EXHIBIT 10.26

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS AGREEMENT made as of the 1^st day of January, 2011

B E T W E E N:

ABITIBIBOWATER INC.,
a corporation existing under the laws of Delaware

(hereinafter referred to as the “Corporation”),

- and -

RICHARD GARNEAU, of the City of Montréal,
in the Province of Québec,

(hereinafter referred to as the “Executive”).

          WHEREAS the Corporation has offered employment to the Executive in the capacity of President and Chief Executive Officer and the Executive has accepted such offer of employment; and

          WHEREAS the Corporation and the Executive have agreed that the terms and conditions of such employment relationship shall be as set out herein;

          NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the respective covenants and agreements of the parties herein contained and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties covenant and agree as follows:

ARTICLE 1
INTERPRETATION

1.1

Defined Terms

          For the purposes of this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

“Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on the date hereof;

“Annual Base Salary” has the meaning set out in Section 4.1;

“Board” means the board of directors of the Corporation;

“Business Day” means any day, other than a Saturday, Sunday or statutory holiday in the Province of Québec on which commercial banks in Montréal are open for business;

“Cause” has the meaning set out in Section 5.2;

“Change in Control” has the meaning ascribed thereto in the Change in Control Agreement being executed between the Executive and the Corporation in conjunction with this Agreement;

“Common Shares” means the outstanding common shares in the capital of the Corporation at any time;

“Confidential Information” has the meaning set out in Section 6.1;

“Date of Termination” means the effective date of any termination of the Executive’s employment with the Corporation;

“Eligible Pay” means Annual Base Salary as in effect at the Date of Termination and the lower of (i) the average of the last two (2) Incentive Awards paid to the Executive and (ii) 125% of the Executive’s target incentive (expressed in dollars) for the year in which the Date of Termination occurs;

“Good Reason” has the meaning ascribed thereto in the Change in Control Agreement;

“Improvements” has the meaning set out in Section 6.2(a);

“Incentive Award” means the amount(s), if any, to which the Executive is entitled for the relevant period in question under a regular cash incentive plan or program of the Corporation established from time to time, including the 2011 STIP (as defined in Section 4.2), as same may be amended or replaced from time to time, it being understood that other cash recognition, non-recurring or multi-year incentive awards shall not be considered as an Incentive Award for the purpose hereof;

“Non-Disclosure Period” has the meaning set out in Section 6.1;

“Permanent Disability” has the meaning set out in Section 5.3;

“person” includes, without limitation, an individual, corporation, partnership, joint venture, association, trust, firm, unincorporated organization or other legal or business entity;

“Prohibited Area” means the territorial limits of Canada, the United States, Mexico, Italy, the United Kingdom and South Korea;

“Restricted Period” means the period from the date hereof to (i) the Date of termination in the event of termination of this Agreement by the Corporation without Cause or

termination of this Agreement by the Executive for Good Reason pursuant to the terms of the Change in Control Agreement or (ii) the end of the ninth month following the Date of Termination in all other circumstances, except in the case of termination for Cause, in which case the Restricted Period shall end on the twelfth (12th) month following the Date of Termination;

“Subsidiary” has the meaning ascribed thereto in the Canada Business Corporations Act;

“Voting Shares” means any securities of the Corporation ordinarily carrying the right to vote at elections of directors.

1.2 Rules of Construction

          Except as may be otherwise specifically provided in this Agreement and unless the context otherwise requires, in this Agreement:

	(a)		the terms “Agreement”, “this Agreement”, “the Agreement”, “hereto”, “hereof”, “herein”, “hereby”, “hereunder” and similar expressions refer to this Agreement in its entirety and not to any particular provision hereof;
	(b)		references to an “Article”, “Section”, “Schedule” or “Exhibit” followed by a number or letter refer to the specified Article or Section of or Schedule or Exhibit to this Agreement;
	(c)		the division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement;
	(d)		words importing the singular number only shall include the plural and vice versa and words importing the use of any gender shall include all genders;
	(e)		the word “including” is deemed to mean “including without limitation”;
	(f)		the terms “party” and “the parties” refer to a party or the parties to this Agreement;
	(g)		any reference to a statute, regulation or rule shall be construed to be a reference thereto as the same may from time to time be amended, re-enacted or replaced, and any reference to a statute shall include any regulations or rules made thereunder; and
	(h)		all dollar amounts refer to United States dollars unless expressly provided to the contrary.

1.3 Severability

          If any provision of this Agreement, including the breadth or scope of the provisions contained in Article 6 (whether as to the Non-Disclosure Period, the Restricted Period, the Prohibited Area, or otherwise), shall be held by any court of competent jurisdiction to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining provisions, or part thereof, of this Agreement and such remaining provisions, or part thereof, shall remain enforceable and binding.

