
                          EXHIBIT 10.6
                      EMPLOYMENT AGREEMENT

     THIS AGREEMENT, made this 20TH day of MAY, 1993, by and
between BOWATER INCORPORATED, a Delaware corporation having a
mailing address of ONE PARKLANDS DRIVE, DARIEN, CONNECTICUT
06820, (the "Corporation"), and ROBERT J. PASCAL of 49 LEEUWARDEN
ROAD, DARIEN, CONNECTICUT 06820 (the "Executive").
     WHEREAS, the Corporation desires to employ the Executive as
Vice President; President Communication Papers Group; and

     WHEREAS, the Executive is desirous of serving the Cor-
poration in such capacity;

     NOW, THEREFORE, the parties hereto agree as follows:

     1.   Employment. During the term of this Agreement the
Corporation agrees to continue to employ the Executive, and the
Executive agrees to continue in the employ of the Corporation, in
accordance with and subject to the provisions of this Agreement.

     2.  Term.

     (a)  Subject to the provisions of subparagraphs (b) and
          (c)of this Section 2, the term of this Agreement shall
          begin on the date hereof and shall continue thereafter
          until terminated by either party by written notice
          given to the other party at least thirty (30) days
          prior to the effective date of any such termination. 
          The effective date of the termination shall be the date
          stated in such notice, provided that if the Corporation
          specifies an effective date that is more than thirty
          (30) days following the date of such notice, the
          Executive may, upon thirty (30) days' written notice to
          the Corporation, accelerate the effective date of such
          termination.

     (b)  Notwithstanding Section 2(a), upon the occurrence of a
          Change in Control as defined in the Severance Agreement
          of even date between the Corporation and the Executive
          (the "Severance Agreement"), the term of this Agreement
          shall be deemed to continue until terminated, but in
          any event, for a period of not less than three (3)
          years following the date of the Change in control,
          unless such termination shall be at the Executive's
          election for other than "Good Reason" as that term is


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          defined in the Severance Agreement.

     (c)  Notwithstanding Section 2(a), the term of this
          Agreement shall end upon: (i) the death of the
          Executive; (ii) the 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; or (iii) the executives retirement on his early
          or normal retirement date.

     3.   Position and Duties.  Throughout the term hereof, the
Executive shall be employed as Vice President; President
Communication Papers Group of the Corporation, with 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.

     4.   Place of Employment.  The Executive will be employed at
the Corporation's offices in the City of Darien,
Connecticut or at such other place as the Corporation shall
designate from time to time, provided, however, that if the
Executive is transferred to another place of employment,
necessitating a change in his residence, the Executive shall be
entitled to financial assistance in accordance with the terms of
the Corporation's relocation policy then in effect.

5.   Compensation and Benefits.

     (a)  Base Salary.  The Corporation shall pay to the
          Executive a base salary at the annual rate of $213,000,
          payable in substantially equal periodic installments on
          the Corporation's regular payroll dates.  The
          Executive's base salary shall be reviewed at least
          annually and from time to time may be increased (or
          reduced, if such reduction is effected pursuant to
          across-the-board salary reductions similarly affecting
          all management personnel of the Corporation).

     (b)  Bonus Plan.  In addition to his base salary, the
          Executive-shall be entitled to receive a bonus under
          the Corporation's bonus plan in effect from time to
          time determined in the manner, at the time, and in the
          amounts set forth under such plan.

     (c)  Benefit Plans.  The Corporation shall make con-
          tributions on the Executive's behalf to the various
          benefit plans and programs of the corporation in which



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          the Executive is eligible to participate in accordance
          with the provisions thereof as in effect from time to
          time.

     (d)  Vacations.  The Executive shall be entitled to paid
          vacation, in keeping with the Corporation's policy as
          in effect from time to time, to be taken at such time
          or times as may be approved by the Corporation.

     (e)  Expenses.  The Corporation shall reimburse the
          Executive for all reasonable expenses properly
          incurred, and appropriately documented, by the
          Executive in connection with the business of the
          Corporation.

