EXHIBIT 10.4.1
MODIFICATION OF EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of January,
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. Xxxxxx, of 0 Xxxx Xxx Xxx Xxxxx, Xxxxxxxxxx, XX
00000 (the "Executive").
WHEREAS, the Corporation now employs the Executive pursuant to an
Employment Agreement dated as of February 1, 1990 (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 continue the
Executive's employment until a specified and agreed upon date, whereupon the
Executive may retire from the employment of the Corporation and be entitled to
receive certain benefits;
NOW, THEREFORE, the parties hereto agree to the following:
1. Change in Control Agreement. The Change in Control
Agreement will terminate as of January 31, 1997, unless sooner
terminated by your death or disability.
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
January 31, 1999, unless terminated earlier by 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 an
exempt employee. The Executive is relieved as of the
date hereof of the obligation to devote his full
working time to the performance of duties under his
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 in substantially equal periodic
installments on the Corporation's regular
pay dates. 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 25/12 times the bonus amount paid
in 1997 for the calendar year 1996, to be
paid on March 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, 1998, or 1999 Annual
Incentive Plans (or any other bonus plans).
The Executive will not be eligible to
receive an award under the Long Term Cash
Incentive Plan (or any similar plan)
applicable to any period of time after
December 31, 1996.
(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
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 the
date hereof, the Executive will not be
eligible to receive any stock option or
equity participation right awards.
(d) Vacations. The Executive will be entitled
to be paid for all vacation accrued as of
January 31, 1997, but will no longer accrue
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vacation from and after January 31, 1997.
(e) Perquisites. The Executive will be entitled
to outplacement assistance for up to twelve
months as determined by Corporation, and
will continue to be entitled to all other
perquisites to which he is currently
entitled (including, without limitation,
membership in the Commerce Club, the
Institute of Chartered Accountants of
Newfoundland, and the Institute of
Management Accountants), until January 31,
1999."
(d) Noncompetition. Section 7 of the Employment Agreement
is hereby deleted.
(e) Severance Pay. Section 8 of the Employment Agreement
is 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 January 31, 1999. 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, and savings (but not
long-term disability or business travel accident
insurance) plans, policies or arrangements will
not, except as otherwise required by law or
regulation or provided in this Agreement, 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."
(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."
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(g) Ratification. In all respects, except as herein provided,
the Employment Agreement is hereby ratified and confirmed.
3. Supplemental Retirement Plan.
(a) Retirement Benefit. The period of the terminal leave of absence
is hereby designated as a "leave of absence with the consent of the
Participant's employer" which is intended to be counted toward "Years of
Service" as defined in the Supplemental Benefit Plan for Designated Employees of
Bowater Incorporated and Affiliated Companies as Amended and Restated Effective
November 1, 1995 (the "Supplemental Benefit Plan"), and compensation paid during
the terminal leave of absence is intended to be included within the definition
of "Compensation" in the Supplemental Benefit Plan. This instrument further
confirms that if the Executive's Employment Agreement as amended hereunder is
terminated at any time by his death, then (1) the Executive's surviving Spouse
(as defined in the Supplemental Benefit Plan), or the Executive's estate if
there is no surviving Spouse, will be entitled to receive the balance of the
compensation payable herein pursuant to Sections 5(a) and(b) of the Employment
Agreement as amended hereunder; and (2) the Executive's surviving Spouse (as
defined in the Supplemental Benefit Plan) will be entitled to the sixty (60%)
percent Spouse's Pre-Retirement Death Benefit as provided in the Supplemental
Benefit Plan, determined by reference to the benefit projected to January 31,
1999, at the compensation levels herein provided. The determination of the
Corporation's Human Resources and Compensation Committee of the Board of
Directors (the "HRCC") of the Executive's eligibility upon retirement at any
time after the expiration of the term of this Agreement (as well as his Spouse's
eligibility upon his death) to receive benefits from the Supplemental Benefit
Plan is hereby confirmed.
(b) Waiver. The Corporation (as authorized to act on behalf of the
HRCC) hereby waives the provisions of Sections 6.01 and 6.02(b) of the
Supplemental Benefit Plan.
4. Stock Options. The HRCC has affirmed by their approval of this Modification
that the terminal leave of absence will not interrupt or terminate employment
for purposes of determining the Executive's continued eligibility to become
vested in, and to exercise, options awarded pursuant to the Corporation's 1984,
1988 and 1992 Stock Option and Stock Incentive Plans. Notwithstanding the
foregoing, however, in no circumstances shall the original term of any stock
option grant be deemed to be extended beyond its original term by the terms of
this paragraph.
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Upon the Executive's retirement at the completion of his terminal
leave of absence, the Executive, his heirs, executors and administrators will be
granted the longest period permissible within which to exercise the rights
granted to the Executive pursuant to the Corporation's 1984, 1988 and 1992 Stock
Incentive Plans consistent with applicable law, regulation, Corporation policy
and practice, and provisions of the relevant plans and awards.
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 January 15, 1997,
and the applicable seven-day revocation period provided for therein has expired.
If the Executive should breach the terms of the Release Agreements in the
future, this Modification, 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.
6. Binding Agreement. Except as provided in Section 5 above, this Modification
and the Employment Agreement shall inure to the benefit of and be enforceable by
the Executive, his heirs, executors, administrators, successors and assigns.
This Modification and the Employment Agreement shall be binding upon the
Corporation, its successors and assigns.
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. Xxxxxx
------------------------- --------------------
Name: Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
Title: Vice President - Human
Resources
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