0001104659-13-044671.txt : 20130524 0001104659-13-044671.hdr.sgml : 20130524 20130524161057 ACCESSION NUMBER: 0001104659-13-044671 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20130521 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130524 DATE AS OF CHANGE: 20130524 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOREST OIL CORP CENTRAL INDEX KEY: 0000038079 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 250484900 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13515 FILM NUMBER: 13872221 BUSINESS ADDRESS: STREET 1: 707 SEVENTEENTH STREET STREET 2: SUITE 3600 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3038121400 MAIL ADDRESS: STREET 1: 707 SEVENTEENTH STREET STREET 2: SUITE 3600 CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: Forest Oil CORP DATE OF NAME CHANGE: 20040819 FORMER COMPANY: FORMER CONFORMED NAME: FOREST OIL CORP DATE OF NAME CHANGE: 19920703 8-K 1 a13-13149_18k.htm 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 21, 2013

FOREST OIL CORPORATION

(Exact name of registrant as specified in its charter)

New York

(State or other jurisdiction of incorporation)

1-13515		25-0484900
(Commission File Number)		(IRS Employer Identification No.)

707 17th Street, Suite 3600, Denver, Colorado		80202
(Address of principal executive offices)		(Zip Code)

303.812.1400

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(a) On May 21, 2013, the Compensation Committee of the Board of Directors (the “Committee”) of Forest Oil Corporation (“Forest”) approved several new forms of agreements for use in granting equity awards to Forest officers and employees. The new forms of agreements consist of the following:

· Two new forms of restricted stock award agreements, one of which provides for cliff vesting (the “2013 Restricted Stock Award Agreement — Cliff Vesting”) and the other of which provides for vesting in equal annual increments over a three-year period (the “2013 Restricted Stock Award Agreement — Annual Vesting,” and together with the 2013 Restricted Stock Award Agreement — Cliff Vesting, the “2013 Restricted Stock Award Agreements”);

· Two new forms of phantom stock unit award agreements that settle in cash, one of which provides for cliff vesting (the “2013 Phantom Stock Unit Award Agreement — Cliff Vesting”) and the other of which provides for vesting in equal increments over a three-year period (the “2013 Phantom Stock Unit Award Agreement — Annual Vesting,” and together with the 2013 Phantom Stock Unit Award Agreement — Cliff Vesting, the “2013 Phantom Stock Unit Award Agreements”); and

· Two new forms of performance unit award agreements, one of which is payable only in stock (the “2013 Performance Unit Award Agreement — Stock Settled”) and one of which is payable only in cash (the “2013 Performance Unit Award Agreement — Cash Settled,” and together with the 2013 Performance Unit Award Agreement — Stock Settled, the “2013 Performance Unit Award Agreements”).

All of the new forms of agreements are collectively referred to as the “New Equity Agreements,” and individually as a “New Equity Agreement.”

Each of the New Equity Agreements is substantially similar to an existing form of equity agreement and, like all equity awards granted since October 2012, provides for vesting upon a change of control only if (i) the surviving corporation does not replace or assume the award, or (ii) even if the award is replaced or assumed, in the event of an involuntary termination of the employee within two years following the change of control. Each New Equity Agreement also includes language that incorporates certain definitions from the award recipient’s severance agreement, to the extent such severance agreements exist, including those for the terms “Change of Control,” “Involuntary Termination,” and “Disability.” If no such severance agreement exists, then definitions substantially similar to those used in previous equity awards agreement apply; provided, that the change of control threshold in the New Equity Agreements has been reduced to 30 percent to conform to amendments to the Company’s 2007 Stock Incentive Plan recently approved by the

Company’s shareholders. In addition, the 2013 Performance Unit Award Agreements are substantially similar to performance unit award agreements used in past years, except that (i) a new peer company has been added to replace a peer company on the previous agreements that has announced it is being acquired, and (ii) awards on the new 2013 Performance Unit Award Agreement — Cash Settled are payable solely in cash, whereas all performance unit awards given in previous years were payable only in stock.

The foregoing does not purport to be a complete description of each of the New Equity Agreements, and is qualified in its entirety to the forms of New Equity Agreement filed herewith as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, and 10.6, and incorporated herein by reference.

(b) In connection with the adoption of the New Equity Awards, the Compensation Committee also approved a grant of equity awards to the officers of the Company, including the President and Chief Executive Officer and each of the other named executive officers identified in the Company’s most recent proxy statement. The President and Chief Executive Officer received an award consisting of 40 percent cash-settled phantom stock, on the new 2013 Phantom Stock Unit Award Agreement — Cliff Vesting, and 60 percent performance units. The phantom stock units will vest in full on the third anniversary of the date of grant, or earlier if certain other events transpire as set forth in the form of agreement. The performance unit awards were made pursuant to the 2013 Performance Unit Award Agreements, and were split evenly between cash-settled and stock settled awards. The performance period for the new performance unit awards runs from April 1, 2013, until March 31, 2016.

Each of the other officers, including the named executive officers other than the President and Chief Executive Officer, received awards consisting of 50 percent restricted stock, on the 2013 Restricted Stock Award Agreement — Cliff Vesting, and 50 percent performance units, on the 2013 Performance Unit Award Agreement — Cash Settled. The restricted stock awards vest in full on the third anniversary of the date of grant, or earlier if certain other events transpire as set forth in the form of agreement. The performance unit awards may only be settled in cash. The performance period for the new performance unit awards runs from April 1, 2013, until March 31, 2016.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit		Description

10.1		2013 Restricted Stock Award Agreement — Cliff Vesting.
10.2		2013 Restricted Stock Award Agreement — Annual Vesting.
10.3		2013 Phantom Stock Unit Award Agreement — Cliff Vesting.
10.4		2013 Phantom Stock Unit Award Agreement — Annual Vesting.
10.5		2013 Performance Unit Award Agreement — Stock Settled.
10.6		2013 Performance Unit Award Agreement — Cash Settled.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		FOREST OIL CORPORATION
		(Registrant)


Dated:	May 24, 2013	By	/s/ Cyrus D. Marter IV
			Cyrus D. Marter IV
			Senior Vice President, General Counsel and Secretary

INDEX TO EXHIBITS FILED WITH THE CURRENT REPORT ON FORM 8-K

Exhibit		Description

10.1		2013 Restricted Stock Award Agreement — Cliff Vesting.
10.2		2013 Restricted Stock Award Agreement — Annual Vesting.
10.3		2013 Phantom Stock Unit Award Agreement — Cliff Vesting.
10.4		2013 Phantom Stock Unit Award Agreement — Annual Vesting.
10.5		2013 Performance Unit Award Agreement — Stock Settled.
10.6		2013 Performance Unit Award Agreement — Cash Settled.

EX-10.1 2 a13-13149_1ex10d1.htm EX-10.1

Exhibit 10.1

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the day of , 20 , between Forest Oil Corporation, a New York corporation (the “Company”), and (the “Employee”).

1. Award. Pursuant to the Forest Oil Corporation 2007 Stock Incentive Plan, as amended (the “Plan”), as of the date of this Agreement, shares of the Company’s common stock, par value $.10 per share (the “Restricted Stock”), shall be issued as hereinafter provided in the Employee’s name subject to certain restrictions thereon, in consideration of services that the Employee has performed for the Company in 20 and services to be provided to the Company in the future. The Restricted Stock shall be issued upon acceptance of this Agreement by the Employee and upon satisfaction of the conditions of this Agreement. This award of Restricted Stock shall be subject to all of the terms and provisions of the Plan, including future amendments thereto, if any, which is available on http://corpweb1/. For paper copies of the Plan and prospectus please contact Stock Administration, 707 Seventeenth Street, Suite 3600, Denver, CO 80202, or call 303.812.1502. In the event of any conflict between the terms of this Agreement and the Plan, the Plan shall control.

2. Restricted Stock. The Employee hereby accepts the Restricted Stock when issued and agrees with respect thereto as follows:

(a) Forfeiture Restrictions. The Restricted Stock may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the extent then subject to the Forfeiture Restrictions (as hereinafter defined), and in the event of termination of the Employee’s employment with the Company for any reason other than death, Disability, or Involuntary Termination (as such terms are hereinafter defined), the Employee shall, for no consideration, forfeit to the Company all Restricted Stock to the extent then subject to the Forfeiture Restrictions. The prohibition against transfer and the obligation to forfeit and surrender Restricted Stock to the Company upon termination of employment are herein referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of Restricted Stock. For purposes of this Agreement, the following capitalized words and terms shall have the meanings indicated below:

(i) “Board” shall mean the Board of Directors of the Company.

(ii) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(iii) “Committee” shall mean the committee of the Board that is selected by the Board to administer the Plan as provided in the Plan.

(iv) “Corporate Change” shall have the meaning of the term “Change of Control” as set forth in the Severance Agreement, or if there is no Severance Agreement or the Severance Agreement contains no such definition, “Corporate Change” shall mean the occurrence of any one or more of the following events:

Confidential

(A) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously wholly-owned subsidiary of the Company);

(B) the Company sells, leases or exchanges all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary of the Company);

(D) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 30% of the outstanding shares of the Company’s voting stock (based upon voting power); or

(E) as a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board.

