(Cash Only)

FOREST OIL CORPORATION
PHANTOM STOCK UNIT AGREEMENT
THIS PHANTOM STOCK UNIT AGREEMENT (this “Agreement”) is made as of the ____ day
of ____________ (the “Date of Grant”), between Forest Oil Corporation, a New
York corporation (the “Company”), and [Employee Name] (the “Employee”).
1.    Award. Pursuant to the FOREST OIL CORPORATION 2007 STOCK INCENTIVE PLAN,
as amended (the “Plan”), the Company hereby makes a grant of phantom stock units
with respect to _____ shares of the Company’s common stock, par value $.10 per
share (the “Phantom Stock Units”). The Employee agrees that this award of
Phantom Stock Units constitutes a Phantom Stock Award under the Plan and shall
be subject to all of the terms and provisions of the Plan, including future
amendments thereto, if any, which is available on the Company’s intranet at the
following site: http://corpweb1/. For paper copies of the Plan and prospectus,
the Employee may contact Stock Administration, 707 Seventeenth Street, Suite
3600, Denver, CO 80202, or call 303.812.1502. In the event of any conflict
between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall control.
2.    Definitions. Capitalized terms used in this Agreement that are not defined
below or in the body of this Agreement shall have the meanings given to them in
the Plan. In addition to the terms defined in the body of this Agreement, the
following capitalized words and terms shall have the meanings indicated below:
(a)    “Corporate Change” shall mean 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 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.

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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.

(b)    “Disability” shall have the meaning set forth in the Severance Agreement,
or if there is no Severance Agreement or the Severance Agreement contains no
such definition, “Disability” shall mean that, as a result of the Employee’s
incapacity due to physical or mental illness, the Employee shall have been
absent from the full-time performance of the Employee’s duties for six
consecutive months, and the Employee shall not have returned to full-time
performance of the Employee’s 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).
(c)    “Forfeiture Restrictions” shall have the meaning set forth in the
Severance Agreement, or if there is no Severance Agreement or the Severance
Agreement contains no such definition, “Forfeiture Restrictions” shall have the
meaning specified in Section 3(a) hereof.
(d)    “Involuntary Termination” shall have the meaning set forth in the
Severance Agreement, or if there is no Severance Agreement or the Severance
Agreement contains no such definition, “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 a termination of the Employee’s employment by the Company by
reason of the Employee’s unsatisfactory performance of the Employee’s duties, to
be determined by the Company in its sole discretion, or final conviction of a
misdemeanor involving moral turpitude or a felony.
(e)    “Severance Agreement” shall mean any Severance Agreement solely between
the Employee and the Company in effect as of the date of this Agreement, as such
may be amended or superseded from time to time.
3.    Phantom Stock Units. The Employee hereby accepts the Phantom Stock Units
and agrees with respect thereto as follows:
(a)    Forfeiture Restrictions. The Phantom Stock Units may not be sold,
assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or disposed of, and in the event of termination of the Employee’s employment
with the Company for any reason other than death, Disability, or Involuntary
Termination, the Employee shall, for no consideration, forfeit to the Company
all Phantom Stock Units to the extent then subject to the Forfeiture
Restrictions. The prohibition against transfer and the obligation to forfeit and
surrender Phantom Stock Units to the Company upon termination of employment as
provided in the preceding sentence are herein referred to as the “Forfeiture
Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable
against any transferee of Phantom Stock Units.
(b)    Lapse of Forfeiture Restrictions. Provided that the Employee has been
continuously employed by the Company from the Date of Grant through the lapse
date described in this sentence, the Forfeiture Restrictions shall lapse with
respect to 100% of the Phantom Stock