1.4 Prior Agreements

          This Agreement cancels and replaces any prior agreements between the Executive and the Corporation, other than (i) the indemnification agreement executed by the Executive dated December 9, 2010 (the “Indemnification Agreement”) and (ii) the prospective grant under the LTIP of stock options approved by the Board on December 9, 2010, granted to the Executive in his capacity as a Director of the Corporation. Such grant will be documented in an award agreement to be executed on the date of the grant (to occur on January 9, 2011), and all options so awarded will continue to vest in accordance with the terms of such award agreement.

1.5 Related Plans, Policies and Agreements

          In the event of any conflict or inconsistency between the provisions of this Agreement and any other plans, policies and agreements referred to herein, including without limitation the 2011 STIP, the LTIP (as defined in Section 4.3) and any and all related award agreements to be entered into by the Corporation and the Executive from time to time, the DC SERP (as defined in Section 4.4) and the Indemnification Agreement (as defined in Section 1.4) (all of which are collectively referred to as the “Collateral Agreements”), the provisions of the Collateral Agreements, as same may be amended from time to time by the Corporation, shall prevail, all of which shall be in the corporate records of the Corporation and available for review from time to time by the Executive. It is further acknowledged that in conjunction with this Agreement, the Executive and the Corporation are executing a Change in Control Agreement, the provisions of which shall govern all matters relating to the substance thereof notwithstanding anything herein to the contrary.

ARTICLE 2
EMPLOYMENT

2.1 Employment

          The Corporation hereby agrees to employ the Executive and the Executive hereby accepts such employment effective January 1, 2011, all in accordance with and subject to the terms and conditions hereof. The Executive shall serve the Corporation in the capacity of President and Chief Executive Officer.

2.2 Location of Executive

          The Executive’s office will be located at the current offices of the Corporation in the Sun Life Building in Montréal, Québec, provided that the Corporation may subsequently require that the Executive relocate to such other corporate office of the Corporation in the general area of Montréal as may be determined by the Board from time to time. The Executive will furthermore be required to travel to other locations from time to time, including offices, production facilities, customers and suppliers of the Corporation or of its Affiliates.

ARTICLE 3
DUTIES

3.1 Employment Duties

          The Executive shall perform such duties and exercise such powers as are normally associated with and incidental and ancillary to the position of President and Chief Executive Officer and shall perform such additional duties and exercise such additional powers as may from time to time be assigned to him by the Board, acting reasonably. Without limiting the foregoing, during the term of his employment hereunder, the Executive shall, to the best of his ability:

	(a)		devote his full time and attention during normal business hours and such other times as may be reasonably required to the business and affairs of the Corporation and its Affiliates and shall not, without the prior written consent of the Board, undertake any other business or occupation or public office which may detract from the proper and timely performance of his duties hereunder;
	(b)		perform diligently and faithfully those duties as are consistent with the position and status of President and Chief Executive Officer that may be assigned to the Executive;
	(c)		promote the interests and goodwill of the Corporation and its Affiliates and not knowingly do, or willingly permit to be done, anything to the prejudice, loss or injury of the Corporation or any of its Affiliates; and
	(d)		at all times keep the Corporation regularly informed (in writing if so requested) of his conduct of the business and affairs of the Corporation and provide such explanations of his conduct as the Board may require.

3.2 Board Membership

          The Executive agrees to serve as a Director of the Corporation if elected, and further agrees to become a Director and/or Officer of the Corporation’s Subsidiaries or Affiliates as designated by the Corporation. Subject to approval of the Board, the Executive shall be permitted to serve as an outside director of one (1) public company that does not, directly or

indirectly, compete with the Corporation and provided furthermore that no conflict of interest exists or would reasonably be expected to arise as a consequence thereof.

3.3 Reporting

          The Executive shall report to the Board. The Executive shall report fully on the management and operations of the Corporation and shall advise to the best of his ability and in accordance with reasonable business standards on business matters that may arise from time to time during the term of this Agreement.

ARTICLE 4
COMPENSATION

4.1 Annual Base Salary

          The annual base salary (“Annual Base Salary”) payable to the Executive for his services hereunder shall be $765,000, payable in equal semi-monthly instalments in arrears in accordance with the usual compensation practices of the Corporation from time to time.

          The Annual Base Salary shall be subject to a periodic increase adjustment if as and when determined by the Board from time to time at its discretion.

4.2 Short-Term Incentive Plan

          In addition to the Annual Base Salary, the Executive shall be eligible to participate in the Short-Term Incentive Plans that are adopted by the Corporation from time to time, including without limitation the 2011 Short-Term Incentive Plan (“2011 STIP”), pursuant to which the Executive will be eligible to receive discretionary Incentive Awards as approved by the Human Resources and Compensation/Nominating and Governance Committee of the Board. Under the 2011 STIP, the Executive’s target Incentive Award will be one hundred percent (100%) of the Annual Base Salary, with a threshold of fifty percent (50%) and a maximum of one hundred fifty percent (150%), it being understood that Incentive Awards are based on performance targets established by the Board and that Incentive Awards under the Short-Term Incentive Plans adopted as aforesaid from time to time are discretionary and subject to modifications by the Board, including increases, decreases, cancellation, deferral or other conditions as determined by the Board, at its discretion, even if and after performance levels have been met.