Notwithstanding the foregoing, the term “Corporate Change” shall not include any reorganization, merger or consolidation involving solely the Company and one or more previously wholly-owned subsidiaries of the Company.

(v) “Disability” shall have the meaning set forth in the Severance Agreement, or if there is no Severance Agreement or if the Severance Agreement contains no such definition, “Disability” shall mean that, as a result of the Employee’s incapacity due to physical or mental illness, he shall have been absent from the full-time performance of his duties for six consecutive months, and he shall not have returned to full-time performance of his duties within 30 days after written notice of termination is given to the Employee by the Company (provided, however, that such notice may not be given prior to 30 days before the expiration of such six-month period).

(vi) “Involuntary Termination” shall have the meaning set forth in the Severance Agreement, or if there is no Severance Agreement or if the Severance Agreement contains no such definition, “Involuntary Termination” shall mean any termination of the Employee’s employment with the Company which does not result from a resignation by the Employee; provided, however, that the term “Involuntary Termination” shall not include a termination as a result of death, Disability, or a termination of the Employee’s employment by the Company (or its subsidiaries) by reason of the Employee’s unsatisfactory performance of his duties, to be determined by the Company in its sole discretion, or final conviction of a misdemeanor involving moral turpitude or a felony.

(vii) “Section 16 Person” shall mean an officer, director or affiliate of

the Company or a former officer, director or affiliate of the Company who is subject to section 16 of the Securities Exchange Act of 1934, as amended.

(viii) “Severance Agreement” means any Severance Agreement solely between the Employee and the Company in effect as of the date of this Agreement, as such may be amended or superseded from time to time.

(b) Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to the Restricted Stock in accordance with the following schedule provided that the Employee has been continuously employed by the Company from the date of this Agreement through the lapse date:

Lapse Date		Percentage of Total Number of Shares of Restricted Stock as to Which Forfeiture Restrictions Lapse

Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all of the Restricted Stock then subject to the Forfeiture Restrictions on (i) the date of a Corporate Change if the successor entity does not assume, convert or replace the Restricted Stock governed by this Agreement with an equity or equity-based award that is substantially the same in all material economic respects, (ii) the date the Employee’s employment with the Company is terminated by reason of death, Disability or Involuntary Termination, or (iii) at the Committee’s discretion, as of the date determined by the Committee. For the avoidance of doubt, if, in connection with a Corporate Change, the successor entity assumes, converts or replaces this Agreement with an agreement that is substantially the same in all material economic respects, any Forfeiture Restrictions continuing after such Corporate Change with respect to such assumed, converted or replaced award shall lapse on the earliest to occur of (i) the lapse date set forth above or (ii) date of Employee’s Involuntary Termination following such a Corporate Change.

(c) Certificates. A certificate evidencing the Restricted Stock shall be issued by the Company in Employee’s name, pursuant to which Employee shall have all of the rights of a shareholder of the Company with respect to the Restricted Stock, including, without limitation, voting rights and the right to receive dividends; provided, however, that dividends paid in shares of the Company’s stock shall be subject to the Forfeiture Restrictions. The Employee may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Restricted Stock until the Forfeiture Restrictions have expired and a breach of the terms of this Agreement shall cause a forfeiture of the Restricted Stock. The Company, in its discretion, may elect to complete the delivery of the Restricted Stock by means of electronic, book-entry statement, instead of issuing physical share certificates.

lapse pursuant to the terms of the Plan and this award. Upon the lapse of the Forfeiture Restrictions, the Company shall cause a new certificate or certificates to be issued without legend (except for any legend required pursuant to applicable securities laws or any other agreement to which the Employee is a party) in the name of the Employee in exchange for the certificate evidencing the Restricted Stock, or, as may be the case, it shall issue appropriate instructions to the transfer agent if the electronic, book-entry method is utilized. In any event, the Company, in its discretion, may elect to deliver the shares in certificate form or electronically to a brokerage account established for the Employee’s benefit at a brokerage financial institution selected by the Company. At the Company’s request, the Employee shall deliver to the Company a stock power, endorsed in blank, relating to the Restricted Stock and the Employee agrees to complete and sign any other documents and take additional action that the Company may request to enable it to deliver the Restricted Stock on the Employee’s behalf.

(d) Corporate Acts. The existence of the Restricted Stock shall not affect in any way the right or power of the Board or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. The prohibitions of Section 2(a) hereof shall not apply to the transfer of Restricted Stock pursuant to a plan of reorganization of the Company, but the stock, securities or other property received in exchange therefore shall also become subject to the Forfeiture Restrictions and provisions governing the lapsing of such Forfeiture Restrictions applicable to the original Restricted Stock for all purposes of this Agreement and the certificates representing such stock, securities or other property shall include a legend to show such restrictions.

3. Withholding of Tax. To the extent that the receipt of the Restricted Stock or the lapse of any Forfeiture Restrictions results in compensation income or wages to the Employee for federal, state or local income tax purposes, the Employee shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of shares of common stock of the Company or money as the Company may require to meet its obligation under applicable tax laws or regulations, in accordance with the sub-sections below.

(a) Non Section 16 Persons. The Employee shall automatically surrender to the Company shares of stock of the Company subject to this Agreement and with respect to which the Forfeiture Restrictions lapse (valued at their fair market value on the date of surrender of such shares) to satisfy any tax required to be withheld by reason of compensation income or wages resulting under this Agreement, unless the Employee elects to deliver to the Company a check in the amount of the required taxes at the time of the lapse of the Forfeiture Restrictions. An election pursuant to the preceding sentence shall be referred to herein as a “Withholding Election,” and the Company retains the right to impose conditions on the withholding election right. All Withholding Elections shall be made by written notice to the Company at its principal executive office addressed to the attention of the Secretary. So long as the Employee is not a Section 16 Person, the Employee may revoke such election by delivering to the Secretary written notice of such revocation at least 5 business days prior to the date such election is implemented through actual surrender or withholding of shares of stock of the Company.

(b) Section 16 Persons. Notwithstanding the foregoing, if the Employee is a Section 16 Person, the Employee must provide the Company with an election form that must:

(i) be in writing, signed, irrevocable and delivered at least six months prior to the date any tax withholding is required by reason of this Agreement (the “Withholding Date”) and either (1) authorize the surrender to the Company by the Employee of shares of stock of the Company subject to this Agreement and with respect to which the Forfeiture Restrictions lapse sufficient to satisfy any tax required to be withheld by reason of compensation income or wages resulting under this Agreement, or (2) confirm that the Employee will deliver to the Company a check in the amount of the required taxes at the time of the lapse of the Forfeiture Restrictions, or

(ii) (a) be approved by the Committee, either before or after such election is made, (b) be made, and the Withholding Date occur, during a period beginning on the third business day following the date of release by the Company for publication of quarterly and annual summary statements of sales and earnings and ending on the thirtieth day following such date, and (c) be made more than six months after the effective date of this Agreement.

(c) If the Employee fails to pay the required amount to the Company or fails to make an election pursuant to the foregoing sub-sections (a) or (b), the Company is authorized to withhold from any cash remuneration (or, if the Employee is not a Section 16 Person, stock remuneration, including withholding any Restricted Stock distributable to the Employee under this Agreement) then or thereafter payable to the Employee any tax required to be withheld by reason of compensation income or wages resulting under this Agreement or the disposition of Restricted Stock acquired under this Agreement.

4. Status of Stock. The Employee agrees that the Restricted Stock issued under this Agreement will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws. The Employee also agrees that (i) certificates, if any, representing the Restricted Stock may bear such legend or legends as the Committee deems appropriate in order to reflect the Forfeiture Restrictions and to assure compliance with applicable securities laws, (ii) the Company may refuse to register the transfer of the Restricted Stock on the stock transfer records of the Company if such proposed transfer would constitute a violation of the Forfeiture Restrictions or, in the opinion of counsel satisfactory to the Company, of any applicable securities law, and (iii) the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the Restricted Stock.

5. Employment Relationship. For purposes of this Agreement, the Employee shall be considered to be in the employment of the Company as long as the Employee remains an employee of either the Company, an Affiliate (as such term is defined in the Plan), or any successor entity. Without limiting the scope of the preceding sentence, it is expressly provided that the Employee shall be considered to have terminated employment with the Company at the time of the termination of the “Affiliate” status under the Plan of the entity or other organization that employs the Employee. Nothing in the adoption of the Plan, nor the award of the Restricted Stock thereunder pursuant to this Agreement, shall confer upon the Employee the right to continued employment by the Company or affect in any way the right of the Company to terminate such employment at any time. Unless otherwise provided in a written employment agreement or by applicable law, the Employee’s employment by the Company shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Employee or the Company for any reason whatsoever, with or without cause. Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

6. Notices. Any notices or other communications provided for in this Agreement shall be sufficient if in writing. In the case of the Employee, such notices or communications shall be effectively delivered if hand delivered to the Employee at his principal place of employment or if sent by registered or certified mail to the Employee at the last address the Employee has filed with the Company. In the case of the Company, such notices or communications shall be effectively delivered if sent by registered or certified mail to the Company at its principal executive offices.