     (f)  Perquisites.  The Corporation shall make available to
          the Executive all perquisites to which he is entitled
          by virtue of his position.

     6.   Nondisclosure.  During and after the term of this
Agreement, the Executive shall not, without the written consent
of the Board of Directors of the Corporation, disclose or use
directly or indirectly, (except in the course of employment
hereunder and in furtherance of the business of the Corporation
or any of its subsidiaries and affiliates) any of the trade
secrets or other confidential information or proprietary data of
the Corporation or its subsidiaries or affiliates; provided,
however, that confidential information shall not include any
information known generally to the public (other than as a result
of unauthorized disclosure by the Executive) or any information
of a type not otherwise considered confidential by persons
engaged in the same or similar businesses.

     7.   Noncompetition.  During the term of this Agreement,and
for a period of one (1) year after the date the Executive's
employment terminates, the Executive shall not, without the prior
approval of the Board of Directors of the Corporation in the same
or a similar capacity engage in or invest in, or aid or assist
anyone else in the conduct of any business (other than the
businesses of the Corporation and its subsidiaries and
affiliates) which directly competes with the business of the
Corporation and its subsidiaries and affiliates as conducted
during the term hereof.  If any court of competent jurisdiction
shall determine that any of the provisions of this Section 7
shall not be enforceable because of the duration or scope
thereof, the parties hereto agree that said court shall have the
power to reduce the duration and scope of such provision to the
extent necessary to make it enforceable and this Agreement in its
reduced form shall be valid and enforceable to the extent
permitted by law.  The Executive acknowledges that the
Corporation's remedy at law for a breach by the Executive of the
provisions of this Section 7 will be inadequate.  Accordingly, in
the event of the breach or threatened breach by the Executive of
this Section 7, the Corporation shall be entitled to injunctive


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relief in addition to any other remedy it may have.

     8.   Severance Pay.  If the Executive's employment hereunder
is involuntarily terminated for any reason other than those set
forth in Section 2(c) hereof, then unless the Corporation shall
have terminated the Executive for "Cause", the Corporation shall
pay the Executive severance pay in the amount equal to thirty-six
(36) months of the Executive's base salary on the effective date
of the termination plus 1/12 of the amount of the last bonus paid
to the Executive under the Corporation's bonus plan applicable to
the Executive for each month in the period beginning on January 1
of the year in which the date of the termination occurs and
ending on the date of the termination and for each months' base
salary to which the Executive is entitled under this Section 8,
provided however, that any amount paid to the Executive for
services rendered subsequent to the thirtieth (30th) day
following the communication to the Executive of notice of
termination shall be deducted from the severance pay otherwise
due hereunder.  Such payment shall be made in a lump sum within
ten (10) business days following the effective date of the
termination.  The severance pay shall be in lieu of all other
compensation or payments of any kind relating to the termination
of the Executive's employment hereunder; provided that the
Executive's entitlement to compensation or payments under the
Corporation's retirement plans, stock option or incentive plans,
savings plans or bonus plans attributable to service rendered
prior to the effective date of the termination shall not be
affected by this clause and shall continue to be governed by the
applicable provisions of such plans; and further provided that 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 in a manner
and at a time when such Severance Agreement is applicable.  For
purposes of this Agreement, the term for "Cause" shall mean
because of gross negligence or willful misconduct by the
Executive either in the course of his employment hereunder or
which has a material adverse effect on the Corporation or the
Executive's ability to perform adequately and effectively his
duties hereunder.

      9.  Notices.  Any notices required or permitted to be given
under this Agreement shall be in writing and shall be deemed to
have been given when delivered or mailed, by registered or
certified mail, return receipt requested to the respective
addresses of the parties set forth above, or to such other
address as any party hereto shall designate to the other party in
writing pursuant to the terms of this Section 9 .

     10.  Severability.  The provisions of this Agreement are
severable, and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of any
other provision.

     11.  Governing Law.  This Agreement shall be governed by and


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interpreted in accordance with the substantive laws of the State
of Connecticut.
     12.   Supersedure. This Agreement shall cancel and supersede
all prior agreements relating to employment between the Executive
and the Corporation, except the Severance Agreement.

