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                                                              [Draft -- 1/25/94]
                              BOWATER INCORPORATED
                          CERTIFICATE OF DESIGNATIONS
                                     OF THE
                     % SERIES C CUMULATIVE PREFERRED STOCK

                     Pursuant to Section 151 of the General
                    Corporation Law of the State of Delaware

                  BOWATER INCORPORATED, a corporation organized and existing
under the laws of the State of Delaware (the Corporation), hereby certifies that
the following resolution was duly adopted by the Board of Directors of the
Corporation (the Board of Directors) at a meeting duly called and held on
January 26, 1994 at which meeting a quorum of the members of the Board of
Directors was present and acting throughout, and was duly amended and
supplemented by the action of the Pricing Committee (the Pricing Committee) of
the Board of Directors, acting pursuant to authority delegated to the Pricing
Committee by the Board of Directors on October 21, 1993, at a meeting duly
called and held on [                ] at which meeting a quorum of the members
of the Pricing Committee was present and acting throughout.
 
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                                                                               2
                  RESOLVED that, pursuant to authority expressly vested in the
Board of Directors by the provisions of the Restated Certificate of
Incorporation of the Corporation (the Certificate), the Board of Directors
hereby provides for the issuance of a series of serial preferred stock of the
Corporation, par value $1.00 per share (all series of serial preferred stock of
the Corporation being hereinafter referred to collectively as the Preferred
Stock), to consist of [750,000] shares, and hereby fixes the powers,
designation, preferences and relative, participating, optional and other rights
of such series of Preferred Stock, and the qualifications, limitations and
restrictions thereof, as follows:
                  1. Designation; Ranking. (a) The designation of the series of
Preferred Stock created by this resolution shall be [     ]% Series C Cumulative
Preferred Stock(hereinafter called the Cumulative Preferred Stock), and the
number of shares constituting the Cumulative Preferred Stock is [750,000].
                  (b) Any shares of the Cumulative Preferred Stock that at any
time have been redeemed, purchased or otherwise acquired by the Corporation
shall, after such redemption, purchase or other acquisition, resume the status
of authorized and unissued shares of Preferred Stock without designation as to
series until such shares are once more designated as part of a particular series
by the Board of Directors.
 
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                  (c) The shares of Cumulative Preferred Stock will rank on a
parity, both as to payment of dividends and distribution of assets upon
liquidation, with the Corporation's LIBOR Preferred Stock, Series A, [and its
[     ]% PRIDES, Series B Convertible Preferred Stock,] as well as any Preferred
Stock issued in the future by the Corporation that by its terms ranks pari passu
with the shares of Cumulative Preferred Stock.
                  2. Dividends. The holders of record of the shares of
Cumulative Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available therefor, cash
dividends (Preferred Dividends) from the date of the initial issuance of the
shares of Cumulative Preferred Stock at the rate of [       ] percent of the
$100 liquidation preference per annum, payable quarterly in arrears on the 15th
day of January, April, July and October or, if any such date is not a business
day (as defined in paragraph 7 hereof), the Preferred Dividend due on such date
shall be payable on the next succeeding business day (each a Dividend Payment
Date). The first dividend period will be from the date of initial issuance of
the shares of Cumulative Preferred Stock to but excluding April 15, 1994 and
will be payable on April 15, 1994. Preferred Dividends will cease to accrue in
respect of the shares of Cumulative Preferred Stock on the date of their
redemption. Preferred Dividends will be payable to holders of record of the
Cumulative Preferred Stock as
 
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                                                                               4
they appear on the stock register of the Corporation on such record dates, not
less than 15 nor more than 60 days preceding the payment date thereof, as shall
be fixed by the Board of Directors. Preferred Dividends payable on shares of
Cumulative Preferred Stock for any period less than a full quarterly dividend
period (or, in the case of the first Preferred Dividend, from the date of
initial issuance of the shares of Cumulative Preferred Stock to the first
Dividend Payment Date) shall be computed on the basis of a 360-day year of
twelve 30-day months and the actual number of days elapsed in any period less
than one month. Preferred Dividends shall accrue on a daily basis (computed as
set forth in the immediately preceding sentence) whether or not there are funds
of the Corporation legally available for the payment of such dividends and
whether or not such Preferred Dividends are declared. Accrued but unpaid
Preferred Dividends shall cumulate as of the Dividend Payment Date on which they
first become payable, but no interest shall accrue on accumulated but unpaid
Preferred Dividends.
                  As long as shares of Cumulative Preferred Stock are
outstanding, no dividends (other than dividends payable in shares of, or
warrants, rights or options exercisable for or convertible into shares of, any
capital stock of the Corporation, including without limitation the Corporation's
common stock, $1.00 par value per share (Common Stock), ranking junior to the
shares of
 