7. Parachute Payment. If, in connection with a Corporate Change, the lapse of Forfeiture Restrictions on one or more shares of Restricted Stock pursuant to this Agreement comprises part of any “parachute payment” as defined in Code Section 280G(a)(2), the number of shares of Restricted Stock to which such accelerated lapse of Forfeiture Restrictions would otherwise apply may be reduced in accordance with the terms of the Severance Agreement, to the extent applicable.

8. Entire Agreement; Amendment. This Agreement replaces and merges all previous agreements and discussions relating to the same or similar subject matters between the Employee and the Company and constitutes the entire agreement between the Employee and the Company with respect to the subject matter of this Agreement. This Agreement may not be modified in any respect by any verbal statement, representation or agreement made by any employee, officer, or representative of the Company or by any written agreement unless signed by an officer of the Company who is expressly authorized by the Company to execute such document. Except as provided below, any modification of this Agreement shall be effective only if it is in writing and signed by both the Employee and an authorized officer of the Company.

9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Employee.

10. Controlling Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and the Employee has executed this Agreement, all as of the date first above written.

	FOREST OIL CORPORATION


	By:
		[Name]
		[Title]


	EMPLOYEE


		[EMPLOYEE NAME]
		SS#:

EX-10.2 3 a13-13149_1ex10d2.htm EX-10.2

Exhibit 10.2

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the day of , 20 , between Forest Oil Corporation, a New York corporation (the “Company”), and (the “Employee”).

2. Restricted Stock. The Employee hereby accepts the Restricted Stock when issued and agrees with respect thereto as follows:

(i) “Board” shall mean the Board of Directors of the Company.

(ii) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(iii) “Committee” shall mean the committee of the Board that is selected by the Board to administer the Plan as provided in the Plan.

Confidential

(B) the Company sells, leases or exchanges all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary of the Company);

(E) as a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board.

(vii) “Section 16 Person” shall mean an officer, director or affiliate of

the Company or a former officer, director or affiliate of the Company who is subject to section 16 of the Securities Exchange Act of 1934, as amended.

(b) Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse and cease to apply with respect to one-third of the shares of Restricted Stock on each of the first three anniversaries of the Date of Grant; provided that the Forfeiture Restrictions shall lapse as to all shares of Restricted Stock then subject to Forfeiture Restrictions on the earlier of (i) the date upon which a Corporate Change occurs if the successor entity does not assume, convert or replace the Restricted Stock governed by this Agreement with an equity or equity-based award that is substantially the same in all material economic respects, (ii) the date upon which the Employee’s employment with the Company is terminated by reason of death, Disability, or Involuntary Termination, or (iii) at the Committee’s discretion, the date determined by the Committee. Any shares of Restricted Stock with respect to which the Forfeiture Restrictions do not lapse in accordance with the preceding sentence shall be forfeited to the Company for no consideration as of the date of the termination of the Employee’s employment with the Company. For the avoidance of doubt, if, in connection with a Corporate Change, the successor entity assumes, converts or replaces this Agreement with an agreement that is substantially the same in all material economic respects, any Forfeiture Restrictions continuing after such Corporate Change with respect to such assumed, converted, or replaced award shall lapse on the earliest to occur of (a) the lapse dates set forth above or (b) the date of the Employee’s Involuntary Termination following such Corporate Change.

Certificates, if any, shall be delivered upon issuance to the Secretary of the Company or to such other depository as may be designated by the Committee as a depository for safekeeping until the forfeiture of such Restricted Stock occurs or the Forfeiture Restrictions lapse pursuant to the terms of the Plan and this award. Upon the lapse of the Forfeiture Restrictions, the Company shall cause a new certificate or certificates to be issued without legend (except for any legend required pursuant to applicable securities laws or any other agreement to which the Employee is a party) in the name of the Employee in exchange for the certificate evidencing the Restricted Stock, or, as may be the case, it shall issue appropriate instructions to the transfer agent if the electronic, book-entry method is utilized. In any event,

the Company, in its discretion, may elect to deliver the shares in certificate form or electronically to a brokerage account established for the Employee’s benefit at a brokerage financial institution selected by the Company. At the Company’s request, the Employee shall deliver to the Company a stock power, endorsed in blank, relating to the Restricted Stock and the Employee agrees to complete and sign any other documents and take additional action that the Company may request to enable it to deliver the Restricted Stock on the Employee’s behalf.

(b) Section 16 Persons. Notwithstanding the foregoing, if the Employee is a Section 16 Person, the Employee must provide the Company with an election form that must:

(i) be in writing, signed, irrevocable and delivered at least six months prior to the date any tax withholding is required by reason of this Agreement (the “Withholding

Date”) and either (1) authorize the surrender to the Company by the Employee of shares of stock of the Company subject to this Agreement and with respect to which the Forfeiture Restrictions lapse sufficient to satisfy any tax required to be withheld by reason of compensation income or wages resulting under this Agreement, or (2) confirm that the Employee will deliver to the Company a check in the amount of the required taxes at the time of the lapse of the Forfeiture Restrictions, or

9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Employee.

10. Controlling Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

	FOREST OIL CORPORATION


	By:
		[Name]
		[Title]


	EMPLOYEE


		[EMPLOYEE NAME]
		SS#:

EX-10.3 4 a13-13149_1ex10d3.htm EX-10.3

Exhibit 10.3

FOREST OIL CORPORATION

PHANTOM STOCK UNIT AGREEMENT

THIS PHANTOM STOCK UNIT AGREEMENT (this “Agreement”) is made as of the day of (the “Date of Grant”), between Forest Oil Corporation, a New York corporation (the “Company”), and [Employee Name] (the “Employee”).

1. Award. Pursuant to the FOREST OIL CORPORATION 2007 STOCK INCENTIVE PLAN, as amended (the “Plan”), the Company hereby makes a grant of phantom stock units with respect to shares of the Company’s common stock, par value $.10 per share (the “Phantom Stock Units”). The Employee agrees that this award of Phantom Stock Units constitutes a Phantom Stock Award under the Plan and shall be subject to all of the terms and provisions of the Plan, including future amendments thereto, if any, which is available on the Company’s intranet at the following site: http://corpweb1/. For paper copies of the Plan and prospectus, the Employee may contact Stock Administration, 707 Seventeenth Street, Suite 3600, Denver, CO 80202, or call 303.812.1502. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

2. Definitions. Capitalized terms used in this Agreement that are not defined below or in the body of this Agreement shall have the meanings given to them in the Plan. In addition to the terms defined in the body of this Agreement, the following capitalized words and terms shall have the meanings indicated below:

(a) “Corporate Change” shall have the meaning of the term “Change of Control” as set forth in the Severance Agreement, or if there is no Severance Agreement or the Severance Agreement contains no such definition, “Corporate Change” mean the occurrence of any one or more of the following events:

(i) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously wholly-owned subsidiary of the Company);

(ii) the Company sells, leases or exchanges all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary of the Company);

(iii) the Company is to be dissolved and liquidated;

(iv) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 30% of the outstanding shares of the Company’s voting stock (based upon voting power); or

(v) as a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board.

Confidential

(b) “Disability” shall have the meaning set forth in the Severance Agreement, or if there is no Severance Agreement or the Severance Agreement contains no such definition, “Disability” shall mean that, as a result of the Employee’s incapacity due to physical or mental illness, the Employee shall have been absent from the full-time performance of the Employee’s duties for six consecutive months, and the Employee shall not have returned to full-time performance of the Employee’s duties within 30 days after written notice of termination is given to the Employee by the Company (provided, however, that such notice may not be given prior to 30 days before the expiration of such six-month period).

(c) “Forfeiture Restrictions” shall have the meaning set forth in the Severance Agreement, or if there is no Severance Agreement or the Severance Agreement contains no such definition, “Forfeiture Restrictions” shall have the meaning specified in Section 3(a) hereof.

(d) “Involuntary Termination” shall have the meaning set forth in the Severance Agreement, or if there is no Severance Agreement or the Severance Agreement contains no such definition, “Involuntary Termination” shall mean any termination of the Employee’s employment with the Company which does not result from a resignation by the Employee; provided, however, that the term “Involuntary Termination” shall not include a termination as a result of death, Disability, or a termination of the Employee’s employment by the Company by reason of the Employee’s unsatisfactory performance of the Employee’s duties, to be determined by the Company in its sole discretion, or final conviction of a misdemeanor involving moral turpitude or a felony.

(e) “Severance Agreement” shall mean any Severance Agreement solely between the Employee and the Company in effect as of the date of this Agreement, as such may be amended or superseded from time to time.

