Exhibit 10.4

Form of Non-Employee Director Phantom Stock Unit Agreement

PHANTOM STOCK UNIT AGREEMENT

THIS PHANTOM STOCK UNIT AGREEMENT(this "Agreement") is made as of the        day
of                  ,
2008, between Forest Oil Corporation, a New York corporation (the "Company"), and                        (the "Director").

1.Award.Pursuant to the Forest Oil Corporation
2007 Stock Incentive Plan (the "Plan"), as of the date of this Agreement, and in consideration of the services that the Director has provided to the Company and the services to be provided by
the Director to the Company in the future, the Company hereby makes a grant of Phantom Stock Units (as defined below).



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:



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.

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3.Terms of Phantom Stock Unit Grant.The Director hereby
accepts the Phantom Stock Units when granted and agrees with respect thereto as follows:



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4.Withholding of Tax.To the extent that the receipt of the
Phantom Stock Units or the settlement of Phantom Stock Units results in compensation income, wages or other taxable income to the Director for federal, state, provincial or local tax purposes, the
Director shall deliver to the Company at the time of such receipt or settlement, as the case may be, such amount of money as the Company may require to meet its minimum obligation under applicable tax
laws or regulations, and if the Director fails to do so, the Company is authorized to withhold from any cash or stock remuneration (including withholding any Shares distributable to the Director under
this Agreement) then or thereafter payable to the Director any tax or other source deductions required to be withheld by reason of such resulting compensation income or wages. The Director
acknowledges and agrees that the Company is making no representation or warranty as to the tax consequences to the Director as a result of the grant, settlement or forfeiture of Phantom Stock Units.

5.Membership on the Board.Nothing in the adoption of the Plan,
nor the award of the Phantom Stock Units thereunder pursuant to this Agreement, shall confer upon the Director the right to continued membership on the Board or affect in any way the right of the
Company to terminate such membership at any time. Any question as to whether and when there has been a termination of the Director's membership on the Board, and the cause of such termination, shall
be determined by the Board or its delegate, and its determination shall be final.

6.Rights as Holder of Phantom Stock Units.The Phantom Stock
Units represent an unsecured and unfunded right to receive a payment in Shares, which right is subject to the terms, conditions and restrictions set forth in this Agreement and the Plan. Accordingly,
the Director will have no rights as a stockholder with respect to any Shares covered by this Phantom Stock Unit Agreement until the Phantom Stock Units vest and the Shares, if any, are issued by the
Company and are deposited in the Director's account at a transfer agent or other custodian selected by the Committee. Notwithstanding the preceding provisions of this Section 6 to the contrary,
if the Company pays dividends to holders of its common stock prior to the earlier of the forfeiture of the Phantom Stock Units or the transfer to the Director of Shares in settlement of vested Phantom
Stock Units, then the Director shall be entitled to receive dividend equivalents payable in the same amount, time and form with respect to each Phantom Stock Unit as is applicable to a share of the
Company's common stock; provided, however, that (a) dividends paid in shares of the Company's stock shall be subject to the Forfeiture Restrictions and shall be paid to the Director only if and
when Shares are transferred to the Director in settlement of vested Phantom Stock Units and (b) dividends paid other than in shares of the Company's stock shall be paid no later than the end of
the calendar year in which the dividend for such class of stock is paid to stockholders of such class.

7.Committee's Powers.No provision contained in this Agreement
shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering, any of the powers,

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rights
or authority vested in the Committee pursuant to the terms of the Plan, including, without limitation, the Committee's rights to make certain determinations and elections with respect to the
Phantom Stock Units.

8.Resolution of Disputes.As a condition of the granting of the
Phantom Stock Units hereby, the Director and the Director's heirs, personal representatives and successors agree that any dispute or disagreement which may arise hereunder shall be determined by the
Committee in its sole discretion and judgment, and that any such determination and any interpretation by the Committee of this Agreement shall be final and shall be binding and conclusive, for all
purposes, upon the Company, Director, Director's heirs, personal representatives and successors or any person or entity claiming through any of them.

9.Notices.Any notices or other communications provided for in
this Agreement shall be sufficient if in writing. In the case of the Director, such notices or communications shall be effectively delivered if hand delivered to the Director or if sent by registered
or certified mail to the Director at the last
address the Director 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.

10.Entire Agreement; Amendment.This Agreement replaces and
merges all previous agreements and discussions relating to the same or similar subject matters between the Director and the Company and constitutes the entire agreement between the Director 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; Survival.This Agreement shall be binding
upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Director. The provisions of Section 3(b) shall survive the lapse of the Forfeiture
Restrictions without forfeiture.

12.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 Director
has executed this Agreement, all as of the date first above written.

| |  | FOREST OIL CORPORATION
| |  | ----------------------
| |  | By:                   
| |  |                       
| |  | Name:                 
| |  |                       
| |  | Title:                
| |  |                       
| |  |                       
| |  | DIRECTOR              

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