Exhibit 10.1

DIRECTOR DEFERRED STOCK UNIT AGREEMENT

DIRECTOR DEFERRED STOCK UNIT AGREEMENT (the “ Agreement ”) dated as of the Grant Date set forth in the Notice of Grant (defined below), by and between Domtar Corporation, a Delaware corporation (the “ Company ”), and the director whose name appears in the Notice of Grant (the “ Director ”).

(a) Grant of Deferred Stock Units . The Company hereby evidences and confirms its grant to the Director, effective as of the Grant Date, of the number of deferred stock units (the “ Deferred Stock Units ”) specified in the Domtar Corporation 2007 Omnibus Incentive Plan Deferred Stock Unit Grant Notice delivered by the Company to the Director (the “ Notice of Grant ”). This Agreement is subordinate to, and the terms and conditions of the Deferred Stock Units granted hereunder are subject to, the terms and conditions of the Domtar Corporation 2007 Omnibus Incentive Plan (the “ Plan ”), which are incorporated by reference herein. If there is any inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall govern. Any capitalized terms used herein without definition shall have the meanings set forth in the Plan. All Deferred Stock Units shall be vested immediately upon grant.

2. Settlement of Deferred Stock Units . Subject to Section 6(d), the Company shall deliver to the Director one share of Stock or the cash value thereof, as elected by the Director, in settlement of each outstanding Deferred Stock Unit upon Termination of Service or, if payment is required to be delayed past such date pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) because the Director is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(1) of the Code and the regulations thereunder, on the first business day following the six-month anniversary of the Director’s Termination of Service, or as soon thereafter as practicable (but no later than December 31 of such year), in each case by either ( x ) if the Director elects to receive Stock, ( A ) issuing one or more stock certificates evidencing the Stock to the Director, or ( B ) registering the issuance of the Stock in the name of the Director through a book entry credit in the records of the Company’s transfer agent, ( y ) if the Director has elected to receive cash, a cash payment equal to the Fair Market Value of the Stock on the settlement date or ( z ) in the event of a Change in Control in which Alternative Awards are not available, a cash payment equal to Change in Control Price multiplied by the number of Deferred Stock Units plus interest from the date of the Change in Control to the payment date at a rate equal to the average prime rate charged during such period by JP Morgan Chase Bank, N.A. or such other U.S. nationally recognized bank as may be designated by the Company. No fractional shares of stock shall be issued in respect of Deferred Stock Units. Fractional Deferred Stock Units shall be settled through a cash payment equal to the Fair Market Value of the Stock on the settlement date. Notwithstanding anything to the contrary contained in the Plan, Change in Control shall not trigger any settlement of Deferred Stock Units.

3. Securities Law Compliance . Notwithstanding any other provision of this Agreement, the Director may not sell the shares of Stock acquired upon vesting of the Deferred Stock Units unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such shares must also comply with other applicable laws and regulations governing the shares and Director may not sell the shares of Stock if the Company determines that such sale would not be in material compliance with such laws and regulations.

4. Director’s Rights with Respect to the Deferred Stock Units .

(a) Restrictions on Transferability . The Deferred Stock Units granted hereby are not assignable or transferable, in whole or in part, and may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including without limitation by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Director upon the Director’s death; provided that the deceased Director’s beneficiary or representative of the Director’s estate shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary or the estate were the Director.

(b) No Rights as Stockholder . The Director shall not have any rights as a stockholder including any voting, dividend or other rights or privileges as a stockholder of the Company with respect to any Stock corresponding to the Deferred Stock Units granted hereby unless and until shares of Stock are issued to the Director in respect thereof.

(c) Dividend Equivalents . The Director shall be credited with Dividend Equivalents in the form of additional Deferred Stock Units when cash dividends are paid on the Stock. Such Dividend Equivalents shall be computed by dividing: ( i ) the amount obtained by multiplying the amount of the dividend declared and paid for each share of Stock by the number of Deferred Stock Units held by the Director on the record date, by ( ii ) the Fair Market Value of the Stock on the dividend payment date for such dividend, with fractions computed to four decimal places. Such additional Deferred Stock Units shall vest and be settled in the same manner as the Deferred Stock Units to which they relate.

5. Adjustment in Capitalization . The number, class or other terms of any outstanding Deferred Stock Units shall be adjusted by the Board to reflect any extraordinary dividend, stock dividend, stock split or share combination or any recapitalization, business combination, merger, consolidation, spin-off, exchange of shares, liquidation or dissolution of the Company or other similar transaction affecting the Stock in such manner as it determines in its sole discretion.

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6. Miscellaneous .

(a) Binding Effect; Benefits . This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(b) No Right to Continued Service . Nothing in the Plan or this Agreement shall interfere with or limit in any way the right of the Company to terminate the Director’s service at any time, or confer upon the Director any right to continue as a director.

(c) Interpretation . The Committee shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award. Any determination or interpretation by the Committee under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

(d) Tax Withholding . The Company and its Subsidiaries shall have the right to deduct from all amounts paid to the Director in cash (whether under the Plan or otherwise) any amount of taxes required by law to be withheld in respect of settlement of the Deferred Stock Units under the Plan as may be necessary in the opinion of the Employer to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions that are required by law to be withheld. The Company may require the recipient of the shares of Stock to remit to the Company an amount in cash sufficient to satisfy the amount of taxes required to be withheld as a condition to the issuance of such shares. The Committee may, in its discretion, require the Director, or permit the Director to elect, subject to such conditions as the Committee shall impose, to meet such obligations by having the Company withhold or sell the least number of whole shares of Stock having a Fair Market Value sufficient to satisfy all or part of the amount required to be withheld. The Company may defer issuance of Stock until such requirements are satisfied.

(e) Applicable Law . This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

(f) Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation . By entering into this Agreement and accepting the Deferred Stock Units evidenced hereby, the Director acknowledges: ( a ) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; ( b ) that the Award

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does not create any contractual or other right to receive future grants of Awards; ( c ) that Directors in the Plan is voluntary; ( d ) that the value of the Deferred Stock Units is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and ( e ) that the future value of the Stock is unknown and cannot be predicted with certainty.

(g) Employee Data Privacy . By entering into this Agreement and accepting the Deferred Stock Units evidenced hereby, the Director: ( a ) authorizes the Company, any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan; ( b ) waives any data privacy rights the Director may have with respect to such information; and ( c ) authorizes the Company and its agents to store and transmit such information in electronic form.

(h) Consent to Electronic Delivery . By entering into this Agreement and accepting the Deferred Stock Units evidenced hereby, Director hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Director pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Deferred Stock Units via Company web site or other electronic delivery.

(i) Headings and Captions . The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(j) Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

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Exhibit 10.2

NONQUALIFIED STOCK OPTION AGREEMENT

NON-QUALIFIED STOCK OPTION AGREEMENT, dated as of the Grant Date set forth in the Notice of Grant (as defined below), between Domtar Corporation, a Delaware corporation (the “ Company ”), and the Participant whose name appears in the Notice of Grant (the “ Participant ”), pursuant to the Domtar Corporation 2007 Omnibus Incentive Plan, as in effect and as amended from time to time (the “ Plan ”). Capitalized terms that are not defined herein shall have the meanings given to such terms in the Plan.