     13.   Waiver of Breach.  The waiver by a party of a breach
of any provision of this Agreement shall not operate or be
construed as a waiver of any prior or subsequent breach by any of
the parties hereto.

     14.   Binding Effect.  The terms of this Agreement shall be
binding upon and inure to the benefit of the successors and
assigns of the Corporation and the heirs, executors,
administrators and successors of the Executive, but this
Agreement may not be assigned by the Executive.


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


                                  BOWATER INCORPORATED
/s/ Susan R. Wasilko          By /s/ A. P. Gammie            
Witness                              Its




/s/ R. E. Gustafson                /s/ Robert J. Pascal          


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                       SEVERANCE AGREEMENT

     THIS AGREEMENT, made the 20TH day of MAY, 1993, by and
between BOWATER INCORPORATED, a Delaware corporation having a
mailing address of ONE PARKLANDS DRIVE, DARIEN, CONNECTICUT
06820, (the "Corporation"), and ROBERT J. PASCAL of 49 LEEUWARDEN
ROAD, DARIEN, CONNECTICUT 06820 (the "Executive").


     WHEREAS, the Corporation considers it essential to the best
interests of its shareholders to foster the continued employment
of key management personnel; and

     WHEREAS, the uncertainty attendant to a change in control of
the Corporation may result in the departure or distraction of
management personnel to the detriment of the Corporation and its
shareholders; and

     WHEREAS, the Board of Directors of the Corporation (the
"Board") has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Corporation's management, including Executive, to
their assigned duties in the event of a change in control of the
Corporation.

    NOW THEREFORE, it is hereby agreed as follows:

1.   DEFINITIONS

     The following terms when used herein shall have the meanings
assigned to them below:

     (a)  "Acquiring Person" shall mean any Person who is or
          becomes a "beneficial owner" (as defined in Rule 13d-3
          of the Securities Exchange Act of 1934, as amended (the
          "Exchange Act") of securities of the Corporation
          representing twenty percent (20%) or more of the
          combined voting power of the Corporation's then
          outstanding voting securities, unless such Person has
          filed Schedule 13G and all required amendments thereto
          with respect to its holdings and continues to hold such
          securities for investment in a manner qualifying such
          Person to utilize Schedule 13G for reporting of
          ownership.

     (b)  "Affiliate" and "Associate" shall have the respective
          meanings ascribed to such terms in Rule 12b-2 of the
          General Rules and Regulations under the Exchange Act,
          as in effect on the date hereof.


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    (c)  "Cause" shall mean and be limited to the Executive's
          gross negligence, willful misconduct or conviction of a
          felony, which negligence, misconduct or conviction has
          a demonstrable and material adverse effect upon the
          Corporation, provided that the Corporation shall have
          given the Executive written notice of the alleged
          negligence or misconduct and the Executive shall have
          failed to cure such negligence or misconduct within
          thirty (30) days after his receipt of such notice.  The
          Executive shall be deemed to have been terminated for
          Cause effective upon the effective date stated in a
          written notice of such termination delivered by the
          Corporation to the Executive and accompanied by a
          resolution duly adopted by the affirmative vote of not
          less than three-quarters (3/4) of the entire membership
          of the Board at a meeting of the Board (after
          reasonable notice to the Executive and an opportunity
          for the Executive, with his counsel present, to be
          heard before the Board) finding that, in the good faith
          opinion of the Board, the Executive was guilty of
          conduct constituting Cause hereunder and setting forth
          in reasonable detail the facts and circumstances
          claimed to provide the basis for the Executive's
          termination, provided that the effective date shall not
          be less than thirty (30) days from the date such notice
          is given.

     (d)  "Change in Control" of the Corporation shall be deemed
          to have occurred if:

          (i)  any Person is or becomes an Acquiring Person;

         (ii)  less than two-thirds (2/3) of the total membership
               of the Board shall be Continuing Directors; or

        (iii)  the shareholders of the Corporation shall approve
               a merger or consolidation of the Corporation or a
               plan of complete liquidation of the Corporation or
               an agreement for the sale or disposition by the
               Corporation of all or substantially all of the
               Corporation's assets.

