1
EXHIBIT 10.41
AMENDED AND RESTATED
BOWATER INCORPORATED
1997-1999 LONG-TERM INCENTIVE PLAN
(Effective As Of February 26, 1999)
2
TABLE OF CONTENTS
Page No.
--------
Section 1. Establishment of Plan.............................................1
Section 2. Definitions.......................................................1
Section 3. Administration....................................................7
Section 4. Eligibility and Participation.....................................7
Section 5. Award Determination...............................................8
Section 6. Payment of Final Awards...........................................9
Section 7. Termination of Employment........................................10
Section 8. Covered Officers.................................................10
Section 9. Change in Control................................................11
Section 10. Amendment and Modification......................................11
Section 11. Miscellaneous...................................................11
3
SECTION 1. ESTABLISHMENT OF PLAN
Effective January 1, 1997, Bowater Incorporated, a Delaware corporation
(the "Company"), established an incentive compensation plan to be known as the
"Bowater Incorporated 1997-1999 Long-Term Incentive Plan" (the "Plan"), as set
forth in this document. Effective January 1, 1997, the Plan was amended and
restated on March 17, 1999. The Plan is now being restated in its entirety as of
February 26, 1999, in order to incorporate amendments that have been previously
adopted. This amended and restated Plan document shall supersede the Plan
document as originally adopted.
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 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 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.
"Acceleration Price" means the highest of:
(A) The highest reported sales price of the Common Stock
within the sixty (60) days preceding the date of the
Change in Control, as reported on any securities
exchange upon which the Common Stock is listed,
(B) The highest price of the Common Stock as reported in
a Schedule 13D or an amendment thereto that is paid
within the sixty (60) days preceding the date of the
Change in Control,
(C) The highest tender offer price paid for the Common
Stock, and
(D) Any cash merger or similar price.
1
4
"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.
"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.
"Aggregate Unit Value" means the sum of the Unit Values for the Fiscal
Years in the Plan Cycle. For a Participant described in Section 4.2 or 7,
Aggregate Unit Value will only include the Unit Values for the portion of the
Plan Cycle during which the Participant participated hereunder (with the Unit
Value for any partial Fiscal Years of participation calculated only on the basis
of the portion during which participation occurred).
"Average RONA" means the quotient of (i) the sum of Operating Earnings
for Fiscal Years 1997-1999, divided by (ii) the quotient of (A) the sum of Net
Assets as of the end of Fiscal Years 1996, 1997, 1998 and 1999 divided by (B)
four (4).
"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.
"Board" means the Board of Directors of the Company.
"Cause" means the Participant's gross negligence, willful misconduct or
conviction of a felony, which negligence, misconduct or conviction has a
demonstrable and material adverse effect upon the Company, provided that the
Company shall have given the Participant written notice of the alleged
negligence or misconduct and the Participant shall have failed to cure such
negligence or misconduct within thirty (30) days after his receipt of such
notice. The Participant 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 Company to the Participant 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 Participant and an opportunity for the Participant, with his
counsel present, to be heard before the Board) finding that, in the good faith
opinion of the Board, the Participant was guilty of conduct constituting Cause
hereunder and setting forth in reasonable detail the facts and circumstances
claimed to provide the basis for the Participant's termination, provided that
the effective date shall not be less than thirty (30) days from the date such
notice is given.
2
5
"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
Company 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 Company as
of such 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 Company 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 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
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; or
(iv) the date on which less than 50% of the total
membership of the Board consists of Continuing
Directors.
"Code" means the Internal Revenue Code of 1986, as amended. References
to a Section of the Code shall include references to any Temporary or Final
Regulations related to such Section, and to any successor to such Section or
Regulations.
"Committee" means the Human Resources and Compensation Committee of the
Board, or such other committee of two (2) or more "outside directors" within the
meaning of section 162(m) of the Code, who are appointed by the Board to
administer the Plan.
"Common Stock" means the common stock of the Company, par value $1.00
per share.
3
6
"Company" means Bowater Incorporated, a Delaware corporation, and any
successor thereto.
"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.