1. Confirmation of Grant, Option Price .

(a) Confirmation of Grant . The Company hereby evidences and confirms the grant to the Participant of options to purchase the number of shares of Stock (the “ Options ”) set forth in the Domtar Corporation 2007 Omnibus Incentive Plan Stock Option Grant Notice delivered by the Company to the Participant (the “ Notice of Grant ”). The Options are not intended to be incentive stock options under the U.S. Internal Revenue Code of 1986, as amended. This Agreement is entered into pursuant to, and the terms of the Options are subject to, the terms and conditions of the Plan, which is incorporated by reference herein. If there is any inconsistency between this Agreement and the terms of the Plan, the terms of the Plan shall govern. The Options shall be considered a Service Award under the Plan.

(b) Exercise Price . Each share of Stock covered by an Option shall have the Exercise Price set forth in the Notice of Grant.

2. Vesting, Exercisability and Exercise.

(a) Vesting . Except as otherwise provided in Section 3, the Option shall become vested in three equal annual installments on each of the first through third anniversaries of the Grant Date[ or, for Options granted in 2007, the vesting dates set forth in the Notice of Grant], subject to the continuous employment of the Participant with the Company until the applicable vesting date.

(b) Exercise; Condition to Exercise . Once vested in accordance with the provisions of this Agreement, the Options may be exercised at any time and from time to time prior to the date such Options terminate pursuant to Section 3. Notwithstanding anything to the contrary contained herein, except as otherwise provided in Section 3(c), vested Options may not be exercised unless, at any time after the Grant Date, the average Fair Market Value of a share of Stock over a period of at least 20 consecutive trading days is at least 120% of the Exercise Price. Options may only be exercised with respect to whole shares of Stock. The Participant may exercise the Option by giving notice to the Company or a brokerage firm designated or approved by the Company, in form and substance

satisfactory to the Company, which will state the Participant’s election to exercise the Option and the number of shares of Stock for which the Participant is exercising the Option. The notice must be accompanied by full payment of the exercise price for the number of shares of Stock the Participant is purchasing. The Participant may make this payment in any combination of the following: ( a ) by cash; ( b ) by check acceptable to the Company; ( c ) by tendering (either actually or by attestation) shares of Common Stock the Participant has owned for at least six months (if such holding period is necessary to avoid a charge to the Company’s earnings); ( d ) to the extent permitted by law, by instructing a broker to deliver to the Company the total payment required in accordance with procedures established by the Company; or ( e ) by any other method permitted by the Committee.

(c) Cashless Exercise . In lieu of tendering the exercise price to the Company in accordance with Section 2(b), the Participant may elect to perform a “Cashless Exercise” of the Option, in whole or in part, by surrendering the Option to the Company, marked “Cashless Exercise” and designating the number of shares of Common Stock desired by the Participant out of the total for which the Option is exercisable. The Participant shall thereupon be entitled to receive the number of shares of Stock having a Fair Market Value equal to the excess of ( i ) the then Fair Market Value per share of Stock multiplied by the number of the shares of Stock into which the Option, or portion thereof designated by the Participant, would have been exercisable pursuant to Section 2(b) upon payment of the exercise price by the Participant over (ii) the exercise price the Participant would have been required to pay under Section 2(b) in respect of such an exercise.

3. Termination of Options

(a) Normal Expiration Date . Unless earlier terminated pursuant to Section 3(b) or Section 3(c), the Options shall terminate on the seventh anniversary of the Grant Date (the “ Normal Expiration Date ”), if not exercised prior to such date.

(b) Termination of Employment .

(i) Death or Disability . If the Participant’s employment with the Company terminates due to death or Disability, all of the Participant’s Options shall vest and shall remain outstanding until the first anniversary of the date of termination or the Normal Expiration Date, whichever is earlier, after which any unexercised Options shall immediately terminate.

(ii) Retirement . If the Participant’s employment with the Company terminates due to Retirement[either with prior approval of the Board or

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following the 2009 Annual Meeting of Stockholders] ¹ , the Participant’s Options will vest to the extent of the number of shares of Stock subject to the Option multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date through the date of the Participant’s Retirement and the denominator of which is the number of days from the Grant Date to the date the Option would have vested had the Participant’s employment continued through the original vesting date, and the remainder of the Option shall be forfeited and canceled as of the date of such Retirement. All vested Options shall remain outstanding until the fifth anniversary of the date of termination or the Normal Expiration Date, whichever is earlier, after which any unexercised Options shall immediately terminate.

(iii) Termination for Cause . If a Participant’s employment terminates for Cause, all Options, whether vested or unvested, shall be immediately forfeited and canceled, effective as of the date of the Participant’s Termination of Service.

(iv) Voluntary Termination by the Participant . If a Participant terminates his or her employment with the Company for any reason other than death, Disability or Retirement, all of the Participant’s Options, vested or unvested, shall be immediately forfeited and canceled as of the date of Termination of Service.

(v) Involuntary Termination for any Other Reason . Except as otherwise provided in Section 3(b)(iv) if a Participant’s employment is terminated by the Company for any reason other than death, Disability, Retirement or Cause, all vested Options shall remain outstanding until the 90th day after of the date of Termination of Service or the Normal Expiration Date, whichever is earlier, after which any unexercised Options shall immediately terminate.

(c) Change in Control . In the event of a change in control, the Options shall vest or continue as set forth in the Plan.

4. Securities Law Compliance . Notwithstanding any other provision of this Agreement, the Participant may not sell the shares of Stock acquired upon exercise of the Option unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such shares must also comply with other applicable laws and regulations governing the shares and Participant may not sell the shares of Stock if the Company determines that such sale would not be in material compliance with such laws and regulations.

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5. Participant’s Rights with Respect to the Options .

(a) Restrictions on Transferability . The Options granted hereby are not assignable or transferable, in whole or in part, and may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including without limitation by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Participant upon the Participant’s death; provided that the deceased Participant’s beneficiary or representative of the Participant’s estate shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary or the estate were the Participant.

(b) No Rights as Stockholder . The Participant shall not have any rights as a stockholder including any voting, dividend or other rights or privileges as a stockholder of the Company with respect to any Stock underlying the Option granted hereby unless and until shares of Stock are issued to the Participant upon exercise thereof.

6. Adjustments . The number, class and Exercise Price of the shares of Stock covered by the Options shall be adjusted by the Board to reflect any extraordinary dividend, stock dividend, stock split or share combination or any recapitalization, business combination, merger, consolidation, spin-off, exchange of shares, liquidation or dissolution of the Company or other similar transaction affecting the Stock in such manner as the Board determines in its sole discretion.

7. Miscellaneous .

(a) Binding Effect; Benefits . This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(b) No Right to Continued Employment . Nothing in the Plan or this Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time, or confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries.

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(c) Interpretation . The Committee shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award. Any determination or interpretation by the Committee under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

(d) Tax Withholding . The Company and its Subsidiaries shall have the right to deduct from all amounts paid to a Participant in cash (whether under the Plan or otherwise) any amount of taxes required by law to be withheld in respect of the Options as may be necessary in the opinion of the Employer to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions that are required by law to be withheld. The Company may require the recipient of the shares of Stock to remit to the Company an amount in cash sufficient to satisfy the amount of taxes required to be withheld as a condition to the issuance of such shares. The Committee may, in its discretion, require the Participant to elect, subject to such conditions as the Committee shall impose, to meet such obligations by having the Company withhold or the Participant sell the least number of whole shares of Stock having a Fair Market Value sufficient to satisfy all or part of the amount required to be withheld.

