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Domtar Corporation announces quarterly dividend and a share buyback program

Press release from the issuing company

Montreal - Domtar Corporation today announced that its Board of Directors has approved a quarterly dividend to holders of its common stock as well as holders of exchangeable shares of Domtar (Canada) Paper Inc. The first quarterly dividend of US$0.25 per share will be paid on July 15, 2010 to shareholders of record on June 15, 2010.

In addition, Domtar's Board of Directors has authorized a share buyback program of up to $150 million of Domtar Corporation's common stock.

"We continue to focus on shareholder value and I am pleased to announce this milestone," said John D. Williams, President and Chief Executive Officer. "The initiation of a regular quarterly dividend coupled with a share repurchase plan is a strong commitment to return cash to shareholders," added Mr. Williams.

Under the share buyback program, the Company is authorized to repurchase from time to time shares of its outstanding common stock on the open market or in privately negotiated transactions in the United States. The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified or discontinued at any time and the Company has no obligation to repurchase any amount of its common stock under the program. The repurchase program has no set expiration date. The company intends to make all repurchases in compliance with applicable regulatory guidelines and to administer the plan in accordance with applicable laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The company had a total combined number of common stock and exchangeable shares issued and outstanding of 43,091,494 shares at March 31, 2010.