þ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 98-0526415 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) |
New York Stock Exchange | ||||
Common Stock, par value $.001 per share | Toronto Stock Exchange | |||
(Title of class) | (Name of exchange on which registered) |
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company þ |
1
| each of the Debtors operations were continued in substantially the same form; | ||
| all allowed pre-petition and post-petition secured claims, administrative expense claims and priority claims were paid in full in cash, including accrued interest, if applicable, and all pre-petition and post-petition secured credit facilities were terminated; | ||
| all outstanding receivable interests sold under the Abitibi and Donohue Corp. (Donohue, an indirect, wholly-owned subsidiary of AbitibiBowater Inc.) accounts receivable securitization program were repurchased in cash for a price equal to the par amount thereof and the program was terminated; | ||
| holders of allowed claims arising from the Debtors pre-petition unsecured indebtedness received their pro rata share of common stock issued by us on account of their claims; | ||
| holders of pre-petition unsecured claims with individual claim amounts of $5,000 or less (or reduced to that amount) were paid in cash in an amount equal to 50% of their claim amount, but under certain circumstances, these claim holders were treated instead like all other holders of claims arising from pre-petition unsecured liabilities and received shares of common stock issued by us on account of their claims; | ||
| all equity interests in the Predecessor Company (as defined below) existing immediately prior to the Emergence Date, including, among other things, all of our common stock issued and outstanding, were discharged, canceled, released and extinguished; | ||
| AbitibiBowater Inc. issued an aggregate of 97,134,954 shares of Successor Company (as defined below) common stock, par value $0.001 per share, for the benefit of unsecured creditors of the Debtors in the Creditor Protection Proceedings, and distributed 73,752,881 of those shares in December 2010 to the holders of unsecured claims as of the applicable distribution record date on account of allowed unsecured creditor claims; | ||
| various equity incentive and other employee benefit plans came into effect, including the AbitibiBowater Inc. 2010 Equity Incentive Plan, pursuant to which 8.5% of common stock on a fully diluted basis (or 9,020,960 shares) was |
2
reserved for issuance to eligible persons, of which awards representing not more than 4% (or 4,245,158 shares) were to be made approximately 30 days after the Emergence Date; | |||
| the Debtors obligations to fund the prior service costs related to their pension and other postretirement (OPEB) benefit plans were reinstated prospectively; | ||
| the Debtors assets were retained by, and were reinvested in, the Successor Company; | ||
| AbitibiBowater Inc. assumed by merger the obligations of ABI Escrow Corporation with respect to $850 million in aggregate principal amount of 10.25% senior secured notes due 2018, as further discussed in Item 7 of this Form 10-K, Managements Discussion and Analysis of Financial Condition and Results of Operations (Item 7), under Liquidity and Capital Resources; and | ||
| we entered into the ABL Credit Facility, as defined and further discussed in Item 7 under Liquidity and Capital Resources. |
3
4
5
6
Number | 2011 | 2010 | 2010 Production by Product Line | |||||||||||||||||||||||||
of Paper | Total | Total | Coated | Specialty | ||||||||||||||||||||||||
(In 000s of metric tons) | Machines | Capacity | Production | Newsprint | Papers | Papers | Market Pulp | |||||||||||||||||||||
Canada
|
||||||||||||||||||||||||||||
Alma, Quebec
|
3 | 369 | 366 | | | 366 | | |||||||||||||||||||||
Amos, Quebec
|
1 | 196 | 194 | 194 | | | | |||||||||||||||||||||
Baie-Comeau,
Quebec
(1)
|
4 | 535 | 521 | 521 | | | | |||||||||||||||||||||
Clermont,
Quebec
(2)
|
2 | 345 | 336 | 336 | | | | |||||||||||||||||||||
Fort Frances, Ontario
|
2 | 291 | 272 | | | 209 | 63 | |||||||||||||||||||||
Iroquois Falls, Ontario
|
2 | 270 | 236 | 208 | | 28 | | |||||||||||||||||||||
Kenogami, Quebec
|
2 | 216 | 204 | | | 204 | | |||||||||||||||||||||
Laurentide, Quebec
|
2 | 334 | 330 | | | 330 | | |||||||||||||||||||||
Liverpool,
Nova Scotia
(3)
|
2 | 258 | 222 | 195 | | 27 | | |||||||||||||||||||||
Thorold,
Ontario
(4)
|
1 | 202 | 47 | 47 | | | | |||||||||||||||||||||
Thunder Bay,
Ontario
(5)
|
1 | 579 | 540 | 202 | | 2 | 336 | |||||||||||||||||||||
United States
|
||||||||||||||||||||||||||||
Augusta,
Georgia
(6)
|
2 | 407 | 403 | 403 | | | | |||||||||||||||||||||
Calhoun,
Tennessee
(7)
|
3 | 666 | 658 | 115 | | 401 | 142 | |||||||||||||||||||||
Catawba, South Carolina
|
3 | 878 | 858 | | 620 | 19 | 219 | |||||||||||||||||||||
Coosa Pines,
Alabama
(8)
|
1 | 454 | 419 | 51 | | 112 | 256 | |||||||||||||||||||||
Grenada, Mississippi
|
1 | 246 | 242 | 242 | | | | |||||||||||||||||||||
Usk,
Washington
(9)
|
1 | 248 | 244 | 244 | | | | |||||||||||||||||||||
South Korea
|
||||||||||||||||||||||||||||
Mokpo, South Korea
|
1 | 253 | 242 | 242 | | | | |||||||||||||||||||||
|
34 | 6,747 | 6,334 | 3,000 | 620 | 1,698 | 1,016 | |||||||||||||||||||||
(1) | On April 1, 2011, we announced the permanent closure of a newsprint machine at our Baie-Comeau facility, effective May 28, 2011 (representing approximately 117,000 metric tons of capacity). | |
(2) | Donohue Malbaie Inc. (DMI), which owns one of Clermonts paper machines, is owned 51% by us and 49% by NYT Capital Inc. We manage the facility and wholly own all of the other assets at the site. Manufacturing costs are transferred between us and DMI at agreed-upon transfer costs. DMIs paper machine produced 213,000 metric tons of newsprint in 2010. The amounts in the above table represent the mills total capacity and production including DMIs paper machine. | |
(3) | Bowater Mersey Paper Company Limited (Mersey) is located in Liverpool, Nova Scotia and is owned 51% by us and 49% by The Daily Herald Company, a wholly-owned subsidiary of The Washington Post. We manage the facility. The amounts in the above table represent the mills total capacity and production. | |
(4) | On March 11, 2010, we announced the indefinite idling of one of our newsprint machines at our Thorold facility, effective April 12, 2010 (representing approximately 207,000 metric tons of capacity in 2010). In the fourth quarter of 2010, this machine was restarted and we permanently closed our other newsprint machine at this facility (representing approximately 207,000 metric tons of capacity). | |
(5) | In August 2009, we announced the indefinite idling of our two newsprint machines at our Thunder Bay facility effective August 21, 2009 (representing 392,000 metric tons of capacity), one of which was restarted in February 2010. In the fourth quarter of 2010, we permanently closed the machine that was still idled. | |
(6) | As of December 31, 2010, Augusta Newsprint Company (ANC), which operates our newsprint mill in Augusta was owned 52.5% by us and 47.5% by an indirect subsidiary of The Woodbridge Company Limited (Woodbridge). We manage the facility. The amounts in the above table represent the mills total capacity and production. ANC became a wholly-owned subsidiary of ours on January 14, 2011. | |
(7) | Calhoun Newsprint Company (CNC), which owns one of Calhouns paper machines, Calhouns recycled fiber plant and a portion of the thermomechanical pulp (TMP) mill, is owned 51% by us and 49% by Herald Company, Inc. We manage the facility and wholly own all of the other assets at the site, including the remaining portion of the TMP mill, a kraft pulp mill, a market pulp dryer, four other paper machines (two of which are still operating) and other support equipment. Pulp, other raw materials, labor and other manufacturing services are transferred between us and CNC at agreed-upon transfer costs. CNCs paper machine produced 115,000 metric tons of newsprint and 95,000 metric tons of specialty papers in 2010. The amounts in |
7
the above table represent the mills total capacity and production including CNCs paper machine. | ||
(8) | On February 14, 2011, we announced the permanent closure of our paper machine at our Coosa Pines mill effective at the end of March 2011 (representing approximately 183,000 metric tons of capacity related to lightweight containerboard and other packaging grades, which were being produced on a trial basis on this paper machine since May 2010). | |
(9) | Ponderay Newsprint Company is located in Usk, Washington and is an unconsolidated partnership in which we have a 40% interest and, through a wholly-owned subsidiary, we are the managing partner. The balance of the partnership is held by subsidiaries of three newspaper publishers. The amounts in the above table represent the mills total capacity and production. |
2011 | 2010 | |||||||||
(In million board feet) | Total Capacity | Total Production | ||||||||
Comtois, Quebec
|
140 | 35 | ||||||||
Girardville-Normandin, Quebec
|
175 | 176 | ||||||||
La Dore, Quebec
|
160 | 178 | ||||||||
La Tuque, Quebec
(1)
|
130 | 44 | ||||||||
Maniwaki, Quebec
|
140 | 91 | ||||||||
Mistassini, Quebec
|
170 | 160 | ||||||||
Oakhill, Nova Scotia
(2)
|
152 | 91 | ||||||||
Obedjiwan, Quebec
(3)
|
30 | 42 | ||||||||
Petit Saguenay, Quebec
(4)
|
13 | | ||||||||
Pointe-aux-Outardes, Quebec
|
175 | 53 | ||||||||
Roberval, Quebec
|
100 | 23 | ||||||||
Saint-Felicien, Quebec
|
115 | 130 | ||||||||
Saint-Fulgence,
Quebec
(4)
|
150 | 10 | ||||||||
Saint-Hilarion, Quebec
|
35 | 25 | ||||||||
Saint-Ludger-de-Milot, Quebec
(5)
|
80 | 98 | ||||||||
Saint-Thomas, Quebec
|
95 | 87 | ||||||||
Senneterre, Quebec
|
85 | 103 | ||||||||
Thunder Bay, Ontario
|
280 | 225 | ||||||||
|
2,225 | 1,571 | ||||||||
(1) | Produits Forestiers Mauricie L.P. is located in La Tuque, Quebec and is a consolidated subsidiary in which we have a 93.2% interest. The amounts in the above table represent the mills total capacity and production. | |
(2) | The Oakhill sawmill is wholly owned by Mersey, which is a consolidated subsidiary in which we have a 51% interest. The amounts in the above table represent the mills total capacity and production. | |
(3) | Societe en Commandite Scierie Opitciwan is located in Obedjiwan, Quebec and is an unconsolidated entity in which we have a 45% interest. The amounts in the above table represent the mills total capacity and production. | |
(4) | In the third quarter of 2010, we indefinitely idled our Petit Saguenay and Saint-Fulgence sawmills. | |
(5) | Produits Forestiers Petit-Paris Inc. is located in Saint-Ludger-de-Milot, Quebec and is an unconsolidated entity in which we have a 50% interest. The amounts in the above table represent the mills total capacity and production. |
2011 | 2010 | |||||||
(In million board feet, except where otherwise stated) | Total Capacity | Total Production | ||||||
Remanufacturing Wood Products Facilities
|
||||||||
Chateau-Richer, Quebec
|
63 | 51 | ||||||
La Dore, Quebec
|
15 | 19 | ||||||
Manseau, Quebec
|
20 | 7 | ||||||
Saint-Prime, Quebec
|
28 | 27 | ||||||
Total Remanufacturing Wood Facilities
|
126 | 104 | ||||||
|
||||||||
Engineered Wood Products Facilities
|
||||||||
Larouche and Saint-Prime, Quebec
(million linear feet)
(1)
|
145 | 41 | ||||||
(1) | Abitibi-LP Engineering Wood Inc. and Abitibi-LP Engineering Wood II Inc. are located in Larouche, Quebec and Saint- |
8
Prime, Quebec, respectively, and are unconsolidated entities in which we have a 50% interest in each entity. We operate the facilities and our joint venture partners sell the products. The amounts in the above table represent the mills total capacity and production. |
9
Share of | ||||||||||||||||||||||||||||
Installed | Share of | Share of | Generation | |||||||||||||||||||||||||
Number of | Capacity | Capacity | Generation | Generation | Received | |||||||||||||||||||||||
Ownership | Installations | (MW) | (MW) | (GWh) | (GWh) | (GWh) | ||||||||||||||||||||||
Hydro Saguenay, Quebec
|
100 | % | 7 | 162 | 162 | 880 | 880 | 880 | ||||||||||||||||||||
Fort Frances, Ontario
(1)
|
75 | % | 3 | 27 | 20 | 148 | 111 | 111 | ||||||||||||||||||||
Kenora, Ontario
(1)
|
75 | % | 2 | 18 | 14 | 102 | 77 | 77 | ||||||||||||||||||||
Iroquois Falls, Ontario
(1)
|
75 | % | 3 | 92 | 69 | 335 | 251 | 251 | ||||||||||||||||||||
|
15 | 299 | 265 | 1,465 | 1,319 | 1,319 | ||||||||||||||||||||||
(1) | The amounts in the above table represent the facilitys total installed capacity and power generation. On February 11, 2011, AbiBow Canada entered into an agreement to sell its 75% equity interest in ACH Limited Partnership (ACH), which owns these facilities. For additional information, see Item 7 under Liquidity and Capital Resources. |
10
11
Name | Age | Position | Officer Since | |||||
Richard Garneau | 63 |
President and Chief Executive Officer
|
2011 | |||||
Alain Boivin | 60 |
Senior Vice President, Pulp and Paper Operations
|
2011 | |||||
Alain Grandmont | 55 |
Senior Vice President, Human Resources and Public Affairs
|
2007 | |||||
William G. Harvey | 53 |
Senior Vice President and Chief Financial Officer
|
2007 | |||||
John Lafave | 46 |
Senior Vice President, Pulp and Paper Sales and Marketing
|
2011 | |||||
Yves Laflamme | 55 |
Senior Vice President, Wood Products, Global Supply Chain,
Procurement and Information Technology |
2007 | |||||
Jacques P. Vachon | 51 |
Senior Vice President and Chief Legal Officer
|
2007 | |||||
12
13
14
15
16
17
18
19
20
21
22
23
24
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27
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31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
67
68
69
70
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72
73
74
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78
79
80
81
82
84
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89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
High
Low
$
1.25
$
0.31
$
0.60
$
0.11
$
0.18
$
0.10
$
0.34
$
0.10
$
0.24
$
0.09
$
0.60
$
0.09
$
0.14
$
0.01
$
0.08
$
0.00
$
25.15
$
21.50
Table of Contents
Predecessor
(In millions, except per share amounts or otherwise
indicated)
2010
2009
2008
2007
2006
$
4,746
$
4,366
$
6,771
$
3,876
$
3,530
(160
)
(375
)
(1,430
)
(400
)
41
1,901
(639
)
2,775
(1,560
)
(1,951
)
(491
)
(130
)
2,614
(1,553
)
(2,234
)
(490
)
(138
)
45.30
(26.91
)
(38.79
)
(14.11
)
(4.64
)
27.63
(26.91
)
(38.79
)
(14.11
)
(4.64
)
1.15
1.54
$
1,804
$
1,802
$
3,238
$
1,574
$
1,438
482
416
659
570
612
1,321
1,331
1,829
800
570
715
518
626
600
559
424
290
418
318
332
9
1
14
19
$
4,746
$
4,366
$
6,771
$
3,876
$
3,530
$
39
$
46
$
(420
)
$
(247
)
$
182
81
101
186
128
199
Successor
Predecessor
2010
2009
2008
2007
2006
$
2,641
$
3,897
$
4,507
$
5,733
$
2,939
7,156
7,112
8,072
10,287
4,646
905
613
5,293
5,059
2,267
905
1,499
5,970
5,648
2,267
10,500
12,100
15,900
18,000
7,400
(1)
Operating (loss) income for 2010, 2009, 2008, 2007 and 2006 included a net gain on
disposition of assets and other of $30 million, $91 million, $49 million, $145 million and
$186 million, respectively, and included closure costs, impairment of assets other than
goodwill and other related charges of $11 million, $202 million, $481 million, $123
Table of Contents
million and $53 million, respectively. Operating loss for 2009 included $276 million of
alternative fuel mixture tax credits (see Note 25, Alternative Fuel Mixture Tax Credits, to
our Consolidated Financial Statements for additional information). Operating (loss) income for
2008 and 2006 included impairment of goodwill charges of $810 million and $200 million,
respectively. Operating loss for 2007 included a charge for an arbitration award of $28 million.
Operating income for 2006 included a lumber duties refund of $92 million.
(2)
Certain expenses, provisions for losses and other charges and credits directly
associated with or resulting from the reorganization and restructuring of the business that
were realized or incurred in the Creditor Protection Proceedings, including the impact of the
implementation of the Plans of Reorganization and the application of fresh start accounting,
were recorded in Reorganization items, net in our Consolidated Statements of Operations. For
additional information, see Note 4, Creditor Protection Proceedings Related Disclosures
-
Reorganization items, net, to our Consolidated Financial Statements.
(3)
Net loss attributable to AbitibiBowater Inc. in 2008 included a $256 million
extraordinary loss for the non-cash write-off of the carrying value of our timber rights,
water rights, leases and hydroelectric assets in the province of Newfoundland and Labrador,
which were expropriated by the government of Newfoundland and Labrador in the fourth quarter
of 2008. For additional information, see Item 1, Business Newfoundland and Labrador
Expropriation.
(4)
Dividends were declared quarterly. During the fourth quarter of 2007, the payment of
a quarterly dividend to shareholders was suspended indefinitely. Additionally, during the
Creditor Protection Proceedings, we could not pay dividends on the Predecessor Companys
common stock under the terms of our debtor in possession financing arrangements.
(5)
As part of the application of fresh start accounting, fixed assets were adjusted to
their fair values as of December 31, 2010. For additional information, see Note 4, Creditor
Protection Proceedings Related Disclosures Fresh start accounting, to our Consolidated
Financial Statements.
(6)
As previously discussed, as of the Emergence Date and pursuant to the Plans of
Reorganization, all amounts outstanding under our debtor in possession financing arrangements
and the Debtors pre-petition secured debt obligations were paid in full in cash and certain
holders of allowed claims arising from the Debtors pre-petition unsecured debt obligations
received their pro rata share of the Successor Companys common stock. Additionally, upon the
consummation of the Plans of Reorganization, we assumed the obligations in respect of the $850
million principal amount of 2018 Notes issued by an escrow subsidiary of ours. For additional
information, see Note 17, Liquidity and Debt, to our Consolidated Financial Statements.
(7)
Due to the commencement of the Creditor Protection Proceedings, our Consolidated
Balance Sheets as of December 31, 2009 included unsecured pre-petition debt obligations of
$4,852 million (included in Liabilities subject to compromise), secured pre-petition debt
obligations of $980 million (included in current liabilities) and pre-petition secured debt
obligations of $34 million (included in Long-term debt, net of current portion).
Table of Contents
Table of Contents
lower depreciation, amortization and cost of timber harvested as a result of the rationalization of facilities, sale of
assets, reductions in the carrying values of fixed assets and amortizable intangible assets to reflect fair values and
updated useful lives of fixed assets and amortizable intangible assets;
lower labor and salary costs as a result of the implementation of our new labor agreements (costs of sales,
excluding depreciation, amortization and cost of timber harvested) and salary reductions at the corporate
level (selling and administrative expenses);
significantly lower interest expense as a result of the settlement or extinguishment of the Predecessor
Companys secured and unsecured debt obligations, partially
offset by interest expense on our exit financing; and
higher income tax provision due to the reversal of deferred tax valuation allowances in
connection with the implementation of the Plans of Reorganization. We
established approximately $1,783 million of
deferred income tax assets and therefore do not expect to pay
significant cash taxes until these deferred income tax
assets are fully utilized.
Table of Contents
Predecessor
Years Ended December 31,
(In millions, except per share amounts)
2010
2009
Change
$
4,746
$
4,366
$
380
(160
)
(375
)
215
2,614
(1,553
)
4,167
45.30
(26.91
)
72.21
27.63
(26.91
)
54.54
$
233
147
380
(272
)
(66
)
43
191
(61
)
$
215
Table of Contents
an increase in manufacturing costs of $56 million, primarily due to an unfavorable
currency exchange ($26 million, primarily due to the Canadian dollar) and higher costs for
wood and fiber ($4 million), energy ($27 million), chemicals ($2 million) and other
unfavorable cost variances, partially offset by lower volumes ($56 million) and lower costs
for maintenance ($6 million), labor and benefits ($12 million) and depreciation ($24
million), as well as benefits from the alternative fuel mixture tax credits ($75 million)
that were recorded in the fourth quarter of 2009;
an increase in distribution costs of $9 million, due to higher distribution costs per
ton, partially offset by lower shipment volumes;
an increase in selling and administrative expenses of $13 million, primarily due to an
accrual of approximately $7 million in the fourth quarter of 2010 for the 2010 short-term
incentive plan and a lease termination fee of approximately $2 million in the fourth
quarter of 2010 related to our head office in Montreal, Quebec; and
a change in closure costs, impairment of assets other than goodwill and other related
charges, which were not associated with our work towards a comprehensive restructuring
plan, of $30 million.
Table of Contents
Predecessor
Years Ended December 31,
(In millions, except per share amounts)
2009
2008
Change
$
4,366
$
6,771
$
(2,405
)
(375
)
(1,430
)
1,055
(1,553
)
(2,234
)
681
(26.91
)
(38.79
)
11.88
$
(838
)
(1,567
)
(2,405
)
1,925
270
134
810
279
42
$
1,055
Table of Contents
Table of Contents
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
Change
$
600
$
571
$
29
$
657
$
682
$
(25
)
3,005
3,157
(152
)
738
1,404
(666
)
75
117
(42
)
$
1,804
$
1,802
$
2
(171
)
(353
)
182
$
93
(91
)
2
211
(22
)
(9
)
$
182
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
Change
$
718
$
730
$
(12
)
$
672
$
574
$
98
671
571
100
10
114
(104
)
20
22
(2
)
$
482
$
416
$
66
31
89
(58
)
$
(6
)
72
66
(117
)
(6
)
(1
)
$
(58
)
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
Change
$
687
$
731
$
(44
)
$
709
$
685
$
24
1,924
1,819
105
115
521
(406
)
88
86
2
$
1,321
$
1,331
$
(10
)
(44
)
85
(129
)
$
(82
)
72
(10
)
(114
)
(3
)
(2
)
$
(129
)
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
Change
$
737
$
548
$
189
$
596
$
430
$
166
970
946
24
47
138
(91
)
58
53
5
$
715
$
518
$
197
137
112
25
$
180
17
197
(159
)
(10
)
(3
)
$
25
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
Change
$
304
$
254
$
50
$
297
$
303
$
(6
)
1,395
1,143
252
954
1,761
(807
)
122
106
16
$
424
$
290
$
134
9
(56
)
65
$
57
77
134
(54
)
(17
)
2
$
65
Table of Contents
Predecessor
Years Ended December 31,
(In millions)
2010
2009
Change
$
$
9
$
(9
)
(122
)
(252
)
130
$
$
9
$
(9
)
(44
)
(8
)
(36
)
(3
)
6
(9
)
(94
)
(148
)
54
(11
)
(202
)
191
30
91
(61
)
$
(122
)
$
(252
)
$
130
Table of Contents
Predecessor
Years Ended December 31,
2009
2008
Change
$
571
$
682
$
(111
)
$
682
$
676
$
6
3,157
4,746
(1,589
)
1,404
238
1,166
117
129
(12
)
$
1,802
$
3,238
$
(1,436
)
(353
)
30
(383
)
$
(529
)
(907
)
(1,436
)
873
170
10
$
(383
)
Table of Contents
Predecessor
Years Ended December 31,
2009
2008
Change
$
730
$
882
$
(152
)
$
574
$
713
$
(139
)
571
748
(177
)
114
10
104
22
39
(17
)
$
416
$
659
$
(243
)
89
126
(37
)
$
(113
)
(130
)
(243
)
183
16
7
$
(37
)
Table of Contents
Predecessor
Years Ended December 31,
2009
2008
Change
$
731
$
754
$
(23
)
$
685
$
760
$
(75
)
1,819
2,425
(606
)
521
124
397
86
143
(57
)
$
1,331
$
1,829
$
(498
)
85
(14
)
99
$
(54
)
(444
)
(498
)
537
60
$
99
Table of Contents
Predecessor
Years Ended December 31,
2009
2008
Change
$
548
$
700
$
(152
)
$
430
$
626
$
(196
)
946
895
51
138
79
59
53
101
(48
)
$
518
$
626
$
(108
)
112
66
46
$
(136
)
28
(108
)
150
1
3
$
46
Table of Contents
Predecessor
Years Ended December 31,
2009
2008
Change
$
254
$
269
$
(15
)
$
303
$
313
$
(10
)
1,143
1,556
(413
)
1,761
1,225
536
106
133
(27
)
$
290
$
418
$
(128
)
(56
)
(69
)
13
$
(14
)
(114
)
(128
)
121
17
3
$
13
Table of Contents
Predecessor
Years Ended December 31,
(In millions)
2009
2008
Change
$
9
$
1
$
8
(252
)
(1,569
)
1,317
$
9
$
1
$
8
(8
)
(69
)
61
6
6
(148
)
(259
)
111
(810
)
810
(202
)
(481
)
279
91
49
42
$
(252
)
$
(1,569
)
$
1,317
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Predecessor
(In millions)
2010
2009
2008
$
39
$
46
$
(420
)
96
484
(27
)
(572
)
34
444
$
(437
)
$
564
$
(3
)
Table of Contents
(In millions)
Total
2011
2012 2013
2014 2015
Thereafter
$
1,550
$
90
$
174
$
174
$
1,112
28
8
8
3
9
249
20
35
24
170
136
62
15
14
45
598
148
100
100
250
$
2,561
$
328
$
332
$
315
$
1,586
(1)
Long-term debt commitments include interest payments but exclude the related premium
on the debt of $55 million as of December 31, 2010, as this item requires no cash outlay. Also
excluded is ACHs long-term debt of $280 million, which was included in Liabilities
associated with assets held for sale in our Consolidated Balance Sheets as of December 31,
2010.
(2)
We lease timberlands, certain office premises, office equipment and transportation
equipment under operating leases.
(3)
As of December 31, 2010, purchase obligations include, among other things, a bridge
and railroad contract for our Fort Frances operations with commitments totaling $136 million
through 2044.
(4)
Pension and OPEB funding is calculated on an
annual basis for the following year only. The amounts in the above table for 2012 and thereafter represent the
Cdn$50 million basic contribution only, which is discussed further below.
Table of Contents
not pay a dividend at any time when the weighted average solvency ratio of its pension
plans in Quebec or Ontario is less than 80%;
abide by the compensation plan detailed in the Plans of Reorganization with respect to
salaries, bonuses and severance;
direct at least 60% of the maintenance and value-creation investments earmarked for our
Canadian pulp and paper operations to projects in Quebec and at least 30% to projects in
Ontario;
invest a minimum of Cdn$50 million over a two to three year construction period for a
new condensing turbine at our Thunder Bay facility, subject to certain conditions;
invest at least Cdn$75 million in strategic projects in Quebec over a five-year period;
maintain our head office and the current related functions in Quebec;
make an additional solvency deficit reduction contribution to its pension plans of
Cdn$75, payable over four years, for each metric ton of capacity reduced in Quebec or
Ontario, in the event of downtime of more than six consecutive months or nine cumulative
months over a period of 18 months;
create a diversification fund by contributing Cdn$2 million per year for five years for
the benefit of the municipalities and workers in our Quebec operating regions;
pay an aggregate of Cdn$5 million over five years to be used for such environmental
remediation purposes instructed by the province of Ontario; and
maintain and renew certain financial assurances with the province of Ontario in respect
of certain properties in the province.
Table of Contents
Table of Contents
Excess of
Retained
Total
Total
Assets over
(In millions)
Interest
Assets
Obligations
Obligations
$
8
$
74
$
64
$
10
11
74
62
12
$
19
$
148
$
126
$
22
Table of Contents
Table of Contents
Inventories:
The fair value of our finished goods inventories was based on their
estimated selling prices less the sum of selling costs, shipping costs and a reasonable
profit allowance for the selling effort. The fair value of our mill stores and other
supplies inventories was based on replacement cost for high-turnover items and on replacement cost less economic obsolescence for all other items.
The fair values of our raw materials and
work in process inventories were recorded at the Predecessor
Companys carrying values, which
approximated fair value.
Fixed assets
: Except for construction in progress, the estimated fair
values of our fixed assets were based on the cost approach and income approach valuation methods.
The cost approach method considers the amount required to replace an asset by constructing or purchasing a new asset with similar utility,
adjusted for depreciation as of the appraisal date as described below:
Physical deterioration
the loss in value or usefulness attributable solely to the use
of the asset and physical causes such as wear and tear and exposure to the elements.
Functional obsolescence
the loss in value caused by the inability of the property to adequately perform the function for which it is utilized.
Technological obsolescence (a form of functional obsolescence)
the loss in value due to changes in technology, discovery of new materials and improved manufacturing processes.
Economic obsolescence
the loss in value caused by external forces such as legislative enactments, overcapacity in the industry, low commodity pricing, changes in the supply and demand relationships in the marketplace and other market inadequacies.
The cost approach relies on managements assumptions regarding current material and labor costs required to
rebuild and repurchase significant components of our fixed assets along with assumptions regarding the age and
estimated useful lives of our fixed assets.
The income approach method estimates fair value based on a DCF analysis. We derived our income approach
assumptions from our business plan, which was developed using several sources, including our internal budgets
(which contain existing sales data based on current product lines and assumed production levels, manufacturing
costs and product pricing). Our valuation model used a cash flow period of four years, with a terminal value based
on a multiple of EBITDA. We used Discount Rates ranging from 13% 15%.
Construction in progress was recorded at the Predecessor Companys carrying value, which approximated fair value.
Amortizable intangible assets:
In the application of fresh start accounting, we
identified amortizable intangible assets related to water rights. The estimated fair value of these
identifiable intangible assets was primarily
based on DCF valuation methods.
Table of Contents
Joint ventures:
The fair values of our joint ventures were based on a combination of the
cost, income and market approach valuation methods.
Long-term debt:
The fair value of our Senior Secured Notes due 2018 was based on quoted
market prices.
All other assets and liabilities were recorded at the
Predecessor Companys carrying values,
after adjustments resulting from the implementation of the Plans of Reorganization. The
resulting carrying values approximated their fair values.
discount rate used to arrive at the net present value of the pension and OPEB
projected benefit obligations;
return on assets used to estimate the growth in the value of invested assets that are
available to satisfy pension projected benefit obligations;
mortality rate used to estimate the impact of mortality on pension and OPEB projected
benefit obligations;
rate of compensation increase used to calculate the impact future pay increases will
have on pension projected benefit obligations; and
health care cost trend rate used to calculate the impact of future health care costs
on OPEB projected benefit obligations.
Table of Contents
Net Pension and OPEB Projected
Benefit Obligations as of
2010 Net Periodic Benefit Cost
December 31, 2010
25 Basis Point
25 Basis Point
25 Basis Point
25 Basis Point
Assumption
Increase
Decrease
Increase
Decrease
$
(1
)
$
1
$
(174
)
$
180
(13
)
13
2
(2
)
5
(5
)
1
(1
)
11
(9
)
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Federal and state net operating loss carryforwards of approximately $500 million. Our federal operating loss
carryforwards are subject to certain annual limitations; however,
these ordinary losses expire in 2029 and we expect to fully utilize
them during this period. In most instances, we have applied a
full valuation allowance to our state operating loss carryforwards.
Our remaining U.S. deferred tax assets and liabilities net to a deferred tax liability position of approximately
$100 million and relate primarily to a deferred tax liability on our fixed assets.
We have approximately $400 million of capital loss carryforwards against which we have applied a full
valuation allowance because we are not assured of realizing capital gains in the carryforward period.
Operating loss carryforwards of approximately $130 million and investment tax credits of approximately $201
million that expire between 2014 and 2030 and which we expect to fully utilize during this period.
A pool of scientific research and experimental development costs of approximately
$270 million that expire between 2019 and 2029 and which we expect to fully utilize
during this period.
Indefinite lived deferred tax assets for undepreciated capital costs of approximately $500 million and tax credits related
to our employee future benefits (pension and OPEB) of approximately $210 million.
Table of Contents
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Page
62
63
64
65
66
67
138
140
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
2008
$
4,746
$
4,366
$
6,771
3,724
3,343
5,144
493
602
726
553
487
757
155
198
332
810
11
202
481
(30
)
(91
)
(49
)
(160
)
(375
)
(1,430
)
(483
)
(597
)
(706
)
(89
)
(71
)
93
(732
)
(1,043
)
(2,043
)
1,901
(639
)
1,169
(1,682
)
(2,043
)
1,606
122
92
2,775
(1,560
)
(1,951
)
(256
)
2,775
(1,560
)
(2,207
)
(161
)
7
(27
)
$
2,614
$
(1,553
)
$
(2,234
)
$
45.30
$
(26.91
)
$
(34.34
)
(4.45
)
$
45.30
$
(26.91
)
$
(38.79
)
$
27.63
$
(26.91
)
$
(34.34
)
(4.45
)
$
27.63
$
(26.91
)
$
(38.79
)
57.7
57.7
57.6
94.6
57.7
57.6
Table of Contents
Successor
Predecessor
As of December 31,
As of December 31,
2010
2009
$
319
$
756
854
644
438
581
698
52
47
26
88
113
2,444
2,172
2,641
3,897
19
473
1,736
53
316
517
$
7,156
$
7,112
$
568
$
462
206
680
305
289
35
857
1,688
905
308
1,272
89
72
107
63
162
3,169
2,354
6,727
3,169
9,081
December 31, 2009
55
December 31, 2009
173
3,709
2,522
(4,391
)
(450
)
3,709
(2,091
)
278
122
3,987
(1,969
)
$
7,156
$
7,112
Table of Contents
AbitibiBowater Inc. Shareholders Equity (Deficit)
Accumulated
Additional
Other
Non-
Total
Common
Exchangeable
Paid-in
Comprehensive
Treasury
controlling
Equity
Stock
Shares
Capital
Deficit
(Loss) Income
Stock
Interests
(Deficit)
$
52
$
276
$
2,313
$
(598
)
$
(144
)
$
$
150
$
2,049
(6
)
(11
)
(17
)
1
(34
)
33
6
6
105
105
(6
)
(6
)
(25
)
(25
)
(2,234
)
27
(2,207
)
(229
)
(16
)
(245
)
53
242
2,451
(2,838
)
(384
)
136
(340
)
2
(69
)
67
4
4
(7
)
(7
)
(1,553
)
(7
)
(1,560
)
(66
)
(66
)
55
173
2,522
(4,391
)
(450
)
122
(1,969
)
3
3
2,614
161
2,775
(570
)
(5
)
(575
)
(55
)
(173
)
228
3,709
3,709
44
44
(2,753
)
1,777
976
to Donohue Corp., a wholly-owned
subsidiary of the Company
(17.0 shares in treasury) (Note 23)
$
$
$
3,709
$
$
$
$
278
$
3,987
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
2008
$
2,775
$
(1,560
)
$
(2,207
)
8
(15
)
(9
)
(598
)
(176
)
(110
)
15
125
(136
)
10
(575
)
(66
)
(245
)
2,200
(1,626
)
(2,452
)
(161
)
7
(27
)
5
16
(156
)
7
(11
)
$
2,044
$
(1,619
)
$
(2,463
)
Table of Contents
Predecessor
Years Ended December 31,
2010
2009
2008
$
2,775
$
(1,560
)
$
(2,207
)
256
3
4
4
493
602
726
810
11
170
428
17
30
(1,600
)
(118
)
(225
)
(36
)
(150
)
(241
)
(30
)
(91
)
(49
)
(31
)
14
57
123
116
62
(39
)
217
230
(1,981
)
535
10
31
27
(75
)
159
(63
)
(13
)
101
159
4
(29
)
(13
)
119
(1
)
(171
)
(15
)
27
83
39
46
(420
)
(81
)
(101
)
(186
)
554
96
119
220
76
(142
)
(3
)
49
(69
)
8
5
5
3
96
484
(27
)
(141
)
(7
)
(25
)
261
(10
)
(31
)
(206
)
(55
)
400
(347
)
(53
)
(338
)
(7
)
(248
)
850
763
(334
)
(118
)
(298
)
(46
)
(9
)
(89
)
(6
)
(572
)
34
444
(437
)
564
(3
)
756
192
195
$
319
$
756
$
192
$
198
$
276
$
559
$
(3
)
$
(3
)
$
6
Table of Contents
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
AbitibiBowater
Partner
Consolidated Subsidiary
Ownership
Partner
Ownership
93.2
%
Cooperative Forestiere du Haut Saint-Maurice
6.8
%
75
%
Caisse de depot et placement du Quebec
25
%
52.5
%
The Woodbridge Company Limited (Woodbridge)
47.5
%
51
%
Herald Company, Inc.
49
%
51
%
The Daily Herald Company
49
%
51
%
NYT Capital Inc.
49
%
(1)
On February 11, 2011, AbiBow Canada Inc. (AbiBow Canada, our post-emergence
Canadian operating subsidiary) entered into an agreement to sell its 75% equity interest in
ACH. For additional information, see Note 29, Subsequent Events.
(2)
On January 14, 2011, Augusta Newsprint Inc. (ANI), an indirect subsidiary of
Woodbridge, became a wholly-owned subsidiary of ours. For additional information, see Note 29,
Subsequent Events.
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
Valuations based on quoted prices in active markets for identical assets and liabilities.
Valuations based on observable inputs, other than Level 1 prices, such as quoted interest or currency exchange rates.
Valuations based on significant unobservable inputs that are supported by little or no market activity, such as
discounted cash flow methodologies based on internal cash flow forecasts.
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
each of the Debtors operations were continued in substantially the same form;
all allowed pre-petition and post-petition secured claims, administrative expense claims
and priority claims were paid in full in cash, including accrued interest, if applicable,
and all pre-petition and post-petition secured credit facilities were terminated;
all outstanding receivable interests sold under the Abitibi and Donohue Corp.
(Donohue, an indirect, wholly-owned subsidiary of AbitibiBowater Inc.) accounts
receivable securitization program were repurchased in cash for a price equal to the par
amount thereof and the program was terminated;
holders of allowed claims arising from the Debtors pre-petition unsecured indebtedness
received their pro rata share of common stock issued by us on account of their claims;
holders of pre-petition unsecured claims with individual claim amounts of $5,000 or less
(or reduced to that amount) were paid in cash in an amount equal to 50% of their claim
amount, but under certain circumstances, these claim holders were treated instead like all
other holders of claims arising from pre-petition unsecured liabilities and received shares
of common stock issued by us on account of their claims;
all equity interests in the Predecessor Company existing immediately prior to the
Emergence Date, including, among other things, all of our common stock issued and
outstanding, were discharged, canceled, released and extinguished;
AbitibiBowater Inc. issued an aggregate of 97,134,954 shares of Successor Company common
stock, par value $0.001 per share, for the benefit of unsecured creditors of the Debtors in
the Creditor Protection Proceedings, and distributed 73,752,881 of those shares in December
2010 to the holders of unsecured claims as of the applicable distribution record date on
account of allowed unsecured creditor claims;
various equity incentive and other employee benefit plans came into effect, including
the AbitibiBowater Inc. 2010 Equity Incentive Plan, pursuant to which 8.5% of common stock
on a fully diluted basis (or 9,020,960 shares) was reserved for issuance to eligible
persons, of which awards representing not more than 4% (or 4,245,158 shares) were to be
made approximately 30 days after the Emergence Date;
the Debtors obligations to fund the prior service costs related to their pension and
OPEB benefit plans were reinstated prospectively;
the Debtors assets were retained by, and were reinvested in, the Successor Company;
AbitibiBowater Inc. assumed by merger the obligations of ABI Escrow Corporation with
respect to $850 million in aggregate principal amount of 10.25% senior secured notes due
2018, as further discussed in Note 17, Liquidity and Debt; and
we entered into the ABL Credit Facility, as defined and further discussed in Note 17,
Liquidity and Debt.
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
Inventories:
The fair value of our finished goods inventories was based on their
estimated selling prices less the sum of selling costs, shipping costs and a reasonable
profit allowance for the selling effort. The fair value of our mill stores and other
supplies inventories was based on replacement cost for high-turnover items and on replacement cost less
economic obsolescence for all other items. The fair values of our raw materials and
work in process inventories were recorded at the Predecessor Companys carrying values, which
approximated fair value. Additionally, in the future, no inventories will be valued using
the LIFO method. See Note 11, Inventories, Net, for the fair values of inventory by
category as of December 31, 2010.
Fixed assets
: Except for construction in progress, the estimated fair values of our fixed assets were based on the
cost approach and income approach valuation methods.
The cost approach method considers the amount required to replace an asset by constructing or purchasing a new
asset with similar utility, adjusted for depreciation as of the appraisal date as described below:
Physical
deterioration
the loss in value or usefulness attributable solely to the use of the asset and physical
causes such as wear and tear and exposure to the elements.
Functional
obsolescence
the loss in value caused by the inability of the property to adequately perform the
function for which it is utilized.
Technological
obsolescence (a form of functional obsolescence)
the loss in value due to changes in technology,
discovery of new materials and improved manufacturing processes.