4.3 Long-Term Incentive Plan

          The Executive will be eligible to participate in the long-term incentive plans adopted by the Corporation and in effect from time to time, including without limitation under the Corporation’s 2010 Equity Incentive Plan (the “LTIP”), and to receive grants thereunder as determined by the Board from time to time at its discretion, with an initial grant equivalent to

two hundred twenty-five percent (225%) of the Executive’s Annual Base Salary to be awarded in the spring of 2011.

4.4 Pension

          The Executive shall be entitled to participate in the Corporation’s 2010 defined contribution program (comprised of a registered defined contribution pension plan for Canadian non-unionized employees and the 2010 DC Supplemental Executive Retirement Plan (“DC SERP”) (collectively the “DC Program”)), pursuant to which the Executive contributes five percent (5%) and the Corporation contributes twenty-two point five percent (22.5%) of the aggregate of the Executive’s Annual Base Salary and the Incentive Award paid to the Executive from time to time.

4.5 Fringe Benefits

          During the term of the Executive’s employment hereunder, the Executive shall be entitled to participate in all medical, dental, disability and group life plans and other employee benefit programs established by the Corporation from time to time for the benefit of its non-unionized employees in Canada. The benefits will be provided in accordance with and subject to the terms and conditions of the applicable plan, fund or arrangement relating to such benefits in effect from time to time. The Executive acknowledges that the Corporation may amend or terminate the benefits from time to time as provided in the applicable plan, fund or arrangement. The Executive shall also be provided with a fully paid club membership at the Mount-Royal Club in Montreal during the term of employment and, in addition, an annual perquisite allowance of $16,000 to cover all perquisites such as other club memberships, fiscal and financial advice and tax preparation by professionals selected by the Executive. The Corporation will provide for an annual medical examination at its expense for the Executive and his wife.

4.6 Vacation

          The Executive shall be entitled to five (5) weeks plus an additional three (3) “floating” or discretionary days of paid vacation in each calendar year in accordance with the policies of the Corporation in effect from time to time applicable to its senior executives, to be taken during such calendar year subject to the need for the timely performance of the Executive’s responsibilities hereunder. In the event that the Executive’s employment is terminated, he shall be entitled to a pro-rated vacation leave with pay for the portion of the year in which such termination occurs that he has been actively employed. It is the responsibility of the Executive to ensure that his vacation entitlement is taken in each calendar year, as there shall be no carry forward of vacation entitlement to a year other than for which it has accrued without the permission of the Board.

4.7 Expenses

          The Executive shall be reimbursed for all reasonable travel and other out-of-pocket expenses properly incurred by the Executive from time to time in connection with the carrying out of his duties hereunder in accordance with the Corporation’s travel and

entertainment policy as amended from time to time. For all such expenses, the Executive shall furnish to the Corporation originals or true copies of all invoices or statements in respect of which the Executive seeks reimbursement. Any Corporation credit card shall be used only for expenses incurred in the course of carrying out the Executive’s duties.

          The Executive shall furthermore be entitled to reimbursement of reasonable legal fees and expenses incurred by him in the negotiation and documentation of this Agreement and the Change in Control Agreement.

4.8 Deductions and Withholdings

          The Corporation shall be entitled to make such deductions and withholdings from the Executive’s remuneration as may be required by law and as may be required by the Executive’s participation in or receipt of any benefit, stock option or other program contemplated hereby, and the Corporation’s obligations in respect thereof shall thereby be satisfied to the extent of such deductions and withholdings.

4.9 Compensation Exhaustive

          For greater certainty, the Executive shall not be entitled to any salary, bonus, participation in profits or other remuneration, or payment or compensation in lieu thereof, except as expressly set forth in this Agreement.

ARTICLE 5
TERMINATION OF EMPLOYMENT

5.1 Term of Employment

          The employment of the Executive hereunder shall continue for an indefinite period until it is terminated in accordance with the provisions of this Article 5.

5.2 Cause

          The Corporation may terminate the employment of the Executive at any time for Cause, effective immediately, by giving written notice of termination to the Executive setting out the basis for termination. “Cause” shall mean any of the following:

	(a)		the wilful failure of the Executive to carry out his duties hereunder, to comply in all material respects with the rules and policies of the Corporation or to follow any reasonable instruction or directive of the Board which is consistent with the Executive’s duties and responsibilities under this Agreement;
	(b)		the Executive acting dishonestly or fraudulently in connection with the business of the Corporation, or the wilful gross misconduct of the Executive in the course of his employment hereunder, in each case resulting in adverse consequences to the Corporation or to any of its Affiliates;