(e) Forfeiture for Financial Reporting Misconduct . If the Company is required to prepare an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct or knowingly or grossly negligently failed to prevent the misconduct as determined by the Committee, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, then the Participant shall forfeit and disgorge to the Company ( i ) the Option if granted or vested during the 12-month period following the filing of the financial document embodying such financial reporting requirement, ( ii ) all gains earned or accrued due to the exercise of the Option or sale of any Stock during the 12-month period following the filing of the financial document embodying such financial reporting requirement and ( iii ) if the Option vested based on the materially non- complying financial reporting, the Option.

(f) Applicable Law . This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

(g) Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation . By entering into this Agreement and accepting the Option evidenced hereby, the Participant acknowledges: ( a ) that the Plan is discretionary

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in nature and may be suspended or terminated by the Company at any time; ( b ) that the Award does not create any contractual or other right to receive future grants of Awards; ( c ) that participation in the Plan is voluntary; ( d ) that the value of the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and ( e ) that the future value of the Stock is unknown and cannot be predicted with certainty.

(h) Employee Data Privacy . By entering into this Agreement and accepting the Options evidenced hereby, the Participant: ( a ) authorizes the Company, the Participant’s employer, if different, and any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan; ( b ) waives any data privacy rights the Participant may have with respect to such information; and ( c ) authorizes the Company and its agents to store and transmit such information in electronic form.

(i) Consent to Electronic Delivery . By entering into this Agreement and accepting the Options evidenced hereby, Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Options via Company web site or other electronic delivery.

(j) Headings and Captions . The headings and captions herein are provided for reference and convenience only, shall not be considered part of this Agreement, and shall not be employed in the construction of this Agreement.

(k) Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

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Exhibit 10.3

RESTRICTED STOCK UNIT AGREEMENT

RESTRICTED STOCK UNIT AGREEMENT (the “ Agreement ”) dated as of the Grant Date set forth in the Notice of Grant (as defined below), by and between Domtar Corporation, a Delaware corporation (the “ Company ”), and the participant whose name appears in the Notice of Grant (the “ Participant ”).

1. Grant of Restricted Stock Units . The Company hereby evidences and confirms its grant to the Participant, effective as of the Grant Date, of the number of restricted stock units (the “ Restricted Stock Units ”) specified in the Domtar Corporation 2007 Omnibus Incentive Plan Restricted Stock Unit Grant Notice delivered by the Company to the Participant (the “ Notice of Grant ”). Except as otherwise provided in Section 2(c), this Agreement is subordinate to, and the terms and conditions of the Restricted Stock Units granted hereunder are subject to, the terms and conditions of the Domtar Corporation 2007 Omnibus Incentive Plan (the “ Plan ”), which are incorporated by reference herein. If there is any inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall govern. Any capitalized terms used herein without definition shall have the meanings set forth in the Plan. The Restricted Stock Units shall be considered Service Awards under the Plan.

2. Vesting of Restricted Stock Units .

(a) Vesting . Except as otherwise provided in this Section 2, the Restricted Stock Units shall become vested, if at all, on the vesting date set forth in the Notice of Grant (the “Vesting Date”), subject to the continued employment of the Participant by the Company or any Subsidiary thereof through such date.

(b) Termination of Employment .

(i) Death or Disability . If the Participant’s employment is terminated due to death or Disability prior to the Vesting Date, 100% of the Restricted Stock Units shall become fully vested and nonforfeitable and shall be paid as provided in Section 3.

(ii) Retirement . If the Participant’s employment is terminated due to Retirement, the Participant shall be entitled to receive, and such Restricted Stock Units shall be deemed vested to the extent of, the number of shares of Stock that would have been payable had the Participant’s Service continued until the Vesting Date, multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date through the date of the Participant’s Retirement and the denominator of which is the number of days from the Grant Date to the Vesting Date, and the remainder of each Restricted Stock Unit shall be forfeited and canceled as of the date of such Retirement.

(iii) Any Other Reason . If the Participant’s employment is terminated prior to the Vesting Date for any reason other than death, Disability or Retirement, all Restricted Stock Units shall immediately be forfeited and canceled effective as of the date of the Participant’s termination.

(c) Change in Control with respect to Specified Units . For purposes of this Agreement, and notwithstanding anything in the Plan to the contrary, with respect to any Specified Units (as hereinafter defined), ( i ) Change in Control shall not have the meaning set forth in the Plan, but, for purposes of this Agreement, shall mean ( x ) a Corporate Event in which ( A ) the shareholders of the Company receive solely cash, non-voting securities or any combination of cash and non-voting securities in exchange for their Stock or ( B ) the stockholders of the Company immediately prior to such Corporate Event do not hold, directly or indirectly, at least 25% of the Voting Power of the surviving, resulting or acquiring corporation or ( y ) the direct or indirect acquisition by any person (within the meaning of Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including any group (within the meaning of Rule 13d-5(b) under the Exchange Act), but excluding any of the Company, any Subsidiary or any employee benefit plan sponsored or maintained by the Company or any Subsidiary, of “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing 75% or more of the combined Voting Power of the Company’s securities and ( ii ) in the event of a Change in Control (as defined in this Section 2(c)) then all of the unvested Restricted Stock Units shall immediately vest and be settled as provided in Section 3 upon the Change in Control. No other Change in Control (as defined in the Plan) shall trigger any settlement of Specified Units.

For purposes of this Agreement, “Specified Units” shall mean Restricted Stock Units that are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), including Restricted Stock Units granted to any Participant who is on the Grant Date or will in any fiscal year of the Company prior to the fiscal year of the Company prior to the Vesting Date become eligible for Retirement.

(d) Change in Control with respect to Non-Specified Units . In the event of a Change in Control (as defined in the Plan), then the Restricted Stock Units other than Specified Units shall vest or continue as set forth in the Plan.

(e) Committee Discretion . Notwithstanding anything contained in this Agreement to the contrary, the Committee, in its sole discretion, may accelerate the vesting with respect to any Restricted Stock Units under this Agreement, at such times and upon such terms and conditions as the Committee shall determine.

3. Settlement of Restricted Stock Units . Subject to Section 7(d), the Company shall deliver to the Participant one share of Stock in settlement of each outstanding Restricted Stock Unit that has vested as provided in Section 2 on the first to occur of ( i )

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the Vesting Date, ( ii ) in the event of a Termination of Service due to death, Disability or Retirement, January 31 of the year following the Participant’s Termination of Service or, if payment is required to be delayed past such date pursuant to Section 409A of the the Code because the Participant is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(1) of the Code and the regulations thereunder, on the first business day following the six-month anniversary of the Participant’s Termination of Service, or as soon thereafter as practicable (but no later than December 31 of such year), ( iii ) with respect to Restricted Stock Units other than Specified Units, upon a Change in Control (as defined in the Plan) in which the Restricted Stock Units do not continue, and (iv) with respect to Specified Units, upon a Change in Control (as defined in Section 2(c)), in each case by either ( A ) issuing one or more stock certificates evidencing the Stock to the Participant, ( B ) registering the issuance of the Stock in the name of the Participant through a book entry credit in the records of the Company’s transfer agent or ( C ) in the event of settlement upon a Change in Control, a cash payment equal to the Change in Control Price multiplied by the number of vested Restricted Stock Units. No fractional shares of stock shall be issued in respect of Restricted Stock Units. Fractional Restricted Stock Units shall be settled through a cash payment equal to the Fair Market Value of the Stock on the settlement date.