"Covered Officer" means any individual designated by the Committee as
such, because, in the Committee's judgment, he is or may become a "covered
employee" within the meaning of section 162(m) of the Code. Notwithstanding the
foregoing, if at the time of payment of a Final Award to a Participant, the
Committee has concluded that such Participant is not a covered employee for the
year in which the Final Award would be deductible by the Company for tax
purposes, then such Participant shall not be a Covered Officer.
"Disability" shall have the meaning contained in the Company's
long-term disability plan.
"Effective Date" means January 1, 1997.
"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.
"Fair Market Value" means the closing price per share of the Common
Stock as reported for the New York Stock Exchange Composite Transactions in the
Wall Street Journal for that date.
"Final Award" means the amount for each Participant calculated pursuant
to Section 5.3.
"Fiscal Year" means (i) for the Company, the referenced year ended
December 31; and (ii) for any Peer Company, its fiscal year ending with or
within such Fiscal Year of the Company.
"Good Reason" means:
(i) an adverse change in the Participant's status, duties
or responsibilities as an executive of the Company as
in effect immediately prior to the Change in Control;
(ii) failure of the Company to pay or provide the
Participant in a timely fashion the salary or
benefits to which he is entitled under any
4
7
Employment Agreement between the Company and the
Participant in effect on the date of the Change in
Control, or under any benefit plans or policies in
which the Participant 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 Participant's salary as in
effect on the date of the Change in Control;
(iv) the taking of any action by the Company (including
the elimination of a plan without providing
substitutes therefor, the reduction of the
Participant's awards thereunder or failure to
continue the Participant's participation therein)
that would substantially diminish the aggregate
projected value of the Participant's awards or
benefits under the Company's benefit plans or
policies in which the Participant was participating
at the time of the Change in Control;
(v) a failure by the Company to obtain from any successor
the assent to the Participant's Change in Control
Agreement contemplated by Section 5 thereof; or
(vi) the relocation of the principal office at which the
Participant is to perform his services on behalf of
the Company 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
Participant's business travel obligations subsequent
to the Change in Control.
Any circumstance described above shall constitute Good Reason even if
such circumstance would not constitute a breach by the Company of the terms of
the Employment Agreement between the Company and the Participant in effect on
the date of the Change in Control. The Participant 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 Company
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 Participant's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstances constituting Good Reason
hereunder.
"Net Assets" means total assets less nonfinancial current liabilities
as recorded on the Company's or a Peer Company's balance sheet.
5
8
"Normal Retirement Date" shall have the meaning given to such term in
the Company's basic qualified pension plan in which the Participant is a
participant as in effect on the Effective Date or any successor or substitute
plan adopted prior to a Change in Control.
"Operating Earnings" means operating income, after depreciation, but
before interest and taxes, as recorded on the Company's or on a Peer Company's
statement of operations for the applicable Fiscal Year.
"Participant" means an Active Employee who is eligible to participate
in the Plan.
"Peer Companies" mean the following companies in the paper and wood
products industry designated by the Committee:
Abitibi-Price Inc. Avenor Inc.
Champion International Corporation Donohue Inc.
Fletcher Challenge Canada Limited International Paper Company
The Mead Corporation Stone-Consolidated Corporation
Westvaco Corporation Weyerhaeuser Company
"Peer Group Average" means the arithmetic mean of the Average RONAs of
the Peer Companies for the Plan Cycle. If one or more of the Peer Companies is
eliminated during the Plan Cycle either through acquisition or dissolution, or
because of any other reason, then the Peer Group Average shall be based on the
Average RONAs of the remaining Peer Companies. If one or more Peer Companies are
combined during the Plan Cycle, either through merger, consolidation, purchase
and sale of assets, or because of any other reason, then (i) for periods before
they are combined, "Peer Group Average" shall be based on the Average RONAs of
all such Peer Companies; and (ii) for periods after they are combined, "Peer
Group Average" shall include the Average RONA of the combined entity.
"Performance Goal Formula" means the formula established by the
Committee and described in Section 5.3 to be used to determine the percentage,
if any, of a Participant's Aggregate Unit Value that becomes a Final Award.
