Exhibit 10.32

[g261582kk01i001.gif]

FOREST OIL CORPORATION

EXECUTIVE DEFERRED COMPENSATION PLAN

As Amended and Restated
Effective as of January 1, 2005

--------------------------------------------------------------------------------

TABLE OF CONTENTS

ARTICLE

 

PAGE

 

 

 

I.

DEFINITIONS AND CONSTRUCTION

I-1

 

 

 

II.

PARTICIPATION

II-1

 

 

 

III.

ACCOUNT CREDITS AND ALLOCATIONS OF INCOME OR LOSS

III-1

 

 

 

IV.

DEEMED INVESTMENT OF FUNDS

IV-1

 

 

 

V.

IN-SERVICE DISTRIBUTIONS

V-1

 

 

 

VI.

TERMINATION BENEFITS

VI-1

 

 

 

VII.

ADMINISTRATION OF THE PLAN

VII-1

 

 

 

VIII.

ADMINISTRATION OF FUNDS

VIII-1

 

 

 

IX.

NATURE OF THE PLAN

IX-1

 

 

 

X.

MISCELLANEOUS

X-1

i

--------------------------------------------------------------------------------

FOREST OIL CORPORATION

EXECUTIVE DEFERRED COMPENSATION PLAN

W I T N E S S E T H :

WHEREAS, Forest Oil Corporation (the “Company”) has heretofore adopted the
FOREST OIL CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN (the “Plan”) for the
benefit of its eligible employees; and

WHEREAS, the Company desires to restate the Plan and to amend the Plan in
several respects, intending thereby to provide an uninterrupted and continuing
program of benefits;

NOW THEREFORE, the Plan is hereby restated in its entirety as follows with no
interruption in time, effective as of January 1, 2005, except as otherwise
indicated herein:

ii

--------------------------------------------------------------------------------

I.

Definitions and Construction

1.1          Definitions.  The capitalized words or terms used in the Plan and
which are not otherwise defined herein shall have the same meanings as such
words or terms have in the Retirement Savings Plan of Forest Oil Corporation, as
the same may be amended from time to time.  Where the following words and
phrases appear in the Plan, they shall have the respective meanings set forth
below, unless their context clearly indicates to the contrary.

(1)                                  Account(s):  A Member’s Grandfathered
Account and/or Deferral Account and the amounts credited thereto.  A Member
shall have a 100% nonforfeitable interest in his Accounts at all times.

(2)                                  Affiliate:  With respect to a person, any
other person with whom the person would be considered a single employer under
section 414(b) of the Code (employees of controlled group of corporations), and
any other person with whom the person would be considered a single employer
under section 414(c) of the Code (employees of partnerships, proprietorships,
etc., under common control).

(3)                                  Change of Control:  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 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 (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 Company’s Board of Directors. 
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.

(4)                                  Code:  The Internal Revenue Code of 1986,
as amended.

(5)                                  Committee:  The Compensation Committee of
the Board of Directors of the Company.

(6)                                  Company: Forest Oil Corporation.

(7)                                  Compensation: Amounts equal to a Member’s
“Compensation,” as such term is defined under the Retirement Savings Plan,
including amounts a Member could have received in cash in lieu of Compensation
deferrals pursuant to Section 3.1, and without regard to the maximum dollar
limitation of section 401(a)(17) of the Code.

I-1

--------------------------------------------------------------------------------

(8)                                  Deferral Account:  An individual account
for each Member to which is credited, from and after the Effective Date, his
Compensation deferrals pursuant to Section 3.1, the Employer Deferrals made on
his behalf pursuant to Section 3.2, and which reflects such Account’s allocation
of earnings and/or changes in value as provided in Section 3.3.

(9)                                  Directors:  The Board of Directors of the
Company.

(10)                            Discretionary Contribution Percentage:  For each
Plan Year and with respect to each Member, the percentage obtained by dividing
(i) the Employer Discretionary Contribution, if any, allocated to such Member’s
Employer Contribution Account under the Retirement Savings Plan for such Plan
Year by (ii) the amount of such Member’s “Compensation” (as such term is defined
in the Retirement Savings Plan) that was considered under the Retirement Savings
Plan to determine such allocation for such Plan Year.

(11)                            Effective Date:  January 1, 2005, as to this
restatement of the Plan, except as otherwise indicated in specific provisions of
the Plan.  The original effective date of the Plan was July 1, 1994.

(12)                            Employer: The Company and any other adopting
entity that adopts the Plan pursuant to the provisions of Section 2.3.

(13)                            Employer Deferrals:  Deferrals made by the
Employer on a Member’s behalf pursuant to Section 3.2.

(14)                            Entry Date:  The first day of each Plan Year.

(15)                            Funds:  The investment funds designated from
time to time for the deemed investment of Accounts pursuant to Article IV.

(16)                            Grandfathered Account:  An individual account
for each Member to which is credited all amounts, if any, deferred under the
Plan by or on behalf of such Member prior to the Effective Date plus all
allocations of earnings on such amounts prior to the Effective Date.  From and
after the Effective Date, a Member’s Grandfathered Account shall not be credited
with any Compensation deferrals pursuant to Section 3.1 or any Employer
Deferrals pursuant to Section 3.2, but such Account shall be adjusted to reflect
such Account’s allocation of earnings and/or changes in value as provided in
Section 3.3.

