UFS Domtar Corporation

  Employee Benefits and Perquisites

As part of a competitive total compensation program, we also offer our executives the ability to participate in customary employee benefit programs as outlined in the table below.  

12

Employment Agreements and Other Post-Termination Protections

In mid-2013, Domtar entered into an amended and restated employment agreement with Mr. Williams. Effective November 30, 2021, a second amended and restated agreement was entered in place of the 2013 agreement. Under the terms of Mr. Williams’ new employment agreement, Mr. Williams is entitled to a Change in Control bonus equal to the amount of $5,270,000 to be paid in three equal installments on each of the following dates: November 30, 2021, November 30, 2022 and Term End Date (June 30, 2023). Upon a termination of the Executive’s employment for any reason prior to the Term Date, any unpaid installment will be paid no later than 30 days after the date of such termination.  Additional material terms of the agreement with Mr. Williams are described in the section entitled “Employment Agreements and Potential Payments upon Termination or a Change in Control”.  

On January 16, 2022, Mr. Buron’s entered into a fixed term employment contract, from January 17, 2021 to March 1, 2024.  Mr. Buron’s duties and responsibilities will be consistent with that of the senior-most financial executive of the Company.  Under the contract, Domtar agreed to pay Mr. Buron a final gross sum of US$2,501,112, less statutory tax withholdings, to be paid in two equal installments as of January 16, 2022 and November 30, 2022, respectively.  The material terms of the new employment contract with Mr. Buron are described in the section entitled “Employment Agreements and Potential Payments upon Termination or a Change in Control.”  

In January 2014, the Corporation entered into an employment agreement with Mr. Garcia.  On January 19, 2021, the Corporation entered into a separation agreement and general release with Mr. Garcia in connection with his separation from employment with the Corporation effective January 4, 2021. The material terms of Mr. Garcia’s separation agreement are described in the section entitled “Employment Agreements and Potential Payments upon Termination or a Change in Control.”

On April 2, 2021, the Corporation entered into a separation agreement and general release with Mr. Jablonski in connection with his separation from employment with the Corporation effective April 2, 2021. The material terms of Mr. Jablonski’s separation agreement are described in the section entitled “Employment Agreements and Potential Payments upon Termination or a Change in Control.”  

Members of our Management Committee (other than Messrs. Williams and Buron, whose severance is governed by their respective employment agreements) are eligible to participate in Domtar’s Severance Program for Management Committee Members, which is a severance program intended to assure that members are treated fairly in the event their employment is terminated.  

This program is intended to:  

The benefits provided under the arrangements and plans described above are detailed and quantified under the heading “Employment Agreements and Potential Payments upon Termination or a Change in Control” later in this statement.  

Related Policies and Considerations

Forfeiture of Awards for Misconduct (“Clawback”)

If a participant in the Long-Term Incentive Plan knowingly or grossly negligently engages in financial reporting misconduct, then all awards in the 12 months prior to the date the misleading financial statements were issued, as well as any awards that vested based on the misleading financial statements, will be disgorged to the Corporation. In addition, the Corporation may cancel or reduce, or require a participant to forfeit and disgorge to the Corporation or reimburse the Corporation for, any awards granted or vested, and bonus granted or paid, and any gains earned or accrued, due to the exercise, vesting or settlement of awards or sale of any common stock, to the extent permitted or required by, or pursuant to any Corporation policy implemented as required by, applicable law, regulation or stock exchange rule as may from time to time be in effect.  

Timing of Equity Grants

The HRC’s practice was to make all annual equity award grants (other than new hire grants) once per year.  

Risk Assessment of Compensation Programs, Policies and Practices

The Corporation has conducted an assessment of its compensation programs, policies and practices for all employees, including the Named Executive Officers, relative to risk to determine whether they create a reasonable likelihood of a material adverse effect on the Corporation. Based on this assessment, which also considered the control environment and approval processes in place, the Corporation concluded that its compensation programs, policies and practices do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on the Corporation. The Corporation’s findings were reported to, and discussed by, the Advisory Human Resources Committee.  

13

EXECUTIVE COMPENSATION  

Summary Compensation Table and Narrative Disclosure

The table and footnotes below describe the total compensation paid or awarded to or earned by the Corporation’s Named Executive Officers (“NEOs”).  For the description of the role of each component within the total compensation package, see the description under the heading “Compensation Discussion and Analysis”.  

