FOREST OIL CORPORATION

CASH-BASED AWARD AGREEMENT
[_________________, 20__]
 
To: _______________

Forest Oil Corporation, a New York corporation (the “Company”), is pleased to
grant you two separate awards (the “Awards”) with respect to cash-based
incentive compensation. One of such Awards shall be referred to herein as the
“Time-Based Award,” and the other of such Awards shall be referred to herein as
the “Performance-Based Award.” The Performance-Based Award shall relate to the
period beginning on ____________, 20__ and ending on ____________, 20__ (the
“Performance Period”). The Performance-Based Award is granted under, and subject
to the terms of, the Forest Oil Corporation 2007 Stock Incentive Plan (as it may
be amended from time to time, the “Plan”), and shall constitute a “Performance
Award” under the Plan that is subject to the payment limitations described in
clause (ii) of the penultimate sentence of Paragraph V(a) of the Plan. A copy of
the Plan is available upon request. The Time-Based Award is not granted under,
and shall not be subject to the terms of, the Plan. The Awards are subject to
your acceptance of and agreement to all the applicable terms, conditions and
restrictions described in this Cash-Based Award Agreement (this “Agreement”). To
the extent that any provision of this Agreement as it relates to the
Performance-Based Award 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 or Appendix A attached hereto, shall have the meanings given to them
in the Plan in effect as of the date of this Agreement.

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

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.

1.    Time-Based Award.    The Time-Based Award entitles you to a cash payment
from the Company on (or within five business days after) the Time-Based Award
Payment Date in an amount equal to the Time-Based Award Payment Amount. In the
event your employment with the Company terminates prior to the occurrence of the
Time-Based Award Payment Date for any reason other than death, Disability, or
Involuntary Termination, then you shall, for no consideration, immediately
forfeit to the Company the Time-Based Award and you shall not have any further
rights with respect to such Award.

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2.    Performance-Based Award.

(a)     In General. The Performance-Based Award shall be subject to achievement
of the Total Shareholder Return performance objective (the “Performance
Objective”). The Performance-Based Award entitles you to a cash payment from the
Company after the Performance-Based Award Computation Date in an amount equal to
the Performance-Based Award Payment Amount. In the event your employment with
the Company terminates prior to the occurrence of the Performance-Based Award
Computation Date for any reason other than death, Disability, or Involuntary
Termination, then you shall, for no consideration, immediately forfeit to the
Company the Performance-Based Award and you shall not have any further rights
with respect to such Award. Subject to Sections 2(b) and 2(c), the payment of
any Performance-Based Award Payment Amount to which you may be entitled shall be
made as follows: (i) if the Performance-Based Award Computation Date is the last
day of the Performance Period, then payment shall be made not later than the
15th day of the third calendar month following the calendar month in which the
Performance Period ends; (ii) if the Performance-Based Award Computation Date is
the date your employment with the Company terminates due to your death or
Disability, then payment shall be made not later than the 15th day of the third
calendar month following the calendar month in which the date of your death or
Disability occurs; (iii) if the Performance-Based Award Computation Date is the
date your employment with the Company terminates due to your Involuntary
Termination, then payment shall be made not later than the 15th day of the third
calendar month following the calendar month in which the date of your
Involuntary Termination occurs; and (iv) if the Performance-Based Award
Computation Date is the date upon which a Change of Control occurs, then payment
shall be made immediately following (and not later than five business days after
) the date upon which the Change of Control occurs.

(b)     Certification of Performance Objective. Prior to any payment described
in clauses (i), (iii) or (iv) of the last sentence of Section 2(a), and as soon
as administratively practicable following the Performance-Based Award
Computation Date relating to any such payment (but in no event later than the
date which will permit the Company to satisfy the time of payment requirements
of Section 2(a)), the Committee shall certify in writing whether and to the
extent that the Performance Objective has been achieved and will determine the
Performance-Based Award Payment Amount.