(17)                            Match Compensation:  Amounts equal to a Member’s
Compensation plus amounts of base salary that a Member elects to defer pursuant
to the Salary Deferral Plan.

(18)                            Member: Each individual who has been selected
for participation in the Plan and who has become a Member pursuant to Article
II.

(19)                            Plan:  The Forest Oil Corporation Executive
Deferred Compensation Plan, as amended from time to time.

(20)                            Plan Year:  The twelve-consecutive month period
commencing January 1 of each year.

I-2

--------------------------------------------------------------------------------

(21)                            Retirement Savings Plan:  The Retirement Savings
Plan of Forest Oil Corporation, as amended from time to time.

(22)                            Salary Deferral Plan:  The Forest Oil
Corporation Salary Deferral Deferred Compensation Plan.

(23)                            Termination of Service:  A Member’s separation
from service with the Employer and its Affiliates within the meaning of section
409A(a)(2)(A)(i) of the Code (and applicable administrative guidance
thereunder).

(24)                            Trust:  The trust, if any, established under the
Trust Agreement.

(25)                            Trust Agreement:  The agreement, if any, entered
into between the Company and the Trustee pursuant to Article IX.

(26)                            Trust Fund:  The funds and properties, if any,
held pursuant to the provisions of the Trust Agreement, together with all
income, profits and increments thereto.

(27)                            Trustee:  The trustee or trustees qualified and
acting under the Trust Agreement at any time.

(28)                            Valuation Dates:  December 31, 2004 and, for the
period beginning on the Effective Date through December 31, 2006, the last day
of each calendar month.  From and after January 1, 2007, each calendar day shall
be a Valuation Date.

1.2          Number and Gender.  Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular.  The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.

1.3          Headings.  The headings of Articles and Sections herein are
included solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.

I-3

--------------------------------------------------------------------------------

II.

Participation

2.1          Participation.  Prior to each Entry Date, the Committee, in its
sole discretion, shall select and notify those management or highly compensated
employees of the Employer who shall be eligible to become Members as of such
Entry Date.  Any such eligible employee may become a Member on such Entry Date
by executing and filing with the Committee, prior to such Entry Date, the form
prescribed by the Committee.  Such form shall include, among other things
prescribed by the Committee, the consent of such Member to be subject to all of
the terms and provisions of the Plan including, without limitation, the
Compensation deferral provisions set forth in Section 3.1.  Subject to the
provisions of Section 2.2, a Member shall remain eligible to defer Compensation
hereunder and receive an allocation of Employer Deferrals for each Plan Year
following his initial year of participation in the Plan.  By participating in
the Plan for a Plan Year that begins after December 31, 2006, a Member agrees
that he shall not make any changes during such Plan Year to his deferral
election with respect to Before-Tax Contributions for such Plan Year under the
Retirement Savings Plan.

2.2          Cessation of Active Participation.  Notwithstanding any provision
herein to the contrary, an individual who has become a Member of the Plan shall
cease to be entitled to defer Compensation hereunder or receive an allocation of
Employer Deferrals effective as of the Entry Date of any subsequent Plan Year
designated by the Committee.  Any such Committee action shall be communicated to
the affected individual prior to such Entry Date.  Further, an individual who
has become a Member of the Plan may cancel his Compensation deferrals hereunder
and his right to receive an allocation of Employer Deferrals, effective as of
the Entry Date of any subsequent Plan Year, by executing and delivering to the
Employer the form prescribed by the Committee prior to such Entry Date and
within the time period prescribed by the Committee.  An individual described in
the preceding provisions of this Section may again become entitled to defer
Compensation hereunder and receive an allocation of Employer Deferrals beginning
on any subsequent Entry Date selected by the Committee in its sole discretion.

2.3          Adopting Entities.  It is contemplated that other entities may
adopt the Plan and thereby become an Employer.  Any such entity, whether or not
presently existing, may become a party hereto by appropriate action of its
officers without the need for approval of its board of directors or of the
Committee or the Directors; provided, however, that such entity must be an
Affiliate of the Company.  The provisions of the Plan shall apply separately and
equally to each Employer and its employees in the same manner as is expressly
provided for the Company and its employees, except that (a) the power to appoint
or otherwise affect the Trustee and the power to amend or terminate the Plan or
amend the Trust Agreement shall be exercised by the Committee alone and (b) the
determination of whether a Change of Control has occurred shall be made based
solely on the Company.  Any Employer may, by appropriate action of its officers
without the need for approval of its board of directors (or noncorporate
counterpart) or the Committee or the Directors, terminate its participation in
the Plan effective immediately prior to the start of any subsequent Plan Year. 
Moreover, the Committee may, in its discretion, terminate an Employer’s Plan
participation effective immediately prior to the start of any subsequent Plan
Year; provided, however, that if an Employer ceases to be an Affiliate of the
Company, such

II-1

--------------------------------------------------------------------------------

Employer’s Plan participation may be terminated by the Committee effective
immediately upon such cessation.

II-2

--------------------------------------------------------------------------------

III.