Economic
obsolescence
the loss in value caused by external
forces such as legislative enactments, overcapacity in the industry, low commodity pricing,
changes in the supply and demand relationships in the marketplace and other market inadequacies.
The cost approach relies on managements assumptions regarding current material and labor costs required to
rebuild and repurchase significant components of our fixed assets along with assumptions regarding the age and
estimated useful lives of our fixed assets.
The income approach method estimates fair value based on a DCF analysis. We derived our income approach
assumptions from our business plan, which was developed using several sources, including our internal budgets
(which contain existing sales data based on current product lines and assumed production levels, manufacturing
costs and product pricing). Our valuation model used a cash flow period of four years, with a terminal value based
on a multiple of EBITDA. We used Discount Rates ranging from 13% 15%.
Construction in progress was recorded at the Predecessor Companys carrying value, which approximated
fair value.
Additionally, as part of fresh start accounting, accumulated depreciation was eliminated and the estimated
remaining useful lives of our fixed assets were updated. See Note 13, Fixed Assets, Net, for the updated
remaining useful lives and the fair values of fixed assets by category as of December 31, 2010.
Table of Contents
Notes to Consolidated Financial Statements
Amortizable intangible assets:
In the application of fresh start accounting, we
identified amortizable intangible assets related to water rights. The estimated fair value
of these identifiable intangible assets was primarily
based on DCF valuation methods. Additionally, as part of fresh start accounting,
accumulated amortization was eliminated and the estimated remaining useful life of our
amortizable intangible assets was updated. See Note 5, Goodwill and Amortizable
Intangible Assets, Net, for the updated remaining useful life and the fair value of our
identifiable intangible assets as of December 31, 2010.
Joint ventures:
The fair values of our joint ventures were based on a combination of the
cost, income and market approach valuation methods.
Long-term debt:
The fair value of our Senior Secured Notes due 2018 was based on quoted
market prices.
All other assets and liabilities were recorded at the
Predecessor Companys carrying values,
after adjustments resulting from the implementation of the Plans of Reorganization. The
resulting carrying values approximated their fair values.
Table of Contents
Notes to Consolidated Financial Statements
As of December 31, 2010
Plans of
Fresh Start
Reorganization
Accounting
(In millions)
Predecessor
Adjustments
Adjustments
Successor
$
608
$
(279
)
(1
)
$
(10
)
(23
)
$
319
863
(5
)
(2
)
(4
)
(23
)
854
560
(122
)
(18
)
438
2
696
(23
)
698
16
(3
)
(3
)
34
(18
)
47
74
15
(4
)
(1
)
(23
)
88
2,123
(272
)
593
2,444
3,173
(532
)
(18
)(23)
2,641
464
(445
)
(18
)(23)
19
1,582
(3
)
154
(18
)
1,736
53
(53
)
(19
)
432
(115
)
(5
)
(1
)
(20
)(23)
316
$
6,245
$
1,195
$
(284
)
$
7,156
$
706
$
(129
)
(6
)
$
(9
)
(23
)
$
568
40
(40
)
(7
)
120
(120
)
(8
)
685
(685
)
(9
)
300
(300
)
(10
)
289
(23
)
289
1,851
(1,274
)
280
857
290
816
(11
)
(201
)
(18
)(23)
905
91
1,181
(12
)
1,272
101
(29
)
(13
)
72
84
(20
)
(14
)
(1
)
(18
)
63
2,417
674
78
3,169
8,407
(8,407
)
(15
)
10,824
(7,733
)
78
3,169
55
(55
)
(16
)
(16
)
173
(173
)
(16
)
(16)
2,525
3,932
(16
)
(2,748
)
(21
)
3,709
(16)
(6,420
)
5,180
(17
)
1,240
(21
)
(1,020
)
44
(12
)
976
(21
)
(4,687
)
8,928
(532
)
3,709
108
170
(22
)
278
(4,579
)
8,928
(362
)
3,987
$
6,245
$
1,195
$
(284
)
$
7,156
Table of Contents
Notes to Consolidated Financial Statements
(1)
Reflects the cash effects of the Plans of Reorganization:
(2)
Represents miscellaneous write-offs.
(3)
Represents adjustments to deferred income tax assets arising from changes in tax attributes as a
result of the implementation of the Plans of Reorganization and the reversal of valuation
allowances upon emergence from the Creditor Protection Proceedings. See Note 21, Income Taxes.
(4)
Reflects a deposit with the Monitor of $22 million for the payment of secured claims
and the release of $7 million of restricted cash in lockbox accounts related to the accounts
receivable securitization program.
(5)
Reflects: (i) the recording of deferred financing costs of $44 million associated
with our exit financing, (ii) the return of deposits and release of restricted cash of $181
million for various items held either in trust with the Monitor, in escrow or in a designated
account for which the restrictions were terminated on the Emergence Date, (iii) an increase in
restricted cash of $28 million associated with a guarantee agreement with Alcoa (as defined
and discussed in Note 17, Liquidity and Debt Debt Sale of our investment in MPCo) and
(iv) $6 million of miscellaneous write-offs.
(6)
Reflects the following items:
(7)
Reflects the repayment of the Bowater DIP Agreement.
(8)
Reflects the repayment of secured borrowings under the accounts receivable
securitization program.
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Notes to Consolidated Financial Statements
(9)
Reflects the repayment of Bowaters pre-petition secured bank credit facilities of
$338 million and ACCCs pre-petition senior secured term loan of $347 million.
(10)
Reflects the repayment of ACCCs pre-petition 13.75% Senior Secured Notes.
(11)
Reflects the issuance of the Senior Secured Notes due 2018 of $850 million and the
repayment of Bowaters pre-petition floating rate industrial revenue bonds due 2029 of $34
million.
(12)
Pursuant to the Plans of Reorganization, pension and OPEB projected benefit
obligations were retained by us. These obligations, which were previously classified as
liabilities subject to compromise, were reclassified to the appropriate accounts.
(13)
Represents a reduction of deferred income taxes upon the
deconsolidation of BCFC of $32 million (see Note 22,
Commitments and Contingencies BCFC Bankruptcy and
Insolvency Act filing) and an increase in deferred income tax
liabilities of $3 million.
(14)
Represents the recording of a liability for a diversification fund in each of the
provinces of Quebec and Ontario of $10 million (see Note 20, Pension and Other Postretirement Benefit Plans
Resolution of Canadian pension situation) and a reduction in
tax reserves of $30 million.
(15)
Reflects the reclassification of pension and OPEB projected benefit obligations to
the appropriate liability accounts, as discussed above, as well as the settlement or
extinguishment of all other remaining liabilities subject to compromise pursuant to the Plans
of Reorganization. The disposition of the Predecessor Companys liabilities subject to
compromise is summarized as follows:
(a)
As discussed in Note 3, Creditor Protection Proceedings, the majority of
holders of allowed unsecured claims received their pro rata share of Successor Company
common stock on account of their claims, whereas the majority of holders of disputed
unsecured claims will receive their pro rata share of common stock from the shares we have
reserved for their benefit as and if their claims are allowed or accepted.
(b)
As discussed in Note 3, Creditor Protection Proceedings, except for certain
specific claims, the outstanding general unsecured claims will be satisfied by the future
distribution of shares of common stock from the reserve discussed above. For claims
expected to be settled in cash, the Consolidated Balance Sheet of the Successor Company
includes a total liability of approximately $35 million as of December 31, 2010 (of which
$23 million was included in the Predecessor Company) for the fair value of the estimated
cash settlement of such claims.
(16)
Reflects the cancellation of the Predecessor Companys common stock and
exchangeable shares, as well as the issuance of common stock of the Successor Company, which
has an equity value of $3,709 million and was determined as follows:
(a)
The excess of the allocated values of assets and liabilities over the
reorganization value arises principally from the accounting for deferred income taxes and
pension and OPEB projected benefit obligations, where the amounts determined for these
items based on their respective accounting standards exceed their respective fair values
included in the enterprise valuation.
Table of Contents
Notes to Consolidated Financial Statements
(17)
Reflects the following items, all of which were included in Reorganization items,
net or Income tax benefit in our Consolidated Statements of Operations for the year ended
December 31, 2010:
(a)
Represents professional fees that were contractually due to certain
professionals as success fees upon our emergence from the Creditor Protection Proceedings
and were recorded as part of the effects of implementing the Plans of Reorganization.
(18)
Reflects the following adjustments to the carrying value of assets and liabilities
to reflect their estimated values based on the respective valuation methods discussed above:
(19)
The following table summarizes the reconciliation of the enterprise equity value to
the reorganization value, the allocation of the reorganization value to our assets and
liabilities based on the value determined pursuant to FASB ASC 805 and the resulting
adjustment to goodwill:
(20)
Reflects an increase to our investments in unconsolidated joint ventures of $32
million to reflect fair value and the write-off of deferred financing costs associated with
the Senior Secured Notes due 2018 of $27 million.
Table of Contents
Notes to Consolidated Financial Statements
(21)
The net adjustments to additional paid-in capital, deficit and accumulated other
comprehensive loss include: (i) the adjustments required to state assets and liabilities at
fair value, which resulted in a loss of $362 million that was included in Reorganization
items, net in our Consolidated Statements of Operations for the year ended December 31, 2010
and (ii) the elimination of the Predecessor Companys additional paid-in capital, accumulated
other comprehensive loss and deficit pursuant to fresh start accounting.
(22)
Reflects the net effect of the adjustments to the fair value of assets and
liabilities related to our noncontrolling interests.
(23)
As of December 31, 2010, we held for sale various mills and other assets, including
our investment in ACH. Accordingly, in order to reflect the related assets and liabilities as
held for sale in the Successor Companys Consolidated Balance Sheet as of December 31, 2010,
the reclassification of such assets and liabilities to Assets held for sale and Liabilities
associated with assets held for sale are included in this column. Since we have control over
ACH, our consolidated financial statements include this entity on a fully consolidated basis.
(In millions)
$
9
280
$
289
Predecessor
(In millions)
2010
2009
$
154
$
106
(3,553
)
362
121
225
307
242
(70
)
666
546
(447
)
(26
)
(16
)
10
31
45
35
$
(1,901
)
$
639
(1)
Professional fees directly related to the Creditor Protection Proceedings and the establishment of the Plans of Reorganization, including legal, accounting and
other professional fees, as well as professional fees incurred by our creditors. Additionally,
pursuant to the Plans of Reorganization, as part of our exit financing, we had initially
planned to conduct a rights offering for the issuance of convertible senior subordinated notes
to holders of eligible unsecured claims. With the approval of the Courts, we entered into a
backstop commitment agreement that provided for the purchase by certain investors of the
convertible notes to the extent that the rights offering would have been under-subscribed. On
September 21, 2010, we announced that we had elected not to pursue the rights offering. In
2010, we recorded the backstop commitment agreement termination fee of $15 million, which was paid on the
Emergence Date. One of the parties to the backstop commitment agreement was Fairfax Financial
Holdings Limited (Fairfax). See
Table of Contents
Notes to Consolidated Financial Statements
Fresh Start Accounting section above for additional
professional fees included in Plans of Reorganization adjustments.
(2)
See Fresh Start Accounting section above.
(3)
Provision for repudiated or rejected executory contracts represents provision for
estimated claims arising from repudiated or rejected executory contracts, primarily Abitibis
guarantee of BPCLs obligation under an agreement with NPower Cogen Limited, as well as supply
contracts and equipment leases. See Note 3, Creditor Protection Proceedings Events prior to
emergence from Creditor Protection Proceedings, for additional information.
(4)
In 2010, represents charges primarily for accelerated depreciation and other charges
related to: (i) the indefinite idling of our Saint-Fulgence, Quebec and Petit Saguenay, Quebec
sawmills; (ii) the indefinite idling of our Gatineau, Quebec paper mill (for which we
announced its permanent closure later in the year); (iii) the indefinite idling of a de-inking
line and paper machine at our Thorold, Ontario paper mill, (iv) the permanent closure of a
paper machine at our Coosa Pines, Alabama paper mill and a paper machine at our Thorold paper
mill and (iv) an impairment charge related to our Lufkin, Texas paper mill to reduce the
carrying value of the assets to their estimated fair value prior to the sale of these assets.
In 2009, represents charges related to the indefinite idling of various paper mills and paper
machines located in Canada, as well as the permanent closure of a sawmill in the United States
and a chipping operation in Quebec, Canada. The fair value of all impaired assets was
determined based on their estimated sale or salvage values. All of these actions were
initiated subsequent to the commencement of the Creditor Protection Proceedings as part of our
work towards a comprehensive restructuring plan. Accordingly, these charges were included in
Reorganization items, net. Such charges for the years ended December 31, 2010 and 2009 were
comprised of the following:
Predecessor
(In millions)
2010
2009
$
251
$
51
10
130
29
32
17
17
12
$
307
$
242
(5)
Represents the gains on disposition of various mills and other assets as part of our
work towards a comprehensive restructuring plan, including the write-off of related asset
retirement obligations. Such gains for the year ended December 31, 2010 included our
Mackenzie, British Columbia paper mill and sawmills, four previously permanently closed paper
mills that were bundled and sold together, our Westover, Alabama sawmill, our recycling
divisions material recycling facilities located in Arlington, Houston and San Antonio, Texas,
our Albertville, Alabama sawmill, our Covington, Tennessee paper mill and various other
assets, all of which we sold for proceeds of approximately
$80 million.
(6)
FASB ASC 852 requires that debt discounts and premiums, as well as debt issuance
costs, be viewed as part of the valuation of the related pre-petition debt in arriving at the
net carrying amount of the debt. When the debt becomes an allowed claim and the allowed claim
differs from the net carrying amount of the debt, the recorded debt obligations should be adjusted to
the amount of the allowed claim. In 2010, pursuant to the Courts approval of the respective
Plan of Reorganization (which included the approval of allowed debt claims), we adjusted the
net carrying amount of the Debtors debt obligations to the allowed amount of the claims,
which resulted in a write-off of the unamortized balance of debt discounts, premiums and
issuance costs.
(7)
For purposes of determining the amounts of allowed unsecured claims, claims filed
against a CCAA filer or Chapter 11 filer denominated in a currency other than the local
currency are to be translated to Canadian dollars and U.S. dollars, respectively, using the
exchange rate in effect as of the date of the commencement of the Creditor Protection
Proceedings for all Chapter 11 claims and for CCAA claims that existed as of the filing date,
or the exchange rate in effect as of the date of the notice or event that gave rise to the
claim for CCAA claims that arose after the filing date (the fixed exchange rate). The
majority of our CCAA filers pre-petition unsecured debt obligations were denominated in U.S.
dollars. As noted above, when the debt becomes an allowed claim and the allowed claim differs
from the net carrying amount of the debt, the recorded debt obligations should be adjusted to the amount
of the allowed claim. In 2010, pursuant to the Canadian Courts sanction of the CCAA
Reorganization Plan (which included the approval of allowed debt claims), we adjusted the CCAA
filers pre-petition unsecured debt obligations to the allowed amount of the claims, which
resulted in a revaluation to reflect the impact of the fixed exchange rate.
(8)
We had recorded post-petition accrued interest on the CCAA filers pre-petition
unsecured debt obligations based on the expectation that such accrued interest would be a
permitted claim under the CCAA Proceedings. However, pursuant to the CCAA Reorganization Plan
sanctioned by the Canadian Court, the CCAA filers pre-petition unsecured debt
Table of Contents
Notes to Consolidated Financial Statements
obligations did
not include the amount of such post-petition accrued interest for distribution purposes and
therefore, such accrued interest was then accounted for as not having been approved as a
permitted claim. Accordingly, in the third quarter of 2010, we reversed such post-petition
accrued interest as a Reorganization item and ceased accruing interest on the CCAA filers
pre-petition unsecured debt obligations.
(9)
As discussed in Note 1, Organization and Basis of Presentation Bridgewater
Administration, we are no longer consolidating BPCL in our consolidated financial statements.
At the time of the BPCL Administration filing, we had a negative basis in our investment in
BPCL. Upon the deconsolidation of BPCL, we derecognized our negative investment, which
resulted in a gain.
(10)
During the second quarter of 2010, a subsidiary that was a VIE that we had been
consolidating was placed into receivership. As a result, we lost control over and the ability
to influence this VIEs operations and are no longer the primary beneficiary of this VIE.
Therefore, we are no longer consolidating this VIE in our consolidated financial statements.
At such date, we had a negative basis in our investment in this VIE. Upon the deconsolidation
of this VIE, we derecognized our negative investment, which resulted in a gain of $16 million.
Additionally, in the fourth quarter of 2010, we transferred assets and liabilities associated
with certain Canadian properties to this VIE. Upon the transfer of these properties to this
VIE and the assumption of the associated liabilities by this VIE, we lost control of the
assets transferred and were no longer primarily responsible for the liabilities transferred
and therefore deconsolidated these properties, which resulted in a
gain on disposition of assets of approximately $2
million.
(11)
Debtor in possession financing costs were recorded in 2010 in connection with: (i)
the May 5, 2010 extension, the July 15, 2010 amendment, the October 15, 2010 extension and for
the exit fee related to the Bowater DIP Agreement (as defined in Note 17, Liquidity and
Debt) and (ii) the June 11, 2010 amendment to the Abitibi and Donohue second amended and
restated accounts receivable securitization program. Debtor in possession financing costs were
incurred in 2009 in connection with entering into: (i) the Bowater DIP Agreement, (ii) the
debtor in possession financial facility for the benefit of Abitibi and Donohue, which was
terminated on
December 9,
2009, and
(iii) the Abitibi and Donohue second amended and restated
accounts receivable securitization program. For additional information, see Note 17,
Liquidity and Debt.
(12)
For the year ended December 31, 2010, Other primarily included: (i) the write-off of
environmental liabilities related to our Newfoundland and Labrador properties that were
expropriated and for which no claim was filed against us in the Creditor Protection Proceedings; (ii) environmental charges related to our
estimated liability for an environmental claim filed against us by the current owner of a site
previously owned by Abitibi; (iii) employee termination charges resulting from our work
towards a comprehensive restructuring plan related to a workforce reduction at our Catawba,
South Carolina paper mill and the departure of our former Chief Executive Officer and (iv)
additional claim amounts recorded as a result of the claims reconciliation process. For the
year ended December 31, 2009, Other included: (i) charges of $14 million for reserves for
certain pre-petition receivables and (ii) impairment charges of $21 million to reduce our
retained interest in three QSPEs to zero (for further information, reference is made to Note
18, Monetization of Timber Notes). Other for both periods also included interest income,
which was $3 million and less than $1 million for the years ended December 31, 2010 and 2009,
respectively.
Table of Contents
Notes to Consolidated Financial Statements
Predecessor
(In millions)
2009
$
4,852
385
463
791
228
8
$
6,727
Coated
(In millions)
Papers
Total
$
53
$
53
53
53
(53
)
(53
)
$
$
(1)
See Note 4, Creditor Protection Proceedings Related Disclosures Fresh start
accounting, for a discussion of the adjustment to goodwill arising from fresh start
accounting.
Table of Contents
Notes to Consolidated Financial Statements
2010 (Successor)
2009 (Predecessor)
Estimated
Gross
Estimated
Gross
Life
Carrying
Accumulated
Life
Carrying
Accumulated
(Dollars in millions)
(Years)
Value
Amortization
Net
(Years)
Value
Amortization
Net
40
$
19
$
$
19
15 40
$
436
$
27
$
409
20
73
9
64
$
19
$
$
19
$
509
$
36
$
473
Predecessor
(In millions)
2010
2009
2008
$
2
$
87
$
247
21
84
181
8
10
1
10
43
$
11
$
202
$
481
Table of Contents
Notes to Consolidated Financial Statements
Table of Contents
Notes to Consolidated Financial Statements
Successor
Predecessor
(In millions)
2010
2009
$
10
$
4
1
149
52
528
6
$
698
$
52
Successor
Predecessor
(In millions)
2010
2009
$
9
$
35
280
$
289
$
35
Table of Contents
Notes to Consolidated Financial Statements
Predecessor
(In millions)
2010
2009
2008
$
(94
)
$
(59
)
$
72
(23
)
(3
)
(9
)
1
1
10
31
(17
)
(20
)
7
37
(1
)
$
(89
)
$
(71
)
$
93
(1)
As consideration for entering into certain waivers and amendments to our former
accounts receivable securitization program, we incurred fees of $23 million in 2009 prior to
the commencement of the Creditor Protection Proceedings.
(2)
During the Creditor Protection Proceedings, we recorded our Debtors interest income in
Reorganization items, net in our Consolidated Statements of Operations.
(3)
Miscellaneous income (loss) in 2009 included approximately $24 million of income,
net from a subsidiarys proceeds sharing arrangement related to a third partys sale of
timberlands. The related proceeds were deposited in trust with the Monitor during the Creditor
Protection Proceedings and were released upon our emergence from the Creditor Protection
Proceedings (see Note 12, Restricted Cash).
Unamortized
Unamortized
Foreign
Prior Service
Actuarial
Currency
(In millions)
(Costs) Credits
(1)
(Losses) Gains
(2)
Translation
(3)(4)
Total
$
(24
)
$
(432
)
$
6
$
(450
)
8
(598
)
20
(570
)
20
24
44
(4
)
1,006
(26
)
976
$
$
$
$
(1)
As of December 31, 2009, net of deferred tax provision of $16 million and
net of noncontrolling interests of $2 million of net income.
(2)
As of December 31, 2009, net of deferred tax benefit of $64 million and
net of noncontrolling interests of $6 million of net losses.
(3)
No tax effect was recorded for foreign currency translation since the
investment in foreign net assets translated is deemed indefinitely invested. Net of
noncontrolling interests of zero as of December 31, 2009.
(4)
Accumulated other comprehensive loss as of December 31, 2009 is net of
$91 million that was transferred and included in Closure costs, impairment of assets other
than goodwill and other related charges in our Consolidated Statements of
Operations for the year ended December 31, 2009 as a result of the sale of our interest in MPCo.
(5)
Plans of Reorganization adjustments were a result of changes made to our
defined benefit pension plans, which became effective upon
Table of Contents
Notes to Consolidated Financial Statements
our emergence from the Creditor Protection
Proceedings. See Note 20, Pension and Other Postretirement Benefit Plans, for additional
information. The adjustments to unamortized prior service costs and unamortized
actuarial losses are net of tax of $6 million and $7 million, respectively.
(6)
In connection with the application of fresh start accounting, Accumulated
other comprehensive loss was eliminated. For additional information, see Note 4, Creditor
Protection Proceedings Related Disclosures
-
Fresh start accounting.
Predecessor
2010
2009
2008
Before-
After-
Before-
Before-
After-
tax
tax
tax
After-tax
tax
Tax
tax
(In millions)
Amount
Taxes
Amount
Amount
Taxes
Amount
Amount
Provision
Amount
$
8
$
$
8
$
$
$
$
$
$
(15
)
(15
)
(6
)
(3
)
(9
)
8
8
(15
)
(15
)
(6
)
(3
)
(9
)
(606
)
(606
)
(176
)
(176
)
(118
)
(3
)
(121
)
8
8
(598
)
(598
)
(176
)
(176
)
(118
)
(3
)
(121
)
$
(590
)
$
$
(590
)
$
(191
)
$
$
(191
)
$
(124
)
$
(6
)
$
(130
)
Predecessor
(In millions)
2010
2009
2008
57.7
57.7
57.6
36.9
94.6
57.7
57.6
Table of Contents
Notes to Consolidated Financial Statements
Successor
Predecessor
(In millions)
2010
2009
$
136
$
124
184
199
118
271
438
594
(13
)
$
438
$
581
Successor
Predecessor
(In millions)
2010
2009
$
80
$
49
48
27
11
3
$
80
$
138
(1)
These proceeds were held either in trust with the Monitor, in escrow or in a
designated account and were released upon our emergence from the Creditor Protection Proceedings.
(2)
Represents cash restricted for capital expenditures, as well as reserves required
under the partnerships credit agreement.
As of December 31, 2010, this restricted cash was classified in Assets held for sale in our
Consolidated Balance Sheets. See Note 7, Assets Held for Sale, Liabilities Associated with
Assets Held for Sale and Net Gain on Disposition of Assets and Other.
Table of Contents
Notes to Consolidated Financial Statements
Successor
Predecessor
Range of Estimated
Range of Estimated
Useful Lives in
Useful Lives in
(Dollars in millions)
Years
2010
Years
2009
10 20
$
72
10 20
$
140
11 24
280
20 40
546
3 20
1,853
5 20
7,851
40
283
40
372
100
88
53
49
49
2,641
9,095
(5,198
)
$
2,641
$
3,897
(1)
As of December 31, 2009, included $6 million of accumulated amortization on the capital lease.
Successor
Predecessor
(In millions)
2010
2009
$
271
$
249
99
95
21
15
35
47
36
40
35
71
16
$
568
$
462
Table of Contents
Notes to Consolidated Financial Statements
2010
2009
2008
2007
(In millions)
Initiatives
Initiatives
Initiatives
Initiatives
Total
$
$
$
34
$
21
$
55
45
(5
)
(3
)
37
(3
)
(5
)
(4
)
(12
)
1
3
3
7
43
27
17
87
24
5
(4
)
25
(22
)
(48
)
(29
)
(12
)
(111
)
2
(1
)
1
$
2
$
$
$
$
2
Table of Contents
Notes to Consolidated Financial Statements
Predecessor
(In millions)
2010
2009
$
55
$
48
5
4
2
1
(20
)
(20
)
(1
)
(2
)
(3
)
(3
)
(1
)
7
$
17
$
55
Table of Contents
Notes to Consolidated Financial Statements
all amounts outstanding under the Bowater DIP Agreement were paid in full in cash and
the facility was terminated;
all amounts outstanding under the ULC DIP Facility were paid in full and the facility
was terminated;
all outstanding receivable interests sold under the Abitibi and Donohue accounts
receivable securitization program were repurchased in cash for a price equal to the par
amount thereof and the program was terminated;
all amounts outstanding under our pre-petition secured financing agreements, including
the Bowater secured bank credit facilities, the ACCC senior secured term loan, the ACCC
13.75% Senior Secured Notes due 2011 and the Bowater floating rate industrial revenue bonds
due 2029, were paid in full in cash, including accrued interest, and the agreements were
terminated;
holders of allowed debt claims relating to the Debtors pre-petition unsecured
indebtedness were allocated shares of the Successor Companys common stock on account of
their claims;
we assumed by merger the obligations of ABI Escrow Corporation with respect to $850
million in aggregate principal amount of 10.25% senior secured notes due 2018 (the 2018
Notes or notes), as discussed below; and
we entered into a senior secured asset-based revolving credit facility in an amount of
$600 million (the ABL Credit Facility), as discussed below.
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Notes to Consolidated Financial Statements
Successor
Predecessor
(In millions)
2010
2009
$
$
333
347
$
$
680
(1)
As of the Emergence Date and pursuant to the Plans of Reorganization,
any amount outstanding was paid in full in cash, including accrued interest, and the
facilities, including the agreements governing the obligations and all other related
agreements, supplements and amendments, were canceled and terminated.
(2)
As of December 31, 2009, the weighted average interest rate was 8.0%.
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Notes to Consolidated Financial Statements
Successor
Predecessor
(In millions)
2010
2009
$
905
$
8
371
241
176
176
8
277
364
239
76
172
182
334
300
248
234
76
600
125
399
141
30
199
62
40
21
4
5
4
3
34
277
905
5,426
39
905
5,465
(305
)
(4,852
)
$
905
$
308
(1)
As of December 31, 2010, the unamortized premium totaled $55 million,
resulting in an effective interest rate of 9.4%.
(2)
As of the Emergence Date and pursuant to the Plans of Reorganization,
any amount outstanding was compromised and settled in shares of the Successor Companys
common stock, all obligations of the Debtors thereunder were discharged and the agreements
governing the obligations, including all other related agreements, supplements, amendments
and arrangements, were canceled and terminated.
(3)
As of December 31, 2009, this debt, which is an obligation of ACH, was
classified in Long-term debt, net of current
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Notes to Consolidated Financial Statements
portion in our Consolidated Balance Sheets. As of December 31, 2010, this debt was classified
in Liabilities associated with assets held for sale in our Consolidated Balance Sheets. See
Note 7, Assets Held for Sale, Liabilities Associated with Assets Held for Sale and Net Gain on
Disposition of Assets and Other.
(4)
As of the Emergence Date and pursuant to the Plans of Reorganization,
any amount outstanding was paid in full in cash, including accrued interest, and the
facilities, including the agreements governing the obligations and all other related
agreements, supplements and amendments, were canceled and terminated.
(5)
As of December 31, 2009, we had a capital lease obligation related to a
building and equipment lease for our BPCL cogeneration facility. As discussed in Note 1,
Organization and Basis of Presentation Bridgewater Administration, we are no longer
consolidating BPCL in our consolidated financial statements.
(6)
As of December 31, 2009, the current portion of long-term debt was
comprised of ACCCs 13.75% Senior Secured Notes due 2011 of $300 million and the current portion of the capital
lease obligation of $5 million.
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Notes to Consolidated Financial Statements
The borrowing base availability of each borrower is subject to certain reserves, which are
established by the agent in its discretion.
The reserves may include dilution reserves, inventory
reserves, rent reserves and any other reserves that the agent
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Notes to Consolidated Financial Statements
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Notes to Consolidated Financial Statements
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Notes to Consolidated Financial Statements
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Notes to Consolidated Financial Statements
$267 million was set aside temporarily in the ULC to secure certain indemnities and
undertakings provided to Alcoa under the MPCo Transactions, and the ULC entered into a
guarantee agreement with Alcoa for this purpose. Of the $267 million set aside in the ULC,
$218 million was used by the ULC to fund the ULC DIP Facility;
$55 million was used to repay all amounts outstanding under the Abitibi DIP Agreement,
$26 million of which was paid from the proceeds of the ULC DIP Facility;
$113 million was used as a partial repayment of ACCCs 13.75% Senior Secured Notes due
2011, $72 million was used to pay accrued interest on such notes and $5 million was used to
cover fees related to the partial repayment of such notes;
approximately $67 million was used to pay Alcoa in respect of taxes that it incurred as
a result of the MPCo Transactions, as well as ACCCs estimated transaction costs,
pre-petition amounts owed to the distribution division of Hydro-Quebec by ACCC and its
affiliates, including amounts owed by BCFPI, and pre-petition amounts owed to MPCo and
Alcoa for electricity purchased by ACCC from MPCo and to make certain other adjustments
contemplated by the MPCo Transactions; and
approximately $29 million is subject to a two-year holdback by HQ Manicouagan Inc. (and
guaranteed by Hydro-Quebec) and was included in Other assets in our Consolidated Balance
Sheets as of December 31, 2010 and 2009.
A private placement by ACCC of $413 million of 13.75% Senior Secured Notes due April 1,
2011. As discussed above, during 2009, ACCC repaid $113 million of these notes with a
portion of the proceeds from the sale of our interest in MPCo, which reduced the
outstanding balance to $300 million.
A $400 million 364-day senior secured term loan due March 30, 2009 (Term Loan), with
interest at LIBOR plus 800 basis points, with a 3.5% LIBOR floor. During 2008, ACCC repaid
$53 million of the Term Loan, which reduced the outstanding balance to $347 million.
The private exchange of a combination of $293 million principal amount of new senior
unsecured 15.5% notes due July 15, 2010 of ACCC and $218 million in cash for an aggregate
of $455 million of outstanding notes issued by Abitibi, ACCC and Abitibi-Consolidated
Finance L.P., a wholly-owned subsidiary of Abitibi. The exchange resulted in a debt
extinguishment gain of $31 million in 2008, which is included in Other (expense) income,
net in our Consolidated Statements of Operations. This exchange represented a 2008
non-cash financing item of $211 million.
Simultaneously with these transactions, AbitibiBowater Inc. consummated a private sale
of $350 million of 8% convertible notes due April 15, 2013 (Convertible Notes) to Fairfax
and certain of its designated subsidiaries. The Convertible Notes bore interest at a rate
of 8% per annum (10% per annum if we elected to pay interest through the issuance of
additional convertible notes with the same terms as pay in kind). The Convertible Notes
were
convertible into shares of our common stock at a conversion price of $10.00 per share (the
Conversion Price). Since the closing price of our common stock on the issuance date (also
the commitment date) of the Convertible Notes exceeded the Conversion Price by $3.00 per
share, the Convertible Notes included a beneficial conversion feature. In accordance with
FASB ASC 505, Equity, we recorded a discount on the Convertible Notes and an increase in
additional paid-in capital of $105 million representing the fair value of the beneficial
conversion feature. We paid $20 million of fees associated with the issuance of the
Convertible Notes, of which $6 million were allocated to the beneficial conversion feature
and were recorded directly to additional paid-in capital. On October
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Notes to Consolidated Financial Statements
15, 2008, we elected to
make the interest payment due on that date through the issuance of additional convertible
notes. As a result, the balance as of December 31, 2009 of the Convertible Notes outstanding
was $369 million.
Abitibis former bank credit facility was repaid and cancelled.
The QSPEs are not consolidated within our financial statements. The business purpose of
the QSPEs is to hold the notes receivable and issue fixed and floating rate senior notes,
which are secured by the notes receivable, to third parties. The value of these debt
securities is equal to approximately 90% of the value of the notes receivable. The full
principal amounts of the notes receivable are backed by letters of credit issued by
third-party financial institutions.
Our retained interest consists principally of the net excess cash flows (the difference
between the interest received on the notes receivable and the interest paid on the debt
issued by the QSPE to third parties) and a cash reserve account. Fair value of our retained
interests was estimated based on the present value of future excess cash flows to be
received over the life of the notes, using managements best estimate of key assumptions,
including credit risk and discount rates. Our retained interest is recorded at a
proportional amount of the previous carrying amount of the notes receivable and treated as
interest-bearing investments.
The cash reserve accounts were established at inception and are required to meet
specified minimum levels throughout the life of the debt issued by the QSPEs to third-party
investors. Any excess cash flows revert to us on a quarterly or semi-annual basis. The
balance of the cash reserve accounts, if any, reverts to us at the maturity date of the
third-party debt.
With respect to Calhoun Note Holdings AT LLC and Calhoun Note Holdings TI LLC, we may be
required to make capital contributions to these QSPEs from time to time in sufficient
amounts so that these QSPEs will be able to comply with their covenants regarding the
payment of taxes, maintenance as entities in good standing, transaction fees, contractual
indemnification of the collateral agent and certain other parties, and the maintenance of
specified minimum amounts in the cash reserve account. Notwithstanding these covenants,
because of the expected net available cash flow to these QSPEs (interest and principal on
notes receivable backed by letters of credit will be in excess of interest and principal on
debt securities), we do not expect to be required to make additional capital contributions,
nor have any capital contributions been required to date.
No QSPEs are permitted to hold our common stock and there are no commitments or
guarantees that provide for the potential issuance of our common stock. These entities do
not engage in speculative activities of any description and are not used to hedge
AbitibiBowater positions, and no AbitibiBowater employee is permitted to invest in any
QSPE.
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Notes to Consolidated Financial Statements
Successor
Predecessor
(In millions)
2010
2009
$
8
$
7
11
11
$
19
$
18
In order to determine the fair value of the forward contracts component, the changes in
the standing charge that resulted from changes in the indices were bifurcated and accounted
for separately from the minimum lease payments portion of the standing charge. The indices
were priced as index forward contracts and future cash flows based on these indices, a
portion of which was not observable, were projected over the remaining term of the
contract, after deduction for the minimum lease payments. The present value of the future
payments on this embedded derivative component were then determined.
In calculating the fair value of the call option component, we considered the
termination charge mechanism as a cap on the fair value of the various components of the
contract (embedded derivative and the capital lease obligation), thus in essence a call
option (which was considered in-the-money) to terminate the contract for a determinable
(i.e. strike) price. As such, the termination charge was considered a series of call
options with strike prices that changed over time subject to a pre-determined contractual
schedule. The fair value of the option was calculated by taking into account the difference
between the total fair value of the contract obligation and the termination charge.
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Notes to Consolidated Financial Statements
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Notes to Consolidated Financial Statements
Predecessor
Pension Plans
OPEB Plans
(In millions)
2010
2009
2010
2009
$
5,665
$
4,659
$
382
$
361
41
40
4
3
350
346
23
24
649
451
29
21
24
5
4
(8
)
(22
)
(4
)
(16
)
(68
)
(2
)
(98
)
(92
)
(461
)
(416
)
(31
)
(29
)
265
629
8
21
6,302
5,665
408
382
5,241
4,270
458
644
50
158
26
25
21
24
5
4
(14
)
(41
)
(43
)
(67
)
(461
)
(416
)
(31
)
(29
)
237
602
5,422
5,241
$
(880
)
$
(424
)
$
(408
)
$
(382
)
$
19
$
121
$
$
(7
)
(19
)
(28
)
(28
)
(892
)
(54
)
(380
)
(35
)
(472
)
(319
)
$
(880
)
$
(424
)
$
(408
)
$
(382
)
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Notes to Consolidated Financial Statements
Predecessor
Pension Plans
OPEB Plans
(In millions)
2010
2009
2008
2010
2009
2008
$
41
$
40
$
71
$
4
$
3
$
3
350
346
340
23
24
23
(365
)
(370
)
(385
)
3
3
3
(7
)
(10
)
(11
)
4
(7
)
7
3
4
6
(19
)
(4
)
11
(5
)
2
$
14
$
8
$
47
$
23
$
16
$
23
Predecessor
Pension Plans
OPEB Plans
(In millions)
2010
2009
2008
2010
2009
2008
$
1
$
2
$
1
$
$
$
4
(6
)
4
(5
)
5
2
1
(24
)
$
(19
)
$
(4
)
$
11
$
$
(5
)
$
2
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Notes to Consolidated Financial Statements
Pension Plans
OPEB Plans
2010
2009
2008
2010
2009
2008
5.5
%
6.4
%
7.3
%
5.6
%
6.3
%
7.0
%
0.9
%
2.3
%
3.0
%
2.3
%
2.9
%
3.0
%
6.4
%
7.3
%
5.8
%
6.3
%
7.0
%
6.1
%
6.8
%
7.3
%
7.2
%
2.3
%
3.0
%
2.5
%
2.9
%
3.0
%
3.0
%
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Notes to Consolidated Financial Statements
2010
2009
Domestic
Foreign
Domestic
Foreign
Plans
Plans
Plans
Plans
7.2
%
4.5
%
7.2
%
6.5
%
4.5
%
2.9
%
4.5
%
3.8
%
2028
2031
2028
2014
1% Increase
1% Decrease
(Dollars in millions)
Domestic Plans
Foreign Plans
Domestic Plans
Foreign Plans
$
36
15
%
$
7
4
%
$
(29
)
(12
)%
$
(7
)
(4
)%
$
3
16
%
$
1
6
%
$
(2
)
(13
)%
$
(1
)
(6
)%
Successor
(In millions)
Total
Level 1
Level 2
Level 3
$
978
$
946
$
32
$
1,093
775
318
2,861
87
2,774
114
114
44
44
42
42
242
242
48
48
$
5,422
$
2,050
$
3,286
$
86
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Notes to Consolidated Financial Statements
Predecessor
(In millions)
Total
Level 1
Level 2
Level 3
$
1,248
$
1,219
$
29
$
1,163
496
667
2,296
45
2,251
154
154
5
5
37
37
296
296
42
42
$
5,241
$
2,056
$
3,143
$
42
Bank Loans/
Foreign
(In millions)
Annuities
Real Estate
Total
$
3
$
41
$
44
(2
)
(2
)
2
(2
)
5
37
42
5
5
39
39
$
44
$
42
$
86
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Notes to Consolidated Financial Statements
Expected
Pension
OPEB
Subsidy
(In millions)
Plans
Plans
Receipts
$
594
$
30
$
2
447
29
2
424
29
2
441
29
2
433
30
2
2,224
155
15
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Notes to Consolidated Financial Statements
not pay a dividend at any time when the weighted average solvency ratio of its pension
plans in Quebec or Ontario is less than 80%;
abide by the compensation plan detailed in the Plans of Reorganization with respect to
salaries, bonuses and severance;
direct at least 60% of the maintenance and value-creation investments earmarked for our
Canadian pulp and paper operations to projects in Quebec and at least 30% to projects in
Ontario;
invest a minimum of Cdn$50 million over a two to three year construction period for a
new condensing turbine at our Thunder Bay facility, subject to certain conditions;
invest at least Cdn$75 million in strategic projects in Quebec over a five-year period;
maintain our head office and the current related functions in Quebec;
make an additional solvency deficit reduction contribution to its pension plans of
Cdn$75, payable over four years, for each metric ton of capacity reduced in Quebec or
Ontario, in the event of downtime of more than six consecutive months or nine cumulative
months over a period of 18 months;
create a diversification fund by contributing Cdn$2 million per year for five years for
the benefit of the municipalities and workers in our Quebec operating regions;
pay an aggregate of Cdn$5 million over five years to be used for such environmental
remediation purposes instructed by the province of Ontario; and
maintain and renew certain financial assurances with the province of Ontario in respect
of certain properties in the province.