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Units on the earlier of (i) the third anniversary of the Date of Grant, (ii) the
date upon which a Corporate Change occurs if the successor entity does not
assume, convert or replace the Phantom Stock Units governed by this Agreement
with an equity or equity-based award that is substantially the same in all
material economic respects, (iii) the date upon which the Employee’s employment
with the Company is terminated by reason of death, Disability, or Involuntary
Termination, or (iv) at the Committee’s discretion, the date determined by the
Committee. Any Phantom Stock Units with respect to which the Forfeiture
Restrictions do not lapse in accordance with the preceding sentence shall be
forfeited to the Company for no consideration as of the date of the termination
of the Employee’s employment with the Company. For the avoidance of doubt, if,
in connection with a Corporate Change, the successor entity assumes, converts or
replaces this Agreement with an agreement that is substantially the same in all
material economic respects, any Forfeiture Restrictions continuing after such
Corporate Change with respect to such assumed, converted, or replaced award
shall lapse on the earliest to occur of (a) the lapse dates set forth above or
(b) the date of the Employee’s Involuntary Termination following such Corporate
Change.
(c)    Payments. Subject to Section 4 hereof, as soon as reasonably practicable
after the lapse of the Forfeiture Restrictions with respect to any Phantom Stock
Units as provided in Section 3(b) hereof (but in no event later than March 15 of
the calendar year following the calendar year in which the Forfeiture
Restrictions so lapse), the Company shall pay to the Employee with respect to
each share of the Company’s common stock covered by such Phantom Stock Unit an
amount in cash equal to the Fair Market Value of one share of the Company’s
common stock determined as of the date the Forfeiture Restrictions lapse.
(d)    Corporate Acts. The existence of the Phantom Stock Units 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.
4.    Withholding of Tax. The Company may withhold from any payment made
pursuant to this Agreement all federal, state, city and other taxes and
withholdings as may be required pursuant to any law or governmental regulation
or ruling and all other customary deductions made with respect to the Company’s
employees generally. The Employee acknowledges and agrees that the Company is
making no representation or warranty as to the tax consequences to the Employee
as a result of the receipt of the Phantom Stock Units, the lapse of any
Forfeiture Restrictions or the forfeiture of any Phantom Stock Units pursuant to
the Forfeiture Restrictions.
5.    Rights as Stockholder. The Phantom Stock Units represent an unsecured and
unfunded right to receive a cash payment, which right is subject to the terms,
conditions and restrictions set forth in this Agreement and the Plan.
Accordingly, the Employee will have no rights as a shareholder with respect to
any shares covered by Phantom Stock Units granted under this Agreement. Without
limiting the scope of the preceding sentence, the Employee will have no rights
to vote or receive dividend equivalents with respect to any shares covered by
Phantom Stock Units granted under this Agreement.

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6.    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 has not incurred a “separation from service” with the Company within
the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable
administrative guidance issued thereunder. Nothing in the adoption of the Plan,
nor the award of the Phantom Stock Units 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 or for no reason, with or
without cause or notice. 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 or its delegate, and its determination shall be
final.
7.    Conditions to Plan Participation and Receipt of Phantom Stock Units. In
consideration of the grant of the Phantom Stock Units, and in order to protect
the interests of the Company, its Affiliates, and their respective equity
holders and employees, the Employee acknowledges and agrees that it is a
condition precedent to his or her right to participate in, continue to
participate in, and receive benefits under the Plan (including receipt of the
Phantom Stock Units) that (a) the Employee shall at all times comply with laws
(whether domestic or foreign) applicable to the Employee’s actions on behalf of
the Company or any Affiliate, (b) the Employee shall not commit any action that
results in the Employee’s employment being subject to a termination for cause,
and (c) the Employee shall at all times fully and faithfully comply with all
material covenants and agreements set forth in this Agreement. By entering into
this Agreement, the parties hereto agree that the conditions to participation in
the Plan set forth in this Section are an essential component of the Plan and
this Agreement, and it is their intent that such conditions not be severed from
the other terms and provisions of the Plan and this Agreement.
8.    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 the Employee’s 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.
9.    Parachute Payment. If, in connection with a Corporate Change, the lapse of
Forfeiture Restrictions on one or more of the Phantom Stock Units pursuant to
this Agreement comprises part of any “parachute payment” as defined in Code
Section 280G(a)(2), the number of Phantom Stock Units to which such accelerated
lapse of Forfeiture Restrictions would otherwise apply may be reduced in
accordance with the terms of the Severance Agreement, to the extent applicable.
10.    Entire Agreement; Amendment. This Agreement replaces and merges all
previous agreements and discussions relating to the same or similar subject
matters between the Employee

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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.
11.    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.
12.    Controlling Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflicts
of law principles thereof, or, if applicable, the laws of the United States.
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:    ____________________________________
[Name]    
[Title]

EMPLOYEE

________________________________________
[Employee Name]

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