EXHIBIT 10.8
BOWATER INCORPORATED
NON-QUALIFIED OPTION AGREEMENT
THIS AGREEMENT, entered into as of the Grant Date (as defined in paragraph
1), by and between the Participant and Bowater Incorporated (the "Company");
WITNESSETH THAT:
WHEREAS, the Company maintains the Bowater Incorporated 2006 Stock Option
and Restricted Stock Plan (the "Plan"), which is incorporated into and forms a
part of this Agreement, and the Participant has been selected by the committee
administering the Plan (the "Committee") to receive a Non-Qualified Stock Option
Award under the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:
1. Terms of Award. The following terms used in this Agreement shall have
the meanings of set forth in this paragraph 1:
(a) The "Participant" is . ----------------------------
(b) The "Grant Date" is May 10, 2006 .
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(c) The number of "Covered Shares" is shares of Stock. (d) The "Exercise Price"
is $ per share. Other terms used in this Agreement are defined in the Plan
or elsewhere in this Agreement.
2. Award and Exercise Price. This Agreement specifies the terms of the
option (the "Option") granted to the Participant to purchase the number of
Covered Shares of Stock at the Exercise Price per share as set forth in
paragraph 1. The Option is not intended to constitute an "incentive stock
option" as that term is used in Code section 422.
3. Date of Exercise. If the Date of Termination does not occur prior to
January 24, 2009, then the Option shall become exercisable on and after such
date. Notwithstanding the foregoing provisions of this paragraph 3, the Option
shall become vested and exercisable as follows:
(a) The Option shall be exercisable on the Date of Termination for a prorated
number of Covered Shares, if the Date of Termination occurs by reason of
the Participant's death, Disability, Retirement or involuntary termination
without cause (as determined by the Company). The Participant's prorated
number of Covered Shares shall be determined by multiplying the number of
Covered Shares shown in paragraph 1 by a fraction of which the numerator
shall be the number of days from January 24, 2006, to the Participant's
Date of Termination and the denominator of which shall be 1095.
(b) The Option shall become fully exercisable upon a Change in Control that
occurs on or before the Date of Termination. The Option may be exercised on
or after the Date of Termination only as to that portion of the Covered
Shares for which it was exercisable immediately prior to (or became
exercisable on) the Date of Termination, or became exercisable upon the
Date of Termination.
4. Expiration. The Option shall not be exercisable after the Company's
close of business on the last business day that occurs prior to the Expiration
Date. The "Expiration Date" shall be the earliest to occur of:
(a) the ten-year anniversary of the Grant Date;
(b) if the Date of Termination occurs by reason of Retirement or Disability,
the five year anniversary of such Date of Termination;
(c) if the Date of Termination occurs by reason of death, the two-year
anniversary of such Date of Termination;
(d) if the Date of Termination occurs for reasons other than death, Retirement
or Disability the 90-day anniversary of such Date of Termination; or
(e) if the Participant's employment is terminated for cause, as determined by
the Company, the Date of Termination.
5. Method of Option Exercise. Subject to the terms of this Agreement and
the Plan, the Option may be exercised in whole or in part by complying with
notification procedures specified by the Company's Human Resources Department at
its corporate headquarters. Such notice shall specify the number of shares of
Stock which the Participant elects to purchase, and shall be accompanied by
payment of the Exercise Price for such shares of Stock indicated by the
Participant's election. Payment shall be by cash or by check. Except as
otherwise provided by the Committee before the Option is exercised: (i) all or a
portion of the Exercise Price may be paid by the Participant by delivery of
shares of Stock owned by the Participant and acceptable to the Committee having
an aggregate Fair Market Value (valued as of the date of exercise) that is equal
to the amount of cash that would otherwise be required; and (ii) the Participant
may pay the Exercise Price by authorizing a third party to sell shares of Stock
(or a sufficient portion of the shares) acquired upon exercise of the Option and
remit to the Company a sufficient portion of the sale proceeds to pay the entire
Exercise Price and any tax withholding resulting from such exercise. Except as
otherwise provided by the Committee, payments made with shares of Stock in
accordance with clause (i) above shall be limited to shares held by the
Participant for not less than six months prior to the payment date. The Option
shall not be exercisable if and to the extent the Company determines that such
exercise would violate applicable state or Federal securities laws or the rules
and regulations of any securities exchange on which the Stock is traded. If the
Company makes such a determination, it shall use all reasonable efforts to
obtain compliance with such laws, rules and regulations. In making any
determination hereunder, the Company may rely on the opinion of counsel for the
Company.