4. Securities Law Compliance . Notwithstanding any other provision of this Agreement, the Participant may not sell the shares of Stock acquired upon vesting of the Restricted Stock Units unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such shares must also comply with other applicable laws and regulations governing the shares and Participant may not sell the shares of Stock if the Company determines that such sale would not be in material compliance with such laws and regulations.

5. Participant’s Rights with Respect to the Restricted Stock Units .

(a) Restrictions on Transferability . The Restricted Stock Units granted hereby are not assignable or transferable, in whole or in part, and may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including without limitation by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Participant upon the Participant’s death; provided that the deceased Participant’s beneficiary or representative of the Participant’s estate shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary or the estate were the Participant.

(b) No Rights as Stockholder . The Participant shall not have any rights as a stockholder including any voting, dividend or other rights or privileges as a stockholder of the Company with respect to any Stock corresponding to the Restricted Stock Units granted hereby unless and until shares of Stock are issued to the Participant in respect thereof.

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(c) Dividend Equivalents . The Participant shall be credited with Dividend Equivalents in the form of additional Restricted Stock Units when cash dividends are paid on the Stock. Such Dividend Equivalents shall be computed by dividing: ( i ) the amount obtained by multiplying the amount of the dividend declared and paid for each share of Stock by the number of Restricted Stock Units held by the Participant on the record date, by ( ii ) the Fair Market Value of the Stock on the dividend payment date for such dividend, with fractions computed to four decimal places. Such additional Restricted Stock Units shall vest and be settled in the same manner as the Restricted Stock Units to which they relate.

6. Adjustment in Capitalization . The number, class or other terms of any outstanding Restricted Stock Units shall be adjusted by the Board to reflect any extraordinary dividend, stock dividend, stock split or share combination or any recapitalization, business combination, merger, consolidation, spin-off, exchange of shares, liquidation or dissolution of the Company or other similar transaction affecting the Stock in such manner as it determines in its sole discretion.

7. Miscellaneous .

(a) Binding Effect; Benefits . This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(b) No Right to Continued Employment . Nothing in the Plan or this Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time, or confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries.

(c) Interpretation . The Committee shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award. Any determination or interpretation by the Committee under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

(d) Tax Withholding . The Company and its Subsidiaries shall have the right to deduct from all amounts paid to the Participant in cash (whether under the Plan or otherwise) any amount of taxes required by law to be withheld in respect of settlement of

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the Restricted Stock Units under the Plan as may be necessary in the opinion of the Employer to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions that are required by law to be withheld. The Company may require the recipient of the shares of Stock to remit to the Company an amount in cash sufficient to satisfy the amount of taxes required to be withheld as a condition to the issuance of such shares. The Committee may, in its discretion, require the Participant, or permit the Participant to elect, subject to such conditions as the Committee shall impose, to meet such obligations by having the Company withhold or sell the least number of whole shares of Stock having a Fair Market Value sufficient to satisfy all or part of the amount required to be withheld. The Company may defer issuance of Stock until such requirements are satisfied.

(e) Forfeiture for Financial Reporting Misconduct . If the Company is required to prepare an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct or knowingly or grossly negligently failed to prevent the misconduct as determined by the Committee, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, then the Participant shall forfeit and disgorge to the Company ( i ) any Restricted Stock Units granted or vested and all gains earned or accrued due to the sale of any Stock received in respect of the Restricted Stock Units during the 12-month period following the filing of the financial document embodying such financial reporting requirement and ( ii ) any Restricted Stock Units that vested based on the materially non- complying financial reporting.

(f) Applicable Law . This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

(g) Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, the Participant acknowledges: ( a ) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; ( b ) that the Award does not create any contractual or other right to receive future grants of Awards; ( c ) that participants in the Plan is voluntary; ( d ) that the value of the Restricted Stock Units is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and ( e ) that the future value of the Stock is unknown and cannot be predicted with certainty.

(h) Employee Data Privacy . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, the Participant: ( a ) authorizes the Company and

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the Participant’s employer, if difference, any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan; ( b ) waives any data privacy rights the Participant may have with respect to such information; and ( c ) authorizes the Company and its agents to store and transmit such information in electronic form.

(i) Consent to Electronic Delivery . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Restricted Stock Units via Company web site or other electronic delivery.

(j) Headings and Captions . The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(k) Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

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Exhibit 10.4

SENIOR EXECUTIVE RESTRICTED STOCK UNIT AGREEMENT

RESTRICTED STOCK UNIT AGREEMENT (the “ Agreement ”) dated as of the Grant Date set forth on the signature page hereof, by and between Domtar Corporation, a Delaware corporation (the “ Company ”), and the participant whose name appears on the signature page hereof (the “ Participant ”).

1. Grant of Restricted Stock Units . The Company hereby evidences and confirms its grant to the Participant, effective as of the Grant Date, of the number of restricted stock units specified on the signature page hereof (the “ Restricted Stock Units ”). This Agreement is subordinate to, and the terms and conditions of the Restricted Stock Units granted hereunder are subject to, the terms and conditions of the Domtar Corporation 2007 Omnibus Incentive Plan (the “ Plan ”), which are incorporated by reference herein. If there is any inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall govern. Any capitalized terms used herein without definition shall have the meanings set forth in the Plan. The Restricted Stock Units shall be considered Service Awards under the Plan.

2. Vesting of Restricted Stock Units .

(a) Vesting . Except as otherwise provided in this Section 2, the Restricted Stock Units shall become vested, if at all, on the vesting date set forth on the signature page hereof (such date, or such earlier vesting date as may be determined by the Committee pursuant to Section 2(c) hereof, the “Vesting Date”), subject to the continued employment of the Participant by the Company or any Subsidiary thereof on such date.

(b) Termination of Employment .

(i) Death or Disability . If the Participant’s employment is terminated due to death or Disability prior to the Vesting Date, 100% of the Restricted Stock Units shall become fully vested and nonforfeitable and shall be paid as provided in Section 3.

(ii) Retirement . If the Participant’s employment is terminated due to Retirement either with prior approval of the Board or following the 2009 Annual Meeting of Stockholders, the Participant shall be entitled to receive, and such Restricted Stock Units shall be deemed vested to the extent of, the number of shares of Stock that would have been payable had the Participant’s Service continued until the Vesting Date, multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date through the date of the Participant’s Retirement and the denominator of which is the number of days from the Grant Date to the Vesting Date, and the remainder of each Restricted Stock Unit shall be forfeited and canceled as of the date of such Retirement.

(iii) Any Other Reason . If the Participant’s employment is terminated prior to the Vesting Date for any reason other than death, Disability or Retirement, all Restricted Stock Units shall immediately be forfeited and canceled effective as of the date of the Participant’s termination.

(c) Committee Discretion . Notwithstanding anything contained in this Agreement to the contrary, the Committee, in its sole discretion, may accelerate the vesting with respect to any Restricted Stock Units under this Agreement, at such times and upon such terms and conditions as the Committee shall determine.

(d) Change in Control . Notwithstanding anything to the contrary contained in the Plan, Change in Control shall not trigger any settlement of Restricted Stock Units.

