Resolute Forest Products Severance Policy for Chief Executive Officer and Direct Reports

resolute

Forest Products

Corporate Policy Human Resources

Severance Policy - Chief Executive Officer and Direct Reports

This Policy provides an eligible Executive with financial support in the event that his employment is terminated under circumstances entitling the eligible Executive to severance pay and benefits, as provided in this Policy.

This Policy is effective August 1, 2012.

Ill. Eligible Employees

This Policy applies to the Chief Executive Officer and his direct reports in Job Grades 43 and above, determined at the time the termination is announced ("Eligible Executive"). An employee who is not a direct report of the Chief Executive Officer at the time his termination is announced is not covered by this Policy.

Except for the terminations noted below, severance pay and benefits under this Policy will be payable to an Eligible Executive for a Company-triggered termination or if an Eligible Executive voluntarily terminates his employment with the Company for "good reason" within 12 months after a "change in control" of the Company. Refer to the attached Appendix for a definition of "change in control" and "good reason." An Eligible Executive covered by U.S. Section 409A must be required to provide written notice to the Company of the existence of the condition constituting good reason within a period not to exceed 90 days of the initial existence of the condition. Upon the Eligible Executive's written notice, the Company will have a period of 30 days during which it may remedy the condition and not be required to pay the severance amount.

Terminations under the following circumstances are not eligible for severance pay and benefits under this Policy:

If the employment of an Eligible Executive other than the Senior Vice President of Human Resources is being terminated, the Chair of the Board or Chief Executive Officer and the Senior Vice President of Human Resources must approve the termination before any announcement of the termination can be made. In the case of a termination of employment of the Senior Vice President of Human Resources, the Chair of the Board and the Chief Executive Officer must approve the termination before any announcement of the termination can be made.

Eligible Executives will be informed of the decision to terminate their employment in a face to face meeting with the Chief Executive Officer (or the Chair of the Board in the case of the Chief Executive Officer) and a senior Human Resources professional, and will be given a standard letter setting out the terms and conditions of the severance package.

Eligible Executives will be entitled to severance pay calculated as described below. The severance package will comply with all obligations of notice, termination and severance pay under applicable legislation and any common law (Civil Code in Quebec), and entitlements to pay in lieu of reasonable notice. Subject to the minimums and maximums below, severance pay will be based on the following criteria:

As a condition to the receipt of severance pay and benefits under this Policy, a terminating Executive must execute and not revoke a Waiver and Release Agreement in a form acceptable to the Company. For Canadian Eligible Executives, only severance pay amounts that exceed statutory requirements are conditioned on execution of a Waiver and Release Agreement that is not later revoked. The period for considering the Waiver and Release Agreement and related period of revocation will be provided in the notice of termination.

Severance pay for Eligible Executives subject to U.S. Code Section 409A will be paid in the form of a lump sum payment as soon as practicable after an Eligible Executive signs the Waiver and Release Agreement and the seven (7) day period for revoking the Agreement expires, but in no event later than 45 days following the end of the year in which the Executive is terminated. The Eligible Executive will be given up to 45 days, as the Company determines, from the date of termination to review and consider the Waiver and Release Agreement.

Severance pay for Eligible Executives subject to Canadian tax will be paid in the form of a lump sum payment, provided that in Ontario, the first eight (8) weeks of severance will be paid in the form of salary continuance, with full benefits and pension coverage, both subject to usual cost sharing arrangements.

For the avoidance of doubt, there will be no compounding effect between the statutory requirements and the severance pay offered by the Company.

As a condition to receiving severance pay and benefits under this Policy, the Eligible Executive must execute a Non-Compete Agreement in a form acceptable to the Company.

Severed Executives need to observe at all times the rules governing the protection of the Company's confidential information, before, on and after their termination of employment date. Payment of severance pay and the availability of related benefits will cease if an Eligible Executive discloses or improperly uses such confidential information. The Company will be entitled to seek recovery of any prior severance pay previously made to the Eligible Executive and/or seek any equitable relief.

Eligibility for an Incentive Award for the year in which the Eligible Executive's employment terminates and for the prior year (in the event of termination after the performance year and before payment) will be governed by the provisions of the applicable incentive plan. Eligibility to other cash recognition, non-recurring or multi-year incentive awards will cease as of an Executive's termination of employment date, unless the governing plan documents provide otherwise.

If the Eligible Executive has formerly received equity-based compensation awards, the Senior Vice President of Human Resources (or the Chief Executive Officer in the event of termination of the Senior Vice President of Human Resources) must provide notice of such Executive's termination date to the Director of Corporate Compensation, so that the third party administrator of the Company equity-based compensation plans can be advised on a timely basis. Any such awards will be governed by the provisions of the applicable award agreements and equity­ based compensation plans.

