to the contrary,
effective as of January 1, 2005, any amounts that are earned and
deferred under the Plan, but not vested as of December 31, 2004, shall
be subject to Internal Revenue Code (the `Code') Section 409A and the
Treasury Regulations promulgated thereunder. For such amounts, the
Plan shall be interpreted and administered consistent with Code
Section 409A and the Treasury Regulations promulgated thereunder. Any
amounts that are earned, deferred and vested under the Plan as of
December 31, 2004 are `grandfathered' (within the meaning of, and as
determined in accordance with, Code Section 409A and the Treasury
Regulations thereunder). Therefore, such grandfathered amounts are not
subject to Code Section 409A."
2. Section 1.12 of the Plan is amended, effective as of January 1, 2006, to
read as follows:
"1.12 `COMPENSATION' shall mean the entire cash compensation paid to, or
deferred for the benefit of, a Participant by the
Employer as salary, wages, commissions, overtime pay, regular bonuses
paid under the Bowater Incorporated Annual Incentive Plan, severance
pay paid in periodic installments, Employer contributions made
pursuant to a salary reduction agreement that are not includible in
the gross income of the Participant under Code Sections 125,
401(e)(3), 402(h) or 403(b), and any compensation that is contributed
to a plan maintained by an Employer on behalf of the participant under
Code Section 401(k). Except as otherwise provided in the following
sentence of this Section 1.12, compensation shall exclude any non-cash
remuneration, income received upon the exercise of a stock option or
stock appreciation right, bonuses received under a long term cash
incentive plan, other special remuneration, and any benefits and
credits under this or any other employee benefit plan of the Employer.
If a Participant's Final Average Monthly Compensation includes
compensation for 2006, then the value of restricted stock units,
determined as of the date of grant, awarded to Participants in lieu of
the annual cash bonus payable under the Bowater Incorporated Annual
Incentive Plan for 2005 shall be included as an item of compensation
for 2006, subject to the vesting and forfeiture provisions of such
award."
3. Section 2.01 is amended, effective as of May 1, 2006, to read as
follows:
"2.01 PARTICIPATION: Employees of the Corporation who (i) are in salary
grades thirty-one (31) and above, or (ii) are designated as eligible
by the Committee, shall be Participants in the Plan. Should the Plan
be extended to an Affiliated Company that adopts the Plan, the
Committee shall designate which Employees of such Affiliated Company
shall participate in the Plan. Notwithstanding the foregoing,
effective as of May 1, 2006, the Corporation's President and Chief
Executive Officer shall not be eligible to participate in the Plan in
accordance with his Employment Agreement dated April 4, 2006. Subject
to the provisions of Section 7.04(a)(i), a Participant who ceases to
be an Employee of the Corporation or an Affiliated Company that has
adopted the Plan or who no longer satisfies the eligibility
requirements set forth above will cease accruing benefits under the
Plan, unless and until the Participant again becomes eligible to be a
Participant in the Plan.
Notwithstanding the foregoing, the Employee's Compensation shall
continue to be included for purposes of determining his Final Average
Monthly Compensation under Article 3."
4. Article 3 is amended, effective as of January 1, 2005, by adding a new
Section 3.05 to read as follows:
"3.05 DISTRIBUTION OF CODE SECTION 409A AMOUNTS: Notwithstanding the
foregoing, any Retirement benefits payable pursuant to this Article
that are subject to Code Section 409A shall be distributed in a single
lump sum payment upon a Participant's `separation from service'
(within the meaning of Code Section 409A and the Treasury Regulations
promulgated thereunder), subject to a six-month delay in payment for
any Participant determined to be a `key employee' (within the meaning
of Code Section 409A and the Treasury Regulations promulgated
thereunder). If payment is subject to the six-month delay, payment
shall be made on the first day of the seventh month following the
Participant's separation from service. If as a result of the six month
delay in payment, such amounts are paid in the year following the year
in which the grandfathered portion of any benefit is paid, the
interest rate in effect on the date of the Participant's separation
from service shall be used to calculate the lump sum amount subject to
Code Section 409A."
* * *
IN WITNESS WHEREOF, the HRCC has caused this Fourth Amendment to the Plan
to be executed by a duly authorized officer this 11th day of May, 2006.
BOWATER INCORPORATED
By: /s/ James T. Wright
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James T. Wright
Title: Senior Vice President -
Human Resources