3. Settlement of Restricted Stock Units . Subject to Section 7(d), the Company shall deliver to the Participant one share of Stock in settlement of each outstanding Restricted Stock Unit that has vested as provided in Section 2 in January of the fiscal year following the Participant’s Termination of Service or, if payment is required to be delayed past such date pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) because the Participant is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(1) of the Code and the regulations thereunder, on the first business day following the six-month anniversary of the Participant’s Termination of Service, or as soon thereafter as practicable (but no later than December 31 of such year), in each case by either ( A ) issuing one or more stock certificates evidencing the Stock to the Participant, ( B ) registering the issuance of the Stock in the name of the Participant through a book entry credit in the records of the Company’s transfer agent or ( C ) in the event of a Change in Control in which Alternative Awards are not available, a cash payment equal to Change in Control Price multiplied by the number of vested Restricted Stock Units plus interest from the later of the date of the Change in Control and the Vesting Date to the payment date at a rate equal to the average prime rate charged during such period by JP Morgan Chase Bank, N.A. or such other U.S. nationally recognized bank as may be designated by the Company. No fractional shares of stock shall be issued in respect of Restricted Stock Units. Fractional Restricted Stock Units shall be settled through a cash payment equal to the Fair Market Value of the Stock on the settlement date.

4. Securities Law Compliance . Notwithstanding any other provision of this Agreement, the Participant may not sell the shares of Stock acquired upon vesting of the Restricted Stock Units unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such shares must also comply with other applicable laws and regulations governing the share and Participant may not sell the shares of Stock if the Company determines that such sale would not be in material compliance with such laws and regulations.

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5. Participant’s Rights with Respect to the Restricted Stock Units .

(a) Restrictions on Transferability . The Restricted Stock Units granted hereby are not assignable or transferable, in whole or in part, and may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including without limitation by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Participant upon the Participant’s death; provided that the deceased Participant’s beneficiary or representative of the Participant’s estate shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary or the estate were the Participant.

(b) No Rights as Stockholder . The Participant shall not have any rights as a stockholder including any voting, dividend or other rights or privileges as a stockholder of the Company with respect to any Stock corresponding to the Restricted Stock Units granted hereby unless and until shares of Stock are issued to the Participant in respect thereof.

(c) Dividend Equivalents . The Participant shall be credited with Dividend Equivalents in the form of additional Restricted Stock Units when cash dividends are paid on the Stock. Such Dividend Equivalents shall be computed by dividing: (a) the amount obtained by multiplying the amount of the dividend declared and paid for each share of Stock by the number of Restricted Stock Units held by the Participant on the record date, by (b) the Fair Market Value of the Stock on the dividend payment date for such dividend, with fractions computed to four decimal places. Such additional Restricted Stock Units shall vest and be settled in the same manner as the Restricted Stock Units to which they relate.

6. Adjustment in Capitalization . The number, class or other terms of any outstanding Restricted Stock Units shall be adjusted by the Board to reflect any extraordinary dividend, stock dividend, stock split or share combination or any recapitalization, business combination, merger, consolidation, spin-off, exchange of shares, liquidation or dissolution of the Company or other similar transaction affecting the Stock in such manner as it determines in its sole discretion.

7. Miscellaneous .

(a) Binding Effect; Benefits . This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

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(b) No Right to Continued Employment . Nothing in the Plan or this Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time, or confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries.

(c) Interpretation . The Committee shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award. Any determination or interpretation by the Committee under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

(d) Tax Withholding . The Company and its Subsidiaries shall have the right to deduct from all amounts paid to the Participant in cash (whether under the Plan or otherwise) any amount of taxes required by law to be withheld in respect of settlement of the Restricted Stock Units under the Plan as may be necessary in the opinion of the Employer to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions that are required by law to be withheld. The Company may require the recipient of the shares of Stock to remit to the Company an amount in cash sufficient to satisfy the amount of taxes required to be withheld as a condition to the issuance of such shares. The Committee may, in its discretion, require the Participant, or permit the Participant to elect, subject to such conditions as the Committee shall impose, to meet such obligations by having the Company withhold or sell the least number of whole shares of Stock having a Fair Market Value sufficient to satisfy all or part of the amount required to be withheld. The Company may defer issuance of Stock until such requirements are satisfied.

(e) Forfeiture for Financial Reporting Misconduct . If the Company is required to prepare an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct or knowingly or grossly negligently failed to prevent the misconduct as determined by the Committee, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, then the Participant shall forfeit and disgorge to the Company ( i ) any Restricted Stock Units granted or vested and all gains earned or accrued due to the sale of any Stock received in respect of the Restricted Stock Units during the 12-month period following the filing of the financial document embodying such financial reporting requirement and ( ii ) any Restricted Stock Units that vested based on the materially non- complying financial reporting.

(f) Applicable Law . This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

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(g) Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, the Participant acknowledges: ( a ) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; ( b ) that the Award does not create any contractual or other right to receive future grants of Awards; ( c ) that participants in the Plan is voluntary; ( d ) that the value of the Restricted Stock Units is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and ( e ) that the future value of the Stock is unknown and cannot be predicted with certainty.

(h) Employee Data Privacy . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, the Participant: ( a ) authorizes the Company and the Participant’s employer, if difference, any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan; ( b ) waives any data privacy rights the Participant may have with respect to such information; and ( c ) authorizes the Company and its agents to store and transmit such information in electronic form.

(i) Consent to Electronic Delivery . By executing this Agreement, Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Restricted Stock Units via Company web site or other electronic delivery.

(j) Headings and Captions . The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(k) Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

– Signature page follows –

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IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement as of the Grant Date.

Restricted Stock Units :                     

Grant Date :                                           

Vesting Date :                                      

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Exhibit 10.5

PERFORMANCE CONDITIONED

RESTRICTED STOCK UNIT AGREEMENT

PERFORMANCE CONDITIONED RESTRICTED STOCK UNIT AGREEMENT (the “ Agreement ”) dated as of the Grant Date set forth in the Notice of Grant (as defined below), by and between Domtar Corporation, a Delaware corporation (the “ Company ”), and the participant whose name appears on the Notice of Grant (the “ Participant ”).

1. Grant of Restricted Stock Units . The Company hereby evidences and confirms its grant to the Participant, effective as of the Grant Date, of the number of restricted stock units (the “ Restricted Stock Units ”) specified in the Domtar Corporation 2007 Omnibus Incentive Plan Performance Conditioned Restricted Stock Unit Grant Notice delivered by the Company to the Participant (“ Notice of Grant ”). Except as otherwise provided in Section 2(c), this Agreement is subordinate to, and the terms and conditions of the Restricted Stock Units granted hereunder are subject to, the terms and conditions of the Domtar Corporation 2007 Omnibus Incentive Plan (the “ Plan ”), which are incorporated by reference herein. If there is any inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall govern. Any capitalized terms used herein without definition shall have the meanings set forth in the Plan. The Restricted Stock Units shall be considered Performance Awards under the Plan.

2. Vesting of Restricted Stock Units .

(a) Vesting . Except as otherwise provided in this Section 2, the Restricted Stock Units shall become vested, if at all, on the vesting date(s) specified in the Notice of Grant (such date, the “Vesting Date”), subject to the continued employment of the Participant by the Company or any Subsidiary thereof through such date, and to the achievement of the Performance Goals (the “Goals”) established by the Committee pursuant to the Plan for the Restricted Stock Units for the performance period(s) (the “Performance Period”) set forth in the Notice of Grant. As soon as feasible after the end of the Performance Period, the Committee will determine whether the Goals have been satisfied, in whole or in part. Based upon the foregoing determination, the number of Restricted Stock Units will vest on the Vesting Date on a percentage basis, as set forth in the Notice of Grant.

