Exhibit 10.5


 


SEVERANCE
AGREEMENT


 


SEVERANCE AGREEMENT (the “Agreement”) dated as
of December 1, 2009, between FOREST OIL CORPORATION,
a New York corporation (the “Company”), with its principal offices located at
707 Seventeenth Street, Suite 3600, Denver, Colorado, and Victor A. Wind
(“Executive”),


 


W I T N E S S E T H:


 


WHEREAS, the Company desires to attract and retain certain
key employee personnel and, accordingly, the Board of Directors of the Company
(the “Board”) has approved the Company entering into a severance agreement with
Executive in order to encourage his continued service to the Company;


 


WHEREAS, Executive
is prepared to commit such services in return for specific arrangements with
respect to severance compensation and other benefits;


 


WHEREAS,
Executive will receive and/or has received proprietary and confidential trade
secret information of the Company; and


 


WHEREAS,
Executive will serve and/or has served as an executive, management personnel,
or officer of the Company;


 


NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the Company and Executive agree as
follows:


 


1.             Definitions.


 


(a)           “Annual Compensation” shall mean an
amount equal to the greater of:


 


(i)            Executive’s annual base salary at the annual
rate in effect at the date of his Involuntary Termination;


 


(ii)           Executive’s annual base salary at the
annual rate in effect sixty days prior to the date of his Involuntary
Termination; or


 


(iii)          Executive’s annual base salary at the
annual rate in effect immediately prior to a Change of Control.


 


Notwithstanding the foregoing, if
Executive’s employment shall be subject to an Involuntary Termination within
two years after such Change of Control, then the amount determined pursuant to
the preceding sentence shall be increased by the amount of the Annual
Bonus.  For purposes of the preceding
sentence, the term ‘Annual Bonus’ shall mean the annual bonus most recently
paid by the Company to Executive prior to the date of his Involuntary
Termination; provided, however, that if Executive was employed by the Company
for only a portion of the year


 


Confidential


 


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year with respect to which such bonus
was paid, then the ‘Annual Bonus’ shall equal an amount determined by
annualizing the bonus received by Executive based on the ratio of the number of
days Executive was employed by the Company during such year to 365 days;
provided, further, that if Executive has not received an annual bonus from the
Company at any time prior to the date of his Involuntary Termination, then the
‘Annual Bonus’ shall equal the amount of Executive’s target annual bonus for
the year in which such termination occurs.


 


(b)           “Change in Duties” shall mean the occurrence of any one or
more of the following:


 


(i)            A significant change in the nature or
scope of Executive’s authorities or duties from those applicable to him
immediately prior to the date on which a Change of Control occurs;


 


(ii)           A reduction in Executive’s base salary
from that provided to him immediately prior to the date on which a Change of
Control occurs;


 


(iii)          A diminution in Executive’s eligibility
to participate in bonus, stock option, incentive award and other compensation
plans which provide opportunities to receive compensation which are the greater
of (A) the opportunities provided by the Company (including its
subsidiaries) for employees with comparable duties or (B) the
opportunities under any such plans under which he was participating immediately
prior to the date on which a Change of Control occurs;


 


(iv)          A diminution in employee benefits
(including but not limited to medical, dental, life insurance and long-term
disability plans) and perquisites applicable to Executive from the greater of (A) the
employee benefits and perquisites provided by the Company (including its
subsidiaries) to employees with comparable duties or (B) the employee
benefits and perquisites to which he was entitled immediately prior to the date
on which a Change of Control occurs; or


 


(v)           A change in the location of Executive’s
principal place of employment by the Company (including its subsidiaries) by
more than 50 miles from the location where he was principally employed
immediately prior to the date on which a Change of Control occurs.