	(c)		if the Executive or his spouse or child under the age of majority makes any personal profit arising out of or in connection with any transaction to which the Corporation or any of its Affiliates is a party or with which the Corporation or any of its Affiliates is associated without making disclosure to and obtaining the prior written consent of the Board, or other material breach of the Executive’s fiduciary duties to the Corporation;
	(d)		the conviction of the Executive for, or a guilty plea by the Executive to, any criminal offence punishable by imprisonment that may reasonably be considered to be likely to adversely affect the Corporation or any of its Affiliates or the suitability of the Executive to perform his duties hereunder, including without limitation any offence involving fraud, theft, embezzlement, forgery, wilful misappropriation of funds or property, or other fraudulent or dishonest acts;
	(e)		any material breach of any provisions of this Agreement by the Executive;
	(f)		misconduct on the part of the Executive that is materially detrimental to the business or financial position of the Corporation or to any of its Affiliates;
	(g)		personal misconduct by the Executive which is of such a serious and substantial nature that it has or would injure the reputation of the Corporation or of any of its Affiliates;
	(h)		the habitual inability by the Executive to carry out functions of his employment hereunder due to alcohol or drug related causes, provided that the Executive shall have been provided with written notice thereof at least thirty (30) days prior to the Date of Termination and shall have failed to remedy such alcohol or drug related causes during such period of time; or
	(i)		any serious reason pursuant to Article 2094 of the Civil Code of Québec.

          For purposes of this provision, no act or omission on the part of the Executive shall be considered “wilful” unless it is done or omitted in bad faith or without reasonable belief that the act or omission was in the best interests of the Corporation. Any act or omission based upon a resolution duly adopted by the Board or advice of counsel for the Corporation shall be conclusively presumed to have been done or omitted in good faith and in the best interests of the Corporation. Cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity to be heard before the Board) determining that the employment of the Executive is to be terminated for Cause.

5.3 Termination Where Executive Disabled

          If at any time the Executive is unable to perform his duties properly because of ill health, accident or otherwise, for a period or periods totalling at least twenty-six (26) weeks in any period of twelve (12) consecutive calendar months (“Permanent Disability”), the Corporation may terminate the Executive’s employment in accordance with the applicable corporate practices of the Corporation in effect at the time the Executive becomes permanently disabled. The Executive shall submit to such reasonable medical examinations as may be requested by a doctor or other medical practitioner selected jointly by the Executive and the Corporation in order to determine whether the condition or conditions suffered by the Executive constitute Permanent Disability. In no event shall the Executive be considered to have a Permanent Disability for the purposes of this Agreement unless the Executive is deemed disabled and eligible for benefits pursuant to the Company’s long-term disability plan.

5.4 Death

          The Executive’s employment shall terminate automatically upon the death of the Executive.

5.5 Other Termination by the Corporation

          The Corporation may terminate this Agreement (other than as provided in the foregoing provisions of this Article 5) at any time and for any reason if the Board, in its sole discretion, so determines, by giving three (3) months’ prior written notice of termination to the Executive.

5.6 Other Termination by the Executive

          The Executive may terminate his employment at any time and for any reason by giving three (3) months’ prior notice in writing to the Corporation. For greater certainty, such notice shall not be required in respect of termination by the Executive for Good Reason pursuant to the terms of the Change in Control Agreement.

5.7 Cessation of Duties

          The Corporation shall have the right, at any time prior to the end of the applicable notice period pursuant to Sections 5.5 or 5.6, notwithstanding the provisions of the relevant Section, by giving written notice to the Executive, to require that the Executive cease to perform his duties and responsibilities and cease attending the Corporation’s premises immediately upon giving such notice and in such event, the employment of the Executive hereunder shall terminate on the termination date stipulated in the written notice of termination, it being understood that the Executive shall continue to receive the employment benefits during the balance of such three (3) month period. A termination by the Executive pursuant to Section 5.6 shall remain as such even if the Corporation exercises its right hereunder.

5.8 Severance Payments

          The following severance pay provisions shall apply notwithstanding anything to the contrary in or inconsistent with the provisions of the Corporation’s Severance Policy — Chief Executive Officer and Direct Reports (“Severance Policy”):

