AMENDMENT TO AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
EXHIBIT 10.56
THE AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT, dated January 25, 2006, between Bowater
Incorporated (the “Corporation”) and Xxxxxx X. Xxxxxxx (the “Executive”) is hereby amended as
follows:
1. It is agreed that the transaction by which the Corporation became a subsidiary of
AbitibiBowater Inc. did not constitute a Change in Control, and that henceforth the definition of
Change in Control shall be interpreted as if AbitibiBowater Inc. were the Corporation.
2. A new paragraph (v) is added at the end of Section 1 to read as follows:
| “(v) | The phrase ‘termination of employment’ or ‘employment is terminated’ (whether or not capitalized) shall mean a separation from service as defined in Section 409A of the Internal Revenue Code (the ‘Code’), any reference to the Executive’s employment being terminated shall mean that the Executive has incurred a separation from service as so defined, and any reference to the effective date of a termination shall mean the date on which the Executive has incurred a separation from service.” |
3. Section 4(b) is amended by deleting the second to the last paragraph (“Unless otherwise
required in the next paragraph . . .”) and amending the last paragraph to read as follows:
“Amounts payable pursuant to subsections (b)(i)-(vi), shall be made in a lump sum
not later than ten (10) business days following the Executive’s Termination Date,
except as otherwise provided below. If the Executive is a ‘designated employee,’ as
defined in Section 409A of the Code, on the date on which he incurs a termination of
employment, then payment shall be deferred until the first business day that is more
than six months after the Executive has incurred a termination of employment (such
six month period being hereinafter referred to as the ‘409A Deferral Period’). If
the Executive dies during the 409A Deferral Period, the payment shall be made
instead, within ten (10) business days following his death, to the person designated
by the Executive in writing, or if no such person is designated, to the Executive’s
estate. The benefits the Executive is entitled to receive pursuant to subsections
(b)(i)-(vi) shall be a substitute for any salary or severance payments or benefits
under the provisions of any Employment Agreement then in effect (the ‘other
severance’), and if the other severance constitutes deferred compensation subject to
Section 409A of the Code, the applicable payment provided in subsections (b)(i)-(vi)
shall be paid in accordance with the same schedule of payments provided for the
other severance for which it serves as a substitute, to the extent the payment
provided in subsection (b)(i)-(vi) does not exceed the other severance, except that
no such payment shall be made
until the end of the 409A Deferral Period; provided that this sentence shall not
apply if the Executive’s employment is terminated not more than two years following
a Change in Control that also constitutes a ‘change in control event’ with respect
to the Executive as defined in Section 409A of the Code. In addition, and
regardless of whether the preceding sentence applies, no payments of other severance
that are subject to Section 409A of the Code shall be paid during the 409A Deferral
Period (and for purposes of such determination each installment of other severance
that is payable in installments shall be treated as a separate payment), and all
such payments that would otherwise have been paid during the 409A Deferral Period
shall be accumulated and paid in a lump sum on the first business day after the end
of the 409A Deferral Period. Each employment or other agreement providing for
payment of other severance is hereby deemed amended in accordance with the preceding
sentence.”
4. Section 4(b)(vii) is amended by replacing the last sentence with the following sentence:
“If and to the extent that the benefit described in this paragraph is not or cannot
be provided under any plan, program, or arrangement of the Corporation, or without
the benefits provided thereunder being taxable to the Executive, the Corporation
shall either, at its election, procure an insurance policy on substantially similar
terms and conditions for the Executive and the Executive’s spouse or surviving
spouse and dependents, or pay Executive an additional amount of severance pay for
each month during which such coverage is in effect equal to the amount of tax that
is imposed on the value of such coverage (plus the tax imposed on such additional
severance pay), which amount shall be withheld to satisfy the tax obligation; and”
5. Section 4(b)(viii) is amended in its entirety to read as follows:
“The Corporation shall pay for or provide the Executive with reasonable individual
out-placement assistance as offered by a member firm of the Association of
Out-Placement Consulting Firms; provided that such assistance shall be provided not
later than the end of the second year following the year in which the termination of
employment occurs and, if reimbursed by the Corporation rather than paid directly,
shall be reimbursed not later than the end of the year following the year in which
the expense is incurred.”
6. A new sentence is added to the end of the last paragraph of Section 5 to read as follows:
“Anything else contained herein to the contrary notwithstanding, any payment to the
Executive pursuant to this Section 5 shall be paid not later than the end of the
year following the year in which the applicable tax is paid by the Executive;
provided that this sentence is included solely to satisfy the requirements of
Section 409A of the Code and shall not be construed to permit the Corporation to
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make any payment later than the date on which it would otherwise have been required
to be paid.”
7. A new sentence is added to the end of Section 10 to read as follows:
“Anything else contained herein to the contrary notwithstanding, any payment to the
Executive pursuant to this Section 10 shall be paid not later than the end of the
year following the year in which the reimbursable expense is paid by the Executive;
provided that this sentence is included solely to satisfy the requirements of
Section 409A of the Code and shall not be construed to permit the Corporation to
make any payment later than the date on which it would otherwise have been required
to be paid.”
8. A new sentence is added to the end of Section 15 to read as follows:
“This Agreement is also intended to comply with all requirements of Section 409A of
the Code with respect to any amount payable to the Executive that constitutes
deferred compensation subject to Section 409A and, to the maximum extent permitted
by law, the terms of this Agreement shall be interpreted in such a manner that the
Executive is not subject to additions to tax imposed by Section 409A; provided that
nothing contained herein shall be construed to require the Corporation to reimburse
the Executive for any such additions to tax.”
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed this 29 day
of December, 2008.
| BOWATER INCORPORATED | ||||||
| By | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxx | |||||
| Title: | Vice President and Secretary | |||||
| /s/ Xxxxxx X. Xxxxxxx | ||||||
| Name: Xxxxxx X. Xxxxxxx | ||||||
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