 


(c)           “Change of Control”
shall mean the occurrence of any one of the following events:


 


(i)            Any one person, or more than one person Acting as a Group
(as hereinafter defined), acquires ownership of stock of the Company that,
together with stock held by such person or group, constitutes more than 50% of
the total fair market value or total voting power of the stock of the Company;
provided, however, that if any one person, or more than one person Acting as a
Group, is considered to own more than 50% of the total fair market value or
total voting power of the stock of the Company, the acquisition of additional
stock by the same person or group does not cause a Change of Control within the
meaning of this Paragraph 1(c)(i); and provided, further, that an increase in the
percentage of stock owned by any one person, or 


 


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persons
Acting as a Group, as a result of a transaction in which the Company acquires
its stock in exchange for property will be treated as an acquisition of stock
for purposes of this Paragraph 1(c)(i); and provided, further, that this
Paragraph 1(c)(i) applies to cause a Change of Control only when there is
a transfer of stock of the Company (or issuance of stock of the Company) and
stock in the Company remains outstanding after the transaction; and provided,
further, that, if any person, or more than one person Acting as a Group, is
considered to have met the control requirements of Paragraph 1(c)(ii) below,
the acquisition of additional control by the same person or group will not
cause a Change of Control within the meaning of this Paragraph 1(c)(i); or


 


(ii)           A majority of the members of the Board is replaced during
any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board before the date of such appointment
or election; provided, however, that, if any person, or more than one person
Acting as a Group, is considered to have met the control requirements of this
Paragraph 1(c)(ii), the acquisition of additional control by the same person or
group will not cause a Change of Control within the meaning of this Paragraph
1(c)(ii); or


 


(iii)          Any one person, or more than one person Acting as a Group,
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or group) assets from the Company that
have a total “gross fair market value” equal to or more than 60% of the total
“gross fair market value” of all the assets of the Company immediately before
such acquisition or acquisitions; provided, however, that there is no Change of
Control under this Paragraph 1(c)(iii) where there is a transfer to an
entity  that is controlled by the
shareholders of the Company immediately after the transfer, as provided in the
following proviso; and, provided, further, that a transfer of assets by the
Company shall not be treated as change in the ownership of such assets if the
assets are transferred to (1) a shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to its stock, (2) an
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a person, or more than one
person Acting as a Group, that owns, directly or indirectly, 50% or more of the
total value or voting power of all the outstanding stock of the Company, or (4) an
entity, at least 50% of the total value or voting power of which is owned,
directly or indirectly, by a person described in clause (3) of this
proviso.  For purposes of this Paragraph
1(c)(iii), “gross fair market value” means the value of the assets of the
Company, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.


 


For
purposes of this Paragraph 1(c), (x) Section 318(a) of the Code
applies to determine stock ownership, and (y) the term “Acting as a Group”
means “acting as a group” within the meaning of Treasury Regulation section
1.409A-3(i)(5)(v)(B), (vi)(D), or (vii)(C), as applicable.  The definition of Change of Control under
this Paragraph 1(c) is intended to comply with applicable definitions and
requirements of Section 409A(a)(2)(A)(v) of the Code and Treasury
Regulation section 1.409A-3(i)(5) that correspond to the change of control
events described above, and shall be interpreted consistently therewith.


 


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


 


(e)           “Compensation Committee” shall mean the Compensation
Committee of the Board.


 


(f)            “Disability” shall mean
that, as a result of Executive’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 thirty days after written notice of termination is given to
Executive by the Company (provided, however, that such notice may not be given
prior to thirty days before the expiration of such six-month period).


 


(g)           “Involuntary Termination” shall mean any
termination of Executive’s employment with the Company which:


 


(i)            does not result from a resignation by
Executive (other than a resignation pursuant to clause (ii) of this
subparagraph (g)); or


 


(ii)           results from a resignation by Executive
on or before the date which is sixty days after the date upon which Executive
receives notice of a Change in Duties;


 


provided,
however, the term “Involuntary Termination”
shall not include a Termination for Cause or any termination as a result of
Death, Disability, or Retirement.  For
all purposes of this Agreement, Executive shall be considered to have
terminated employment with the Company when Executive incurs 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.


 


(h)           “Retirement” shall mean
Executive’s resignation on or after the date he reaches age sixty-five.