	(a)		Upon termination of the Executive’s employment (i) for Cause pursuant to Section 5.2, or (ii) voluntarily by the Executive pursuant to Section 5.6, the Executive shall not be entitled to any pay in lieu of notice of termination, severance or similar payment in respect of such termination other than (A) accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination and (B) vacation pay earned up to the Date of Termination and (C) in the event of early termination by the Corporation of the notice period in Section 5.6, the portion of the Annual Base Salary that would have otherwise been payable during such notice period, and (D) any amount of or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with any then applicable plans and agreements. In addition, any unvested stock option, SAR, full value award (including, without limitation, unrestricted stock, restricted stock or restricted stock units, performance stock or performance stock units, and deferred stock or deferred stock units) in the Corporation held by the Executive under a long term incentive plan adopted by the Corporation from time to time shall vest and shall remain exercisable by the Executive subject to and with in accordance with the relevant plan and award agreements.
	(b)		Upon termination of the Executive’s employment (i) as a result of the Permanent Disability of the Executive pursuant to Section 5.3, or (ii) by the death of the Executive pursuant to Section 5.4, the Executive (or his estate, as the case may be) shall be entitled to receive (A) accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination, (B) vacation pay earned up to the Date of Termination and (C) any amount or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with any then applicable plans and agreements. In addition, any unvested stock option, SAR, full value award (including, without limitation, unrestricted stock, restricted stock or restricted stock units, performance stock or performance stock units, and deferred stock or deferred stock units) in the Corporation held by the Executive under a long term incentive plan adopted by the Corporation from time to time shall vest and shall remain exercisable by the Executive subject to and in accordance with the relevant plan and award agreements.
	(c)		If the Executive’s employment is terminated pursuant to Section 5.5, other than within two years following a Change in Control (in which case the Change in Control Agreement shall govern and the Executive shall not be entitled to any payment pursuant to this Agreement), the Executive shall be entitled to receive:

	(i)		accrued and unpaid Annual Base Salary earned by the Executive up to the Date of Termination;
	(ii)		vacation pay earned up to the Date of Termination;
	(iii)		severance pay in an amount equal to six (6) weeks of Eligible Pay per year of continuous service, subject to a minimum of fifty-two (52) weeks and a maximum of one hundred four (104) weeks, and pro-rated for partial years of service; and
	(iv)		any amount or entitlement to Incentive Awards, other awards, pension benefits and other benefits in accordance with the relevant plans and agreements.

          In addition, any unvested stock option, SAR, full value award (including, without limitation, unrestricted stock, restricted stock or restricted stock units, performance stock or performance stock units, and deferred stock or deferred stock units) in the Corporation held by Executive under a long term incentive plan adopted by the Corporation from time to time shall vest and shall remain exercisable by the Executive subject to and in accordance with the relevant plan and award agreements.

          All amounts payable to the Executive as a result of the termination of the Executive’s employment pursuant to any statute, regulation or other provision of law are included in and are not in addition to the amounts payable pursuant to this Section 5.8. Amounts payable pursuant to Section 5.8(c)(i), (ii) and (iii) shall be paid on the tenth (10^th) day following the effectiveness of the release described above; provided however that, if the sixtieth (60^th) day following termination of employment falls in the subsequent calendar year, then the payment shall be the later of (i) the first (1^st) business day of that subsequent year or (ii) the tenth (10^th) day following the effectiveness of the release. For greater certainty, the Corporation agrees that payment of undisputed claims will not be delayed should there exist any disputed claims.

5.9 Resignation on Termination

          The Executive agrees that upon any termination of his employment with the Corporation he shall immediately tender his resignation from any position he may hold as an officer or director of the Corporation or any of its Affiliates. In the event of the Executive failing within three days to comply with his obligation hereunder, he hereby irrevocably authorizes and appoints any other director or officer of the Corporation as his agent and attorney to sign in his name and on his behalf any written resignations or other documents and do all other things necessary to give effect to such resignation.

5.10 Continuance in Effect

          For greater certainty, notwithstanding any termination of the employment of the Executive, the provisions of this Agreement shall continue in full force and effect in accordance with their terms, including, without limitation, (i) the provisions of Article 6, (ii) rights to

indemnification and insurance under the Indemnification Agreement, Charter, By-Laws and directors’ and officers’ insurance policies maintained by the Corporation and (iii) rights to which the Executive is entitled by virtue of his participation in the employee benefits plans, policies and arrangements of the Corporation, all in accordance with the terms of the relevant plans and agreements.

ARTICLE 6
EXECUTIVE’S COVENANTS

6.1 Non-Disclosure

          The Executive acknowledges and agrees that:

	(a)		in the course of performing his duties and responsibilities hereunder, he will have access to and will be entrusted with detailed confidential information and trade secrets concerning past, present, future and contemplated company strategy, plans and activities (including acquisition plans and activities), products, services, operations, technology, intellectual property, methodologies and procedures of the Corporation or its Affiliates, whether in written, printed, pictorial, diagrammatic, electronic or any other form or medium, including, without limitation, information relating to names, addresses, contact persons, preferences, needs and requirements of past, present and prospective clients, customers, suppliers and employees of the Corporation and its Affiliates (collectively, “Confidential Information”), the disclosure of any of which to competitors of the Corporation or of any of its Affiliates or to the general public, or the use of any of which by the Executive or any competitor of the Corporation or of any of its Affiliates, could reasonably be expected to be detrimental to the interests of the Corporation and its Affiliates;
	(b)		in the course of performing his duties and responsibilities hereunder, the Executive will be a representative of the Corporation and its Affiliates to its and their customers, clients and suppliers and as such will have significant responsibility for maintaining and enhancing the goodwill of the Corporation and its Affiliates with such customers, clients and suppliers and would not have, except by virtue of his employment with the Corporation, developed a close and direct relationship with the customers, clients and suppliers of the Corporation and its Affiliates; and
	(c)		the right to maintain the confidentiality of the Confidential Information, the right to preserve the goodwill of the Corporation and its Affiliates and the right to the benefit of the contacts and connections previously developed by the Executive with prospective clients, customers and others and any relationships that will be developed between the Executive and the customers, clients and suppliers of the Corporation and its Affiliates by virtue of the Executive’s employment with the

Corporation constitute proprietary rights of the Corporation and its Affiliates which the Corporation and its Affiliates are entitled to protect.