3. Phantom Stock Units. The Employee hereby accepts the Phantom Stock Units and agrees with respect thereto as follows:

(a) Forfeiture Restrictions. The Phantom Stock Units may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, and in the event of termination of the Employee’s employment with the Company for any reason other than death, Disability, or Involuntary Termination, the Employee shall, for no consideration, forfeit to the Company all Phantom Stock Units to the extent then subject to the Forfeiture Restrictions. The prohibition against transfer and the obligation to forfeit and surrender Phantom Stock Units to the Company upon termination of employment as provided in the preceding sentence are herein referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of Phantom Stock Units.

(b) Lapse of Forfeiture Restrictions. Provided that the Employee has been continuously employed by the Company from the Date of Grant through the lapse date described in this sentence, the Forfeiture Restrictions shall lapse with respect to 100% of the Phantom

Stock Units on the earlier of (i) the third anniversary of the Date of Grant, (ii) the date upon which a Corporate Change occurs if the successor entity does not assume, convert or replace the Phantom Stock Units governed by this Agreement with an equity or equity-based award that is substantially the same in all material economic respects, (iii) the date upon which the Employee’s employment with the Company is terminated by reason of death, Disability, or Involuntary Termination, or (iv) at the Committee’s discretion, the date determined by the Committee. Any Phantom Stock Units with respect to which the Forfeiture Restrictions do not lapse in accordance with the preceding sentence shall be forfeited to the Company for no consideration as of the date of the termination of the Employee’s employment with the Company. For the avoidance of doubt, if, in connection with a Corporate Change, the successor entity assumes, converts or replaces this Agreement with an agreement that is substantially the same in all material economic respects, any Forfeiture Restrictions continuing after such Corporate Change with respect to such assumed, converted, or replaced award shall lapse on the earliest to occur of (a) the lapse dates set forth above or (b) the date of the Employee’s Involuntary Termination following such Corporate Change.

(c) Payments. Subject to Section 4 hereof, as soon as reasonably practicable after the lapse of the Forfeiture Restrictions with respect to any Phantom Stock Units as provided in Section 3(b) hereof (but in no event later than March 15 of the calendar year following the calendar year in which the Forfeiture Restrictions so lapse), the Company shall pay to the Employee with respect to each share of the Company’s common stock covered by such Phantom Stock Unit an amount in cash equal to the Fair Market Value of one share of the Company’s common stock determined as of the date the Forfeiture Restrictions lapse.

(d) Corporate Acts. The existence of the Phantom Stock Units shall not affect in any way the right or power of the Board or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.

4. Withholding of Tax. The Company may withhold from any payment made pursuant to this Agreement all federal, state, city and other taxes and withholdings as may be required pursuant to any law or governmental regulation or ruling and all other customary deductions made with respect to the Company’s employees generally. The Employee acknowledges and agrees that the Company is making no representation or warranty as to the tax consequences to the Employee as a result of the receipt of the Phantom Stock Units, the lapse of any Forfeiture Restrictions or the forfeiture of any Phantom Stock Units pursuant to the Forfeiture Restrictions.

5. Rights as Stockholder. The Phantom Stock Units represent an unsecured and unfunded right to receive a cash payment, which right is subject to the terms, conditions and restrictions set forth in this Agreement and the Plan. Accordingly, the Employee will have no rights as a shareholder with respect to any shares covered by Phantom Stock Units granted under this Agreement. Without limiting the scope of the preceding sentence, the Employee will have

no rights to vote or receive dividend equivalents with respect to any shares covered by Phantom Stock Units granted under this Agreement.

6. Employment Relationship. For purposes of this Agreement, the Employee shall be considered to be in the employment of the Company as long as the Employee has not incurred a “separation from service” with the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance issued thereunder. Nothing in the adoption of the Plan, nor the award of the Phantom Stock Units thereunder pursuant to this Agreement, shall confer upon the Employee the right to continued employment by the Company or affect in any way the right of the Company to terminate such employment at any time. Unless otherwise provided in a written employment agreement or by applicable law, the Employee’s employment by the Company shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Employee or the Company for any reason whatsoever or for no reason, with or without cause or notice. Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee or its delegate, and its determination shall be final.

7. Conditions to Plan Participation and Receipt of Phantom Stock Units. In consideration of the grant of the Phantom Stock Units, and in order to protect the interests of the Company, its Affiliates, and their respective equity holders and employees, the Employee acknowledges and agrees that it is a condition precedent to his or her right to participate in, continue to participate in, and receive benefits under the Plan (including receipt of the Phantom Stock Units) that (a) the Employee shall at all times comply with laws (whether domestic or foreign) applicable to the Employee’s actions on behalf of the Company or any Affiliate, (b) the Employee shall not commit any action that results in the Employee’s employment being subject to a termination for cause, and (c) the Employee shall at all times fully and faithfully comply with all material covenants and agreements set forth in this Agreement. By entering into this Agreement, the parties hereto agree that the conditions to participation in the Plan set forth in this Section are an essential component of the Plan and this Agreement, and it is their intent that such conditions not be severed from the other terms and provisions of the Plan and this Agreement.

8. Notices. Any notices or other communications provided for in this Agreement shall be sufficient if in writing. In the case of the Employee, such notices or communications shall be effectively delivered if hand delivered to the Employee at the Employee’s principal place of employment or if sent by registered or certified mail to the Employee at the last address the Employee has filed with the Company. In the case of the Company, such notices or communications shall be effectively delivered if sent by registered or certified mail to the Company at its principal executive offices.

9. Parachute Payment. If, in connection with a Corporate Change, the lapse of Forfeiture Restrictions on one or more of the Phantom Stock Units pursuant to this Agreement comprises part of any “parachute payment” as defined in Code Section 280G(a)(2), the number of Phantom Stock Units to which such accelerated lapse of Forfeiture Restrictions would otherwise apply may be reduced in accordance with the terms of the Severance Agreement, to the extent applicable.

10. Entire Agreement; Amendment. This Agreement replaces and merges all previous agreements and discussions relating to the same or similar subject matters between the Employee and the Company and constitutes the entire agreement between the Employee and the Company with respect to the subject matter of this Agreement. This Agreement may not be modified in any respect by any verbal statement, representation or agreement made by any employee, officer, or representative of the Company or by any written agreement unless signed by an officer of the Company who is expressly authorized by the Company to execute such document.

11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Employee.

12. Controlling Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of law principles thereof, or, if applicable, the laws of the United States.

	FOREST OIL CORPORATION


	By:
		[Name]
		[Title]


	EMPLOYEE


	[Employee Name]

EX-10.4 5 a13-13149_1ex10d4.htm EX-10.4

Exhibit 10.4

FOREST OIL CORPORATION

PHANTOM STOCK UNIT AGREEMENT

(a) “Corporate Change” shall have the meaning of the term “Change of Control” as set forth in the Severance Agreement, or if there is no Severance Agreement or the Severance Agreement contains no such definition, “Corporate Change” shall mean the occurrence of any one or more of the following events:

(ii) the Company sells, leases or exchanges all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary of the Company);

(iii) the Company is to be dissolved and liquidated;

(v) as a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board.

Confidential

3. Phantom Stock Units. The Employee hereby accepts the Phantom Stock Units and agrees with respect thereto as follows:

(b) Lapse of Forfeiture Restrictions. Provided that the Employee has been continuously employed by the Company from the Date of Grant through the lapse date described

in this sentence, the Forfeiture Restrictions shall lapse and cease to apply with respect to one-third of the Phantom Stock Units on each of the first three anniversaries of the Date of Grant; provided that the Forfeiture Restrictions shall lapse as to all Phantom Stock Units then subject to Forfeiture Restrictions on the earlier of (i) the date upon which a Corporate Change occurs if the successor entity does not assume, convert or replace the Phantom Stock Units governed by this Agreement with an equity or equity-based award that is substantially the same in all material economic respects, (ii) the date upon which the Employee’s employment with the Company is terminated by reason of death, Disability, or Involuntary Termination, or (iii) at the Committee’s discretion, the date determined by the Committee. Any Phantom Stock Units with respect to which the Forfeiture Restrictions do not lapse in accordance with the preceding sentence shall be forfeited to the Company for no consideration as of the date of the termination of the Employee’s employment with the Company. For the avoidance of doubt, if, in connection with a Corporate Change, the successor entity assumes, converts or replaces this Agreement with an agreement that is substantially the same in all material economic respects, any Forfeiture Restrictions continuing after such Corporate Change with respect to such assumed, converted, or replaced award shall lapse on the earliest to occur of (a) the lapse dates set forth above or (b) the date of the Employee’s Involuntary Termination following such Corporate Change.

this Agreement. Without limiting the scope of the preceding sentence, the Employee will have no rights to vote or receive dividend equivalents with respect to any shares covered by Phantom Stock Units granted under this Agreement.

11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Employee.

