Exhibit
10.1


 


FIRST
AMENDMENT TO


FOREST OIL
CORPORATION PENSION TRUST AGREEMENT


AS AMENDED
AND RESTATED JANUARY 1, 2002


 


WHEREAS,
Forest Oil Corporation (the “Company”) has heretofore entered into an agreement
with David H. Keyte, Cyrus D. Marter IV, Timothy F. Savoy, and Michael N.
Kennedy (or the individuals who preceded them as trustees or Committee members)
denominated the Forest Oil Corporation Pension Trust Agreement, as amended and
restated as of January 1, 2002 (the “Trust Agreement”); and


 


WHEREAS,
the Company desires to amend the Trust Agreement to incorporate certain
revisions required by recent legislative developments and to clarify operation
of the Trust in certain respects.


 


NOW, THEREFORE,
the parties hereto hereby mutually agree that the Trust Agreement shall be
amended as follows:


 


I.                                           Effective
as of January 1, 2002 (and, with respect to earlier versions of the Plan,
effective as of the date the affected provisions (or provisions similar
thereto) were incorporated into the Plan):


 


1.                                       The
first paragraph of Section 1.23 of the Trust Agreement shall be deleted
and the following shall be substituted therefor:


 


“‘Qualified Joint and
Survivor Annuity’” shall mean a monthly annuity payable during the joint lives
of a married Participant and such Participant’s spouse, continuing for the life
of the spouse if the spouse survives the Participant, in an amount equal to
one-half (1/2) the amount payable during the joint lives of the Participant and
spouse; provided that for purposes of this form of annuity, the Participant’s
spouse may only receive benefits following the death of the Participant if he
or she was married to the Participant when payments under such annuity
commenced.  A Qualified Joint and
Survivor Annuity shall be payable in amounts such that the Qualified Joint and
Survivor Annuity is the actuarial equivalent of the amount of pension payable
for 10 years certain and continuously for the life of the Participant
determined under Section 3.01.  A
Participant shall be entitled to elect not to take a Qualified Joint and
Survivor Annuity as herein provided. If a Participant elects not to take a
Qualified Joint and Survivor Annuity, once payments commence under the optional
form of benefit chosen by the Participant, the Participant may not change his
election (either as to form of benefit or designated Beneficiary), except to
the extent specifically provided in Section 3.10.”


 


2.                                       The
following provision shall be added at the end of the second paragraph of Section 1.24
of the Trust Agreement:


 


“If a Participant elects
not to take a Qualified Survivor Annuity, once payments commence under the
optional form of benefit chosen by the Participant, the


 





















 


Participant may not
change his election (either as to form of benefit or designated Beneficiary).”


 


3.                                       The
following new Section 3.10 shall be added to the Trust Agreement:


 


“3.10                     Notwithstanding
the foregoing provisions of this Article III, once payments commence under
the Qualified Joint and Survivor Annuity or optional form of benefit chosen by
the Participant, the Participant may not change his election (either as to form
of benefit or designated Beneficiary); provided, however, that if a Participant
elects a life annuity with a term certain, he may change his designated
Beneficiary after payments commence.”


 


4.                                       The
following new Section 4.06 shall be added to the Trust Agreement:


 


“4.06                     Notwithstanding
the foregoing provisions of this Article IV, once payments commence under
the Qualified Survivor Annuity or optional form of benefit chosen by the designated
Beneficiary of the Participant), the Participant or the designated Beneficiary,
as applicable, may not change his election (either as to form of benefit or
designated Beneficiary); provided, however, that the designated Beneficiary may
be changed if the Qualified Survivor Annuity has been waived and either a term
certain annuity or installment benefit has been elected.”


 


5.                                       The
following new Section 5.05 shall be added to the Trust Agreement:


 


“5.05                     Notwithstanding
the foregoing provisions of this Article V, once payments commence under
the Qualified Joint and Survivor Annuity, the Participant may not change his
election (either as to form of benefit or designated Beneficiary).”


