THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Bowater Incorporated (BOW)

4/12/2006 Proxy Information

Mr. Sawchuk served as acting President and Chief Executive Officer of Avenor Inc., a forest products company, from November 1997 until its acquisition by Bowater, Inc. in July 1998.

Company director L. Jacques Mˇnard is the chairman of the board of directors of BMO Nesbitt Burns and president of its affiliate BMO Financial Group, Quˇbec. BMO Nesbitt Burns was a member of the initial purchasers syndicate for BowaterÕs June 2003 private placement of an aggregate principal amount of $400 million of 6.5% Senior Notes due 2013 and a member of the underwriters syndicate for BowaterÕs March 2004 public offering of an aggregate principal amount of $250 million of Floating Rate Senior Notes due 2010. The principal amount of notes allotted to BMO Nesbitt Burns in these transactions was $32.0 million and $17.5 million, respectively, and BMO Nesbitt Burns received an initial purchasersÕ or underwritersÕ discount of $400,000 and $262,500, respectively, in these transactions. In addition, BMO Nesbitt Burns is assisting Bowater with the sale of certain of its Canadian assets. Although the terms of the engagement have not yet been finalized, Bowater anticipates paying BMO Nesbitt Burns a customary fee if the sale is consummated. The Bank of Montreal, an affiliate of BMO Nesbitt Burns, is one of the creditors under the Bowater Incorporated revolving credit agreement. At December 31, 2005, the Bank of MontrealÕs commitments under the revolving credit agreement were $55.0 million. Mr. Mˇnard did not receive any portion of BMO Nesbitt BurnsÕ or the Bank of MontrealÕs fees as direct compensation and benefited from these transactions only to the extent that BMO Nesbitt Burns and the Bank of Montreal, as entities, benefited. Bowater believes that its arrangements with BMO Nesbitt Burns and the Bank of Montreal are on terms as favorable as could be obtained from unrelated parties.

Company director Bruce W. Van Saun is Vice Chairman and Chief Financial Officer of The Bank of New York Company Inc. The Bank of New York is the registrar of BowaterÕs common stock and is the trustee on various debt and pension obligations of Bowater. The Bank of New York was a member of the initial purchasers syndicate for BowaterÕs June 2003 private placement of an aggregate principal amount of $400 million of 6.5% Senior Notes due 2013 and a member of the underwriters syndicate for BowaterÕs March 2004 public offering of an aggregate principal amount of $250 million of Floating Rate Senior Notes due 2010. The principal amount of notes allotted to The Bank of New York in these transactions was $17.3 million and $10.3 million, respectively, and The Bank of New York received an initial purchasersÕ or underwritersÕ discount of $216,650 and $154,688, respectively, in these transactions. The Bank of New York is one of the creditors under the Bowater Incorporated revolving credit agreement. At December 31, 2005, the bankÕs commitments under the revolving credit agreement were $25.0 million. Mr. Van Saun did not receive any portion of The Bank of New YorkÕs fees as direct compensation and benefited from these transactions only to the extent that The Bank of New York, as an entity, benefited. Bowater believes that its arrangements with bank are on terms as favorable as could be obtained from unrelated parties.

4/10/2006 8K Information

Mr. Nemirow has been Chairman of Bowater Incorporated since 1996. He previously served as Chief Executive Officer from 1995 thru April 2006.

