CANCELLATION OF SEVERANCE AGREEMENT
MODIFICATION OF EMPLOYMENT AGREEMENT AND ADDENDUM
THIS AGREEMENT is made and entered into as of this 23rd day of
February, 1995, by and between Bowater Incorporated, a Delaware
corporation having a mailing address of 55 East Camperdown Way,
Greenville, South Carolina 29602, (the "Corporation"), and Phillip A.
Temple of 1175 Haywood Road, #9-0, Greenville, South Carolina 29681,
(the "Executive").
WHEREAS, the Corporation now employs the Executive as Vice
President - Human Resources and Administration pursuant to an Employment
Agreement dated March 15, 1993, (the "Employment Agreement") and a
Severance Agreement dated March 15, 1993, (the "Severance Agreement")
both modified by an Addendum to the Employment and Severance Agreements
dated March 15, 1993, (the "Addendum"); and
WHEREAS, the Executive and the Corporation wish to continue the
Executive's employment until a specified and agreed upon date, whereupon
the Executive will leave the employment of the Corporation and be
entitled to receive certain benefits;
NOW, THEREFORE, the parties hereto agree that the Severance
Agreement will be canceled as of June 30, 1995, and that the Employment
Agreement is hereby modified (by this "Modification") in the following
respects:
1. Severance Agreement. The Severance Agreement will be
terminated as of June 30, 1995.
2. Addendum and Employment Agreement. The Employment Agreement
is hereby modified as follows:
(a) Term. Section 2 of the Employment Agreement is amended to
read in its entirety as follows:
"2. Term.
The term of this Agreement, having begun on March 15,
1993, will continue from the date of this Modification until
December 31, 1995."
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(b) Position and Duties. Section 3 of the Employment Agreement
is amended in its entirety to read as follows:
"3. Position and Duties.
"From February 23, 1995, through December 31, 1995, the
Executive will have the employment status of an exempt
employee. The Executive is relieved as of February 23, 1995,
of the obligation to devote his full working time to the
performance of duties under this Employment Agreement."
(c) Compensation and Benefits. Section 5 of the Employment
Agreement is amended in its entirety to read as follows:
"5. Compensation and Benefits.
(a) Base Salary. The Corporation will pay to the
Executive a base salary at his current annual rate,
payable in substantially equal periodic installments on
the Corporation's regular pay dates. All applicable
taxes and other authorized deductions will be deducted
from each pay check.
(b) Bonus Plan. The Executive will not be eligible to
participate in the 1995 Annual Bonus Plan. In lieu
thereof, the Executive will be entitled to the bonus
provided for in Section 8 entitled "Severance Pay." The
Executive will be eligible to participate in the
Corporation's Long Term Cash Incentive Plan on a
prorated basis (based on eighteen months'
participation).
(c) Benefit Plans. The Corporation will make
contributions on the Executive's behalf to the
Corporation's various benefit plans and programs (except
for long-term disability) in which the Executive is
eligible to participate in accordance with the
provisions thereof as in effect from time to time. The
Executive will continue to be responsible for all
required employee contributions.
(d) Vacations. The Executive is entitled to payment
for all accrued vacation as of July 1, 1995. The
Executive will not be entitled to accrue vacation from
and after July 1, 1995.
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(e) Expenses. The Corporation will reimburse the
Executive for all reasonable expenses properly incurred,
and appropriately documented, by the Executive in
connection with the business of the Corporation."
(d) Severance Pay. Section 8 of the Employment Agreement is
amended in its entirety to read as follows:
"8. Terminal Leave of Absence and Severance Pay.
(a) Terminal Leave of Absence. The Executive will be
on a terminal paid leave of absence from February 23,
1995, through December 31, 1995. The Executive's
entitlement to compensation, benefits, or payments under
the Corporation's health, accident, life insurance,
retirement, stock option or incentive, and savings (but
not long-term disability) plans, policies or
arrangements will not, except as otherwise required by
law or regulation, be affected by the Executive's leave
of absence status and will continue to be governed by
the applicable provisions of such plans as though the
Executive had continued to render services in the active
employment of the Corporation to the end of the term of
this Agreement or event (such as the Executive's death)
that otherwise ends the term of this Agreement.
(b) Severance Pay. On July 1, 1995, the Executive will be
paid severance pay in the amount equal to eighteen (18)
months of the Executive's base salary plus 30/12 times
the amount of the bonus paid to the Executive in 1995
for calendar year 1994. All applicable taxes and other
authorized deductions will be deducted from this
payment. (Of the total bonus amount, 12/12's of the
bonus to be paid is attributable to calendar year 1995,
and will be included in the computation of "Final
Average Earnings" within the meaning of the Supplemental
Benefit Plan for Designated Employees of Bowater
Incorporated and Affiliated Companies, and therefore in
the computation of the retirement benefit to which the
Executive is entitled pursuant to the provisions of
Section 3 hereof.)"
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(e) Ratification. In all respects, except as herein provided,
the Employment Agreement is hereby ratified and confirmed.
3. Addendum Benefits. The Corporation hereby confirms that, as
of January 1, 1996, the Executive will be entitled to the benefits
described in Sections 3 and 4 of the Addendum.
4. Stock Options. The Bowater Incorporated incentive stock
option agreements dated March 15, 1993, and January 25, 1995, between
the Executive and the Corporation are hereby amended to vest and make
exercisable as of April 26, 1995, all remaining stock option grants not
presently exercisable. The terminal leave of absence will not interrupt
or terminate employment for purposes of determining the Executive's
continued eligibility to exercise options awarded pursuant to the
Corporation's 1992 Stock Option and Stock Incentive Plan.
5. Effectiveness Contingent Upon Release and Approval by HRCC.
This Modification shall not be effective unless and until (a) it has
been approved by the Human Resource and Compensation Committee (the
"HRCC") of the Board of Directors; and (b) the Executive has executed a
certain Waiver and Release Agreement, (the "Release Agreement") at the
request and for the benefit of the Corporation, and the seven-day
revocation period provided for therein has expired. If the Executive
should breach the terms of the Release Agreement in the future, this
Modification will immediately become null and void, and be deemed
canceled.
IN WITNESS WHEREOF, the Corporation and the Executive have
executed this Agreement as of the day and year first above
written.
BOWATER INCORPORATED
/s/ Carol D. Hinton By /s/ A. P. Gammie
Witness Its
/s/ Wendy C. Shiba /s/ Phillip A Temple
Witness Phillip A. Temple
Executive
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