14

For purposes of this table, amounts paid in Canadian dollars were converted to U.S. dollars at the average prevailing spot exchange rate during 2021 (0.7976).  

(d)      This represents the amount paid for club membership dues pursuant to Mr.  Williams’ employment agreement.  

(e)    Represents amounts equal to 24 months of their respective salary at the time of termination pursuant to the separation agreements in place for Messrs. Garcia and Jablonski.

15

Grants of Plan-Based Awards Table

During 2021, the NEOs received the following types of plan-based awards:  

Annual Incentive Plan – Domtar’s AIP is an incentive plan based on achieving pre-established annual targets. For 2021, the award under the AIP was payable in cash (see “Compensation Discussion and Analysis – Performance Based Annual Bonuses” on page 7 of this statement).  

For each plan year, a specified percentage of each bonus award is based upon the performance objectives selected by the HRC for that plan year. Each performance objective has an associated threshold level that must be achieved for any of the bonus award associated with such objective to be paid. The maximum bonus award that could be paid under the plan framework to a NEO for any plan year is $5 million. The HRC may, in its sole discretion, reduce or eliminate the amount otherwise payable to a participant under the AIP. There is no payment under the plan for performance that does not meet the threshold level. The actual amount paid under the AIP for 2021 is set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.  

Omnibus Incentive Plan – The following equity awards were granted to current NEOs in 2021 under the Omnibus Incentive Plan:  

RSUs – RSUs were granted on February 23, 2021 under our Omnibus Incentive Plan to the NEOs.

PSUs – These awards were granted on February 23, 2021 under our Omnibus Incentive Plan.  

Stock Options – No stock options were granted to the NEOs in 2021 under the Omnibus Incentive Plan.

Outstanding Equity Awards at Fiscal Year-End Table

Due to the acquisition by Paper Excellence as of November 30, 2021, all outstanding equity awards were settled and paid in cash on December 13, 2021.  

16

Option Exercises and Stock Vested Table

17

(5)    Effective December 9, 2020, the DB SERP is closed to new membership.

DB SERP for Management Committee Members of Domtar (“DB SERP”). Some of the NEOs participate in the DB SERP, a defined benefit plan. The annual pension payable is equal to 2% of the best average earnings during any consecutive 60 months in the last 120 months for each year of credited service as a member of the Management Committee, less an offset based on entitlements from other pension plans of the Corporation (generally based on the assumption that maximum contributions have been made to tax-qualified plans in which the executive is eligible to participate). Earnings include base salary and annual cash bonuses (up to the lesser of 50% of previous year’s salary or 100% of target bonus). Effective December 9, 2020, the DB SERP is closed to new membership; however, NEOs participating in the DB SERP on or prior to that date will continue to accumulate benefits in accordance with its provisions.  

Executives may retire as early as age 55 and are eligible for an unreduced pension at age 62 provided they have completed two years of service as a member of the Management Committee (age 60 for Mr. Buron), with a 0.5% reduction for each calendar month that retirement precedes age 62 (0.25% reduction for each month that retirement precedes age 60 for Mr. Buron). Member benefits are fully vested after two years of membership in the DB SERP. Normal retirement age is 65. If an executive dies before commencement of his pension payments, a single lump sum payment equal to the actuarial equivalent of the benefits to which he would have been entitled had his employment terminated for a reason other than death will be paid to his estate.  

For a Canadian executive, the DB SERP pension is payable for life and guaranteed for a minimum of five years. Other forms of payment are available on an actuarially equivalent basis. A Canadian executive will continue to accrue credited service in the DB SERP if he is considered “disabled” under the Canadian Pension Plan. Benefits under the DB SERP will only be paid upon a disabled participant’s actual termination of employment. Benefits for Canadian members of the Management Committee under the DB SERP who are not U.S. tax payers are generally gradually funded when such member reaches age 60, up to the normal retirement age (currently age 65). Such funding is maintained through retirement only if the member actually retires at age 65 or above while being a member of the Management Committee; otherwise, amounts set aside for the member revert to the Corporation. In the event of termination within 12 months of a change of control, the member’s interest in the assets set aside vest. Otherwise, members will receive their benefits out of the general funds of the Corporation. For a U.S. executive, the present value of the DB SERP benefits will be paid in a lump sum upon retirement instead of a pension. Benefits under the DB SERP will only be paid upon a disabled participant’s actual termination of employment. U.S. executives will receive their benefits out of the general funds of the Corporation.  