Account Credits and Allocations of Income or Loss

3.1          Member Deferrals.

(a)           For each payroll period in which a Member’s Before-Tax
Contributions under the Retirement Savings Plan are limited as a result of the
limitations contained in section 401(a)(17) and/or 402(g) of the Code, the
Employer shall withhold from such Member’s Compensation for such payroll period
and the Member shall defer hereunder the amount by which such Member’s
Before-Tax Contributions to the Retirement Savings Plan are reduced solely
because of the application of such limitations; provided, however, that (i) any
amount withheld and deferred pursuant to this sentence shall be determined based
upon the assumption that the Member’s election with respect to the percentage
rate of his Before-Tax Contributions under the Retirement Savings Plan in effect
during such payroll period is equal to the percentage rate of his Before-Tax
Contributions in effect on the first day of the Plan Year in which such payroll
period occurs and (ii) the limitation contained in section 402(g) of the Code
for a Plan Year beginning after December 31, 2006, shall be determined by
including in such limitation the “catch-up contributions”, if any, a Member is
eligible to defer under the Retirement Savings Plan for such Plan Year pursuant
to section 414(v) of the Code.  For purposes of determining the amount of a
Member’s Compensation to be withheld and deferred under the preceding sentence
(for each payroll period in which a Member’s Before-Tax Contributions under the
Retirement Savings Plan are limited as described in the preceding sentence), the
amount of the Member’s Compensation shall be deemed to be the Member’s Match
Compensation.  Notwithstanding the foregoing, the maximum amount that may be
withheld and deferred for any payroll period shall be the amount of 80% of the
Member’s Compensation for such period.

(b)           For each Plan Year in which a Member’s Before-Tax Contributions
under the Retirement Savings Plan are limited as a result of the limitations
contained in section 401(k)(3) and/or 415 of the Code, the Company shall
withhold from such Member’s Compensation and the Member shall defer hereunder an
amount equal to the reduction in such Member’s Before-Tax Contributions to the
Retirement Savings Plan as a result solely of the application of such
limitations.

(c)           A Member’s compensation deferrals shall become effective as of the
Entry Date which is coincident with or next following the date the Member
executes and files with the Committee the form described in Section 2.1.  A
Member’s compensation deferrals shall remain in force and effect unless and
until such deferrals are to cease in accordance with the provisions of Section
2.2.  Compensation for a Plan Year not deferred by a Member pursuant to the
above paragraphs shall be received by such Member in cash.  Compensation
deferrals made by a Member shall be credited to such Member’s Deferral Account
as of the date upon which the Compensation deferred would have been received by
such Member in cash had no deferral been made pursuant to this Section 3.1.

III-1

--------------------------------------------------------------------------------

3.2          Employer Deferrals.

(a)           As of the last day of each calendar month, the Employer shall
credit a Member’s Deferral Account with an amount which equals a specified
percentage (the “Match Percentage”) of the deferrals made by such Member
pursuant to Section 3.1(a) (determined without regard to the final sentence
thereof, which provides that the maximum amount that may be withheld and
deferred for any payroll period shall be the amount of 80% of the Member’s
Compensation for such period) and Section 3.1(b) during such month that are not
in excess of a specified percentage (the “Compensation Percentage”) of such
Member’s Match Compensation for such month.  For purposes of the preceding
sentence, the Match Percentage and the Compensation Percentage for a particular
month shall be determined based on the formula used for determining the amount
of Employer Matching Contributions under the Retirement Savings Plan for such
month.  For example, if the Retirement Savings Plan provides that the Employer
Matching Contributions for a month shall equal 100% of the Before-Tax
Contributions that were made by a participant during such month that were not in
excess of 7% of such participant’s compensation for such month, then the Match
Percentage for such month shall equal 100%, and the Compensation Percentage for
such month shall equal 7%.

(b)           As of the last day of each Plan Year, the Employer shall credit a
Member’s Deferral Account with an amount equal to the difference, if any,
between (i) the Discretionary Contribution Percentage applicable to such Member
for such Plan Year multiplied by such Member’s Compensation for such Plan Year,
and (ii) the Employer Discretionary Contribution allocated to such Member’s
Employer Contribution Account under the Retirement Savings Plan for such Plan
Year.  Further, as of the last day of each Plan Year in which the Employer
Matching Contributions and/or Employer Discretionary Contributions under the
Retirement Savings Plan on behalf of a Member are limited as a result of the
limitations contained in section 401(m)(2) and/or 415 of the Code, the Employer
shall credit such Member’s Deferral Account with an amount equal to the
reduction in such Member’s share of such contributions to the Retirement Savings
Plan as a result solely of the application of such limitations.

(c)          As of any date selected by the Committee, the Employer may credit a
Member’s Deferral Account with such amount, if any, as the Committee shall
determine in its sole discretion.  Such credits may be made on behalf of some
Members but not others, and such credits may vary in amount among individual
Members.

3.3          Earnings Credits; Valuation of Accounts.

(a)           As of each Valuation Date that occurs during the period beginning
on the Effective Date and ending on December 31, 2005, the Employer shall credit
each Account of a Member with an amount that equals 1% of the balance in such
Account as of the next preceding Valuation Date.

(b)           As of each Valuation Date that occurs during the period beginning
on January 1, 2006, and ending on December 31, 2006, the Employer shall credit
each Account of a Member with an amount that equals one-half of 1% of the
balance in such Account as of the next preceding Valuation Date.

III-2

--------------------------------------------------------------------------------

(c)           From and after January 1, 2007, all amounts credited to a Member’s
Accounts shall be deemed invested as soon as administratively feasible among the
Funds as provided in Article IV, and the balance of each Account shall reflect
the result of daily pricing of the assets in which such Account is deemed
invested from time to time until the time of distribution.

III-3

--------------------------------------------------------------------------------

IV.

Deemed Investment of Funds

The provisions of this Article IV shall be effective from and after January 1,
2007.

Each Member shall designate, in accordance with the procedures established from
time to time by the Committee, the manner in which the amounts allocated to his
Accounts shall be deemed to be invested from among the Funds made available from
time to time for such purpose by the Committee.  Such Member may designate one
of such Funds for the deemed investment of all the amounts allocated to his
Accounts or he may split the deemed investment of the amounts allocated to his
Accounts between such Funds in such increments as the Committee may prescribe. 
If a Member fails to make a proper designation, then his Accounts shall be
deemed to be invested in the Fund or Funds designated by the Committee from time
to time in a uniform and nondiscriminatory manner.

A Member may change his deemed investment designation for future deferrals to be
allocated to his Accounts.  Any such change shall be made in accordance with the
procedures established by the Committee, and the frequency of such changes may
be limited by the Committee.

A Member may elect to convert his deemed investment designation with respect to
the amounts already allocated to his Accounts.  Any such conversion shall be
made in accordance with the procedures established by the Committee, and the
frequency of such conversions may be limited by the Committee.

IV-1

--------------------------------------------------------------------------------

V.

In-Service Distributions

5.1          Domestic Relations Order.  The Plan shall permit such acceleration
of the time or schedule of a payment to an individual other than a Member as may
be necessary to fulfill a domestic relations order (as defined in section
414(p)(1)(B) of the Code).

5.2          No Other In-Service Distributions.  Except as provided in Section
5.1, in-service distributions shall not be permitted under the Plan.  Members
shall not be permitted to make withdrawals from the Plan prior to a Termination
of Service.  Members shall not, at any time, be permitted to borrow from the
Trust Fund.  Following a Member’s Termination of Service, the amounts credited
to such Member’s Accounts shall be payable to such Member in accordance with the
provisions of Article VI.

V-1

--------------------------------------------------------------------------------

VI.

Termination Benefits

6.1          Amount of Benefit.  Upon a Member’s Termination of Service, the
Member, or, in the event of the Member’s death, the Member’s designated
beneficiary (as determined under Section 6.3), shall become entitled to receive
a benefit equal in value to the aggregate balance in the Member’s Accounts. 
With respect to distributions made prior to January 1, 2007, the value of a
Member’s Accounts shall be deemed to be equal to the balance in his Accounts as
of the Valuation Date next preceding the date of the payment of the Member’s
benefit pursuant to Section 6.2.  With respect to distributions made on or after
January 1, 2007, the value of a Member’s Accounts shall be determined as of the
Valuation Date next preceding the date of the payment of the Member’s benefit
pursuant to Section 6.2.

6.2           Time of Payment.

(a)           Subject to the delayed payment restriction of Section 6.2(b), a
Member’s benefit under Section 6.1 shall be paid in a single lump sum, cash
payment on one of the following dates irrevocably elected by such Member in
writing on the form prescribed by the Committee on or before the date he becomes
a Member of the Plan:

(1)           the first day of the second calendar month following the month in
which the Member’s Termination of Service occurs; or

(2)           February 1 of the year following the calendar year in which the
Member’s Termination of Service occurs.

In the event such Member fails to timely elect the date upon which his benefit
payment is to be made, such benefit payment shall be made at the time provided
in clause (1) of the preceding sentence.

(b)           With respect to a Member who is identified as a specified employee
within the meaning of section 409A(a)(2)(B)(i) of the Code (and applicable
administrative guidance thereunder), (1) payment of the portion of the Member’s
Section 6.1 benefit that is attributable to his Grandfathered Account shall be
paid at the time provided in Section 6.2(a) and (2) payment of the portion of
the Member’s Section 6.1 benefit that is attributable to his Deferral Account
shall not be paid until the later of (i) the time provided in Section 6.2(a) or
(ii) the earlier of (A) the date that is six months after the Member’s
Termination of Service or (B) the date of death of the Member.  For purposes of
identifying a specified employee, the Plan’s identification date is December 31.

6.3          Designation of Beneficiaries.

(a)           Each Member shall have the right to designate the beneficiary or
beneficiaries to receive payment of his benefit in the event of his death.  Each
such designation shall be made by executing the beneficiary designation form
prescribed by the Committee and

VI-1

--------------------------------------------------------------------------------

filing same with the Committee.  Any such designation may be changed at any time
by execution of a new designation in accordance with this Section.

(b)           If no such designation is on file with the Committee at the time
of the death of the Member or such designation is not effective for any reason
as determined by the Committee, then the designated beneficiary or beneficiaries
to receive such benefit shall be as follows:

(i)            If a Member leaves a surviving spouse, his benefit shall be paid
to such surviving spouse;

(ii)           If a Member leaves no surviving spouse, his benefit shall be paid
to such Member’s executor or administrator, or to his heirs at law if there is
no administration of such Member’s estate.

6.4          Accelerated Pay-Out of Certain Benefits.  The Plan shall permit
such acceleration of the time or schedule of a payment to an individual other
than a Member as may be necessary to fulfill a domestic relations order (as
defined in section 414(p)(1)(B) of the Code).

6.5          Payment of Benefits.  To the extent the Trust Fund has sufficient
assets, the Trustee shall pay benefits to Members or their beneficiaries, except
to the extent the Employer pays the benefits directly and provides adequate
evidence of such payment to the Trustee.  To the extent the Trustee does not or
cannot pay benefits out of the Trust Fund, the benefits shall be paid by the
Employer.  Any benefit payments made to a Member or for his benefit pursuant to
any provision of the Plan shall be debited to such Member’s Accounts.  All
benefit payments pursuant to any provision of the Plan shall be made in cash to
the fullest extent practicable.

6.6          Unclaimed Benefits.  In the case of a benefit payable on behalf of
a Member, if the Committee is unable to locate the Member or beneficiary to whom
such benefit is payable, upon the Committee’s determination thereof, such
benefit shall be forfeited to the Employer.  Notwithstanding the foregoing, if
subsequent to any such forfeiture the Member or beneficiary to whom such benefit
is payable makes a valid claim for such benefit, such forfeited benefit (without
any adjustment for earnings or loss after the time of such forfeiture) shall be
restored to the Plan by the Employer and paid in accordance with the Plan.

VI-2

--------------------------------------------------------------------------------

VII.

Administration of the Plan

7.1          The Committee.  The general administration of the Plan shall be
vested in the Committee.

7.2          Self-Interest of Members.  No member of the Committee shall have
any right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved.  In any case in which a Committee
member is so disqualified to act and the remaining members cannot agree, the
Directors shall appoint a temporary substitute member to exercise all the powers
of the disqualified member concerning the matter in which he is disqualified.

7.3          Committee Powers and Duties.  The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, and authority:

(a)           To make rules, regulations, and bylaws for the administration of
the Plan that are not inconsistent with the terms and provisions hereof, and to
enforce the terms of the Plan and the rules and regulations promulgated
thereunder by the Committee;

(b)           To construe in its discretion all terms, provisions, conditions,
and limitations of the Plan;

(c)           To correct any defect or to supply any omission or to reconcile
any inconsistency that may appear in the Plan in such manner and to such extent
as it shall deem in its discretion expedient to effectuate the purposes of the
Plan;

(d)           To employ and compensate such accountants, attorneys, investment
advisors, and other agents, employees, and independent contractors as the
Committee may deem necessary or advisable for the proper and efficient
administration of the Plan;

(e)           To determine in its discretion all questions relating to
eligibility;

(f)            To determine whether and when a Member has incurred a Termination
of Service, and the reason for such termination;

(g)           To make a determination in its discretion as to the right of any
person to a benefit under the Plan and to prescribe procedures to be followed by
distributees in obtaining benefits hereunder;

(h)           To receive and review reports from the Trustee as to the financial
condition of the Trust Fund, including its receipts and disbursements; and

VII-1

--------------------------------------------------------------------------------

(i)            To establish or designate Funds as investment options as provided
in Article IV.

7.4          Claims Review.

(a)           Definitions.  For purposes of this Section, the following terms,
when capitalized, will be defined as follows:

(1)           Act:  The Employee Retirement Income Security Act of 1974, as
amended.

(2)           Adverse Benefit Determination:  Any denial, reduction or
termination of or failure to provide or make payment (in whole or in part) for a
Plan benefit, including any denial, reduction, termination or failure to provide
or make payment that is based on a determination of a Claimant’s eligibility to
participate in the Plan.  Further, any invalidation of a claim for failure to
comply with the claim submission procedure will be treated as an Adverse Benefit
Determination.

(3)           Benefits Administrator:  The Company’s Benefits Supervisor, or
such other person or office to whom the Committee has delegated day-to-day Plan
administration responsibilities and who, pursuant to such delegation, processes
Plan benefit claims in the ordinary course.

(4)           Claimant:  A Member or beneficiary or an authorized representative
of such Member or beneficiary who has filed or desires to file a claim for a
Plan benefit.

(b)           Filing of Benefit Claim.  To file a benefit claim under the Plan,
a Claimant must obtain from the Benefits Administrator the information and
benefit election forms, if any, provided for in the Plan and otherwise follow
the procedures established from time to time by the Committee or the Benefits
Administrator for claiming Plan benefits.  If, after reviewing the information
so provided, the Claimant needs additional information regarding his Plan
benefits, he may obtain such information by submitting a written request to the
Benefits Administrator describing the additional information needed.  A Claimant
may only request a Plan benefit by fully completing and submitting to the
Benefits Administrator the benefit election forms, if any, provided for in the
Plan and otherwise following the procedures established from time to time by the
Committee or the Benefits Administrator for claiming Plan benefits.

(c)           Processing of Benefit Claim.  Upon receipt of a fully completed
benefit claim from a Claimant, the Benefits Administrator shall determine if the
Claimant’s right to the requested benefit, payable at the time or times and in
the form requested, is clear and, if so, shall process such benefit claim
without resort to the Committee.  If the Benefits Administrator determines that
the Claimant’s right to the requested benefit, payable at the time or times and
in the form requested, is not clear, it shall refer the benefit claim to the
Committee for review and determination, which referral shall include:

(1)           All materials submitted to the Benefits Administrator by the
Claimant in connection with the claim;

VII-2

--------------------------------------------------------------------------------

(2)           A written description of why the Benefits Administrator was of the
view that the Claimant’s right to the benefit, payable at the time or times and
in the form requested, was not clear;

(3)           A description of all Plan provisions pertaining to the benefit
claim;

(4)           Where appropriate, a summary as to whether such Plan provisions
have in the past been consistently applied with respect to other similarly
situated Claimants; and

(5)           Such other information as may be helpful or relevant to the
Committee in its consideration of the claim.

If the Claimant’s claim is referred to the Committee, the Claimant may examine
any relevant document relating to his claim and may submit written comments or
other information to the Committee to supplement his benefit claim.  Within 90
days of receipt of a fully completed benefit claim form from a Claimant that has
been referred to the Committee by the Benefits Administrator (or such longer
period as may be necessary due to unusual circumstances or to enable the
Claimant to submit comments, but in any event not later than will permit the
Committee sufficient time to fully and fairly consider the claim and make a
determination within the time frame provided in Section 7.4(d)), the Committee
shall consider the referral regarding the claim of the Claimant and make a
decision as to whether it is to be approved, modified or denied.  If the claim
is approved, the Committee shall direct the Benefits Administrator to process
the approved claim as soon as administratively practicable.

(d)           Notification of Adverse Benefit Determination.  In any case of an
Adverse Benefit Determination of a claim for a Plan benefit, the Committee shall
furnish written notice to the affected Claimant within a reasonable period of
time but not later than 90 days after receipt of such claim for Plan benefits
(or within 180 days if special circumstances necessitate an extension of the
90-day period and the Claimant is informed of such extension in writing within
the 90-day period and is provided with an extension notice consisting of an
explanation of the special circumstances requiring the extension of time and the
date by which the benefit determination will be rendered).  Any notice that
denies a benefit claim of a Claimant in whole or in part shall, in a manner
calculated to be understood by the Claimant:

(1)           State the specific reason or reasons for the Adverse Benefit
Determination;

(2)           Provide specific reference to pertinent Plan provisions on which
the Adverse Benefit Determination is based;

(3)           Describe any additional material or information necessary for the
Claimant to perfect the claim and explain why such material or information is
necessary; and

(4)           Describe the Plan’s review procedures and the time limits
applicable to such procedures, including a statement of the Claimant’s right to
bring a civil action under section 502(a) of the Act following an Adverse
Benefit Determination on review.

VII-3

--------------------------------------------------------------------------------

(e)           Review of Adverse Benefit Determination.  A Claimant has the right
to have an Adverse Benefit Determination reviewed in accordance with the
following claims review procedure:

(1)           The Claimant must submit a written request for such review to the
Committee not later than 60 days following receipt by the Claimant of the
Adverse Benefit Determination notification;

(2)           The Claimant shall have the opportunity to submit written
comments, documents, records, and other information relating to the claim for
benefits to the Committee;

(3)           The Claimant shall have the right to have all comments, documents,
records, and other information relating to the claim for benefits that have been
submitted by the Claimant considered on review without regard to whether such
comments, documents, records or information were considered in the initial
benefit determination; and

(4)           The Claimant shall have reasonable access to, and copies of, all
documents, records, and other information relevant to the claim for benefits
free of charge upon request, including (i) documents, records or other
information relied upon for the benefit determination, (ii) documents, records
or other information submitted, considered or generated without regard to
whether such documents, records or other information were relied upon in making
the benefit determination, and (iii) documents, records or other information
that demonstrates compliance with the standard claims procedure.

The decision on review by the Committee will be binding and conclusive upon all
persons, and the Claimant shall neither be required nor be permitted to pursue
further appeals to the Committee.

(f)            Notification of Benefit Determination on Review.  Notice of the
Committee’s final benefit determination regarding an Adverse Benefit
Determination will be furnished in writing or electronically to the Claimant
after a full and fair review.  Notice of an Adverse Benefit Determination upon
review will:

(1)           State the specific reason or reasons for the Adverse Benefit
Determination;

(2)           Provide specific reference to pertinent Plan provisions on which
the Adverse Benefit Determination is based;

(3)           State that the Claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the Claimant’s claim for benefits including (i)
documents, records or other information relied upon for the benefit
determination, (ii) documents, records or other information submitted,
considered or generated without regard to whether such documents, records or
other information were relied upon in making the benefit

VII-4

--------------------------------------------------------------------------------

determination, and (iii) documents, records or other information that
demonstrates compliance with the standard claims procedure; and

(4)           Describe the Claimant’s right to bring an action under section
502(a) of the Act.

The Committee shall notify a Claimant of its determination on review with
respect to the Adverse Benefit Determination of the Claimant within a reasonable
period of time but not later than 60 days after the receipt of the Claimant’s
request for review unless the Committee determines that special circumstances
require an extension of time for processing the review of the Adverse Benefit
Determination.  If the Committee determines that such extension of time is
required, written notice of the extension (which shall indicate the special
circumstances requiring the extension and the date by which the Committee
expects to render the determination on review) shall be furnished to the
Claimant prior to the termination of the initial 60-day review period.  In no
event shall such extension exceed a period of 60 days from the end of the
initial 60-day review period.  In the event such extension is due to the
Claimant’s failure to submit necessary information, the period for making the
determination on a review will be tolled from the date on which the notification
of the extension is sent to the Claimant until the date on which the Claimant
responds to the request for additional information.

(g)           Exhaustion of Administrative Remedies.  Completion of the claims
procedures described in this Section will be a condition precedent to the
commencement of any legal or equitable action in connection with a claim for
benefits under the Plan by a Claimant or by any other person or entity claiming
rights individually or through a Claimant; provided, however, that the Committee
may, in its sole discretion, waive compliance with such claims procedures as a
condition precedent to any such action.

(h)           Payment of Benefits.  If the Benefits Administrator or Committee
determines that a Claimant is entitled to a benefit hereunder, payment of such
benefit will be made to such Claimant (or commence, as applicable) as soon as
administratively practicable after the date the Benefits Administrator or
Committee determines that such Claimant is entitled to such benefit or on such
other date as may be established pursuant to the Plan provisions.

(i)            Authorized Representatives.  An authorized representative may act
on behalf of a Claimant in pursuing a benefit claim or an appeal of an Adverse
Benefit Determination.  An individual or entity will only be determined to be a
Claimant’s authorized representative for such purposes if the Claimant has
provided the Committee with a written statement identifying such individual or
entity as his authorized representative and describing the scope of the
authority of such authorized representative.  In the event a Claimant identifies
an individual or entity as his authorized representative in writing to the
Committee but fails to describe the scope of the authority of such authorized
representative, the Committee shall assume that such authorized representative
has full powers to act with respect to all matters pertaining to the Claimant’s
benefit claim under the Plan or appeal of an Adverse Benefit Determination with
respect to such benefit claim.

7.5          Employer to Supply Information.  The Employer shall supply full and
timely information to the Committee, including, but not limited to, information
relating to each

VII-5

--------------------------------------------------------------------------------

Member’s Compensation, age, retirement, death, or other cause of Termination of
Service and such other pertinent facts as the Committee may require.  The
Employer shall advise the Trustee of such of the foregoing facts as are deemed
necessary for the Trustee to carry out the Trustee’s duties under the Plan and
the Trust Agreement.  When making a determination in connection with the Plan,
the Committee shall be entitled to rely upon the aforesaid information furnished
by the Employer.

7.6          Indemnity.  To the extent permitted by applicable law, the Company
shall indemnify and save harmless the Directors and each member of the Committee
against any and all expenses, liabilities and claims (including legal fees
incurred to defend against such liabilities and claims) arising out of their
discharge in good faith of responsibilities under or incident to the Plan. 
Expenses and liabilities arising out of willful misconduct shall not be covered
under this indemnity.  This indemnity shall not preclude such further
indemnities as may be available under insurance purchased by the Company or
provided by the Company under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, as such indemnities are permitted under
applicable law.

VII-6

--------------------------------------------------------------------------------

VIII.

Administration of Funds

8.1          Payment of Expenses.  All expenses incident to the administration
of the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, and expenses of the Committee, may be paid by the Employer and, if not
paid by the Employer, shall be paid by the Trustee from the Trust Fund, if any.

8.2          Trust Fund Property.  All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and properties of
any kind at any time received or held by the Trustee, if any, shall be held for
investment purposes as a commingled Trust Fund pursuant to the terms of the
Trust Agreement.  The Committee shall maintain one or more Accounts in the name
of each Member, but the maintenance of an Account designated as the Account of a
Member shall not mean that such Member shall have a greater or lesser interest
than that due him by operation of the Plan and shall not be considered as
segregating any funds or property from any other funds or property contained in
the commingled fund.  No Member shall have any title to any specific asset in
the Trust Fund, if any.

VIII-1

--------------------------------------------------------------------------------

IX.

Nature of the Plan

The Employer intends and desires by the adoption of the Plan to recognize the
value to the Employer of the past and present services of employees covered by
the Plan and to encourage and assure their continued service with the Employer
by making more adequate provision for their future retirement security.  The
establishment of the Plan is, in part, made necessary by certain benefit
limitations which are imposed on the Retirement Savings Plan by the Code.  The
Plan is intended to constitute an unfunded, unsecured plan of deferred
compensation for a select group of management or highly compensated employees of
the Employer.  Plan benefits herein provided are a contractual obligation of the
Employer and shall be paid out of the Employer’s general assets.  Nevertheless,
subject to the terms hereof and of the Trust Agreement, the Employer may
transfer money or other property to the Trustee to provide Plan benefits
hereunder, and the Trustee shall pay Plan benefits to Members and their
beneficiaries out of the Trust Fund.

The Committee, in its sole discretion, may establish the Trust and direct the
Employer to enter into the Trust Agreement.  Notwithstanding the foregoing,
immediately prior to the occurrence of a Change of Control, the Employer shall
enter into the Trust Agreement and shall fund the Trust with money or other
property having an aggregate value equal to not less than the aggregate balance
in the Accounts maintained under the Plan on behalf of all Members and
beneficiaries (determined as of the day immediately preceding the date of such
funding of the Trust); provided, however, that the Employer shall not be
required to take the actions described in this sentence if such actions would
result in adverse tax consequences to one or more of the Members pursuant to
Section 409A(b) of the Code.  If the Employer enters into the Trust Agreement,
then the Employer shall remain the owner of all assets in the Trust Fund and the
assets shall be subject to the claims of the Employer’s creditors if the
Employer ever becomes insolvent.  For purposes hereof, the Employer shall be
considered “insolvent” if (a) the Employer is unable to pay its debts as such
debts become due or (b) the Employer is subject to a pending proceeding as a
debtor under the United Sates Bankruptcy Code (or any successor federal
statute).  The chief executive officer of the Employer and its board of
directors shall have the duty to inform the Trustee in writing if the Employer
becomes insolvent. Such notice given under the preceding sentence by any party
shall satisfy all of the parties’ duty to give notice.  When so informed, the
Trustee shall suspend payments to the Members and hold the assets for the
benefit of the Employer’s general creditors.  If the Trustee receives a written
allegation that the Employer is insolvent, the Trustee shall suspend payments to
the Members and hold the Trust Fund for the benefit of the Employer’s general
creditors, and shall determine in the manner specified in the Trust Agreement
whether the Employer is insolvent.  If the Trustee determines that the Employer
is not insolvent, the Trustee shall resume payments to the Members.  No Member
or beneficiary shall have any preferred claim to, or any beneficial ownership
interest in, any assets of the Trust Fund, and, upon commencement of
participation in the Plan, each Member shall have agreed to waive his priority
credit position, if any, under applicable state law with respect to the assets
of the Trust Fund.

IX-1

--------------------------------------------------------------------------------

X.

Miscellaneous

10.1        Not Contract of Employment.  The adoption and maintenance of the
Plan shall not be deemed to be a contract between the Employer and any person or
to be consideration for the employment of any person.  Nothing herein contained
shall be deemed to (a) give any person the right to be retained in the employ of
the Employer, (b) restrict the right of the Employer to discharge any person at
any time, (c) give the Employer the right to require any person to remain in the
employ of the Employer, or (d) restrict any person’s right to terminate his
employment at any time.

10.2        Alienation of Interest Forbidden.  The interest of a Member or his
beneficiary or beneficiaries hereunder may not be sold, transferred, assigned,
or encumbered in any manner, either voluntarily or involuntarily, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be null and void; neither shall the benefits hereunder be
liable for or subject to the debts, contracts, liabilities, engagements or torts
of any person to whom such benefits or funds are payable, nor shall they be an
asset in bankruptcy or subject to garnishment, attachment or other legal or
equitable proceedings.  Notwithstanding the foregoing, the Plan shall comply
with the terms of a domestic relations order as provided in Sections 5.1 and
6.4.

10.3        Withholding.  All Compensation deferrals and Employer Deferrals and
payments provided for hereunder shall be subject to applicable withholding and
other deductions as shall be required of the Employer under any applicable
local, state or federal law.

10.4        Amendment and Termination. The Committee may from time to time, in
its discretion, amend, in whole or in part, any or all of the provisions of the
Plan; provided, however, that no amendment may be made that would impair the
rights of a Member with respect to amounts already allocated to his Accounts. 
The Committee may terminate the Plan at any time.  In the event that the Plan is
terminated, the balance in a Member’s Accounts shall be paid to such Member or
his designated beneficiary at the time specified by the Committee in a single
lump sum, cash payment in full satisfaction of all of such Member’s or
beneficiary’s benefits hereunder.  Notwithstanding the preceding provisions of
this Section, (a) to the extent required by section 409A of the Code, the Plan
may not be amended or terminated in a manner that would give rise to an
impermissible acceleration of the time or form of a payment of a benefit under
the Plan pursuant to section 409A(a)(3) of the Code and any regulations or
guidance issued thereunder and (b) if the Committee determines that the terms of
the Plan do not, in whole or in part, satisfy the requirements of section 409A
of the Code, then the Committee may, in its sole discretion, amend the Plan
(without obtaining the consent of any Member) in such manner as the Committee
deems appropriate to comply with section 409A of the Code and any regulations or
guidance issued thereunder.

10.5        Severability.  If any provision of the Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each

X-1

--------------------------------------------------------------------------------

provision shall be fully severable and the Plan shall be construed and enforced
as if said illegal or invalid provision had never been included herein.

10.6        Guaranty.  Notwithstanding any provisions of the Plan to the
contrary, in the event any Affiliate of the Company that adopts the Plan
pursuant to Section 2.3 hereof fails to make payment of the benefits due under
the Plan on behalf of its Members, whether directly or through the Trust, the
Company shall, during the period that such entity is an Affiliate of the
Company, be liable for and shall make payment of such benefits due as a
guarantor of such entity’s obligations hereunder.  The guaranty obligations
provided herein shall (a) be satisfied directly and not through the Trust and
(b) terminate with respect to a particular entity as of the date such entity
ceases to be an Affiliate of the Company.

10.7        Governing Laws.  All provisions of the Plan shall be construed in
accordance with the laws of Colorado except to the extent preempted by federal
law.

X-2

--------------------------------------------------------------------------------

EXECUTED this 30th day of November, 2006.

FOREST OIL CORPORATION

 

 

 

 

 

 

 

By:

/s/ CYRUS D. MARTER IV

 

 

 

Name:

Cyrus D. Marter IV

 

 

Title:

Vice President, General Counsel and
Secretary

 

iii

--------------------------------------------------------------------------------