Predecessor
(In millions)
2010
2009
2008
$
(1,039
)
$
(421
)
$
(118
)
2,208
(1,261
)
(1,925
)
$
1,169
$
(1,682
)
$
(2,043
)
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Notes to Consolidated Financial Statements
Predecessor
(In millions)
2010
2009
2008
$
$
$
400
(1
)
(32
)
400
(1
)
(32
)
(1
)
70
1
70
1,136
123
124
1,136
123
124
(1
)
1,606
122
93
$
1,606
$
122
$
92
Predecessor
(In millions)
2010
2009
2008
$
1,169
$
(1,682
)
$
(2,043
)
(409
)
588
715
1,166
(615
)
(331
)
1,043
(107
)
308
45
(6
)
(251
)
9
(230
)
313
2
12
2
(72
)
30
(323
)
(26
)
(16
)
(27
)
$
1,606
$
122
$
92
(1)
See Deferred income taxes section below for a discussion of the
valuation allowance.
(2)
Subsequent to the commencement of Abitibis CCAA Proceedings, in 2009, we
concluded that our investment in the common stock of Abitibi no longer had any value and
therefore, we recorded a $308 million tax benefit for a worthless stock deduction, which
represented the estimated tax basis in our investment in Abitibi of approximately $800
million.
(3)
We recorded goodwill impairment charges of $810 million during the year
ended December 31, 2008. No tax benefits were provided by these charges.
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Notes to Consolidated Financial Statements
Successor
Predecessor
(In millions)
2010
2009
$
$
(119
)
(31
)
(37
)
(98
)
(4
)
6
(72
)
(211
)
71
89
416
139
317
264
234
220
252
598
968
371
(474
)
(1,552
)
1,783
130
$
1,711
$
(81
)
Successor
(Dollars in millions)
Total
Expiration
$
1,382
2029
354
2014
2030
573
2014
2030
3,291
Indefinite
936
Indefinite
474
2019
2029
1,210
2014
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Notes to Consolidated Financial Statements
Predecessor
(In millions)
2010
2009
$
206
$
138
2
(17
)
42
105
(25
)
(1
)
15
(58
)
(10
)
$
191
$
206
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Notes to Consolidated Financial Statements
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Notes to Consolidated Financial Statements
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Notes to Consolidated Financial Statements
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Notes to Consolidated Financial Statements
Predecessor
(In millions)
2010
2009
$
27
$
18
33
11
(2
)
(2
)
(38
)
(15
)
2
(2
)
(3
)
2
$
4
$
27
and Debt Debt Financings during Creditor Protection Proceedings ULC DIP
Facility, the ULC maintained a reserve of approximately Cdn $80 million ($80 million, based on the exchange rate in
effect on December 31, 2010) and Cdn $52 million ($49 million, based on the exchange rate in effect on December 31,
2009) as of December 31, 2010 and 2009, respectively, to secure those obligations. This reserve was included as restricted
cash in Other assets in our Consolidated Balance Sheets as of December 31, 2010 and 2009. As discussed in Note 6,
Closure Costs, Impairment of Assets Other than Goodwill and Other Related Charges, in 2010, we recorded an $8
million tax indemnification liability, which will be paid from this reserve in 2011. We believe it is unlikely that we will be
required to make additional material payments pursuant to our undertakings and indemnities and therefore have recorded no
additional liability as of December 31, 2010.
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Notes to Consolidated Financial Statements
Timberland
Purchase
Operating
(In millions)
Leases
Obligations
(1)
Leases, Net
$
$
20
$
8
19
5
16
3
13
2
11
1
2
170
7
$
2
$
249
26
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Notes to Consolidated Financial Statements
(1)
Purchase obligations include, among other things, a bridge and railroad contract for
our Fort Frances, Ontario operations with commitments totaling $136 million through 2044.
(1)
For the years ended December 31, 2010, 2009 and 2008, market pulp sales excluded
inter-segment sales of $22 million, $17 million and $20 million, respectively.
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Notes to Consolidated Financial Statements
(2)
Corporate and Other operating loss for the years ended December 31, 2010, 2009 and
2008 included the following special items:
Predecessor
(In millions)
2010
2009
2008
$
30
$
91
$
49
(11
)
(202
)
(481
)
(17
)
(30
)
(2
)
(43
)
16
(10
)
(810
)
$
19
$
(124
)
$
(1,315
)
(3)
For the year ended December 31, 2009, operating (loss) income for newsprint,
coated papers, specialty papers and market pulp included $15 million, $62 million, $34 million
and $165 million, respectively, for the alternative fuel mixture tax credits. Reference is
made to Note 25, Alternative Fuel Mixture Tax Credits, for additional information.
(4)
The decrease in assets in 2010 compared to 2009 was primarily due to the revaluation
of assets to fair value as a result of the application of fresh start accounting, the sale of
assets and a decrease in cash and cash equivalents as of December 31, 2010. The decrease in
assets in 2009 compared to 2008 relates primarily to planned reductions in inventory levels,
the sale of assets and the impairments of long-lived assets and asset held for sale, partially
offset by an increase in cash and cash equivalents.
Predecessor
(In millions)
2010
2009
2008
$
2,775
$
2,852
$
4,583
703
508
559
166
93
141
156
118
202
128
83
92
96
34
133
73
188
281
36
88
104
613
402
676
1,971
1,514
2,188
$
4,746
$
4,366
$
6,771
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Notes to Consolidated Financial Statements
Successor
Predecessor
(In millions)
2010
2009
2008
$
1,189
$
1,449
$
1,812
1,736
2,785
2,968
32
102
112
78
72
1,768
2,965
3,152
$
2,957
$
4,414
$
4,964
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
2,761
$
3,393
$
(1,408
)
$
4,746
2,389
2,743
(1,408
)
3,724
133
360
493
134
419
553
34
36
85
155
(32
)
32
2
9
11
(13
)
(17
)
(30
)
(2
)
80
(206
)
(32
)
(160
)
(26
)
(96
)
(371
)
10
(483
)
(1
)
66
29
(183
)
(89
)
1,652
(1,652
)
1,623
50
(548
)
(1,857
)
(732
)
(185
)
1,274
4,848
(4,036
)
1,901
1,438
1,324
4,300
(5,893
)
1,169
8
461
1,145
(8
)
1,606
1,446
1,785
5,445
(5,901
)
2,775
(161
)
(161
)
$
1,446
$
1,785
$
5,284
$
(5,901
)
$
2,614
Table of Contents
Notes to Consolidated Financial Statements
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
2,519
$
3,222
$
(1,375
)
$
4,366
2,052
2,666
(1,375
)
3,343
147
455
602
120
367
487
29
74
95
198
410
299
(709
)
111
91
202
(13
)
(78
)
(91
)
(439
)
(271
)
(374
)
709
(375
)
(40
)
(136
)
(464
)
43
(597
)
12
38
(78
)
(43
)
(71
)
(467
)
(369
)
(916
)
709
(1,043
)
(2
)
(193
)
(444
)
(639
)
(469
)
(562
)
(1,360
)
709
(1,682
)
(24
)
146
122
(469
)
(586
)
(1,214
)
709
(1,560
)
7
7
$
(469
)
$
(586
)
$
(1,207
)
$
709
$
(1,553
)
Table of Contents
Notes to Consolidated Financial Statements
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
4,127
$
4,048
$
(1,404
)
$
6,771
3,483
3,065
(1,404
)
5,144
194
532
726
221
536
757
36
135
161
332
235
575
810
28
453
481
(45
)
(4
)
(49
)
(36
)
(124
)
(1,270
)
(1,430
)
(88
)
(238
)
(495
)
115
(706
)
35
113
60
(115
)
93
(1,837
)
1,837
(1,926
)
(249
)
(1,705
)
1,837
(2,043
)
32
(39
)
99
92
(1,894
)
(288
)
(1,606
)
1,837
(1,951
)
of tax of $0
(256
)
(256
)
(256
)
256
(2,150
)
(288
)
(1,862
)
2,093
(2,207
)
(27
)
(27
)
$
(2,150
)
$
(288
)
$
(1,889
)
$
2,093
$
(2,234
)
Table of Contents
Notes to Consolidated Financial Statements
As of December 31, 2010 (Successor)
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
164
$
155
$
$
319
348
506
854
40
287
(327
)
158
280
438
15
683
698
31
16
47
864
(864
)
10
(10
)
25
63
88
40
1,615
1,990
(1,201
)
2,444
858
1,783
2,641
19
19
439
1,297
1,736
30
(30
)
5,977
2,933
(8,910
)
34
168
114
316
$
6,017
$
5,909
$
5,257
$
(10,027
)
$
7,156
$
26
$
175
$
367
$
$
568
178
99
(277
)
864
(864
)
10
(10
)
289
289
1,068
274
666
(1,151
)
857
905
905
30
(30
)
362
910
1,272
72
72
32
31
63
1,973
668
1,709
(1,181
)
3,169
4,044
5,241
3,548
(8,846
)
3,987
$
6,017
$
5,909
$
5,257
$
(10,027
)
$
7,156
Table of Contents
Notes to Consolidated Financial Statements
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
418
$
338
$
$
756
334
310
644
51
234
(285
)
177
407
(3
)
581
50
2
52
20
6
26
8
(8
)
67
46
113
1,125
1,343
(296
)
2,172
1,218
2,679
3,897
473
473
30
(30
)
3,105
(3,105
)
53
53
12
81
460
(36
)
517
$
12
$
5,612
$
4,955
$
(3,467
)
$
7,112
$
6
$
250
$
239
$
(33
)
$
462
77
209
(286
)
8
(8
)
164
42
206
204
476
680
305
305
20
15
35
83
847
1,085
(327
)
1,688
34
274
308
30
(30
)
17
72
89
72
268
(233
)
107
37
134
(9
)
162
83
1,007
1,863
(599
)
2,354
1,025
2,962
4,141
(1,401
)
6,727
1,108
3,969
6,004
(2,000
)
9,081
(1,096
)
1,643
(1,049
)
(1,467
)
(1,969
)
$
12
$
5,612
$
4,955
$
(3,467
)
$
7,112
Table of Contents
Notes to Consolidated Financial Statements
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
168
$
(129
)
$
$
39
(19
)
(62
)
(81
)
43
53
96
12
64
76
21
(21
)
(3
)
(3
)
8
8
(850
)
100
750
(850
)
165
802
(21
)
96
(141
)
(141
)
(9
)
(1
)
(10
)
(166
)
(40
)
(206
)
(347
)
(347
)
(204
)
(134
)
(338
)
(21
)
21
850
850
(34
)
(300
)
(334
)
(33
)
(13
)
(46
)
850
(587
)
(856
)
21
(572
)
(254
)
(183
)
(437
)
418
338
756
$
$
164
$
155
$
$
319
Table of Contents
Notes to Consolidated Financial Statements
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
323
$
(277
)
$
$
46
(28
)
(73
)
(101
)
554
554
16
103
119
(12
)
(130
)
(142
)
15
(15
)
49
49
5
5
(9
)
508
(15
)
484
(7
)
(7
)
166
95
261
(23
)
(8
)
(31
)
(55
)
(55
)
(74
)
67
(7
)
(15
)
15
(1
)
(117
)
(118
)
(8
)
(1
)
(9
)
60
(41
)
15
34
374
190
564
44
148
192
$
$
418
$
338
$
$
756
Table of Contents
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2008 (Predecessor)
Guarantor
Non-guarantor
Consolidating
(In millions)
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
$
$
(29
)
$
(391
)
$
$
(420
)
(54
)
(132
)
(186
)
350
(350
)
210
10
220
(350
)
350
(350
)
350
130
(130
)
(48
)
48
(69
)
(69
)
5
5
3
3
(350
)
(242
)
345
220
(27
)
(25
)
(25
)
400
400
(53
)
(53
)
75
(323
)
(248
)
350
413
763
350
(350
)
(130
)
130
(1
)
(297
)
(298
)
(30
)
(59
)
(89
)
(6
)
(6
)
350
258
56
(220
)
444
(13
)
10
(3
)
57
138
195
$
$
44
$
148
$
$
192
Table of Contents
Notes to Consolidated Financial Statements
Year ended December 31, 2010 (Predecessor)
First
Second
Third
Fourth
(In millions, except per share amounts)
Quarter
Quarter
Quarter
Quarter
Year
$
1,100
$
1,182
$
1,192
$
1,272
$
4,746
(110
)
(73
)
12
11
(160
)
(500
)
(297
)
(829
)
4,240
2,614
(8.68
)
(5.15
)
(14.35
)
73.48
45.30
(8.68
)
(5.15
)
(14.35
)
44.82
27.63
Year ended December 31, 2009 (Predecessor)
First
Second
Third
Fourth
(In millions, except per share amounts)
Quarter
Quarter
Quarter
Quarter
Year
$
1,113
$
1,036
$
1,091
$
1,126
$
4,366
(24
)
(285
)
(33
)
(43
)
(375
)
(218
)
(510
)
(511
)
(314
)
(1,553
)
(3.78
)
(8.84
)
(8.85
)
(5.43
)
(26.91
)
(1)
Operating (loss) income for the year ended December 31, 2010 included
the following special items:
Predecessor
First
Second
Third
Fourth
(In millions)
Quarter
Quarter
Quarter
Quarter
Year
$
9
$
4
$
1
$
16
$
30
(5
)
(3
)
3
(6
)
(11
)
$
4
$
1
$
4
$
10
$
19
(2)
Operating loss for the year ended December 31, 2009 included the following special
items:
Predecessor
First
Second
Third
Fourth
(In millions)
Quarter
Quarter
Quarter
Quarter
Year
$
52
$
1
$
38
$
$
91
33
85
83
75
276
(30
)
(240
)
44
24
(202
)
(12
)
(5
)
(17
)
(2
)
(2
)
16
16
(6
)
(4
)
(10
)
$
49
$
(154
)
$
158
$
99
$
152
(3)
In our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, filed on
August 11, 2009, in the six month period ended June 30, 2009, we classified $10 million of
costs incurred in the first quarter of 2009 related to our Creditor Protection Proceedings in
Reorganization items, net, which prior to the application of FASB ASC 852, were classified
within Selling and administrative expenses in our Consolidated Statements of Operations in
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed on May 15, 2009.
Table of Contents
Notes to Consolidated Financial Statements
As discussed in Note 22, Commitments and Contingencies Legal items, on January 14,
2011, ANC distributed the ANI securities to ACSC, and ANI thus became a wholly-owned
subsidiary of ACSC and a wholly-owned subsidiary of ours. The consideration paid by ANC
consisted of: (i) a cash payment of $15 million; (ii) a secured promissory note in the
principal amount of $90 million and (iii) an assignment of ANIs pro rata portion of
certain claims held by ANC.
On February 11, 2011, AbiBow Canada entered into an agreement to sell its 75% equity
interest in ACH to a consortium formed by a major Canadian institutional investor and a
private Canadian renewable energy company. Cash proceeds for our interest will be
approximately Cdn$293 million ($296 million, based on the exchange rate in effect on
February 11, 2011) plus certain adjustments based on ACHs working capital and cash
available at closing, which is currently anticipated to occur in the
second quarter of 2011. The closing of the transaction is subject to a number of conditions, including the receipt of applicable regulatory approvals
and other third party consents, the execution of certain ancillary definitive agreements, other customary closing conditions
and addressing pending or threatened litigation. The purchaser will acquire ACH with its current
outstanding debt.
Table of Contents
Montreal, Canada
April 5, 2011
(1)
Chartered accountant auditor permit No. R24549
Table of Contents
Montreal, Canada
April 5, 2011
(1)
Chartered accountant auditor permit No. R24549
Table of Contents
pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of AbitibiBowater Inc.;
provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. generally accepted accounting
principles;
provide reasonable assurance that receipts and expenditures of AbitibiBowater Inc. are
being made only in accordance with the authorizations of management and directors of
AbitibiBowater Inc.; and
provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of assets that could have a material effect on the
consolidated financial statements.
Table of Contents
Table of Contents
142
(c)
Number of securities
(a)
remaining available for
Number of securities
(b)
future issuance under
to be issued upon
Weighted-average
equity compensation
exercise of
exercise price of
plans (excluding
outstanding options,
outstanding options,
securities reflected in
$
9,020,960
$
9,020,960
(1)
In connection with the implementation of the Plans of Reorganization, each share
of the Predecessor Companys common stock and each option, warrant, conversion privilege or
other legal or contractual right to purchase shares of the Predecessor Companys common stock,
in each case to the extent outstanding immediately before the Emergence Date, was canceled and
the holders thereof are not entitled to receive or retain any property on account thereof.
(2)
The 2010 AbitibiBowater Inc. Equity Incentive Plan was approved by the Courts
pursuant to the Plans of Reorganization.
Table of Contents
143
144
145
146
62
63
64
65
66
67
138
140
F-1
Exhibit No.
Sanction Order, dated September 23, 2010 (incorporated by reference from Exhibit 10.1
of AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File
No. 001-33776).
Confirmation Order, dated November 23, 2010, which includes the
Debtors Second
Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code
, dated
November 16, 2010 (as amended) (incorporated by reference from Exhibit 10.2 of
AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File
No. 001-33776).
CCAA Plan of Reorganization and Compromise, dated August 2, 2010 (incorporated by
reference from Exhibit 99.2 to AbitibiBowater Inc.s Current Report on Form 8-K filed
August 5, 2010, SEC File No. 001-33776).
Third Amended and Restated Certificate of Incorporation of AbitibiBowater Inc.
(incorporated by reference from Exhibit 3(i) to AbitibiBowater Inc.s Form 8-A filed
on December 9, 2010).
Third Amended and Restated By-laws of AbitibiBowater Inc. (incorporated by reference
from Exhibit 3(ii) to AbitibiBowater Inc.s Form 8-A filed on December 9, 2010).
Indenture, dated as of October 4, 2010, between ABI Escrow Corporation and
Wells Fargo Bank, National Association
(incorporated by reference from Exhibit 4.1 to AbitibiBowater
Inc.s Current Report on Form 8-K filed October 8, 2010, SEC
File No. 001-33776).
Form of 10.25% Senior Note due 2018 (included in Exhibit 4.1).
Supplemental Indenture, dated as of December 9, 2010, between AbitibiBowater Inc. and Wells Fargo
Bank, National Association (incorporated by reference from Exhibit 4.1 to AbitibiBowater Inc.s
Current Report on Form 8-K filed December 15, 2010, SEC File No. 001-33776).
Secured Promissory Note, dated January 14, 2011, made by Augusta Newsprint
Company LLC in favor of Woodbridge International Holdings Limited.
Table of Contents
Exhibit No.
ABL Credit Agreement, dated as of December 9, 2010, among AbitibiBowater Inc.,
Bowater Incorporated, Abitibi-Consolidated Corp., Abitibi-Consolidated Inc., Barclays
Bank PLC, JPMorgan Chase Bank, N.A., and Citibank, N.A., as administrative agent and
collateral agent (incorporated by reference from Exhibit 10.1 to AbitibiBowater
Inc.s Current Report on Form 8-K filed December 15, 2010, SEC File No. 001-33776).
Stock Purchase Agreement, dated as of December 23, 2010, among Woodbridge International Holdings
Limited, The Woodbridge Company Limited, Abitibi Consolidated Sales Corporation, AbitibiBowater
Inc., Augusta Newsprint Company and Augusta Newsprint Inc.
Securities Purchase Agreement, dated February 11, 2011, among AbiBow Canada Inc.,
Caisse de depot et placement du Quebec and CDP Investissements Inc., as vendors, and
Infra H2O GP Partners Inc., Infra H2O LP Partners Inc. and BluEarth Renewables Inc.,
as the purchaser (incorporated by reference from Exhibit 2.1 to AbitibiBowater Inc.s
Current Report on Form 8-K filed February 17, 2011, SEC File No. 001-33776).
AbitibiBowater 2010 Canadian DB Supplemental Executive Retirement Plan, effective as of December 9, 2010.
AbitibiBowater 2010 DC Supplemental Executive Retirement Plan, effective as of December 9, 2010.
AbitibiBowater Outside Director Deferred Compensation Plan, effective as of April 1, 2011.
AbitibiBowater Inc. 2010 Equity Incentive Plan, effective as of December 9, 2010 (incorporated by
reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File No. 001-33776).
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Restricted Stock Unit Agreement (incorporated
by reference from Exhibit 10.2 to AbitibiBowater Inc.s Registration Statement on Form S-8 filed
January 7, 2011, SEC
Registration No. 333-171602).
AbitibiBowater Inc. 2010 Equity
Incentive Plan Form of Director Nonqualified Stock Option Agreement
(incorporated by reference from Exhibit 10.3 to AbitibiBowater Inc.s Registration Statement on Form
S-8 filed January 7, 2011, SEC Registration No. 333-171602).
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Employee Nonqualified Stock Option Agreement
(incorporated by reference from Exhibit 10.4 to AbitibiBowater Inc.s Registration Statement on Form
S-8 filed January 7, 2011, SEC Registration No. 333-171602).
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Director Deferred Stock Unit Agreement.
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Director Restricted Stock Unit Agreement.
AbitibiBowater Executive Restricted Stock Unit Plan, effective as of April 1, 2011.
2010 AbitibiBowater Inc. Short-Term Incentive Plan (incorporated by reference from Exhibit 10.2 to
AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File No. 001-33776).
AbitibiBowater Inc. Severance Policy - Chief Executive Officer and Direct Reports (incorporated by
reference from Exhibit 10.3 to AbitibiBowater Inc.s Current Report on Form 8-K filed November 30,
2010, SEC File No. 001-33776).
Summary of 2011 AbitibiBowater Inc. Short-Term Incentive Plan.
Offer Letter between David J. Paterson and AbitibiBowater Inc., dated October 26, 2010.
Separation Agreement between David J. Paterson and AbitibiBowater Inc., dated December 9, 2010.
Offer Letter between Pierre Rougeau and AbitibiBowater Inc., dated October 26, 2010.
Pierre Rougeau Severance Terms and Waiver and Release Agreement, dated March 25, 2011.
Offer Letter between Alain Grandmont and AbitibiBowater Inc., dated October 26, 2010.
Employment Agreement between Alain Grandmont and AbitibiBowater Inc., dated February 14, 2011
(incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed
February 18, 2011, SEC
File No. 001-33776).
Table of Contents
Exhibit No.
Offer Letter between Yves Laflamme and AbitibiBowater Inc., dated October 26, 2010.
Employment Agreement between Yves Laflamme and AbitibiBowater Inc., dated February 14, 2011
(incorporated by reference from Exhibit 10.2 to AbitibiBowater Inc.s Current Report on Form 8-K filed
February 18, 2011, SEC
File No. 001-33776).
Offer Letter between Jacques Vachon and AbitibiBowater Inc., dated October 26, 2010.
Executive Employment Agreement between AbitibiBowater Inc. and Richard Garneau, dated January 1, 2011.
Change in Control Agreement between AbitibiBowater Inc. and Richard Garneau, dated January 1, 2011.
Employment Agreement between Alain Boivin and AbitibiBowater Inc., dated February 22, 2011.
Employment Agreement between John Lafave and AbitibiBowater Inc., dated February 14, 2011.
Director compensation program chart (incorporated by reference from Exhibit 10.2 to AbitibiBowater
Inc.s Current Report on Form 8-K filed December 15, 2010, SEC File No. 001-33776).
Form of Indemnification Agreement for Executive Officers and Directors.
Agreement Concerning the Pulp and Paper Operations of AbiBow Canada in Ontario, dated November
10, 2010, between Bowater Canadian Forest Products Inc. and Abitibi-Consolidated Company of
Canada and The Province of Ontario.
Agreement Concerning the Pulp and Paper Operations of AbiBow Canada in Quebec, dated September
13, 2010, between Bowater Canadian Forest Products Inc. and Abitibi-Consolidated Company of
Canada and The Government of Quebec.
Backstop Commitment Agreement, dated May 24, 2010, between AbitibiBowater Inc. and Fairfax
Financial Holdings Limited, Avenue Capital Management II, L.P., Paulson Credit Opportunities Master
Ltd., Barclays Bank plc, Steelhead Navigator Master, L.P., J.P. Morgan Securities Inc. and Whitebox
Advisors, LLC (incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on
Form 8-K filed May 28, 2010, SEC File No. 001-33776).
First Amendment, dated July 20, 2010, to the Backstop Commitment Agreement dated May 24, 2010
between AbitibiBowater Inc. and Fairfax Financial Holdings Limited, Avenue Capital Management II,
L.P., Paulson Credit Opportunities Master Ltd., Barclays Bank plc, Steelhead Navigator Master, L.P.,
J.P. Morgan Securities Inc. and Whitebox Advisors, LLC (incorporated by reference from Exhibit 10.1
to AbitibiBowater Inc.s Current Report on Form 8-K filed August 5, 2010, SEC
File No. 001-33776).
Amendment No. 6, dated as of April 12, 2010, to the Senior Secured Superpriority Debtor in Possession
Credit Agreement, dated as of April 21, 2009, by and among AbitibiBowater Inc., Bowater Incorporated,
Bowater Canadian Forest Products Inc., as debtors, debtors in possession and borrowers and Law
Debenture Trust Company of New York, as administrative agent and collateral agent, and the lenders
(incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed
April 16, 2010, SEC File No. 001-33776).
Amendment No. 1 to Second Amended and Restated Receivables Purchase Agreement, Amendment No.
1 to the Second Amended and Restated Purchase and Contribution Agreement and Amendment No. 3 to
Guaranty and Undertaking Agreement, among Abitibi-Consolidated U.S. Funding Corp., Abitibi-
Consolidated Inc., Abitibi Consolidated Sales Corporation and certain other subsidiaries of the Company
and Citibank, N.A., as agent for the banks party thereto, dated as of June 11, 2010 (incorporated by
reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed June 17, 2010,
SEC File No. 001-33776).
Table of Contents
Exhibit No.
Amendment No. 10, dated as of July 15, 2010, to the Senior Secured Superpriority Debtor in Possession
Credit Agreement, dated as of April 21, 2009, by and among AbitibiBowater Inc., Bowater Incorporated,
Bowater Canadian Forest Products Inc., as debtors, debtors in possession and borrowers and Law
Debenture Trust Company of New York, as administrative agent and collateral agent, and the lenders
(incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed
July 26, 2010, SEC File No. 001-33776).
Settlement Agreement, dated as of August 24, 2010, between AbitibiBowater Inc., Abitibi-Consolidated
Company of Canada, Abitibi-Consolidated Inc. and AbitibiBowater Canada Inc. and The Government of
Canada (incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Quarterly Report on Form
10-Q filed for the quarter ended September 30, 2010, SEC File No. 001-33776).
Computation of Ratio of Earnings to Fixed Charges.
Subsidiaries of the registrant.
Consent of PricewaterhouseCoopers LLP.
Powers of attorney for certain Directors of the registrant.
Certification of President and Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certification of Senior Vice President and Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of President and Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Certification of Senior Vice President and Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
*
Previously filed and incorporated herein by reference.
**
Filed with this Form 10-K.
This is a management contract or compensatory plan or arrangement.
(b)
The above-referenced exhibits are being filed with this Form 10-K.
(c)
None.
Table of Contents
147
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
ABITIBIBOWATER INC.
Date: April 5, 2011
By:
/s/ Richard Garneau
Richard Garneau
President and Chief Executive Officer
President and Chief Executive Officer
(Principal Executive Officer)
April 5, 2011
Chairman, Director
April 5, 2011
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
April 5, 2011
Senior Vice President, Finance
and Chief Accounting Officer
(Principal Accounting Officer)
April 5, 2011
Director
April 5, 2011
Director
April 5, 2011
Director
April 5, 2011
Director
April 5, 2011
Director
April 5, 2011
Director
April 5, 2011
Director
April 5, 2011
Director
April 5, 2011
*
William G. Harvey, by signing his name hereto, does sign this document on behalf of the persons
indicated above pursuant to powers of attorney duly executed by such persons that are filed
herewith as Exhibit 24.
By:
/s/ William G. Harvey
William G. Harvey, Attorney-in-Fact
Table of Contents
(Parent Company Only)
Condensed Statements of Operations and Deficit
(In millions)
Predecessor
Years Ended December 31,
2010
2009
2008
$
34
$
29
$
36
(32
)
410
(2
)
(439
)
(36
)
(26
)
(40
)
(88
)
(1
)
12
35
1,652
(1,837
)
1,623
(467
)
(1,926
)
(185
)
(2
)
1,438
(469
)
(1,926
)
8
32
1,446
(469
)
(1,894
)
(256
)
1,446
(469
)
(2,150
)
(3,223
)
(2,754
)
(598
)
1,777
(6
)
$
$
(3,223
)
$
(2,754
)
Table of Contents
(Parent Company Only)
Condensed Balance Sheets
(In millions)
Successor
Predecessor
As of December 31,
As of December 31,
2010
2009
$
40
$
5,977
12
$
6,017
$
12
$
26
$
6
178
77
864
1,068
83
905
1,973
83
1,025
1,973
1,108
55
4,044
2,522
(3,223
)
(450
)
4,044
(1,096
)
$
6,017
$
12
Table of Contents
(Parent Company Only)
Condensed Statements of Cash Flows
(In millions)
Predecessor
Years Ended December 31,
2010
2009
2008
$
$
$
(850
)
(350
)
(850
)
(350
)
850
350
850
350
$
$
$
Table of Contents
(Parent Company Only)
Notes to Condensed Financial Statements
Table of Contents
(Parent Company Only)
Notes to Condensed Financial Statements
Predecessor
(In millions)
2010
2009
$
18
$
(160
)
82
5
2
103
134
3
$
185
$
2
(1)
Professional fees directly related to the Creditor Protection Proceedings.
Additionally, pursuant to the Plans of Reorganization, as part of our exit financing, we had
initially planned to conduct a rights offering for the issuance of convertible senior
subordinated notes to holders of eligible unsecured claims. With the approval of the Courts,
we entered into a backstop commitment agreement that provided for the purchase by certain
investors of the convertible notes to the extent that the rights offering would have been
under-subscribed. On September 21, 2010, we announced that we had elected not to pursue the
rights offering. In 2010, we recorded the backstop commitment agreement termination fee of $15
million, which was paid by Bowater on our behalf on the Emergence
Date (see Note E, Transactions with Related Parties).
(2)
Represents the gain on extinguishment of liabilities subject to compromise of $174 million (see Liabilities subject to
compromise below), net of $14 million of professional fees that were contractually due to certain professionals as
success fees upon our emergence from the Creditor Protection Proceedings and were recorded as part of the effects of
implementing the Plans of Reorganization.
(3)
Reflects the adjustments required to state assets and liabilities at fair value: (i)
the write-off of deferred financing costs associated with the 2018 Notes of $27 million and
(ii) the premium of $55 million recorded on the 2018 Notes
(see Note D, Financing Arrangements).
(4)
FASB ASC 852 requires that debt discounts and premiums, as well as debt issuance
costs, be viewed as part of the valuation of the related pre-petition debt in arriving at the
net carrying amount of the debt. When the debt becomes an allowed claim and the allowed claim
differs from the net carrying amount of the debt, the recorded debt
obligations should be adjusted to
the amount of the allowed claim. In 2010, pursuant to the U.S. Courts approval of the Chapter
11 Reorganization Plan (which included the approval of allowed debt claims), we adjusted the
net carrying amount of the Convertible Notes to the allowed amount of the claim, which
resulted in a write-off of the unamortized balance of the debt discounts and issuance costs.
Table of Contents
(Parent Company Only)
Notes to Condensed Financial Statements
Predecessor
(In millions)
2009
$
927
94
2
2
$
1,025
(1)
As discussed in Note 3, Creditor Protection Proceedings, to the Consolidated
Financial Statements, the majority of holders of allowed unsecured claims received their pro
rata share of Successor Company common stock on account of their claims, whereas the majority of
holders of disputed unsecured claims will receive their pro rata share of common stock from
the shares we have reserved for their benefit as and if their claims are allowed or accepted.
Table of Contents
(Parent Company Only)
Notes to Condensed Financial Statements
Table of Contents
(Parent Company Only)
Notes to Condensed Financial Statements
Table of Contents
(Parent Company Only)
Notes to Condensed Financial Statements
Table of Contents
Exhibit No.
Sanction Order, dated September 23, 2010 (incorporated by reference from Exhibit 10.1
of AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File
No. 001-33776).
Confirmation Order, dated November 23, 2010, which includes the
Debtors Second
Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code
, dated
November 16, 2010 (as amended) (incorporated by reference from Exhibit 10.2 of
AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File
No. 001-33776).
CCAA Plan of Reorganization and Compromise, dated August 2, 2010 (incorporated by
reference from Exhibit 99.2 to AbitibiBowater Inc.s Current Report on Form 8-K filed
August 5, 2010, SEC File No. 001-33776).
Third Amended and Restated Certificate of Incorporation of AbitibiBowater Inc.
(incorporated by reference from Exhibit 3(i) to AbitibiBowater Inc.s Form 8-A filed
on December 9, 2010).
Third Amended and Restated By-laws of AbitibiBowater Inc. (incorporated by reference
from Exhibit 3(ii) to AbitibiBowater Inc.s Form 8-A filed on December 9, 2010).
Indenture, dated as of October 4, 2010, between ABI Escrow Corporation and
Wells Fargo Bank, National Association
(incorporated by reference from Exhibit 4.1 to AbitibiBowater
Inc.s Current Report on Form 8-K filed October 8, 2010, SEC
File 001-33776).
Form of 10.25% Senior Note due 2018 (included in Exhibit 4.1).
Supplemental Indenture, dated as of December 9, 2010, between AbitibiBowater Inc. and Wells Fargo
Bank, National Association (incorporated by reference from Exhibit 4.1 to AbitibiBowater Inc.s
Current Report on Form 8-K filed December 15, 2010, SEC File No. 001-33776).
Secured Promissory Note, dated January 14, 2011, made by Augusta Newsprint
Company LLC in favor of Woodbridge International Holdings Limited.
ABL Credit Agreement, dated as of December 9, 2010, among AbitibiBowater Inc.,
Bowater Incorporated, Abitibi-Consolidated Corp., Abitibi-Consolidated Inc., Barclays
Bank PLC, JPMorgan Chase Bank, N.A., and Citibank, N.A., as administrative agent and
collateral agent (incorporated by reference from Exhibit 10.1 to AbitibiBowater
Inc.s Current Report on Form 8-K filed December 15, 2010, SEC File No. 001-33776).
Stock Purchase Agreement, dated as of December 23, 2010, among Woodbridge International Holdings
Limited, The Woodbridge Company Limited, Abitibi Consolidated Sales Corporation, AbitibiBowater
Inc., Augusta Newsprint Company and Augusta Newsprint Inc.
Securities Purchase Agreement, dated February 11, 2011, among AbiBow Canada Inc.,
Caisse de depot et placement du Quebec and CDP Investissements Inc., as vendors, and
Infra H2O GP Partners Inc., Infra H2O LP Partners Inc. and BluEarth Renewables Inc.,
as the purchaser (incorporated by reference from Exhibit 2.1 to AbitibiBowater Inc.s
Current Report on Form 8-K filed February 17, 2011, SEC File No. 001-33776).
AbitibiBowater 2010 Canadian DB Supplemental Executive Retirement Plan, effective as of December 9, 2010.
AbitibiBowater 2010 DC Supplemental Executive Retirement Plan, effective as of December 9, 2010.
AbitibiBowater Outside Director Deferred Compensation Plan, effective as of April 1, 2011.
AbitibiBowater Inc. 2010 Equity Incentive Plan, effective as of December 9, 2010 (incorporated by
reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File No. 001-33776).
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Restricted Stock Unit Agreement (incorporated
by reference from Exhibit 10.2 to AbitibiBowater Inc.s Registration Statement on Form S-8 filed
January 7, 2011, SEC
Registration No. 333-171602).
AbitibiBowater Inc. 2010 Equity
Incentive Plan Form of Director Nonqualified Stock Option Agreement
(incorporated by reference from Exhibit 10.3 to AbitibiBowater Inc.s Registration Statement on Form
S-8 filed January 7, 2011, SEC Registration No. 333-171602).
Table of Contents
Exhibit No.
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Employee Nonqualified Stock Option Agreement
(incorporated by reference from Exhibit 10.4 to AbitibiBowater Inc.s Registration Statement on Form
S-8 filed January 7, 2011, SEC Registration No. 333-171602).
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Director Deferred Stock Unit Agreement.
AbitibiBowater Inc. 2010 Equity Incentive Plan Form of Director Restricted Stock Unit Agreement.
AbitibiBowater Executive Restricted Stock Unit Plan, effective as of April 1, 2011.
2010 AbitibiBowater Inc. Short-Term Incentive Plan (incorporated by reference from Exhibit 10.2 to
AbitibiBowater Inc.s Current Report on Form 8-K filed November 30, 2010, SEC File No. 001-33776).
AbitibiBowater Inc. Severance Policy - Chief Executive Officer and Direct Reports (incorporated by
reference from Exhibit 10.3 to AbitibiBowater Inc.s Current Report on Form 8-K filed November 30,
2010, SEC File No. 001-33776).
Summary of 2011 AbitibiBowater Inc. Short-Term Incentive Plan.
Offer Letter between David J. Paterson and AbitibiBowater Inc., dated October 26, 2010.
Separation Agreement between David J. Paterson and AbitibiBowater Inc., dated December 9, 2010.
Offer Letter between Pierre Rougeau and AbitibiBowater Inc., dated October 26, 2010.
Pierre Rougeau Severance Terms and Waiver and Release Agreement, dated March 25, 2011.
Offer Letter between Alain Grandmont and AbitibiBowater Inc., dated October 26, 2010.
Employment Agreement between Alain Grandmont and AbitibiBowater Inc., dated February 14, 2011
(incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed
February 18, 2011, SEC
File No. 001-33776).
Offer Letter between Yves Laflamme and AbitibiBowater Inc., dated October 26, 2010.
Employment Agreement between Yves Laflamme and AbitibiBowater Inc., dated February 14, 2011
(incorporated by reference from Exhibit 10.2 to AbitibiBowater Inc.s Current Report on Form 8-K filed
February 18, 2011, SEC
File No. 001-33776).
Offer Letter between Jacques Vachon and AbitibiBowater Inc., dated October 26, 2010.
Executive Employment Agreement between AbitibiBowater Inc. and Richard Garneau, dated January 1, 2011.
Change in Control Agreement between AbitibiBowater Inc. and Richard Garneau, dated January 1, 2011.
Employment Agreement between Alain Boivin and AbitibiBowater Inc., dated February 22, 2011.
Employment Agreement between John Lafave and AbitibiBowater Inc., dated February 14, 2011.
Director compensation program chart (incorporated by reference from Exhibit 10.2 to AbitibiBowater
Inc.s Current Report on Form 8-K filed December 15, 2010, SEC File No. 001-33776).
Form of Indemnification Agreement for Executive Officers and Directors.
Agreement Concerning the Pulp and Paper Operations of AbiBow Canada in Ontario, dated November
10, 2010, between Bowater Canadian Forest Products Inc. and Abitibi-Consolidated Company of
Canada and The Province of Ontario.
Agreement Concerning the Pulp and Paper Operations of AbiBow Canada in Quebec, dated September
13, 2010, between Bowater Canadian Forest Products Inc. and Abitibi-Consolidated Company of
Canada and The Government of Quebec.
Table of Contents
Exhibit No.
Backstop Commitment Agreement, dated May 24, 2010, between AbitibiBowater Inc. and Fairfax
Financial Holdings Limited, Avenue Capital Management II, L.P., Paulson Credit Opportunities Master
Ltd., Barclays Bank plc, Steelhead Navigator Master, L.P., J.P. Morgan Securities Inc. and Whitebox
Advisors, LLC (incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on
Form 8-K filed May 28, 2010, SEC File No. 001-33776).
First Amendment, dated July 20, 2010, to the Backstop Commitment Agreement dated May 24, 2010
between AbitibiBowater Inc. and Fairfax Financial Holdings Limited, Avenue Capital Management II,
L.P., Paulson Credit Opportunities Master Ltd., Barclays Bank plc, Steelhead Navigator Master, L.P.,
J.P. Morgan Securities Inc. and Whitebox Advisors, LLC (incorporated by reference from Exhibit 10.1
to AbitibiBowater Inc.s Current Report on Form 8-K filed August 5, 2010, SEC
File No. 001-33776).
Amendment No. 6, dated as of April 12, 2010, to the Senior Secured Superpriority Debtor in Possession
Credit Agreement, dated as of April 21, 2009, by and among AbitibiBowater Inc., Bowater Incorporated,
Bowater Canadian Forest Products Inc., as debtors, debtors in possession and borrowers and Law
Debenture Trust Company of New York, as administrative agent and collateral agent, and the lenders
(incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed
April 16, 2010, SEC File No. 001-33776).
Amendment No. 1 to Second Amended and Restated Receivables Purchase Agreement, Amendment No.
1 to the Second Amended and Restated Purchase and Contribution Agreement and Amendment No. 3 to
Guaranty and Undertaking Agreement, among Abitibi-Consolidated U.S. Funding Corp., Abitibi-
Consolidated Inc., Abitibi Consolidated Sales Corporation and certain other subsidiaries of the Company
and Citibank, N.A., as agent for the banks party thereto, dated as of June 11, 2010 (incorporated by
reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed June 17, 2010,
SEC File No. 001-33776).
Amendment No. 10, dated as of July 15, 2010, to the Senior Secured Superpriority Debtor in Possession
Credit Agreement, dated as of April 21, 2009, by and among AbitibiBowater Inc., Bowater Incorporated,
Bowater Canadian Forest Products Inc., as debtors, debtors in possession and borrowers and Law
Debenture Trust Company of New York, as administrative agent and collateral agent, and the lenders
(incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Current Report on Form 8-K filed
July 26, 2010, SEC File No. 001-33776).