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                                                                               5
Cumulative Preferred Stock as to the payment of dividends and the distribution
of assets upon liquidation (collectively, Junior Stock) and cash in lieu of
fractional shares in connection with any such dividend) will be paid or declared
in cash or otherwise, nor will any other distribution be made (other than a
distribution payable in Junior Stock and cash in lieu of fractional shares in
connection with any such distribution), on any Junior Stock unless (i) full
dividends on Preferred Stock that does not constitute Junior Stock (Parity
Preferred Stock) have been paid, or declared and set aside for payment, for all
dividend periods terminating on or prior to the date of such Junior Stock
dividend or distribution payment to the extent such dividends are cumulative;
(ii) dividends in full for the current quarterly dividend period have been paid,
or declared and set aside for payment, on all Parity Preferred Stock to the
extent such dividends are cumulative; (iii) the Corporation has paid or set
aside all amounts, if any, then or theretofore required to be paid or set aside
for all purchase, retirement, and sinking funds, if any, for any Parity
Preferred Stock; and (iv) the Corporation is not in default on any of its
obligations to redeem any Parity Preferred Stock.
                  As long as any shares of Cumulative Preferred Stock are
outstanding, no shares of Junior Stock may be purchased, redeemed, or otherwise
acquired by the Corporation or any of its subsidiaries (except in connection
with a reclassification or
 
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                                                                               6
exchange of any Junior Stock through the issuance of other Junior Stock (and
cash in lieu of fractional shares in connection therewith) or the purchase,
redemption, or other acquisition of any Junior Stock with any Junior Stock (and
cash in lieu of fractional shares in connection therewith)) nor may any funds be
set aside or made available for any sinking fund for the purchase, redemption or
acquisition of any Junior Stock unless: (i) full dividends on Parity Preferred
Stock have been paid, or declared and set aside for payment, for all dividend
periods terminating on or prior to the date of such purchase, redemption,
acquisition, setting aside or making available to the extent such dividends are
cumulative; (ii) dividends in full for the current quarterly dividend period
have been paid, or declared and set aside for payment, on all Parity Preferred
Stock to the extent such dividends are cumulative; (iii) the Corporation has
paid or set aside all amounts, if any, then or theretofore required to be paid
or set aside for all purchase, retirement, and sinking funds, if any, for any
Parity Preferred Stock; and (iv) the Corporation is not in default on any of its
obligations to redeem any Parity Preferred Stock.
                  As long as any shares of Cumulative Preferred Stock are
outstanding, dividends or other distributions may not be declared or paid on any
Parity Preferred Stock (other than dividends or other distributions payable in
Junior Stock and cash in lieu of fractional shares in connection therewith) and
the Corporation
 
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                                                                               7
may not purchase, redeem or otherwise acquire any Parity Preferred Stock (except
with any Junior Stock and cash in lieu of fractional shares in connection
therewith and except with the right, subject to clause (b) of this paragraph and
any similar requirement of any other Certificate of Designations for Preferred
Stock, to receive accrued and unpaid dividends), unless either: (a)(i) full
dividends on Parity Preferred Stock have been paid, or declared and set aside
for payment, for all dividend periods terminating on or prior to the date of
such Parity Preferred Stock dividend, distribution, redemption, purchase or
acquisition payment to the extent such dividends are cumulative; (ii) dividends
in full for the current quarterly dividend period have been paid, or declared
and set aside for payment, on all Parity Preferred Stock to the extent such
dividends are cumulative; (iii) the Corporation has paid or set aside all
amounts, if any, then or theretofore required to be paid or set aside for all
purchase, retirement, and sinking funds, if any, for any Parity Preferred Stock;
and (iv) the Corporation is not in default on any of its obligations to redeem
any Parity Preferred Stock; or (b) with respect to the declaration and payment
of dividends only, any such dividends are declared and paid pro rata so that the
amounts of any dividends declared and paid per share of Cumulative Preferred
Stock and each other share of Parity Preferred Stock will in all cases bear to
each other the same ratio that accrued and
 
