MODIFICATION OF EMPLOYMENT AGREEMENT
CANCELLATION OF CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is made and entered into as of this 30th day of April,
1997, by and between Bowater Incorporated, a Delaware corporation having a
mailing address of 00 Xxxx Xxxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the
"Corporation"), and Xxxxxx X. Xxxxx, of 000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX
00000 (the "Executive").
WHEREAS, the Corporation now employs the Executive pursuant to an
Employment Agreement dated as of March 15, 1993 (the "Employment Agreement") and
a Change in Control Agreement dated as of November 1, 1995 (the "Change in
Control Agreement"); and
WHEREAS, the Executive and the Corporation wish to terminate the
Executive's employment as Vice President-Corporate Relations and provide for
certain severance benefits.
NOW, THEREFORE, the parties hereto agree to the following:
1. Change in Control Agreement. The Change in Control Agreement will
terminate as of April 30, 1997.
2. Employment Agreement. The Employment Agreement is hereby modified
as follows:
(a) Term. Section 2 of the Employment Agreement is
amended in its entirety to read as follows:
"2. Term. The term of this Agreement will end on
April 30, 1998, unless terminated earlier by the Executive's
death. In the event of the Executive's death, all amounts
remaining unpaid under Sections 5(a) and (b), and the last
sentence of Section 5(e), shall immediately become due and
will be paid within sixty (60) days of the Executive's
death."
(b) Position and Duties. Section 3 of the Employment Agreement
is amended in its entirety to read as follows:
"3. Position and Duties. Throughout the term hereof, the
Executive will have the employment status of a salaried
exempt employee. The Executive is relieved as of April 30,
1997, of the obligation to devote his full working time to
the performance of duties under his Employment Agreement."
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(c) Compensation and Benefits. Section 5 of the Employment
Agreement is replaced and 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
in substantially equal periodic installments on the
Corporation's regular pay dates for the period
ending April 30, 1998. All applicable taxes and
other authorized deductions will be deducted from
each paycheck.
(b) Bonus Plan. In addition to the base salary, the
Executive will be entitled to a bonus equal to
16/12 times the bonus amount paid in 1997 for the
calendar year 1996, to be paid on August 1, 1997,
and subject to all applicable withholding
requirements. This bonus is in lieu of any bonus
for which the Executive may have been eligible
under the Corporation's 1997 or 1998 Annual
Incentive Plans (or any other bonus plans).
(c) Benefit Plans. The Corporation will make
contributions on the Executive's behalf to the
Corporation's various benefit plans and programs
(except for disability and business travel accident
insurance) in which the Executive is eligible to
participate in accordance with the provisions
thereof as in effect from time to time and in
accordance with the provisions hereof. The
Executive will continue to be responsible for all
required employee contributions. From and after
April 30, 1997, the Executive will not be eligible
to receive any stock option or equity participation
right awards or to participate in the disability or
business travel accident insurance benefit plans.
(d) Vacations. The Executive will be entitled to be
paid in a lump sum for all vacation accrued as of
April 30, 1997, but will no longer accrue vacation
from and after April 30, 1997.
(e) Perquisites. The Executive will be entitled to
outplacement assistance for up to twelve months as
determined and paid for by the Corporation, and
will continue to be entitled to all other
perquisites to which he is currently entitled by
virtue of his position until April 30, 1998. In
addition, the Executive will be paid the sum of
$40,000 (subject to all withholding requirements)
on August 1, 1997, as a relocation allowance."
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(d) Noncompetition. Section 7 of the Employment Agreement is
hereby deleted.
(e) Severance Pay. Section 8 of the Employment Agreement is
replaced and amended in its entirety to read as follows:
"8. Terminal Leave of Absence. The Executive will be on a
terminal paid leave of absence from the date hereof through
April 30, 1998. This terminal paid leave of absence is in
lieu of any severance pay the Executive would otherwise be
entitled to. The Executive's entitlement to benefits under
the Corporation's health, life insurance, retirement, stock
option (except for new awards), equity participation rights
(except for new awards), and savings (but not disability or
business travel accident insurance) plans, policies or
arrangements will not, except as otherwise required by law
or regulation or provided in this Modification, 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
terminal paid leave of absence. The Executive will no longer
participate in the Corporation's disability or business
travel accident benefit plans."
(f) Governing Law. Section 11 is hereby amended in its entirety to
read as follows:
"11. Governing Law. The Employment Agreement and this
Modification of Employment Agreement shall be governed by
and interpreted in accordance with the substantive laws of
the State of Delaware."
(g) Ratification. In all respects, except as herein provided, the
Employment Agreement is hereby ratified and confirmed.
3. Nondisclosure Obligation. The Executive agrees not to take any actions or
make any statements to the public, future employers, business associates,
clients, customers, the media, current, former or future employees, or any other
third party whatsoever that reflect negatively on the Corporation, and not to
express any opinions concerning the Corporation, its affiliates, officers,
directors, shareholders, employees and/or its operations that shall reflect
negatively upon same.
4. Equity Participation Rights. The Human Resources and Compensation Committee
of the Board of Directors has agreed to
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amend the Executive's Equity Participation Right Agreement dated as of January
22, 1997, to make it exercisable as to all 3000 units as of January 22, 1998,
provided such Agreement has not sooner expired by its terms.
5. Effectiveness Contingent Upon Release. This Modification shall not be
effective unless and until the Executive has executed a certain Waiver and
Release Agreement (the "Release Agreement") by no later than April 22, 1997, and
the applicable 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 (except for Section 3, which shall continue in full force and
effect), the Employment Agreement (except for Sections 6 and 7, which Sections
shall continue in full force and effect) and the Change in Control Agreement
shall immediately become null and void, and be deemed canceled. In addition, the
Executive shall be required to repay all but $500 of the monetary benefits which
the Executive has received under the terms of this Modification.
6. Binding Agreement. Except as provided in Section 5 above, this Modification
and the Employment Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Corporation and the heirs,executors,
administrators and successors of the Executive, but this Modification may not be
assigned by the Executive.
IN WITNESS WHEREOF, the Corporation and the Executive have executed this
Agreement as of the day and year first above written.
BOWATER INCORPORATED
By /s/Xxxxxxx X. Xxxxxx /s/Xxxxxx X. Xxxxx
Name:Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
Title: Vice President - Human Date signed: 4/24/97
Resources
Date signed: 4/23/97
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