Exhibit 10.1

 

AMENDMENT NO. 2 TO

FOREST OIL CORPORATION

2007 STOCK INCENTIVE PLAN

 

WHEREAS, Forest Oil Corporation (the “Company”) has heretofore adopted the
Forest Oil Corporation 2007 Stock Incentive Plan (the “Plan”); and

 

WHEREAS, the Company desires to amend the Plan (i) to increase the maximum
aggregate number of shares of the Company’s common stock available for issuance
under the Plan, (ii) to further restrict the ability of the Company to reprice
or exchange options or stock appreciation rights, and (iii) to prohibit payments
in connection with a Corporate Change (as defined in the Plan) prior to the
consummation of the transaction constituting the Corporate Change (collectively,
the “Amendment”); and

 

WHEREAS, the Company is seeking shareholder approval of the Amendment, as set
forth in the Company’s Proxy Statement for the Annual Meeting of Shareholders
scheduled for May 12, 2010;

 

NOW, THEREFORE, the Plan shall be amended as follows, provided that such
amendments shall not be effective until the date of approval of the Company’s
shareholders:

 

1.             The first sentence of Paragraph V(a) of the Plan shall be deleted
and replaced in its entirety with the following:

 

“Subject to adjustment in the same manner as provided in Paragraph XI with
respect to shares of Common Stock subject to Options then outstanding, the
aggregate maximum number of shares of Common Stock that may be issued under the
Plan, and the aggregate maximum number of shares of Common Stock that may be
issued under the Plan through Incentive Stock Options, shall not exceed
6,700,000.”

 

2.             The proviso at the end of the last sentence of Paragraph
VII(d) of the Plan shall be deleted and replaced in its entirety with the
following:

 

“provided, however, that, except as provided in Paragraph XI, the Committee may
not, without approval of the shareholders of the Company, amend any outstanding
Option or Stock Appreciation Right to lower the purchase or exercise price of
the underlying Option or Stock Appreciation Right, or cancel, replace or
exchange any outstanding Option or Stock Appreciation Right for (x) cash,
(y) another Award  other than an Option, or (z) an Option or Stock Appreciation
Right having a lower purchase or exercise price than the purchase or exercise
price of the original Option or Stock Appreciation Right.”

 

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3.     The second sentence of Paragraph XI(c) shall be deleted and replaced in
its entirety with the following:

 

“If (i) the Company shall not be the surviving entity in any merger or
consolidation (or survives only as a subsidiary of an entity), (ii) the Company
sells, leases, or exchanges or agrees to sell, lease, or exchange all or
substantially all of its assets to any other person or entity, (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 40% 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 (each such event is
referred to herein as a “Corporate Change”), then  (x) no earlier than effective
as of the consummation by the Company of such merger, consolidation,
reorganization, sale, lease, or exchange of assets or dissolution or such
election of Directors or (y) no later than 30 days after a Corporate Change of
the type described in clause (iv), the Committee, acting in its sole discretion
without the consent or approval of any Participant, shall effect one or more of
the following alternatives in an equitable and appropriate manner to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, which alternatives may vary among individual
Participants and which may vary among Options or Stock Appreciation Rights held
by any individual Participant:  (1) accelerate the time at which Options or
Stock Appreciation Rights then outstanding may be exercised so that such Awards
may be exercised in full for a limited period of time on or before a specified
date fixed by the Committee, after which specified date all such unexercised
Awards and all rights of Participants thereunder shall terminate, (2) require
the mandatory surrender to the Company by all or selected Participants of some
or all of the outstanding Options or Stock Appreciation Rights held by such
Participants (irrespective of whether such Awards are then exercisable under the
provisions of the Plan) as of a date specified by the Committee, in which event
the Committee shall thereupon cancel such Awards and the Company shall pay (or
cause to be paid) to each Participant an amount of cash per share equal to the
excess, if any, of the amount calculated in Subparagraph (d) below (the “Change
of Control Value”) of the shares subject to such Awards over the exercise
price(s) under such Awards for such shares, or (3) make such adjustments to
Options or Stock Appreciation Rights then outstanding as the Committee deems
appropriate to reflect such Corporate Change and to prevent the dilution or
enlargement of rights (provided, however, that the Committee may determine in
its sole discretion that no adjustment is necessary to such Awards then
outstanding), including, without limitation, adjusting such an Award to provide
that the number and class of shares of Common Stock covered by such Award shall
be adjusted so that such Award shall thereafter cover securities of the
surviving or acquiring corporation or other property (including, without
limitation, cash) as determined by the Committee in its sole discretion.”

 

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IN WITNESS WHEREOF, the undersigned, acting pursuant to authority granted to him
by the Board of Directors and shareholders of the Company, has caused this
Amendment No. 2 to Forest Oil Corporation 2007 Stock Incentive Plan to be
executed this 12th day of May, 2010.

 

 

FOREST OIL CORPORATION

 

 

 

 

 

By:

/S/Cyrus D. Marter IV

 

 

Cyrus D. Marter IV

 

 

Vice President, General Counsel &

 

 

Secretary

 

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