EMPLOYMENT AGREEMENT
EXHIBIT 10.6
THIS AGREEMENT, is made as of this 1st day of February 2005, by and between BOWATER
INCORPORATED, a Delaware corporation having a mailing address of 00 Xxxx Xxxxxxxxxx Xxx,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the “Corporation”), and Xxxxxxx X. Xxxxxx, 000 Xxxxxxx Xxx,
Xxxxxxxxxxxx, XX 00000 (the “Executive”).
WHEREAS, the Corporation has been employing the Executive as Vice President – Treasurer of the
Corporation pursuant to the terms of an Employment Agreement dated August 1, 1998;
WHEREAS, the Corporation desires to employ the Executive in a new position as Senior Vice
President and Chief Financial Officer of the Corporation; and
WHEREAS, the Executive is desirous of serving the Corporation in such
capacity;
NOW, THEREFORE, the parties hereto agree to cancel the previous Employment Agreement and enter
into a new Employment Agreement as follows:
1. Employment. During the term of this Agreement, the Corporation agrees to employ
the Executive and the Executive agrees to be in the employ of the Corporation, in accordance with
and subject to the provisions of this Agreement.
2. Term.
| (a) | Subject to the provisions of subparagraphs (b) and (c) of this Section 2, the term of this Agreement shall begin on the date hereof and shall continue thereafter until terminated by either party by written notice given to the other party at least thirty (30) days prior to the effective date of any such termination. The effective date of the termination shall be the date stated in such notice, provided that if the Corporation specifies an effective date that is more than thirty (30) days following the date of such notice, the Executive may, upon thirty (30) days’ written notice to the Corporation, accelerate the effective date of such termination. | ||
| (b) | Notwithstanding Section 2(a), upon the occurrence of a Change in Control as defined in the Change in Control Agreement between the Corporation and the Executive (the “Change in Control Agreement”), the term of this Agreement shall be deemed to continue until terminated, but in any event, for a period of not less |
| than three (3) years following the date of the Change in Control, unless such termination shall be at the Executive’s election for other than “Good Reason” as that term is defined in the Change in Control Agreement. | |||
| (c) | Notwithstanding Section 2(a), the term of this Agreement shall end upon: |
| (i) | the death of the Executive; | ||
| (ii) | the inability of the Executive to perform his duties properly, whether by reason of ill-health, accident or other cause, for a period of one hundred and eighty (180) consecutive days or for periods totaling one hundred and eighty (180) days occurring within any twelve (12) consecutive calendar months; or | ||
| (iii) | the Executive’s retirement as of the retirement date. |
3. Position and Duties. Throughout the term hereof, the Executive shall be employed
as Senior Vice President and Chief Financial Officer of the Corporation (subject to election by the
Board of Directors), with the duties and responsibilities customarily attendant to that office,
provided that the Executive shall undertake such other and further assignments and responsibilities
of at least comparable status as the Board of Directors may direct. The Executive shall diligently
and faithfully devote his full working time and best efforts to the performance of the services
under this Agreement and to the furtherance of the best interests of the Corporation.
4. Place of Employment. The Executive will be employed at the Corporation’s offices
located in Greenville, SC, or at such other place as the Corporation shall designate from time to
time.
5. Compensation and Benefits.
| (a) | Base Salary. The Corporation shall pay to the Executive a base salary of $300,000.00 (Salary Grade 35) payable in substantially equal periodic installments on the Corporation’s regular payroll dates. The Executive’s base salary shall be reviewed at least annually and from time to time may be increased (or reduced, if such reduction is effected pursuant to across-the-board salary reductions similarly affecting all management personnel of the Corporation). |
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| (b) | Incentive Plans. |
| (i) | Annual Incentive Plan. In addition to his base salary, the Executive shall be eligible to receive an annual incentive award under the Corporation’s annual incentive plan in effect from time to time determined in the manner, at the time, and in the amounts set forth under such plan. | ||
| (ii) | MTIP. The Executive shall be eligible to participate in the Bowater Incorporated Mid-Term Incentive Plan. The Executive’s awards, if any, shall be prorated based on his date of employment hereunder. | ||
| (iii) | Stock-Based Incentive Compensation. Subject to the approval of the Board of Directors, the Executive shall be eligible for an annual award under a Bowater stock-based incentive program, as modified from time to time, and for so long as such program continues. |
| (c) | Benefit Plans. The Corporation shall make contributions on the Executive’s behalf to the various benefit plans and programs of the Corporation in which the Executive is eligible to participate in accordance with the provisions thereof as in effect from time to time. | ||
| (d) | Vacations. The Executive shall be entitled to paid vacation in keeping with the Corporate policy as in effect from time to time, to be taken at such time or times as may be approved by the Corporation. | ||
| (e) | Expenses. The Corporation shall reimburse the Executive for all reasonable expenses properly incurred, and appropriately documented, by the Executive in connection with the business of the Corporation. | ||
| (f) | Perquisites. The Corporation shall make available to the Executive all perquisites to which he is entitled by virtue of his position. |
6. Nondisclosure. During and after the term of this Agreement, the Executive shall
not, without the written consent of the Board of Directors of the Corporation,
disclose or use directly or indirectly (except in the course of employment hereunder and in
furtherance of the business of the Corporation or any of its subsidiaries and affiliates) any
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of
the trade secrets or other confidential information or proprietary data of the
Corporation or its subsidiaries or affiliates; provided, however, that confidential
information shall not include any information known generally to the public (other than as
a result of unauthorized disclosure by the Executive) or any information of a type
not otherwise considered confidential by persons engaged in the same or similar
businesses.