 


(i)            “Severance Amount” shall mean an
amount equal to 2.5 times Executive’s Annual Compensation.


 


(j)            “Severance Period” shall mean a
period commencing on the date of such Involuntary Termination and continuing
for twenty-four  months.


 


(k)           “Termination for Cause” shall mean
termination of Executive’s employment by the Company (or its subsidiaries) by
reason of Executive’s (i) gross negligence in the performance of his
duties, (ii) willful and continued failure to perform his duties, (iii) willful
engagement in conduct which is materially injurious to the Company or its
subsidiaries (monetarily or otherwise) or (iv) conviction of a misdemeanor
involving moral turpitude or a felony.


 


2.             Services.  Executive agrees that he will render services
to the Company (as well as any subsidiary thereof or successor thereto) during
the period of his employment to the best of


 


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his
ability and in a prudent and businesslike manner and that he will devote
substantially the same time, efforts and dedication to his duties as heretofore
devoted.


 


3.             Termination Within Two Years
After a Change of Control.  Subject to the provisions of Paragraph 6(i) hereof,
if Executive’s employment by the Company or any subsidiary thereof or successor
thereto shall be subject to an Involuntary Termination which occurs within two
years after the date upon which a Change of Control occurs, then the Company
will, as additional compensation for services rendered to the Company
(including its subsidiaries), pay to Executive the following amounts (subject
to any applicable payroll or other taxes required to be withheld and any
employee benefit premiums) and take the following actions after the last day of
Executive’s employment with the Company:


 


(a)           Pay Executive a lump sum cash payment in
an amount equal to the Severance Amount. 
Subject to the provisions of Paragraph 6(i) hereof, such payment
shall be made on. January 15 of the first calendar year following the
calendar year in which Executive’s Involuntary Termination occurs.  Executive and the Company acknowledge and
agree that this provision is consistent with the election first made by
Executive pursuant to that certain Amendment to Severance Agreement dated December 24,
2008, by and between Executive and the Company. 
If the payment described in the first sentence of this Paragraph 3(a) will
occur after the Interest Commencement Date (as defined below), then such
payment shall, subject to Paragraph 4, accrue interest (compounded annually on January 15
of each year) from the Interest Commencement Date to the actual date of payment
at the Interest Credit Rate (as defined below and subject to periodic
adjustment as provided below) and such interest shall be paid in a lump sum on
the actual date of payment of the Severance Amount.  Further, if the payment described in the
first sentence of this Paragraph 3(a) will occur after the date that is
six months after the date of Executive’s Involuntary Termination, then the
Company shall, on or as soon as practicable after the date of Executive’s Involuntary
Termination, contribute cash in an amount equal to the Severance Amount plus
the interest described in the preceding sentence to an irrevocable grantor
(“rabbi”) trust of which Executive is the sole beneficiary and the trustee of
which is a nationally-recognized and solvent bank or trust company that is not
affiliated with the Company (subject to the claims of the Company’s creditors,
as required pursuant to applicable Internal Revenue Service guidance to prevent
the imputation of income to Executive prior to distribution from the trust),
pursuant to which such payment plus applicable interest shall be payable from
the trust at the time provided herein, provided that (x) the Company shall
remain liable to Executive for any deficiency in the payments from the trust
and (y) in no event shall cash be transferred to the trust during any
period in which such transfer would result in adverse tax consequences to
Executive pursuant to Section 409A(b)(3) of the Code.  As used herein, (A) the term “Interest
Commencement Date” shall mean the fifth day after the effective date of the
release described in Paragraph 6(i) hereof and (B) the term “Interest
Credit Rate” shall mean the sum of 3% plus the “prime rate” of interest as
reported in The Wall Street Journal as of the date of determination of the
Interest Credit Rate as provided in the following sentence.  The Interest Credit Rate shall initially be
determined as of the Interest Commencement Date (or the first business day
following such date if such date is not a business day) and shall be
re-determined and adjusted as of each January 15 (or the first business
day following such date if such date is not a business day) that occurs after
the Interest Commencement Date and prior to the actual date of payment of the
Severance Amount.