4/6/2005 Proxy Information

Company director L. Jacques Mˇnard is the chairman of the board of directors of BMO Nesbitt Burns and president of its affiliate BMO Financial Group, Quˇbec. BMO Nesbitt Burns was a member of the initial purchasers syndicate for BowaterÕs June 2003 private placement of an aggregate principal amount of $400 million of 6.5% Senior Notes due 2013 and a member of the underwriters syndicate for BowaterÕs March 2004 public offering of an aggregate principal amount of $250 million of Floating Rate Senior Notes due 2010. The principal amount of notes allotted to BMO Nesbitt Burns in these transactions was $32.0 million and $17.5 million, respectively, and BMO received an initial purchasersÕ or underwritersÕ discount of $400,000 and $262,500, respectively, in these transactions. The Bank of Montreal, an affiliate of BMO Nesbitt Burns, is one of the creditors under the Bowater Incorporated revolving credit agreement. At December 31, 2004, the Bank of MontrealÕs commitments under the revolving credit agreement were $55.0 million, and on that date the Bank of MontrealÕs share of the outstanding balance was $4.8 million. Mr. Mˇnard did not receive any portion of BMO Nesbitt BurnsÕ or the Bank of MontrealÕs fees as direct compensation and benefited from these transactions only to the extent that BMO Nesbitt Burns and the Bank of Montreal, as entities, benefited. Bowater believes that its arrangements with BMO Nesbitt Burns and the Bank of Montreal are on terms as favorable as could be obtained from unrelated parties.

3/23/2004 Proxy Information

Francis J. Aguilar and Arthur R. Sawchuk served on BowaterÕs Human Resources and Compensation Committee during the entirety of 2003. Richard Barth served on the committee until his retirement from the board. Togo D. West, Jr. began serving in November 2003. Mr. Sawchuk served as acting President and Chief Executive Officer of Avenor Inc., a forest products company, from November 1997 until its acquisition by Bowater in July 1998. None of the members of the Committee has served as officers of Bowater, and none has any interlocking relationships, as defined by SEC regulations.

Fidelity Management Trust Company (ŅFidelity ManagementÓ), under trust agreements between it and Bowater or BowaterÕs affiliate (the ŅFidelity AgreementsÓ), provides trustee services and investment management services to qualified retirement plans maintained by Bowater and its affiliates. In addition, pursuant to the Fidelity Agreements, Fidelity Institutional Retirement Services Company (ŅFIRSCOÓ), a company affiliated with Fidelity Management, provides administrative record-keeping services to these plans. Fidelity Management and FIRSCO are subsidiaries of FMR Corp. During 2003, Bowater paid these entities approximately $572,000 as a result of this relationship. Bowater expects that similar amounts will be paid in the future. FMR Corp. reported in a Schedule 13G that it had sole dispositive power with respect to 4,385,090 shares of Common Stock at December 31, 2003, and sole voting power with respect to 133,710 of these shares, and that Fidelity Management beneficially owned 106,910 of these shares of Common Stock as a result of its serving as an investment manager of institutional accounts. Bowater believes that its arrangements with these entities are on terms as favorable as could be obtained from a non-shareholder.

Pursuant to an investment management and participation agreement, both dated July 1, 1997 (the ŅWellington AgreementÓ), Wellington Trust Company, NA (ŅWellington TrustÓ) provides investment management services to a collective investment fund of which three qualified pension plans (through a master trust) sponsored by Bowater and its subsidiaries are participants. Pursuant to the terms of the Wellington Agreement, Wellington Trust is paid by the trustee of BowaterÕs benefit plans a fee for each calendar quarter based on the average of the asset values of the accounts managed by Wellington Trust. The Wellington Agreement generally continues in effect until terminated by Bowater or Wellington Trust on fifteen daysÕ notice. For services provided in 2003, Bowater paid Wellington Trust approximately $261,000. Bowater expects that similar amounts will be paid in the future. As of December 31, 2003, Wellington Management Company, LLP, a registered investment adviser and the parent of Wellington Trust, reported on a Schedule 13G that it had shared dispositive power with respect to 5,692,342 shares of Common Stock and shared voting power with respect to 3,892,782 shares of Common Stock. The Schedule 13G reported that the clients of Wellington Management Company, LLP have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds of the sale of, such securities. Bowater believes that its arrangements with Wellington Trust are on terms as favorable as could be obtained from an unrelated party.