18

Supplementary Pension Plan for Designated Managers of Domtar Inc. (“Canadian Supplementary Plan”). The annual pension payable under the Canadian Supplementary Plan is equal to 1.5% of the average of the Yearly Maximum Pensionable Earnings during the five years preceding the employee’s termination of employment, plus 2% of the employee’s best average earnings during any consecutive 60 months in the last 120 months prior to his termination of employment, in excess of the average Yearly Maximum Pensionable Earnings, multiplied by his years of credited service. This annual pension is reduced by the benefits payable under the Domtar Pension Plan for Non-Negotiated Employees (same benefits as the Canadian Supplementary Plan, but subject to the Canadian Income Tax Act limits). The Yearly Maximum Pensionable Earnings correspond to the maximum earnings on which an employee may contribute under the Quebec Pension Plan. Effective January 1, 2015, bonuses are limited to the lesser of 50% of previous year’s salary or 100% of target bonus; however, the best average earnings since January 1, 2015 cannot be less than such average determined as at December 31, 2014. These benefits are fully vested from age 55 and also vest upon earlier of death or involuntary termination. Mr. Buron is eligible to receive benefits under the Canadian Supplementary Plan with respect to his service prior to becoming a member of the Management Committee of Domtar Inc. in 2004.  

The Corporation has a securing arrangement through a letter of credit for benefits payable from the DB SERP and the Canadian Supplementary Plan for eligible Canadian executives who are not U.S. taxpayers. Mr. Buron is eligible for this coverage. The letter of credit will be used to pay eligible benefits in the event of failure of the employer to make payments.  

The Corporation cautions that the values reported in the Present Value of Accumulated Benefit column are theoretical and are calculated pursuant to SEC requirements. The change in pension value from year to year is subject to market volatility and does not represent the value that a named executive officer actually accrues under the Corporation’s retirement plans during any given year nor what he will receive at retirement, termination or death.  

Domtar U.S. Salaried Pension Plan (“U.S. Pension Plan”). The U.S. Pension Plan is a cash balance plan entirely funded by the Corporation. The plan was closed to new entrants on December 31, 2007. Under the U.S. Pension Plan, a percentage of the employee’s earnings is credited to his account each year, based on his age. In addition, the employee’s account is credited with an annual rate of interest based on the 30-year Treasury Constant Maturities rate published by the Federal Reserve Board. Benefits are fully vested in the employee after three years of service. Upon termination of employment or retirement, the account of the employee is converted into a pension using factors specified in the plan. The employee may instead elect a lump sum payment corresponding to the present value of the pension.

19

Nonqualified Deferred Compensation

The following table and narrative provide information on the nonqualified deferred compensation plans in which our NEOs participate. The table shows the 2021 account activity for each NEO and includes each executive’s contributions, company contributions, earnings, distributions and the aggregate balance of his total deferral account as of December 31, 2021. The aggregate balance includes the total personal contributions made (and not withdrawn) by each executive and the contributions made by the Corporation and predecessor companies over the career of each executive.  

Canadian executives’ accounts are credited with an amount equal to 11% of earnings, less the value of the benefit provided by the employer contributions under the Domtar Pension Plan for Non-Negotiated Employees (the “Canadian Pension Plan”), calculated based on the assumption that the executive has elected to contribute to the defined contribution option at the maximum allowable rate. A Canadian executive will continue to accrue benefits if he is considered “disabled” under the Canadian Pension Plan. Benefits under the DC SERP will only be paid upon a disabled participant’s actual termination of employment. A Canadian executive who retires after age 55 also has the option to receive his benefits over a 10-year period.  

The Corporation has a securing arrangement through a letter of credit for benefits payable from the DC SERP for eligible Canadian executives who are not U.S. taxpayers. Mr. Buron is eligible for this coverage. The letter of credit will be used to pay eligible benefits in the event of failure of the employer to make payments.  

For U.S. executives, the contribution formula under the DC SERP is the same as under the Domtar U.S. Salaried 401(k) Plan for a participant of the same age, without taking into account the tax limit applicable to tax qualified plans, less the employer contribution to the Domtar U.S. Salaried 401(k) Plan, calculated based on the assumption that the executive has elected to contribute to the Domtar U.S. Salaried 401(k) Plan at the maximum allowable rate.

For purposes of the DC SERP, “earnings” includes base salary and annual cash bonuses.  