	FOREST OIL CORPORATION


	By:
		[Name]
		[Title]


	EMPLOYEE


	[Employee Name]

EX-10.5 6 a13-13149_1ex10d5.htm EX-10.5

Exhibit 10.5

FOREST OIL CORPORATION

2007 STOCK INCENTIVE PLAN

PERFORMANCE UNIT AWARD AGREEMENT

, 20

To:

Forest Oil Corporation, a New York corporation (the “Company”), is pleased to grant you an award (the “Award”) to receive an aggregate of performance units (each, a “Performance Unit”) in respect of the period , 20 through , 20 (the “Performance Period”). The Award is subject to your acceptance of and agreement to all the applicable terms, conditions and restrictions described in this Performance Unit Award Agreement (this “Agreement”) and the Forest Oil Corporation 2007 Stock Incentive Plan (as it may be amended from time to time, the “Plan”). A copy of the Plan is available upon request. To the extent that any provision of this Agreement conflicts with the expressly applicable terms of the Plan, you acknowledge and agree that those terms of the Plan shall control and, if necessary, the applicable provisions of this Agreement shall be deemed amended so as to carry out the purpose and intent of the Plan. Terms that have their initial letters capitalized, but that are not otherwise defined in this Agreement, shall have the meanings given to them in the Plan in effect as of the date of this Agreement. The Performance Units contemplated herein are granted as Performance Awards under the Plan and are subject to the award limitations applicable to awards denominated in shares of the Company’s common stock (the “Common Stock”) that are set forth in Paragraph V(a) of the Plan.

This Agreement sets forth the terms of the agreement between you and the Company with respect to the Performance Units. By accepting this Agreement, you agree to be bound by all of the terms hereof.

1. Overview of Performance Units.

(a) Performance Units Generally. Each Performance Unit represents a contractual right to receive one share of Common Stock, subject to the terms and conditions of this Agreement; provided that, based on the relative achievement against the performance objective outlined in Section 2 below (the “Performance Objective”), the number of shares of Common Stock that may be deliverable hereunder in respect of the Performance Units may range from 0% to 200% of the number of Performance Units stated in the preamble to this Agreement (such stated number of Performance Units hereafter called the “Initial Performance Units”). Your right to receive Common Stock in respect of Performance Units is generally contingent, in whole or in part, upon (i) the achievement of the Performance Objective and (ii) except as provided in Section 4 or Section 5, your continued employment with the Company through the date of the Committee’s certification as set forth in Section 2.

(b) Dividend Equivalents. With respect to each outstanding Performance Unit, the Company shall credit a book entry account with an amount equal to the amount of any cash dividend paid during the Performance Period on one share of Common Stock. The amount credited to such book entry account shall be payable to you at the same time or times, and subject to the same terms and conditions as are applicable to, your Performance Units; provided that, if more than the Initial Performance Units shall become payable in accordance with this Agreement, then the maximum amount payable in respect of such dividend equivalents shall be the amount credited to your book entry account. Dividends and distributions payable on Common Stock other than in cash will be addressed in accordance with Section 9 hereof.

2. Total Shareholder Return Objective. The Performance Objective with respect to the Initial Performance Units is based on Total Shareholder Return. “Total Shareholder Return” shall mean, as to the Company and each of the Peer Companies (as defined below), the annualized rate of return shareholders receive through stock price changes and the assumed reinvestment of dividends paid over the Performance Period. Dividends per share paid other than in the form of cash shall have a value equal to the amount of such dividends reported by the issuer to its shareholders for purposes of Federal income taxation. For purposes of determining the Total Shareholder Return for the Company and each of the Peer Companies, the change in the price of the Company’s Common Stock and of the common stock of each Peer Company, as the case may be, shall be based upon the average of the closing stock prices of the Company and such Peer Company over the 20 trading days immediately preceding each of the start (the “Initial Value”) and the end of the Performance Period. The Initial Value of the Common Stock to be used to determine Total Shareholder Return over the Performance Period is $ per share. Achievement with respect to this Performance Objective shall be determined by the Committee based on the Company’s relative ranking in respect of the Performance Period with regard to Total Shareholder Return as compared to Total Shareholder Return of the Peer Companies, and shall be determined in accordance with the applicable table as set forth in Appendix A hereto (subject to adjustment as provided in Appendix A hereto). The applicable table shall be determined based on the number of Peer Companies for the Performance Period. A company shall be a “Peer Company” if it (i) is one of the companies listed on Appendix A hereto and (ii) has a class of common equity securities listed to trade under Section 12(b) of the Exchange Act during each day of the Performance Period. As soon as administratively practicable following the end of the Performance Period (but in no event later than the 15th day of the third calendar month following the calendar month in which the Performance Period ends), the Committee shall certify whether and to the extent that the Performance Objective has been achieved and will determine, in the manner described above, the number of Performance Units, if any, determined to be earned pursuant to the applicable table under Appendix A (as adjusted in the manner provided therein). The number of Performance Units, if any, determined by the Committee pursuant to the preceding provisions of this Section 2 shall be referred to as the “Earned Performance Units.”

3. Conversion of Performance Units; Delivery of Common Stock with respect to Performance Units. Unless an earlier date applies pursuant to Sections 4(a), 4(b) or 5(b), payment in respect of Earned Performance Units shall be made not later than the 15th day of the third calendar month following the calendar month in which the Performance Period ends. All payments in respect of Earned Performance Units shall be made in freely transferable shares of

Common Stock. Neither this Section 3 nor any action taken pursuant to or in accordance with this Section 3 shall be construed to create a trust of any kind. Any shares of Common Stock issued to you pursuant to this Agreement in settlement of Earned Performance Units shall be in book entry form registered in your name. Any fractional Earned Performance Units shall be rounded up to the nearest whole share of Common Stock.

4. Termination of Employment.

(a) Death or Disability. In the event that your employment with the Company terminates during the Performance Period due to your death or Disability (as defined below), then the date of such termination of your employment shall be deemed the end of the Performance Period and you will be issued a number of shares of Common Stock equal to the product of:

(i) the number of Initial Performance Units (subject to adjustment as set forth in Section 9); and

(ii) a fraction (A) the numerator of which is the number of full months during the Performance Period during which you were employed by the Company (counting the month in which your termination of employment occurs as a full month) and (B) the denominator of which is thirty-six (36).

Distribution of shares of Common Stock determined to be earned by reason of this Section 4(a) shall be made not later than the 15th day of the third calendar month following your death or Disability.

(b) Involuntary Termination. In the event that your employment with the Company terminates during the Performance Period due to your Involuntary Termination (as defined below), then you will be issued a number of shares of Common Stock equal to the number of Performance Units that would have become Earned Performance Units in accordance with the provisions of Section 2 assuming that:

(i) the Performance Period ended on the date of your Involuntary Termination; and

(ii) the determination of whether, and to what extent, the Performance Objective is achieved, is based on actual performance against the stated performance criteria through the date of your Involuntary Termination.

Distribution of shares of Common Stock in respect of the Performance Units determined to be earned by reason of this Section 4(b) shall be made not later than the 15th day of the third calendar month following the Involuntary Termination of your employment.

or 4(b), all of your Performance Units shall terminate and automatically be canceled upon such termination of employment.

(d) Definitions of Disability and Involuntary Termination. As used in this Agreement, the term “Disability” (i) shall have the meaning given such term in the Severance Agreement between you and the Company in effect as of the grant date specified above, as the same may be amended or superseded from time to time (the “Severance Agreement”), or (ii) if there is no Severance Agreement or the Severance Agreement contains no such definition, shall mean that as a result of your incapacity due to physical or mental illness, you shall have been absent from the full-time performance of your duties for six consecutive months, and you shall not have returned to full-time performance of your duties within 30 days after written notice of termination is given to you by the Company (provided, however, that such notice may not be given prior to 30 days before the expiration of such six-month period). As used in this Agreement, the term “Involuntary Termination” (x) shall have the meaning given such term in the Severance Agreement, or (y) if there is no Severance Agreement or the Severance Agreement contains no such definition, shall mean any termination of your employment with the Company which does not result from your resignation; provided, however, that the term “Involuntary Termination” shall not include a termination as a result of death, Disability, or a termination of your employment by the Company by reason of your unsatisfactory performance of your duties, to be determined by the Company in its sole discretion, or by reason of your final conviction of a misdemeanor involving moral turpitude or a felony.

(e) Termination of Employment. For all purposes of this Agreement, you will be considered to have terminated from employment with the Company when you incur a “separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance thereunder.

