Exhibit 10.4

 

AMENDMENT TO SEVERANCE AGREEMENT

 

THIS AMENDMENT TO SEVERANCE AGREEMENT (“Amendment”) is made this 18th day of
December, 2012, by and between Forest Oil Corporation, a New York corporation
(the “Company”), and Patrick R. McDonald (“Executive”).

 

WHEREAS, the Company and Executive have heretofore entered into that certain
Severance Agreement dated as of October 1, 2012 (the “Severance Agreement”); and

 

WHEREAS, the Company and Executive desire to amend the Severance Agreement as
set forth herein;

 

NOW, THEREFORE, in consideration of the premises set forth above and the mutual
agreements set forth herein, the Company and Executive hereby agree that the
Severance Agreement shall be amended as hereafter provided, effective as of the
date first set forth above:

 

1.                                      Paragraph 1(c)(i) of the Severance
Agreement shall be deleted and the following shall be substituted therefor:

 

“(i)                               Any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (A) the then-outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that, for purposes of this Section 1(d), the following
acquisitions shall not constitute a Change of Control:  (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Affiliated Company or (iv) any acquisition
pursuant to a transaction that complies with clauses (iii)(A), (iii)(B) and
(iii)(C) of this Paragraph 1(c);”

 

2.                                      Paragraph 1(c)(iii) of the Severance
Agreement shall be deleted and the following shall be substituted therefor:

 

“(iii)                         Consummation of a reorganization, merger,
statutory share exchange or consolidation or similar transaction involving the
Company or any of its subsidiaries, a sale or other disposition of more than 60%
of the total gross fair market value of all the assets of the Company
immediately before such sale or other disposition (determined without regard to
any liabilities associated with such assets), or the acquisition of assets or
securities of another entity by the Company or any of its subsidiaries (each, a
“Business Combination”), in each case unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities

 

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immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock (or,
for a non-corporate entity, equivalent securities) and the combined voting power
of the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any entity
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then-outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) of the entity resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such entity, except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors (or, for a non-corporate entity, equivalent governing
body) of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination; or

 

3.                                      Paragraph 3 of the Severance Agreement
up to and including the end of Paragraph 3(a) shall be deleted and the following
shall be substituted therefor:

 

“3.                                Termination Within Two Years After a Change
of Control.  Subject to the provisions of Paragraph 7(i) hereof, if Executive’s
employment by the Company or any subsidiary thereof or successor thereto shall
be subject to an Involuntary Termination which occurs on or within two years
after the date upon which a Change of Control occurs, then the Company will, as
additional compensation for services rendered to the Company (including its
subsidiaries), pay to Executive the following amounts (subject to any applicable
payroll or other taxes required to be withheld and any employee benefit
premiums) and take the following actions after the last day of Executive’s
employment with the Company:

 

(a)                                 Pay Executive a lump sum cash payment in an
amount equal to the Severance Amount.  Subject to the provisions of Paragraph
7(i) hereof, such payment shall be made on the date that is 60 days after the
date of Executive’s Involuntary Termination or on the immediately following
business day if such day is not a business day.”

 

4.                                      Paragraph 4 of the Severance Agreement
shall be deleted and the following shall be substituted therefor:

 

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“4.                                Interest on Late Payments.  If any payment
provided for in Paragraph 3(a) hereof is not made when due (determined after
giving effect to any delay in such payment required pursuant to Paragraph
7(i)(2) hereof), the Company shall pay to Executive interest on the amount
payable from the date that such payment should have been made under such
paragraph until such payment is made, which interest shall be calculated at 10%
plus the prime rate of interest announced by JPMorgan Chase Bank (or any
successor thereto) at its principal office in New York on a non-compounded
basis, and shall change when and as any such change in such prime rate shall be
announced by such bank.”

 

5.                                      Paragraph 6(c) of the Severance
Agreement shall be deleted and the following shall be substituted therefor:

 

“(c)                            Provisions Generally Applicable to Section 6. 
Executive understands that the provisions of Paragraphs 6(a) and 6(b) of this
Agreement may limit his ability to earn a livelihood in a business similar to
that of the Company but Executive nevertheless agrees and hereby acknowledges
that (i) such provisions do not impose a greater restraint than is necessary to
protect the goodwill or other business interests of the Company and its members,
principals and directors, (ii) such provisions contain reasonable limitations as
to time and scope of activity to be restrained, (iii) such provisions are not
harmful to the general public, (iv) such provisions are not unduly burdensome to
Executive, and (v) the consideration provided under Paragraph 3 hereof is
sufficient to compensate Executive for the restrictions contained in Paragraphs
6(a) and 6(b) hereof.  If any court determines that any of the covenants in
Paragraphs 6(a) and 6(b) hereof, or any part thereof, is invalid or
unenforceable, the remainder of the covenants shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.  In the
event any of the covenants in Paragraphs 6(a) and 6(b) hereof shall be more
restrictive than permitted by applicable law, it shall be limited to the extent
which is so permitted and, in its reduced form, such provision shall then be
enforceable. Nothing in this Agreement shall be construed as preventing the
Company from pursuing any and all other remedies available to it for the breach
or threatened breach of the covenants in Paragraphs 6(a) and 6(b) hereof,
including recovery of money damages or temporary or permanent injunctive relief.
Accordingly, Executive acknowledges that the remedy at law for breach of the
covenants in Paragraphs 6(a) and 6(b) hereof may be inadequate and that, in
addition to any other remedy the Company may have, it shall be entitled to an
injunction restraining any breach or threatened breach.”

 

7.                                      As amended hereby, the Severance
Agreement is specifically ratified and reaffirmed.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment effective as herein provided.

 

 

FOREST OIL CORPORATION

 

 

 

 

 

By:

/s/ Paul Dusha

 

 

Name:

Paul Dusha

 

 

Title:

Vice President Human Resources

 

 

 

 

 

EXECUTIVE

 

 

 

/s/ Patrick R. McDonald

 

Patrick R. McDonald

 

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