(c)    Forfeiture under Certain Circumstances. Notwithstanding any provision
herein to the contrary, the Committee may terminate your Performance-Based 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 Performance-Based 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 Performance-Based Award,
then the Committee may take such action, in its sole discretion, as it deems
necessary to adjust such amount.

3.     Nontransferability of Awards. The Awards 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 respect of an Award will be paid, at the time specified in
Section 1 or Section 2, as applicable, to your beneficiary in accordance with,
and subject to, the terms and

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conditions hereof.

4.     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 Awards at the time specified in Section 1 or Section 2, as
applicable. 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.

5.    Effect of Settlement. Upon payment with respect to an Award in accordance
with any applicable provision of this Agreement, all of your rights relating to
such Award shall be cancelled and terminated. If and to the extent that you are
still employed at the end of the Performance Period (with respect to the
Performance-Based Award) or on ___________, 20__ (with respect to your
Time-Based Award), and no payment amount shall have been earned in respect of
the applicable Award in accordance with the terms of this Agreement, then such
Award shall be cancelled and terminated.

6.     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.

7.     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.

8.     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.

9.     Withholding of Taxes. The Company shall deduct and withhold, or cause to
be withheld, from your payment(s) made under this Agreement, or from any other
payment to you, an amount necessary to satisfy any and all tax withholding
obligations arising under applicable local, state, federal, or foreign laws
associated with such payment. The Company may take any other action as may in
its opinion be necessary to satisfy all obligations for the payment and
withholding of such taxes.

10.     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.

11.    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
Awards granted hereunder.

12.     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.

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13.     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.

14.     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.

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

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

17.     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.

18.     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.
19.     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, to execute a release and receipt therefore in such form as it shall
determine.

20.    Delayed Payment Restriction. Notwithstanding any provision in this
Agreement to the contrary, if the payment of any amount under this Agreement
would be subject to additional taxes and interest under Section 409A of the Code
because the timing of such payment is not delayed as provided in Section
409A(a)(2)(B)(i) of the Code and the regulations thereunder, then any such
payment that you would otherwise be entitled to during the first six months
following the date of your termination of employment shall be accumulated and
paid on the date that is six months after the date of your termination of
employment (or if

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such date does not fall on a business day of the Company, the next following
business day of the Company), or such earlier date upon which such amount can be
paid or provided under Section 409A of the Code without being subject to such
additional taxes and interest. If this Section 20 becomes applicable such that
the payment of any amount is delayed, any payments that are so delayed shall
accrue interest on a non-compounded basis, from the date such payment would have
been made had this Section 20 not applied to the actual date of payment, at the
prime rate of interest announced by JPMorgan Chase Bank (or any successor
thereto) at its principal office in New York on the date of your termination of
employment (or the first business day following such date if such termination
does not occur on a business day) and shall be paid in a lump sum on the actual
date of payment of the delayed payment amount. You agree to be bound by the
Company’s determination of its “specified employees” (as such term is defined in
Section 409A of the Code) in accordance with any of the methods permitted under
the regulations issued under Section 409A of the Code.

21.     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.
    
If you accept this Cash-Based 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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Appendix A

Defined Terms

“Change of Control” means (i) with respect to the Performance-Based Award, the
meaning given such term in the Severance Agreement, and (ii) with respect to the
Time-Based Award, the occurrence of one or more of the following events:
(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);
(C)     the Company is to be dissolved and liquidated;
(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
50% 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, for purposes of the Time-Based Award, 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.

“Disability” has the meaning given to such term in the Severance Agreement.

“Involuntary Termination” means 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.

“Performance-Based Award Computation Date” means the first to occur of the
following: (i) the last day of the Performance Period; (ii) the date upon which
a Change of Control occurs; or (iii) the date your employment with the Company
is terminated by reason of death, Disability or Involuntary Termination.