 


II.                                     Effective
as of March 28, 2005:


 


1.                                       Section 3.07
of the Trust Agreement shall be deleted and the following shall be substituted
therefor:


 


“3.07                     Notwithstanding the foregoing
provisions of this Article III, if at a Participant’s termination of
employment with all Employers, the present value (determined using the
actuarial assumptions specified in Schedule A) of the Participant’s
pension is $1,000 or less, then a lump-sum payment equal to such present value
shall be paid to the Participant, in lieu of any other benefit under the Plan,
as soon as practicable following his termination of employment with all
Employers.  Further, notwithstanding the
foregoing provisions of this Article III, if at a Participant’s
termination of employment with all Employers, the present value (determined
using the actuarial assumptions specified in Schedule A) of the
Participant’s pension exceeds $1,000 but does not exceed $5,000, then the
Participant may elect to receive a lump-sum payment equal to such present
value, in lieu of any other benefit under the Plan, which shall be payable as
soon as administratively feasible following his election.  Payment of benefits pursuant to


 


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this Section shall
not require spousal consent or waiver of the Qualified Joint and Survivor
Annuity.”


 


2.                                       The
last paragraph of Section 5.02 of the Trust Agreement shall be deleted and
the following shall be substituted therefor:


 


“Notwithstanding the
foregoing provisions of this Section 5.02, if at a Participant’s
termination of employment with all Employers, the present value (determined
using the actuarial assumptions specified in Schedule A) of the
Participant’s accrued benefit is $1,000 or less, then a lump-sum payment equal
to such present value shall be paid to the Participant, in lieu of any other
benefit under the Plan, as soon as practicable following his termination of
employment with all Employers.  Further,
notwithstanding the foregoing provisions of this Section 5.02, if at a
Participant’s termination of employment with all Employers, the present value
(determined using the actuarial assumptions specified in Schedule A) of
the Participant’s accrued benefit exceeds $1,000 but does not exceed $5,000,
then the Participant may elect to receive a lump-sum payment equal to such
present value, in lieu of any other benefit under the Plan, which shall be
payable as soon as administratively feasible following his election.  Payment of benefits pursuant to this
paragraph shall not require spousal consent or waiver of the Qualified Joint
and Survivor Annuity.”


 


3.                                       The
following provision shall be added at the end of Section 10.10 of the
Trust Agreement:


 


“In the event that the
total value of an amount directed to be paid pursuant to a ‘qualified domestic
relations order’ is not in excess of $5,000, such amount shall be paid to the
recipient or recipients identified in such order in one lump sum payment as
soon as practicable after such order has been determined to be a ‘qualified
domestic relations order.’”


 


III.                                   Effective
for determining required minimum distributions for calendar years beginning on
or after January 1, 2003, the following new Section 3.11 shall be
added to Article III of the Trust Agreement:


 


“3.11                     (a)                                  The
provisions of this Section 3.11 will apply for purposes of determining
required minimum distributions for calendar years beginning with the 2003
Distribution Calendar Year.  The
foregoing notwithstanding, distributions made from the Plan for Distribution
Calendar Years 2003, 2004 and 2005 will not fail to satisfy the requirements
and rules of this Section 3.11 if they were based upon a reasonable and
good faith interpretation of Section 401(a)(9) of the Code.


 


(b)                                 The
requirements of this Section 3.11 will take precedence over any
inconsistent provisions of the Plan.


 


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(c)                                  All
distributions required under this Section 3.11 will be determined and made
in accordance with the Treasury regulations under section 401(a)(9) of the
Code.


 


(d)                                 Notwithstanding
the other provisions of this Section 3.11, other than Paragraph (c) above,
distributions may be made under a designation made before January 1, 1984,
in accordance with section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act (TEFRA) and the provisions of the Plan that relate to section 242(b)(2)
of TEFRA.


 


(e)                                  The
Participant’s entire interest will be distributed, or begin to be distributed,
to the Participant no later than the Participant’s Required Beginning
Date.  If the Participant dies before
distributions begin, the Participant’s entire interest will be distributed, or
begin to be distributed, no later than as follows:


 


(1)                                         If
the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary, distributions to the surviving spouse will begin by December 31
of the calendar year immediately following the calendar year in which the
Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 701⁄2, if later.


 


(2)                                         If
the Participant’s surviving spouse is not the Participant’s sole Designated
Beneficiary, distributions to the designated beneficiary will begin by December 31
of the calendar year immediately following the calendar year in which the
Participant died.


 


(3)                                         If
there is no Designated Beneficiary as of September 30 of the year
following the year of the Participant’s death, the Participant’s entire
interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant’s death.


 


(4)                                         If
the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Paragraph (disregarding item
(1) above), will apply as if the surviving spouse were the Participant.