7. Noncompetition. During the term of this Agreement and for a period of one (1) year
after the date the Executive’s employment terminates, the Executive shall not, without the prior
approval of the Board of Directors of the Corporation or its delegate, in the same or a similar
capacity engage in or invest in, or aid or assist anyone else in the conduct of any business (other
than the businesses of the Corporation and its subsidiaries and affiliates) which directly competes
with the business of the Corporation and its subsidiaries and affiliates as conducted during the
term hereof. If any court of competent jurisdiction shall determine that any of the provisions of
this Section 7 shall not be enforceable because of the duration or scope thereof, the parties
hereto agree that said court shall have the power to reduce the duration and scope of such
provision to the extent necessary to make it enforceable and this Agreement in its reduced form
shall be valid and enforceable to the extent permitted by law. The Executive acknowledges that the
Corporation’s remedy at law for a breach by the Executive of the provisions of this Section 7 will
be inadequate. Accordingly, in the event of the breach or threatened breach by the Executive of
this Section 7, the Corporation shall be entitled to injunctive relief in addition to any other
remedy it may have.
8. Severance Pay. If the Executive’s employment hereunder is involuntarily
terminated for any reason other than those set forth in Section 2(c) hereof, then unless the
Corporation shall have terminated the Executive for “Cause”, the Corporation shall pay the
Executive severance pay in an amount equal to twenty-four (24) months of the Executive’s base
salary on the effective date of the termination, plus 1/12 of the amount of the last bonus paid to
the Executive under the Corporation’s annual incentive plan as applicable to the Executive, for
each month in the period beginning on January 1 of the year in which the date of the termination
occurs and ending on the date of the termination and for each months’ base salary to which the
Executive is entitled under this Section 8, provided, however, that any amount paid to the
Executive by the Corporation for services rendered subsequent to the thirtieth (30th) day following
the communication to the Executive of notice of termination shall be deducted from the severance
pay otherwise due hereunder. The severance pay shall be paid in a lump sum as soon as
administratively feasible following the executive’s effective date of termination, but in no event
shall payment be made later than March 15 following the calendar year of the Executive’s
termination from employment, unless otherwise required by Internal Revenue Code Section 409A or
guidance issued thereunder. The severance pay shall be in lieu of all
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other compensation or payments of any kind relating to the termination of the Executive’s
employment hereunder; provided that the Executive’s entitlement to compensation or payments under
the Corporation’s retirement plans, stock option or stock-based incentive plans, savings plans, or
bonus plans attributable to service rendered prior to the effective date of the termination shall
not be affected by this clause and shall continue to be governed by the applicable provisions of
such plans; and further provided that in lieu hereof, at his election, the Executive shall be
entitled to the benefits of the Change in Control Agreement between the Corporation and the
Executive, if termination occurs in a manner and at a time when such Change in Control Agreement is
applicable. For purposes of this Agreement, the term for “Cause” shall mean because of gross
negligence or willful misconduct by the Executive either in the course of his employment hereunder
or which has a material adverse effect on the Corporation or the Executive’s ability to perform
adequately and effectively his duties hereunder.
9. Notices. Any notices required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been given when delivered or mailed, by registered or
certified mail, return receipt requested to the respective addresses of the parties set forth
above, or to such other address as any party hereto shall designate to the other party in writing
pursuant to the terms of this Section 9.
10. Severability. The provisions of this Agreement are severable, and the invalidity
or unenforceability of any provision shall not affect the validity or enforceability of any other
provision.
11. Governing Law. This Agreement shall be governed by and interpreted in accordance
with the substantive laws of the State of Delaware.
12. Supersedure. This Agreement shall cancel and supersede all prior agreements
relating to employment between the Executive and the Corporation.
13. Waiver of Breach. The waiver by a party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any prior or subsequent breach by any of
the parties hereto.
14. Binding Effect. The terms of this Agreement shall be binding upon and
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inure to
the benefit of the successors and assigns of the Corporation and the heirs, executors,
administrators and successors of the Executive, but this Agreement 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/ Xxxxx X.Xxxxxx | /s/ Xxxxxxx X. Xxxxxx | ||||
| Xxxxx X. Xxxxxx | Xxxxxxx X. Xxxxxx | |||||
| Xx. Vice President – Human Resources | ||||||
| Date Signed: August 4, 2006 | Date Signed: August 4, 2006 | |||||
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