Settlement Agreement, dated as of August 24, 2010, between AbitibiBowater Inc., Abitibi-Consolidated
Company of Canada, Abitibi-Consolidated Inc. and AbitibiBowater Canada Inc. and The Government of
Canada (incorporated by reference from Exhibit 10.1 to AbitibiBowater Inc.s Quarterly Report on Form
10-Q filed for the quarter ended September 30, 2010, SEC File No. 001-33776).
Computation of Ratio of Earnings to Fixed Charges.
Subsidiaries of the registrant.
Consent of PricewaterhouseCoopers LLP.
Powers of attorney for certain Directors of the registrant.
Certification of President and Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certification of Senior Vice President and Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of President and Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Certification of Senior Vice President and Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
*
Previously filed and incorporated herein by reference.
**
Filed with this Form 10-K.
This is a management contract or compensatory plan or arrangement.
$90,000,000 | January 14, 2011 |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
if to the Note Obligors, to:
|
c/o Abitibi Consolidated Sales LLC | |
|
1155 Metcalfe Street, Suite 800 | |
|
Montreal, Quebec | |
|
H3B 5H2 | |
|
Attn: Executive Vice President, | |
|
Operations and Sales | |
|
Facsimile: 514.394.2241 | |
|
With a copy to: Vice President Legal Affairs | |
|
Facsimile: 514.394.3644 | |
|
||
|
With a copy to: | |
|
||
|
Paul, Weiss, Rifkind, Wharton & Garrison LLP | |
|
1285 Avenue of the Americas | |
|
New York, NY 10019-6064 | |
|
Attn: Ariel J. Deckelbaum | |
|
Facsimile: 212.492.0546 | |
|
||
if to the Noteholder, to:
|
Woodbridge International Holdings Limited | |
|
65 Queen Street West | |
|
Toronto, Ontario M5H 2M8 | |
|
Attn: Gregory Dart | |
|
Facsimile: 416.365.9293 | |
|
||
|
With a copy to: | |
|
||
|
Torys LLP | |
|
79 Wellington Street West | |
|
Suite 3000, Box 270 | |
|
TD Centre | |
|
Toronto, Ontario M5K 1N2 | |
|
Attn: Michael J. Siltala | |
|
Facsimile: 416.865.7380 |
33
34
35
AUGUSTA NEWSPRINT COMPANY LLC | ||||||
as Payor | ||||||
|
||||||
|
By: |
ABITIBI CONSOLIDATED SALES
LLC, as Manager |
||||
|
||||||
|
By: |
ABITIBIBOWATER, INC.,
as Sole Member |
||||
|
||||||
|
By: |
/s/ Pierre Rougeau
|
||||
|
Title: Executive Vice President,
Sales and Operations |
WOODBRIDGE INTERNATIONAL
HOLDINGS LIMITED |
||||||
as Noteholder | ||||||
|
||||||
|
By: |
/s/ Gregory J. Dart
|
||||
|
Title: Vice President |
ABITIBI CONSOLIDATED SALES LLC | ||||||
|
||||||
|
By: |
ABITIBIBOWATER, INC.,
as Sole Member |
||||
|
||||||
|
By: |
/s/ Pierre Rougeau
|
||||
|
Title: Executive Vice President,
Sales and Operations |
|||||
|
||||||
AUGUSTA NEWSPRINT INC. | ||||||
|
||||||
|
By: |
/s/ Jacques P. Vachon
|
||||
|
Title: Vice President and Secretary |
MOR 90%
|
||||
|
||||
mill maintenance & boiler inspection
|
4 days} | |||
|
||||
approved capital projects
|
10 days} | 11 days | ||
|
||||
Force Majeure event
|
3 days |
MOR 95%
|
||||
|
||||
mill maintenance & boiler inspection
|
4 days} | |||
|
||||
approved capital projects
|
10 days} | 11 days | ||
|
||||
Force Majeure event
|
3 days |
MOR 99%
|
||||
|
||||
mill maintenance & boiler inspection
|
4 days} | |||
|
||||
approved capital projects
|
10 days} | 11 days | ||
|
||||
Force Majeure event
|
3 days |
MOR 102% (i.e. U.S. 98.5% + 3.5%)
|
||||
|
||||
mill maintenance & boiler inspection
|
4 days} | |||
|
||||
approved capital projects
|
10 days} | 11 days | ||
|
||||
Force Majeure event
|
3 days |
ARTICLE 1
|
||||
DEFINITIONS AND SCHEDULES
|
2 | |||
1.1 Definitions
|
2 | |||
1.2 Schedules
|
11 | |||
|
||||
ARTICLE 2
|
||||
PURCHASE AND SALE
|
12 | |||
2.1 Purchase and Sale
|
12 | |||
2.2 Purchase Price
|
12 | |||
2.3 Payment Instructions
|
13 | |||
2.4 Closing
|
13 | |||
2.5 Distribution
|
13 | |||
2.6 Intercompany Payables and Receivables
|
13 | |||
2.7 Redemption of ANI Preferred Stock
|
13 | |||
2.8 Assignment of Bankruptcy Claims
|
13 | |||
2.9 Assignment of Administrative Claim
|
14 | |||
2.10 Wood Fraud Claim Payment
|
14 | |||
2.11 Distribution Adjustment
|
15 | |||
2.12 Adjustment Payment
|
16 | |||
2.13 Withholding Rights
|
16 | |||
|
||||
ARTICLE 3
|
||||
CONDITIONS TO CLOSING
|
16 | |||
3.1 Mutual Conditions
|
16 | |||
3.2 Additional Conditions to ACSC and AbitibiBowaters Obligations
|
16 | |||
3.3 Additional Conditions to Woodbridges Obligations
|
17 | |||
3.4 Unsatisfied Closing Conditions
|
17 | |||
3.5 Releases
|
18 | |||
|
||||
ARTICLE 4
|
||||
COVENANTS
|
18 | |||
4.1 Further Actions
|
18 | |||
4.2 Settlement Motion
|
19 | |||
4.3 Conduct of Business
|
19 | |||
4.4 Bank Account
|
20 | |||
4.5 WIHSA Share Transfer
|
20 | |||
4.6 Notice of Withdrawal of Appeal
|
20 | |||
4.7 Resignation of Directors and Officers of ANI
|
20 |
- ii -
4.8 LLC Conversion
|
20 | |||
|
||||
ARTICLE 5
|
||||
REPRESENTATIONS AND WARRANTIES
|
21 | |||
5.1 ACSC and AbitibiBowater Representations and Warranties
|
21 | |||
5.2 Woodbridge and Woodbridge Parent Representations and Warranties
|
23 | |||
5.3 Woodbridge Representations and Warranties Regarding ANI
|
25 | |||
5.4 Survival of Representations and Warranties
|
30 | |||
|
||||
ARTICLE 6
|
||||
TAX MATTERS
|
30 | |||
6.1 ANI Pre-Closing Tax Returns
|
30 | |||
6.2 ANI Straddle Period Returns
|
31 | |||
6.3 Cooperation
|
31 | |||
6.4 Indemnified Taxes
|
32 | |||
6.5 Amended Tax Returns
|
32 | |||
6.6 Pre-Closing Period Tax Refund
|
33 | |||
6.7 Audits and Proceedings
|
33 | |||
6.8 Termination of Tax Sharing Agreements
|
34 | |||
6.9 Taxes and Fees
|
34 | |||
6.10 Tax Attributes
|
34 | |||
|
||||
ARTICLE 7
|
||||
DISPUTE RESOLUTION
|
34 | |||
7.1 Commercial Arbitration
|
34 | |||
7.2 Proposed Adjustment Disputes
|
35 | |||
|
||||
ARTICLE 8
|
||||
INDEMNIFICATION
|
35 | |||
8.1 Indemnification by Woodbridge and Woodbridge Parent
|
35 | |||
8.2 Indemnification by ACSC and AbitibiBowater
|
36 | |||
8.3 Indemnification by ACSC and AbitibiBowater of Woodbridge Indemnitees
|
36 | |||
8.4 Indemnification by Woodbridge and Woodbridge Parent of Abitibi Indemnitees
|
37 | |||
8.5 Resolution of Indemnification Claims
|
37 | |||
8.6 Indemnification for Tax Contests
|
39 | |||
8.7 Limitations on Liability
|
39 | |||
8.8 Indemnification Payment
|
39 |
- iii-
ARTICLE 9
|
||||
GENERAL
|
39 | |||
9.1 Assignment
|
39 | |||
9.2 Notices
|
39 | |||
9.3 Governing Law
|
42 | |||
9.4 Time of Performance
|
42 | |||
9.5 Entire Agreement
|
42 | |||
9.6 Amendment
|
43 | |||
9.7 Time of the Essence
|
43 | |||
9.8 Waiver
|
43 | |||
9.9 Further Assurances
|
43 | |||
9.10 Costs and Expenses
|
43 | |||
9.11 Currency
|
43 | |||
9.12 Confidentiality
|
43 | |||
9.13 Counterparts
|
43 | |||
9.14 Sections and Headings
|
44 | |||
9.15 Successors and Assigns
|
44 | |||
9.16 Availability of Equitable Relief; Specific Performance
|
44 |
- iv -
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
ERISA means the Employee Retirement Income Security Act of 1974. |
ERISA Affiliate means, with respect to any Person, any other Person that is or may be treated as a single employer together with such first Person within the meaning of Section 4001 of ERISA or Section 414(b), (c) (m) or (o) of the Code. |
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
Schedule A
|
| Form of Secured Promissory Note | ||
Schedule B
|
| Form of Woodbridge Release | ||
Schedule C
|
| Form of AbitibiBowater Release | ||
Schedule D
|
| Closing Deliveries | ||
Schedule E
|
| Form of Settlement Motion | ||
Schedule F
|
| Form of WIHSA Transfer Agreement | ||
Schedule G
|
| Form of Assignment and Assumption of Bankruptcy Claims Agreement | ||
Schedule H
|
| Form of Assignment and Assumption of Administrative Claim Agreement | ||
Schedule I
|
| Known Environmental Conditions |
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(a) | An amount in cash equal to the lesser of (i) fifteen million dollars ($15,000,000) and (ii) 52.5% of the Estimated Partnership Cash, payable by the Partnership at the Closing; plus | ||
(b) | a secured, first priority promissory note issued, at the Closing, by the Partnership, payable to Woodbridge in the aggregate original principal amount of ninety million dollars ($90,000,000), plus the excess, if any, of fifteen million dollars ($15,000,000) over 52.5% of the Estimated Partnership Cash (the Secured Promissory Note ); plus | ||
(c) | an assignment of 47.5% of the Partnerships right, title and interest in and to the Bankruptcy Claims pursuant to Section 2.8 hereof, except to the extent such claims are paid to the Partnership in cash prior to the Measurement Time; | ||
(d) | an assignment of 47.5% of the Partnerships right, title and interest in and to the Administrative Claim pursuant to Section 2.9 hereof, except to the extent such claims are paid to the Partnership in cash prior to the Measurement Time; plus | ||
(e) | an amount in cash equal 47.5% of any Wood Fraud Claim Payments received by the Partnership from time to time to the extent such amount was not distributed by the Partnership to ANI on or prior to the Closing Date, including pursuant to Section 2.5 hereof. |
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(a) | Subject to Section 2.8(b), prior to Closing, except to the extent that the Bankruptcy Claims are paid to the Partnership in cash prior to the Measurement Time, pursuant to an Assignment and Assumption in the form attached hereto as Schedule G, ACSC and ANI shall cause the Partnership to, and the Partnership shall, assign, grant, convey and transfer to Woodbridge, 47.5% of the Partnerships right, title and interest in and to the Bankruptcy Claims (the Bankruptcy Claims Assignment ), which shall include, without limitation or offset, 47.5% of ((i) through (iv) below collectively, the Transferred Bankruptcy Claims Rights ): |
(i) | the Bankruptcy Claims; |
(ii) | the Partnerships right, title and interest in and to the Bankruptcy Claims, including all agreements, instruments, subscriptions, statements, proofs of claim, proofs of investment and other documents evidencing, or supporting the Bankruptcy Claims and any agreements, stipulations, or |
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other settlement rights or documentation relating to the allowance or disallowance of the Bankruptcy Claims; |
(iii) | the Partnerships right to receive principal, interest, fees, expenses, damages and other amounts in respect of, or in connection with, the Bankruptcy Claims; and |
(iv) | cash, securities, instruments, proceeds, collateral, guarantees and/or other property distributed, received or paid from and after the Closing, on account of, or exchanged in return for the Bankruptcy Claims. |
(b) | Prior to the first distribution in respect of Bankruptcy Claims to be made in shares of AbitibiBowater, each of AbitibiBowater, ACSC and the Partnership shall take all necessary actions so that such distribution shall be deferred until as promptly as practicable following the Closing and the rights thereto (as to 47.5%) shall be assigned to Woodbridge pursuant to the Bankruptcy Claims Assignment. |
(a) | the Administrative Claim; | ||
(b) | the Partnerships right, title and interest in and to the Administrative Claim, including all agreements, instruments, subscriptions, statements, proofs of claim, proofs of investment and other documents evidencing, or supporting the Administrative Claim and any agreements, stipulations, or other settlement rights or documentation relating to the allowance or disallowance of the Administrative Claim; | ||
(c) | the Partnerships right to receive principal, interest, fees, expenses, damages and other amounts in respect of, or in connection with, the Administrative Claim; and | ||
(d) | cash, securities, instruments, proceeds, collateral, guarantees and/or other property distributed, received or paid from and after the Closing, on account of, or exchanged in return for the Administrative Claim. |
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(a) | Not later than 60 days after the Closing Date, ANI shall cause a statement (the Closing Date Cash Statement ) setting forth the amount of the Partnership Cash (the Proposed Final Partnership Cash Amount ) to be prepared and delivered to Woodbridge. The Closing Date Cash Statement shall be prepared in accordance with the normal procedures of the Partnership. | ||
(b) | If Woodbridge notifies ANI that it agrees with the Proposed Final Partnership Cash Amount within 20 days after receipt of the Closing Date Cash Statement or, within such 20-day period, fails to deliver notice to ANI that it disagrees with the Proposed Final Partnership Cash Amount or that it believes an error is contained in the Closing Date Cash Statement, the Proposed Final Partnership Cash Amount shall be conclusive and binding on the parties to this Agreement and the parties shall be deemed to have agreed thereto, in the first case, on the date ANI receives the notice and, in the second case, on such 20 th day. If Woodbridge notifies ANI that it disagrees with the Proposed Final Partnership Cash Amount or believes that an error is contained in the Closing Date Cash Statement within the 20 - day period immediately following the delivery required under Section 2.11(a), then ANI and Woodbridge shall meet and attempt, in good faith, to resolve their differences with respect to such matters and determine the amount of the Partnership Cash within 30 days after ANIs receipt of Woodbridges notice of disagreement. If Woodbridge and ANI cannot agree within such 30-day period, then Deloitte Financial Advisory Services LLP (the Accounting Firm ), acting as an expert shall be retained by the parties to determine the amount of Partnership Cash (the expense of such determination by the Accounting Firm to be shared equally among ANI and Woodbridge). ANI and Woodbridge shall use commercially reasonable efforts to cause the Accounting Firm to determine the amount of Partnership Cash in accordance with the normal procedures of the Partnership. The amount of Partnership Cash as determined by such accounting firm shall not be greater than the amount proposed by Woodbridge or lesser than the amount proposed by ANI. The amount of the Partnership Cash as determined (or deemed determined) by the parties or by the Accounting Firm pursuant to this Section 2.11(b), shall be conclusive of the amount of the Partnership Cash (the amount of the Partnership Cash as so determined, the Final Partnership Cash Amount ). | ||
(c) | On the 5th Business Day following the date on which the Final Partnership Cash Amount is determined pursuant to Section 2.11(b)(the Settlement Date ), the payment contemplated by Section 2.12 shall be made. |
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(a) | there shall be no Order or Law prohibiting the purchase and sale of the Purchase Stock; | ||
(b) | any waiting period (and any extension thereof) under The notification required by Section X of the Final Judgment in United States of America v. Abitibi-Consolidated Inc. and Bowater Incorporated , Case No. 07-1912, 15-17 (D.D.C. Nov. 6, 2008) (the DOJ Order ) applicable to the transaction shall have expired or shall have been terminated; | ||
(c) | the effective date of the Chapter 11 plans for AbitibiBowater and its affiliated debtors and debtors-in-possession shall have occurred; and | ||
(d) | the Settlement Order shall have been approved and entered by the Bankruptcy Court. |
(a) | the representations and warranties of (i) Woodbridge and Woodbridge Parent contained in Section 5.2 shall be true and correct when made and as of the Closing Date as though restated on the Closing Date and (ii) Woodbridge, |
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Woodbridge Parent and ANI contained in Section 5.3 shall be true and correct when made and as of the Closing Date as though restated on the Closing Date; | |||
(b) | Woodbridge shall have delivered to the Partnership a certificate or certificates, in compliance with Treasury Regulations Section 1.1445-2, certifying that the transactions contemplated hereby are exempt from withholding under Section 1445 of the Code; | ||
(c) | Woodbridge and Woodbridge Parent shall have delivered the closing documents set forth on Schedule D that are required to be delivered by Woodbridge and/or Woodbridge Parent, in form and substance reasonably acceptable to ACSC and AbitibiBowater; | ||
(d) | all covenants contained in this Agreement to be performed by Woodbridge, Woodbridge Parent or ANI at or prior to the Closing Time shall have been performed in all material respects; and | ||
(e) | as of immediately prior to the Closing Time, Woodbridge shall own (beneficially and of record) all of the ANI Common Shares, free and clear of all Encumbrances. |
(a) | the representations and warranties of ACSC and AbitibiBowater contained in Section 5.1 shall be true and correct when made and as of the Closing Date as though restated on the Closing Date; | ||
(b) | ACSC, AbitibiBowater and the Partnership shall have delivered (i) the closing documents set forth on Schedule D that are required to be delivered by ACSC, AbitibiBowater and/or the Partnership, and (ii) the Security Documents, in each case in form and substance reasonably acceptable to Woodbridge and Woodbridge Parent; | ||
(c) | all covenants contained in this Agreement to be performed by ACSC, the Partnership and AbitibiBowater at or prior to the Closing Time shall have been performed in all material respects; and | ||
(d) | the Bankruptcy Claim and the Administrative Claim shall be allowed in the full amount as asserted or claimed by the Partnership. |
(a) | In the event that (i) the transactions contemplated by this Agreement shall not have been consummated on or prior to March 31, 2011; and (ii) the party seeking to terminate this Agreement pursuant to this Section 3.4(a) shall not |
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have breached in material respect any obligation under this Agreement in any manner that shall have proximately caused the failure to consummate the transactions contemplated by this Agreement prior to March 31, 2011, then this Agreement may be terminated by such party. | |||
(b) | In the event that either party shall have breached any of its representations, warranties, covenants or agreements and such breach is not cured within 20 Business Days of notice to such party by the other party, then this Agreement may be terminated by such other party, provided such other party is not then in breach of its representations, warranties, covenants or agreements where such other partys breach would give such first party the right to terminate this Agreement pursuant to this Section 3.4(b). | ||
(c) | For the purposes of this Section 3.4, (i) AbitibiBowater and ACSC collectively shall be deemed one party and (ii) Woodbridge Parent, Woodbridge and ANI collectively shall be deemed one party. | ||
(d) | If this Agreement is terminated pursuant to this Section 3.4 all further obligations of the parties under or pursuant to this Agreement shall terminate without further liability of any party to the other except for the provisions of (i) this Section 3.4(d) (Unsatisfied Closing Conditions), (ii) Article 7 (Dispute Resolution) and (iii) Article 9 (Miscellaneous); provided , that neither the termination of this Agreement nor anything in this Section 3.4(d) shall relieve any party from Liability for any breach of this Agreement occurring prior to such termination hereof. |
(a) | ACSC, AbitibiBowater and the Partnership shall deliver the Woodbridge Release (attached hereto as Schedule B) to Woodbridge; and | ||
(b) | Woodbridge and Woodbridge Parent shall deliver the AbitibiBowater Release (attached hereto as Schedule C) to ACSC. |
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(a) | From the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, ACSC and ANI shall cause the Partnership to, and the Partnership shall, conduct the business of the Partnership in all material respects in the ordinary course of business on a basis consistent with past practice, and use commercially reasonable efforts to preserve its business operation, including the services of its officers and employees, and its business relationships with customers, suppliers and others having business dealings with the Partnership. By way of amplification and not of limitation, from the date hereof until the Closing Date, ACSC and ANI shall cause the Partnership to, and the Partnership shall, refrain from (i) shortening or lengthening the customary payment cycles of the Partnership with respect to accounts payable and accounts receivable, (ii) changing customary payment terms of the Partnership with respect to accounts receivable and accounts payable, and (iii) changing the customary inventory management practices of the Partnership. | ||
(b) | From the date hereof until the earlier of the Closing or the termination of this Agreement in accordance with its terms, ANI shall not, and Woodbridge shall cause ANI not do any of the following: |
(i) | enter into any Contract; |
(ii) | (A) issue, sell, transfer, pledge, grant, dispose of, encumber or deliver (whether through the issuance or granting of any options, warrants, commitments, subscriptions, rights to purchase or otherwise) any equity securities of any class or any securities convertible into or exercisable or exchangeable for voting or equity securities of any class (except for the issuance of certificates in replacement of lost certificates) or (B) adjust, split, combine, or reclassify any of its equity securities; |
(iii) | redeem, purchase or otherwise acquire any outstanding shares of the capital stock of ANI, other than as contemplated by Section 2.7 of this Agreement. |
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(iv) | acquire in any manner any Assets or Properties; |
(v) | mortgage, pledge or subject to any Encumbrances, any of its Assets or Properties; |
(vi) | amend or restate, or propose to amend or restate, any Organizational Document of ANI; |
(vii) | merge or consolidate with or into any other Person or dissolve or liquidate; |
(viii) | incur or assume any Liabilities, assume, guarantee, endorse or otherwise become liable or responsible for the Liabilities of any other Person; |
(ix) | lease, sell or otherwise dispose of any Assets or Properties, other than as contemplated by Section 2.6 of this Agreement; |
(x) | commence or settle any claim, action or proceeding; or |
(xi) | agree in writing or otherwise to do anything contained in this clause (b). |
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(a) | in the case of ACSC and AbitibiBowater, it is a corporation duly and validly incorporated under the laws of the jurisdiction of its incorporation and, in the case of the Partnership, it is a partnership, or, in the case of a LLC Conversion, at the Closing, will be a limited liability company, duly formed and validly existing under the laws of its jurisdiction of formation; | ||
(b) | it has the requisite power and authority to own its Assets and Properties and to carry on its business as currently conducted; | ||
(c) | in the case of ACSC and AbitibiBowater, it has the corporate power and corporate capacity and, in the case of the Partnership, has the partnership power and partnership capacity, or at Closing, if applicable, it will have the limited liability company power and limited liability company capacity, to execute and deliver, and to observe and perform its covenants and obligations under, this Agreement and the documents being entered into in connection herewith, and to consummate the transactions contemplated hereby and thereby; | ||
(d) | in the case of ACSC and AbitibiBowater, it has taken all corporate action and, in the case of the Partnership, it has taken all partnership action, or at Closing, if applicable, it will have taken all limited liability company action, necessary to duly and validly authorize the execution and delivery of, and the observance and performance of its covenants and obligations under, this Agreement and the documents being entered into in connection herewith, and to consummate the transactions contemplated hereby and thereby; | ||
(e) | this Agreement and each of the documents entered into in connection herewith have been duly and validly executed and delivered by it, and constitute legal, valid and binding obligations of it enforceable against it in accordance with their respective terms, subject to the fact that (i) specific performance, injunctive relief and other equitable remedies are discretionary and may not be available where damages are considered an adequate remedy and (ii) |
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enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction, moratorium, arrangement and other similar Laws generally affecting the enforceability of creditors rights and remedies generally and general principles of equity; |
(f) | none of the execution and delivery of, or the observance and performance by it of any covenant or obligation under this Agreement and the documents entered into in connection herewith and the consummation of the transactions contemplated hereby: |
(i) | conflicts with or results in a violation or breach of any of the terms, conditions or provisions of its Organizational Documents; |
(ii) | conflicts with or results in a violation or breach of any term or provision of any applicable Law or Order applicable to it or to its Assets and Properties; |
(iii) | (A) conflicts with or results in a violation or breach of, (B) constitutes (with or without notice or lapse of time or both) a default under, (C) requires it to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, (D) results in, or gives to any Person any right of termination, cancellation, acceleration or modification in or with respect to, (E) results in or gives to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, or (F) results in the creation or imposition of any Encumbrance upon its Assets and Properties under, any material Contract to which it is a party or by which its material Assets and Properties are bound or affected, other than the Secured Promissory Note or the Security Documents; or |
except, in the case of (ii) and (iii) above, as required pursuant to the DOJ Order and for such defaults, violations, actions and notifications that would not reasonably be expected to, individually or in the aggregate, materially delay or prevent, the performance by ACSC or the Partnership of any of its obligations hereunder or the Partnerships obligations under the Secured Promissory Note; | |||
(g) | other than pursuant to the DOJ Order, in connection with the sale of the Purchase Stock, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority is required by it in connection with the execution, delivery and performance of this Agreement or any of the documents being entered into in connection herewith or the consummation of the transactions contemplated hereby or thereby, except for such defaults, violations, actions and notifications that would not reasonably be expected to, individually or in the aggregate, materially delay or prevent, the performance by ACSC or the Partnership of any of its obligations hereunder or the Partnerships obligations under the Secured Promissory Note; and |
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(h) | it has not taken and agrees it will not take any action that would cause any other party hereto to become liable to any claim or demand for a brokerage commission, finders fee or other similar payment. |
(a) | it is a corporation duly and validly incorporated under the laws of the jurisdiction of its incorporation; | ||
(b) | no Actions or Proceedings have been taken or authorized by it, or to the best of its knowledge, by any other Person, with respect to bankruptcy, insolvency, liquidation, reconstruction, moratorium, dissolution or winding-up or other similar Actions or Proceedings of or affecting it; | ||
(c) | it has the requisite power and authority to own its Assets and Properties and to carry on its business as currently conducted; | ||
(d) | it has the corporate power and corporate capacity to execute and deliver, and to observe and perform its covenants and obligations under, this Agreement and the documents being entered into in connection herewith, and to consummate the transactions contemplated hereby and thereby; | ||
(e) | it has taken all corporate action necessary to duly and validly authorize the execution and delivery of, and the observance and performance of its covenants and obligations under, this Agreement and the documents being entered into in connection herewith, and to consummate the transactions contemplated hereby and thereby; | ||
(f) | this Agreement and each of the documents entered into in connection herewith have been duly and validly executed and delivered by it, and constitute legal, valid and binding obligations of it enforceable against it in accordance with their respective terms, subject to the fact that (i) specific performance, injunctive relief and other equitable remedies are discretionary and may not be available where damages are considered an adequate remedy and (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction, moratorium, arrangement and other similar Laws generally affecting the enforceability of creditors rights and remedies generally and general principles of equity; |
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(g) | none of the execution and delivery of, or the observance and performance by it of any covenant or obligation under this Agreement and the documents entered into in connection herewith and the consummation of the transactions contemplated hereby: |
(i) | conflicts with or results in a violation or breach of any of the terms, conditions or provisions of its Organizational Documents; |
(ii) | conflicts with or results in a violation or breach of any term or provision of any applicable Law or Order applicable to it or to its Assets and Properties; or |
(iii) | (A) conflicts with or results in a violation or breach of, (B) constitutes (with or without notice or lapse of time or both) a default under, (C) requires it to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, (D) results in, or gives to any Person any right of termination, cancellation, acceleration or modification in or with respect to, (E) results in or gives to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, or (F) results in the creation or imposition of any Encumbrance upon its Assets and Properties under, any Contract to which it is a party or by which its Assets and Properties are bound or affected, |
(h) | other than filings under, and waiting periods mandated by HSR in connection with the sale of the Purchase Stock, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority is required by it in connection with the execution, delivery and performance of this Agreement or any of the documents being entered into in connection herewith or the consummation of the transactions contemplated hereby or thereby, except for such defaults, violations, actions and notifications that would not reasonably be expected to, individually or in the aggregate, materially delay or prevent, the performance by Woodbridge of any of its obligations hereunder; and | ||
(i) | it has not taken and agrees it will not take any action that would cause any other party hereto to become liable to any claim or demand for a brokerage commission, finders fee or other similar payment. |
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(a) | ANI is a corporation duly and validly incorporated and existing in good standing under the laws of the State of Delaware; | ||
(b) | ANI is duly qualified, Licensed or admitted to transact business as a foreign corporation, and is in good standing, in the State of Georgia, which is the only jurisdiction in which the ownership, use or leasing of the Assets and Properties of ANI, or the conduct and nature of the business of ANI, makes such qualification, Licensing or admission necessary; | ||
(c) | ANI has the corporate power and corporate capacity to execute and deliver, and to observe and perform its covenants and obligations under, this Agreement and the documents being entered into in connection herewith, and to consummate the transactions contemplated hereby and thereby; | ||
(d) | ANI has taken all corporate action necessary to duly and validly authorize the execution and delivery of, and the observance and performance of its covenants and obligations under, this Agreement and the documents being entered into in connection herewith, and to consummate the transactions contemplated hereby and thereby; | ||
(e) | this Agreement and each of the documents entered into in connection herewith have been duly and validly executed and delivered by ANI, and constitute legal, valid and binding obligations of it enforceable against it in accordance with their respective terms, subject to the fact that (i) specific performance, injunctive relief and other equitable remedies are discretionary and may not be available where damages are considered an adequate remedy and (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction, moratorium, arrangement and other similar Laws generally affecting the enforceability of creditors rights and remedies generally and general principles of equity; | ||
(f) | none of the execution and delivery of, or the observance and performance by ANI of any covenant or obligation under this Agreement and the documents entered into in connection herewith and the consummation of the transactions contemplated hereby or thereby: |
(i) | conflicts with or results in a violation or breach of any of the terms, conditions or provisions of ANIs Organizational Documents; |
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(ii) | conflicts with or results in a violation or breach of any term or provision of any applicable Law or Order applicable to ANI or to ANIs Assets and Properties; or |
(iii) | (A) conflicts with or results in a violation or breach of, (B) constitutes (with or without notice or lapse of time or both) a default under, (C) requires it to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, (D) results in or gives to any Person any right of termination, cancellation, acceleration or modification in or with respect to, (E) results in or gives to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, or (F) results in the creation or imposition of any Encumbrance upon ANIs Assets and Properties under, any Contract to which ANI is a party or by which ANIs Assets and Properties are bound or affected; |
(g) | ANI has the requisite power and authority to own its Assets and Properties; | ||
(h) | ANI has no outstanding Liabilities of any kind other than (i) Liabilities to the other partners in the Partnership under the terms of the Partnership Agreement, (ii) the contingent Liabilities of a general partner arising directly and exclusively from the operation and business of the Partnership, (iii) Liabilities for Taxes not yet due for which Woodbridge has agreed to reimburse or indemnify ACSC under this Agreement (provided, however neither Woodbridge nor Woodbridge Parent has any obligation to reimburse or indemnify ACSC for Liabilities for Taxes in respect of which Abitibi-Consolidated Corp. agreed to indemnify ANI pursuant to the Indemnity Agreement made as of February 23, 2007 between Abitibi-Consolidated Corp., ANI and ACSC). | ||
(i) | The financial statements delivered to ACSC as of the date hereof, which are the last annual financial statements of ANI prior to the Closing Date (the ANI Financial Statements ), are true and complete copies of the financial statements of ANI as at the dates provided therein. The ANI Financial Statements have been prepared in accordance with GAAP, and fairly present the financial condition, results of operations, changes in equity and cash flows of ANI as of the date thereof and for the period covered thereby, except for changes to such amounts resulting from (A) distributions (x) by the Partnership to ANI, (y) as contemplated by Section 2.5 of this Agreement and (z) as contemplated by Section 2.6 of this Agreement and (B) the redemption contemplated by Section 2.7 of this Agreement. Since the date of the ANI Financial Statements there has not been any change or any event or development, except for such change, event or development contemplated by this Agreement, which, individually or together with other such events, could reasonably be expected to result in a change in the condition, financial or otherwise, of ANI; |
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(j) | ANI has no Assets or Properties other than the Partnership Interest. Except for the Partnership Agreement, there are no other Contracts to which ANI is a party or by which ANI or its Assets and Properties are bound as of the date hereof and at the Closing Date; | ||
(k) | no Actions or Proceedings have been taken or authorized by ANI, Woodbridge, WIHSA or Woodbridge Parent, or to the best of ANIs, Woodbridges, WIHSAs or Woodbridge Parents knowledge, by any other Person, with respect to bankruptcy, insolvency, liquidation, reconstruction, moratorium, dissolution or winding-up or other similar Actions or Proceedings of or affecting ANI, other than the Bankruptcy Proceedings; | ||
(l) | there are no Actions or Proceedings pending or threatened to the best of ANIs, Woodbridges, WIHSAs or Woodbridge Parents knowledge against ANI, or affecting ANIs Assets and Properties; | ||
(m) | ANI is and has at all times been, in compliance in all material respects with all Licenses, Laws and Orders applicable to it; | ||
(n) | ANI has never had and now has no employees; | ||
(o) | ANI has no direct or indirect, contingent or otherwise, ERISA Affiliate Liability or any other liability that is imposed on a controlled group basis; | ||
(p) | attached hereto as Exhibit A is a true and complete copy of the Certificate of Incorporation of ANI as in effect on the date hereof; | ||
(q) | attached hereto as Exhibit B is a true and complete copy of the By-laws of ANI as in effect on the date hereof; | ||
(r) | Woodbridge has provided ACSC with access to true and correct copies of the transfer ledgers and minute books of ANI, which accurately reflect all issues and transfers of Equity Interests prior to the date hereof and all actions taken by the directors and stockholders of ANI prior to the date hereof; | ||
(s) | except for its interest in the Partnership, ANI neither owns, nor has it heretofore owned, directly or indirectly, any Equity Interest in, or any Option with respect to any Equity Interest in, any Person; | ||
(t) | ANI is the sole legal and beneficial owner of the Partnership Interest, free of all Encumbrances; | ||
(u) | all of the shares of Purchase Stock (i) have been duly authorized and validly issued, (ii) are fully paid and non-assessable, and (iii) have not been issued in violation of pre-emptive, subscription or other rights or of any Law or Order; the authorized capital of ANI is 20,000 shares of ANI Class A Preferred Stock, 20,000 shares of ANI Class B Preferred Stock and 20,000 shares of ANI Common Stock; and the Purchase Stock constitute all of the issued and |
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outstanding Equity Interests of ANI; and no Person has an Option to purchase any of the Equity Interests of ANI (other than pursuant to the WIHSA Transfer Agreement); |
(v) | Woodbridge (together with WIHSA, from which Woodbridge will acquire all of the outstanding ANI Common Stock prior to Closing pursuant to the WIHSA Transfer Agreement) is the sole legal and beneficial owner of the Purchase Stock, free and clear of all Encumbrances, and upon the delivery of certificates evidencing the Purchase Stock to ACSC, duly endorsed in blank, ACSC shall acquire good and marketable legal and beneficial title to the Purchase Stock, free and clear of all Encumbrances; no Person has an Option to purchase any of the Purchase Stock (other than Woodbridge pursuant to the WIHSA Transfer Agreement); there are no Actions or Proceedings pending or threatened with respect to any of the Purchase Stock, Woodbridges or WIHSAs, as applicable, ownership of the Purchase Stock or Woodbridges or WIHSAs, as applicable, right to sell the Purchase Stock and there is no basis for any such Action or Proceeding; and no Person enjoys any right of first refusal, right of first opportunity, tag along/drag along right or similar right with respect to the Purchase Stock; | ||
(w) | the Purchase Stock is not subject to any voting trust agreement or other Contract relating to the voting or transfer of the Purchase Stock (other than the WIHSA Transfer Agreement); | ||
(x) | ANI conducts no business, and at no time has conducted any business or operations or pursued any activities, other than the holding of the Partnership Interest; | ||
(y) | except as disclosed in writing by Woodbridge to ACSC prior to the date hereof: |
(i) | all Tax Returns that are required to be filed with respect to ANI have been filed. All such Tax Returns were correct and complete in all material respects. All Taxes owed by ANI (whether or not shown on any Tax Return) have been paid. ANI is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where ANI does not file Tax Returns that ANI is or may be subject to taxation by that jurisdiction. There are no Encumbrances on any of the Assets or Properties of ANI that arose in connection with any failure (or alleged failure) to pay any Tax; |
(ii) | ANI has withheld and timely paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party; |
(iii) | there is no dispute or claim concerning any Tax Liability of ANI either (A) claimed or raised by any Taxing Authority in writing, or (B) as to |
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which Woodbridge and their respective directors and officers (and other Persons responsible for their Tax matters) has knowledge. Woodbridge has delivered to ACSC correct and complete copies of all United States federal income Tax Returns for the years ended June 30, 2010, June 30, 2009 and June 30, 2008, and all Georgia state income Tax Returns for the years ended June 30, 2010, June 30, 2009 and June 30, 2008. There have been no audits of ANI by any Taxing Authority; |
(iv) | ANI has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency and no request for any such waiver or extension is currently pending; |
(v) | ANI has not filed a consent under Code Section 341(f) concerning collapsible corporations. ANI has not made any payments, is not obligated to make any payments, and is not a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Code Section 280G. ANI is not a party to any Tax allocation or sharing agreement. ANI (A) has not been a member of an Affiliated Group (as defined in Code Section 1504(a)) filing a consolidated federal income Tax Return (other than a group the common parent of which was ANI), or (B) has no Liability for the Taxes of any other Person under Code Reg. Section 1.1502-6 or 1.1502-78, as a transferee or successor, by contract, or otherwise; |
(vi) | ANI has not constituted a distributing corporation or a controlled corporation (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for tax-free treatment under Section 355 of the Code (A) in the two years prior to the date of this Agreement or (B) in a distribution that could otherwise constitute part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) in conjunction with this acquisition; |
(vii) | except for income recognized by ANI attributable to any transactions entered into by ACSC, its affiliates or ANI after the Closing Date or occurring after the Closing Date, ANI will not be required to include in a taxable period ending after the Closing Date taxable income attributable to income that accrued in a taxable period prior to the Closing Date but was not recognized for Tax purposes in such prior taxable period (or to exclude from taxable income in a taxable period ending after the Closing Date any deduction the recognition of which was accelerated from such taxable period to a taxable period prior to the Closing Date) as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting, Section 481 of the Code or Section 108(i) of the Code or comparable provisions of state, local or foreign Tax law; and |
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(viii) | ANI has not executed or entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision of state, local or foreign Tax law, and is not subject to any private letter ruling of the IRS or comparable ruling of any other Governmental Authority; |
(z) | ANI has not taken and agrees it will not take any action that would cause any other party hereto to become liable to any claim or demand for a brokerage commission, finders fee or other similar payment. |
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(a) | After the Closing Date, ANI and ACSC shall promptly notify Woodbridge, or Woodbridge shall promptly notify ANI and ACSC, in writing, of any written notice by a Taxing Authority of a proposed Tax assessment or claim against ANI or an audit or administrative or judicial proceeding involving ANI which, would reasonably be expected to give rise to indemnification under Section 6.4 ( Tax Contest ); provided , however , that failure to give prompt written notice of any such claim shall bar indemnification hereunder only to the extent such failure materially prejudices Woodbridge. | ||
(b) | Except as provided in Section 6.7(c) below, in the case of a Tax Contest that relates to any Pre-Closing Period, Woodbridge shall have the right, at its own expense, to control the conduct of such a Tax Contest (including any settlement or litigation), provided that ANI and ACSC also may participate in any such a Tax Contest at their own expense and, if Woodbridge does not assume the defense of any such a Tax Contest, ANI or ACSC may defend the same in such manner as it may deem appropriate, including settling such a Tax Contest, without any effect on any right to indemnification under Section 6.4. | ||
(c) | Woodbridge and ACSC may each participate in a Tax Contest relating to a straddle period, and such Tax Contest shall be controlled by Woodbridge or ACSC, whichever group would bear the burden of the greatest portion of any potential Tax adjustment to which the Tax Contest relates. | ||
(d) | All indemnification payments for Losses made pursuant to this Article 6 shall be made on an after-Tax basis. Accordingly, in determining the amount of any indemnification payment for a Loss suffered or incurred by an indemnitee hereunder, the amount of such Loss shall be (i) increased to take into account any additional Tax cost incurred by the indemnitee arising from the receipt of indemnification payments and (ii) decreased to take into account any deduction, credit or other Tax benefit actually realized by the indemnitee with respect to such Loss ( Tax Costs ). In computing the amount of any such Tax Cost or Tax Benefit, the indemnitee shall be deemed to recognize all other |
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items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnification payment hereunder or the incurrence or payment of any indemnified Loss; provided , that, if a Tax Cost or Tax Benefit is not realized in the taxable period during which an indemnifying party makes an indemnification payment or the indemnitee incurs or pays any Loss, the parties hereto shall thereafter make payments to one another at the end of each subsequent taxable period to reflect the net Tax Costs and Tax Benefits realized by the parties hereto in each such subsequent taxable period. |
(a) | any hearing in the course of the arbitration shall be held in New York, New York in the English language; | ||
(b) | if the parties are able to agree in writing to a single arbitrator within twenty (20) days of the institution of any arbitration hereunder, the number of |
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arbitrators shall be one; otherwise, each party shall select one arbitrator and those two arbitrators shall select a third arbitrator, and the three arbitrators so chosen shall serve as the arbitrators of such dispute; |
(c) | any award or determination of the arbitrator shall be final and binding on the parties and there shall be no appeal on any ground, including, for greater certainty, on the ground of alleged errors of Law; | ||
(d) | despite Article M-10 of the Commercial Arbitration Rules, the arbitrator shall not, without the written consent of all parties to the arbitration, retain any expert; | ||
(e) | all costs and expenses of arbitration shall be split equally between the parties hereto; and | ||
(f) | all matters in relation to the arbitration shall be kept confidential to the full extent permitted by Law, and no individual shall be appointed as an arbitrator unless he or she agrees in writing to be bound by this dispute resolution provision. |
(a) | Woodbridge and Woodbridge Parent hereby agree jointly and severally, to indemnify and to hold ACSC, AbitibiBowater and the Partnership harmless from and against any and all Loss (other than Losses indemnified pursuant to Section 6.4) suffered or incurred by ACSC, AbitibiBowater or the Partnership (and following the Closing, ANI) in connection with or arising from: |
(i) | any breach by Woodbridge or Woodbridge Parent of any of its covenants or agreements in this Agreement or any failure by Woodbridge or Woodbridge Parent to perform any of its obligations in this Agreement; and |
(ii) | any breach of any warranty or the inaccuracy of any representation of Woodbridge or Woodbridge Parent contained in this Agreement. |
(b) | The indemnifications provided for in Section 8.1(a)(i) shall continue indefinitely. The indemnifications provided for in Section 8.1(a)(ii) shall terminate on the date that is eighteen (18) months following the Closing Date |
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(and no claims may be made by ACSC, AbitibiBowater or the Partnership (and following the Closing, ANI) under Section 8.1(a)(ii) thereafter), except that the indemnification by Woodbridge and Woodbridge Parent shall continue indefinitely as to the representations and warranties contained in Sections 5.3(h), 5.3(i), 5.3(j), 5.3(n), 5.3(o), 5.3(p), 5.3(q), 5.3(r), 5.3(s), 5.3(t), 5.3(u), 5.3(v), 5.3(w), 5.3(x) and 5.3(y). |
(a) | ACSC and AbitbiBowater hereby agree to indemnify and to hold Woodbridge and Woodbridge Parent harmless from and against any and all Loss suffered or incurred by Woodbridge or Woodbridge Parent in connection with or arising from: |
(i) | any breach by ACSC, the Partnership or AbitibiBowater of any of its covenants or agreements in this Agreement or any failure by ACSC, the Partnership or AbitibiBowater to perform any of its obligations in this Agreement; and |
(ii) | any breach of any warranty or the inaccuracy of any representation of ACSC or AbitibiBowater contained or referred to in this Agreement. |
(b) | The indemnifications provided for in Section 8.1(a)(i) shall continue indefinitely. The indemnifications provided for in Section 8.2(a)(ii) shall terminate on the date that is eighteen (18) months following the Closing Date (and no claims may be made by Woodbridge or Woodbridge Parent under Section 8.2(a)(ii) thereafter). |
(a) | 52.5% of any and all Environmental Damages incurred by the Woodbridge Indemnitees that arise from or pertain to Conditions or Operations known to the parties as listed on Schedule I hereto; and | ||
(b) | 100% of |
(i) | any and all Environmental Damages incurred by the Woodbridge Indemnitees arising from or pertaining to Conditions or Operations that are not covered under clause (a); and |
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(ii) | any and all Losses and Liabilities incurred by the Woodbridge Indemnitees arising directly or indirectly by reason of or as a consequence of the Operations of the Partnership. |
(c) | The indemnifications provided in Section 8.3(a) and 8.3(b) shall continue indefinitely. |
(a) | Woodbridge and Woodbridge Parent hereby agree jointly and severally, at any time or times after the Closing Date, to indemnify ACSC, AbitibiBowater, the Partnership, ANI and all direct and indirect subsidiaries of AbitibiBowater, and each present and former director, officer, agent, servant, employee of each such entity, including any persons who have maintained a position on the management committee of the Partnership (collectively, the Abitibi Indemnitees ), harmless from and against 47.5% of any and all Environmental Damages incurred by the Abitibi Indemnitees that that arise from or pertain to Conditions or Operations known to the parties as listed on Schedule I hereto. | ||
(b) | The indemnifications provided in Section 8.4(a) shall continue indefinitely. |
(a) | The party claiming indemnification (the Indemnified Party ) in respect of, arising out of or involving a claim or demand made by a third party against the Indemnified Party (a Third Party Claim ) shall deliver notice (a Claim Notice ) to the other party (the Indemnifying Party ) within twenty (20) days after receipt by such Indemnified Party of written notice of the Third Party Claim; provided, however, that failure to give such Claim Notice shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure. |
(b) | If a Third Party Claim is made against an Indemnified Party, the Indemnifying Party shall have the right to assume the defense of such Third Party Claim with counsel selected by the Indemnifying Party. Should the Indemnifying Party so assume the defense of a Third Party Claim, except as provided in this Section 8.5(b), the Indemnifying Party shall not be liable to the Indemnified Party for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof. If the Indemnifying Party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party. If (i) the Indemnifying Party shall not assume the defense of a Third Party Claim within thirty (30) days of any Claim Notice, or (ii) legal counsel for the Indemnified Party notifies the Indemnifying Party that there are or may be legal defenses available to the Indemnified Party |
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that are different from or additional to those available to the Indemnifying Party, that, if the Indemnified Party and the Indemnifying Party were to be represented by the same counsel, would constitute a conflict of interest for such counsel or prejudice prosecution of the defenses available to such Indemnified Party, or (iii) if the Indemnifying Party shall assume the defense of a Third Party Claim and fail to prosecute such defense with reasonable diligence following notice of such failure by the Indemnified Party, then in each such case the Indemnified Party, by notice to the Indemnifying Party, may employ its own counsel and the Indemnifying Party shall be liable for the reasonable fees, charges and disbursements of one counsel employed by the Indemnified Party and the Indemnified Party shall be promptly reimbursed for any such fees, charges and disbursements, as and when incurred. Whether the Indemnifying Party or the Indemnified Party controls the defense of any Third Party Claim, the parties shall cooperate in the defense thereof. Such cooperation shall include the retention and provision to the counsel of the controlling party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Indemnifying Party shall have the right to settle, compromise or discharge a Third Party Claim (other than any such Third Party Claim in which criminal conduct is alleged) without the Indemnified Partys consent if such settlement, compromise or discharge (i) constitutes a complete and unconditional discharge and release of the Indemnified Party (and, if Woodbridge is the Indemnifying Party, of ANI and the Partnership), and (ii) provides for no relief other than the payment of monetary damages and such monetary damages are paid in full by the Indemnifying Party. No Third Party Claim may be settled by the Indemnified Party without the written consent of the Indemnifying Party. |
(c) | If any Indemnified Party should have a claim under Article 8 against any Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver notice (an Indemnity Notice ) within thirty (30) days after an Indemnified Party first obtains knowledge of any claim that the Indemnified Party has determined has given or could reasonably be expected to give rise to a right of indemnification under this Agreement describing in reasonable detail the facts giving rise to any claim for indemnification hereunder and shall include in such Indemnity Notice (if then known) the amount or the method of computation of the amount of the Loss relating to such claim, and a reference to the provision of this Agreement upon which such claim is based. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such partys rights hereunder except to the extent that an Indemnifying Party shall have been actually prejudiced as a result of such failure. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim described in such Indemnity Notice, the Loss in the amount specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Article 8 and the Indemnifying Party shall pay such amount to the Indemnified |
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Party on demand. If the Indemnifying Party disputes its liability with respect to such claim, the Indemnifying Party and the Indemnified Party will proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations within thirty (30) days of the Indemnity Notice, such dispute shall be resolved in accordance with Article 7 hereof. |
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In the case of a Notice to Woodbridge, addressed to it at: | ||
|
||
|
Woodbridge International Holdings Limited | |
|
65 Queen Street West | |
|
Suite 2400 | |
|
Toronto, Ontario | |
|
M5H 2M8 | |
|
Attention: Gregory J. Dart | |
|
||
|
Facsimile No.: 416.365.9293 | |
|
||
In the case of a Notice to Woodbridge Parent, addressed to it at: | ||
|
The Woodbridge Company Limited | |
|
65 Queen Street West | |
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Suite 2400 | |
|
Toronto, Ontario | |
|
M5H 2M8 | |
|
Attention: Gregory J. Dart | |
|
||
|
Facsimile No.: 416.365.9293 | |
|
||
With a copy of any Notice sent to Woodbridge or Woodbridge Parent to: | ||
|
||
|
Torys LLP | |
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79 Wellington Street West | |
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Suite 3000, Box 270 TD Centre | |
|
Toronto, Ontario M5K 1N2 | |
|
||
|
Attention: Michael J. Siltala | |
|
||
|
Facsimile No.: 416.865.7380 |
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In the case of a Notice to ACSC, addressed to it at: | ||
|
Abitibi Consolidated Sales Corporation | |
|
1155 Metcalfe Street, Suite 800 | |
|
Montreal, Quebec | |
|
H3B 5H2 | |
|
||
|
Attention: Executive Vice President Operations and Sales | |
|
||
|
Facsimile No.: 514.394.2241 | |
|
||
In the case of a Notice to AbitibiBowater, addressed to it at: | ||
|
AbitibiBowater Inc. | |
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1155 Metcalfe Street, Suite 800 | |
|
Montreal, Quebec | |
|
H3B 5H2 | |
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||
|
Attention: Executive Vice President Operations and Sales | |
|
||
|
Facsimile No.: 514.394.2241 | |
|
||
With a copy of any Notice sent to ACSC, AbitibiBowater, the Partnership or, following the Closing, ANI to: | ||
|
||
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AbitibiBowater Inc. | |
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1155 Metcalfe Street, Suite 800 | |
|
Montreal, Quebec | |
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H3B 5H2 | |
|
Attention: Vice President Legal Affairs | |
|
||
|
Facsimile No.: 514.394.3644 | |
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and to | |
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||
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Paul, Weiss, Rifkind, Wharton & Garrison LLP | |
|
1285 Avenue of the Americas | |
|
New York, NY 10019-6064 | |
|
Attention: Ariel J. Deckelbaum | |
|
||
|
Facsimile No.: 212.757.3990 |
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In the case of a Notice to the Partnership, addressed to it at: | ||
|
Augusta Newsprint Company | |
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c/o AbitibiBowater | |
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1155 Metcalfe Street, Suite 800 | |
|
Montreal, Quebec | |
|
H3B5H2 | |
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||
|
Attention: Executive Vice President Operations and Sales | |
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||
|
Facsimile No.: 514.394.3644 | |
|
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In the case of any pre-Closing Notice to Augusta Newsprint Inc., addressed to it at: | ||
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Woodbridge International Holdings Limited | |
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65 Queen Street West | |
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Suite 2400 | |
|
Toronto, Ontario | |
|
M5H 2M8 | |
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||
|
Attention: Gregory J. Dart | |
|
||
|
Facsimile No.: 416.365.9293 |
(i) | on the day it was delivered, if delivered as aforesaid; or |
(ii) | on the day of sending, if sent by Transmission during normal business hours of the addressee on a Business Day and, if not, then on the first Business Day after the sending thereof. |
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WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED
|
||||
By: | /s/ Gregory J. Dart | |||
Authorized Officer | ||||
THE WOODBRIDGE COMPANY LIMITED
|
||||
By: | /s/ Gregory J. Dart | |||
Authorized Officer | ||||
ABITIBI CONSOLIDATED SALES CORPORATION
|
||||
By: | /s/ Pierre Rougeau | |||
Name: | Pierre Rougeau | |||
Title: | President | |||
ABITIBIBOWATER INC.