     (e)  "Continuing Directors" shall mean any member of the
          Board who was a member of the Board prior to the date
          hereof, and any successor of a Continuing Director
          while such successor is a member of the Board who is
          not an Acquiring Person or an Affiliate or Associate of
          an Acquiring Person or of any such Affiliate or
          Associate and is recommended or elected to succeed the
          Continuing Director by a majority of the Continuing
          Directors.

     (f)  "Disability" shall mean the Executive's total and
          permanent disability as defined in the Corporation's


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          long term disability insurance policy covering the
          Executive immediately prior to the Change in Control.

     (g)  "Good Reason" shall mean:

          (i)  an adverse change in the Executive's status,
               duties or responsibilities as an executive of the
               Corporation as in effect immediately prior to the
               Change in Control;

         (ii)  failure of the Corporation to pay or provide the
               Executive in a timely fashion the salary or
               benefits to which he is entitled under any
               Employment Agreement between the Corporation and
               the Executive in effect on the date of the Change
               in Control, or under any benefit plans or policies
               in which the Executive was participating at the
               time of the Change in Control (including, without
               limitation ' any incentive, bonus, stock option,
               restricted stock, health, accident, disability,
               life insurance, thrift, vacation pay, deferred
               compensation and retirement plans or policies);

        (iii)  the reduction of the Executive's salary as in
               effect on the date of the Change in Control;

         (iv)  the taking of any action by the Corporation
               (including the elimination of a plan without
               providing substitutes therefor, the reduction of
               the Executive's awards thereunder or failure to
               continue the Executive's participation therein)
               that would substantially diminish the aggregate
               projected value of the Executive's awards or
               benefits under the Corporation's benefit plans or
               policies described in Section l(g)(ii) in which
               the Executive was participating at the time of the
               Change in Control;

          (v)  a failure by the Corporation to obtain from any
               successor the assent to this Agreement
               contemplated by Section 5 hereof; or

         (vi)  the relocation of the principal office at which
               the Executive is to perform his services on behalf
               of the Corporation to a location more than thirty-
               five (35) miles from its location immediately
               prior to the Change in Control or a substantial
               increase in the Executive's business travel
               obligations subsequent to the Change in Control.

          Any circumstance described in this Section l(g) shall
          constitute Good Reason even if such circumstance would
          not constitute a breach by the Corporation of the terms
          of the Employment Agreement between the Corporation and


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          the Executive in effect on the date of the Change in
          Control.  The Executive shall be deemed to have
          terminated his employment for Good Reason effective
          upon the effective date stated in a written notice of
          such termination given by him to the Corporation
          setting forth in reasonable detail the facts and
          circumstances claimed to provide the basis for
          termination, provided that the effective date may not
          precede, nor be more than sixty (60) days from, the
          date such notice is given.  The Executive's continued
          employment shall not constitute consent to, or a waiver
          of rights with respect to, any circumstance
          constituting Good Reason hereunder.

     (h)  "Normal Retirement Date" shall have the meaning given
          to such term in the Corporation's basic qualified
          pension plan in which the Executive is a participant as
          in effect on the date hereof or any successor or
          substitute plan adopted prior to a Change in Control.

     (i)  "Person" shall mean any individual, corporation,
          partnership, group, association or other "person" as
          such term is used in Section 13(d) and 14(d) of the
          Exchange Act.


2.   TERM OF AGREEMENT

     (a)  The term of this Agreement shall initially be for the
          period beginning on May 20, 1993 and ending on May 19,
          1996.  The term of this Agreement shall automatically
          be extended on May 20, 1994 until May 19, 1997 without
          further action by the parties, and shall be
          automatically extended by an additional year on each
          succeeding May 20, unless either the Corporation or the
          Executive shall have served notice upon the other party
          prior to such May 20 of its or his intention either
          that the term of this Agreement shall not be extended,
          or that the Executive's Employment Agreement is-
          terminated, provided,,however, that if a Change in
          Control of the Corporation shall occur during the term
          of this Agreement, this Agreement shall continue in
          effect until terminated but in any event for a period
          of not less than three (3) years from the date of the
          Change in Control.

