
                         EXHIBIT 10.3.2
                          MODIFICATION
                               OF
               EMPLOYMENT AND SEVERANCE AGREEMENTS



     THIS AGREEMENT is made and entered into as of this 21st  day
of April 1992, by and between Bowater Incorporated, a Delaware
corporation having a mailing address of One Parklands Drive, P.O.
Box 4012, Darien, Connecticut 06820-1412, (the "Corporation"),
and R. D. McDonough of 25 East Point Lane, Old Greenwich,
Connecticut 06780, (the "Executive").

     WHEREAS, the Corporation now employs the Executive as Senior
Vice President - Finance and Chief Financial Officer and
effective July 1, 1992, will employ the Executive as Vice
Chairman and Chief Financial Officer pursuant to an Employment
Agreement dated March 1, 1989, and amended August 23, 1989, (the
"Employment Agreement") and a Severance Agreement dated March 1,
1989, and amended August 23, 1989, (the "Severance Agreement");
and

     WHEREAS, the Executive and the Corporation wish to continue
the Executive's employment as Vice Chairman and Chief Financial
Officer until the Corporation's 1993 Annual Meeting and
thereafter as Vice Chairman until a specified and agreed upon
date, whereupon the Executive will retire from the employment of
the Corporation and be entitled to receive certain benefits;

     NOW, THEREFORE, the parties hereto agree that the Employment
Agreement and the Severance Agreement shall be modified in the
following respects:

     1.   Employment Agreement.  The Employment Agreement is
hereby modified as follows:

     (a)  Term.  Section 2 of the Employment Agreement is amended
          to read in its entirety as follows:

          "2. Term.

               (a)  Subject to the provisions of subparagraph (b)
               of this Section 2, the term of this Agreement,
               having begun on March 1, 1989, shall continue from
               the date of this Modification until June 1, 1994,
               unless earlier terminated by the Corporation for
               'Cause' or by the Executive for other than 'Good
               Reason' as those terms are defined in the
               Severance Agreement.

               (b)  Notwithstanding Section 2(a), the term of
               this Agreement shall end upon the death of the
               Executive and shall be suspended following the


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               inability of the Executive to perform his duties
               properly, whether by reason of ill-health,
               accident or other cause, for a period of one
               hundred and eighty (180) consecutive days or for
               periods totaling one hundred and eighty (180) days
               occurring within any twelve (12) consecutive
               calendar months, and shall remain suspended for so
               long as the Executive's condition qualifies him
               for benefits under the Corporation's Long Term
               Disability Insurance Program and for credit for
               years of service under the Bowater Incorporated
               Employees' Retirement Plan (the 'Plan'), but not
               beyond the earlier of (i) the end of the
               Executive's period of disability or
               the Executive's 'Normal Retirement Date', as that
                         term is defined in the Plan."

     (b)  Position and Duties.     Section 3 of the Employment
          Agreement is amended to read as follows:

          3.   Position and Duties.  Until July 1, 1992, the 
               Executive shall be employed as Senior Vice
               President - Finance and Chief Financial Officer of
               the Corporation.  Thereafter, until the
               Corporation's 1993 Annual Meeting, the Executive
               shall be employed as Vice Chairman and Chief
               Financial Officer of the Corporation.  Thereafter
               and until the termination of this Agreement, the
               Executive shall be employed as Vice Chairman.  In
               each of these capacities, the Executive shall have
               the duties and responsibilities customarily
               attendant to that office, provided that the
               Executive shall undertake such other and further
               assignments and responsibilities of at least
               comparable status as the Board of Directors may
               direct.  The Executive shall diligently and
               faithfully devote his full working time and best
               efforts to the performance of the services under
               this Agreement and to the furtherance of the best
               interests of the Corporation."

     (c)  Place of Employment.  Section 4 of the Employment
          Agreement is amended to read as follows:

          "4.  Place of Employment.  The Executive will be
          employed at the Corporation's offices (or at suitable
          facilities  provided by the Corporation) in, or with a
          ten (10) mile radius of the City of Darien,
          Connecticut, (or such other place as the Corporation
          and the Executive mutually agree upon)."

     (d)  Severance Pay.  Section 8 of the Employment Agreement
           is amended to read as follows:


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         "8. Terminal Leave of Absence. If the Executive's
          rendering of services hereunder is involuntarily
          terminated for any reason other than those set forth in
          Section 2 (b) hereof, then unless the Executive shall
          have terminated this Agreement for other than 'Good
          Reason' or the Corporation shall have terminated the
          Executive for 'Cause' (as those terms are defined in
          the Severance Agreement), the effective date of such
          termination shall be June 1, 1994, and the Executive
          shall be on a terminal paid leave of absence from the
          date the Corporation notifies the Executive his
          services are no longer required through June 1, 1994. 
          The Corporation shall pay to the Executive in equal
          monthly installments annual compensation during any
          such leave of absence (pro rated for any period less
          than a year) equal to the Executive's annual base
          salary on the date the Executive's services are
          terminated, plus the greater of (i) an amount equal to
          the bonus the Executive would have received under the
          Corporation's bonus plan for the year in which the
          Executive's services are terminated, had the Executive
          continued to render services to the Corporation at the
          same level of performance, at the same level of salary
          and in the same position as immediately preceding the
          termination of his services; or (ii) the bonus received
          by the Executive for the year preceding the year in
          which the Executive's services are terminated.  The
          Executive's entitlement to compensation, benefits or
          payments under the Corporation's health, accident, life
          insurance, retirement, stock option or incentive,
          savings and bonus (but not long term disability) plans,
          policies or arrangements shall not, except as otherwise
          required by law or regulation, be affected by the
          Executive's leave of absence status and shall continue
          to be governed by the applicable provisions of such
          plans as though the Executive had continued to render
          services in the active employment of the Corporation to
          the date or event (such as the Executive's death) that
          otherwise ends the term of this Agreement. 
          Specifically, the period of any terminal leave of
          absence is hereby designated as a "leave of absence
          with the consent of the Participant's Employer" which
          is intended to be included within the definition of
          "Continuous Employment" in the Supplemental Benefit
          Plan for Designated Employees of Bowater Incorporated
          and Affiliated Companies as Amended and Restated
          Effective August 22, 1990, (the "Supplemental Benefit
          Plan") and compensation paid during any terminal leave
          of absence is intended to be included within the
          definition of "Earnings" in the Supplemental Benefit
          Plan (without regard to whether such time is credited
          for benefit accrual purposes under the Bowater
          Incorporated Employee Retirement Plan or such
          compensation is includable within that Plan's