|
||||
By: | /s/ Pierre Rougeau | |||
Name: | Pierre Rougeau | |||
Title: | Executive Vice President, Operations and Sales | |||
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AUGUSTA NEWSPRINT COMPANY | ||||||
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||||||
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By: |
ABITIBI CONSOLIDATED SALES CORPORATION
its General Partner |
||||
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||||||
|
By: |
/s/ Pierre Rougeau
|
||||
|
Title: President | |||||
|
||||||
AUGUSTA NEWSPRINT INC. | ||||||
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||||||
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By: |
/s/ Gregory J. Dart
|
a. | Stock Purchase Agreement means that certain Stock Purchase Agreement by and among the Releasors, Woodbridge, Woodbridge Parent and Augusta Newsprint Inc. made as of n , 2010 and/or any document entered into in connection therewith. | ||
b. | Demands means all Actions and Proceedings, causes of action, suits, debts, losses, expenses, judgments, damages, obligations, Liabilities, dues, accounts, bonds, covenants, Contracts, claims, contributions, indemnifications, executions and demands whatsoever. | ||
c. | Releasees means The Woodbridge Company Limited ( Woodbridge Parent ), Woodbridge International Holdings Limited ( Woodbridge ), and all of the other direct and indirect subsidiaries of Woodbridge Parent (collectively, the Corporations ), each present and former director, officer, agent, servant and employee of the Corporations including, without limitation, any of such persons who have maintained a position on the management committee of the Partnership, and each of their respective successors, assigns, heirs, executors, estate trustees, personal representatives and administrators, as applicable. | ||
d. | Releasors means the undersigned companies, including for these purposes their respective successors by operation of law. | ||
e. | Terms capitalized herein but not defined herein shall have the respective meanings set forth in the Stock Purchase Agreement. |
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ABITIBI CONSOLIDATED SALES CORPORATION
|
||||
By: | ||||
Name: | ||||
Title | ||||
ABITIBIBOWATER INC.
|
||||
By: | ||||
Name: | ||||
Title: | ||||
AUGUSTA NEWSPRINT INC.
|
||||
By: | ||||
Name: | ||||
Title: | ||||
AUGUSTA NEWSPRINT COMPANY
|
||||
By: | ||||
Name: | ||||
Title: | ||||
a. | Stock Purchase Agreement means that certain Stock Purchase Agreement by and among the Releasors, ACSC, AbitibiBowater, Augusta Newsprint Company and ANI made as of n , 2010 and/or any document entered into in connection therewith. | ||
b. | Demands means all Actions and Proceedings, causes of action, suits, debts, losses, expenses, judgments, damages, obligations, Liabilities, dues, accounts, bonds, covenants, Contracts, claims, contributions, indemnifications, executions and demands whatsoever. | ||
c. | Releasees means AbitibiBowater Inc. ( AbitibiBowater ), Abitibi Consolidated Sales Corporation ( ACSC ), Augusta Newsprint Inc. ( ANI ) and all of the other direct and indirect subsidiaries of AbitibiBowater (collectively, the Corporations ) the Partnership and each present and former director, officer, agent, servant and employee of the Corporations or the Partnership including, without limitation, any of such persons who have maintained a position on the management committee of the Partnership, and each of their respective successors, assigns, heirs, executors, estate trustees, personal representatives and administrators, as applicable. | ||
d. | Releasors means the undersigned companies, including for these purposes their respective successors by operation of law. | ||
e. | Terms capitalized herein but not defined herein shall have the respective meanings set forth in the Stock Purchase Agreement. |
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WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED
|
||||
By: | ||||
THE WOODBRIDGE COMPANY LIMITED |
||||
By: | ||||
1. | The Purchase Stock, together with a stock power with respect to the Purchase Stock executed in blank; | |
2. | certificates from the appropriate authorities, dated not more than ten (10) Business Days prior to the Closing Date, to the effect that each of Woodbridge, Woodbridge Parent and ANI each is in good standing in their jurisdiction of incorporation; | |
3. | a certificate dated not more than ten (10) Business Days prior to the Closing Date from the Secretary of State of the State of Georgia to the effect that ANI is duly qualified as a foreign corporation and in good standing in Georgia; | |
4. | the AbitibiBowater Release; | |
5. | a certificate of a Senior Officer of each of Woodbridge and Woodbridge Parent to the effect that all of the representations and warranties made by each of Woodbridge and Woodbridge Parent are true and correct in all respects and that each of Woodbridge and Woodbridge Parent has complied with all covenants required to be complied with by it prior to Closing in all material respects; | |
6. | at least two (2) Business Days prior to the Closing Date, the notice contemplated by Section 2.3; | |
7. | the resignations of all directors and officers of ANI and releases from such individuals from all claims ANI, as contemplated by Section 3.5 of the Agreement; | |
8. | the Assignment and Assumption of Bankruptcy Claims Agreement; | |
9. | the Assignment and Assumption of Administrative Claim Agreement; and | |
10. | all other documents reasonably required to be delivered by Woodbridge to ACSC in connection with the purchase and sale of the Purchase Stock. |
1. | In immediately available funds, an amount equal to the lesser of (i) fifteen million dollars ($15,000,000) and (ii) 52.5% of the Estimated Partnership Cash; | |
2. | the Secured Promissory Note; | |
3. | at least five (5) Business Days prior to the Closing Date, the Estimated Closing Date Cash Statement; |
-2-
4. | a certificate dated not more than ten (10) Business Days prior to the Closing Date from the appropriate authorities, to the effect that each of ACSC and AbitibiBowater is in good standing in their jurisdictions of incorporation; | |
5. | the Woodbridge Release; | |
6. | a certificate of a Senior Officer of each of the Partnership, ACSC and AbitibiBowater to the effect that all of the representations and warranties made by each of the Partnership, ACSC and AbitibiBowater are true and correct in all respects and that each of the Partnership, ACSC and AbitibiBowater has complied with all covenants required to be complied with by it prior to Closing in all material respects; | |
7. | a certified copy of the Settlement Order; | |
8. | the Assignment and Assumption of Bankruptcy Claims Agreement; | |
9. | the Assignment and Assumption of Administrative Claim Agreement; and | |
10. | all other documents reasonably required to be delivered by the Partnership and ACSC to Woodbridge in connection with the purchase and sale of the Purchase Stock. |
1. | Form UCC-1 financing statements naming ACSC and ANI as debtor and Woodbridge as secured party in proper form for filing in the appropriate filing office. | |
2. | Deed of Trust, dated as of the Closing Date, with respect to all of the real property and fixtures of the Partnership located at 2434 Doug Barnard Parkway, Augusta, Georgia 30906, including an assignment of leases and rents, in form and substance reasonably satisfactory to Noteholder. | |
3. | Form UCC-1 financing statements naming the Partnership as debtor and Woodbridge as secured party in proper form for filing in the appropriate filing offices. | |
4. | Deposit account control agreements with respect to the Partnerships accounts, other than Excluded Accounts. |
FOR THE DISTRICT OF DELAWARE
)
)
Chapter 11
)
)
Case No. 09-11296 (KJC)
)
Jointly Administered
)
)
Hearing Date: December 22, 2010 at 1:00 p.m. (ET)
Objection Deadline: December 15, 2010 at 4:00 p.m.
(ET)
)
1 | The Debtors in these cases, along with the last four digits of each Debtors federal tax identification number, are: AbitibiBowater Inc. (6415), AbitibiBowater US Holding 1 Corp. (N/A), AbitibiBowater US Holding LLC (N/A), AbitibiBowater Canada Inc. (N/A), Abitibi-Consolidated Alabama Corporation (4396), Abitibi-Consolidated Corporation (9050), Abitibi-Consolidated Finance LP (4528), Abitibi Consolidated Sales Corporation (7144), Alabama River Newsprint Company (7247), Augusta Woodlands, LLC (9050), Bowater Alabama LLC (7106), Bowater America Inc. (8645), Bowater Canada Finance Corporation (N/A), Bowater Canadian Forest Products Inc. (N/A), Bowater Canadian Holdings Incorporated (N/A), Bowater Canadian Limited (N/A), Bowater Finance Company Inc. (1715), Bowater Finance II LLC (7886), Bowater Incorporated (1803), Bowater LaHave Corporation (N/A), Bowater Maritimes Inc. (N/A), Bowater Newsprint South LLC (1947), Bowater Newsprint South Operations LLC (0168), Bowater Nuway Inc. (8073), Bowater Nuway Mid-States Inc. (8290), Bowater South American Holdings Incorporated (N/A), Bowater Ventures Inc. (8343), Catawba Property Holdings, LLC (N/A), Coosa Pines Golf Club Holdings LLC (8702), Donohue Corp. (9051), Lake Superior Forest Products Inc. (9305) and Tenex Data Inc. (5913). The Debtors corporate headquarters are located at, and the mailing address for each Debtor is, 1155 Metcalfe Street, Suite 800, Montreal, Quebec H3B 5H2, Canada. |
2
2 | All monetary figures are presented in U.S. dollars unless specifically noted otherwise. |
3
3 | The SPV Debtors commenced their Chapter 11 Cases on December 22, 2009. | |
4 | The Cross-Border Debtors are: Bowater Canada Finance Corporation, Bowater Canadian Holdings Incorporated, AbitibiBowater Canada Inc., Bowater Canadian Forest Products Inc., Bowater Maritimes Inc., Bowater LaHave Corporation and Bowater Canadian Limited. | |
5 | The CCAA Debtors are: Bowater Mitis Inc., Bowater Guerette Inc., Bowater Couturier Inc., Alliance Forest Products (2001) Inc., Bowater Belledune Sawmill Inc., St. Maurice River Drive Company, Bowater Treated Wood Inc., Canexel Hardboard Inc., 9068-9050 Quebec Inc., Bowater Canada Treasury Corporation, Bowater Canada Finance Limited Partnership, Bowater Shelburne Corporation, 3231078 Nova Scotia Company, Bowater Pulp and Paper Canada Holdings Limited Partnership, Abitibi-Consolidated Inc., Abitibi-Consolidated Company of Canada, Abitibi-Consolidated Nova Scotia Incorporated, 32117925 Nova Scotia Company, Terra-Nova Explorations Ltd., The Jonquiere Pulp Company, The International Bridge and Terminal Company, Scramble Mining Limited, 9150-3383 Quebec Inc., Star Lake Hydro Partnership, Saguenay Forest Products Inc., 3224112 Nova Scotia Limited, La Tuque Forest Products Inc., Marketing Donohue Inc., Abitibi-Consolidated Canadian Office Products Holdings Inc., 3834328 Canada Inc., 6169678 Canada Incorporated, 4042410 Canada Inc., Donohue Recycling and 1508756 Ontario Inc. |
4
6 | The Debtors who obtained section 18.6 relief are: AbitibiBowater Inc., AbitibiBowater US Holding 1 Corp., Bowater Ventures Inc., Bowater Incorporated, Bowater Nuway Inc., Bowater Nuway-Midstates, Inc., Catawba Property Holdings LLC, Bowater Finance Company Inc., Bowater South American Holdings Incorporated, Bowater America Inc., Lake Superior Forest Products Inc., Bowater Newsprint South LLC, Bowater Newsprint South Operations LLC, Bowater Finance II, LLC, Bowater Alabama LLC and Coosa Pines Golf Club Holdings LLC. |
5
6
7 | The descriptions of the Stock Purchase Agreement in this Motion are for summary purposes only and shall in no way operate to alter, modify, or contradict the terms of the actual Stock Purchase Agreement. Unless otherwise defined herein, all capitalized terms shall have the meanings ascribed to them in the Stock Purchase Agreement. |
7
8
9
10
8 | While the Rejection Appeal will be resolved by entry of an order approving this Motion, Woodbridge will retain its right to assert the damages arising from the rejection of the Call Agreement and the guarantee dated as of September 6, 2001 by ACI in favor of each of WIHL and Woodbridge International Holdings S.A., and the Debtors will retain their rights to object to the same. |
11
12
13
|
|
|||
|
Sean T. Greecher (No. 4484) | |||
|
Andrew L. Magaziner (No. 5426) | |||
|
The Brandywine Building | |||
|
1000 West Street, 17th Floor | |||
|
Wilmington, Delaware 19801 | |||
|
Telephone: (302) 571-6600 | |||
|
Facsimile: (302) 571-1253 | |||
|
||||
|
- and - | |||
|
||||
|
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP | |||
|
Jeffrey D. Saferstein | |||
|
Kelley A. Cornish | |||
|
Alice Belisle Eaton | |||
|
1285 Avenue of the Americas | |||
|
New York, New York 10019-6064 | |||
|
Telephone: (212) 373-3000 | |||
|
Facsimile: (212) 757-3990 | |||
|
Counsel for the Debtors and Debtors-in-Possession |
14
|
) | |||||
|
||||||
In re:
|
) | Chapter 11 | ||||
|
||||||
|
) | |||||
|
||||||
ABITIBIBOWATER INC.,
et al
.,
9
|
) | Case No. 09-11296 (KJC) | ||||
|
||||||
|
) | Jointly Administered | ||||
|
||||||
Debtors.
|
) | |||||
|
||||||
|
) | Ref. Docket No. ____________ | ||||
|
||||||
|
) |
9 | The Debtors in these cases, along with the last four digits of each Debtors federal tax identification number, are: AbitibiBowater Inc. (6415), AbitibiBowater US Holding 1 Corp. (N/A), AbitibiBowater US Holding LLC (N/A), AbitibiBowater Canada Inc. (N/A), Abitibi-Consolidated Alabama Corporation (4396), Abitibi-Consolidated Corporation (9050), Abitibi-Consolidated Finance LP (4528), Abitibi Consolidated Sales Corporation (7144), Alabama River Newsprint Company (7247), Augusta Woodlands, LLC (9050), Bowater Alabama LLC (7106), Bowater America Inc. (8645), Bowater Canada Finance Corporation (N/A), Bowater Canadian Forest Products Inc. (N/A), Bowater Canadian Holdings Incorporated (N/A), Bowater Canadian Limited (N/A), Bowater Finance Company Inc. (1715), Bowater Finance II LLC (7886), Bowater Incorporated (1803), Bowater LaHave Corporation (N/A), Bowater Maritimes Inc. (N/A), Bowater Newsprint South LLC (1947), Bowater Newsprint South Operations LLC (0168), Bowater Nuway Inc. (8073), Bowater Nuway Mid-States Inc. (8290), Bowater South American Holdings Incorporated (N/A), Bowater Ventures Inc. (8343), Catawba Property Holdings, LLC (N/A), Coosa Pines Golf Club Holdings LLC (8702), Donohue Corp. (9051), Lake Superior Forest Products Inc. (9305) and Tenex Data Inc. (5913). The Debtors corporate headquarters are located at, and the mailing address for each Debtor is, 1155 Metcalfe Street, Suite 800, Montreal, Quebec H3B 5H2, Canada. |
10 | Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion. |
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Chief United States Bankruptcy Judge |
4
WOODBRIDGE INTERNATIONAL HOLDINGS S.A. | ||||||
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By: | |||||
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By: | |||||
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WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED | ||||||
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By: | |||||
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(a) | the Bankruptcy Claims; | ||
(b) | the Assignors right, title and interest in and to the Bankruptcy Claims, including all agreements, instruments, subscriptions, statements, proofs of claim, proofs of investment and other documents evidencing, or supporting the Bankruptcy Claims and any agreements, stipulations, or other settlement rights or documentation relating to the allowance or disallowance of the Bankruptcy Claims; | ||
(c) | the Assignors right to receive principal, interest, fees, expenses, damages and other amounts in respect of, or in connection with the Bankruptcy Claims; and | ||
(d) | cash, securities, instruments, proceeds, collateral, guarantees and/or other property distributed, received or paid from and after the Closing, on account of, or exchanged in return for the Bankruptcy Claims; |
2
3
ASSIGNOR : | ||||||
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||||||
AUGUSTA NEWPRINT CORPORATION | ||||||
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By: | |||||
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Title: | |||||
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||||||
ASSIGNEE : | ||||||
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WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED | ||||||
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By: | |||||
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Title: | |||||
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||||||
ACSC | ||||||
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ABITIBI CONSOLIDATED SALES CORPORATION | ||||||
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By: | |||||
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|||||
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Title: |
1. | Assignment . Pursuant to and in accordance with the terms and conditions of this Agreement and the Stock Purchase Agreement, effective as of the date hereof, the Assignor hereby assigns, grants, conveys and transfers to the Assignee, 47.5% of the Assignors right, title and interest in and to the Administrative Claim, which shall include, without limitation or offset, 47.5% of ((a) through (d) below, the Transferred Administrative Claim Rights ): |
(a) | the Administrative Claim; | ||
(b) | the Assignors right, title and interest in and to the Administrative Claim, including all agreements, instruments, subscriptions, statements, proofs of claim, |
proofs of investment and other documents evidencing, or supporting the Administrative Claim and any agreements, stipulations, or other settlement rights or documentation relating to the allowance or disallowance of the Administrative Claim; |
(c) | the Assignors right to receive principal, interest, fees, expenses, damages and other amounts in respect of, or in connection with the Administrative Claim; and |
(d) | cash, securities, instruments, proceeds, collateral, guarantees and/or other property distributed, received or paid from and after the Closing, on account of, or exchanged in return for the Administrative Claim; |
2
3
ASSIGNOR
:
AUGUSTA NEWPRINT CORPORATION |
||||
By: | ||||
Name: | ||||
Title: | ||||
ASSIGNEE
:
WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED |
||||
By: | ||||
Name: | ||||
Title: | ||||
ACSC
ABITIBI CONSOLIDATED SALES CORPORATION |
||||
By: | ||||
Name: | ||||
Title: | ||||
1. | In the 1990s, the Partnership shipped used oil and a small amount of chlorinated solvent to the AER hazardous waste storage and management site in Augusta, Georgia. The site closed, went into bankruptcy and became a superfund site. The Partnership is part of the Potential Responsible Party group. |
2. | In 2009, the Partnership voluntarily disclosed to U.S. EPA and Georgia EPD, the discovery of reporting discrepancies under the Emergency Planning and Community Right-to-Know Act of 1986 ( EPCRA ) section 313 for reporting years 2004 thru 2007. Corrections were submitted for lead, dioxin and dioxin-like compounds and methanol. The U.S. EPA corrected the federal database to reflect these changes. Neither Georgia EPD nor U.S. EPA has issued a Notice of Violation or investigated the matter further as of the date hereof. |
1
2
(i) | on which such share of Preferred Stock was first issued by the Corporation, or |
(ii) | on which any Predecessor Share (as defined below) was first issued by the Corporation. The term Predecessor Share shall mean the share of Preferred Stock which was originally issued by the Corporation and which, directly or indirectly through one or more conversions, was subsequently converted into such outstanding share of Preferred Stock. |
3
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5
6
7
8
9
/s/ Joseph J. Romagnoli | ||||
Name: | Joseph J. Romagnoli | |||
Title: | Secretary | |||
10
2
3
4
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/s/ Alexandra Kau | ||||
Alexandra Kau | ||||
Incorporator | ||||
7
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Page | ||||
ARTICLE 1 INTRODUCTION
|
1 | |||
|
||||
1.1 Plan Introduction
|
1 | |||
1.2 Plan Purpose
|
1 | |||
1.3 409A Compliance
|
1 | |||
|
||||
ARTICLE 2 DEFINITIONS
|
2 | |||
|
||||
2.1 Actuarial Equivalent Value
|
2 | |||
2.2 Active Participant
|
2 | |||
2.3 Additional Voluntary Contribution
|
2 | |||
2.4 Average Pensionable Earnings
|
2 | |||
2.5 Basic Pension
|
3 | |||
2.6 Beneficiary
|
4 | |||
2.7 Company
|
5 | |||
2.8 Continuous Service
|
5 | |||
2.9 Credited Service
|
5 | |||
2.10 Creditor Protection Proceedings
|
5 | |||
2.11 Deferred Vested Participant
|
5 | |||
2.12 Disability
|
5 | |||
2.13 Early Retirement Date
|
6 | |||
2.14 Effective Date
|
6 | |||
2.15 Emergence
|
6 | |||
2.16 Employer
|
6 | |||
2.17 Final Accrual Date
|
6 | |||
2.18 Legacy Participant
|
6 | |||
2.19 MSBA
|
6 | |||
2.20 Normal Retirement Date
|
6 | |||
2.21 Participant
|
6 | |||
2.22 Plan
|
6 | |||
2.23 Plan Administrator
|
6 | |||
2.24 Prior Plan
|
6 | |||
2.25 Reorganization Plan
|
6 | |||
2.26 Registered Pension Plan
|
6 | |||
2.27 Retirement Benefit
|
6 | |||
2.28 Spouse
|
7 | |||
|
||||
ARTICLE 3 ELIGIBILITY AND PARTICIPATION
|
8 | |||
|
||||
3.1 Eligibility for Participation
|
8 | |||
3.2 Participation
|
8 | |||
|
||||
ARTICLE 4 RETIREMENT BENEFITS
|
10 | |||
|
||||
4.1 Status of Retirement Benefits
|
10 | |||
4.2 Payment of Plan Benefits
|
10 | |||
4.3 Amount of Retirement Benefits
|
10 |
i
Page | ||||
4.4 Normal Retirement Benefits
|
12 | |||
4.5 Early Retirement Benefits
|
12 | |||
4.6 Disability Payments
|
13 | |||
4.7 Form of Pension
|
13 | |||
4.8 Death Before Retirement
|
15 | |||
4.9 Termination of Employment
|
16 | |||
4.10 Increase in Benefits
|
18 | |||
4.11 Commutation of Benefits
|
18 | |||
4.12 Service Outside Canada
|
18 | |||
4.13 Conditions for Payment
|
19 | |||
4.14 Right of Offset
|
20 | |||
4.15 Taxes; Compliance with §409A
|
21 | |||
|
||||
ARTICLE 5 PLAN ADMINISTRATION
|
23 | |||
|
||||
5.1 Plan Administration and Interpretation
|
23 | |||
5.2 Powers, Duties, Procedures
|
23 | |||
5.3 Information
|
23 | |||
5.4 Indemnification of Plan Administrator
|
23 | |||
5.5 Claims Procedure
|
23 | |||
|
||||
ARTICLE 6 AMENDMENT AND TERMINATION
|
26 | |||
|
||||
6.1 Authority to Amend and Terminate
|
26 | |||
6.2 Existing Rights
|
26 | |||
|
||||
ARTICLE 7 MISCELLANEOUS
|
27 | |||
|
||||
7.1 Funding
|
27 | |||
7.2 General Creditor Status
|
27 | |||
7.3 No Assignment
|
27 | |||
7.4 Notices and Communications
|
27 | |||
7.5 Limitation of Participants Rights
|
27 | |||
7.6 Participants Bound
|
28 | |||
7.7 Receipt and Release
|
28 | |||
7.8 Governing Law and Severability
|
28 | |||
7.9 Headings
|
28 |
ii
2
(A) | the annual pension is in the form of a pension payable under the normal form provided for under the Registered Pension Plan, or if the Participant elected an optional form in accordance with Section 4.7(c), the annual pension payable under such optional form; | ||
(B) | the Participant has made no Additional Voluntary Contribution; | ||
(C) | the additional pension that is or would be provided by any excess contributions shall be included regardless of whether the Participant elected to receive payment of the excess contribution in cash; and | ||
(D) | the amount of the Basic Pension shall be determined according to the formula under the Registered Pension Plan regardless of any |
3
reduction in benefits that may be applied, by operation of statute or otherwise, as a result of the funded status of such Registered Pension Plan on the date of such determination (it being understood that, where the Registered Pension Plan is a defined benefit pension plan, the foregoing assumption shall also be applicable to the determination of the amount of survivor pension payable to the Spouse under the Registered Pension Plan following the death of the Participant (or any survivor pension that would have been payable had the benefits under the Registered Pension Plan not been commuted) as referred to in Section 4.7(a)(ii), and any amount payable under the Registered Pension Plan to the Participants estate or any designated Beneficiary following the death of the Participant (or any amount that would have been payable had the benefits under the Registered Pension Plan not been commuted) as referred to in Section 4.7(a)(ii)); and |
4
5
6
7
8
9
10
11
(A) | if the Participant has completed at least 20 years of Continuous or Credited Service, the date at which the Participant would first have qualified for an unreduced Retirement Benefit in accordance with paragraph (b) had he continued in the Plan; or |
12
(B) | if the Participant has not completed 20 years of Continuous or Credited Service, age 65. |
13
14
15
(a) | Voluntary Termination after Two Years of Continuous or Credited Service . | ||
A Participant who terminates his service with the Employer on a voluntary basis before his 55th birthday and after he has completed at least two years of Continuous or Credited Service shall be entitled to receive a deferred Retirement Benefit, the amount of which shall be determined as provided hereunder. | |||
The Participant may request that payment commencement of his deferred Retirement Benefit start on the first day of any calendar month during the period between his attainment of age 55 and his Normal Retirement Date. The amount of the deferred Retirement Benefit payable, shall be established based on the elected payment commencement date as follows: |
(A) | 2% of his Average Pensionable Earnings multiplied by his number of years of Credited Service; less | ||
(B) | his Basic Pension from the Registered Pension Plan, or where such Basic Pension has been commuted, the Basic Pension he would have received if such commutation had not taken place. |
(A) | 2% of his Average Pensionable Earnings multiplied by his number of years of Credited Service, such amount to be reduced by 0.5% multiplied by the number of months the payment commencement date precedes the Participants Normal Retirement Date; less |
16
(B) | his Basic Pension from the Registered Pension Plan, or where such Basic Pension has been commuted, the Basic Pension he would have received if such commutation had not taken place. |
The deferred Retirement Benefit shall be paid in the same form and in the same manner as the Retirement Benefit that would have been payable if the Participant had retired on his Normal Retirement Date. |
(b) | Involuntary Termination after Two Years of Continuous or Credited Service . |
A Participant who, before his 55th birthday and provided he has then completed at least 2 years of Continuous or Credited Service, ceases to be employed by the Employer as a result of the termination of his employment initiated by the Employer for any reason other than for cause, shall be entitled to receive a deferred Retirement Benefit the amount of which shall be determined as provided hereunder. |
The Participant may request that payment commencement of his deferred Retirement Benefit start the first day of any calendar month during the period between his attainment of age 55 and his Unreduced Early Retirement Date. For such purpose, the Participants Unreduced Early Retirement Date shall correspond to the earliest date he could have been entitled to an unreduced early Retirement Benefit as provided in Section 4.5(b), established as if his termination of employment had not occurred. |
The amount of the deferred Retirement Benefit payable, shall be established based on the payment commencement date as follows: |
(i) if the payment commencement date is the Participants Unreduced Early Retirement Date: |
(A) | 2% of his Average Pensionable Earnings multiplied by his number of years of Credited Service; less | ||
(B) | his Basic Pension from the Registered Pension Plan, or where such Basic Pension has been commuted, the Basic Pension he would have received if such commutation had not taken place. |
(ii) If the payment commencement date is before the Participants Unreduced Early Retirement Date: |
(A) | 2% of his Average Pensionable Earnings multiplied by his number of years of Credited Service, such amount to be reduced by 0.5% multiplied by the number of months the payment commencement date precedes the Participants Unreduced Early Retirement Date; less |
17
(B) | his Basic Pension from the Registered Pension Plan, or where such Basic Pension has been commuted, the Basic Pension he would have received if such commutation had not taken place. |
The deferred Retirement Benefit shall be paid in the same form and in the same manner as the Retirement Benefit that would have been payable if the Participant had retired on his Normal Retirement Date. |
18
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20
(A) | if the benefit is payable to the Participants surviving Spouse (or if subparagraph (C) applies), such benefit shall be paid as an annuity if the Participant had attained the age of 55 prior to his death, and otherwise shall be paid in a lump sum, regardless of whether it is paid pursuant to Section 4.8(a) or 4.8(b); |
21
(B) | if the individual receiving the benefit was the Participants Spouse for less than one year on the date of the Participants death, any benefit that would otherwise be payable to his surviving Spouse as an annuity shall be paid in a lump sum; and | ||
(C) | if the Participants Spouse stopped being the Participants Spouse less than one year before the Participants death, the benefit that would otherwise have been paid in a lump sum to the Participants estate shall be paid in a life annuity to the person who is the residuary legatee of the Participants estate. |
22
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24
25
26
27
ABITIBIBOWATER INC.