"Person" means any individual, firm, corporation, partnership, trust or
other entity.
"Plan" means the Bowater Incorporated 1997-1999 Long-Term Incentive
Plan.
"Plan Cycle" means the period over which performance will be measured
for purposes of determining the amount, if any, of a Participant's Aggregate
Unit Values that will be paid as a Final Award. The Plan Cycle will commence on
January 1, 1997, and will end December 31, 1999.
6
9
"Retirement" means a Participant's termination of employment in a
retirement status under the qualified pension plan of the Participant's employer
in which he is participating.
"Section" means the indicated provision of the Plan.
"Unit" refers to units granted to Participants pursuant to the Plan,
each of which corresponds to one share of the Company's common stock.
"Unit Value" refers to the dollar value of a Participant's Units as
determined for each Fiscal Year of the Plan Cycle pursuant to Section 5.2.
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 Vice President -- Human Resources of the Company, and other
appropriate officers and employees of the Company, responsibility for
administering the Plan, other than the Committee's powers with respect to
Covered Officers under Section 8.
Subject to the limitations 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, and (ii) make all other necessary determinations
and take all other actions necessary or advisable for the implementation and
administration of the Plan. The Committee's determinations on matters within its
authority shall be conclusive and binding upon all parties; provided that the
Committee may not exercise discretion with respect to a Covered Officer in a
manner that is inconsistent with Treasury Regulation Section
1.162-27(e)(2)(iii).
SECTION 4. ELIGIBILITY AND PARTICIPATION
4.1 General. Active Employees who are in salary grades 31 and above
shall be Participants in the Plan for the Plan Cycle, subject to the limitations
of Section 7 herein. An Employee who is eligible to participate in the Plan
shall be so notified in writing, and shall be apprised of his Units, the manner
of determining Unit Values and the Performance Goal Formula for the Plan Cycle
within the first 90 days of the Plan Cycle.
4.2 Partial Plan Cycle Participation. In the event that an Employee
becomes eligible to participate in the Plan subsequent to the commencement of
the Plan Cycle, such Employee shall be granted the number of Units he would have
received if he had entered the Plan at the beginning of the Plan Cycle based on
his salary grade and shall be notified of his Units, the manner of determining
Unit Values and the Performance Goal Formula for the Plan Cycle as soon as
7
10
practicable and in any event before the earlier of (i) the ninetieth day after
the Employee becomes eligible to participate or (ii) the day as of which 25% of
the portion of the Plan Cycle during which such Employee participates has
lapsed. The Participant's Aggregate Unit Values will include only Unit Values
for the portion of the Plan Cycle during which the Participant participates.
4.3 Change in Salary Grade. Subject to the last sentence of Section
8.3, if a Participant is promoted to a higher salary grade during the Plan
Cycle, his Units shall be increased to a number of Units applicable to the new
salary grade for the Fiscal Year. The Unit Value for the Fiscal Year the change
occurs will equal (i) the sum of the Units he was first granted under Section
5.1 times the number of days he was in that salary grade for that Fiscal Year,
plus the number of Units he received under the new salary grade times the number
of days he was in the new salary grade for that Fiscal Year, divided by (ii) the
total number of days he participated in the Plan for that year. Any subsequent
promotions will be factored in by making additional computations in the same
manner to take account of the new salary grade for the remainder of any Fiscal
Year. If a Participant is demoted during the Plan Cycle, such demotion will have
no effect on the Participant's participation hereunder; provided that the
Committee may elect to reduce or eliminate his Final Award in any fashion it
deems appropriate on account of such demotion.
4.4 No Right to Participate. Except as specifically provided in
Sections 4.1 and 4.2, no Participant or other 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 Initial Units. As of the beginning of the Plan Cycle, each
Participant shall receive the number of Units assigned to his salary grade. The
Units assigned to each salary grade are equal to (i) the product of (A) the
bonus percentage assigned for the 1997 Fiscal Year of the Company to that salary
grade, times (B) the midpoint of that salary grade for the 1997 Fiscal Year,
divided by (ii) the average daily closing price of the Company's Common Stock
for the 1996 calendar year.