 


For purposes
of this Paragraph (e) and Paragraph (h) below, distributions are considered to
begin on the Participant’s Required Beginning Date (or, if item (4) applies,
the date distributions are required to begin to the surviving spouse under item
(1) above).  If annuity payments
irrevocably commence to the Participant before the Participant’s Required
Beginning Date (or to the Participant’s surviving spouse before the date
distributions are required to begin to the surviving spouse under item (1)
above), the date distributions are considered to begin is the date
distributions actually commence.  Unless
the Participant’s interest is distributed in the form of an annuity purchased
from an insurance company or in a single sum on or before the Required
Beginning Date, as of the first Distribution Calendar Year distributions will
be made in accordance with


 


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Paragraphs
(f), (g) and (h) of this Section 3.11, whichever is applicable. If the
Participant’s interest is distributed in the form of an annuity purchased from
an insurance company, distributions thereunder will be made in accordance with
the requirements of Section 401(a)(9) of the Code and the Treasury
regulations promulgated thereunder and, if the annuity contract is purchased
after the Required Beginning Date, the first payment interval must begin on or
before the annuity contract purchase date and the payment required for one
payment interval must be made no later than the end of such payment interval.  Any part of the Participant’s interest which
is in the form of an individual account described in section 414(k) of the
Code will be distributed in a manner satisfying 
the requirements of section 401(a)(9) of the Code and the Treasury
regulations promulgated thereunder that apply to individual accounts.


 


(f)                                    If
the Participant’s interest is paid in the form of annuity distributions under
the Plan, payments under the annuity must satisfy the following requirements:


 


(1)                            The
annuity distributions will be paid in periodic payments made at uniform
intervals not longer than one year.


 


(2)                            The
distribution period will be over a life (or lives) or over a period certain not
longer than the period described in Paragraph (g) or (h).


 


(3)                            Once
payments have begun over a period certain, the period certain will not be
changed even if the period certain is shorter than the maximum permitted unless
such change is permitted under and complies with A-13 of Treasury regulation section 1.401(a)(9)-6.


 


(4)                            Payments
will either be nonincreasing (disregarding ancillary death benefits in the case
of payments made upon the death of the Participant) or increase only as
follows:


 


(i)                                     by
an annual percentage increase that does not exceed the annual percentage
increase in an Eligible Cost-of-Living Index for a twelve-month period ending
in the year in which the increase occurs or the prior year;


 


(ii)                                  by
a percentage increase that occurs at specified times and does not exceed the
cumulative total of annual percentage increases in an Eligible Cost-of-Living Index
since the Annuity Starting Date or, if later, the date of the most recent
percentage increase;


 


(iii)                               to
the extent of the reduction in the amount of the Participant’s payments to
provide for a survivor benefit upon death, but only if the beneficiary whose
life was being used to determine the distribution period described in Paragraph
(g) dies


 


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or is no longer the Participant’s beneficiary pursuant to a qualified
domestic relations order within the meaning of section 414(p);


 


(iv)                              to
provide cash refunds of employee contributions upon the Participant’s death;


 


(v)                                 to
pay increased benefits that result from a Plan amendment;


 


(vi)                              to
allow a beneficiary to convert the survivor portion of a joint and survivor
annuity into a single sum distribution upon the Participant’s death; or


 


(vii)                           to
the extent permitted under items (c) and (d) of A-14 of Treasury regulation section 1.401(a)(9)-6
(regarding permitted increases under certain annuity contracts purchased from
an insurance company and additional permitted increases for annuities payable
from a trust for certain de minimis
increases, payments upon death or as a result of certain dividend payments).


 


The amount
that must be distributed on or before the Participant’s Required Beginning Date
(or, if the Participant dies before distributions begin, the date distributions
are required to begin under item (1) or (2) of Paragraph (e)) is the payment
that is required for one payment interval. The second payment need not be made
until the end of the next payment interval even if that payment interval ends
in the next calendar year. Payment intervals are the bi-monthly, monthly,
semi-annually, annually or other, as applicable, periods for which payments are
received.  All of the Participant’s
benefit accruals as of the last day of the first Distribution Calendar Year
must be included in the calculation of the amount of the annuity payments for
payment intervals ending on or after the Participant’s Required Beginning Date.  Any additional benefits accruing to the
Participant in a calendar year after the first Distribution Calendar Year must
commence to be distributed in accordance with the provisions of this Section 3.11
beginning with the first payment interval ending in the calendar year
immediately following the calendar  year
in which such additional benefit amount accrues.