|
||||
By: | /s/ Richard Garneau | |||
Richard Garneau; President | ||||
and Chief Executive Officer |
28
Additional Years of Service | ||||||||||||
Participants | Continuous Service | Credited Service | Vesting Date | |||||||||
Gilbert Demers
|
| 14.21 | July 1, 2002 | |||||||||
|
||||||||||||
Christian Gélinas
|
| 4.97 | July 1, 2002 | |||||||||
|
||||||||||||
Yves Laflamme
|
| 17.10 | July 1, 2002 | |||||||||
|
||||||||||||
André Piché
|
| 9.70 | July 1, 2002 | |||||||||
|
||||||||||||
Pierre Rougeau
|
5.00 | 5.00 | September 4, 2009 (1)(2) |
(1) | Gradual Vesting of one year for each year of employment. Vesting date represents date from which additional years of service will be fully vested. | |
(2) | For purposes of gradual vesting, years of employment are only counted from September 4, 2004 and onward. |
29
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31
32
Page | ||||
Article 1 INTRODUCTION
|
1 | |||
|
||||
1.1 Plan Introduction
|
1 | |||
1.2 Plan Purpose
|
1 | |||
1.3 409A Compliance and ERISA
|
1 | |||
|
||||
Article 2 DEFINITIONS
|
2 | |||
|
||||
2.1 Account
|
2 | |||
2.2 Base Salary
|
2 | |||
2.3 Beneficiary
|
2 | |||
2.4 Canadian Participant
|
2 | |||
2.5 Code
|
2 | |||
2.6 Company
|
2 | |||
2.7 Compensation
|
2 | |||
2.8 Disability or Disabled
|
3 | |||
2.9 Effective Date
|
3 | |||
2.10 Eligible Canadian Employee
|
3 | |||
2.11 Eligible Employee
|
3 | |||
2.12 Eligible U.S. Employee
|
3 | |||
2.13 Employer
|
3 | |||
2.14 Employer Contribution
|
3 | |||
2.15 ERISA
|
3 | |||
2.16 Excess Canadian Contributions
|
3 | |||
2.17 Excess U.S. Automatic Company Contribution
|
3 | |||
2.18 Excess U.S. Contributions
|
3 | |||
2.19 Excess U.S. Matching Contribution
|
3 | |||
2.20 Incentive Award
|
4 | |||
2.21 Interest
|
4 | |||
2.22 Participant
|
4 | |||
2.23 Plan
|
4 | |||
2.24 Plan Administrator
|
4 | |||
2.25 Plan Year
|
4 | |||
2.26 Prior Plans
|
4 | |||
2.27 Reinstated Amounts
|
4 | |||
2.28 Separation from Service
|
5 | |||
2.29 Tax Qualified Plan
|
5 | |||
2.30 U.S. Participant
|
5 | |||
2.31 Year of Service
|
5 | |||
|
||||
Article 3 ELIGIBILITY AND PARTICIPATION
|
6 | |||
|
||||
3.1 Eligibility for Participation
|
6 | |||
3.2 Participation
|
6 | |||
3.3 Cessation of Participation
|
7 | |||
|
||||
Article 4 CONTRIBUTIONS AND DEFERRALS
|
7 | |||
|
||||
4.1 Reinstated Amounts
|
7 | |||
4.2 Excess Canadian Contributions
|
8 |
i
Page | ||||
4.3 Excess U.S. Matching Contributions
|
8 | |||
4.4 Excess U.S. Automatic Company Contributions
|
8 | |||
4.5 Employer Contributions
|
8 | |||
4.6 Contributions During Period of Disability
|
8 | |||
|
||||
Article 5 ACCOUNTS
|
9 | |||
|
||||
5.1 Accounts
|
9 | |||
5.2 Interest
|
9 | |||
5.3 Investment
|
10 | |||
5.4 Statements
|
10 | |||
|
||||
Article 6 VESTING
|
10 | |||
|
||||
6.1 Vesting Schedules
|
10 | |||
6.2 Accelerated Vesting
|
11 | |||
6.3 Forfeitures
|
12 | |||
|
||||
Article 7 DISTRIBUTION OF ACCOUNTS
|
12 | |||
|
||||
7.1 Timing of Distribution
|
12 | |||
7.2 Benefits Upon Separation from Service
|
12 | |||
7.3 Benefits Upon Death
|
13 | |||
7.4 Benefits Upon Disability
|
13 | |||
7.5 Right of Offset
|
13 | |||
7.6 Taxes
|
14 | |||
7.7 Additional Discretion to Accelerate Distribution
|
14 | |||
|
||||
Article 8 NON-COMPETE AND CONFIDENTIALITY PROVISIONS
|
15 | |||
|
||||
8.1 Non-Competition
|
15 | |||
8.2 Confidentiality
|
15 | |||
8.3 Non-Solicitation
|
16 | |||
8.4 Non-Disparagement
|
16 | |||
|
||||
Article 9 PLAN ADMINISTRATION
|
16 | |||
|
||||
9.1 Plan Administration and Interpretation
|
16 | |||
9.2 Powers, Duties, Procedures
|
17 | |||
9.3 Information
|
17 | |||
9.4 Indemnification of Plan Administrator
|
17 | |||
9.5 Claims Procedure
|
17 | |||
|
||||
Article 10 AMENDMENT AND TERMINATION
|
19 | |||
|
||||
10.1 Authority to Amend and Terminate
|
19 | |||
10.2 Existing Rights
|
19 | |||
|
||||
Article 11 MISCELLANEOUS
|
20 | |||
|
||||
11.1 No Funding
|
20 | |||
11.2 General Creditor Status
|
20 | |||
11.3 No Assignment
|
20 | |||
11.4 Notices and Communications
|
20 | |||
11.5 Limitation of Participants Rights
|
20 | |||
11.6 Participants Bound
|
20 |
ii
Page | ||||
11.7 Receipt and Release
|
21 | |||
11.8 Governing Law and Severability
|
21 | |||
11.9 Currency
|
21 | |||
11.10 Headings
|
21 |
iii
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Vested Percentage | Age | |||
50%
|
Younger than 55 | |||
|
||||
70%
|
55 | |||
|
||||
80%
|
56 | |||
|
||||
90%
|
57 | |||
|
||||
100%
|
58 | |||
|
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20
ABITIBIBOWATER INC.
|
||||
By: | /s/ Richard Garneau | |||
Richard Garneau | ||||
Its: | President and Chief Executive Officer |
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1. | Purpose . AbitibiBowater established this AbitibiBowater Outside Director Deferred Compensation Plan (the Plan) effective as of April 1, 2011 (the Effective Date) to enhance the Companys ability to attract and retain talented individuals to serve as members of the Board and to promote a greater alignment of interests between non-employee members of the Board and the shareholders of the Company. All non-employee directors serving on the Board on the Effective Date are eligible to participate in the Plan and enjoy the benefits of the Plan as set forth below. Non-employee directors elected or appointed to the Board after the Effective Date are eligible to participate in the Plan on the date of election or appointment. For reference, AbitibiBowater previously maintained the AbitibiBowater Inc. Outside Director Deferred Compensation Plan, which plan was terminated and liquidated pursuant to approved plans of reorganization effective upon the Companys emergence on December 9, 2010 from creditor protection proceedings and in accordance with US Department of Treasury Regulation Section 1.409A-3(j)(4)(ix)(A). | |
2. | Definitions . The following words and phrases, when used in this Plan with an initial capital letter, unless the context clearly indicates otherwise, shall have the following meanings, or the meanings as set forth elsewhere in this Plan. Wherever applicable, the masculine pronoun shall include the feminine pronoun and the singular shall include the plural. |
(a) | Account means a bookkeeping account established for the benefit of a Director used to record (i) amounts deferred pursuant to Section 5 and (ii) any credits on and adjustments of such amounts pursuant to Section 6. A Directors Account may include sub-accounts consisting of a Deferred Stock Unit Account and a Restricted Stock Unit Account, or such other sub-accounts as determined by the Administrator. | ||
(b) | Administrator means the Senior Vice President, Human Resources and Public Affairs, of the Company. | ||
(c) | Affiliate has the meaning ascribed to it in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. | ||
(d) | Beneficiary means the person or persons (including, without limitation, any trustee) last designated by a Director in accordance with Section 9 to receive the balance of his Account in the event of the Directors death. If there is no effective designated Beneficiary on file or surviving Beneficiary, the Directors estate shall be the Directors Beneficiary. | ||
(e) | Board means the Board of Directors of the Company. | ||
(f) | Canadian Director means a Director who is subject to taxation under the Income Tax Act (Canada) (the Canadian Tax Act). |
(g) | Cause means (i) the Directors commission of a felony or a crime involving moral turpitude, or other material act or omission involving dishonesty or fraud, (ii) the Directors engaging in conduct that would bring or is reasonably likely to bring the Company or any of its Affiliates or Subsidiaries into public disgrace or disrepute or that would affect the Companys or any Affiliates or Subsidiarys business in any material way, (iii) the Directors failure to perform duties as reasonably directed by the Board (which, if reasonably curable, is not cured within 10 days after notice thereof is provided to the Director) or (iv) the Directors gross negligence, willful malfeasance or material act of disloyalty or other breach of fiduciary duty with respect to the Company or its Affiliates or Subsidiaries (which, if reasonably curable, is not cured within 10 days after notice thereof is provided to the Director). Any determination of whether Cause exists shall be made by the Committee in its sole discretion. | ||
(h) | Code means the U.S. Internal Revenue Code of 1986, as amended from time to time. A reference to any provision of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulation or guidance. | ||
(i) | Committee means the Human Resources and Compensation/Nominating and Governance Committee of the Board or such members of the Board as are selected by the Board from time to time to administer the Plan. | ||
(j) | Company means AbitibiBowater Inc. | ||
(k) | Conversion Date means, unless otherwise determined by the Committee, the last business day of the calendar quarter. | ||
(l) | Deferred Stock Unit or DSU means a Stock Unit which, when vested, shall be settled pursuant to Section 8(a)(i). | ||
(m) | Deferred Stock Unit Account or DSU Account means the sub-account used to record (i) deferrals of cash compensation designated as DSUs and (ii) any credits on and adjustments of such amounts pursuant to Section 6. | ||
(n) | Director means any individual qualified to serve as a member of the Board who is elected or appointed and who is not an employee or a full-time officer of the Company or any Affiliate. | ||
(o) | Effective Date means April 1, 2011, the date the Company established the Plan. | ||
(p) | Fair Market Value means, on a given date, (i) if the Stock is listed on a national securities exchange, the simple arithmetic mean between the highest and lowest prices per share at which the Stock is traded as reported for the national securities exchange for the trading day immediately preceding that date, or if not so traded, the simple arithmetic mean between the closing bid-and-asked prices thereof as reported for such national securities exchange for the trading day immediately preceding that date, rounded to the nearest number within two decimal places; (ii) |
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if the Stock is not listed on any national securities exchange but is quoted in an inter-dealer quotation system on a last sale basis, the simple arithmetic mean between the closing bid-and-asked prices thereof as reported for such quotation system for the applicable date of determination, rounded to the nearest number within two decimal places; or (iii) if the Stock is not listed on a national securities exchange or quoted in an inter-dealer quotation system on a last sale basis, the amount determined by the Committee in good faith to be the fair market value of the Stock. | |||
(q) | Plan means the AbitibiBowater Outside Director Deferred Compensation Plan, as provided herein and as may be amended from time to time. | ||
(r) | Premium Stock Units means the number of Stock Units that represents a number of Stock Units determined by dividing 10% of the compensation deferred on the Conversion Date by the Fair Market Value for a share of Stock on the Conversion Date. Premium Stock Units shall be credited as Premium DSUs with respect to a DSU election and Premium RSUs with respect to an RSU election. | ||
(s) | Restricted Stock Unit or RSU means a Stock Unit which, when vested, shall be settled pursuant to Section 8(a)(ii). | ||
(t) | Restricted Stock Unit Account or RSU Account means the sub-account used to record (i) deferrals of compensation designated as RSUs and (ii) any credits on and adjustments of such amounts pursuant to Section 6. | ||
(u) | Separation from Service means a separation from service with the Company and other entities affiliated with the Company. For U.S. Directors, such Separation from Service shall be determined and interpreted in accordance with Code Section 409A. For purposes of interpreting Code Section 409A, whether an entity is affiliated with the Company shall be determined pursuant to the controlled group rules of Code Section 414, as modified by Code Section 409A. | ||
(v) | Stock means the common stock of the Company, par value $.001. | ||
(w) | Stock Unit means the right to receive payment in cash in an amount equal to the Fair Market Value of one share of Stock, determined as of the Valuation Date with respect to that Stock Unit. Stock Units under the Plan are designated as DSUs for Canadian Directors and RSUs for U.S. Directors. Unless otherwise provided or if the context requires otherwise, the reference to DSUs includes Premium DSUs, and the reference to RSUs includes Premium RSUs. | ||
(x) | Subsidiary means any corporation, partnership, joint venture or other entity during any period in which at least a fifty percent voting or profits interest is owned, directly or indirectly, by the Company (or by any entity that is a successor to the Company), and any other business venture designated by the Committee in which the Company (or any entity that is a successor to the Company) has a significant interest, as determined in the discretion of the Committee. |
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(y) | U.S. Director means a Director who is subject to taxation under the U.S. Internal Revenue Code. | ||
(z) | Valuation Date means the date on which Stock Units are to be settled in accordance with Section 8(a). | ||
(aa) | Vesting Date means the date on which all or a portion of a Directors Premium Stock Units become nonforfeitable. |
3. | Eligibility . All Directors are eligible to participate in the Plan. | |
4. | Administration . The Committee shall administer the Plan, provided that the Committee may delegate responsibility for administration to such person or persons as it deems appropriate from time to time. The Committee shall have all the discretion and authority to take any action that it may deem necessary or desirable in connection with the administration of the Plan, including without limitation: |
(a) | to establish, modify and revoke rules relating to the Plan; | ||
(b) | to interpret and construe the terms of the Plan and any rules under the Plan; | ||
(c) | to approve the form and content of any documentation relating to deferrals of compensation or benefits under the Plan or Plan administration; and | ||
(d) | consistent with the express provisions of the Plan, to approve, establish and amend the terms governing a benefit under the Plan. |
All determinations, interpretations and decisions made by the Committee under or with respect to the Plan shall be final, conclusive and binding on the Company, and Directors and any Beneficiary. No member of the Committee shall be liable for any action taken in good faith with respect to the Plan. Notwithstanding the foregoing, the Administrator shall have the authority to approve the form and content of any election or beneficiary forms for the efficient administration of the Plan. | ||
5. | Deferral Election . A Director may elect to defer 50% or 100% of his cash compensation including, without limitation, his annual retainer and/or other fees for service as a Director (for example, for serving as chair), if he completes and timely delivers to the Administrator (or his designee) a written election. To be considered timely, a Director must deliver the written election as follows and as determined by the Administrator: |
(a) | Election. |
(i) | A Canadian Directors written election must designate the portion of his cash compensation to be deferred under the Plan and credited in DSUs. A deferral by a Canadian director cannot be credited in RSUs. |
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(ii) | A U.S. Directors written election must designate the portion of his cash compensation to be deferred under the Plan and credited in RSUs. A deferral by a U.S. director cannot be credited in DSUs. |
(b) | Time for Filing Election. To be considered timely, a Director must deliver the written deferral election as follows. |
(i) | For Directors in office on the Effective Date, the deferral election must be completed and filed with the Administrator before May 1, 2011 and will only be effective to defer cash compensation earned on and after May 1, 2011 under the Plan. | ||
(ii) | With respect to any calendar year beginning after the Effective Date, the deferral election must be made before the commencement of that calendar year. Notwithstanding the foregoing, an individual who first becomes elected or appointed as a Director must complete and file an election with the Administrator within 30 days after such individual is first elected or appointed. |
An election made in accordance with the foregoing shall be effective for the calendar year for which it was made but shall only be effective with regard to compensation earned on and after January 1 of the year to which the election relates (May 1 in the case of the 2011 calendar year) or after the expiration of the 30-day election period for newly-elected or appointed Directors, as the case may be. Once an election is made, it is irrevocable for the calendar year (or portion thereof for newly-elected or appointed Directors) for which the election relates and will continue in effect for subsequent calendar years until revoked or changed by the Director . An election may be revoked or changed only with respect to a calendar year subsequent to the date of the revocation or change. If no election to defer is made or a prior election is revoked, the Director shall be deemed to have elected to be paid compensation for his duties as a Director entirely in cash. A Directors written election shall constitute the Directors acceptance of the benefits and terms of the Plan. | ||
6. | Accounts . |
(a) | Establishment of Accounts . As of May 1, 2011 or, if later, the date a Director elects to defer compensation to the Plan, the Administrator or its delegate shall establish an Account for each Director to reflect the deferrals of amounts made for the Directors benefit, together with any income adjustments thereto. The Accounts shall not be used to segregate assets for payment of any amounts deferred or allocated under the Plan, and shall not constitute or be treated as a trust fund of any kind. The Director shall, at all times, have a nonforfeitable right to all amounts credited to his Account. | ||
(b) | Crediting of Accounts . An amount will be credited to a Directors DSU Account or RSU Account, as the case may be, pursuant to the Directors deferral election on each Conversion Date. The amount credited as DSUs or RSUs, as applicable, |
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shall be a number of Stock Units (including fractional Stock Units) determined by dividing (i) 110% of the amount of compensation elected for deferral by (ii) the Fair Market Value of the Stock as of the Conversion Date. | |||
(c) | Earnings and Adjustments . |
(i) | Dividend Equivalents . With respect to dividend record dates occurring during the period in which Stock Units are credited to a Directors Account, the Directors Account will be credited with additional Stock Units (including a fractional Stock Unit), the number of which will be determined by dividing: (A) the product obtained by multiplying the amount of each dividend (including extraordinary dividend if so determined by the Company) declared and paid by the Company on the Stock on a per share basis by the number of Stock Units credited to a Directors Account on the record date for payment of any such dividend, by (B) the Fair Market Value of one share of Stock on the dividend payment date for such dividend. The additional Stock Units shall be payable at the same time and in the same proportion as the Stock Units to which the dividend equivalents relate. Dividend equivalents that relate to Premium Stock Units shall vest at the same time and in the same proportion as the Premium Stock Units to which they relate. No additional Stock Units shall be accrued for the benefit of a Director pursuant to this paragraph with respect to (A) any Stock Units settled pursuant to Section 8 or (B) any Premium Stock Units forfeited pursuant to Section 7(c), as of the dividend record date. | ||
(ii) | Adjustments . In the event of (A) a corporate transaction involving the Company (including, without limitation, any dividend (other than regular cash dividends or other distribution (whether in the form of cash, shares of Stock, other securities or other property), stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, sale of assets or subsidiaries, combination or exchange of shares, issuance of warrants or other rights to acquire Stock or other securities of the Company), (B) other similar corporate transaction or event that affects the shares of Stock, or (C) unusual or nonrecurring events affecting the Company, any Affiliate or Subsidiary, or the financial statements of the Company, any Affiliate or Subsidiary, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, then the Committee shall make an adjustment to the amount payable with respect to the Stock Units that the Committee determines to be equitable to prevent undue dilution or enlargement of the intended benefits or potential benefits of the Stock Units credited to a Directors Account consistent with the purposes of the Plan. The Company shall give each Participant notice of any adjustment. Any such adjustment shall be conclusive and binding for all purposes. |
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7. | Vesting . |
(a) | A Director shall, at all times, have a nonforfeitable right to non-Premium Stock Units, which are (i) the number of Stock Units determined by dividing 100% of the amount of cash compensation elected for deferral by the Fair Market Value of a share of Stock on the Conversion Date) and (ii) any additional Stock Units credited as dividend equivalents that relate to such non-Premium Stock Units. | ||
(b) | Subject to continued service as a Director, one third of the Premium Stock Units shall vest on March 31 of each of the first three calendar years following the calendar year in which the Premium Stock Units were credited on behalf of the Directors. | ||
(c) | In the event of a Separation from Service for any reason other than Cause (including termination of service as a Director without Cause or due to disability, or retirement) or death, the Director shall become vested in all non-vested Premium Stock Units. In the event of a Separation from Service due to Cause, the Director shall forfeit any vested, but not settled, and non-vested Premium Stock Units. |
8. | Distributions . |
(a) | Time of Payment. All amounts credited to a Directors Account shall be settled in a single lump sum cash payment on the following dates. |
(i) | DSU Account . All non-Premium DSUs and vested Premium DSUs credited to a Canadian Directors DSU Account shall be settled upon the earlier of (as applicable): |
(A) | for a Canadian Director who is not subject to Code Section 409A, December 15 of the calendar year following the calendar year of the Canadian Directors Separation from Service, unless the Canadian Director provides advance written notice of at least five business days to the Administrator specifying an earlier settlement date (but no earlier than the Separation from Service), | ||
(B) | for a Canadian Director who is subject to Code Section 409A, as soon as administratively feasible following the Canadian Directors Separation from Service, or | ||
(C) | the Directors death. |
For Canadian Directors subject to Code Section 409A, payment shall be made no later than the last day of the calendar year in which the payment event occurs, or if later, the 15 th day of the third month following such event. The latest payment date set forth in the preceding sentence has been specified for purposes of complying with the provisions of Section 409A of the Code. |
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(ii) | RSU Account . One third of the non-Premium RSUs and all vested Premium RSUs credited to a U.S. Directors RSU Account shall be settled as soon as administratively feasible after the applicable Vesting Date described in Section 7(b); provided, however, all non-Premium RSUs and vested Premium RSUs shall be settled as soon as administratively feasible after any Vesting Date described in Section 7(c). |
For U.S. Directors, payment shall be made no later than the last day of the calendar year in which the payment event occurs, or if later, the 15 th day of the third month following such event. The latest payment date set forth in the preceding sentence has been specified for purposes of complying with the provisions of Section 409A of the Code. | |||
(b) | Amount of Payment . A Director shall be entitled to receive an amount equal to the Fair Market Value of a share of Stock multiplied by the number of non-Premium Stock Units and vested Premium Stock Units to be settled. Any amount paid to a Director shall be less any required taxes. |
9. | Designation of Beneficiary . |
(a) | Each Director other than a Director residing in the Province of Québec shall designate on forms provided by the Administrator, signed by the Director and delivered to the Administrator, the Beneficiary or Beneficiaries to receive the balance credited to the Directors Account in the event of his death. A Director may, from time to time, change the designated Beneficiary or Beneficiaries, without the consent of such Beneficiary or Beneficiaries, by delivering to the Administrator a new written and signed designation of Beneficiary. The Directors spouse, if any, shall not be required to consent in writing to any non-spouse designation. The Director may designate primary or contingent Beneficiaries. The written designation last delivered and signed by the Director shall be effective and supersede all prior designations on file with the Administrator. | ||
(b) | Each Director residing in the Province of Québec may only designate a beneficiary by will. Upon the death of a Director residing in the Province of Québec, the Directors Account shall be distributed to the liquidator, administrator or executor of his estate. |
10. | No Rights as Stockholder . A Director shall not be a shareholder of record with respect to Stock Units and shall have no voting rights with respect to the Stock Units. | |
11. | Transferability . Unless otherwise provided by the Committee in writing, the RSUs shall not be transferable by the Director other than by will or the laws of descent and distribution. | |
12. | Covenants of Director . As a condition of participation in this Plan, each participating Director agrees to devote his best efforts and undivided loyalty to the Company and |
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devote such time to his tasks as a Director as shall be required to discharge his obligations to the best of his abilities. |
13. | Remedies of the Company . Upon the occurrence of any one or more of the following circumstances: |
(a) | if the Director is at any time removed from incumbency as a Director for reasons deriving from his gross negligence or misconduct detrimental to the business interests of the Company, or for criminal conduct of any type (regardless of the effect thereof on the business interest of the Company); or | ||
(b) | if the Director at any time materially fails to comply with the requirements of Section 12; |
then, and in any such event, the Companys obligation to pay or provide benefits hereunder to such Director shall automatically cease and terminate, and neither the Director nor any other person claiming any benefit pursuant to the Directors participation in this Plan shall have any rights, claims or causes of action hereunder against the Board, the Company or any person acting on their behalf. The Companys sole remedy for breach by the Director of the provisions of Section 12 shall be to cease paying or providing benefits pursuant to the provisions of Section 7 or receive from the Director repayment of any amounts paid. Such remedy shall not preclude the Company from recovering from a Director damages inflicted on the Company or its Affiliates by conduct of a Director which renders the Director liable to the Company independently of the fact that such conduct constitutes a breach of the Directors covenants in Section 12. | ||
14. | Notices and Communications . All notices, statements, reports and other communications from the Administrator to any Director, Beneficiary or other person required or permitted under the Plan shall be deemed to have been duly given when personally delivered to, when transmitted via facsimile or other electronic media or when mailed overnight or by first-class mail, postage prepaid and addressed to, such Director, Beneficiary or other person at his last known address on the Companys records. All elections, designations, requests, notices, instructions and other communications from a Director, Beneficiary or other person to the Administrator required or permitted under the Plan shall be in such form as is prescribed from time to time by the Administrator, and shall be mailed by first-class mail, transmitted via facsimile or other electronic media or delivered to such location as shall be specified by the Administrator. Such communication shall be deemed to have been given and delivered only upon actual receipt by the Administrator at such location. | |
15. | Limitation of Rights of the Director . Inclusion under the Plan shall not give a Director any right or claim to a benefit, except as specifically defined in this Plan. The establishment of the Plan shall not be construed as giving any Director a right to be continued in service as a Director of the Company. | |
16. | Payments To Incompetents . In the event that any payment hereunder becomes payable to a person adjudicated to be incompetent, payment thereof to the guardian or legal |
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representative of such person shall constitute full and complete compliance herewith and entitle the Company to discharge with respect thereto. | ||
17. | Construction . |
(a) | The decision of the Committee on all matters concerning the interpretation and administration of this Plan shall be final. Each Director agrees, as a condition to participation herein, to be bound by all actions and interpretations regarding this Plan by the Committee. Neither the Board, the Committee, any individual Director nor any persons acting on their behalf shall be subject to any liability to any Director or other person in the construction and administration of this Plan. | ||
(b) | Notwithstanding any other provision of this Plan, it is intended that all Stock Units granted under this Plan which are considered to be deferred compensation subject to Code Section 409A shall be provided and paid in a manner, and at such time, including without limitation payment only in connection with a permissible payment event contained in Code Section 409A (e.g., separation from service from the Company and its affiliates as defined for purposes of Code Section 409A), and in such form, as complies with the applicable requirements of Code Section 409A, to avoid the unfavorable tax consequences provided therein for non-compliance. In addition, it is intended that all Stock Units granted to Canadian Directors under this Plan shall be provided and paid in a manner, and at such time, and in such form, as complies with the applicable requirements of paragraph 6801(d) of the regulations to the Canadian Tax Act, to avoid the unfavorable tax consequences provided therein for non-compliance. Notwithstanding the foregoing, none of the Company or its affiliates or the Committee shall be liable to any person if such person is subject to any additional tax, penalty or interest as a result of failure to comply with Code Section 409A or paragraph 6801(d) of the regulations to the Canadian Tax Act. |
18. | Amendment or Termination . The Company reserves the right at any time, and from time to time, by action of a majority of the Board at a meeting at which all members thereof are present and voting or the required notice of which contained an accurate summary of the action proposed for vote, to amend, in whole or in part, any or all of the provisions of this Plan. The Company reserves the right to terminate the Plan at any time. Notwithstanding the foregoing, no such amendment or termination shall adversely affect benefits under this Plan already being paid or having become unconditionally payable pursuant to the terms hereof. Upon termination of the Plan, the Company reserves the discretion to accelerate distribution of Directors Accounts in accordance with regulations promulgated by the Department of the Treasury under Code Section 409A. | |
19. | Funding . The Companys obligations under this Plan shall be unfunded and the Company shall not be obligated under any circumstances to fund its obligations under this Plan. Notwithstanding the foregoing, the Company may, but shall have no obligation to, authorize the creation of one or more trusts and deposit therein cash or property, or make other arrangements to meet the payment obligations under the Plan; provided that such trusts or other arrangements, if established, shall be consistent with the unfunded |
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status of the Plan. The rights of a Director to the payment of benefits under the Plan shall be no greater than the rights of an unsecured creditor of the Company, and nothing in the Plan shall be construed to give any Director or any other person rights to any specific assets of the Company, any of its subsidiaries or affiliates, or any other person. | ||
20. | Governing Law . This Plan shall be governed by and interpreted in accordance with the laws of the State of Delaware and, subject to Section 17 above, shall be binding upon the Company and its successors, including any successor which acquires all or substantially all of the assets of the Company. | |
21. | Currency . Payments made under the Plan shall be determined in the same currency in which a Director receives his cash compensation. | |
22. | Headings . Headings and subheadings in the Plan are inserted for convenience only and are not to be considered in the construction of the provisions hereof. |
ABITIBIBOWATER INC.
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By: | /s/ Richard Garneau | |||
Richard Garneau | ||||
Its: | President and Chief Executive Officer | |||
Dated: | March 30, 2011 |
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ABITIBIBOWATER, INC. | ||||||
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ABITIBIBOWATER, INC. | ||||||
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1.
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Purpose | 1 | ||||
2.
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Definitions | 1 | ||||
3.
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Administration | 4 | ||||
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Election for RSU Award | 4 | ||||
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Restricted Stock Units | 6 | ||||
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Vesting | 7 | ||||
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Payment | 8 | ||||
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Designation of Beneficiary | 8 | ||||
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No Rights as Stockholder | 9 | ||||
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Transferability | 9 | ||||
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Notices and Communications | 9 | ||||
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Limitation of Rights of the Participant | 9 | ||||
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No Rights to Employment | 9 | ||||
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Payments To Incompetents | 9 | ||||
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Claims Procedures | 10 | ||||
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Construction | 10 | ||||
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Amendment or Termination | 11 | ||||
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Funding | 11 | ||||
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Governing Law | 11 | ||||
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Currency | 12 | ||||
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Headings | 12 |
1. | Purpose . This AbitibiBowater Executive Restricted Stock Unit Plan (the Plan) provides eligible employees with an avenue to further align their interests with shareholders of the Company by providing eligible employees the opportunity to convert a portion of their annual cash incentive compensation (Incentive Award) into restricted stock units (RSUs). This document sets forth the terms and conditions for the grant of restricted stock units (RSUs) in lieu of an Incentive Award. | |
The Plan is intended to comply with Code Section 409A and the Income Tax Act (Canada) (Canadian Tax Act) and shall be interpreted, administered and operated as necessary to comply with the requirements of Code Section 409A, the Canadian Tax Act and applicable regulations. | ||
2. | Definitions . The following words and phrases, when used in this Plan with an initial capital letter, unless the context clearly indicates otherwise, shall have the following meanings, or the meanings as set forth elsewhere in this Plan. Wherever applicable, the masculine pronoun shall include the feminine pronoun and the singular shall include the plural. |
(a) | Account means a bookkeeping account established for the benefit of a Participant used to record, for each RSU Award, (i) amounts elected to be converted into RSUs, (ii) the number of corresponding RSUs, (iii) the number of Premium RSUs, (iii) any earnings or losses on such amounts, and/or (iv) any other information determined by the Administrator as necessary or appropriate. | ||
(b) | Administrator means the Senior Vice President, Human Resources and Public Affairs, of the Company. | ||
(c) | Affiliate has the meaning ascribed to it in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. | ||
(d) | Beneficiary means the person or persons (including, without limitation, any trustee) last designated by a Participant in accordance with Section 8 to receive the balance of his Account in the event of the Participants death. If there is no effective designated Beneficiary on file or surviving Beneficiary, the Participants estate shall be the Participants Beneficiary. | ||
(e) | Board means the Board of Directors of the Company. | ||
(f) | Canadian Participant means a Participant who is subject to taxation under the Canadian Tax Act. | ||
(g) | Cause means (i) the Company, an Affiliate or a Subsidiary having cause to terminate a Participants employment or service, as defined in any employment or consulting agreement between the Participant and the Company, an Affiliate or a Subsidiary in effect at the time of such termination or (ii) in the absence of any such employment or consulting agreement (or the absence of any definition of |
Cause contained therein), (A) the Participants commission of a felony or a crime involving moral turpitude, or other material act or omission involving dishonesty or fraud, (B) Participants engaging in conduct that would bring or is reasonably likely to bring the Company, or any of its Affiliates or Subsidiaries into public disgrace or disrepute or that would affect the Companys or any Affiliates or Subsidiarys business in any material way, (C) the Participants failure to perform duties as reasonably directed by the Company (which, if reasonably curable, is not cured within 10 days after notice thereof is provided to the Participant) or (D) the Participants gross negligence, willful malfeasance or material act of disloyalty or other breach of fiduciary duty with respect to the Company, its Affiliates or Subsidiaries (which, if reasonably curable, is not cured within 10 days after notice thereof is provided to the Participant). Any determination of whether Cause exists shall be made by the Committee in its sole discretion. | |||
(h) | Code means the US Internal Revenue Code of 1986, as amended from time to time. A reference to any provision of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulation or guidance. | ||
(i) | Committee means the Human Resources and Compensation/Nominating and Governance Committee of the Board or such members of the Board as are selected by the Board from time to time to administer the Plan. | ||
(j) | Company means AbitibiBowater Inc. | ||
(k) | Conversion Date means, unless otherwise determined by the Committee, the date on which the Incentive Award would otherwise be paid in cash to the Participant. | ||
(l) | Eligible Employee means an individual employed by the Company or any Affiliate in Salary Grade 29 or higher. | ||
(m) | Effective Date means April 1, 2011, the date the Company established the Plan. | ||
(n) | Fair Market Value means, on a given date, (i) if the Stock is listed on a national securities exchange, the simple arithmetic mean between the highest and lowest prices per share at which the Stock is traded as reported for the national securities exchange for the trading day immediately preceding that date, or if not so traded, the simple arithmetic mean between the closing bid-and-asked prices thereof as reported for such national securities exchange for the trading day immediately preceding that date, rounded to the nearest number within two decimal places; (ii) if the Stock is not listed on any national securities exchange but is quoted in an inter-dealer quotation system on a last sale basis, the simple arithmetic mean between the closing bid-and-asked prices thereof as reported for such quotation system for the applicable date of determination, rounded to the nearest number within two decimal places; or (iii) if the Stock is not listed on a national securities |
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exchange or quoted in an inter-dealer quotation system on a last sale basis, the amount determined by the Committee in good faith to be the fair market value of the Stock. | |||
(o) | Incentive Award means the annual cash incentive award earned by and payable to a Participant under a regular, annual incentive plan or program established by the Company, but does not include any other cash incentive, non-recurring or multi-year incentive award, unless authorized by the Committee. | ||
(p) | Participant means an Eligible Employee who has made an election for a RSU Award pursuant to the Plan and for whom an Account is maintained hereunder. | ||
(q) | Plan means the AbitibiBowater Executive Restricted Stock Unit Plan, as provided herein and as may be amended from time to time. | ||
(r) | Premium RSUs means the number of RSUs covered by an RSU Award that represents a number of RSUs determined by dividing 10% of the amount of the Incentive Award elected to be subject to the RSU Award by the Fair Market Value of a share of Stock on the Conversion Date. | ||
(s) | Restricted Stock Unit or RSU means the right to receive payment in cash in an amount equal to the Fair Market Value of one share of Stock, determined as of the Vesting Date. Unless otherwise provided or if the context requires otherwise, the reference to RSUs includes Premium RSUs. | ||
(t) | RSU Award means the grant of RSUs pursuant to a valid and timely filed written election by an Eligible Employee to convert a permitted and elected percentage of his Incentive Award into RSUs as of the Conversion Date. | ||
(u) | Separation from Service means a termination of employment with the Company and other entities affiliated with the Company. For U.S. Participants, whether a Separation from Service occurs shall be determined and interpreted in accordance with Code Section 409A and applicable regulations. For purposes of interpreting Code Section 409A, whether an entity is affiliated with the Company shall be determined pursuant to the controlled group rules of Code Section 414, as modified by Code Section 409A. | ||
(v) | Stock means the common stock of the Company, par value $.001. | ||
(w) | Subsidiary means any corporation, partnership, joint venture or other entity during any period in which at least a fifty percent voting or profits interest is owned, directly or indirectly, by the Company (or by any entity that is a successor to the Company), and any other business venture designated by the Committee in which the Company (or any entity that is a successor to the Company) has a significant interest, as determined in the discretion of the Committee. | ||
(x) | U.S. Participant means a Participant who is subject to taxation under the US Internal Revenue Code. |
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(y) | Vesting Date means the date on which all or a portion of the non-Premium RSUs become payable and the Premium RSUs become nonforfeitable and payable. |
3. | Administration . The Committee shall administer the Plan, provided that the Committee may delegate responsibility for administration to such person or persons as it deems appropriate from time to time. The Committee shall have all the discretion and authority to take any action that it may deem necessary or desirable in connection with the administration of the Plan, including without limitation: |
(a) | to establish, modify and revoke rules relating to the Plan; | ||
(b) | to interpret and construe the terms of the Plan, any rules under the Plan and the terms and conditions of any RSU Award granted under the Plan; | ||
(c) | to approve the form and content of any documentation relating to RSU Awards under the Plan or Plan administration; and | ||
(d) | consistent with the express provisions of the Plan, to approve, establish and amend the terms governing an RSU Award under the Plan. |
All determinations, interpretations and decisions made by the Committee under or with respect to the Plan shall be final, conclusive and binding on the Company, and Participants and any Beneficiary. No member of the Committee shall be liable for any action taken in good faith with respect to the Plan. Notwithstanding the foregoing, the Administrator shall have the authority to approve the form and content of any election or beneficiary forms for the efficient administration of the Plan. | ||
4. | Election for RSU Award . For any given Incentive Award, the Committee has the discretion to offer the opportunity to Eligible Employees to make an election to receive a RSU Award. If the Committee offers such opportunity, an Eligible Employee may elect to receive 50% or 100% of his Incentive Award as an RSU Award if he completes and timely delivers to the Administrator (or his designee) a written election. Once made, the Eligible Employee shall become a Participant in the Plan. An election for an RSU Award shall only be given effect if the Incentive Award to which it relates is otherwise approved and paid in the calendar year following the calendar year in which the Incentive Award is earned (i.e. the performance period). To be considered timely, a Participant must deliver the written election as follows and as determined by the Administrator: |
(a) | General Rule. |
(i) | Canadian Participants . A Canadian Participants written election for an RSU Award shall be filed with the Administrator by December 15 of the calendar year preceding the Conversion Date. In this circumstance, the election shall be irrevocable as of December 16 of the calendar year preceding the Conversion Date. |
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(ii) | U.S. Participants . A U.S. Participants written election for an RSU Award shall be filed with the Administrator before the beginning of the calendar year in which the Incentive Award is earned (i.e. the performance period). In this circumstance, the election shall be irrevocable as of January 1 of the calendar year in which the Incentive Award is earned. |
(b) | Performance Based Exception. To the extent the Committee determines that an Incentive Award constitutes performance based compensation (within the meaning of Code Section 409A and regulations issued thereunder), the Administrator may permit a U.S. Participant to file a written election with the Administrator no later than June 30 (or such earlier date) of the performance period for the Incentive Award. In no event shall a written election for performance based compensation be filed when such compensation is readily ascertainable (within the meaning of Code Section 409A and regulations issued thereunder). In this circumstance, the election shall be irrevocable as of the deadline established by the Administrator. | ||
(c) | Newly Eligible Employees. Notwithstanding the foregoing, an individual who first becomes an Eligible Employee and intends to receive an RSU Award must complete and file an election with the Administrator. |
(i) | Canadian Eligible Employees . A Canadian Eligible Employees written election for an RSU Award shall be filed with the Administrator by December 15 of the calendar year preceding the Conversion Date. In this circumstance, the election shall be irrevocable as of December 16 of the calendar year preceding the Conversion Date. | ||
(ii) | U.S. Eligible Employees . A U.S. Eligible Employees written election for an RSU Award shall be filed with the Administrator within 30 days after such individual becomes an Eligible Employee. In this circumstance, the election shall be irrevocable as of the day after the 30 day period expires. Any RSU Award received in respect of such election shall be determined pursuant to Section 5(a), but taking into account only the Incentive Award earned for calendar months beginning after the election is filed and accepted by the Administrator, unless Section 4(b) permits the election to apply to the entire Incentive Award earned by such U.S. Eligible Employee. |
(d) | Annual Elections. An Eligible Employee must make a separate election for each Incentive Award that he intends to defer as an RSU Award. A Participants written election shall constitute the Participants acceptance of the terms and conditions of the Plan and each RSU Award. If no election is made or the Committee does not offer the RSU Award election opportunity, the Participant shall receive his entire Incentive Award in cash at the time it would otherwise be paid. |
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(e) | Election Forms. The election materials shall provide the Participant with all materials terms of the RSU Award, including, but not limited to, the percentage of the premium offered and vesting schedule. | ||
(f) | Termination of Employment. In the event an Eligible Employee Separates from Service after he files an election for an RSU Award and before the Conversion Date, the Eligible Employee shall not receive the RSU Award subject to such election. Instead, the Eligible Employee shall receive payment, if any, of his Incentive Award pursuant to the terms of the short-term incentive plan or program that governs such Incentive Award. |
5. | Restricted Stock Units . |
(a) | Determination of RSUs . For each RSU Award elected by a Participant, a number of RSUs will be credited to the Participants Account as of the Conversion Date. Unless otherwise decided by the Committee, the number of RSUs (including fractional RSUs) to be credited is determined by dividing (i) 110% of the amount of the Incentive Award elected by the Participant to be subject to a RSU Award by (ii) the Fair Market Value of the Stock as of the Conversion Date. The Committee reserves the discretion to modify the premium to be applied for any given RSU Award, which premium shall be communicated when the election is solicited. The Accounts shall not be used to segregate assets for payment of any amounts deferred or allocated under the Plan, and shall not constitute or be treated as a trust fund of any kind. The Administrator shall provide a Participant with a statement, in such form as he determines, containing the material terms of the RSU Award, including the number of non-Premium RSUs and Premium RSUs covered by the RSU Award. | ||
(b) | Earnings and Adjustments . |
(i) | Dividend Equivalents . With respect to dividend record dates occurring during the period in which RSUs are credited to a Participants Account, the Participants Account will be credited with additional RSUs (including a fractional RSU), the number of which will be determined by dividing: (A) the product obtained by multiplying the amount of each dividend (including extraordinary dividend if so determined by the Company) declared and paid by the Company on the Stock on a per share basis during the Vesting Period by the number of RSUs credited to a Participants Account on the record date for payment of any such dividend, by (B) the Fair Market Value of one share of Stock on the dividend payment date for such dividend. The additional RSUs shall be payable at the same time and in the same proportion as the RSUs covered by the RSU Award to which the dividend equivalents relate. Dividend equivalents that relate to Premium RSUs shall vest at the same time and in the same proportion as the Premium RSUs to which they relate. No additional RSUs shall be accrued with respect to an RSU Award for the benefit of a Participant for any record dates occurring prior to, or record |
6
dates occurring on or after the date, if any, on which a Participant has received payment of the RSUs and/or forfeited any Premium RSUs. | |||
(ii) | Adjustments . In the event of (A) a corporate transaction involving the Company (including, without limitation, any dividend (other than regular cash dividends or other distribution (whether in the form of cash, shares of Stock, other securities or other property), stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, sale of assets or subsidiaries, combination or exchange of shares, issuance of warrants or other rights to acquire Stock or other securities of the Company), (B) other similar corporate transaction or event that affects the shares of Stock, or (C) unusual or nonrecurring events affecting the Company, any Affiliate or Subsidiary, or the financial statements of the Company, any Affiliate or Subsidiary, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, then the Committee shall make an adjustment to the amount payable with respect to the RSUs that the Committee determines to be equitable to prevent undue dilution or enlargement of the intended benefits or potential benefits of the RSU Award consistent with the purposes of the Plan. The Company shall give each Participant notice of any adjustment. Any such adjustment shall be conclusive and binding for all purposes. |
6. | Vesting . |
(a) | For any given RSU Award, a Participant shall, at all times, have a nonforfeitable right to non-Premium RSUs, which are (i) the number of RSUs determined by dividing 100% of the amount of the Incentive Award elected by a Participant to be subject to the RSU Award by the Fair Market Value of a share of Stock on the Conversion Date and (ii) any additional RSUs credited as dividend equivalents that relate to such RSUs. | ||
(b) | Subject to continued employment with the Company or any Affiliate and subsection (c), the Premium RSUs shall vest over a period that begins on January 1 preceding the Conversion Date and ending on December 15 of the second year following the year containing the Conversion Date (the Vesting Period). During the Vesting Period, one-third of the Premium RSUs (rounded to the nearest whole RSU) shall vest on each December 15. | ||
(c) | In the event of a Participants death or Separation from Service for any reason other than a voluntary termination of employment or Cause (including involuntary termination without Cause or disability), the Participant shall become vested in all non-vested Premium RSUs. In the event of a Separation from Service due to Cause, the Participant shall forfeit any vested, but not paid, and non-vested Premium RSUs. In the event of a voluntary Separation from Service, the Participant shall forfeit any non-vested Premium RSUs. |
7
7. | Payment . |
(a) | Time of Payment. Non-Premium RSUs and vested Premium RSUs shall be paid in a single lump sum cash payment as follows: |
(i) | Canadian Participants . Payment to Canadian Participants shall be made as soon as administratively feasible upon the earliest to occur of: |
(A) | the applicable Vesting Date described in Section 6(b), | ||
(B) | the Participants Separation from Service, and | ||
(C) | the Participants death. |
In no event shall payment of any RSUs be made later than December 31 of the second calendar year following the calendar year in which the Conversion Date occurs. | |||
(ii) | U.S. Participants . Payment to U.S. Participants shall be made as soon as administratively feasible upon the earliest to occur of: |
(A) | the applicable Vesting Date described in Section 6(b), | ||
(B) | the first day of the seventh month following the Participants Separation from Service, and | ||
(C) | the Participants death. |
(b) | Amount of Payment. The Participant shall be entitled to receive an amount equal to the Fair Market Value of a share of Stock multiplied by the number of non-Premium RSUs and vested Premium RSUs to be settled. Fair Market Value shall be determined as of the Vesting Date described in Section 6(b) or 6(c), as applicable, except that if payment for a U.S. Participant is made pursuant to Section 7(a)(ii)(B), Fair Market Value shall be determined as of the first day of the seventh month following such U.S. Participants Separation from Service. Any amount paid to a Participant shall be less any required taxes. |
8. | Designation of Beneficiary . |
(a) | Each Participant other than a Participant residing in the Province of Québec shall designate on forms provided by the Administrator, signed by the Participant and delivered to the Administrator, the Beneficiary or Beneficiaries to receive the balance credited to the Participants Account in the event of his death. A Participant may, from time to time, change the designated Beneficiary or Beneficiaries, without the consent of such Beneficiary or Beneficiaries, by delivering to the Administrator a new written and signed designation of Beneficiary. The Participants spouse, if any, shall not be required to consent in writing to any non-spouse designation. The Participant may designate primary or |
8
contingent Beneficiaries. The written designation last delivered and signed by the Participant shall be effective and supersede all prior designations on file with the Administrator. | |||
(b) | Each Participant residing in the Province of Québec may only designate a beneficiary by will. Upon the death of a Participant residing in the Province of Québec, the Participants Account shall be distributed to the liquidator, administrator or executor of his estate. |
9. | No Rights as Stockholder . A Participant shall not be a shareholder of record with respect to RSUs and shall have no voting rights with respect to the RSUs. | |
10. | Transferability . Unless otherwise provided by the Committee in writing, the RSUs shall not be transferable by the Participant other than by will or the laws of descent and distribution. | |
11. | Notices and Communications . All notices, statements, reports and other communications from the Administrator to any Participant, Beneficiary or other person required or permitted under the Plan shall be deemed to have been duly given when personally delivered to, when transmitted via facsimile or other electronic media or when mailed overnight or by first-class mail, postage prepaid and addressed to, such Participant, Beneficiary or other person at his last known address on the Companys records. All elections, designations, requests, notices, instructions and other communications from a Participant, Beneficiary or other person to the Administrator required or permitted under the Plan shall be in such form as is prescribed from time to time by the Administrator, and shall be mailed by first-class mail, transmitted via facsimile or other electronic media or delivered to such location as shall be specified by the Administrator. Such communication shall be deemed to have been given and delivered only upon actual receipt by the Administrator at such location. | |
12. | Limitation of Rights of the Participant . Inclusion under the Plan shall not give a Participant any right or claim to a benefit, except as specifically defined in this Plan. The establishment of the Plan shall not be construed as giving any Participant a right to be continued in service as a Participant of the Company. | |
13. | No Rights to Employment . Nothing contained in the Plan or any communication provided to Participants shall be construed as giving any Participant a right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the right of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge a Participant at any time for any reason whatsoever. | |
14. | Payments To Incompetents . In the event that any payment hereunder becomes payable to a person adjudicated to be incompetent, payment thereof to the guardian or legal representative of such person shall constitute full and complete compliance herewith and entitle the Company to discharge with respect thereto. |
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15. | Claims Procedures |
(a) | Initial Claims. If an individual believes he is entitled to benefits, or to greater benefits than are paid under the Plan, the individual may file a claim for benefits with the Claims Administrator. The Director, Corporate Compensation, will serve as the Claims Administrator for all initial claims for benefits and will either accept or deny the claim, and will notify the claimant of acceptance or denial of the claim. | ||
The Administrator shall notify the claimant of an adverse benefit determination within 90 days after receipt of the claim by the Claims Administrator, unless the Claims Administrator determines that special circumstances require an extension of time for processing the claim. If the Claims Administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90 day period. | |||
(b) | Right to Appeal. A claimant may appeal the denial of his claim and have the Claims Administrator reconsider the decision. The claimant or the claimants authorized representative has the right to request an appeal by written request to the Claims Administrator no later than 60 days after receipt of notice from the Claims Administrator denying the employees claim. | ||
The claimant will be advised of the Claims Administrators decision on the appeal in writing, no later than 60 days after receipt of the claimants request for review by the Claims Administrator, unless the Claims Administrator determines that special circumstances require an extension of time for processing the claim. If the Claims Administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 60-day period. In no event shall such extension exceed a period of 60 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Claims Administrator expects to render the determination on review. | |||
In no event shall a claimant or any other person be entitled to challenge a decision of the Administrator in court or in any other administrative proceeding unless and until the claim and appeal procedures described above have been complied with and exhausted. Any such action must be initiated not more than 180 days after receipt of the determination on review of the adverse claim decision. | |||
Decisions and any notices may be furnished electronically. |
16. | Construction . |
(a) | The decision of the Committee on all matters concerning the interpretation and administration of this Plan shall be final. Each Participant agrees, as a condition to participation herein, to be bound by all actions and interpretations regarding this Plan by the Committee. Neither the Board, the Committee, any individual |
10
Participant nor any persons acting on their behalf shall be subject to any liability to any Participant or other person in the construction and administration of this Plan. | |||
(b) | Notwithstanding any other provision of this Plan, it is intended that all RSUs granted under this Plan which are considered to be deferred compensation subject to Code Section 409A shall be provided and paid in a manner, and at such time, including without limitation payment only in connection with a permissible payment event contained in Code Section 409A (e.g., separation from service from the Company and its affiliates as defined for purposes of Code Section 409A), and in such form, as complies with the applicable requirements of Code Section 409A, to avoid the unfavorable tax consequences provided therein for non-compliance. In addition, it is intended that all RSUs granted to Canadian Participants under this Plan shall be provided and paid in a manner, and at such time, and in such form, as complies with the applicable requirements of paragraph (k) of the definition of salary deferral arrangement in Section 248 of the Canadian Tax Act, to avoid the unfavorable tax consequences provided therein for non-compliance. Notwithstanding the foregoing, none of the Company or its affiliates or the Committee shall be liable to any person if such person is subject to any additional tax, penalty or interest as a result of failure to comply with Code Section 409A or paragraph (k) of the definition of salary deferral arrangement in Section 248 of the Canadian Tax Act. |
17. | Amendment or Termination . The Company reserves the right at any time, and from time to time, by action of a majority of the Committee to amend, in whole or in part, any or all of the provisions of this Plan. The Company reserves the right to terminate the Plan at any time. Notwithstanding the foregoing, no such amendment or termination shall adversely affect benefits under this Plan already being paid or having become unconditionally payable pursuant to the terms hereof. Upon termination of the Plan, the Company reserves the discretion to accelerate distribution of Participants Accounts in accordance with regulations promulgated by the Department of the Treasury under Code Section 409A. | |
18. | Funding . The Companys obligations under this Plan shall be unfunded and the Company shall not be obligated under any circumstances to fund its obligations under this Plan. Notwithstanding the foregoing, the Company may, but shall have no obligation to, authorize the creation of one or more trusts and deposit therein cash or property, or make other arrangements to meet the payment obligations under the Plan; provided that such trusts or other arrangements, if established, shall be consistent with the unfunded status of the Plan. The rights of a Participant to the payment of benefits under the Plan shall be no greater than the rights of an unsecured creditor of the Company, and nothing in the Plan shall be construed to give any Participant or any other person rights to any specific assets of the Company, any of its subsidiaries or affiliates, or any other person. | |
19. | Governing Law . This Plan shall be governed by and interpreted in accordance with the laws of the State of Delaware and, subject to Section 17 above, shall be binding upon the |
11
Company and its successors, including any successor which acquires all or substantially all of the assets of the Company. | ||
20. | Currency . Payments made under the Plan shall be determined in the same currency in which a Participant receives his other cash compensation. | |
21. | Headings . Headings and subheadings in the Plan are inserted for convenience only and are not to be considered in the construction of the provisions hereof. |
ABITIBIBOWATER INC.