1997 1997
Salary Grade Salary Grade
Units for each Bonus Percentage X Midpoint
Salary Grade = ---------------------------------------------
Company's 1996 Average Common Stock Price
5.2 Unit Values. Except as may be provided in Sections 4.2 and 4.3 or
Section 7, for each Fiscal Year of the Company during the Plan Cycle, the
Committee will determine a Unit Value for each Participant by multiplying each
Participant's Units by the average daily closing price of the Common Stock for
such Year. If a Participant is only entitled to a prorated Award
8
11
for a Fiscal Year pursuant to Sections 4.2 or 7, then the Unit Value for such
Participant shall be multiplied by a fraction equal to the number of days the
Participant participated in the Plan divided by 365.
5.3 Performance Goal Formula and Final Awards. At the end of the Plan
Cycle, the Committee will determine the Final Award for each Participant by
multiplying the Aggregate Unit Value for such Participant by a percentage
determined based on the Company's Average RONA as a multiple of the Peer Group
Average. Such percentage shall equal zero if the Company's Average RONA is not
more than one (1) times the Peer Group Average. If the Company's Average RONA is
more than one (1) times the Peer Group Average, such percentage shall equal the
product of (i) 250% times (ii) a fraction, the numerator of which is the lesser
of (A) the Company's Average RONA divided by the Peer Group Average, minus 1, or
(B) .5, and the denominator of which is .5.
5.4 Adjustments. In the event of any change in the outstanding shares
of Common Stock by reason of any share dividend, split recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, each Participant's Units shall be proportionately adjusted so that the
value of the Units shall not thereby be changed.
SECTION 6. PAYMENT OF FINAL AWARDS
6.1 Form and Timing of Payment. (a) Except as may be otherwise provided
in Section 6.2 or Section 9, the Company shall pay to each Participant (i) a
number of shares of Common Stock equal to one-half of the Participant's Final
Award divided by the Stock Price, and (ii) cash equal to one-half of the Final
Award. The Stock Price shall be the Fair Market Value of one share of Common
Stock as of the date on which the Committee approves the Final Award. Except in
the case of a Participant who is a Covered Officer, the Board may change the
allocation between stock and cash in its discretion.
(b) Shares and cash described in paragraph (a) shall be
distributed as soon as practicable after the amounts thereof have been
determined. Notwithstanding the foregoing, except in the case of a Covered
Officer, the Committee may authorize the payment of part or all of an estimated
Final Award for a Participant prior to the determination thereof pursuant to
Section 5.3, subject to such conditions and limitations deemed appropriate by
the Committee.
6.2 Limitations. Notwithstanding the provisions of Section 6.1, if the
form of payment described therein would cause the number of shares of Common
Stock issued hereunder to exceed five percent (5%) of the outstanding shares of
Common Stock on the record date of the 1997 Annual Meeting of Stockholders of
the Company, less 1,000,000 (the number of shares reserved for issuance under
the Bowater Incorporated 1997 Stock Option Plan as of such record date), then
the number of shares distributable to each Participant hereunder shall be
proportionately reduced so that such limit is not exceeded and cash shall be
paid in lieu thereof to each Participant.
9
12
SECTION 7. TERMINATION OF EMPLOYMENT
7.1 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, the Final Award determined in
accordance with Section 5.3 herein shall be prorated based solely upon the
Aggregate Unit Values computed for the portion of the Plan Cycle occurring prior
to termination during which the Participant was an Active Employee. In the case
of a Participant's Disability, the employment termination shall be deemed to
have occurred on the date the disability commences as determined by the
Committee.
Payments under this Section 7.1 shall be made after the end of the Plan
Cycle in accordance with the provisions of Section 6.
7.2 Termination of Employment for Other Reasons. In the event a
Participant's employment is terminated prior to the payment of the Final Award
for any reason other than death, Disability, or Retirement, or sale by the
Company of the subsidiary or unit employing the Participant, all of the
Participant's rights to a Final Award for the Plan Cycle shall be forfeited.