Restricted Stock Units that have not vested on the Vesting Date in accordance with the preceding paragraph are forfeited. No shares of Stock will be issued or issuable with respect to any portion of the Restricted Stock Units that do not vest on the Vesting Date.

(b) Termination of Employment .

(i) Death . If the Participant’s employment is terminated due to death prior to the end of any Performance Period, 100% of the Restricted Stock Units,

multiplied by a fraction, the numerator of which is the number of days elapsed from the commencement of the Performance Period through the date of the Participant’s death and the denominator of which is the number of days in the Performance Period, shall become fully vested and nonforfeitable and shall be paid as provided in Section 3. and the remainder of each Restricted Stock Unit shall be forfeited and canceled as of the date of termination. If the Participant’s employment is terminated due to death after the end of any Performance Period but prior to the settlement date, the Participant shall be entitled to receive, and such Restricted Stock Units shall be deemed vested to the extent of, the number of shares of Stock that would have been payable had the Participant’s Service continued until the settlement date, subject to achievement of the Goals, and the remainder of each Restricted Stock Unit shall be forfeited and canceled as of the date of termination.

(ii) Disability . If the Participant’s employment is terminated due to Disability, the Participant shall be entitled to receive the number of shares of Stock that would have been payable had the Participant’s Service continued until the Vesting Date, subject to achievement of the Goals, multiplied by a fraction, the numerator of which is the number of days elapsed from the commencement of the Performance Period through the date of the Participant’s termination due to Disability and the denominator of which is the number of days in the Performance Period, and the remainder of each Restricted Stock Unit shall be forfeited and canceled as of the date of such termination due to Disability.

(iii) Retirement . If the Participant’s employment is terminated due to Retirement [either with prior approval of the Board or following the 2009 Annual Meeting of Stockholders] ¹ , the Participant shall be entitled to receive, the number of shares of Stock that would have been payable had the Participant’s Service continued until the Vesting Date, subject to achievement of the Goals, multiplied by a fraction, the numerator of which is the number of days elapsed from the commencement of the Performance Period through the date of the Participant’s Retirement and the denominator of which is the number of days in the Performance Period, and the remainder of each Restricted Stock Unit shall be forfeited and canceled as of the date of such Retirement.

(iv) Any Other Reason . If the Participant’s employment is terminated prior to the Vesting Date for any reason other than death, Disability or Retirement, all Restricted Stock Units shall immediately be forfeited and canceled effective as of the date of the Participant’s termination.

(c) Change in Control with respect to Specified Units . For purposes of this Agreement, and notwithstanding anything in the Plan to the contrary, with respect to any

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Specified Units (as hereinafter defined) ( i ) Change in Control shall not have the meaning set forth in the Plan, but, for purposes of this Agreement, shall mean ( x ) a Corporate Event in which ( A ) the shareholders of the Company receive solely cash, non-voting securities or any combination of cash or non-voting securities in exchange for their Stock or ( B ) the stockholders of the Company immediately prior to such Corporate Event do not hold, directly or indirectly, at least 25% of the Voting Power of the surviving, resulting or acquiring corporation or ( y ) the direct or indirect acquisition by any person (within the meaning of Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including any group (within the meaning of Rule 13d-5(b) under the Exchange Act), but excluding any of the Company, any Subsidiary or any employee benefit plan sponsored or maintained by the Company or any Subsidiary, of “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing 75% or more of the combined Voting Power of the Company’s securities and ( ii ) in the event of a Change in Control (as defined in this Section 2(c)) then all or a portion of the unvested Specified Units shall immediately vest as provided under Section 13(a)(ii) of the Plan (it being understood for this purpose that Alternative Awards shall be deemed unavailable for such Specified Units) and be settled as provided in Section 3 upon the Change in Control and any Specified Units that do not so vest shall be forfeited. No other Change in Control (as defined in the Plan) shall trigger any settlement of Specified Units.

For purposes of this Agreement, “Specified Units” shall mean Restricted Stock Units that are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), including Restricted Stock Units with a Performance Period that ends prior to the fiscal year of the Company prior to the settlement date pursuant to Section 3(i) granted to any Participant who is on the Grant Date or will in any fiscal year of the Company prior to the fiscal year of such settlement date become eligible for Retirement.

(d) Change in Control . In the event of a Change in Control (as defined in the Plan), then the Restricted Stock Units (other than Specified Units) shall vest or continue as set forth in the Plan.

(e) Committee Discretion . Notwithstanding anything contained in this Agreement to the contrary, the Committee, in its sole discretion, may accelerate the vesting with respect to any Restricted Stock Units under this Agreement, at such times and upon such terms and conditions as the Committee shall determine.

3. Settlement of Restricted Stock Units . Subject to Section 7(d), the Company shall deliver to the Participant one share of Stock [or, if elected by a Participant who is not a member of the Company’s management committee, the cash value thereof] ² [or the cash value thereof, as elected by the Participant,] ³ in settlement of each outstanding

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Restricted Stock Unit that has vested as provided in Section 2 on the first to occur of ( i ) the later of the second day after the Committee determines that the Goals have been satisfied (but in no event later than 2  ¹ / 2 months after the end of the Performance Period) and the Vesting Date; ( ii ) in the event of a Termination of Service due to death, January 31 of the year following the Participant’s Termination of Service; ( iii ) in the event of a termination due to Disability, on the later of January 31 of the year following the Participant’s Termination of Service due to Disability and the second day after the Committee determines that the Goals with respect to a Performance Period have been satisfied (but in no event later than 2  ¹ / 2 months after the end of the relevant Performance Period) and (iv) other than with respect to Specified Units, upon a Change in Control (as defined in the Plan) in which the Restricted Stock Units do not continue; and ( v ) with respect to Specified Units, upon a Change in Control (as defined in Section 2(c)), in each case by either ( x ) if the Participant has not elected to receive cash, ( A ) issuing one or more stock certificates evidencing the Stock to the Participant, ( B ) registering the issuance of the Stock in the name of the Participant through a book entry credit in the records of the Company’s transfer agent, ( y ) if the Participant has elected to receive cash, a cash payment equal to the Fair Market Value of the Stock on the settlement date or ( z ) in the event of settlement upon a Change in Control, a cash payment equal to the Change in Control Price multiplied by the number of vested Restricted Stock Units. No fractional shares of stock shall be issued in respect of Restricted Stock Units. Fractional Restricted Stock Units shall be settled through a cash payment equal to the Fair Market Value of the Stock on the settlement date.

4. Securities Law Compliance . Notwithstanding any other provision of this Agreement, the Participant may not sell the shares of Stock acquired upon vesting of the Restricted Stock Units unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such shares must also comply with other applicable laws and regulations governing the shares and Participant may not sell the shares of Stock if the Company determines that such sale would not be in material compliance with such laws and regulations.

5. Participant’s Rights with Respect to the Restricted Stock Units .

(a) Restrictions on Transferability . The Restricted Stock Units granted hereby are not assignable or transferable, in whole or in part, and may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including without limitation by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Participant upon the Participant’s death; provided that the deceased Participant’s beneficiary or representative of the Participant’s estate shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary or the estate were the Participant.