          In accordance with the matters acknowledged and agreed to by the Executive above and in consideration of the payments and other benefits to be received by the Executive pursuant to this Agreement, the Executive hereby covenants and agrees with the Corporation that he will not, except with the specific prior written consent of the Board, either during the term of this Agreement or at any time within five (5) years thereafter (the “Non-Disclosure Period”), directly or indirectly, disclose to any person or in any way make use of (other than for the benefit of the Corporation or its Affiliates), in any manner, any of the Confidential Information, provided that such Confidential Information shall be deemed not to include information which is or becomes generally available to the public other than as a result of disclosure by the Executive.

6.2 Intellectual Property

     (a) The Executive shall disclose to the Corporation or one or more of its Affiliates, as the Board may direct, all ideas, suggestions, discoveries, inventions and improvements (collectively, the “Improvements”) which he may make solely, jointly or in common with other employees, during the term of his employment with the Corporation and which relate to the business activities of the Corporation or its Affiliates. Any Improvements coming within the scope of the business of the Corporation or of any of its Affiliates made and/or developed by the Executive while in the employ of the Corporation, whether or not conceived or made during regular working hours, or whether or not the Executive is specifically instructed to make or develop the same, shall be for the benefit of the Corporation and/or its Affiliates and shall be considered to have been made by virtue of this Agreement and shall immediately become the exclusive property of the Corporation and/or its Affiliates.

     (b) The Executive shall assign, set over and transfer to the Corporation or one or more of its Affiliates, as the Board may direct, his entire right, title and interest in and to any and all the Improvements and to all patents, copyrights or other intellectual property rights (or applications therefor) which may be or have been filed and/or issued by or to him or on his behalf, and the Executive agrees to execute and deliver to the Corporation or any such Affiliate, any and all instruments necessary or desirable to accomplish the foregoing and, in addition, to do all lawful acts which may be necessary or desirable to assist the Corporation or any such Affiliate to obtain and enforce protection of the Improvements.

     (c) The Executive waives all moral rights in any Improvements and all work produced by the Executive during the term of this Agreement.

6.3 Non-Competition

          The Executive represents and warrants that he is not subject to and will not bring any material that is subject to any non-competition, non-disclosure, discoveries and works or other agreements that would prevent or restrict him from rendering services to the Corporation pursuant to this Agreement. Executive further represents and warrants that his employment and

use of any material he brings will not violate the rights of any third party, including without limitation, pursuant to any competition or non-solicitation agreement.

          The Executive hereby agrees that he shall not (without the prior written consent of the Board which shall not be unreasonably withheld taking into account (i) the Executive’s career in the pulp and paper industry and (ii) his non-disclosure obligations under Section 6.1) during the Restricted Period and within the Prohibited Area whether on his own account or in conjunction with or on behalf of any other person, and whether as an employee, director, officer, shareholder, partner, principal, agent, or in any other capacity whatsoever other than as a consultant, in competition with the Corporation or any of its Affiliates, directly or indirectly, operate, manage, control, participate in, carry on, be employed by, be engaged in, perform services in respect of, be concerned with, be financially interested in or financially assist, or permit his name to be used in connection with the activities from time to time of the Corporation (the “Restricted Business”), including the manufacture, sale and/or dealing in newsprint, commercial printing and packaging papers, market pulp and wood products, as well as research into, development, production, manufacture, sale, supply, import, export or marketing of any product which is the same or similar to or competitive with any product researched, developed, produced, manufactured, sold, supplied, imported, exported or marketed by the Corporation or by any of its Affiliates in the context of the above described activities during the term of this Agreement.

          Notwithstanding the foregoing restrictions, the Executive may acquire securities (i) of a class or series that is traded on any stock exchange or over the counter if such securities represent not more than two percent (2%) of the issued and outstanding securities of such class or series, (ii) of a mutual fund or other investment entity that invests in a portfolio the selection and management of which is not within the control of the investor, or (iii) held in a fully managed account where the Executive does not direct or influence in any manner the selection of any investment in such securities.