“Performance-Based Award Payment Amount” means:

(i) if the Performance-Based Award Computation Date is the last day of the
Performance Period, the date upon which a Change of Control occurs or the date
your employment with the Company is terminated by reason of an Involuntary
Termination, then an amount equal to (A) $________ multiplied by (B) the Total
Shareholder Return Ranking Percentage multiplied by (C) a fraction, the
numerator of which shall equal the sum of (x) the Fair Market Value on the
Performance-Based Award Computation Date plus (y) the aggregate value (as
determined by the Committee) of the dividends and other distributions paid to
shareholders with respect to a share of Common Stock

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during the period beginning on the date of this Agreement and ending on the
Performance-Based Award Computation Date, and the denominator of which shall
equal $_____ (which is the Fair Market Value on the date of this Agreement); or

(ii) if the Performance-Based Award Computation Date is the date your employment
with the Company is terminated by reason of death or Disability, then an amount
equal to (A) $________ multiplied by (B) 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,
multiplied by (C) a fraction, the numerator of which shall equal the sum of (x)
the Fair Market Value on the Performance-Based Award Computation Date plus (y)
the aggregate value (as determined by the Committee) of the dividends and other
distributions paid to shareholders with respect to a share of Common Stock
during the period beginning on the date of this Agreement and ending on the
Performance-Based Award Computation Date, and the denominator of which shall
equal $_____ (which is the Fair Market Value on the date of this Agreement).

Notwithstanding the foregoing, the formula described in the preceding sentence
shall be subject to equitable and appropriate adjustment by the Committee so as
to prevent the dilution or enlargement of the benefit intended to be provided
under the Performance-Based Award in the event of any dividend, stock split,
reverse stock split, recapitalization (including, but not limited to, the
payment of an extraordinary dividend), merger, consolidation, combination,
spin-off, distribution of assets to shareholders, exchange of shares, or other
similar matters or corporate changes with regard to the Company that are not
accounted for in such formula, and the Committee’s determination with respect to
any such adjustment shall be conclusive.

“Performance Unit Award Agreement” means the Forest Oil Corporation 2007 Stock
Incentive Plan Performance Unit Award Agreement between you and the Company
dated as of ___________, 20__.

“Severance Agreement” means the Severance Agreement between you and the Company
as in effect on the date of this Agreement.

“Time-Based Award Payment Amount” means an amount equal to (i) $________
multiplied by (ii) a fraction, the numerator of which shall equal the sum of (A)
the Fair Market Value on the trading date immediately preceding the Time-Based
Award Payment Date plus (B) the aggregate value (as determined by the Committee)
of the dividends and other distributions paid to shareholders with respect to a
share of Common Stock during the period beginning on the date of this Agreement
and ending on the Time-Based Award Payment Date, and the denominator of which
shall equal $_____ (which is the Fair Market Value on the date of this
Agreement). Notwithstanding the foregoing, the formula described in the
preceding sentence shall be subject to equitable and appropriate adjustment by
the Committee so as to prevent the dilution or enlargement of the benefit
intended to be provided under the Time-Based Award in the event of any dividend,
stock split, reverse stock split, recapitalization (including, but not limited
to, the payment of an extraordinary dividend), merger, consolidation,
combination, spin-off, distribution of assets to shareholders, exchange of
shares, or other similar matters or corporate changes with regard to the Company
that are not accounted for in such formula, and the Committee’s determination
with respect to any such adjustment shall be conclusive.

“Time-Based Award Payment Date” means the first to occur of the following: (i)
_________, 20__; (ii) the date upon which a Change of Control occurs; or (iii)
the date your employment with the Company is terminated by reason of death,
Disability or Involuntary Termination.

“Total Shareholder Return” has the meaning assigned to such term in the
Performance Unit Award Agreement.

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“Total Shareholder Return Ranking Percentage” shall mean a percentage (which may
range form 0% to 200%) equal to the percentage determined under Appendix A of
the Performance Unit Award Agreement for purposes of determining the percentage
of “Initial Performance Units” earned under such agreement.

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