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(b) No Rights as Stockholder . The Participant shall not have any rights as a stockholder including any voting, dividend or other rights or privileges as a stockholder of the Company with respect to any Stock corresponding to the Restricted Stock Units granted hereby unless and until shares of Stock are issued to the Participant in respect thereof.

6. Adjustment in Capitalization . The number, class, Performance Goals or other terms of any outstanding Restricted Stock Units shall be adjusted by the Board to reflect any extraordinary dividend, stock dividend, stock split or share combination or any recapitalization, business combination, merger, consolidation, spin-off, exchange of shares, liquidation or dissolution of the Company or other similar transaction affecting the Stock in such manner as it determines in its sole discretion.

7. Miscellaneous .

(a) Binding Effect; Benefits . This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(b) No Right to Continued Employment . Nothing in the Plan or this Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time, or confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries.

(c) Interpretation . The Committee shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award. Any determination or interpretation by the Committee under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

(d) Tax Withholding . The Company and its Subsidiaries shall have the right to deduct from all amounts paid to the Participant in cash (whether under the Plan or otherwise) any amount of taxes required by law to be withheld in respect of settlement of the Restricted Stock Units under the Plan as may be necessary in the opinion of the Employer to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions that are required by law to be withheld. The Company may require the recipient of the shares of Stock to remit to the Company an amount in cash sufficient to satisfy the amount of taxes required to be withheld as a condition to the issuance of such shares. The Committee may, in its discretion, require the Participant, or permit the Participant to elect, subject to such

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conditions as the Committee shall impose, to meet such obligations by having the Company withhold or the Participant sell the least number of whole shares of Stock having a Fair Market Value sufficient to satisfy all or part of the amount required to be withheld in respect of settlement of the Restricted Stock Units. The Company may defer issuance of Stock until such requirements are satisfied.

(e) Forfeiture for Financial Reporting Misconduct . If the Company is required to prepare an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct or knowingly or grossly negligently failed to prevent the misconduct as determined by the Committee, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, then the Participant shall forfeit and disgorge to the Company ( i ) any Restricted Stock Units granted or vested and all gains earned or accrued due to the sale of any Stock received in respect of the Restricted Stock Units during the 12-month period following the filing of the financial document embodying such financial reporting requirement and ( ii ) any Restricted Stock Units that vested based on the materially non- complying financial reporting.

(f) Applicable Law . This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

(g) Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, the Participant acknowledges: ( a ) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; ( b ) that the Award does not create any contractual or other right to receive future grants of Awards; ( c ) that participation in the Plan is voluntary; ( d ) that the value of the Restricted Stock Units is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and ( e ) that the future value of the Stock is unknown and cannot be predicted with certainty.

(h) Employee Data Privacy . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, the Participant: ( a ) authorizes the Company and the Participant’s employer, if different, any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan; ( b ) waives any data privacy rights the Participant may have with respect to such information; and ( c ) authorizes the Company and its agents to store and transmit such information in electronic form.

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(i) Consent to Electronic Delivery . By entering into this Agreement and accepting the Restricted Stock Units evidenced hereby, Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Restricted Stock Units via Company web site or other electronic delivery.

(j) Headings and Captions . The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(k) Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

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Exhibit 10.6

DOMTAR CORPORATION

ANNUAL INCENTIVE PLAN

(Effective as of March 7, 2007)

SECTION 1. PURPOSE

The purposes of the Plan are to enable the Company and its Subsidiaries to attract, retain, motivate and reward the best qualified executive officers and key employees by providing them with the opportunity to earn competitive compensation directly linked to the Company’s performance.

SECTION 2. DEFINITIONS

Unless the context requires otherwise; the following words as used in the Plan shall have the meanings ascribed to each below, it being understood that masculine, feminine and neuter pronouns are used interchangeably and that each comprehends the others.

(a) “ Act ” means the Securities and Exchange Act of 1934, as amended.

(b) “ Board ” means the Board of Directors of the Company.

(c) “ Committee ” means the Human Resources and Compensation Committee of the Board or such other committee of the Board as the Board shall designate from time to time, consisting of two or more members, each of whom is an “independent” director under New York Stock Exchange Listing requirements, a “Non-Employee Director” within the meaning of Rule 16b-3, as promulgated under the Act, and an “outside director” within the meaning of Section 162(m).

(d) “ Company ” means Domtar Corporation.

(e) “ Covered Employee ” shall have the meaning set forth in Section 162(m).

(f) “ Omnibus Plan ” means the Domtar Corporation 2007 Omnibus Incentive Plan.

(g) “ Participant ” means (i) each executive officer of the Company and (ii) each other employee of the Company or a Subsidiary whom the Committee designates as a participant under the Plan.

(h) “ Performance Period ” means each fiscal year or another period as designated by the Committee, so long as such period does not exceed one year.

(i) “ Plan ” means this Domtar Corporation Annual Incentive Plan, as set forth herein and as may hereafter be amended from time to time.

(j) “ Section 162(m) ” means Section 162(m) of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

(k) “ Subsidiary ” means any business entity in which the Company owns, directly or indirectly, fifty percent (50%) or more of the total combined voting power of all classes of stock entitled to vote, and any other business organization, regardless of form, in which the Company possesses, directly or indirectly, 50% or more of the total combined equity interests.

SECTION 3. ADMINISTRATION

The Committee shall administer and interpret the Plan, provided that, in no event, shall the Plan be interpreted in a manner which would cause any award intended to be qualified as performance based compensation under Section 162(m) to fail to so qualify. The Committee shall establish the performance objectives for any fiscal year or other Performance Period determined by the Committee in accordance with Section 4 and certify whether such performance objectives have been obtained. Any determination made by the Committee under the Plan shall be final and conclusive. The Committee may employ such legal counsel, consultants and agents (including counsel or agents who are employees of the Company or a Subsidiary) as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant or agent and any computation received from such consultant or agent. All expenses incurred in the administration of the Plan, including, without limitation, for the engagement of any counsel, consultant or agent, shall be paid by the Company. No member or former member of the Board or the Committee shall be liable for any act, omission, interpretation, construction or determination made in connection with the Plan other than as a result of such individual’s willful misconduct.

SECTION 4. BONUSES

(a) Performance Criteria . Within 90 days after each Performance Period begins (or such other date as may be required or permitted under Section 162(m)) but not later than the date on which 25% of the performance period has lapsed, the Committee shall establish the performance objective or objectives that must be satisfied in order for a Participant to receive a bonus award for such Performance Period. Unless the Committee determines at the time of grant not to qualify the award as performance-based compensation under Section 162(m), any such performance objectives will be based upon the relative or comparative achievement of one or more of the following criteria, whether in absolute terms or relative to the performance of one or more similarly situated companies or a published index covering the performance of a number of companies, as determined by the Committee for the Performance Period: operating earnings, net

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earnings, income, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, total shareholder return, return on the Company’s assets, increase in the Company’s earnings or earnings per share, revenue growth, share price performance, return on invested capital, operating income, pre- or post-tax, income, net income, economic value added, cash flow, improvement in or attainment of expense levels, improvement in or attainment of working capital levels, return on equity, debt reduction, gross profit, market share, cost reductions, workplace safety goals, workforce satisfaction and diversity goals, employee retention, completion of key projects, strategic plan development and implementation and achievement of synergy targets, and, in the case of persons who are not Executive Officers, such other criteria as may be determined by the Committee. Performance Goals may be established on a Company-wide basis or with respect to one or more business units, divisions, Subsidiaries, or products; and in either absolute terms or relative to the performance of one or more comparable companies or an index covering multiple companies.