Employment Agreements and Potential Payments upon Termination or a Change in Control

Severance Benefits

Mr. Williams.    Under the terms of Mr. Williams’ second amended and restated employment agreement, effective as of November 30, 2021, upon termination of Mr. Williams’ employment for Good Reason or due to death or disability, in each case, before the Term End Date, severance is to include:  accelerated vesting of any unvested portion of the Service-Based LTI; a pro-rated portion of any unearned Performance-Based LTI in respect of the CEO KPIs for the year in which the termination date occurs (based on actual performance); continued eligibility to earn the amounts related to the Successor KPIs, subject to achievement of such Successor KPIs in the relevant years (2024, 2025 and 2026); a prorated bonus for the year in which the Executive’s termination occurs (based on actual achievement); and if the termination date occurs after the end of a calendar year, any unpaid bonus that the Executive would have received for such calendar year; and reimbursement of health coverage premiums for 24 months following the termination date.  

Upon a termination of Mr. Williams’ employment as a result of the Term End Date, he shall be entitled to: reimbursement of health coverage premiums for 24 months following the Term End Date (or, if earlier, the date on which the Executive obtains coverage from another employer); and earn any unearned Performance-Based LTIP, subject to achievement of the CEO KPI in respect of fiscal year 2023 and applicable Successor KPIs.

20

Upon a termination of Mr. Williams’ employment by the Corporation for reasons other than death, disability, the Term End Date or cause (as defined in the agreement) or his breach of certain obligations in his employment agreement and other term of his employment agreement, Mr. Williams will be entitled to receive: any unpaid base salary and other compensation; any unreimbursed expenses; and any other benefits to which he is legally entitled, such as the unpaid portion of the Change in Control Bonus and, if the termination is due to early retirement, all post-retirement payments and benefits provided under the applicable plans.

Mr. Williams must give the Company six months’ notice of a termination without Good Reason and will continue to receive his base salary and earn other compensation during this period.  The Company may elect to terminate Mr. Williams prior to the end of the notice period and pay him, in a cash lump sum: his base salary for the balance of the notice period; and any amounts that would have been paid or become vested during the notice period under the Annual Incentive Plan, the Service-Based LTI and, subject to achievement of the applicable key performance indicators, the Performance-Based LTI.  

Mr. Buron.     On January 14, 2022, Domtar entered into a fixed term employment contract with Mr. Buron. In consideration of the agreement, Domtar undertakes to pay Mr. Buron a Retention Bonus equal to 50% of base salary, less statutory tax withholdings, for each of the next two years, November 30, 2022 (first anniversary of the Paper Excellence acquisition) and November 30, 2023 (second anniversary of the Paper Excellence acquisition) respectively.  Mr. Buron will not be eligible for the retention bonuses as set forth above if he is terminated for cause or resigns prior to such applicable anniversary.  If the Company terminates employment without cause before the second installment is due, then he will be eligible to receive each of the retention bonuses set forth above minus any such retention bonus that has already been paid.  If Mr. Buron becomes disabled or dies (i) during the first twelve-month period following the Paper Excellence acquisition, he will be eligible for a pro rata portion of the First Year Retention Bonus, or (ii) during the second twelve month period following the Closing, Executive will be eligible for a pro rata portion of the Second Year Retention Bonus (calculations defined in his agreement).

Upon a termination of employment on the Term End Date, March 1, 2024, which shall be deemed a retirement under the Company’s plans, policies and programs, Mr. Buron (or his estate) will receive the following payments and benefits:  any unpaid base salary and any other earned but unpaid compensation with respect to the period prior to the effective date of termination; a prorated bonus under the Annual Incentive Plan for the year in which the Term End Date occurs if Mr. Buron had continued in employment based on achievement of the applicable performance criteria for such year; any unvested Restricted Units prorated based on the number of days elapsed from the respective grant date through the Term End Date; any unvested Performance Units prorated based on the number of days elapsed from the commencement of the respective performance period through the Term End Date, subject to the achievement of the performance goals; and coverage under the Company’s medical and dental insurance policies for 24 months after the Term End Date at no cost to Mr. Buron. .

Mr. Buron’s employment shall terminate automatically upon his death or for cause (as defined in his agreement) without the Company being bound to pay any compensation whatsoever except as otherwise required herein or under the text of the Company’s plans, policies and programs.