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          definition of "Compensation").  In lieu hereof, at his
          election, the Executive shall be entitled to the
          benefits of the Severance Agreement of even date
          between the Corporation and the Executive, if
          termination occurs prior to the commencement of the
          Executive's terminal leave of absence (if any) pursuant
          hereto and in a manner and at a time when such
          Severance Agreement is applicable.

     (e)  Ratification.  In all respects, except as herein
          provided, the Employment Agreement is hereby ratified
          and confirmed.

     2.   Severance Agreement.  The Severance Agreement is hereby
modified as follows:

     (a)  Term.   Section 2 of the Severance Agreement is hereby
          amended to read as follows:

     "2.  Term of Agreement

          The term of this Agreement, having begun on March 1,
          1989, shall extend to June 1, 1994, or the earlier
          termination of the Executive's rendering of services to
          the Corporation pursuant to the Employment Agreement as
          modified hereby; provided, however, that if the
          Corporation terminates the Executive's Employment
          Agreement for Cause (as defined herein) or the
          Executive terminates his Employment Agreement with the
          Corporation for other than Good Reason (as defined
          herein), then in either case this Agreement shall
          terminate upon the termination of the Executive's
          Employment Agreement."

     (b)  Termination.  The first paragraph of Section 3 of the
          Severance Agreement is hereby amended to read as
          follows:

          "If a Change in Control of the Corporation shall have
          occurred and, during the term of this Agreement, the
          Executive's employment by the Corporation is terminated
          for any reason other than his death, the expiration of
          the Executive's Employment Agreement, by the
          Corporation for Cause or by the Executive without Good
          Reason, the Executive shall be under no further
          obligation to perform services for the Corporation and
          shall be entitled to receive the following payments:"

     (c)  Ratification.  In all respects, except as herein
          provided, the Severance Agreement is hereby ratified
          and confirmed.

     3.  Expenses of Successful Contest.  The Corporation shall
pay or reimburse the Executive for all costs, including



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reasonable attorneys fees and expenses of either litigation or
arbitration, incurred by the Executive in successfully contesting
or disputing any termination of his employment or in seeking to
obtain or enforce any right or benefit provided by his Employment
Agreement, his Severance Agreement or this Modification thereof.

     4.  Benefit and Eligibility Confirmation.  This instrument
confirms that if the Executive survives to June 1, 1994, and his
Employment Agreement has not been terminated in a manner
permitted therein prior to that date, he shall be eligible at
that time to retire from the employment of the Corporation with
fifteen (15) years of "Continuous Employment" and an aggregate
annual benefit under the Supplemental Benefit Plan (from which
there shall be deducted "Other Benefits", as defined in that
Plan) of not less than $175,000.00.  Any post-retirement increase
in retirement benefits payable to retired Supplemental Benefit
Plan Participants effected by the Corporation shall inure to the
benefit of the Executive and any post-retirement increase in the
benefits which are described as "Other Benefits" in the
Supplemental Benefit Plan shall be excluded from the amount of
"Other Benefits" to be deducted from the cash benefit payable to
the Executive under the Supplemental Benefit Plan.  This
instrument further confirms that if the Executive's Employment
Agreement is terminated at any time by his death, the Executive's
surviving Spouse (as defined in the Supplemental Benefit Plan)
shall be entitled to the sixty (60%) percent Spouse's Pre-
Retirement Death Benefit as provided in the Supplemental Benefit
Plan, determined by reference to the greater of (i) the
Executive's aggregate annual benefit amount recited above, or
(ii) the benefit projected to his Normal Retirement Date.  The
determination of the Corporation's Executive Committee of the
Executive's eligibility upon retirement at the time herein
provided (as well as his Spouse's eligibility upon his death) to
receive benefits from the Supplemental Benefit Plan is hereby
confirmed.  The Human Resources and Compensation Committee of the
Corporation's Board of Directors has determined that terminal
leave taken pursuant to the Employment Agreement as herein
modified will not interrupt or terminate employment for purposes
of determining the Executive's continued eligibility to exercise
options and or rights awarded pursuant to the Corporation's 1984,
1988 or 1992 Stock Option and Stock Incentive Plans.     That
determination is hereby confirmed.

     5. Upon the Executive's retirement (at the completion of his
terminal leave of absence, if any) the Executive, his heirs,
executors and administrators shall be granted the longest period
permissible within which to exercise the rights granted to the
Executive pursuant to the Corporation's 1984, 1988 and 1992 Stock
Incentive Plans consistent with applicable law, regulation,
Corporation policy and practice, and provisions of the relevant
plans and awards.


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     IN WITNESS WHEREOF, the Corporation and the Executive have
executed this Agreement as of the day and year first above
written.

                                   BOWATER INCORPORATED




/s/ P. A. Temple                 By /s/ A. P. Gammie             
Witness                             Its



/s/ P. A. Temple                    /s/ R. D. McDonough           
Witness                             Executive