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                                                                               8
unpaid dividends (including any accumulation with respect to unpaid dividends
for prior dividend periods, if such dividends are cumulative) per share of
Cumulative Preferred Stock and such other share of Parity Preferred Stock bear
to each other.
                  3. Redemption. The shares of Cumulative Preferred Stock are
not redeemable by the Corporation prior to [                     ], 1999. At any
time and from time to time on or after that date the Corporation will have the
right to redeem, in whole or in part, outstanding shares of Cumulative Preferred
Stock for $100 per share, plus accrued and unpaid dividends (whether or not
declared) to, but not including, the date fixed for redemption (other than
previously declared dividends payable to a holder of record as of a prior date).
Preferred Dividends will cease to accrue on the shares of Cumulative Preferred
Stock on the date fixed for their redemption (unless the Corporation defaults on
the payment of the redemption price). If fewer than all of the outstanding
shares of Cumulative Preferred Stock are to be called for redemption, shares of
Cumulative Preferred Stock to be called for redemption will be selected by the
Corporation from outstanding shares of Cumulative Preferred Stock not previously
called by lot or pro rata (as nearly as may be) or by any other method
determined by the Board of Directors in its sole discretion to be equitable. The
Corporation will provide notice of any call for redemption of shares of
Cumulative Preferred Stock
 
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                                                                               9
to holders of record of the shares of Cumulative Preferred Stock to be called
for redemption not less than 30 nor more than 60 days prior to the date fixed
for redemption. Any such notice will be provided by mail, sent to the holders of
record of the shares of Cumulative Preferred Stock to be called for redemption
at such holder's address as it appears on the stock register of the Corporation,
first class postage prepaid; provided, however, that failure to give such notice
or any defect therein shall not affect the validity of the proceeding for the
redemption of any shares of Cumulative Preferred Stock to be redeemed except as
to the holder to whom the Corporation has failed to give said notice or whose
notice was defective. On and after the redemption date, all rights of the
holders of the shares of Cumulative Preferred Stock called for redemption shall
terminate except the right to receive the redemption price (unless the
Corporation defaults on the payment of the redemption price). A public
announcement of any call for redemption will be made by the Corporation prior
to, or at the time of, the mailing of such notice of redemption. Each such
notice shall state, as appropriate, the following and may contain such other
information as the Corporation deems advisable:
                       (A) the redemption date;
                       (B) that all outstanding shares of Cumulative Preferred
     Stock are to be redeemed or, in the case of a redemption of fewer than all
     outstanding shares of Cumulative Preferred
 
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                                                                              10
     Stock, the number of such shares held by such holder to be redeemed;
                       (C) the place or places where certificates for such
     shares of Cumulative Preferred Stock are to be surrendered for redemption;
     and
                       (D) that dividends on the shares of Cumulative Preferred
     Stock to be redeemed shall cease to accrue on and after such redemption
     date (except as otherwise provided herein).
                  The Corporation's obligation to provide funds upon redemption
in accordance with this paragraph 3 shall be deemed fulfilled if, on or before a
redemption date, the Corporation shall deposit, with a bank or trust company, or
an affiliate of a bank or trust company, having an office or agency in New York,
New York and having a capital and surplus of at least $50,000,000 according to
its last published statement of condition, the redemption price for the shares
of Cumulative Preferred Stock to be redeemed as required by this paragraph 3, in
trust for the account of the holders of such shares of Cumulative Preferred
Stock to be redeemed (and so as to be and continue to be available therefor),
with irrevocable instructions and authority to such bank or trust company, or
affiliate thereof, to deliver such funds upon redemption of the shares of
Cumulative Preferred Stock so called for redemption. Any interest accrued on
such funds shall be paid to the Corporation from time to time. Any funds so
 