Mr. Garcia.    On January 19, 2021, Domtar entered into a separation and general release with Mr. Garcia in connection with his separation from employment with Domtar as of January 4, 2021. Pursuant to the separation agreement, we agreed to provide Mr. Garcia with the payments and benefits in accordance with the Severance Program, including: (i) 24 months’ of base salary, less applicable tax and withholding; (ii) an annual bonus under the AIP for fiscal year 2020, based on Mr. Garcia’s performance and the Pulp & Paper Division’s performance relative to the performance criteria under the AIP for 2020; (iii) continued coverage under Domtar’s group insurance coverage through January 31, 2021, with the option to elect continued coverage under COBRA after such date; (iv) financial counseling reimbursement through the separation date and (v) reasonable outplacement services until the earlier of (x) December 31, 2022 or (y) Mr. Garcia obtaining new employment. In addition, we agreed to treat any unvested equity awards granted to Mr. Garcia under the Omnibus Incentive Plan as follows: (x) full vesting of all unvested stock options; (y) full vesting of all unvested Restricted Stock Units and (z) pro-rated vesting of all unvested Performance Stock Units, based on Mr. Garcia’s service through January 4, 2021. Mr. Garcia’s accrued benefits under the DB SERP, DC SERP and 401(k) Plan will be paid in accordance with the terms of the applicable plan. All severance payments and benefits were subject to Mr. Garcia’s execution and non-revocation of a general release of claims in the Corporation’s favor. Mr. Garcia agreed to continue to be bound by, and adhere to, the restrictive covenants set forth in his employment agreement with the Corporation. The separation agreement also contained customary non-disclosure and non-disparagement provisions.  

Mr. Jablonski.    On April 2, 2021, Domtar entered into a separation and general release with Mr. Jablonski in connection with his separation from employment with Domtar as of April 2, 2021. Pursuant to the separation agreement, we agreed to provide Mr. Jablonski with the payments and benefits in accordance with the Severance Program, including: (i) 24 months’ of base salary, less applicable tax and withholding; (ii) a prorated bonus under the AIP for fiscal year 2021, based on Mr. Jablonski’s performance and the Corporation’s performance relative to the performance criteria under the AIP for 2021; (iii) continued coverage under Domtar’s group insurance coverage through May 31, 2021, with the option to elect continued coverage under COBRA after such date and (iv) financial counseling reimbursement through the separation date and tax preparation services for the 2021 fiscal year. In addition, we agreed to treat any unvested equity awards granted to Mr. Jablonski under the Omnibus Incentive Plan as follows: (x) full vesting of all unvested stock options; (y) full vesting of all unvested Restricted Stock Units and (z) pro-rated vesting of all unvested Performance Stock Units, based on Mr. Jablonski’s service through April 2, 2021. Mr. Jablonski’s accrued benefits under the DB SERP, DC SERP, the Domtar Pension Plan for Non-Negotiated Employees and 401(k) Plan will be paid in accordance with the terms of the applicable plan. All severance payments and benefits were subject to Mr. Jablonski’s execution and non-revocation of a general release of claims in the Corporation’s favor. Mr. Jablonski agreed to continue to be bound by, and adhere to, the restrictive covenants set forth in his employment agreement with the Corporation. The separation agreement also contained customary non-disclosure and non-disparagement provisions.  

Other NEOs.    Under our Severance Program applicable to members of its Management Committee, our NEOs would be entitled to up to 24 months’ salary payable in a lump sum upon a termination of employment by the Corporation for reasons other than cause, with benefit levels that vary based on service. Severance is equal to one year’s base salary regardless of service as a member of the Management Committee, with three

21

additional months’ salary paid for each full year of service on the Management Committee, up to a maximum of 24 months base salary. Messrs. Edwards and Melton would be entitled to 12 months’ salary. The executives would also be entitled to continued health benefits for the severance period, except if the executive’s benefits are subject to taxation in the United States, in which case the health insurance policies maintained by the Corporation will remain in effect until the earlier to occur of the last day of the severance period and the 18-month anniversary of the date the executive’s separation from service. The executives will also be entitled to outplacement services.  

In the event one of the covered executives’ employment is involuntarily terminated without cause or the executive voluntarily terminates his employment for good reason within three months prior to or 24 months following a change in control of the Corporation, each of NEOs would be entitled to cash severance equal to 24 months’ salary plus two times his target bonus as of the date of termination or, if greater, the date of the change in control.  