6.4 Non-Solicitation of Customers

          The Executive hereby agrees that he shall not during the Restricted Period, whether on his own behalf or in conjunction with or on behalf of any other person, directly or indirectly, except on behalf of the Corporation or its Affiliates, solicit, assist in soliciting, accept, facilitate the acceptance of the business of any person (i) to whom the Corporation or its Affiliates has supplied goods or services at any time prior to the Date of Termination, or (ii) to whom the Corporation or any of its Affiliates has offered to supply goods or services prior to the Date of Termination, or (iii) to whom the Corporation or any of its Affiliates has provided details of the terms on which it would or might be willing to supply goods or services prior to the Date of Termination, or (iv) with whom the Corporation or any of its Affiliates has had any negotiations or discussions regarding the possible supply of goods or services prior to the Date of Termination.

6.5 Non-Solicitation of Employees

          The Executive hereby agrees that he will not during the Restricted Period, either on his own behalf or in conjunction with or on behalf of any other person, directly or indirectly, except on behalf of or with the prior written consent of the Corporation or its Affiliates, (a) induce or solicit any person who was employed by the Corporation or by any of its Affiliates to leave such employment; or (b) hire or accept into employment or otherwise engage or use the services of any person who was so employed within the immediately preceding six months. Notwithstanding the foregoing, the general advertisement of open positions, not targeted at any individual, shall not be a violation of this provision.

6.6 Non-interference with Suppliers

          The Executive hereby agrees that he will not during the Restricted Period, either on his own behalf or in conjunction with or on behalf of any other person, directly or indirectly, interfere, seek to interfere, induce and/or incite another person to interfere, or take steps to interfere with the continuance of supplies (or the terms relating to such supplies) from any suppliers who have been supplying products, materials or services to the Corporation or any of its Affiliates at any time during the term of this Agreement.

6.7 Applicability to Affiliates or Purchasers

          The obligations undertaken by the Executive pursuant to this Article 6 may be enforced directly against the Executive by any Affiliate of the Corporation or any purchaser from the Corporation of all or any part of its business, to the extent applicable by their terms to such Affiliate or such purchased business, and shall, with respect to each Affiliate of the Corporation or such purchased business, constitute a separate and distinct covenant and the invalidity or unenforceability of any such covenant shall not affect the validity or enforceability of the covenant in favour of the Corporation or any other Affiliate of the Corporation or any such purchaser. If for any reason any of the obligations of the Executive pursuant to this Article 6 cannot be directly enforced by an Affiliate or purchaser as contemplated hereby, the Executive acknowledges that such obligations may be enforced by the Corporation on behalf of such Affiliate or purchaser, as the case may be.

6.8 Provisions in the Event of Breach

          The Executive agrees that, in the event of any actual or threatened breach by the Executive of any of the covenants or agreements contained in this Article 6, without prejudice to any and all other rights and recourses of the Corporation, the Corporation shall have the right to enforce the terms and provisions thereof by means of compelling specific performance and/or by means of injunction (including, without limitation, provisional, interlocutory and permanent). In addition, and without restriction to the foregoing, in the event of a breach by the Executive of any of the covenants or agreements contained in this Article 6, any payments otherwise payable to the Executive as severance pay pursuant to the provisions of Section 5.8(c)(iii) hereof shall be deemed to have been forfeited in their entirety by the Executive and the running of the Non-

Disclosure Period and Restricted Period shall be stayed and shall recommence upon the date the Executive ceases to be in breach thereof, whether voluntarily or by injunction.

6.9 Disclosure

          During the term of this Agreement, the Executive shall promptly disclose to the Board full information concerning any interest, direct or indirect, of the Executive (whether as owner, shareholder, partner, lender or other investor, director, officer, employee, consultant or otherwise) or his spouse or child under the age of majority in any business which is reasonably known to the Executive to purchase or otherwise obtain services or products from, or to sell or otherwise provide services or products to the Corporation or to any of its Affiliates or to any of their respective suppliers or customers.

          During the Non-Disclosure Period and the Restricted Period, the Executive shall inform any prospective employer of the existence of this Agreement and the obligations which it imposes upon the Executive under Sections 6.1, 6.2, 6.3, 6.4, 6.5 and 6.6.

6.10 Merger Transactions

          The Executive shall not, during the term of this Agreement and during the Restricted Period, solicit, initiate or encourage proposals or offers from, or provide information relating to the Corporation or any of its Affiliates to, any person in connection with or relating to any proposed acquisition or disposition of all or any material part of the issued and outstanding Common Shares or other securities of the Corporation or any of its Affiliates, or any proposed amalgamation, merger, sale of all or any material part of the assets of the Corporation or any of its Affiliates, take-over bid, reorganization, recapitalization, liquidation, winding-up, or other business combination or any similar transaction involving the Corporation or any of its Affiliates, without in each case the consent of the Board.

6.11 Consulting Services after Date of Termination

          Notwithstanding the foregoing restrictions of this Article 6, the Executive may provide consulting services to any person after the date of termination and within the Prohibited Area subject to his obligations under Article 6 and provided furthermore that the Executive shall not become an employee of or enter into an employment agreement with a Restricted Business relating to the Prohibited Area during the Restricted Period.