     (b)  Notwithstanding Section 2(a), the term of this
          Agreement shall end upon the termination of the
          Executive's Employment if, prior to a Change in Control
          of the Corporation, the Executive's employment with the
          Corporation shall have terminated under the provisions
          of any Employment Agreement between the Corporation and
          the Executive then in effect.


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3.   COMPENSATION UPON CHANGE IN CONTROL FOLLOWED BY A
     TERMINATION

     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, his Disability, his retirement on his Normal
Retirement Date, 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:

     (a)  The Corporation shall pay to the Executive his full
          base salary through the effective date of the ter-
          mination within five (5) business days thereafter and
          all benefits and awards (including both the cash and
          stock components,) to which the Executive is entitled
          under any benefit plans or policies in which the
          Executive was a participant prior to the Change in
          Control, at the time such payments are due pursuant to
          the terms of such benefit plans or policies as in
          effect immediately prior to the Change in Control.

     (b)  At the election of the Executive, in addition to the
          entitlements set forth in Section 3(a) but in lieu of
          any payment to the Executive of any salary or severance
          payments or benefits to which the Executive would be
          entitled under the provisions of any Employment
          Agreement between the Corporation and the Executive
          then in effect, the Corporation shall pay to the
          Executive, in a lump sum not later than ten
          (10)business days following the effective date of the
          termination:

          (i)  an amount equal to three (3) times the Executive's
               annual base salary on the effective date of the
               termination or, if higher, immediately prior to
               the Change in Control;

         (ii)  an amount equal to three (3) times the greater of
               (x) the highest amount of the actual bonus awarded
               to the Executive in the five (5) fiscal years
               immediately preceding the year in which the Change
               in Control occurred and (y) an amount equal to the
               amount the Executive would have been awarded under
               the Corporation's bonus plan in effect immediately
               prior to the Change in Control for the fiscal year
               in which the Change in Control occurred 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 prior to the Change in Control;

        (iii)  an amount equal to three (3) times the greater of


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               (x) the largest annual contribution made by the
               Corporation to the Corporation's Savings Plan on
               the Executive's behalf during the five
               (5)fiscal years immediately preceding the year in
               which the Change in Control occurred and (y) an
               amount equal to the contribution the Corporation
               would have made to said Plan on the Executive's
               behalf for the fiscal year in which the Change in
               Control occurred had he participated in said Plan
               for the entire fiscal year, received a base salary
               equal to the salary he was receiving immediately
               prior to the Change in Control and had he elected
               to contribute to the Plan the same percentage of
               his base salary as he was contributing on said
               date; and

        (iv)   an amount equal to thirty percent (30%) of the
               Executive's annual base salary on the effective
               Date of the termination or, if higher, immediately
               prior to the Change in Control (as compensation
               for medical, life insurance and other benefits
               lost as a result of termination of the Executive's
               employment).

         (v)   For each full or partial month in the period
               beginning on January lst of the year in which the
               date of the termination occurs and ending on the
               date of the termination, one-twelfth of the
               greater of (x) the highest amount of the actual
               bonus awarded to the Executive in the five (5)
               fiscal years immediately preceding the year in
               which the Change in Control occurred-and (y) an
               amount equal to the amount the Executive would
               have been awarded under the Corporation's bonus
               plan in effect immediately prior to the Change in
               Control for the fiscal year in which the Change in
               Control occurred 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 prior to
               the Change in Control;

        (vi)   If a payment may be increased by reference to an
               alternate calculation which cannot be made by the
               time the payment is due, payment of the lesser,
               known amount shall be made when due, and if any
               additional amount becomes due, such additional
               amount shall be paid within ten (10)days after the
               information upon which calculation of such payment
               is dependent first becomes available.

               The amount of all payments due to the Executive
               pursuant to this Section 3(b) shall be reduced by
               1/36 for each full calendar month by which the


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               date which is three (3) years from the effective
               date of the Executive's termination extends beyond
               the Executive's Normal Retirement Date.