Under our severance program, a covered executive who has been involuntarily terminated by the Corporation for business reasons, whether or not in connection with a Change in Control, or who in the three months prior to or 24 months following a Change in Control has terminated his or her employment for Good Reason or has been terminated by the Corporation without Cause will be eligible for a prorated bonus under the AIP for the year in which the termination of employment occurred. Payment will be based on the pre-established goals under the AIP for the applicable plan year accrued on the books and records of the Corporation as at the end of the fiscal quarter ended immediately prior to such termination (or such greater amount as is payable under the AIP) and the covered executive’s performance.  

Other Post-Employment Benefits.    In the event of death, an amount equal to 2.5 times base salary (up to a maximum of CAN$1,500,000) in the year of the death is payable to the beneficiaries of Canadian executives pursuant to the life insurance program offered under the Corporation’s flexible benefit program option available to senior Canadian executives. In the event of the death of a U.S. executive (other than Mr. Williams, whose beneficiary would receive a payment of $2,757,000), the beneficiary will receive a payment equal to the calculated amount of the life insurance (up to maximum of $1,600,000 including the basic life insurance of up to $50,000) based on the basic annual salary of the executive in the year of his or her death pursuant to the U.S. Executive Life plan and using the following table:  

The supplemental pension benefits under the DB SERP for Management Committee Members of Domtar for Messrs. Williams and Buron and under the DC SERP for Designated Executives of Domtar for Messrs. Williams, Buron, Edwards and Melton, are fully vested. They will receive benefits under these plans in the event of their death or if their employment were terminated involuntarily. However, before such date, all benefits in the event of death under these plans were considered vested.

Change in Control Protections.    The Corporation does not have change in control agreements with its employees (although as described above, enhanced benefits may be available under our severance plan). Under our Omnibus Incentive Plan, upon a change in control, unless otherwise determined by the HRC, a participant’s awards will be replaced with awards of the acquiring Corporation having the same or better terms. If there is a change in control and a participant’s employment is terminated for business reasons in the three months prior to or 24 months after the change in control, his or her time-based awards will fully vest and performance-based awards will vest to the extent the applicable performance goals have been achieved as of the date of the change in control or the end of the fiscal quarter immediately prior to the date of termination, whichever date on which the achievement is greater (or, for awards with a performance period that has not commenced, at target levels).  

If replacement awards are not available, unless determined otherwise, all time-based awards fully vest and performance-based awards vest to the extent the performance goals related to the award have been achieved as of the date of the change in control (or, for awards with a performance period that has not commenced, at target levels). Alternatively, the Committee may determine that vested awards will be canceled in exchange for a cash payment (or other form of change in control consideration) based on the value of the change in control payment and that unvested awards will be forfeited. The Board may also accelerate the vesting of any or all awards upon a change in control.  

Under our annual incentive plan, bonuses payable for the year in which the change in control occurs will not be less than the bonus amounts accrued on the books and records of the Corporation as of the date of the change in control.  

The following table presents potential payments to each NEO as if the officer’s employment had been terminated and/or if a change in control had occurred as of December 31, 2021, the last business day of 2021. As all outstanding equity has been settled prior to the end of fiscal year 2021, there is no equity that would be paid out under these scenarios. The actual amounts that would be paid to any NEO can only be determined at the time of an actual termination of employment or change in control and would vary from those listed below. The estimated amounts listed below are in addition to any retirement, welfare and other benefits that are available to our salaried employees generally.  

22

23

DISCLOSURE OF THE CEO PAY RATIO

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Regulation S-K (the “Regulation”), we are providing the following information about the relationship between the annual total compensation of our Chief Executive Officer and that of our median employee:  

To determine its median employee for purposes of the CEO pay ratio, Domtar analyzed its employee population (excluding the CEO) of approximately 6,350 full-, part-time and temporary employees across the U.S. and Canada as of December 1, 2021. The median employee was identified using base compensation, which we determined reasonably reflects the annual compensation and is consistently applied to all our employees. The calculation of total compensation of the CEO and the median employee was determined in the same manner as the “Total Compensation” shown for our CEO in the “Summary Compensation Table” on page 14.  

In 2021, Domtar CEO’s total compensation was $9,882,109 and the total compensation of Domtar’s median employee was $100,125. The resulting ratio of total compensation of the CEO to our median employee is 99:1. This ratio is a reasonable estimate calculated in a manner consistent with the Regulation.  

The applicable rules provide issuers with a great degree of flexibility in determining the methodology and related assumptions in identifying their median employee and calculating the ratio. As a result, the pay ratio we have disclosed in this statement may not be comparable to pay ratios disclosed by other companies.  

24