 


(g)                                 If
the Participant’s interest is being distributed in the form of a joint and
survivor annuity for the joint lives of the Participant and a nonspouse
beneficiary, the periodic annuity payment payable to the Designated Beneficiary
after the Participant’s death must not at any time after the Participant’s
Required Beginning Date exceed the applicable percentage of the annuity payment
payable to the Participant using the table set forth in A-2 of Treasury
regulation section 1.401(a)(9)-6. 
If the form of distribution combines a joint and survivor annuity for
the joint lives of the Participant and a nonspouse beneficiary and a period
certain annuity, the requirement in the preceding sentence will apply to
annuity payments to be made to the Designated Beneficiary after the expiration
of the period certain. Unless the Participant’s spouse is the sole Designated
Beneficiary and the form of distribution is a period certain and no life
annuity, the


 


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period certain
for an annuity distribution commencing during the Participant’s lifetime may
not exceed the applicable distribution period for the Participant under the
Uniform Lifetime Table set forth in A-2 of Treasury regulation section 1.401(a)(9)-9
for the calendar year that contains the Participant’s Annuity Starting Date. If
the Annuity Starting Date precedes the year in which the Participant reaches
age 70, the applicable distribution period for the Participant is the
distribution period for age 70 under the Uniform Lifetime Table set forth in
A-2 of Treasury regulation section 1.401(a)(9)-9 plus the excess of 70
over the age of the Participant as of the Participant’s birthday in the year
that contains the Annuity Starting Date. If the Participant’s spouse is the
participant’s sole Designated Beneficiary, the period certain may not exceed
the joint and last survivor expectancy of the Participant and the Participant’s
spouse, if longer than the applicable distribution period for the Participant
as determined under this Paragraph (g), provided the period certain is not
provided in conjunction with a life annuity.


 


(h)                                 If
the Participant dies before the date distribution of his or her interest begins
and there is a Designated Beneficiary, the Participant’s entire interest will
be distributed, beginning no later than the time described in item (1) or (2)
of Paragraph (e), whichever is applicable, over the life of the Designated
Beneficiary or over a period certain not exceeding:


 


(1)                                         Unless
the Pension Starting Date is before the first Distribution Calendar Year, the
Life Expectancy of the Designated Beneficiary determined using the beneficiary’s
age as of the beneficiary’s birthday in the calendar year immediately following
the calendar year of the Participant’s death determined for the Distribution
Calendar Year that contains the Pension Starting Date; or


 


(2)                                         If
the Pension Starting Date is before the first Distribution Calendar Year, the
Life Expectancy of the Designated Beneficiary determined using the beneficiary’s
age as of the beneficiary’s birthday in the calendar year that contains the
Pension Starting Date. If the Participant dies before the date distributions
begin and there is no Designated Beneficiary as of September 30 of the
year following the year of the Participant’s death, distribution of the
Participant’s entire interest will be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant’s death. If
the Participant dies before the date distribution of his or her interest
begins, the Participant’s surviving spouse is the participant’s sole Designated
Beneficiary, and the surviving spouse dies before distributions to the
surviving spouse begin, this Paragraph (h) will apply as if the surviving
spouse were the Participant, except that the time by which distributions must
begin will be determined without regard to item (1) of Paragraph (e).


 


(i)                                     For
purposes of this Section 3.11, payments made by the Plan to a Participant’s
child following the death of the Participant are treated as if made to a
surviving spouse of the Participant until the child reaches the age of majority


 


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under
applicable state law (or dies, if earlier) provided that such payments become
payable to the Participant’s surviving spouse upon cessation of such payments
to the child if such surviving spouse is then living.  A child who has not completed a specified
course of education and is under the age of 26 or who is disabled within the
meaning of Section 72(m)(7) of the Code is not deemed to have reached the
age of majority for purposes of the preceding sentence.


 


(j)                                     For
purposes of this Section 3.11, the following terms shall be defined as
follows:


 


(1)                                         Designated
Beneficiary.  The individual who is
designated as the Beneficiary under the Plan and is a Designated Beneficiary
under Section 401(a)(9) of the Code and section 1.401(a)(9)-1,
Q&A-4, of the Treasury regulations.