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By: | /s/ Richard Garneau | |||
Richard Garneau | ||||
Its: | President and Chief Executive Officer | |||
Dated: March 30, 2011 | ||||
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Location:
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Montreal, Quebec, Canada | |
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Effective Date:
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These terms and conditions are contingent on approval of the restructuring plans and will be effective on the date of emergence. | |
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Compensation:
|
Your annual base salary will be US$765,000. |
Employee | Company | |||
Contributions | Contributions | Contributions | ||
Basic
|
5% of eligible earnings* | 10.5% of eligible earnings | ||
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||||
Additional
|
None | 12% of eligible earnings |
* | Up to the Compensation Limit (U.S.A.) |
/s/ David J. Paterson
|
10/27/10
|
2
3
4
5
6
7
8
9
10
11
Executive | ||||||
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/s/ David J. Paterson | ||||||
David J. Paterson | ||||||
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Company | ||||||
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AbitibiBowater Inc. | ||||||
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By: | /s/ Richard B. Evans | ||||
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Title: | |||||
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(a) | claims, actions, causes of action or liabilities arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as amended (the ADEA), Sections 1981 through 1988 of Title 42 of the United States Code, as amended, and the Civil Rights Act of 1991, as amended, the Fair Labor Standards Act, as amended, the Federal Occupational Safety and Health Act, as amended, the Employee Retirement Income Security Act, as amended, the Rehabilitation Act of 1973, as amended, the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, and/or any other federal, state, municipal or local employment discrimination statutes, laws, regulations, ordinances or executive orders (including, but not limited to, claims based on age, sex, attainment of benefit plan rights or entitlement to plan benefits, race, color, religion, national origin, source of income, union activities, marital status, sexual orientation, ancestry, harassment, parental status, handicap, disability, retaliation and veteran status); and/or | ||
(b) | claims, actions, causes of action or liabilities arising under any other federal, state, municipal or local statute, law, ordinance, regulation, constitution or executive order; and/or | ||
(c) | any other claim whatsoever including, but not limited to, claims for severance pay, claims for salary/wages/commissions/bonus, claims for expense reimbursement, claims based upon breach of contract, wrongful termination, defamation, intentional infliction of emotional distress, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other |
1
common law, statutory or other claim whatsoever arising out of or relating to my employment with and/or separation from employment with the Company and/or any of the other Releasees. |
2
| I am entering into this Agreement knowingly and voluntarily; | ||
| I have been advised to consult with an attorney before signing this Agreement; | ||
| I understand I may take at least forty-five (45) days to consider this Agreement before signing it; | ||
| I have carefully read and fully understand all the provisions of this Agreement and that I voluntarily enter into this Agreement by signing below; | ||
| I am not otherwise entitled to the Benefits; and | ||
| the Separation Agreement, including the exhibits attached thereto, is the entire agreement between me and the Releasees regarding the termination of my employment with the Releasees. |
3
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/s/ David J. Paterson | |||
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(Signature) | |||
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Location:
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Montreal, Quebec, Canada | |
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Effective Date:
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These terms and conditions are contingent on approval of the restructuring plans and will be effective on the date of emergence. | |
|
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Compensation:
|
Your annual base salary will be US$382,500. |
Employee | Company | |||
Contributions | Contributions | Contributions | ||
Basic
|
5% of eligible earnings* | 10.5% of eligible earnings | ||
|
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Additional
|
None | 10% of eligible earnings |
* | Up to the Compensation Limit (U.S.A.) |
/s/ Richard B. Evans
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/s/ David J. Paterson | |
Richard B. Evans
|
David J. Paterson | |
Chairman
|
President and Chief Executive Officer |
/s/ Pierre Rougeau
|
Nov. 4, 2010
|
(a) | claims, actions, causes of action or liabilities arising under the Civil Code of Quebec, An Act Respecting Labour Standards, the Charter of Human Rights and Freedoms or under any other statute or regulation and/or any other federal, or provincial laws; and/or | ||
(b) | any other claim whatsoever including, but not limited to, claims for severance pay, claims for salary/wages/commissions/bonus/awards, claims for expense reimbursement, claims based upon breach of contract, wrongful termination, defamation, intentional infliction of emotional distress, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other common law, statutory or other claim whatsoever relating to my employment with and/or separation from employment with the Company and/or any of the other Releasees. |
2
3
| I have carefully read and fully understand all provisions of this Agreement, and am voluntarily entering into this Agreement by signing below; | ||
| I understand I may take at least twenty-one (21) days to consider this Agreement before signing it; | ||
| this Agreement, together with the Severance Terms attached hereto, is the entire Agreement between me and the Company regarding the termination of my employment with the Company and other subjects addressed herein or in Attachment A; and | ||
| this Agreement may not be changed in any way except in a written agreement signed by both me and an authorized representative of the Company. |
4
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/s/ Pierre Rougeau
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3/28/11
|
5
Executive transitioned from Executive Vice President,
Operations and Sales to Special Executive Advisor
reporting to the President and Chief Executive Officer
effective January 17, 2011. Executive resigned as
officer and director of the Company and all its
subsidiaries and affiliates effective January 17, 2011.
Executives employment to terminate on March 31, 2011
(
Termination Date
). As further set forth in C.1.
below, Executive shall serve as a consultant to the
Company from the Termination Date until June 30, 2011,
on a special assignment to negotiate an exit of Mersey
and Calhoun partners.
Severance pay of US$761,620.
Executive to be eligible to continued AbiBowFlex
coverage at his own cost ($284.76 per month
representing $192.11 for medical coverage and $92.65
for dental coverage, all to be paid via post-dated
cheques to be provided to Human Resources) until the
earlier of i) May 5, 2012 or ii) the date Executive
starts employment with another employer. All other
coverage (i.e. short and long term disability) ceased
on the Termination Date.
As a condition to the receipt of severance pay and
benefits, the Executive must execute and not revoke a
Waiver and Release Agreement in the form attached
hereto. Pursuant the Waiver and Release Agreement, the
Executive shall waive all claims against the Company,
its subsidiaries and affiliates.
Only severance pay amounts that exceed statutory
requirements are conditioned on execution of a Waiver
and Release Agreement that is not later revoked. The
Executive will have 21 days to review and consider the
Waiver and Release Agreement and seven (7) days for
revoking same.
Severance will be paid in the form of a lump sum
payment 15 days after the Executive signs the Waiver
and Release Agreement and the seven (7) day period for
revoking such agreement expires. An amount
corresponding to any personal expenses outstanding on
the Corporate Amex card will be withheld from the net
severance should such
|
balance not be paid by the Executive prior to payment of severance. | |
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2. Equity and Incentive
Awards |
Executive entitlement to STIP and LTIP as follows: | |
|
o 2010 STIP was paid on March 15, 2011 (US$210,375);
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o Entitlement to 2011 STIP on a pro-rata basis up to
the Termination Date, in accordance with plan text and
as per normal payment terms; i.e. if and when approved
for payment by the Board in 2012.
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o LTIP emergence grant: Company to allow continued
vesting until December 9, 2011 (one year vesting).
Options to remain exercisable for one-year following
the later of June 30, 2011 or the end of the Consulting
Agreement.
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3. Vacation
|
Accrued vacation: 4 weeks plus 8% of base salary from January 1, 2011 to the Termination Date. | |
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4. Pension plans
|
Qualified and Registered Pension Plans entitlements in accordance with the terms of the plans to the extent then vested, consistent with payments to other participants. | |
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SERP Benefits | |
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The Executive has waived all his SERP claims in the creditor protection proceedings. As a result, his SERP benefits accrued up to emergence have been reinstated and fully recognized in the new SERPs put in place by the Company. | |
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|
Pursuant to the 2010 DC SERP, the Executive will be entitled to a lump sum payment in accordance with the plan text (two instalments). As regards the Executives entitlements under the Canadian DB SERP, the Company will pay the Executive his accrued benefits as a lump sum (two instalments) once Executive retires (i.e. not earlier than at age 55), provided that if these benefits have been secured in part or in total on the Executives retirement, these benefits will be paid in the form of monthly payments. | |
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Mercer to provide details on qualified and registered pension plans and SERP entitlements. | |
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||
5. Indemnification/D&O
|
Corporate indemnification in accordance with relevant charters, by-laws and applicable law, and consistent with the plans of reorganization. | |
|
||
|
D&O coverage: applicable post-termination/post-service tail coverage. |
2
6. Legal Fees
|
Executive will be entitled to reimbursement of reasonable legal fees, up to $10,000 plus expenses, incurred in the negotiation and documentation of the definitive separation agreement. | |
|
||
C. Consulting Agreement
|
||
|
||
1. Term
|
Executive to serve as a consultant to the Company for three months after termination of employment (the Consulting Period ), taking instructions for the President and Chief Executive Officer. | |
|
||
|
Subject to C.3 below, Consulting Agreement may be terminated sooner by the Company or the Executive upon 5 days notice. | |
|
||
2. Compensation
|
Consulting fees of $32,000 per month. | |
|
||
|
Executive will be treated as an independent contractor and will not be entitled to any benefits or other amounts from the Company during the consulting term (other AbiBowFlex continued coverage as per B.1 above). | |
|
||
|
Reimbursement of Executives business expenses incurred as a result of the consultancy arrangement. | |
|
||
3. Termination Attainment
|
Executive will be entitled to continue to receive monthly payments through the Consulting Period if the Executives consulting agreement is terminated prior to the end of the such period (i) by the Company other than for Cause, (ii) by Executive for Good Reason, or (iii) upon Executives death or disability. | |
|
||
D. Restrictive Covenants
|
The restrictive covenants set forth in this agreement supersede any restrictive covenants provided for in other arrangements and plan texts of the Company. | |
|
||
1. Non-Competition
|
During the 12 months following the Termination Date, the Executive shall not, without the prior written consent from the Company: | |
|
||
|
i) engage or become interested, in North America, whether on his own account or in conjunction with or on behalf of any other person, and whether as an employee, director, officer, partner, principal, agent, advisor, financial backer, shareholder (except as a passive investor in a public Company) or in any other capacity whatsoever, in a business which may fairly be regarded as being in competition with the Business of the Company; or | |
|
||
|
ii) assist financially or in any manner whatsoever any person, firm, association or Company, in North America, whether as principal, agent, officer, employee, manager, advisor, financial |
3
|
backer, shareholder (except as a passive investor in a public Company) or in any capacity whatsoever to enter into, develop, carry on or maintain a business, which may fairly be regarded as being in competition with the Business of the Company. | |
|
||
|
For the purpose of this agreement, Business of the Company means the manufacture, sale and/or dealing in newsprint, commercial printing papers, market pulp and wood products, as well as research into, development, production, manufacture, sale, supply, import, export or marketing of any product which is the same or similar to or competitive with any product researched, developed, produced, manufactured, sold, supplied, imported, exported or marketed by the Company or by any of its subsidiaries and affiliates in the context of the above described activities as of December 31, 2010. | |
|
||
|
Notwithstanding the foregoing, the Executive may act as financial advisor for competing businesses and/or be hired by a bank or an investment bank and advise competing businesses in such capacity. | |
|
||
2. Non-Disclosure
|
For a period of 2 years following the Termination Date, the Executive hereby covenants and agrees with the Company that he will not, except with the prior written consent, directly or indirectly, disclose to any person or in any way make use of in any manner, any of Confidential Information, provided that such Confidential Information shall be deemed not to include information which is or becomes generally available to the public other than as a result of disclosure by the Executive. | |
|
||
3. Non-Solicitation of
Customers
|
For a period of 12 months following the Termination Date and except with prior written consent, the Executive agrees not to, whether on his own behalf or in conjunction with or on behalf of any other person, directly or indirectly, solicit, assist in soliciting, accept, facilitate the acceptance of the business (which may fairly be regarded as being in competition with the Business of the Company) of any person to whom the Company or its Affiliates has supplied goods or services at any time between January 1, 2008 and December 31, 2010. | |
|
||
4. Applicability to Affiliates
|
The obligations undertaken by the Executive may be enforced directly against the Executive by any Affiliate of the Company, to the extent applicable. | |
|
||
5. Provisions in the Event of
Breach
|
The Executive agrees that, in the event of any actual or threatened breach by the Executive of any of the covenants or agreements contained in this provision, without prejudice to any and all other rights and recourses of the Company, the Company shall have the right to enforce the terms and provisions thereof by means of |
4
|
compelling specific performance and/or by means of injunction (including, without limitation, provisional, interlocutory and permanent). | |
|
||
|
In addition, and without restriction to the foregoing, in the event of a breach by the Executive of his non compete, non solicitation and confidentiality obligations, the sum of $400,000 hereof shall be deemed to have been forfeited in its entirety and the Company shall be entitled to seek reimbursement of this gross amount. | |
|
||
6. Return of Material
|
Upon the Termination Date, the Executive agrees to return all files, forms, brochures, books, materials, written correspondence, memoranda, documents, manuals, computer disks, software products and lists (including financial and other information and lists of customers, suppliers, products and prices) pertaining to the Company or to any of its Affiliates and containing Confidential Information in the possession of the Executive or directly or indirectly under the control of the Executive and to destroy all electronic copies thereof, except as necessary for purposes of rendering services during the Consultation Period. Any material retained by the Executive during the Consultation Period will be returned at the end of such period. The Executive agrees not to make, for his personal or business use or that of any other person, reproductions or copies of any such property or other property of the Company or of any of its Affiliates. |
AbitibiBowater Inc.
|
||||
Per: | /s/ Richard Garneau | |||
RICHARD GARNEAU | ||||
Acknowledged and accepted
|
/s/ Pierre Rougeau
|
5
Location:
|
Montreal, Quebec, Canada | |
|
||
Effective Date:
|
These terms and conditions are contingent on approval of the restructuring plans and will be effective on the date of emergence. | |
|
||
Compensation:
|
Your annual base salary will be US$361,250. |
Employee | Company | |||
Contributions | Contributions | Contributions | ||
Basic
|
5% of eligible earnings* | 10.5% of eligible earnings | ||
|
||||
Additional
|
None | 10% of eligible earnings |
* | Up to the Compensation Limit (U.S.A.) |
/s/ Richard B. Evans
|
/s/ David J. Paterson | |
Richard B. Evans
|
David J. Paterson | |
Chairman
|
President and Chief Executive Officer |
/s/ Alain Grandmont
|
November 8, 2010
|
Location:
|
Montreal, Quebec, Canada | |
|
||
Effective Date:
|
These terms and conditions are contingent on approval of the restructuring plans and will be effective on the date of emergence. | |
|
||
Compensation:
|
Your annual base salary will be US$276,250. |
Employee | Company | |||
Contributions | Contributions | Contributions | ||
Basic
|
5% of eligible earnings* | 10.5% of eligible earnings | ||
|
||||
Additional
|
None | 10% of eligible earnings |
* | Up to the Compensation Limit (U.S.A.) |
/s/ Richard B. Evans
|
/s/ David J. Paterson | |
Richard B. Evans
|
David J. Paterson | |
Chairman
|
President and Chief Executive Officer |
/s/ Yves Laflamme
|
10/11/2010
|
Location:
|
Montreal, Quebec, Canada | |
|
||
Effective Date:
|
These terms and conditions are contingent on approval of the restructuring plans and will be effective on the date of emergence. | |
|
||
Compensation:
|
Your annual base salary will be US$289,000. |
Employee | Company | |||
Contributions | Contributions | Contributions | ||
Basic
|
5% of eligible earnings* | 10.5% of eligible earnings | ||
Additional
|
None | 10% of eligible earnings |
* | Up to the Compensation Limit (U.S.A.) |
/s/ Richard B. Evans
|
/s/ David J. Paterson | |
Richard B. Evans
|
David J. Paterson | |
Chairman
|
President and Chief Executive Officer |
/s/ Jacques Vachon
|
Nov. 3, 2010
|
1.1 | Defined Terms |
Affiliate shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date hereof; |
Annual Base Salary has the meaning set out in Section 4.1; |
Board means the board of directors of the Corporation; |
- 2 -
Business Day means any day, other than a Saturday, Sunday or statutory holiday in the Province of Québec on which commercial banks in Montréal are open for business; |
Cause has the meaning set out in Section 5.2; |
Change in Control has the meaning ascribed thereto in the Change in Control Agreement being executed between the Executive and the Corporation in conjunction with this Agreement; |
Common Shares means the outstanding common shares in the capital of the Corporation at any time; |
Confidential Information has the meaning set out in Section 6.1; |
Date of Termination means the effective date of any termination of the Executives employment with the Corporation; |
Eligible Pay means Annual Base Salary as in effect at the Date of Termination and the lower of (i) the average of the last two (2) Incentive Awards paid to the Executive and (ii) 125% of the Executives target incentive (expressed in dollars) for the year in which the Date of Termination occurs; |
Good Reason has the meaning ascribed thereto in the Change in Control Agreement; |
Improvements has the meaning set out in Section 6.2(a); |
Incentive Award means the amount(s), if any, to which the Executive is entitled for the relevant period in question under a regular cash incentive plan or program of the Corporation established from time to time, including the 2011 STIP (as defined in Section 4.2), as same may be amended or replaced from time to time, it being understood that other cash recognition, non-recurring or multi-year incentive awards shall not be considered as an Incentive Award for the purpose hereof; |
Non-Disclosure Period has the meaning set out in Section 6.1; |
Permanent Disability has the meaning set out in Section 5.3; |
person includes, without limitation, an individual, corporation, partnership, joint venture, association, trust, firm, unincorporated organization or other legal or business entity; |
Prohibited Area means the territorial limits of Canada, the United States, Mexico, Italy, the United Kingdom and South Korea; |
Restricted Period means the period from the date hereof to (i) the Date of termination in the event of termination of this Agreement by the Corporation without Cause or |
- 3 -
termination of this Agreement by the Executive for Good Reason pursuant to the terms of the Change in Control Agreement or (ii) the end of the ninth month following the Date of Termination in all other circumstances, except in the case of termination for Cause, in which case the Restricted Period shall end on the twelfth (12 th ) month following the Date of Termination; |
Subsidiary has the meaning ascribed thereto in the Canada Business Corporations Act ; |
Voting Shares means any securities of the Corporation ordinarily carrying the right to vote at elections of directors. |
(a) | the terms Agreement, this Agreement, the Agreement, hereto, hereof, herein, hereby, hereunder and similar expressions refer to this Agreement in its entirety and not to any particular provision hereof; | ||
(b) | references to an Article, Section, Schedule or Exhibit followed by a number or letter refer to the specified Article or Section of or Schedule or Exhibit to this Agreement; | ||
(c) | the division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement; | ||
(d) | words importing the singular number only shall include the plural and vice versa and words importing the use of any gender shall include all genders; | ||
(e) | the word including is deemed to mean including without limitation; | ||
(f) | the terms party and the parties refer to a party or the parties to this Agreement; | ||
(g) | any reference to a statute, regulation or rule shall be construed to be a reference thereto as the same may from time to time be amended, re-enacted or replaced, and any reference to a statute shall include any regulations or rules made thereunder; and | ||
(h) | all dollar amounts refer to United States dollars unless expressly provided to the contrary. |
- 4 -
- 5 -
(a) | devote his full time and attention during normal business hours and such other times as may be reasonably required to the business and affairs of the Corporation and its Affiliates and shall not, without the prior written consent of the Board, undertake any other business or occupation or public office which may detract from the proper and timely performance of his duties hereunder; | ||
(b) | perform diligently and faithfully those duties as are consistent with the position and status of President and Chief Executive Officer that may be assigned to the Executive; | ||
(c) | promote the interests and goodwill of the Corporation and its Affiliates and not knowingly do, or willingly permit to be done, anything to the prejudice, loss or injury of the Corporation or any of its Affiliates; and | ||
(d) | at all times keep the Corporation regularly informed (in writing if so requested) of his conduct of the business and affairs of the Corporation and provide such explanations of his conduct as the Board may require. |
- 6 -
- 7 -
- 8 -
(a) | the wilful failure of the Executive to carry out his duties hereunder, to comply in all material respects with the rules and policies of the Corporation or to follow any reasonable instruction or directive of the Board which is consistent with the Executives duties and responsibilities under this Agreement; | ||
(b) | the Executive acting dishonestly or fraudulently in connection with the business of the Corporation, or the wilful gross misconduct of the Executive in the course of his employment hereunder, in each case resulting in adverse consequences to the Corporation or to any of its Affiliates; |
- 9 -
(c) | if the Executive or his spouse or child under the age of majority makes any personal profit arising out of or in connection with any transaction to which the Corporation or any of its Affiliates is a party or with which the Corporation or any of its Affiliates is associated without making disclosure to and obtaining the prior written consent of the Board, or other material breach of the Executives fiduciary duties to the Corporation; | ||
(d) | the conviction of the Executive for, or a guilty plea by the Executive to, any criminal offence punishable by imprisonment that may reasonably be considered to be likely to adversely affect the Corporation or any of its Affiliates or the suitability of the Executive to perform his duties hereunder, including without limitation any offence involving fraud, theft, embezzlement, forgery, wilful misappropriation of funds or property, or other fraudulent or dishonest acts; | ||
(e) | any material breach of any provisions of this Agreement by the Executive; | ||
(f) | misconduct on the part of the Executive that is materially detrimental to the business or financial position of the Corporation or to any of its Affiliates; | ||
(g) | personal misconduct by the Executive which is of such a serious and substantial nature that it has or would injure the reputation of the Corporation or of any of its Affiliates; | ||
(h) | the habitual inability by the Executive to carry out functions of his employment hereunder due to alcohol or drug related causes, provided that the Executive shall have been provided with written notice thereof at least thirty (30) days prior to the Date of Termination and shall have failed to remedy such alcohol or drug related causes during such period of time; or | ||
(i) | any serious reason pursuant to Article 2094 of the Civil Code of Québec . |
- 10 -
- 11 -
(a) | Upon termination of the Executives employment (i) for Cause pursuant to Section 5.2, or (ii) voluntarily by the Executive pursuant to Section 5.6, the Executive shall not be entitled to any pay in lieu of notice of termination, severance or similar payment in respect of such termination other than (A) accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination and (B) vacation pay earned up to the Date of Termination and (C) in the event of early termination by the Corporation of the notice period in Section 5.6, the portion of the Annual Base Salary that would have otherwise been payable during such notice period, and (D) any amount of or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with any then applicable plans and agreements. In addition, any unvested stock option, SAR, full value award (including, without limitation, unrestricted stock, restricted stock or restricted stock units, performance stock or performance stock units, and deferred stock or deferred stock units) in the Corporation held by the Executive under a long term incentive plan adopted by the Corporation from time to time shall vest and shall remain exercisable by the Executive subject to and with in accordance with the relevant plan and award agreements. | ||
(b) | Upon termination of the Executives employment (i) as a result of the Permanent Disability of the Executive pursuant to Section 5.3, or (ii) by the death of the Executive pursuant to Section 5.4, the Executive (or his estate, as the case may be) shall be entitled to receive (A) accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination, (B) vacation pay earned up to the Date of Termination and (C) any amount or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with any then applicable plans and agreements. In addition, any unvested stock option, SAR, full value award (including, without limitation, unrestricted stock, restricted stock or restricted stock units, performance stock or performance stock units, and deferred stock or deferred stock units) in the Corporation held by the Executive under a long term incentive plan adopted by the Corporation from time to time shall vest and shall remain exercisable by the Executive subject to and in accordance with the relevant plan and award agreements. | ||
(c) | If the Executives employment is terminated pursuant to Section 5.5, other than within two years following a Change in Control (in which case the Change in Control Agreement shall govern and the Executive shall not be entitled to any payment pursuant to this Agreement), the Executive shall be entitled to receive: |
- 12 -
(i) | accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination; | ||
(ii) | vacation pay earned up to the Date of Termination; | ||
(iii) | severance pay in an amount equal to six (6) weeks of Eligible Pay per year of continuous service, subject to a minimum of fifty-two (52) weeks and a maximum of one hundred four (104) weeks, and pro-rated for partial years of service; and | ||
(iv) | any amount or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with the relevant plans and agreements. |
- 13 -
(a) | in the course of performing his duties and responsibilities hereunder, he will have access to and will be entrusted with detailed confidential information and trade secrets concerning past, present, future and contemplated company strategy, plans and activities (including acquisition plans and activities), products, services, operations, technology, intellectual property, methodologies and procedures of the Corporation or its Affiliates, whether in written, printed, pictorial, diagrammatic, electronic or any other form or medium, including, without limitation, information relating to names, addresses, contact persons, preferences, needs and requirements of past, present and prospective clients, customers, suppliers and employees of the Corporation and its Affiliates (collectively, Confidential Information ), the disclosure of any of which to competitors of the Corporation or of any of its Affiliates or to the general public, or the use of any of which by the Executive or any competitor of the Corporation or of any of its Affiliates, could reasonably be expected to be detrimental to the interests of the Corporation and its Affiliates; | ||
(b) | in the course of performing his duties and responsibilities hereunder, the Executive will be a representative of the Corporation and its Affiliates to its and their customers, clients and suppliers and as such will have significant responsibility for maintaining and enhancing the goodwill of the Corporation and its Affiliates with such customers, clients and suppliers and would not have, except by virtue of his employment with the Corporation, developed a close and direct relationship with the customers, clients and suppliers of the Corporation and its Affiliates; and | ||
(c) | the right to maintain the confidentiality of the Confidential Information, the right to preserve the goodwill of the Corporation and its Affiliates and the right to the benefit of the contacts and connections previously developed by the Executive with prospective clients, customers and others and any relationships that will be developed between the Executive and the customers, clients and suppliers of the Corporation and its Affiliates by virtue of the Executives employment with the |
- 14 -
Corporation constitute proprietary rights of the Corporation and its Affiliates which the Corporation and its Affiliates are entitled to protect. |
- 15 -
- 16 -
- 17 -
- 18 -
- 19 -
(i) |
If to the Executive:
111, rue Vinet Montréal, Québec H3J 2W2 |
||
Email: rgar1234@gmail.com | |||
(ii) |
If to the Corporation:
AbitibiBowater Inc. 1155 Metcalfe Street Suite 800 Montréal, Québec H3B 5H2 |
||
Attention: Chief Legal Officer
Fax number: 514-394-3644 |
- 20 -
(a) | the Executive has had sufficient time to review and consider this Agreement thoroughly; | ||
(b) | the Executive has read and understands the terms of this Agreement and the Executives obligations hereunder; | ||
(c) | the Executive has been given an opportunity to obtain independent legal advice, or such other advice as the Executive may desire, concerning the interpretation and effect of this Agreement; and | ||
(d) | this Agreement is entered into voluntarily and without any pressure. |
- 21 -
ABITIBIBOWATER INC. | ||||||
|
||||||
|
By |
/s/ Sarah Nash
|
||||
|
Chair of the Human Resources and Compensation/Nominating and Governance Committee | |||||
|
||||||
|
/s/ Richard Garneau
|
(a) | Base Amount shall mean the Executives Annual Base Salary at the rate in effect on the Termination Date. | ||
(b) | Beneficial Owner of securities shall mean (i) a Person who beneficially owns such securities, directly or indirectly, or (ii) a Person who has the right to acquire such securities (whether such right is exercisable immediately or only with the passage of time) pursuant to any agreement, arrangement or understanding |
- 2 -
(whether or not in writing) or upon the exercise of conversion rights, exchange rights, warrants, options or otherwise. |
(c) | Incentive Amount shall mean an amount equal to the lesser of (i) the average of the last two Incentive Awards paid to the Executive prior to the Termination Date, or (ii) 125% of the Executives target incentive (expressed in dollars) for the year in which the Termination Date occurs. | ||
(d) | Change in Control means any of the following: |
(i) | the acquisition, directly or indirectly and by any means whatsoever, by any person, or by a group of persons acting jointly or in concert, of that number of Voting Shares which is equal to or greater than 50% of the total issued and outstanding Voting Shares immediately after such acquisition; | ||
(ii) | the election or appointment by any holder of Voting Shares, or by any group of holders of Voting Shares acting jointly or in concert, of a number of members of the Board of Directors of the Corporation equal to or greater than one half (50%) of the members of the Board of Directors; | ||
(iii) | any transaction or series of transactions, whether by way of reconstruction, reorganization, consolidation, amalgamation, arrangement, merger, transfer, sale or otherwise, whereby assets of the Corporation become the property of any other person (other than a subsidiary of the Corporation) if such assets which become the property of any other person have a fair market value (net of the fair market value of any then existing liabilities of the Corporation assumed by such other person as part of the same transaction) equal to 50% or more of the Market Capitalization of the Corporation immediately before such transaction; or | ||
(iv) | the completion of any transaction or the first of a series of transactions which would have the same or similar effect as any transaction or series of transactions referred to in paragraphs (i), (ii) and (iii) above. |
(e) | Disability shall mean a physical or mental condition that is defined as a disability in the Corporations long term disability insurance plan covering the Executive immediately prior to the Change in Control. | ||
(f) | Employer Contributions shall mean an amount equal to the maximum contributions the Corporation could have made (regardless of actual circumstances) on the Executives behalf under the DC Program for the fiscal year in which the Executives Termination Date occurs. | ||
(g) | Good Reason shall mean: |
(i) | a material change in the Executives status, title, position or responsibilities (including in reporting line relationships) that represents a substantial adverse change from the Executives status, title, position or |
- 3 -
responsibilities as in effect immediately preceding the date of a Change in Control or at any time within twenty-four (24) months thereafter; the assignment to the Executive of any duties or responsibilities that are materially inconsistent with the Executives status, title, position or responsibilities as in effect immediately preceding the date of a Change in Control or at any time within twenty-four (24) months thereafter; or any removal of the Executive from or failure to reappoint or reelect the Executive to any material office or position held immediately preceding the date of a Change in Control; or at any time within twenty-four (24) months thereafter. |
(ii) | a material reduction in compensation and benefits, in the aggregate, (in terms of benefit levels and/or reward opportunities which opportunities will be evaluated in light of the performance requirements therefor) to those provided for under the employee compensation and benefit plans, programs and practices in which the Executive was participating immediately preceding the date of the Change in Control or at any time within twenty-four (24) months thereafter; | ||
(iii) | a material reduction of the Executives Annual Base Salary as in effect immediately preceding the date of the Change in Control or any time within twenty-four (24) months thereafter; | ||
(iv) | a failure by the Corporation to obtain from any Successor its assent to this Agreement contemplated by Section 10 hereof; or | ||
(v) | a material change in the geographic location at which the Executive is to perform services on behalf of the Corporation from the location immediately prior to the Change in Control. |
(h) | Market Capitalization of the Corporation at any time means the product of (i) the number of outstanding Common Shares of the Corporation at that time, and (ii) the average of the closing prices for the Common Shares of the Corporation on the principal securities exchange (in terms of volume of trading) on which the Common Shares of the Corporation are listed at that time for each of the last 10 business days prior to such time on which the Common Shares of the Corporation traded on such securities exchange. | ||
(i) | Notice of Termination shall mean a notice sent by either the Executive or the Corporation to the other party terminating the Executives employment as of a certain date and setting forth the reasons therefor. | ||
(j) | Successor shall mean the direct or indirect successor by purchase, merger, consolidation or otherwise, to all or substantially all of the business and/or assets of the Corporation. | ||
(k) | Termination Date shall mean (i) in the case of the Executives death, the date of death, (ii) in the case of a termination by the Executive in accordance with |
- 4 -
Section 3, the last day of employment as set forth in the Notice of Termination given by the Executive, (iii) in the case of a termination by the Corporation for Cause, a date not less than thirty (30) days after receipt of the Notice of Termination by the Executive, (iv) in the case of a termination by the Corporation due to the Executives Disability, the date not less than thirty (30) days after receipt of the Notice of Termination by the Executive, provided that the Executive shall not have returned to the full-time performance of duties within thirty (30) days after such receipt, and (v) in all other cases, the date specified in the Notice of Termination or if no Notice of Termination is sent, the last day of the Executives active employment (an Executive receiving periodic severance pay is no longer considered employed for the purposes of this Agreement). |
- 5 -
(a) | A single lump sum, paid as soon as practicable, but in no event later than sixty (60) days after the Executives Termination Date, equal to the sum of the following less applicable withholding taxes: |
(i) | an amount equal to the Base Amount multiplied by three; | ||
(ii) | an amount equal to the Incentive Amount multiplied by three; | ||
(iii) | an amount equal to the Employer Contributions multiplied by three; and | ||
(iv) | a cash payment of $20,000 in lieu of individual outplacement services. |
The payment of severance hereunder is intended to meet the short-term deferral exception under Section 409A of the US Internal Revenue Code of 1986, as amended (the Code), and shall be interpreted and administered consistent with this intent, to the extent applicable. | |||
(b) | As of the Executives Termination Date, the Executive (and the Executives spouse or surviving spouse and dependents) will be provided health care (including medical, prescription drug and dental) and life insurance coverage provided by the Corporation to executives as of the date of the Change in Control for the earlier of thirty-six (36) months after the Termination Date or the date on which the Executive is covered by a subsequent employers health care and life insurance programs. The amount of premiums that the Executive is required to pay for such coverage shall not exceed the amount paid by executives who are active employees on the Termination Date and thereafter. If and to the extent that the benefits described in this paragraph cannot be provided under the Corporations plans or programs, the lump sum payment described in subsection |
- 6 -
(a) shall be increased by an amount calculated so that the amount of such payment, after payment of all applicable income taxes, equals the present value of the difference between the full premium cost without employer subsidy of the lost benefits and the amount of premium the Executive would have been required to pay. |
- 7 -
(a) | The after-tax amount that would be retained by the Executive (after taking into account all required income taxes payable by the Executive and the amount of any excise taxes that would be payable by the Executive under Code Section 4999 (the Excise Taxes)) if the Executive were to receive the Total Payments, or | ||
(b) | The after-tax amount that would be retained by the Executive (after taking into account all federal, state and local income taxes payable by the Executive) if the Executive were to receive the Total Payments reduced to the largest amount that would result in no portion of the Total Payments being subject to Excise Taxes (the Reduced Payments). |
- 8 -
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ABITIBIBOWATER INC. | THE EXECUTIVE | |||||
Per:
|
Per: | |||||
|
||||||
|
/s/ Sarah Nash | /s/ Richard Garneau | ||||
|
||||||
|
Sarah Nash | Richard Garneau | ||||
|
Chair of the Human Resources and Compensation/Nominating and Governance Committee |
Location:
|
Montreal, Quebec, Canada | |
|
||
Effective date:
|
March 4, 2011 | |
|
||
Compensation:
|
Your annual base salary will be US$375,000. | |
|
||
Short-Term Incentive Plan (STIP):
|
You will be eligible to participate in a short-term incentive plan for the year 2011 with a target level of 100% of base salary. Please refer to the documentation enclosed. | |
|
||
Long-Term Incentive Plan (LTIP):
|
You will be eligible to participate in the Companys long-term incentive plan and to receive grants under such plan, as determined by the Board of Directors from time to time, at its discretion. For 2011, you will be eligible to an annual grant equivalent to 125% of your annual base salary. The LTIP plan will be available shortly. |
Employee | ||
Contributions | Company Contributions | |
5% of eligible earnings* | 20.5% of eligible earnings |
* | Up to the US compensation limit |
Please refer to the documentation enclosed. |
Perquisite allowance: | You will be eligible for a perquisite allowance of US$12,000 per year as well as a complete annual medical examination. |
/s/ Alain Boivin | February 22, 2011 | |
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Location:
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Montreal, Quebec, Canada | |
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Effective date:
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January 17, 2011 | |
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Compensation:
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Your annual base salary will be US$300,000. | |
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Short-Term Incentive Plan (STIP):
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You will be eligible to participate in a short-term incentive plan for the year 2011, with a target level of 100% of base salary. Please refer to the documentation enclosed. | |
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Long-Term Incentive Plan (LTIP):
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You will be eligible to participate in the Companys long-term incentive plan and to receive grants under such plan, as determined by the Board of Directors from time to time, at its discretion. For 2011, you will be eligible to an annual grant equivalent to 125% of your annual base salary. The LTIP plan will be available shortly. |
Employee | ||
Contributions | Company Contributions | |
5% of eligible earnings* | 20.5% of eligible earnings |
* | Up to the US compensation limit |
Perquisite allowance: | You will be eligible for a perquisite allowance of US$12,000 per year as well as a complete annual medical examination. |
/s/ John Lafave | February 14, 2011 | |
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Term | Section | |
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Continuing Directors
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DGCL