               Upon entering into this Agreement and for a period
               of fourteen (14) days following each anniversary
               of the date hereof (the "Election Period"), the
               Executive may, in writing, direct the Corporation
               to pay any amounts to which he is entitled under
               this Section 3(b) in equal annual installments
               (not to exceed ten (10) annual installments), with
               the first such installment payable within ten (10)
               business days of the effective date of the
               termination and each successive installment
               payable on the anniversary of the effective date
               of the termination or the next following business
               day if such date is not a business day (the
               "Deferred Payment Election").  A Deferred Payment
               Election, once made, cannot be revoked except
               during an Election Period; provided, however, no
               Deferred Payment Election can be made or revoked
               by the Executive during an Election Period that
               occurs after a Change in Control or at a time
               when, in the judgment of the Corporation, a change
               in control may occur within sixty (60) days of
               such Election Period.

     (c)  The Corporation shall pay or provide to the Executive
          or his widow or children as the case may be, such
          amounts and benefits as may be required so that the
          pension and other post-retirement benefits paid or made
          available to the Executive, his widow and his children
          are equal to those, if any, which would have been paid
          under the Corporation's Basic and Supplemental Pension
          (Benefit) Plans in effect immediately prior to the
          Change in Control, assuming the Executive continued in
          the employ of the Corporation at the same compensation
          until the third anniversary of the effective date of
          the termination of the Executive's employment or until
          his Normal Retirement Date, whichever is earlier. 
          Notwithstanding any conflicting restrictions in the
          Plans or the fact of the termination of the Executive's
          employment, until the Executive's Normal Retirement
          Date, the Executive or his widow and his children shall
          maintain a continuing right to receive the pension and
          other benefits under the above Plans with payments to
          begin upon retirement and to elect an imputed
          retirement on the Executive's 50th birthdate or any of
          his birthdates thereafter until his Normal Retirement
          Date, such election to be made by so notifying the
          Corporation within one (1) year after termination of
          his employment.


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     (d)  The Corporation shall pay for or provide the Executive
          individual out-placement assistance as offered by a
          member firm of the Association of Out-Placement
          Consulting Firms.

     (e)  If any payment or benefit to or for the benefit of the
          Executive in connection with a Change in Control of the
          Corporation or termination of the Executive's
          employment following a Change in Control of the
          Corporation (whether pursuant to the terms of this
          Agreement, or any other plan or arrangement or
          agreement with the Corporation, any Person whose
          actions result in a Change in Control of the Cor-
          poration or any Affiliate or Associate of the Cor-
          poration or any such Person) is subject to the Excise
          Tax (as hereinafter defined), the Corporation shall pay
          to the Executive an additional amount such that the
          total amount of all such payments and benefits
          (including payments made pursuant to this Section 3(e))
          net of the Excise Tax and all other applicable federal,
          state and local taxes shall equal the total amount of
          all such payments and benefits to which the Executive
          would have been entitled, but for this Section 3(e),
          net of all applicable, federal, state and local taxes
          except the Excise Tax.  For purposes of this Section
          3(e), the term "Excise Tax" shall mean the tax imposed
          by Section 4999 of the Internal Revenue Code of 1986
          (the "Code") and any similar tax that may hereafter be
          imposed.

          The amount of the payment to the Executive under
     this Section 3(e) shall be estimated by a nationally
     recognized firm of certified public accountants (other than
     the Corporation's independent auditors) based upon the
     following assumptions:

     (i)  all payments and benefits to or for the benefit of the
          Executive in connection with a Change in Control of the
          Corporation or termination of the Executive's
          employment following a Change in Control of the
          Corporation shall be deemed to be "parachute payments"
          within the meaning of Section 280G(b)(2) of the Code,
          and all "excess parachute payments" shall be deemed to
          be subject to the Excise Tax unless, in the opinion of
          tax counsel selected by the firm of certified public
          accountants charged with estimating the payment to the
          Executive under this Section 3(e), such payments or
          benefits are not subject to the Excise Tax; and

   (ii)   the Executive shall be deemed to pay federal, state and
          local taxes at the highest marginal rate of taxation
          for the applicable calendar year.