5. Change in Control.

(a) Continuous Employment. Notwithstanding the provisions of Section 1 through Section 4 hereof, if you have been continuously employed from the grant date specified above until the date that a Change of Control (as defined below) occurs (the “Change of Control Date”), and either (x) in connection with the Change of Control, the Successor Corporation (as defined below) does not assume, convert or replace this Agreement with an agreement substantially the same in all material economic respects, or (y) this Agreement is assumed, converted or replaced by the Successor Corporation in connection with a Change of Control but you are Involuntarily Terminated at any time following such Change of Control but before the 15th day of the third calendar month following the calendar month in which the Performance Period ends, then, you will be issued a number of shares of Common Stock equal to the number of Performance Units that would have become Earned Performance Units in accordance with the provisions of Section 2 and determined as follows:

(i) if the payment pursuant to this Section 5(a) is being made because the Successor Corporation has not assumed, converted or replaced this Agreement with an agreement substantially the same in all material respects, the payment of shares of Common Stock or cash shall be determined assuming that:

(A) the Performance Period ended on the Change of Control Date; and

(B) the determination of whether, and to what extent, the Performance Objective is achieved, is based on actual performance against the stated performance criteria through the Change of Control Date; or

(ii) if the payment pursuant to this Section 5(a) is being made due to you being Involuntarily Terminated following the Change of Control but before the 15th day of the third calendar month following the calendar month in which the Performance Period ends, the payment of shares of Common Stock or cash shall be determined assuming that:

(A) the Performance Period ended on the date of your Involuntary Termination; and

(b) Time and Form of Payment. Any shares of Common Stock issuable pursuant to this Section 5 shall be issued immediately following (and not later than five business days after) (i) if issued pursuant to Section 5(a)(i) above, the Change of Control Date, or (ii) if issued pursuant to Section 5(a)(ii) above, the date of your Involuntary Termination. All such shares shalll be fully earned and freely transferable as of the date of issuance. Notwithstanding anything else contained in this Section 5 to the contrary (other than Section 5(d)), if the Change of Control involves a merger, reclassification, reorganization or other similar transaction pursuant to which the Common Stock is exchanged for stock of the surviving corporation in such merger, the successor to the corporation or the direct or indirect parent of such a corporation (collectively, the “Successor Corporation”), then you shall receive, instead of each share of Common Stock otherwise deliverable hereunder, the same consideration (whether stock, cash or other property) payable or distributable in such transaction in respect of a share of Common Stock. Any property distributed pursuant to this Section 5(b), whether in shares of the Successor Corporation or otherwise, shall in all cases be freely transferable without any restriction (other than any such restriction that may be imposed by applicable law), and any securities issued hereunder shall be registered to trade under the Exchange Act, and shall have been registered under the Securities Act of 1933, as amended (the “Securities Act”).

(c) Definition of Change of Control. As used in this Agreement, the term “Change of Control” (i) shall have the meaning given such term in the Severance Agreement, or (ii) if there is no Severance Agreement, shall mean the occurrence of any one or more of the following events:

(i) The Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other than a previously wholly-owned subsidiary of the Company);

(ii) The Company sells, leases or exchanges all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary of the Company);

(iii) The Company is to be dissolved and liquidated;

(iv) Any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 30% of the outstanding shares of the Company’s voting stock (based upon voting power); or

(v) As a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board.

Notwithstanding the foregoing, the term “Change of Control” shall not include any reorganization, merger or consolidation involving solely the Company and one or more previously wholly-owned subsidiaries of the Company.

(d) Alternative Form of Payment. Notwithstanding anything else contained in this Section 5 to the contrary, the Committee may elect, at its sole discretion by resolution adopted prior to the Change of Control Date, to have the Company satisfy your rights in respect of the Performance Units (as determined pursuant to the foregoing provisions of this Section 5), in whole or in part, by having the Company make a cash payment to you within five business days of the Change of Control Date in respect of all such Performance Units or such portion of such Performance Units as the Committee shall determine. Any cash payment for any Performance Unit shall be equal to the Fair Market Value of the number of shares of Common Stock into which it would convert, determined on the Change of Control Date.

6. Forfeiture under Certain Circumstances. Notwithstanding any provision herein to the contrary, the Committee may terminate your Award if it determines that you have engaged in material misconduct. Material misconduct includes conduct adversely affecting the Company’s reputation, financial condition, results of operations or prospects, or which constitutes fraud or theft of Company assets. If such material misconduct results, directly or indirectly, in any restatement of the Company’s financial information after an amount has been paid to you with respect to the Award, then the Committee also may require you to reimburse the Company for all or a portion of such payment amount. In addition, if there is a material restatement of the Company’s financial statements that affects the financial information used in the determination of the amount paid to you under the Award, then the Committee may take such action, in its sole discretion, as it deems necessary to adjust such amount.

7. Nontransferability of Awards. The Performance Units granted hereunder may not be sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Following your death, any shares distributable (or cash payable) in respect of Performance Units will be delivered or paid, at the time specified in Section 3, Section 4 or, if applicable, Section 5, to your beneficiary in accordance with, and subject to, the terms and conditions hereof and of the Plan.

8. Beneficiary Designation. You may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) to whom shall be delivered or paid under this Agreement following your death any shares that are distributable or cash payable hereunder in respect of your Performance Units at the time specified in Section 3, Section 4 or, if applicable, Section 5. Each designation will revoke all prior designations, shall be in a form prescribed by the Committee, and will be effective only when filed in writing with the Committee during your lifetime. In the absence of any such effective designation, shares issuable and cash payable in connection with your death shall be paid to your surviving spouse, if any, or otherwise to your estate.

9. Adjustments in Respect of Performance Units. In the event of any common stock dividend or common stock split, recapitalization (including, but not limited to, the payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of assets to stockholders (other than cash dividends), exchange of shares, or other similar corporate change with regard to the Company or any Peer Company, appropriate adjustments shall be made by the Committee to the Initial Value of the corresponding common stock, and, if any such event occurs with respect to the Company, in the aggregate number of Performance Units subject to this Agreement. The Committee’s determination with respect to any such adjustment shall be conclusive.

10. Effect of Settlement. Upon conversion into shares of Common Stock (or Successor Corporation common stock) pursuant to Section 3, Section 4 or Section 5, a cash settlement of your rights, at the election of the Committee at its sole discretion pursuant to Section 5(d), or a combination of the issuance of Common Stock and the payment of cash in accordance with any applicable provisions of this Agreement, all of your Performance Units subject to the Award shall be cancelled and terminated. If and to the extent that you are still employed at the end of the Performance Period, and none of your Performance Units shall have become earned in accordance with the terms of this Agreement, all such Performance Units subject to the Award shall be cancelled and terminated.

11. Furnish Information. You agree to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or regulation.

12. Remedies. The parties to this Agreement shall be entitled to recover from each other reasonable attorneys’ fees incurred in connection with the enforcement of the terms and provisions of this Agreement whether by an action to enforce specific performance or for damages for its breach or otherwise.

13. Information Confidential. As partial consideration for the granting of the Award hereunder, you hereby agree with the Company that you will keep confidential all information and knowledge, except that which has been disclosed in any public filings required by law, that you have relating to the terms and conditions of this Agreement; provided, however, that such information may be disclosed as required by law and may be given in confidence to your spouse, tax and financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan.

14. Payment of Taxes. The Company may from time to time require you to pay to the Company (or an Affiliate if you are an employee of an Affiliate) the amount that the Company deems necessary to satisfy the Company’s or its Affiliate’s current or future obligation to withhold federal, state or local income or other taxes that you incur as a result of the Award. With respect to any required tax withholding, unless another arrangement is permitted by the Company in its discretion, the Company shall withhold from the shares of Common Stock to be issued to you the number of shares necessary to satisfy the Company’s obligation to withhold taxes, that determination to be based on the shares’ Fair Market Value at the time as of which such determination is made. In the event the Company subsequently determines that the aggregate Fair Market Value of any shares of Common Stock withheld as payment of any tax withholding obligation is insufficient to discharge that tax withholding obligation, then you shall pay to the Company, immediately upon the Company’s request, the amount of that deficiency.

15. Right of the Company and Affiliates to Terminate Your Employment. Nothing contained in this Agreement shall confer upon you the right to continue in the employ of the Company or any Affiliate, or interfere in any way with the rights of the Company or any Affiliate to terminate your employment at any time.

16. No Liability for Good Faith Determinations. Neither the Company nor the members of the Board and the Committee shall be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Performance Units granted hereunder.

17. No Guarantee of Interests. The Board, the Committee and the Company do not guarantee the Common Stock of the Company from loss or depreciation.

18. Company Records. Records of the Company or its Affiliates regarding your period of employment, termination of employment and the reason therefore, leaves of absence, re-employment, and other matters shall be conclusive for all purposes hereunder, unless determined by the Company to be incorrect.

19. Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.

20. Notices. Whenever any notice is required or permitted hereunder, such notice must be in writing and personally delivered or sent by mail. Any such notice required or permitted to be delivered hereunder shall be deemed to be delivered on the date on which it is personally delivered, or, whether actually received or not, on the third business day after it is deposited in the United States mail, certified or registered, postage prepaid, addressed to the person who is to receive it at the address which such person has theretofore specified by written notice delivered in accordance herewith. The Company or you may change, at any time and from time to time, by written notice to the other, the address which it or you had previously specified for receiving notices.

The Company and you agree that any notices shall be given to the Company or to you at the following addresses:

Company:		Forest Oil Corporation
		Attn: Corporate Secretary
		707 17th Street, Suite 3600
		Denver, Colorado 80202

Holder:		At your current address as shown in the Company’s records.