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Indemnitee
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Section 409A
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A-1
BETWEEN:
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BOWATER CANADIAN FOREST PRODUCTS INC., a company duly constituted under the laws of Nova Scotia and having its registered office in Halifax, Nova Scotia, and ABITIBI-CONSOLIDATED COMPANY OF CANADA , a company duly constituted under the laws of Quebec and having its head office in Montreal, Quebec, on their own behalf and on behalf of any Canadian successor thereof upon emergence from the current restructuring process described herein | |
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(hereinafter collectively called AbiBow Canada ); | |
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AND:
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HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO, as represented by the Minister Of Northern Development, Mines And Forestry | |
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(hereinafter called the Province ). |
1 | AbiBow Canada Covenants | |
1.1 | Governance |
1.1.1 | not to declare or pay any dividends while the weighted average solvency ratio of its Ontario-registered pension plans is below 80%; |
1.1.2 | to abide by the AbiBow compensation plan with respect to salaries, bonuses and severance, a description of which was filed with the Court and its creditors in the context of its restructuring process in the materials listed in Schedule A hereto and separately delivered to the Province; |
1.1.3 | to present to the Province as soon as they are made public in accordance with applicable securities laws the annual audited financial results of AbiBow for each fiscal year during the term of this Agreement; |
1.1.4 | to report annually to the Province on the implementation of AbiBows business plan, a description of which was filed with the Court and its creditors in the context of its restructuring process in the materials listed in Schedule B hereto and separately delivered to the Province; and |
1.1.5 | that Sections 1.3 and 1.4 of this Agreement shall be deemed also to apply to the pulp and paper operations, if any, which AbiBow may hold from to time in Ontario otherwise than through AbiBow Canada. |
1.2 | Pension Plans |
1.2.1 | that it will not voluntarily terminate any of its Ontario-registered pension plans before it emerges from Court protection under the CCAA; and |
1.2.2 | that it shall comply with any arrangements made with the Ontario Ministry of Finance including any obligations required to be performed by it as set forth in the Ontario Pension Letter and any related regulations that come into force. |
1.3 | Investments |
2
1.3.1 | that at least 30% of its maintenance and value-creation investments with respect to its pulp and paper operations shall be made in Ontario, such that, for example, investments of $60 million per year would result in a minimum investment of $90 million during a 5-year period for Ontario; and |
1.3.2 | that it shall invest a minimum amount of $50 million over a 2-3 year construction period at its facility in Thunder Bay, Ontario for a new condensing turbine. The parties acknowledge that the commitment of AbiBow Canada set forth in this Section 1.3.2 is subject to (i) approval by the new board of directors of AbiBow upon emergence from the current restructuring process, (ii) satisfactory resolution of labour issues at its Thunder Bay facility, AbiBow Canada agreeing to use its ongoing commercially reasonable efforts to resolve such issues promptly following the execution of this Agreement, (iii) the receipt of financial assistance from the Province under its forest sector prosperity fund and loan guarantee programs and (iv) the execution of a power purchase agreement with the Ontario Power Authority ( OPA ) substantially on the terms and conditions set out in the term sheet dated September 8, 2009 and amended on July 16, 2010 provided by OPA to AbiBow Canada, with such further amendments as AbiBow Canada and OPA may agree. |
1.4 | Business Continuity |
1.4.1 | that if any of its pulp and paper mills is permanently shut down in Ontario, it shall work constructively with the Province and any affected communities to develop economic recovery opportunities which may include the sale of such facilities, in accordance with Section 1.4.2; |
1.4.2 | that in the event of the sale of any of its pulp and paper assets, it shall offer favourable conditions to enable potential buyers to purchase such assets located in Ontario at market value, including where necessary, reasonable non-competition provisions in favour of AbiBow Canada as determined on a case-by-case basis; |
1.4.3 | that, having regard to its intent described in the recital to maintain the production capacity of its Ontario pulp and paper mills, it shall pay to one or more of its pension plans, as additional solvency special payments, $75 for every metric ton reduction in such production capacity resulting from a definitive shutdown of at least one machine, including a temporary shutdown for more than 6 consecutive months or 9 cumulative months over a period of 18 months, without any duplication in the production capacity levels of its pulp and paper mills in Ontario or otherwise, such payments being payable over 4 years and only once for any given circumstance; provided however that no payment shall be made in respect of any pension plan having an excess surplus under applicable tax laws; |
1.4.4 | that, where delivered costs are equivalent to those of its mills located outside Ontario, not to transfer outside Ontario any pulp and paper production (or part thereof) located in its Ontario mills as of the date this Agreement become effective; |
1.4.5 | that it shall pay, as instructed by the Province, an aggregate amount of $5 million over a period of five years (at the rate of $1 million per year with the first payment on January 14, 2011) to be used for such environmental remediation purposes as deemed necessary or desirable by the Province in those locations in Ontario where AbiBow Canada or its affiliates has, or has had, facilities, and for greater certainty any such instruction can be given and followed in each case without prejudice to or admission by either party in respect of any pending or future disputes between them; |
1.4.6 | that, without admission of any liability or obligation, it shall maintain and renew the $2,350,764.00 of financial assurances listed in Schedule C currently held by Ontario in respect of the properties listed in Schedule C , until such financial assurances are returned or released in accordance with the Environmental Protection Act (Ontario); and |
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1.4.7 | that, in the event of a future disposition of AbiBow Canadas interest in ACH and acknowledging that it does not own 100% thereof, it is AbiBow Canadas intent and objective to work with the Province to ensure that the power cost advantage to the Mills are not otherwise impacted. |
2 | Term |
2.1 | This Agreement will become effective as of the time of AbiBow Canadas emergence from Court protection under the CCAA and will expire 5 years after such emergence, except that Section 1.2.1 shall become effective upon execution of this Agreement. |
2.2 | The parties agree to re-evaluate the covenants of this Agreement at the end of the initial 5-year term in light of AbiBows situation, the conditions affecting the pulp and paper industry as a whole and the solvency of its pension plans. |
3 | Assignment |
3.1 | The rights and obligations provided herein shall not be assigned, in whole or in part, without the written consent of the Province and of AbiBow Canada. This Agreement is binding and enures to the benefit of any successor or permitted assign of any party thereto. Notwithstanding the foregoing, upon any consolidation, amalgamation or merger, or any sale, transfer, lease or other disposition of all or substantially all of the properties or assets of AbiBow Canada, the successor formed by such consolidation or amalgamation or into or with which AbiBow Canada is amalgamated or to which such sale, transfer, lease or other disposition is made shall succeed to, and be substituted for AbiBow Canada (so that from and after the date of such consolidation, amalgamation, merger, sale, transfer, lease or other disposition, the provisions of this Agreement referring to AbiBow Canada shall refer instead to the successor and not AbiBow Canada), and shall be subject to the obligations and may exercise the rights of AbiBow Canada under this Agreement with the same effect as if such successor had been named as AbiBow Canada herein, and AbiBow Canada shall thereupon be relieved from its obligations hereunder. |
4 | Notice |
4.1 | Any notice and other communication given pursuant to this Agreement must be in writing and sent to the parties to their respective addresses by registered or certified mail, by fax or by messenger. Such notice and communication shall be deemed to have been received the same day it was sent by fax or messenger, and if it was sent by mail, on the fifth business day following. In all cases, the party giving notice must be able to evidence the sending of the notice if required to do so by the other party, absent which the notice is deemed null and void. |
To: |
the Province
Her Majesty The Queen in Right of The Province of Ontario Ministry of Northern Development, Mines and Forestry Suite 210, Roberta Bondar Pl. 70 Foster Drive Sault Ste. Marie, ON P6A 6V5 Facsimile: (705) 945-5977 Attention: Mr. Bill Thornton Assistant Deputy Minister, Forestry Division |
To: |
AbiBow Canada
1155 Metcalfe Street, Suite 800 Montreal (Quebec) H3B 5H2 Canada Fax : (514) 394-3644 |
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Attention: Senior Vice-President, Corporate Affairs and Chief Legal Officer |
5 | General provisions |
5.1 | This Agreement (except Schedules A and B ) may only be modified by a written amendment duly signed by the parties. The plans listed in Schedules A and B herein may be modified or supplemented by AbiBow from time to time, provided that AbiBow Canada shall notify the Province promptly of any material change, and shall promptly provide any information with respect thereto that the Province reasonably requests. AbiBow Canada shall report annually to the Province all changes made to the said plans. The recitals to this Agreement do not confer rights or obligations in respect of either one of the parties. |
5.2 | Time is of the essence of this Agreement. |
5.3 | Each party to this Agreement represents and warrants to the other party (i) that it has the required authorizations and full powers to sign this Agreement and execute all its obligations contemplated herein, (ii) that by the signing and performance of this Agreement it is not violating its constituting act, as applicable, nor any law or regulation, and (iii) that following its signing this Agreement will create contractual obligations as described herein, will have full effect and will be fully enforceable against it pursuant to its terms, subject, except as otherwise provided, in the case of AbiBow Canada, to insolvency laws of general application and to its emergence from the restructuring process under the CCAA, and any required authorizations relating to that process. |
5.4 | Any covenant or condition in favour of a party may only be waived by such party. If any provision herein, or arrangement entered into in connection with this Agreement, is found to be invalid by a Court for any reason whatsoever, the other provisions contained therein shall continue to have their full effect between the parties and, if any invalidated provision has a significant negative impact on either one of the parties, they will negotiate in good faith to revise or replace such invalidated provision in order to compensate the affected party in an equivalent manner. |
5.5 | This Agreement shall be governed by and interpreted in accordance with the laws applicable in Ontario. |
5.6 | All references herein to dollars shall be understood as a reference to Canadian dollars. |
5.7 | This Agreement may be signed in several counterparts, each one deemed to be an original counterpart, but all the counterparts constitute one and the same agreement. |
5.8 | The representatives and signatories for AbiBow Canada and the Province declare that they have read this Agreement and its schedules and that they accept its terms, conditions and modalities and sign it in good faith in the name of AbiBow Canada and the Province, respectively. No party is authorized to bind the other party towards a third party without first obtaining the other partys written consent. The covenants contained herein only benefit the parties and their respective subsidiaries. Nothing herein shall be construed as a stipulation for another. |
5.9 | The arrangements set forth in the Ontario Pension Letter are essential conditions to this Agreement without which AbiBow Canada would not have entered into this Agreement. |
5.10 | In the event of a disagreement or conflict resulting from or in connection with this Agreement, including with its interpretation and application, the parties hereto will first try to resolve it amicably through informal negotiations. |
5.11 | If as a result of an event of force majeure (as defined hereunder) AbiBow Canada is unable to perform an obligation under this Agreement or any arrangement related thereto: |
(a) | it shall promptly give notice to the Province of the occurrence of such event indicating, as correctly as possible, the effect of such event on its obligations under this Agreement and any arrangements relating thereto, including any foreseeable delays resulting therefrom; |
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(b) | the parties will meet to review such affected obligations or arrangements and shall negotiate in good faith to modify this Agreement or arrangements with respect to such affected obligations to take any such event into account and to preserve, to the fullest extent possible, any benefits to be provided to the Province in respect thereof; and | ||
(c) | subject to the foregoing (i) AbiBow Canada may suspend the performance of any such affected obligations or arrangements until the effect of the event of force majeure has been eliminated or sufficiently reduced to allow performance to continue provided that AbiBow Canada shall act with ongoing reasonable diligence in order to eliminate or correct, in the case where it is reasonably possible, the causes and effects of the event of force majeure, it being understood however that except as otherwise provided by applicable law, the resolution of any labour dispute will be left to AbiBow Canadas discretion, and (ii) the non-performance of any affected obligation or arrangement in the circumstances and for the period described above shall not be considered a default, and shall not lead to a right of action against AbiBow Canada. |
For the purposes of this Agreement, the expression force majeure means any event which is unforeseeable, irresistible and beyond the control of AbiBow Canada and which delays, interrupts or prevents complete or partial performance of its obligations pursuant to this Agreement, including any one of the following events: war, embargo, insurrection, invasion, riot, rebellion, social problems, epidemic, flood, fire, explosion, thunder, earthquake, ice storm, storm, sabotage or labour dispute. However, the parties agree that an event shall not be considered beyond AbiBow Canadas control to the extent that a reasonable business person applying due diligence in the same or similar circumstances under the same or similar obligations as those contained in the Agreement would have put in place contingency plans to either materially mitigate or negate the effects of such event. | ||
5.12 | Nothing in this Agreement shall be taken as a waiver or release of the rights preserved for Ontario under section 31 of the Sanction Order. This Agreement, and any action taken under this Agreement, is without prejudice to the positions of either AbiBow Canada or the Province of Ontario (including, for greater certainty, the Minister of the Environment, the Ministry of the Environment and any person exercising an environmental regulatory authority) in respect of any pending or future dispute between them. |
5.13 | The parties agree to make reasonable efforts to consult with each other, to the extent possible, on the timing and content of any written press release or public announcement (a Public Statement ) made in connection with this Agreement or the provisions hereof. |
5.14 | AbiBow Canada acknowledges that the Province is subject to the Freedom of Information and Protection of Privacy Act ( FIPPA ) and is accountable to the Executive Council of the Ontario Government, its committees, the Legislative Assembly and the general public of Ontario and the commitments and agreements flowing from this Agreement and any related documents may form part of the public record. Each of the parties will advise the other of any documents and information supplied in connection with this Agreement which it considers to be sensitive commercial or financial information or otherwise confidential (the Confidential Information ). | |
The parties agree to keep the Confidential Information confidential except as follows: (a) each party may disclose Confidential Information on mutually agreed terms; (b) each party may disclose Confidential Information to its attorneys, accountants, lenders or creditors and other professional advisors (including those of AbiBow or its affiliates in the case of AbiBow Canada) who are under a duty to preserve the confidentiality of such information; (c) each party may disclose Confidential Information to a mediator, arbitrator or court to the extent necessary in connection with the resolution of a dispute; (d) each party may disclose Confidential Information where required by law, including without limitation, where required by FIPPA, any securities law or any other applicable law or legal process requiring the disclosure thereof or by the requirement of any government agency having the power to require disclosure thereof; (e) AbiBow Canada may disclose the Confidential Information to AbiBow and its other affiliates, provided they are under a duty to preserve the confidentiality of such information and (f) the Province may disclose the Confidential Information to persons within the Ontario Government, including without limitation, its |
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Ministries and agencies, the Executive Council, its committees and their respective staff, the Legislative Assembly to the extent any such person is required to report thereto, and to the general public to the extent any such report is required to be disclosed to the general public under applicable law. |
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BOWATER CANADIAN FOREST PRODUCTS INC.
ABITIBI-CONSOLIDATED COMPANY OF CANADA , for themselves and on behalf of any Canadian successor thereof upon emergence from their current restructuring process |
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Per: | /s/David J. Paterson | |||
David J. Paterson | ||||
President | ||||
HER MAGESTY THE QUEEN IN RIGHT OF THE PROVINCE OF
ONTARIO, AS REPRESENTED BY THE MINISTER OF
NORTHERN DEVELOPMENT, MINES AND FORESTRY
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Per: | /s/Michael Gravelle | |||
Michael Gravelle | ||||
Minister of Northern Development, Mines and Forestry | ||||
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– | Plan Supplement 6.8(a) dated September 3, 2010. | |
– | Plan Supplement 6.8(b) dated September 3, 2010. | |
– | Amended Plan Supplement 6.8(b) dated September 13, 2010. | |
– | Plan Supplement 6.8(d) dated September 3, 2010. | |
– | Plan Supplement 6.9(1) dated September 3, 2010. | |
– | Amended Plan Supplement 6.9(1) dated September 17, 2010. | |
– | Plan Supplement 6.9(2) dated September 3, 2010. | |
– | Amended Plan Supplement 6.9(1) dated September 17, 2010. |
– | [US] Plan Supplement 1 dated September 1, 2010. | |
– | [US] Plan Supplement 2 dated September 1, 2010. | |
– | [US] Plan Supplement 6A dated September 3, 2010. | |
– | [US] Amended Supplement 6A-4 dated September 10, 2010. | |
– | [US] Plan Supplement 6B dated September 3, 2010. | |
– | [US] Plan Supplement 7A dated September 3, 2010. | |
– | [US] Plan Supplement 7B dated September 3, 2010. | |
– | [US] Amended Plan Supplement 7A and 7B dated September 17, 2010. |
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Certificate of | ||||||||
Approval | Form of | FA Dollar Amount | ||||||
Number | Financial Assurance | Held | ||||||
Margach Landfill
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A600606 | Irrevocable Letter of Credit | $ | 1,796,511.00 | ||||
Mud Lake Landfill
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A600605 | Irrevocable Letter of Credit | $ | 258,748.00 | ||||
Iroquois Falls
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A7045801 | Irrevocable Letter of Credit | $ | 116,208.00 | ||||
Georgetown Landfill
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A210207 | Irrevocable Letter of Credit | $ | 179,297.00 | ||||
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$ | 2,850,764.00 |
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BETWEEN
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BOWATER CANADIAN FOREST PRODUCTS INC. , a legal person duly constituted under the laws of Nova Scotia, having its registered office in Halifax, Nova Scotia, and ABITIBI- CONSOLIDATED COMPANY OF CANADA , a legal person duly constituted under the laws of Quebec, having its head office in Montreal, Quebec, both acting and duly represented for the purposes hereof by Mr David J. Paterson , President, on their own behalf and on behalf of any Canadian successor upon emergence from the current restructuring process described herein | |
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(hereinafter collectively called AbiBow Canada ); | |
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AND:
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THE GOVERNMENT OF QUEBEC
, acting and duly represented for the
purposes hereof by
Mr. Clément Gignac, Minister of Economic
Development, Innovation and Export Trade
(hereinafter called the Government ). |
1. | AbiBow Canada Covenants | |
1.1. | Governance |
1.1.1. | not to pay any dividend while the weighted average solvency ratio of its pension plans is less than 80%; |
1.1.2. | to abide by the AbiBow compensation plan with respect to salaries, bonuses and severance, which description was filed with the Court and its creditors in the context of its restructuring process is attached hereto as Schedule I ; | |
1.1.3. | to present to the Government the annual financial results of AbiBow as soon as they are made public; and | |
1.1.4. | to report annually to the Government on the implementation of its business plan, which description was filed with the Court and its creditors in the context of its restructuring process is attached hereto as Schedule II ; | |
1.2. | Pension Plans |
1.2.1. | that it will not voluntarily terminate any of its pension plans in Quebec before it emerges from the Court protection under the CCAA; |
1.2.2. | that it will continue its discussions with the Régie des rentes du Québec to examine solutions in order to avoid termination of pension plans; and |
1.2.3. | that the undertakings set forth in this Section 1.2 will also be complied with by its subsidiaries that participate in a supplemental pension plan governed by the Supplemental Pension Plans Act (R.S.Q., c. R-15.1); |
1.3. | Investments |
1.3.1. | in its pulp and paper operations, that at least 60% of its maintenance and value-creation investments shall be made in Quebec, such that, for example, investments of $60 million per year would result in a minimum investment of $180 million during a 5-year period for Quebec; |
1.3.2. | to make investments in strategic projects in Quebec in a minimum amount of $75 million over a 5-year period, to which an amount of $10 million may be added in the event no amount becomes payable in |
1.4. | Business Continuity |
1.4.1. | that the head office of AbiBow and all its actual related functions shall remain in Quebec; | |
1.4.2. | that if a pulp and paper mill is permanently shut down in Quebec, it shall give the Government and the affected communities the opportunity to find recovery alternatives; | |
1.4.3. | that it shall offer favourable conditions to enable potential buyers to purchase its pulp and paper assets at market value, in the event of a sale of such assets located in Quebec, such favourable conditions including the analysis on a case-by-case basis of the need to have non-competition provisions; | |
1.4.4. | that, having regard to its intent described in the recital to maintain the production capacity of the Quebec pulp and paper mills, it shall pay to one or more pension plans, as additional solvency special payments, a total compensation of $75 for every metric ton reduction in such production capacity resulting from a definitive shutdown of at least one machine, including a temporary shutdown for more than 6 consecutive months or 9 cumulative months over a period of 18 months, without any duplication in the capacity levels of pulp and of paper or otherwise, such compensation being payable over 4 years and only once for any given circumstance; it being understood that no payment shall be made in respect of any pension plan having an excess surplus under applicable tax laws; | |
1.4.5. | that, where delivered costs are equivalent to those of its mills located outside Quebec, not to transfer outside Quebec any pulp and paper production (or part thereof) located in its mills located in Quebec at the time all of the terms of this letter become effective; and | |
1.4.6. | to create a diversification fund by contributing 2 million dollars per year for 5 years for the benefit of the municipalities and the workers where the Companys Quebec mills are located. | |
2. | Term | |
2.1. | The present letter will become effective as of the time of AbiBow Canadas emergence from Court protection under the CCAA and will expire 5 years after such emergence, except Section 1.2.1 that becomes effective upon its signing. | |
2.2. | The parties agree to re-evaluate, after the 5 year term, the covenants of this letter, in light of AbiBow Canadas situation, the conditions affecting the pulp and paper industry as a whole and the solvency of its pension plans. | |
3. | Assignment | |
3.1. | The rights and obligations provided herein shall not, under penalty of being null and void, be assigned, in whole or in part, without consent of the Government and of AbiBow Canada. | |
4. | Notice | |
4.1. | A notice and other communication must be in writing and sent to the parties to their respective addresses by recommended or certified mail, or by fax or messenger. Such notice and communication is deemed to have been received the same day it was sent by fax or messenger, and if it was sent by mail, on the fifth business day following. | |
In all cases, the party giving notice must be able to evidence the sending of the notice if required to do so by the other party, absent which the notice is deemed null and void. |
TO: |
Government
Minister of Economic Development, Innovation and Export Trade 710 Place DYouville, 9 th floor Québec (Québec) G1R 4Y4 Fax: 418 643-0221 Attention: Mr. Mario Bouchard |
TO: |
AbiBow Canada
1155 Metcalfe Street, Suite 800 Montréal (Québec) H3B 5H2 Canada Fax: 514 394-3644 Attention: Senior Vice-President, Corporate Affairs and Chief Legal Officer |
5. | General provisions | |
5.1. | The present letter (except the schedules) can only be modified by an amendment duly signed by the parties. The plans described in the schedules herein may be modified by AbiBow from time to time, AbiBow Canada agrees to notify the Government promptly of any important changes to these, including for all information that the Government considers reasonably necessary on this subject, and to report annually to the Government all the changes made to the said plans. The recitals to the present letter do not confer rights or obligations in respect of either one of the parties. | |
5.2. | Time is of the essence of this letter. | |
5.3. | Each party to this letter represents and warrants to the other party (i) that it has the required authorizations and full powers to sign this letter and execute all its obligations contemplated herein, (ii) that by the signing and performance of this letter it is not violating its constituting act, as applicable, nor any law or regulation, and (iii) that following its signing this letter will create contractual obligations as described herein, will have full effect and will be fully enforceable against it pursuant to its terms, subject, except as otherwise provided, in the case of AbiBow Canada, to the insolvency laws of general application, to its emergence from the restructuring process under the CCAA, and any required authorizations. | |
5.4. | Any covenant or condition in favour of a party may only be waived by this party. If one or several provisions herein, or arrangements entered into in connection with this letter, were found to be invalid by a Court for any reason whatsoever, the other provisions contained therein would continue to have their full effect between the parties and, if an invalidated provision had a significant negative impact on either one of the parties, they will negotiate in good faith the relevant terms in order to compensate the affected party in an equivalent manner. | |
5.5. | This letter is governed by and must be interpreted pursuant to the laws applicable in Quebec. | |
5.6. | No party is authorized to bind the other party towards a third party without first obtaining the other partys written consent. The covenants contained herein only benefit the parties and their respective subsidiaries. Nothing herein shall be construed as a stipulation for another. | |
5.7. | Except as otherwise provided, all references herein to dollars must be understood as a reference to Canadian dollars. | |
5.8. | This letter can be signed in several counterparts, each one deemed to be an original counterpart, but all the counterparts constitute one and the same agreement. |
5.9. | The representatives and signatories for AbiBow Canada and the Government declare that they have read this letter and its schedules and that they accept its terms, conditions and modalities and sign it in good faith in the name of AbiBow Canada and the Government, respectively. | |
5.10. | The necessary arrangements in respect of AbiBow Canadas pensions plans and their continued existence are for AbiBow Canada essential conditions to this letter and related arrangements taken in connection with it, without which AbiBow Canada would not have entered into them. | |
5.11. | In the event of a disagreement or conflict resulting from or in connection with this letter, including with its interpretation and application, the parties will first try to resolve it amicably through informal negotiations. | |
5.12. | If AbiBow Canada is subject to an event of force majeure (as defined hereunder): |
5.12.1.1. | it must promptly give notice to the Government and indicate, as correctly as possible, the effect on its obligations under this letter and any arrangements relating thereto, and any foreseeable delays resulting therefrom; | ||
5.12.1.2. | the parties will review in good faith the terms of this letter and of the arrangements relating thereto in order to take any such circumstance into account ;and | ||
5.12.1.3. | (i) its obligations will be suspended as long as it acts with reasonable diligence in order to eliminate or correct, in the case where it is reasonably possible, the causes and effects of this force majeure, it being understood however that the resolution of any labour dispute will be left to its entire discretion, and (ii) the non-performance of an obligation is not considered a default, and does not lead to a right of action of any nature whatsoever; as applicable, there is a deferral of the delays resulting from a suspended obligation. |
For these purposes, the expression force majeure means any event which is unforeseeable, irresistible and beyond the control of AbiBow Canada and delays, interrupts or prevents complete or partial performance of its obligations pursuant to this letter, including any one of the following events: war, embargo, insurrection, invasion, riot, rebellion, social problems, epidemic, flood, fire, explosion, thunder, earthquake, ice storm, storm, sabotage or labour dispute, as well as any act, omission or constraint by a government, court or public authority. | ||
5.13. | This letter, as well as any document, communication or other information relating directly or indirectly to it, are confidential and may not be communicated to anybody, unless to the extent it is required by any applicable law. If a party believes that it is held by law to disclose information or receives a request to that effect, it must immediately notify the other party so that it may have the opportunity to take all appropriate recourse and, in any event, take all reasonable steps in order to maintain confidentiality. These obligations apply to any information whether communicated in writing, verbally or by electronic means and whether it was communicated prior or subsequent to the date of this letter. AbiBow Canada confirms that this letter and the arrangements with the competent authorities are disclosed in the context of its restructuring process and with the Court, creditor committees and competent authorities in Quebec or otherwise. |
By :
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(Signed) | |
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Name :
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David J. Paterson | |
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Title :
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President | |
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THE GOVERNMENT OF QUEBEC | ||
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By :
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(Signed) | |
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Name :
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Clément Gignac | |
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Title :
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Minister of Economic Development, Innovation and Export Trade |
– | Notice of Meeting and Information Circular dated August 2, 2010, at pages G-1 G-11. | |
– | Disclosure Statement dated August 2, 2010, at pages 116-119. |
– | Notice of meeting and Information Circular dated August 2, 2010, at pages 11-116. | |
– | Disclosure Statement dated August 2, 2010, Exhibit B, at pages 1-12. |
Predecessor | ||||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Earnings (loss):
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||||||||||||||||||||
Earnings (loss) before income taxes and
cumulative effect of accounting changes
(a)
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$ | 1,169 | $ | (1,682 | ) | $ | (2,299 | ) | $ | (649 | ) | $ | (111 | ) | ||||||
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||||||||||||||||||||
Add: Fixed charges from below
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489 | 606 | 727 | 266 | 203 | |||||||||||||||
Less: Capitalized interest
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| (1 | ) | | (1 | ) | (4 | ) | ||||||||||||
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$ | 1,658 | $ | (1,077 | ) | $ | (1,572 | ) | $ | (384 | ) | $ | 88 | |||||||
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||||||||||||||||||||
Fixed Charges:
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||||||||||||||||||||
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||||||||||||||||||||
Interest expense, net of interest capitalized
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$ | 469 | $ | 540 | $ | 594 | $ | 248 | $ | 200 | ||||||||||
Capitalized interest
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| 1 | | 1 | 4 | |||||||||||||||
Estimate of interest within rental expense
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6 | 8 | 10 | 9 | 3 | |||||||||||||||
Amortized premium and discounts related to
indebtedness
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14 | 57 | 123 | 8 | (4 | ) | ||||||||||||||
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$ | 489 | $ | 606 | $ | 727 | $ | 266 | $ | 203 | ||||||||||
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||||||||||||||||||||
Ratio of Earnings to Fixed Charges
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3.4 | x | (b | ) | (b | ) | (b | ) | (b | ) | ||||||||||
(a) | For the year ended December 31, 2008, loss before income taxes and cumulative effect of accounting changes included an extraordinary loss on expropriation of assets of $256 million. | |
(b) | For the years ended December 31, 2009, 2008, 2007 and 2006, earnings were inadequate to cover fixed charges, resulting in a deficiency of $1,683 million, $2,299 million, $650 million and $115 million, respectively. |
Name | Jurisdiction of Incorporation | |||||
3239432 Nova Scotia Company
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Nova Scotia | |||||
9192-8515 Quebec Inc.
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Quebec | |||||
AbitibiBowater Canada Inc.
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Canada | |||||
Abitibi-Consolidated Alabama Corporation
(1)
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Alabama | |||||
AbiBow Recycling LLC
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Delaware | |||||
Abitibi Consolidated Europe
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Belgium | |||||
Abitibi-Consolidated Hydro Inc.
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Canada | |||||
AbiBow Canada Inc.
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Canada | |||||
Abitibi Consolidated Sales LLC
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Delaware | |||||
ACH Limited Partnership
(2)
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Manitoba | |||||
ACH Calm Lake Inc.
(3)
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Canada | |||||
ACH Fort Frances Inc.
(3)
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Canada | |||||
ACH Iroquois Falls Inc.
(3)
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Canada | |||||
ACH Island Falls Inc.
(3)
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Canada | |||||
ACH Kenora Inc.
(3)
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Canada | |||||
ACH Norman Inc.
(3)
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Canada | |||||
ACH Sturgeon Falls Inc.
(3)
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Canada | |||||
ACH Twin Falls Inc.
(3)
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Canada | |||||
Alabama River Newsprint Company
(4)
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Alabama | |||||
Augusta Newsprint Company
(5)
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Georgia | |||||
Bowater Asia Pte. Ltd.
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Singapore | |||||
Bowater Canada Finance Corporation
(6)
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Nova Scotia | |||||
Bowater Canadian Holdings Incorporated
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Nova Scotia | |||||
Bowater Canadian Limited
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Canada | |||||
Bowater Europe Limited
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United Kingdom | |||||
AbiBow US Inc.
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Delaware | |||||
Bowater-Korea Ltd.
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Korea | |||||
Bowater LaHave Corporation
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Nova Scotia | |||||
Bowater Mersey Paper Company Limited
(7)
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Nova Scotia | |||||
Bowater Newsprint South LLC
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Delaware | |||||
Bowater Nuway Mid-States Inc.
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Delaware | |||||
Bowater S. America Ltda.
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Brazil | |||||
Bowater South American Holdings Incorporated
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Delaware | |||||
Bridgewater Paper Leasing Ltd.
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United Kingdom | |||||
Bridgewater Paper Company Limited
(8)
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United Kingdom | |||||
Calhoun Newsprint Company
(9)
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Delaware | |||||
Donohue Corp.
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Delaware | |||||
Donohue Malbaie Inc.
(10)
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Quebec | |||||
The International Bridge and Terminal Company
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Canada/Special Act | |||||
Lake Superior Forest Products Inc.
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Delaware | |||||
Produits Forestiers Mauricie L.P.
(11)
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Quebec | |||||
Star Lake Hydro Partnership
(12)
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Newfoundland and Labrador |
(1) | Merged into AbiBow US Inc. on January 3, 2011. | |
(2) | 75 percent owned. On February 11, 2011, AbiBow Canada Inc. entered into an agreement to sell its 75% equity interest in ACH Limited Partnership. For additional information, reference is made to Note 29, Subsequent Events, to the Consolidated Financial Statements of AbitibiBowater Inc., included in AbitibiBowater Inc.s Annual Report on Form 10-K for the year ended December 31, 2010. | |
(3) | 100 percent owned by ACH Limited Partnership. | |
(4) | Liquidated into AbiBow US Inc. on January 3, 2011. | |
(5) | 52.5 percent owned. On January 13, 2011, Augusta Newsprint Company was converted as a limited liability company under the laws of Delaware and changed its name to Augusta Newsprint Company LLC. On January 14, 2011, Augusta Newsprint Company LLC became a wholly-owned subsidiary of AbitibiBowater Inc. For additional information, reference is made to Note 29, Subsequent Events, to the Consolidated Financial Statements of AbitibiBowater Inc., included in AbitibiBowater Inc.s Annual Report on Form 10-K for the year ended December 31, 2010. | |
(6) | Bowater Canada Finance Corporation filed under the Bankruptcy and Insolvency Act (Canada) and has been dismissed from the CCAA Proceedings and is expected to be dismissed from the Chapter 11 Cases. For additional information, reference is made to Note 22, Commitments and Contingencies BCFC Bankruptcy and Insolvency Act filing, to the Consolidated Financial Statements of AbitibiBowater Inc., included in AbitibiBowater Inc.s Annual Report on Form 10-K for the year ended December 31, 2010. | |
(7) | 51 percent owned. | |
(8) | Effective February 2, 2010, Bridgewater Paper Company Limited filed for administration pursuant to U.K. insolvency law. For additional information, reference is made to Note 1, Organization and Basis of Presentation Bridgewater Administration, to the Consolidated Financial Statements of AbitibiBowater Inc., included in AbitibiBowater Inc.s Annual Report on Form 10-K for the year ended December 31, 2010. | |
(9) | 51 percent owned. | |
(10) | 51 percent owned. | |
(11) | 93.2 percent owned. | |
(12) | 51 percent owned. On December 16, 2008, the Government of Newfoundland and Labrador passed legislation to, among other things, expropriate all of the long-lived assets, excluding vehicles, of Star Lake Hydro Partnership. For additional information, reference is made to Note 22, Commitments and Contingencies Extraordinary loss on expropriation of assets, to the Consolidated Financial Statements of AbitibiBowater Inc., included in AbitibiBowater Inc.s Annual Report on Form 10-K for the year ended December 31, 2010. |
/s/ Richard B. Evans
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/s/ Pierre Dupuis | |
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Richard B. Evans
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Pierre Dupuis | |
Chairman of the Board
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Director | |
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/s/ Richard Falconer
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/s/ Jeffery A. Hearn | |
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Richard Falconer
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Jeffery A. Hearn | |
Director
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Director | |
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/s/ Sarah E. Nash
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/s/ Alain Rhéaume | |
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Sarah E. Nash
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Alain Rhéaume | |
Director
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Director | |
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/s/ Paul C. Rivett
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/s/ Michael Rousseau | |
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Paul C. Rivett
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Michael Rousseau | |
Director
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Director | |
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/s/ David H. Wilkins
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Director
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1. | I have reviewed this annual report on Form 10-K for the year ended December 31, 2010 of ABITIBIBOWATER INC.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
1. | I have reviewed this annual report on Form 10-K for the year ended December 31, 2010 of ABITIBIBOWATER INC.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: April 5, 2011 | /s/ Richard Garneau | |||
Name: | Richard Garneau | |||
Title: | President and Chief Executive Officer | |||
Dated:
April 5, 2011
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/s/ William G. Harvey
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|||
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Title: Senior Vice President and Chief Financial Officer |