Company director L. Jacques Mˇnard is the chairman of the board of directors of BMO Nesbitt Burns and president of its affiliate BMO Financial Group, Quˇbec. Bowater engaged BMO Nesbitt Burns as its financial advisor with respect to the sale of four non-strategic sawmills and certain timberlands located in Canada in 2003. Bowater paid investment banking fees of approximately $159,000 associated with these transactions to BMO Nesbitt Burns. In addition, BMO Nesbitt Burns was a member of the initial purchasers syndicate for BowaterÕs June 2003 private placement of an aggregate principal amount of $400 million of 6.5% Senior Notes due 2013 and a member of the underwriters syndicate for BowaterÕs March 2004 public offering of an aggregate principal amount of $250 million of Floating Rate Senior Notes due 2010. The principal amount of notes allotted to BMO Nesbitt Burns in these transactions was $32.0 million and $17.5 million, respectively, and BMO received an initial purchasersÕ or underwritersÕ discount of $400,000 and $262,500, respectively, in these transactions. The Bank of Montreal, an affiliate of BMO Nesbitt Burns, is one of the creditors under the Bowater Incorporated revolving credit agreement, BowaterÕs $100 million term loan, and BowaterÕs 364-day revolving credit facility. At December 31, 2003, the Bank of MontrealÕs commitments under the revolving credit agreement, term loan and 364-day revolving credit facility were $43.8 million, $10.0 million and $20.0 million, respectively, and on that date the Bank of MontrealÕs share of the outstanding balance was $3.4 million under the revolving credit agreement and $10.0 million under the term loan; there was no outstanding balance on that date under the 364-day revolving credit facility. Mr. Mˇnard did not receive any portion of BMO Nesbitt BurnsÕ or the Bank of MontrealÕs fees as direct compensation and benefited from these transactions only to the extent that BMO Nesbitt Burns and the Bank of Montreal, as entities, benefited. Bowater believes that its arrangements with BMO Nesbitt Burns and the Bank of Montreal are on terms as favorable as could be obtained from unrelated parties.

A Schedule 13G dated December 31, 2003 and filed with the SEC on February 12, 2004 by J.P. Morgan Chase & Co. on behalf of itself and certain of its subsidiaries indicates that it was the beneficial owner of 5.0% of BowaterÕs common stock on December 31, 2003. JP Morgan Securities, Inc., an affiliate of J.P. Morgan Chase & Co., was a member of the initial purchasers syndicate for BowaterÕs June 2003 private placement of an aggregate principal amount of $400 million of 6.5% Senior Notes due 2013 and a member of the underwriters syndicate for BowaterÕs March 2004 public offering of an aggregate principal amount of $250 million of Floating Rate Senior Notes due 2010. The principal amount of notes allotted to JP Morgan Securities, Inc. in these transactions was $80.0 million and $62.5 million, respectively, and JP Morgan Securities, Inc. received an initial purchasersÕ or underwritersÕ discount of $1.0 million and $937,500, respectively, in these transactions. JP Morgan Chase Bank, an affiliate of J.P. Morgan Chase & Co., is one of the creditors under the Bowater Incorporated revolving credit agreement and BowaterÕs $100 million term loan. At December 31, 2003, JP Morgan Chase BankÕs commitments under the revolving credit agreement and term loan were $59.4 million and $6.9 million, respectively, and on that date JP Morgan Chase BankÕs share of the outstanding balance was $4.6 million and $6.9 million, respectively.

In addition, J.P. Morgan Investment Management Inc. (ŅJP Morgan InvestmentÓ), an affiliate of J.P. Morgan Chase & Co., provided investment management services to two collective investment funds of which three qualified pension plans (through a master trust) sponsored by Bowater and its subsidiaries are participants during 2003, and it will continue to provide investment management services to one such fund in 2004. Pursuant to the terms of the investment manager agreements with respect to the funds, JP Morgan Investment is paid by the trustee of BowaterÕs benefit plans a fee for each calendar quarter based on the average of the asset values of the accounts managed by JP Morgan Investment. The continuing investment manager agreement generally continues in effect until terminated by either party on fifteen daysÕ notice. For services provided in 2003, Bowater paid JP Morgan Investment approximately $436,000. Of this, approximately $163,000 relates to services that will continue in 2004, and Bowater expects that similar amounts will be paid in the future. Bowater believes that its arrangements with JP Morgan Securities, Inc., JP Morgan Chase Bank and J.P. Morgan Investment Management Inc. are on terms as favorable as could be obtained from unrelated parties.