21. Waiver of Notice. Any person entitled to notice hereunder may waive such notice in writing.

22. Successor. This Agreement shall be binding upon you, your legal representatives, heirs, legatees and distributees, and upon the Company, its successors and assigns.

23. Headings. The titles and headings of Sections and paragraphs are included for convenience of reference only and are not to be considered in construction of the provisions hereof.

24. Governing Law. All questions arising with respect to the provisions of this Agreement shall be determined by application of the laws of the State of New York except to the extent New York law is preempted by federal law. The obligation of the Company to sell and deliver Common Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Common Stock.

25. Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Common Stock or other property to you, or to your legal representative, heir, legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Company may require you or your legal representative, heir, legatee or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefore in such form as it shall determine.

26. Amendment. This Agreement may be amended at any time unilaterally by the Company provided that such amendment is consistent with all applicable laws and does not reduce any rights or benefits you have accrued pursuant to this Agreement. This Agreement may also be amended at any time unilaterally by the Company to the extent the Company believes in good faith that such amendment is necessary or advisable to bring this Agreement into compliance with any applicable laws, including Section 409A of the Code.

27. The Plan. This Agreement is subject to all the terms, conditions, limitations and restrictions contained in the Plan.

28. Agreement Respecting Securities Act. You represent and agree that you will not sell the Common Stock that may be issued to you pursuant to your Performance Units except

pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration under the Securities Act (including Rule 144).

29. No Shareholder Rights. The Performance Units granted pursuant to this Agreement do not and shall not entitle you to any rights as a shareholder of Common Stock until such time as you receive shares of Common Stock pursuant to this Agreement. Your rights with respect to the Performance Units shall remain forfeitable at all times prior to the date on which rights become earned in accordance with this Agreement.

30. Parachute Payment. If, in connection with a Change of Control, the accelerated vesting of one or more Performance Units pursuant to this Agreement comprises part of any “parachute payment” as defined in Code Section 280G(a)(2), the number of Performance Units to which such accelerated vesting would otherwise apply may be reduced in accordance with the terms of the Severance Agreement, to the extent applicable.

If you accept this Performance Unit Award Agreement and agree to its terms and conditions, please so confirm by signing and returning the duplicate of this Agreement enclosed for that purpose.

			Very Truly Yours,

			FOREST OIL CORPORATION


			By:
			Name:
			Title:
			Date:


ACKNOWLEDGED AND AGREED:


By:
Name:

Appendix A

Determination of Performance Units Earned

Peer Companies:		SM Energy Company
		Exco Resources, Inc.
		Ultra Petroleum Corporation
		Cimarex Energy Company
		Range Resources Corporation
		Cabot Oil & Gas Corporation
		Comstock Resources, Inc.
		Quicksilver Resources, Inc.
		Bill Barrett Corporation
		Rosetta Resources
		Swift Energy Company
		Carrizo Oil & Gas, Inc.

If during the Performance Period the number of companies qualifying as Peer Companies for the Performance Period becomes less than seven, the Committee shall, in good faith, determine the percentage of the Performance Units earned in a manner consistent with the requirements to qualify the Performance Units as performance-based compensation exempt from the limitations imposed by Section 162(m) of the Code.

Percentage of Initial Performance Units Earned:

The
Company’s
Rank Among	No. of Peer Companies
Peers	12		11		10		9		8		7

1	200	%	200	%	200	%	200	%	200	%	200	%
2	183	%	182	%	180	%	178	%	175	%	171	%
3	167	%	164	%	160	%	156	%	150	%	143	%
4	150	%	145	%	140	%	133	%	125	%	114	%
5	133	%	127	%	120	%	111	%	100	%	86	%
6	117	%	109	%	100	%	89	%	75	%	57	%
7	100	%	91	%	80	%	67	%	50	%	28	%
8	83	%	73	%	60	%	45	%	25	%	0	%
9	67	%	55	%	40	%	22	%	0	%
10	50	%	36	%	20	%	0	%
11	33	%	18	%	0	%
12	17	%	0	%
13	0	%

Adjustment Rules:

Notwithstanding the table above, the following additional rules shall apply in determining the Percentage of Initial Performance Units Earned under the applicable table:

1. If the Total Shareholder Return of one or more Peer Companies included in the applicable table above is within one percentage point of the Company’s Total Shareholder Return, then such table shall be applied by averaging the percentages that would apply under such table based on the Company’s actual rank against the Peer Companies and as if the Company’s ranking was switched with each such Peer Company that is within such one percentage point range;

2. If the Company’s Total Shareholder Return is negative, then the percentage shall be the percentage determined under the table above (determined after adjustment pursuant to clauses 1 and 2 of this paragraph, as applicable).

EX-10.6 7 a13-13149_1ex10d6.htm EX-10.6

Exhibit 10.6

FOREST OIL CORPORATION

2007 STOCK INCENTIVE PLAN

PERFORMANCE UNIT CASH AWARD AGREEMENT

, 20

To:

Forest Oil Corporation, a New York corporation (the “Company”), is pleased to grant you an award (the “Award”) to receive an aggregate of performance units (each, a “Performance Unit”) in respect of the period , 20 through , 20 (the “Performance Period”). The Award is subject to your acceptance of and agreement to all the applicable terms, conditions and restrictions described in this Performance Unit Cash Award Agreement (this “Agreement”) and the Forest Oil Corporation 2007 Stock Incentive Plan (as it may be amended from time to time, the “Plan”). A copy of the Plan is available upon request. To the extent that any provision of this Agreement conflicts with the expressly applicable terms of the Plan, you acknowledge and agree that those terms of the Plan shall control and, if necessary, the applicable provisions of this Agreement shall be deemed amended so as to carry out the purpose and intent of the Plan. Terms that have their initial letters capitalized, but that are not otherwise defined in this Agreement, shall have the meanings given to them in the Plan in effect as of the date of this Agreement. The Performance Units contemplated herein are granted as Performance Awards under the Plan and are subject to the award limitations applicable to both awards denominated in shares of the Company’s common stock (the “Common Stock”) and awards denominated in cash that are set forth in Paragraph V(a) of the Plan.

This Agreement sets forth the terms of the agreement between you and the Company with respect to the Performance Units. By accepting this Agreement, you agree to be bound by all of the terms hereof.

1. Overview of Performance Units. Each Performance Unit represents a contractual right to receive, in cash, an amount equal to the Fair Market Value of one share of Common Stock, subject to the terms and conditions of this Agreement; provided that, based on the relative achievement against the performance objective outlined in Section 2 below (the “Performance Objective”), the number of Performance Units for which a payment may be made hereunder may range from 0% to 200% of the number of Performance Units stated in the preamble to this Agreement (such stated number of Performance Units hereafter called the “Initial Performance Units”). Your right to receive payment in respect of Performance Units is generally contingent, in whole or in part, upon (i) the achievement of the Performance Objective and (ii) except as provided in Section 4 or Section 5, your continued employment with the Company through the date of the Committee’s certification as set forth in Section 2.

2. Total Shareholder Return Objective. The Performance Objective with respect to the Initial Performance Units is based on Total Shareholder Return. “Total

Shareholder Return” shall mean, as to the Company and each of the Peer Companies (as defined below), the annualized rate of return shareholders receive through stock price changes and the assumed reinvestment of dividends paid over the Performance Period. Dividends per share paid other than in the form of cash shall have a value equal to the amount of such dividends reported by the issuer to its shareholders for purposes of Federal income taxation. For purposes of determining the Total Shareholder Return for the Company and each of the Peer Companies, the change in the price of the Common Stock and of the common stock of each Peer Company, as the case may be, shall be based upon the average of the closing stock prices of the Company and such Peer Company over the 20 trading days immediately preceding each of the start (the “Initial Value”) and the end of the Performance Period. The Initial Value of the Common Stock to be used to determine Total Shareholder Return over the Performance Period is $ per share. Achievement with respect to this Performance Objective shall be determined by the Committee based on the Company’s relative ranking in respect of the Performance Period with regard to Total Shareholder Return as compared to Total Shareholder Return of the Peer Companies, and shall be determined in accordance with the applicable table as set forth in Appendix A hereto (subject to adjustment as provided in Appendix A hereto). The applicable table shall be determined based on the number of Peer Companies for the Performance Period. A company shall be a “Peer Company” if it (i) is one of the companies listed on Appendix A hereto and (ii) has a class of common equity securities listed to trade under Section 12(b) of the Exchange Act during each day of the Performance Period. As soon as administratively practicable following the end of the Performance Period (but in no event later than the 15th day of the third calendar month following the calendar month in which the Performance Period ends), the Committee shall certify whether and to the extent that the Performance Objective has been achieved and will determine, in the manner described above, the number of Performance Units, if any, determined to be earned pursuant to the applicable table under Appendix A (as adjusted in the manner provided therein). The number of Performance Units, if any, determined by the Committee pursuant to the preceding provisions of this Section 2 shall be referred to as the “Earned Performance Units.”