6. Withholding. All deliveries and distributions under this Agreement are
subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of shares of Stock (i) which the Participant already owns,
or (ii) to which the Participant is otherwise entitled under the Plan; provided,
however, that shares described in this clause (ii) may be used to satisfy not
more than the Company's minimum statutory withholding obligation (based on
minimum statutory withholding rates for Federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable
income).
7. Transferability. The Option is not transferable other than as designated
by the Participant by will or by the laws of descent and distribution, and
during the Participant's life, may be exercised only by the Participant.
8. Heirs and Successors. This Agreement shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company's assets and business. If any rights
exercisable by the Participant or benefits distributable to the Participant
under this Agreement have not been exercised or distributed, respectively, at
the time of the Participant's death, any rights that would have been exercisable
by the Participant and any benefits distributable to the Participant shall be
exercised by or distributed to the legal representative of the estate of the
Participant.
9. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement is final and binding on
all persons.
10. Plan Governs. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Participant from the office of the
Secretary of the Company; and this Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan.
11. Fractional Shares. In lieu of issuing a fraction of a share of the
Stock resulting from any exercise of the Option, resulting from an adjustment of
the Option pursuant to paragraph 5.2(f) of the Plan or otherwise, the Company
will be entitled to pay to the Participant an amount equal to the fair market
value of such fractional share.
12. Notices. Any written notices provided for in this Agreement or the Plan
shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail. Notices sent by mail shall be deemed received three business days after
mailing but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant's address indicated by the
Company's records, or if to the Company, at the Company's principal executive
office.
13. No Rights As Shareholder. The Participant shall not have any rights of
a shareholder with respect to the shares subject to the Option, until a stock
certificate has been duly issued following exercise of the Option as provided
herein.
14. Amendment. This Agreement may be amended in accordance with the
provisions of the Plan, and may otherwise be amended by written agreement of the
Participant and the Company without the consent of any other person.
15. Applicable Law. The provisions of this Agreement shall be construed
in accordance with the laws of the State of Delaware, without regard to the
conflict of law provisions of any jurisdiction. 16. Definitions. For purposes of
this Agreement, the terms used in this Agreement shall be subject to the
following:
(a) Date of Termination. The term "Date of Termination" means the first day
occurring on or after the Grant Date on which the Participant is not
employed by the Company or any Subsidiary, regardless of the reason for the
termination of employment; provided that a termination of employment shall
not be deemed to occur by reason of a transfer of the Participant between
the Company and a Subsidiary or between two Subsidiaries; and further
provided that the Participant's employment shall not be considered
terminated while the Participant is on a leave of absence from the Company
or a Subsidiary approved by the Participant's employer. If, as a result of
a sale or other transaction, the Participant's employer ceases to be a
Subsidiary (and the Participant's employer is or becomes an entity that is
separate from the Company), and the Participant is not, at the end of the
30-day period following the transaction, employed by the Company or an
entity that is then a Subsidiary, then the occurrence of such transaction
shall be treated as the Date of Termination caused by the Participant being
involuntarily discharged by the employer.
(b) Disability. The term "Disability" shall have the meaning contained in the
Company's long-term disability plan.
(c) Retirement. The term "Retirement" shall mean the status of having
terminated employment and being eligible for the payment of benefits
immediately under any qualified or registered defined benefit pension plan
maintained by Bowater Incorporated or a Subsidiary.
(d) Plan Definitions. Except where the context clearly implies or indicates the
contrary, a word, term, or phrase used in the Plan is similarly used in
this Agreement.
IN WITNESS WHEREOF, the Company has caused these presents to be executed in its
name and on its behalf, all as of the Grant Date.
Bowater Incorporated
By:
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Name: Xxxxx X. Xxxxxx
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Title: Sr. Vice President - Human Resources
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