However, except as provided under Section 8, the Committee, in its sole
discretion, may pay an award (or a portion of an award) for the portion of the
Plan Cycle that the Participant was a Participant, computed as determined by the
Committee and payable after the end of this Plan Cycle in accordance with the
provisions of Section 6.
SECTION 8. COVERED OFFICERS
8.1 Applicability of Section 8. The provisions of this Section 8 shall
apply only to Covered Officers. In the event of any inconsistencies between this
Section 8 and the other Plan provisions (other than Section 9), the provisions
of this Section 8 shall control.
8.2 Committee Certification. At the end of the Plan Cycle and prior to
payment, the Committee shall certify (i) the extent to which the performance
goals reflected in the Performance Goal Formula were satisfied, and (ii) the
Final Awards for each Covered Officer as computed in accordance with Sections 5
and 6.
8.3 Non-adjustment of Performance Goals and Maximum Award. Subject to
Sections 4.3, 5.3 and 5.4, once established for a Participant, the number of
Units received by the Participant, the method of computing Aggregate Unit Value
and the Performance Goal Formula shall not be changed during the Plan Cycle.
Notwithstanding any provision herein, the maximum Final Award for each Covered
Officer is $6,000,000.
10
13
SECTION 9. CHANGE IN CONTROL
Notwithstanding any other provision of the Plan, if a Change in Control
of the Company shall have occurred and, prior to payment of Final Awards, if
any, under the Plan, a Participant's employment by the Company is terminated for
any reason other than his death, his Disability, his retirement on his Normal
Retirement Date, by the Company for Cause, or by the Participant without Good
Reason, the Company shall pay the Participant a Final Award equal to three times
the Participant's Units multiplied by 250%, times the Acceleration Price. All
Final Awards paid pursuant to this Section 9 shall be paid entirely in cash
within thirty (30) days of termination of employment.
SECTION 10. AMENDMENT AND MODIFICATION
Subject to Section 8.3, the Committee, in its sole discretion, with
notice to all 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 no such modification,
amendment, suspension, or termination may affect Participants' rights under
Section 9, and in the event of any such modification, amendment, suspension or
termination, any Participant (or his beneficiary, as the case may be) who is an
Active Employee on the effective date thereof shall be entitled to no less of a
payment or distribution hereunder than the amount he would have otherwise
received, based upon the Participant's Units, the Aggregate Unit Value and the
percentage determined under the Performance Goal Formula, all computed as of the
end of the Fiscal Year prior to or following the date of the change or
termination, whichever is greater.
SECTION 11. MISCELLANEOUS
11.1 Governing Law. The Plan, and all agreements hereunder, shall be
governed by and construed in accordance with the laws of the State of Delaware.
11.2 Withholding Taxes. The Company shall have the right to deduct from
all payments under the Plan any Federal, state, or local taxes required by law
to be withheld with respect to such payments.
11.3 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.
11.4 Costs of the Plan. All costs of implementing and administering the
Plan shall be borne by the Company.
11.5 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.
11
14
11.6 Stockholder Approval. This Plan was adopted and all Awards made
subject to the condition that the Plan be approved by the stockholders of the
Company at the 1997 Annual Meeting of the Stockholders of the Company. The Plan
was approved at the 1997 Annual Meeting of the Stockholders of the Company.
11.7 Employment Status. The Plan does not constitute a contract of
employment or continued service, and selection as a Participant will not give
any Employee the right to be retained in the employ of the Company or any
subsidiary.
11.8 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 obligation under the Plan shall be that of an unfunded
and unsecured promise of the Company to pay money in the future.
11.9 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
of the amounts, if any, payable 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 amounts payable 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 February 26, 1999.
BOWATER INCORPORATED
By: /s/ James T. Wright
---------------------------------
James T. Wright
Vice President - Human Resources
Date signed: 5/11/99
--------------------
As adopted by the Human Resources and Compensation Committee and the Board of
Directors at their January 22, 1997, meetings, as subsequently amended and
restated by the Human Resources and Compensation Committee at its February 28,
1997, meeting, and as further amended by the Board of Directors at its April 15,
1998, and February 26, 1999 meetings.
12