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deposited and unclaimed at the end of three years from such redemption date
shall be repaid and released to the Corporation, after which, subject to
applicable law, the holder or holders of such shares of Cumulative Preferred
Stock so called for redemption shall look only to the Corporation for payment of
the funds due in connection with the redemption of such shares of Cumulative
Preferred Stock.
                  Each holder of shares of Cumulative Preferred Stock called for
redemption must surrender the certificates evidencing such shares (properly
endorsed or assigned for transfer, if the Board of Directors shall so require
and the notice shall so state) to the Corporation at the place designated in the
notice of such redemption and will thereupon be entitled to receive any funds
payable pursuant to this paragraph 3, without interest, following such surrender
and on or following the date of such redemption. In case fewer than all the
shares represented by any such surrendered certificate are called for
redemption, a new certificate shall be issued at the expense of the Corporation
representing the unredeemed shares. If such notice of redemption shall have been
given, and funds equal to the redemption price of all redeemed shares of
Cumulative Preferred Stock shall have been irrevocably either (A) set aside by
the Corporation separate and apart from its other funds or assets in trust for
the account of
 
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                                                                              12
the holders of the shares to be redeemed (and so as to be and continue to be
available therefor) or (B) deposited with a bank or trust company or an
affiliate thereof as provided herein or the Corporation shall have made other
reasonable provision therefor, then notwithstanding that the certificates
evidencing any shares of Cumulative Preferred Stock so called for redemption
shall not have been surrendered, the shares represented thereby so called for
redemption shall be deemed no longer outstanding, Preferred Dividends with
respect to the shares so called for redemption shall cease to accrue on the date
fixed for redemption and all rights with respect to the shares so called for
redemption shall forthwith after such date cease and terminate, except for the
rights of the holders to funds, if any, payable pursuant to this paragraph 3
without interest upon surrender of their certificates therefor and except that
holders of shares of Cumulative Preferred Stock at the close of business on a
record date (preceding the redemption date) for any payment of Preferred
Dividends shall be entitled to receive the Preferred Dividend payable on such
shares on the corresponding Dividend Payment Date notwithstanding the redemption
of such shares following such record date and prior to such Dividend Payment
Date.
 
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                  4. Conversion. The holders of shares of Cumulative Preferred
Stock shall not have any rights to convert such shares into shares of any other
class or series of capital stock of the Corporation.
                  5. Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and
subject to the rights of the holders of any other series of Preferred Stock, the
holders of outstanding shares of Cumulative Preferred Stock are entitled to
receive the sum of $100 per share, plus an amount equal to any accrued and
unpaid dividends thereon, out of the assets of the Company available for
distribution to stockholders, before any distribution of assets is made to
holders of Junior Stock upon liquidation, dissolution, or winding up. If upon
any voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation, the assets of the Corporation are insufficient to permit the
payment of the full preferential amounts payable with respect to shares of
Cumulative Preferred Stock and all other series of Parity Preferred Stock, the
holders of shares of Cumulative Preferred Stock and of all other series of
Parity Preferred Stock will share ratably in any distribution of assets of the
Corporation in proportion to the full respective preferential amounts to which
they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of Cumulative
 
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Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Corporation. A consolidation or merger of the
Corporation with one or more corporations or a sale or transfer of substantially
all of the assets of the Corporation shall not be deemed to be a liquidation,
dissolution, or winding up of the Corporation.
                  6. Voting Rights. In the event that dividends on the shares of
Cumulative Preferred Stock or any other series of Preferred Stock shall be in
arrears and unpaid for six quarterly dividend periods, or if any other series of
Preferred Stock shall be entitled for any other reason to exercise voting
rights, separate from the Common Stock, to elect any Directors of the
Corporation (Preferred Stock Directors), the holders of the shares of Cumulative
Preferred Stock (voting separately as a class with holders of all other series
of Preferred Stock upon which like voting rights have been conferred and are
exercisable), with each share of Cumulative Preferred Stock entitled to one vote
on this and other matters in which Preferred Stock votes as a group, will be
entitled to vote for the election of two Preferred Stock Directors, such
Directors to be in addition to the number of Directors constituting the Board of
Directors immediately prior to the accrual of such right. Such right, when
vested, shall continue until all dividends in arrears on the shares of
Cumulative Preferred Stock and such other series of Preferred Stock shall have
 
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been paid in full and the right of any other series of Preferred Stock to
exercise voting rights, separate from the Common Stock, to elect any Preferred
Stock Directors shall terminate or have terminated, and, when so paid and such
termination occurs or has occurred, such right of the holders of the shares of
Cumulative Preferred Stock shall cease. Upon any termination of the aforesaid
voting right, subject to the requirements of the Delaware corporation law and
the Certificate, such Preferred Stock Directors shall cease to be Directors of
the Corporation and shall resign.
                  The Corporation will not, without the approval of the holders
of at least 66-2/3% of all the Cumulative Preferred Stock then outstanding: (i)
amend, alter, or repeal any of the provisions of the Certificate or the By-laws
of the Corporation so as to affect adversely the powers, preferences, or rights
of the holders of the Cumulative Preferred Stock then outstanding or reduce the
minimum time required for any notice to which only the holders of the Cumulative
Preferred Stock then outstanding may be entitled (an amendment of the
Certificate to authorize or create, or to increase the authorized amount of,
Junior Stock, Preferred Stock or any stock of any class ranking on a parity with
the Cumulative Preferred Stock shall be deemed not to affect adversely the
powers, preferences, or rights of the holders of the Cumulative Preferred
Stock); (ii) create any series of Preferred Stock
 
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ranking prior to the shares of Cumulative Preferred Stock as to payment of
dividends or the distribution of assets upon liquidation; (iii) authorize or
create, or increase the authorized amount of, any capital stock, or any security
convertible into capital stock, of any class ranking prior to the Cumulative
Preferred Stock as to payment of dividends or the distribution of assets upon
liquidation; or (iv) merge or consolidate with or into any other corporation,
unless each holder of the Cumulative Preferred Stock immediately preceding such
merger or consolidation shall receive or continue to hold in the resulting
corporation the same number of shares, with substantially the same rights and
preferences, as correspond to the Cumulative Preferred Stock so held.
                  As long as any shares of Cumulative Preferred Stock are
outstanding, the Corporation will not, without the approval of the holders of at
least a majority of the shares of Parity Preferred Stock then outstanding: (i)
increase the authorized amount of the Preferred Stock or (ii) create any class
or classes of capital stock ranking on a parity with the Parity Preferred Stock,
either as to payment of dividends or the distribution of assets upon
liquidation, and not existing on the date of this Certificate of Designations,
or create any stock, or other security, convertible into or exchangeable for or
evidencing the right to purchase any stock of such other class of capital stock
ranking on
 
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a parity with the Parity Preferred Stock, or increase the authorized number of
shares of any such other class of capital stock or amount of such other stock or
security.
                  Notwithstanding the provisions set forth in the preceding two
paragraphs, however, no such approval described therein of the holders of the
shares of Cumulative Preferred Stock shall be required if, at or prior to the
time when such amendment, alteration, or repeal is to take effect or when the
authorization, creation or increase of any such prior or parity stock or such
other stock or security is to be made, or when such consolidation or merger is
to take effect, as the case may be, provision is made for the redemption of all
shares of Cumulative Preferred Stock at the time outstanding.
                  7. Definitions. As used in this Certificate of Designations:
                         (i) the term business day shall mean any day other than
       a Saturday, a Sunday or a day on which commercial banking institutions in
       the City of New York, New York, or Atlanta, Georgia, are authorized or
       obligated by law or executive order to close; and
                         (ii) the term record date shall be such date as is from
       time to time fixed by the Board of Directors with respect to the receipt
       of dividends, the receipt of a
 
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       redemption price upon redemption or the taking of any action or exercise
       of any voting rights permitted hereby.
                  8. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
 
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                  IN WITNESS WHEREOF, Bowater Incorporated has caused this
Certificate of Designations to be signed by            , its           
and attested by            , its                  , this        day of , 1994.

                                     BOWATER INCORPORATED,
                                     by
[CORPORATE SEAL]
ATTEST:
by