3/21/2003 Proxy Information

Fidelity Management Trust Company (ŅFidelity ManagementÓ), under trust agreements between it and Bowater or BowaterÕs affiliate (the ŅFidelity AgreementsÓ), provides trustee services and investment management services to qualified retirement plans maintained by Bowater and its affiliates. In addition, pursuant to the Fidelity Agreements, Fidelity Institutional Retirement Services Company (ŅFIRSCOÓ), a company affiliated with Fidelity Management, provides administrative record-keeping services to these plans. Fidelity Management and FIRSCO are subsidiaries of FMR Corp. During 2002, Bowater paid these entities approximately $439,980 as a result of this relationship. Bowater expects that similar amounts will be paid in the future. FMR Corp. reported in a Schedule 13G that it had sole dispositive power with respect to 3,247,778 shares of Common Stock at December 31, 2002, and sole voting power with respect to 119,888 of these shares, and that Fidelity Management beneficially owned 71,200 of these shares of Common Stock as a result of its serving as an investment manager of institutional accounts. Bowater believes that its arrangements with these entities are on terms as favorable as could be obtained from a non-shareholder.

Pursuant to an investment management and participation agreement, both dated July 1, 1997 (the ŅWellington AgreementÓ), Wellington Trust Company, NA (ŅWellington TrustÓ) provides investment management services to a collective investment fund of which three qualified pension plans sponsored by Bowater and its subsidiaries are participants. Pursuant to the terms of the Wellington Agreement, Wellington Trust is paid by the trustee of BowaterÕs benefit plans a fee for each calendar quarter based on the average of the asset values of the accounts managed by Wellington Trust. The Wellington Agreement generally continues in effect until terminated by Bowater or Wellington Trust on fifteen daysÕ notice. For services provided in 2002, Bowater paid Wellington Trust approximately $254,000. Bowater expects that similar amounts will be paid in the future. As of December 31, 2002, Wellington Management Company, LLP, a registered investment adviser and the parent of Wellington Trust, reported on a Schedule 13G that it had shared dispositive power with respect to 6,184,259 shares of Common Stock and shared voting power with respect to 4,668,941 shares of Common Stock. The Schedule 13G reported that the clients of Wellington Management Company, LLP have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds of the sale of, such securities. Bowater believes that its arrangements with Wellington Trust are on terms as favorable as could be obtained from an unrelated party.

In connection with the reduction of BowaterÕs workforce, Bowater solicited proposals for outplacement services. Spherion Corporation submitted the lowest cost proposal and is now providing outplacement services to former employees of Bowater. Bowater paid Spherion approximately $50,000 for these services in 2002 and expects to pay Spherion several times that amount in 2003, depending upon the need for the services by former employees. One of BowaterÕs directors, Ms. Hallman, is the President and Chief Executive Officer of Spherion. Bowater believes that its arrangements with Spherion are on terms as favorable as could be obtained from an unrelated party.

Bowater has engaged BMO Nesbitt Burns as its financial advisor with respect to the planned sale of four non-strategic sawmills and certain timberlands located in Canada. Bowater will pay investment banking fees associated with these transactions to BMO Nesbitt Burns until the transactions are consummated or until Bowater ends the engagement. Mr. Mˇnard, who is a director of Bowater, is the Chairman of the Board of Directors of BMO Nesbitt Burns, but will not receive any portion of BMO Nesbitt BurnsÕ fee as direct compensation and will benefit only to the extent that BMO Nesbitt Burns, as an entity, benefits. Bowater believes that its arrangements with BMO Nesbitt Burns are on terms as favorable as could be obtained from an unrelated party.