6.12 Return of Materials

          All files, forms, brochures, books, materials, written correspondence, memoranda, documents, manuals, computer disks, software products and lists (including financial and other information and lists of customers, suppliers, products and prices) pertaining to the Corporation or to any of its Affiliates and containing Confidential Information which may come into the possession or control of the Executive shall at all times remain the property of the Corporation or such Affiliate, as the case may be. Upon termination of the Executive’s employment hereunder for any reason, the Executive agrees to immediately return all such property of the Corporation

or of any of its Affiliates in the possession of the Executive or directly or indirectly under the control of the Executive and to destroy all electronic copies thereof. The Executive agrees not to make, for his personal or business use or that of any other person, reproductions or copies of any such property or other property of the Corporation or of any of its Affiliates.

ARTICLE 7
GENERAL

7.1 Reasonableness of Restrictions and Covenants

          The Executive hereby confirms and agrees that the covenants and restrictions pertaining to the Executive contained in this Agreement, including, without limitation, those contained in Article 6, are reasonable and valid and hereby further acknowledges and agrees that the Corporation and its Affiliates would suffer irreparable injury in the event of any breach by the Executive of his obligations under any such covenant or restriction. Accordingly, the Executive hereby acknowledges and agrees that damages would be an inadequate remedy at law in connection with any such breach and that the Corporation and its Affiliates shall therefore be entitled, in addition to any other right or remedy which they may have at law, in equity or otherwise, to temporary and permanent injunctive relief enjoining and restraining the Executive from any such breach.

7.2 Amendments and Waivers

          No amendment or waiver of any provision of this Agreement shall be binding on any party unless consented to in writing by such party. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

7.3 Successors and Assigns

          This Agreement shall enure to the benefit of and shall be binding on and enforceable by and against the heirs, executors, administrators and legal personal representatives of the Executive and the successors and permitted assigns of the Corporation. This Agreement is personal to the Executive and none of his rights may be assigned, made subject to a security interest or otherwise disposed of or encumbered, nor may any of his obligations be delegated or transferred, except as permitted in writing by the Board, or in accordance with the written policies, governance procedures and management practices of the Corporation, if any, as approved by the Board from time to time.

7.4 Notices

       (a) Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered or sent in person, by courier, by registered mail, charges prepaid, or by fax in the case of the Corporation and by electronic mail in the case of the Executive, addressed as follows:

	(i)		If to the Executive: 111, rue Vinet Montréal, Québec H3J 2W2
			Email: rgar1234@gmail.com
	(ii)		If to the Corporation: AbitibiBowater Inc. 1155 Metcalfe Street Suite 800 Montréal, Québec H3B 5H2
			Attention: Chief Legal Officer Fax number: 514-394-3644

     (b) Any such notice or other communication shall be deemed to have been given and received on the day on which it was delivered or transmitted (or, if such day is not a Business Day or if delivery or transmission is made on a Business Day after 5:00 p.m. at the place of receipt, then on the next following Business Day) or, if mailed, on the third (3^rd) Business Day following the date of mailing; provided, however, that if at the time of mailing or within three (3) Business Days thereafter there is or occurs a labour dispute or other event which might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered or transmitted by any aforesaid permitted means of communication.

     (c) Any party may at any time change its address for service from time to time by giving notice to the other parties in accordance with this Section 7.4.

7.5 Entire Agreement

          This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral. There are no conditions, covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or otherwise, relating to the subject matter hereof except as provided herein.

7.6 Rules and Policies

          In addition to this Agreement, all written rules and policies of the Corporation adopted by the Board from time to time apply to the Executive except to the extent that they are inconsistent with the express provisions of this Agreement, in which case such provisions will prevail.

7.7 Governing Law

          This Agreement shall be interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of Quebec and the federal laws of Canada applicable in that province, without regard to the principles of conflict of laws.

7.8 Acknowledgements

          The Executive acknowledges that:

	(a)		the Executive has had sufficient time to review and consider this Agreement thoroughly;
	(b)		the Executive has read and understands the terms of this Agreement and the Executive’s obligations hereunder;
	(c)		the Executive has been given an opportunity to obtain independent legal advice, or such other advice as the Executive may desire, concerning the interpretation and effect of this Agreement; and
	(d)		this Agreement is entered into voluntarily and without any pressure.

7.9 Counterparts

          This Agreement and all documents contemplated by or delivered under or in connection with this Agreement may be executed and delivered in any number of counterparts, with the same effect as if all parties had signed and delivered the same document, and all counterparts shall be construed together to be an original and will constitute one and the same agreement.

7.10 Language

          The parties have requested that this Agreement be drawn up in the English Language. Les parties ont demandé que ce contrat soit rédigé en anglais.

          IN WITNESS WHEREOF this Agreement has been executed by the parties as of the date first above written.

		ABITIBIBOWATER INC.
		By		/s/ Sarah Nash   Sarah Nash
				Chair of the Human Resources and Compensation/Nominating and Governance Committee
				/s/ Richard Garneau   Richard Garneau