3. Payment of Cash with respect to Performance Units. Unless an earlier date applies pursuant to Sections 4(a), 4(b) or 5(b), payment in respect of Earned Performance Units shall be made not later than the 15th day of the third calendar month following the calendar month in which the Performance Period ends. All payments in respect of Earned Performance Units shall be made in cash. Neither this Section 3 nor any action taken pursuant to or in accordance with this Section 3 shall be construed to create a trust of any kind.

4. Termination of Employment.

(i) the Fair Market Value of a share of Common Stock on the date of such termination multiplied by the number of Initial Performance Units, multiplied by (ii) a fraction, the numerator of which shall be the number of full months during the

Performance Period during which you were employed by the Company (counting the month in which your termination of employment occurs as a full month), and the denominator of which is 36.

(b) Involuntary Termination. In the event that your employment with the Company terminates during the Performance Period due to your Involuntary Termination (as defined below), then you will be paid an amount of cash equal to the product of the number of Performance Units that would have become Earned Performance Units in accordance with the provisions of Section 2 and the Fair Market Value on the date of your Involuntary Termination, assuming that:

(i) the Performance Period ended on the date of your Involuntary Termination; and

Payments of Cash determined to be earned by reason of this Section shall be made not later than the 15th day of the third calendar month following the Involuntary Termination of your employment.

(c) Other Termination of Employment. Unless otherwise determined by the Committee at or after grant, in the event that your employment with the Company terminates prior to the end of the Performance Period for any reason other than those listed in Sections 4(a) or 4(b), all of your Performance Units shall terminate and automatically be canceled upon such termination of employment.

5. Change in Control.

(a) Continuous Employment. Notwithstanding the provisions of Section 1 through Section 4 hereof, if you have been continuously employed from the grant date specified above until the date that a Change of Control (as defined below) occurs (the “Change of Control Date”), and either (x) in connection with the Change of Control, the Successor Corporation (as defined below) does not assume, convert or replace this Agreement with an agreement substantially the same in all material economic respects, or (y) this Agreement is assumed, converted or replaced by the Successor Corporation in connection with a Change of Control but you are Involuntarily Terminated at any time following such Change of Control but before the 15th day of the third calendar month following the calendar month in which the Performance Period ends, then, you will be paid an amount of cash equal to the product of the Fair Market Value of one share of Common Stock on the date of the Change of Control and the number of Performance Units that would have become Earned Performance Units in accordance with the provisions of Section 2 and determined as follows:

(A) the Performance Period ended on the Change of Control Date; and

(A) the Performance Period ended on the date of your Involuntary Termination; and

(b) Time and Form of Payment. Any amount payable pursuant to this Section 5 shall be paid immediately following (and not later than five business days after) (i) if the

payment is made pursuant to Section 5(a)(i) above, the Change of Control Date, or (ii) if the payment is made pursuant to Section 5(a)(ii) above, the date of your Involuntary Termination. As used herein, the term “Successor Corporation” shall mean the surviving corporation, other than the Company or any of its affiliates, pursuant to a merger, reclassification, reorganization or other similar transaction pursuant to which the Common Stock is exchanged for stock of the surviving corporation in such merger, the successor to such corporation or the direct or indirect parent of such a corporation.

(ii) The Company sells, leases or exchanges all or substantially all of its assets to any other person or entity (other than a wholly-owned subsidiary of the Company);

(iii) The Company is to be dissolved and liquidated;

(v) As a result of or in connection with a contested election of directors, the persons who were directors of the Company before such election shall cease to constitute a majority of the Board.

6. Forfeiture under Certain Circumstances. Notwithstanding any provision herein to the contrary, the Committee may terminate your Award if it determines that you have engaged in material misconduct. Material misconduct includes conduct adversely affecting the Company’s reputation, financial condition, results of operations or prospects, or which constitutes fraud or theft of Company assets. If such material misconduct results, directly or indirectly, in any restatement of the Company’s financial information after an amount has been paid to you with respect to the Award, then the Committee also may require you to reimburse the Company for all or a portion of such payment amount. In addition, if there is a material restatement of the Company’s financial statements that affects the financial information used in the determination of the amount paid to you under the Award, then the Committee may take such action, in its sole discretion, as it deems necessary to adjust such amount.

7. Nontransferability of Awards. The Performance Units granted hereunder may not be sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Following your death, any cash payable in settlement of Performance Units will be paid at the time specified in Section 3, Section 4 or, if applicable, Section 5, to your beneficiary in accordance with, and subject to, the terms and conditions hereof and of the Plan.

8. Beneficiary Designation. You may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) to whom shall be paid under this Agreement following your death any cash payable hereunder in respect of your Performance Units at the time specified in Section 3, Section 4 or, if applicable, Section 5. Each designation will revoke all prior designations, shall be in a form prescribed by the Committee, and will be effective only when filed in writing with the Committee during your lifetime. In the absence of any such effective designation, cash payable in connection with your death shall be paid to your surviving spouse, if any, or otherwise to your estate.

10. Effect of Settlement. Upon the payment of cash in settlement of your Performance Units pursuant to Section 3, Section 4 or Section 5, all of your Performance Units subject to the Award shall be cancelled and terminated. If and to the extent that you are still employed at the end of the Performance Period, and none of your Performance Units shall have become earned in accordance with the terms of this Agreement, all such Performance Units subject to the Award shall be cancelled and terminated.

that such information may be disclosed as required by law and may be given in confidence to your spouse, tax and financial advisors, or to a financial institution to the extent that such information is necessary to secure a loan.

17. No Guarantee of Interests. The Board, the Committee and the Company do not guarantee the Common Stock of the Company from loss or depreciation.

The Company and you agree that any notices shall be given to the Company or to you at the following addresses:

Company:		Forest Oil Corporation
		Attn: Corporate Secretary
		707 17th Street, Suite 3600
		Denver, Colorado 80202

Holder:		At your current address as shown in the Company’s records.

21. Waiver of Notice. Any person entitled to notice hereunder may waive such notice in writing.

22. Successor. This Agreement shall be binding upon you, your legal representatives, heirs, legatees and distributees, and upon the Company, its successors and assigns.

23. Headings. The titles and headings of Sections and paragraphs are included for convenience of reference only and are not to be considered in construction of the provisions hereof.

25. Execution of Receipts and Releases. Any payment of cash to you, or to your legal representative, heir, legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Company may require you or your legal representative, heir, legatee or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefore in such form as it shall determine.

27. The Plan. This Agreement is subject to all the terms, conditions, limitations and restrictions contained in the Plan.

28. No Shareholder Rights. The Performance Units represent an unsecured and unfunded potential right to receive a cash payment, which right is subject to the terms, conditions and restrictions set forth in this Agreement and the Plan. Accordingly, the Employee will have

no rights as a shareholder with respect to any shares covered by Performance Units granted under this Agreement. Without limiting the scope of the preceding sentence, the Employee will have no rights to vote or receive dividend equivalents with respect to any shares covered by Performance Units granted under this Agreement.

29. Parachute Payment. If, in connection with a Change of Control, the accelerated vesting of one or more Performance Units pursuant to this Agreement comprises part of any “parachute payment” as defined in Code Section 280G(a)(2), the number of Performance Units to which such accelerated vesting would otherwise apply may be reduced in accordance with the terms of the Severance Agreement, to the extent applicable.

If you accept this Performance Unit Cash Award Agreement and agree to its terms and conditions, please so confirm by signing and returning the duplicate of this Agreement enclosed for that purpose.

		Very Truly Yours,

		FOREST OIL CORPORATION


		By:
		Name:
		Title:
		Date:


ACKNOWLEDGED AND AGREED:


By:
Name:

Appendix A

Determination of Performance Units Earned

Peer Companies: SM Energy Company

Exco Resources, Inc.

Ultra Petroleum Corporation

Cimarex Energy Company

Range Resources Corporation

Cabot Oil & Gas Corporation

Comstock Resources, Inc.

Quicksilver Resources, Inc.

Bill Barrett Corporation

Rosetta Resources

Swift Energy Company

Carrizo Oil & Gas, Inc.

Percentage of Initial Performance Units Earned:

The
Company’s
Rank Among	No. of Peer Companies
Peers	12		11		10		9		8		7
1	200	%	200	%	200	%	200	%	200	%	200	%
2	183	%	182	%	180	%	178	%	175	%	171	%
3	167	%	164	%	160	%	156	%	150	%	143	%
4	150	%	145	%	140	%	133	%	125	%	114	%
5	133	%	127	%	120	%	111	%	100	%	86	%
6	117	%	109	%	100	%	89	%	75	%	57	%
7	100	%	91	%	80	%	67	%	50	%	28	%
8	83	%	73	%	60	%	45	%	25	%	0	%
9	67	%	55	%	40	%	22	%	0	%
10	50	%	36	%	20	%	0	%
11	33	%	18	%	0	%
12	17	%	0	%
13	0	%

Adjustment Rules:

Notwithstanding the table above, the following additional rules shall apply in determining the Percentage of Initial Performance Units Earned under the applicable table: