EXHIBIT 10.6

 

RESTRICTED STOCK AGREEMENT

 

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the
             day of                       , between FOREST OIL CORPORATION, a
New York corporation (the “Company”), and                                   (the
“Employee”).

 

1.                                       Award. Pursuant to the FOREST OIL
CORPORATION 2001 STOCK INCENTIVE PLAN, as amended (the “Plan”), as of the date
of this Agreement,               shares (the “Restricted Shares”) of the
Company’s common stock, par value $.10 per share, that are currently held in
Treasury, shall be issued as hereinafter provided in the Employee’s name subject
to certain restrictions thereon.  The Restricted Shares shall be issued upon
acceptance hereof by the Employee and upon satisfaction of the conditions of
this Agreement. The Employee acknowledges receipt of a copy of the Plan, and
agrees that this award of Restricted Shares shall be subject to all of the terms
and provisions of the Plan, including future amendments thereto, if any,
pursuant to the terms thereof.  In the event of any conflict between the terms
of this Agreement and the Plan, the Plan shall control.

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)                                 “Disability” shall mean that, as a result of
the Employee’s incapacity due to physical or mental illness, he shall have been
absent from the full-time performance of his duties for six consecutive months,
and he shall not have returned to full-time performance of his duties within 30
days after written notice of termination is given to the Employee by the Company
(provided, however, that such notice may not be given prior to 30 days before
the expiration of such six-month period).

 

(vi)                              “Involuntary Termination” shall mean any
termination of the Employee’s employment with the Company which does not result
from a resignation by the Employee; provided, however, that the term
“Involuntary Termination” shall not include a termination as a result of death,
Disability, or Retirement or a termination of the Employee’s employment by the
Company (or its subsidiaries) by reason of the Employee’s gross negligence or
willful misconduct in the performance of his duties or final conviction of a
misdemeanor involving moral turpitude or a felony.

 

(vii)                           “Retirement” shall mean the Employee’s
resignation from employment with the Company after attaining age 65 or, if
earlier, after attaining age 55 and completing 15 years of Vesting Service, as
such term is defined in the Retirement Savings Plan of Forest Oil Corporation.

 

(viii)                        “Section 16 Person” shall mean an officer,
director or affiliate of the Company or a former officer, director or affiliate
of the Company who is subject to section 16 of the Securities Exchange Act of
1934, as amended.

 

(b)                                 Lapse of Forfeiture Restrictions.  The
Forfeiture Restrictions shall lapse

 

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as to the Restricted Shares in accordance with the following schedule provided
that the Employee has been continuously employed by the Company from the date of
this Agreement through the lapse date:

 

Lapse Date

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all
of the Restricted Shares then subject to the Forfeiture Restrictions on (i) the
date of a Corporate Change provided that the Employee has been continuously
employed by the Company from the date of this Agreement to the date of such
Corporate Change or (ii) the date the Employee’s employment with the Company is
terminated by reason of death, Disability, Involuntary Termination, or
Retirement.

 

(c)                                  Certificates.     A certificate evidencing
the Restricted Shares shall be issued by the Company in the Employee’s name,
pursuant to which the Employee shall have all of the rights of a shareholder of
the Company with respect to the Restricted Shares, including, without
limitation, voting rights and the right to receive dividends (provided, however,
that dividends paid in shares of the Company’s stock shall be subject to the
Forfeiture Restrictions). The Employee may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the stock until the Forfeiture Restrictions
have expired and a breach of the terms of this Agreement shall cause a
forfeiture of the Restricted Shares. The certificate shall be delivered upon
issuance to the Secretary of the Company or to such other depository as may be
designated by the Committee as a depository for safekeeping until the forfeiture
of such Restricted Shares occurs or the Forfeiture Restrictions lapse pursuant
to the terms of the Plan and this award. On the date of this Agreement, the
Employee shall deliver to the Company a stock power, endorsed in blank, relating
to the Restricted Shares. Upon the lapse of the Forfeiture Restrictions without
forfeiture, the Company shall cause a new certificate or certificates to be
issued without legend (except for any legend required pursuant to applicable
securities laws or any other agreement to which the Employee is a party) in the
name of the Employee in exchange for the certificate evidencing the Restricted
Shares.  However, the Company, in its sole discretion, may elect to deliver the
certificate either in certificate form or electronically to a brokerage account
established for the Employee’s benefit at a brokerage/financial institution
selected by the Company.  The Employee agrees to complete and sign any documents
and take additional action that the Company may request to enable it to deliver
the shares on the Employee’s behalf.

 

(d)                                 Corporate Acts.  The existence of the
Restricted Shares shall not affect in any way the right or power of the Board or
the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities, the dissolution or liquidation of the Company or
any sale, lease, exchange or other disposition of all or any part of its assets
or business or any other corporate act or proceeding. The prohibitions of
Section 2(a) hereof shall not

 

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apply to the transfer of Restricted Shares pursuant to a plan of reorganization
of the Company, but the stock, securities or other property received in exchange
therefor shall also become subject to the Forfeiture Restrictions and provisions
governing the lapsing of such Forfeiture Restrictions applicable to the original
Restricted Shares for all purposes of this Agreement and the certificates
representing such stock, securities or other property shall be legended to show
such restrictions.

 

3.                                       Withholding of Tax.   To the extent
that the receipt of the Restricted Shares or the lapse of any Forfeiture
Restrictions results in compensation income to the Employee for federal or state
income tax purposes, the Employee shall deliver to the Company at the time of
such receipt or lapse, as the case may be, such amount of money as the Company
may require to meet its obligation under applicable tax laws or regulations. The
Employee may elect with respect to this Agreement to surrender or authorize the
Company to withhold shares of stock of the Company (valued at their fair market
value on the date of surrender or withholding of such shares) to satisfy any tax
required to be withheld by reason of compensation income resulting under this
Agreement.  An election pursuant to the preceding sentence shall be referred to
herein as a “Stock Withholding Election.”  All Stock Withholding Elections shall
be made by written notice to the Company at its principal executive office
addressed to the attention of the Secretary.  If the Employee is not a Section
16 Person, the Employee may revoke such election by delivering to the Secretary
written notice of such revocation prior to the date such election is implemented
through actual surrender or withholding of shares of stock of the Company (the
“Withholding Date”).  If the Employee is a Section 16 Person, the Stock
Withholding Election must:

 

(i)                                     be irrevocable and made six months prior
to the Withholding Date, or

 

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

 

If the Employee fails to pay the required amount to the Company or fails to make
a Stock

Withholding Election, the Company is authorized to withhold from any cash
remuneration (or, if the Employee is not a Section 16 Person, stock
remuneration, including withholding any Restricted Shares distributable to the
Employee under this Agreement) then or thereafter payable to the Employee any
tax required to be withheld by reason of compensation income resulting under
this Agreement or the disposition of Restricted Shares acquired under this
Agreement.

 

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

 

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violation of the Forfeiture Restrictions or, in the opinion of counsel
satisfactory to the Company, of any applicable securities law, and (iii) the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the Restricted Shares.

 

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

 

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

 

7.                                       Parachute Payment.   In the event that
the receipt of the Restricted Shares or the lapse of any Forfeiture Restrictions
would constitute a parachute payment (within the meaning of section 280G of the
Code) at a time when the Employee’s Severance Agreement with the Company that is
in effect as of the date hereof (or any successor agreement) is in effect, then
the amount of such parachute payment shall be treated as a payment to the
Employee for purposes of determining the amount of any gross-up payment to be
made to the Employee under the terms of such Severance Agreement (or any
successor agreement) with respect to the excise tax imposed by Section 4999 of
the Code.

 

8.                                       Entire Agreement; Amendment.   This
Agreement replaces and merges all previous agreements and discussions relating
to the same or similar subject matters between the Employee and the Company and
constitutes the entire agreement between the Employee and the Company with
respect to the subject matter of this Agreement.  This Agreement may not be
modified in any respect by any verbal statement, representation or agreement
made by any employee, officer, or representative of the Company or by any
written agreement unless signed by an officer of the Company who is expressly
authorized by the Company to execute such document. Except as provided below,
any modification of this Agreement shall be effective only if it is in writing
and signed by both the Employee and an authorized officer of the Company.
Notwithstanding anything in the Plan or this Agreement to the contrary, if the
Committee determines that the provisions of new Section 409A of the Code apply
to this Agreement and that the terms of this Agreement do not, in whole or in
part, satisfy the requirements of such section, then the Committee, in its sole
discretion, may unilaterally modify this Agreement in such manner as it deems
appropriate to comply with such section and any regulations or guidance issued
thereunder.

 

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

 

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

 

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

 

 

FOREST OIL CORPORATION

 

 

 

 

 

 

 

By:

 

 

 

 

Newton W. Wilson III

 

 

 

Senior Vice President,

 

 

General Counsel and Secretary

 

 

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

 

 

[EMPLOYEE NAME]

 

 

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