          The estimated amount of the payment due the Executive 


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     pursuant to this Section 3(e) shall be paid to the Executive
     in a lump sum not later than thirty (30) business days
     following the effective date of the termination.  In the
     event that the amount of the estimated payment is less than
     the amount actually due to the Executive under this Section
     3(e), the amount of any such shortfall shall be paid to the
     Executive within ten (10) days after the existence of the
     shortfall is discovered.

     (f)  The Executive shall not be required to mitigate the
          amount of any payment provided in this Section 3, nor
          shall any payment or benefit provided for in this
          Section 3 be offset by any compensation earned by the
          Executive as the result of employment by another
          employer, by retirement benefits, or by offset against
          any amount claimed to be owned by the Executive to the
          Corporation, or otherwise.

     (g)  If any payment to the Executive required by this
          Section 3 is not made within the time for such payment
          specified herein, the Corporation shall pay to the
          Executive interest on such payment at the legal rate
          payable from time to time upon judgments in the State
          of Connecticut from the date such payment is payable
          under the terms hereof until paid.


4.   EXECUTIVE'S EXPENSES

     The Corporation shall pay or reimburse the Executive for
all costs, including reasonable attorney's fees and expenses of
either litigation or arbitration, incurred by the Executive in
contesting or disputing any termination of his employment
following a Change in Control or in seeking to obtain or enforce
any right or benefit provided by this Agreement.


5.   BINDING AGREEMENT

     This Agreement shall inure to the benefit of and be
enforceable by the Executive, his heirs, executors, adminis-
trators, successors and assigns. This Agreement shall be binding
upon the Corporation, its successors and assigns.  The
Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the
Corporation expressly to assume and agree to perform this
Agreement in accordance with its terms.  The Corporation shall
obtain such assumption and agreement prior to the effectiveness
of any such succession.



<PAGE>



6.   NOTICE

     Any notices and all other communications provided for
herein shall be in writing and shall be deemed to have been duly
given when delivered or mailed, by certified or registered mail,
return receipt requested, postage prepaid addressed to the
respective addresses set forth on the first page of this
Agreement or to such other address as either party may have
furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon
receipt.  All notices to the Corporation shall be addressed to
the attention of the Board with a copy to each of the General
Counsel, the Vice President-Human Resources and Administration
and the Secretary of the Corporation.

7.   AMENDMENTS; WAIVERS

     No provision of this Agreement may be modified, waived
or discharged except in a writing specifically referred to such
provision and signed by the party against which enforcement of
such modification, waiver or discharge is sought.  No waiver by
either party hereto of the breach of any condition or provision
of this Agreement shall be deemed a waiver of any other condition
or provision at the same or any other time.


8.   GOVERNING LAW

     The validity, interpretation, construction and per-
formance of this Agreement shall be governed by the substantive
laws of the State of Connecticut.


9.   VALIDITY

     The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full
force and effect.


10.  ARBITRATION

     If the Executive so elects, any dispute or controversy
arising under or in connection with this Agreement shall be
settled exclusively by arbitration in the city nearest to the
Executive's principal residence (or, at the Executive's election,
in the city within the state in which the Executive's principal
residence is located nearest to such principal residence) which
has an office of the American Arbitration Association by one
arbitrator in accordance with the rules of the American
Arbitration Association then in effect.  Judgment may be entered
on the arbitrator's award in any court having jurisdiction.  The
Corporation hereby waives its right to contest the personal


<PAGE>


jurisdiction or venue of any court, federal or state, in an
action brought to enforce this Agreement or any award of an
arbitrator hereunder which action is brought in the jurisdiction
in which such arbitration was conducted, or, if no arbitration
was elected, in which arbitration could have been conducted
pursuant to this provision.

 11.  COUNTERPARTS

     This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.

                              BOWATER INCORPORATED
 
 /s/ Susan R. Wasilko        By/s/ A. P.Gammie            
Witness                        Its



 /s/ R. E. Gustafson           /s/Robert J. Pascal           
Witness