When establishing Performance Goals for a Performance Period, the Committee may exclude any or all “extraordinary items” as determined under U.S. generally accepted accounting principles and as identified in the financial statements, notes to the financial statements or management’s discussion and analysis in the annual report, including, without limitation, the charges or costs associated with restructurings of the Company or any Subsidiary, discontinued operations, extraordinary items, capital gains and losses, dividends, share repurchase, other unusual or non recurring items, and the cumulative effects of accounting changes. Except in the case of Awards to Executive Officers intended to be “other performance-based compensation” under Section 162(m)(4) of the Code, the Committee may also adjust the Performance Goals for any Performance Cycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine (including, without limitation, any adjustments that would result in the Company paying non-deductible compensation to a Participant).

(b) Maximum Amount Payable . If the Committee certifies in writing that any of the performance objectives established for the relevant Performance Period under Section 4(a) has been satisfied, each Participant who is employed by the Company or one of its Subsidiaries on the last day of the Performance Period for which the bonus is payable shall be entitled to receive an annual bonus in an amount not to exceed $5,000,000. If a Participant’s employment terminates for any reason other than for Cause (including, without limitation, his death, disability or retirement under the terms of any retirement plan maintained by the Company or a Subsidiary) prior to the last day of the Performance Period for which the bonus is payable, the maximum bonus payable to such Participant under the preceding sentence shall be multiplied by a fraction, the numerator of which is the number of days that have elapsed during the Performance Period in which the termination occurs prior to and including the date of the Participant’s termination of employment and the denominator of which is the total number of days in the Performance Period.

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(c) Termination of Employment . Unless otherwise determined by the Committee in its sole discretion at the time the performance criteria are selected for a particular Performance Period in accordance with Section 4(a), if a Participant’s employment terminates for any reason prior to the date on which the award is paid hereunder, such Participants shall forfeit all rights to any and all awards which have not yet been paid under the Plan; provided that if a Participant’s employment terminates as a result of death, disability or retirement (as defined under any retirement plan of the Company or a Subsidiary) the Committee shall give consideration at its sole discretion to the payment of a partial bonus with regard to the portion of the Performance Period worked. Notwithstanding the foregoing, if a Participant’s employment terminates for any reason prior to the date on which the award is paid hereunder, the Committee, in its discretion, may waive any forfeiture pursuant to Section 4 in whole or in part.

(d) Negative Discretion . Notwithstanding anything else contained in Section 4(b) to the contrary, the Committee shall have the right, in its absolute discretion, (i) to reduce or eliminate the amount otherwise payable to any Participant under Section 4(b) based on individual performance or any other factors that the Committee, in its discretion, shall deem appropriate and (ii) to establish rules or procedures that have the effect of limiting the amount payable to each Participant to an amount that is less than the maximum amount otherwise authorized under Section 4(b).

(e) Affirmative Discretion . Notwithstanding any other provision in the Plan to the contrary (including, without limitation, the maximum amounts payable under Section 4(b)), but subject in the case of bonuses paid in shares of the Company’s Common Stock to the maximum number of shares available for issuance under the Omnibus Plan, (i) the Committee shall have the right, in its discretion, to grant any annual bonus in cash, in shares of the Company’s Common Stock or in any combination thereof, to any Participant who is not a Covered Employee for the year in which the amount paid would ordinarily be deductible by the Company for federal income tax purposes in an amount up to the maximum bonus payable under Section 4(b), based on individual performance or any other criteria that the Committee deems appropriate and (ii) in connection with the hiring any person who is or becomes a Covered Employee, the Committee may provide for a minimum bonus amount in any Performance Period, regardless of whether performance objectives are attained.

SECTION 5. PAYMENT

Except as otherwise provided hereunder, payment of any bonus amount determined under Section 4 shall be made to each Participant as soon as practicable after the Committee certifies that one or more of the applicable performance objectives have been attained (or, in the case of any bonus payable under the provisions of Section 4(d), after the Committee determines the amount of any such bonus) and in any event within two and a half months of the end of the fiscal year in which the Performance Period ends.

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SECTION 6. FORM OF PAYMENT

The Committee shall determine whether any bonus payable under the Plan is payable in cash, in shares of Common Stock or in any combination thereof. Awards of shares under this Plan may be issued under the Omnibus Plan in forms including, without limitation, Restricted Stock and Restricted Stock Units. The Committee shall have the right to impose whatever conditions it deems appropriate with respect to the award of shares of Common Stock, including conditioning the vesting of such shares on the performance of additional service.

SECTION 7. GENERAL PROVISIONS

(a) Effectiveness of the Plan . The Plan shall be effective with respect to Performance Periods beginning on or after March 7, 2007 and ending on or before December 31, 2011, unless the term hereof is extended by action of the Board, subject in the case of years after 2007 to approval by the Company’s shareholders at its 2008 annual meeting of shareholders.

(b) Amendment and Termination . Notwithstanding Section 6(a), the Board or the Committee may at any time amend, suspend, discontinue or terminate the Plan; provided; however, that no such action shall be effective without approval by the shareholders of the Company to the extent necessary to continue to qualify the amounts payable hereunder to Covered Employees as performance-based compensation under Section 162(m).

(c) Designation of Beneficiary . Each Participant may designate a beneficiary or beneficiaries (which beneficiary may be an entity other than a natural person) to receive any payments which may be made following the Participant’s death. Such designation may be changed or canceled at any time without the consent of any such beneficiary. Any such designation, change or cancellation must be made in a form approved by the Committee and shall not be effective until received by the Committee. If no beneficiary has been named, or the designated beneficiary or beneficiaries shall have predeceased the Participant, the beneficiary shall be the Participant’s spouse or, if no spouse survives the Participant, the Participant’s estate. If a Participant designates more than one beneficiary, the rights of such beneficiaries shall be payable in equal shares, unless the Participant has designated otherwise.

(d) No Right of Continued Employment . Nothing in this Plan shall be construed as conferring upon any Participant any right to continue in the employment of the Company or any of its Subsidiaries.

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(e) No Limitation on Corporate Actions . Nothing contained in the Plan shall be construed to prevent the Company or any Subsidiary from taking any corporate action which is deemed by it to be appropriate or in its best interest, whether or not such action would have an adverse effect on any awards made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any Subsidiary as a result of any such action.

(f) Non-alienation of Benefits . Except as expressly provided herein, no Participant or beneficiary shall have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under the Plan. The Company’s obligations under this Plan are not assignable or transferable except to (i) a corporation which acquires all or substantially all of the Company’s assets or (ii) any corporation into which the Company may be merged or consolidated. The provisions of the Plan shall inure to the benefit of each Participant and the Participant’s beneficiaries; heirs, executors, administrators or successors in interest.

(g) Withholding . Any amount payable to a Participant or a beneficiary under this Plan shall be subject to any applicable Federal, state and local income and employment taxes and any other amounts that the Company or a Subsidiary is required at law to deduct and withhold from such payment.

(h) Severability . If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not contained in the Plan.

(i) Governing Law . The Plan shall be construed in accordance with and governed by the laws of the State of Delaware, without reference to the principles of conflict of laws.

(j) Headings . Headings are inserted in this Plan for convenience of reference only and are to be ignored in a construction of the provisions of the Plan.

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