Any earned but unused vacation time will be paid in a lump sum shortly after the termination of employment date by the Eligible Executive. Current vacation time cannot be taken after the last worked day by the Eligible Executive and no further vacation pay will accrue after the termination of employment date.

The Company will make available career transition and outplacement counseling through an outside firm chosen by the Company. All severed Executives who receive severance pay should be encouraged to take advantage of these services in a timely manner.

Although the Executive has the choice whether to participate in the career transition and outplacement counseling program, an Executive who refuses to participate eliminates his right to any Company provided benefit related to career transition and outplacement counseling. In such cases, the Executive should also be reminded about his legal obligation to mitigate any income loss arising from the termination of employment.

All benefits, including pension accruals (defined benefit or defined contribution) cease on the last day of work.

For severed Canadian Executives hired before 1996, subject to a maximum defined by tax rules, Revenue Canada allows a tax-deferred transfer of a portion of the severance pay to one's registered retirement savings plan ("RRSP") as a retiring allowance.

For any Canadian Eligible Executive, a portion of the Severance Pay can be transferred to the Eligible Executive's RRSP as a retiring allowance, subject to the RRSP deduction limit available according to the Executive's notice of assessment and upon presentation of written evidence of such RRSP deduction limit by the Executive to the Company.

An Executive wanting to take advantage of these possibilities must submit the relevant tax forms prior to any direct transfer being made to the financial institution holding his RRSP.

Upon termination of employment, an Eligible Executive's medical and dental benefits, if any, will cease as of the last day of the calendar month in which the termination occurs (the "Benefit

Termination Date"), unless the governing plan documents provide otherwise. The Eligible Executive will be entitled to continue his medical and dental coverage after the Benefit Termination Date as required by U.S. law under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Eligible Executives who elect to continue coverage through COBRA will be obligated to pay the full cost of the coverage, plus a two percent (2%) administrative charge.

All other Company benefits for an Eligible Executive (including, but not limited to, 401(k), life insurance, disability coverage, etc.) will cease as of an Executive's termination of employment date, unless the governing plan documents provide otherwise. All pay and other benefits (except benefits under this Policy) under any such plan, policy or arrangement of the Company that is payable on account of the Executive's termination of employment will be paid according to the terms of those established policies, plans and arrangements. Severance pay under this Policy will not be considered in the calculation of retirement plan benefits under any Company plan.

All materials and Company property including, but not limited to, computers and peripherals, records, files, telephone calling cards, building or parking access passes, blackberries, electronic devices, cellular phones, personal digital assistants (PDAs) and Company credit cards must be returned upon termination of employment. Employee data, strategic plans, financial information, customer lists or data, trademarks, patents and the like are Company property and must also be returned and must remain strictly confidential. Any questions about what other information is considered confidential should be addressed by the severed Executive to the Executive's superior and/or the Legal Department.

The Board of Directors may approve deviations from this policy upon recommendation of the Human Resources and Compensation/Nominating and Governance Committee of the Board.

Eligible Executives do not have any vested right to severance pay and other related benefits, and the Company reserves the right in its sole discretion to amend or terminate this Policy at any time, in a writing signed by the Human Resources and Compensation/Nominating and Governance Committee of the Board of Directors.

Notwithstanding anything herein to the contrary, the Company may not reduce the protection offered pursuant to this Policy without providing to the Chief Executive Officer and his direct reports in Job Grades 43 and above then in office 12 months prior written notice of any such reduction. Any reduction in the protection offered pursuant to this Policy will be ineffective and may not be applied to an Eligible Executive before the expiry of a 12-month notice.

In the event of a change in control, in addition to the foregoing prior written notice requirement, the Company may not reduce the protection offered pursuant to this Policy to the Chief Executive Officer and his direct reports in Job Grades 43 and above in office on the effective date of the change in control, for any severance pay and benefits that may be offered to such officers upon an eligible termination that occurs during the 24-month period that begins on the effective date of the change in control. In other words, any reduction for severance pay and benefits payable upon an eligible termination following a change in control will be ineffective and may not be applied to an eligible termination that occurs during this 24-month period by the Eligible Executive. Any such reductions shall only be effective for an eligible termination that occurs after the foregoing 24-month period.

Except for cases where a termination of employment has been properly approved and administered in accordance to the Company guidelines, it is strictly forbidden for anyone to make verbal or written representations to future, current or past Executives about possible future severance entitlements. It is also forbidden to set pre-determined levels of severance pay and other related benefits in any conversations or documents related to the hire, transfer or re-assignment of any Eligible Executive, unless formally approved by the Human Resources and Compensation/Nominating and Governance Committee of the Board of Directors.

An Eligible Executive will be required to return to the Company any severance and related benefits payment, or portion thereof, made by mistake of fact or law, and the Company shall have all remedies available at law for the recovery of such amounts, including the right to offset such amounts from any future amounts payable to the severed Executive by the Company in relation to his employment or the termination of his employment with the Company.