 


(2)                                         Distribution
Calendar Year.  A calendar year for
which a minimum distribution is required. For distributions beginning before
the Participant’s death, the first Distribution Calendar Year is the calendar
year immediately preceding the calendar year which contains the Participant’s
Required Beginning Date. For distributions beginning after the Participant’s
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Paragraph (e) above.


 


(3)                                         Eligible
Cost-in-Living Index.  Any index
described in items (b)(2), (b)(3) or (b)(4) of A-14 of Treasury regulation section 1.401(a)(9)-6.


 


(4)                                         Life
Expectancy.  Life expectancy as
computed by use of the Single Life Table in Treasury Regulation section 1.401(a)(9)-9.


 


(5)                                         Required
Beginning Date.  With respect to a
Participant or beneficiary, the date specified in the second paragraph of Section 3.08
of the Plan.”


 


IV.                                   Effective
as of February 1, 2006, the third paragraph of Section 1.23 of the
Trust Agreement shall be deleted and the following shall be substituted
therefor:


 


“The Committee shall furnish an explanation regarding the standard form
of benefit and the Sections 3.02, 3.03 and 5.02 election to each Participant no
less than thirty days before the end of the election period described below
(unless such thirty-day period is waived by an affirmative election in
accordance with the Code and applicable Treasury regulations) and no more than
ninety days before his Annuity Starting Date. 
The furnished explanation shall be written in nontechnical language in a
manner calculated to be understood by the average Plan Participant and shall
include the following specific information relating to the standard form of
benefit and each other optional form of benefit generally available under the
Plan:  (1) a description of the form of
benefit, (2) a description of the eligibility


 


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conditions for
the form of benefit, (3) a description of the financial effect of election the
form of benefit (i.e., the amount payable under the form of benefit to the
Participant during the Participant’s lifetime and the amount payable after the
death of the Participant), (4) a chart or other comparable device showing the
financial effect and relative value of the optional forms of benefit in
accordance with Treasury regulation section 1.417(a)(3)-1(d)(2)(i) and
which is accompanied with explanations and statements required under such
regulation, (5) the amount payable to the Participant expressed in the form of
a pension commencing at his Normal Retirement Date or commencing immediately,
(6) a statement that offers to provide the Participant upon his request to the
Committee a statement of financial effect and a comparison of relative values
that is specific to the Participant for any presently available option form of
benefit and how he may request such information, and (7) a statement that, upon
the Participant’s request to the Committee, he may obtain the specific items of
Participant-specific information described in Treasury regulation section 1.417(a)(3)-1(c)
with respect to any or all of the optional forms of benefits available under
the Plan to the Participant with a Pension Starting Date for which the explanation
applies and how he may request such information.  The period of time during which a Participant
may make or revoke the election described in this Section shall be the
ninety-day period ending on the later of the date such Participant’s pension
payments commence or the thirtieth day after the information required by this
Paragraph has been furnished to the Participant; provided, however, that a
Participant may affirmatively elect (with spousal consent if required) to waive
the requirement that such information be provided at least thirty days before
the end of the election period so long as the election period does not end, and
the Participant’s benefit hereunder does not commence, until at least eight
days after the information required by this Paragraph has been furnished to the
Participant.  In the event of such
waiver, the election period shall end on the later of the date of the waiver or
the eighth day after the information required by this Paragraph has been
furnished to the Participant, and payment of the Participant’s benefit shall
commence as soon as administratively feasible thereafter.”


 


V.                                     As
amended hereby, the Trust Agreement is specifically ratified and reaffirmed.


 


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EXECUTED
this 10th day of May, 2005.


 


	
  FOREST OIL CORPORATION

  	
  EMPLOYEE BENEFITS COMMITTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ CYRUS D.
  MARTER IV

  	
   

  	
    /s/
  DAVID H. KEYTE

  	
   

  
	
   

  	
  Cyrus D.
  Marter IV

  	
  David H. Keyte

  
	
   

  	
  Vice President, General Counsel

  	
   

  	
   

  	
   

  
	
   

  	
  and Secretary

  	
   

  	
   

  	
   

  
	
   

  	
    /s/
  CYRUS D. MARTER IV

  	
   

  
	
   

  	
  Cyrus D. Marter IV

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  TIMOTHY F. SAVOY

  	
   

  
	
   

  	
  Timothy F. Savoy

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  MICHAEL N. KENNEDY

  	
   

  
	
   

  	
  Michael N. Kennedy

  



 


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