Exhibit 10.1


 


AMENDMENT NO. 2 TO


FOREST OIL CORPORATION


2007 STOCK INCENTIVE PLAN


 


WHEREAS, Forest Oil Corporation  (the “Company”)
has heretofore adopted the  Forest Oil Corporation 2007 Stock Incentive
Plan (the “Plan”); and


 


WHEREAS, the Company desires to amend the Plan (i) to
increase the maximum aggregate number of shares of the Company’s common stock
available for issuance under the Plan, (ii) to further restrict the
ability of the Company to reprice or exchange options or stock appreciation
rights, and (iii) to prohibit payments in connection with a Corporate
Change (as defined in the Plan) prior to the consummation of the transaction
constituting the Corporate Change (collectively, the “Amendment”); and


 


WHEREAS, the Company is seeking shareholder approval of the
Amendment, as set forth in the Company’s Proxy Statement for the Annual Meeting
of Shareholders scheduled for May 12, 2010;


 


NOW, THEREFORE, the Plan shall be amended as follows,
provided that such amendments shall not be effective until the date of approval
of the Company’s shareholders:


 


1.             The first sentence
of Paragraph V(a) of the Plan shall be deleted and replaced in its
entirety with the following:


 


“Subject to adjustment in the same manner as provided in Paragraph XI
with respect to shares of Common Stock subject to Options then outstanding, the
aggregate maximum number of shares of Common Stock that may be issued under the
Plan, and the aggregate maximum number of shares of Common Stock that may be
issued under the Plan through Incentive Stock Options, shall not exceed
6,700,000.”


 


2.             The proviso at the
end of the last sentence of Paragraph VII(d) of the Plan shall be deleted
and replaced in its entirety with the following:


 


“provided, however, that, except as provided in Paragraph XI, the
Committee may not, without approval of the shareholders of the Company, amend
any outstanding Option or Stock Appreciation Right to lower the purchase or
exercise price of the underlying Option or Stock Appreciation Right, or cancel,
replace or exchange any outstanding Option or Stock Appreciation Right for (x) cash,
(y) another Award  other than an
Option, or (z) an Option or Stock Appreciation Right having a lower
purchase or exercise price than the purchase or exercise price of the original
Option or Stock Appreciation Right.”


 


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3.     The second sentence of
Paragraph XI(c) shall be deleted and replaced in its entirety with the
following:


 


“If (i) the Company shall not be the surviving entity in any
merger or consolidation (or survives only as a subsidiary of an entity), (ii) the
Company sells, leases, or exchanges or agrees to sell, lease, or exchange all
or substantially all of its assets to any other person or entity, (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 (each such event is referred to herein as a “Corporate
Change”), then  (x) no earlier than
effective as of the consummation by  the Company of
such merger, consolidation, reorganization, sale, lease, or exchange of assets
or dissolution or such election of Directors or (y) no later than 30 days
after a Corporate Change of the type described in clause (iv), the Committee,
acting in its sole discretion without the consent or approval of any
Participant, shall effect one or more of the following alternatives in an
equitable and appropriate manner to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
which alternatives may vary among individual Participants and which may vary
among Options or Stock Appreciation Rights held by any individual
Participant:  (1) accelerate the
time at which Options or Stock Appreciation Rights then outstanding may be
exercised so that such Awards may be exercised in full for a limited period of
time on or before a specified date fixed by the Committee, after which
specified date all such unexercised Awards and all rights of Participants
thereunder shall terminate, (2) require the mandatory surrender to the
Company by all or selected Participants of some or all of the outstanding Options
or Stock Appreciation Rights held by such Participants (irrespective of whether
such Awards are then exercisable under the provisions of the Plan) as of a date
specified by the Committee, in which event the Committee shall thereupon cancel
such Awards and the Company shall pay (or cause to be paid) to each Participant
an amount of cash per share equal to the excess, if any, of the amount
calculated in Subparagraph (d) below (the “Change of Control Value”) of
the shares subject to such Awards over the exercise price(s) under such
Awards for such shares, or (3) make such adjustments to Options or Stock
Appreciation Rights then outstanding as the Committee deems appropriate to
reflect such Corporate Change and to prevent the dilution or enlargement of rights
(provided, however, that the Committee may determine in its sole discretion
that no adjustment is necessary to such Awards then outstanding), including,
without limitation, adjusting such an Award to provide that the number and
class of shares of Common Stock covered by such Award shall be adjusted so that
such Award shall thereafter cover securities of the surviving or acquiring
corporation or other property (including, without limitation, cash) as
determined by the Committee in its sole discretion.”


 


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IN WITNESS WHEREOF, the undersigned, acting
pursuant to authority granted to him by the Board of Directors and shareholders
of the Company, has caused this Amendment No. 2 to Forest Oil Corporation
2007 Stock Incentive Plan to be executed this 12th day of May,
2010.


 


	
   

  	
  FOREST
  OIL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/Cyrus
  D. Marter IV

  
	
   

  	
   

  	
  Cyrus
  D. Marter IV

  
	
   

  	
   

  	
  Vice
  President, General Counsel &

  
	
   

  	
   

  	
  Secretary

  



 


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