Without limiting the generality of the foregoing, the Company may offset and deduct any amount which the severed Executive is required to return to the Company, from any lump sum payable hereunder, or from any amount owed to the Eligible Executive pursuant to any short-term

incentive plan, long-term incentive plan, deferred compensation arrangements, other compensation programs, or any supplemental pension plan. Any such offset from a plan, arrangement or program that provides for deferred compensation subject to Code Section 409A shall comply with the rules and limitations for offsets under Treasury Regulation Section 1.409A- 3U)(4)(xiii).

Severed Executives need to display the highest personal and professional standards at all times, prior and after their termination of employment date. Any improper personal or professional conduct such as, without limitation, unlawful behaviour, theft, fraud, misrepresentation, harassment, disparagement, defamation or speaking negatively of the Company, its personnel, its products and services, its customers, its suppliers, and any such conduct shall be sanctioned with the loss or reduction of severance pay and other related benefits.

Severance pay and other related benefits offered by the Company are the maximum made available in the event of involuntary termination of employment. To the extent that a federal, provincial, state or local law mandates the Company to make a payment to an Eligible Executive because of termination of employment or in accordance with a plant/work location closing law, the severance pay and other related benefits under this Policy will be reduced by the amount of such mandated payment(s). Similarly, in the event that a decision from the court of competent jurisdiction would result in a monetary award to a severed Executive, such monetary award would reduce the amount of severance pay under this Policy.

Notwithstanding anything contained hereunder, severance pay comes from the general funds of the Company and is not secured by a trust agreement or any other financial instrument (such as a letter of credit).

The Severance Pay payable under this policy shall not be subject to anticipation, alienation, pledge, sale, transfer, assignment, garnishment, attachment, execution or encumbrance of any kind and any attempt to do so shall be void, except as required by law.

This severance Policy will be governed and construed in accordance with the law applicable in the state or province where the severed Executive reported to work on his last worked day. except where pre.-.empted by federal law.

For Eligible Executives subject to U.S. tax, it is intended that payments and benefits under this Policy be exempt from the provisions of section 409A of the Internal Revenue Code and Treasury regulations or other guidance thereundec This Poficy will be interpreted and administered in a manner consistent with this intent, and, if either party determines that any provision would cause payments and benefits under this Policy to be subject to but fail to comply with U.S. Section 409A, the parties will cooperate in preparing an amendment to comply with U.S. Section 409A (which amendment may be retroactive to the extent permitted under U.S. Section 409A).

The severance compensation provided by under this Policy constitutes an unfunded compensation arrangement for a member of a select group of the Company's management and any exemptions under ERISA, as applicable to such an arrangement, will be applicable to thls Policy.

Approved by:

Richard R Evans

Chair of the Board of Directors

This document is issued for guidance and information. It should not be construed as creating any obligation on the part of Resolute Forest Products. Resolute Forest Products reserves the right to modify this document at any time. This document is gender neutral and the masculine form is used only to facilitate its reading.

Adopted December 9, 2010 Amended August l, 2012

Appendix

For purposes of the Severance Policy, the following shall apply:

(3) any transaction or series of transactions, whether by way of reconstruction, reorganization, consolidation, amalgamation, arrangement, merger, transfer, sale or otherwise, whereby assets of Resolute Forest Products Inc. or any subsidiary become the property of any other Person (other than a subsidiary of Resolute Forest Products Inc.) if such assets which become the property of any other person have a fair market value (net of the fair market value of any then existing liabilities of Resolute Forest Products Inc. assumed by such other Person as part of the same transaction) equal to 50% or more of the Market Capitalization of Resolute Forest Products Inc. immediately before such transaction; or

For purposes of the foregoing definition, the following terms have the following meanings:

(A) "Market Capitalization of Resolute Forest Products Inc." at any time means the product of (i) the number of outstanding common shares of Resolute Forest Products Inc. at that time, and (ii) the average of the closing prices for the common shares of Resolute Forest Products Inc. on the principal securities exchange (in terms of volume of trading) on which the common shares of Resolute Forest Products Inc. are listed at that time for each of the last 10 business days prior to such time on which the common shares of Resolute Forest Products Inc. traded on such securities exchange.

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

(C) "Voting Shares" means any securities of Resolute Forest Products Inc. ordinarily carrying the right to vote at elections of directors.

Notwithstanding the foregoing, the following events do not constitute a change in control for purposes of this Policy: the Company's emergence from creditor protection on the Emergence Date; any and all related corporate restructuring transactions that occur coincident with or following emergence; the change in the Company's Board of Directors coincident with emergence; any change in shareholders coincident with emergence; and any other transactions coincident with or following emergence provided for in the plan of reorganization and related Canadian plan of arrangement that would otherwise constitute a change in control.