 


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(b)           Cause Executive and those of his
dependents (including his spouse) who were covered under the Company’s medical
and dental benefit plans on the day prior to Executive’s Involuntary
Termination to continue to be covered under such plans (or to receive
equivalent benefits) throughout the Severance Period, without any cost to
Executive; provided, however, that (i)  such coverage shall terminate if
and to the extent Executive becomes eligible to receive medical and dental
coverage from a subsequent employer (and any such eligibility shall be promptly
reported to the Company by Executive) and (ii) if Executive (and/or his
spouse) would have been entitled to retiree medical and/or dental coverage
under the Company’s plans had he voluntarily retired on the date of such
Involuntary Termination, then such coverages shall be continued as provided
under such plans, and (iii) such coverage to Executive (or the receipt of
equivalent benefits) shall be provided through an arrangement that satisfies
the requirements of Sections 105 and 106 of the Code such that the benefits or
reimbursements under such arrangement are not includible in Executive’s income.


 


(c)           Cause any and all outstanding options to
purchase common stock of the Company held by Executive to become immediately
exercisable in full and cause Executive’s accrued benefits under any and all
nonqualified deferred compensation plans sponsored by the Company to become
immediately nonforfeitable.  If and to
the extent that the preceding provisions of this paragraph are inconsistent or
conflict with the terms of any stock option agreement or non-qualified deferred
compensation plan, then the preceding provisions of this paragraph shall govern
and control.


 


(d)           Cause
any and all outstanding options to purchase common stock of the Company held by
Executive to remain exercisable for twelve months after the last day of
Executive’s employment with the Company (but in no event shall any such option
be exercisable for (i) a longer period than the original term of such
option (but in no event after the 10th anniversary of the
original date of grant of such option) or (ii) a shorter period than that
already provided for under the terms of such option).  If and to the extent that the preceding
provisions of this paragraph are inconsistent or conflict with the terms of any
stock option agreement, then the preceding provisions of this paragraph shall
govern and control.


 


4.             Interest on Late Payments.  If any payment provided for
in Paragraphs 3(a) or 5 hereof is not made when due (determined after
giving effect to any delay in such payment required pursuant to Paragraph 6(i)(2) hereof),
the Company shall pay to Executive interest on the amount payable from the date
that such payment should have been made under such paragraph until such payment
is made, which interest shall be calculated at 10% plus the prime or base rate
of interest announced by JPMorgan Chase Bank (or any successor thereto) at its
principal office in New York on a non-compounded basis, and shall change when
and as any such change in such prime or base rate shall be announced by such
bank.


 


5.             Certain Additional Payments by
the Company.


 


(a)           Notwithstanding anything to
the contrary in this Agreement, in the event that any payment, distribution or
provision of a benefit by the Company to or for the benefit of Executive,
whether paid or payable, distributed or distributable or provided or to be
provided pursuant to the terms of this Agreement or otherwise (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, or any 


 


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interest
or penalties with respect to such excise tax (such excise tax, together with
any such interest or penalties, are hereinafter collectively referred to as the
“Excise Tax”), the Company shall pay to Executive an additional payment (a
“Gross-up Payment”) in an amount such that after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed on any Gross-up Payment, Executive retains an
amount of the Gross-up Payment equal to the Excise Tax imposed upon the
Payments.  The Gross-up Payment
attributable to a particular Payment shall be made at the time such Payment is
made; provided, however, that in no event shall the Gross-up Payment be made
later than the end of Executive’s taxable year next following Executive’s
taxable year in which Executive remits the related taxes.  The Company and Executive shall make an
initial determination as to whether a Gross-up Payment is required and the
amount of any such Gross-up Payment.  Executive
shall notify the Company immediately in writing of any claim by the Internal
Revenue Service which, if successful, would require the Company to make a
Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially
determined by the Company and Executive) within five days of the receipt of
such claim.  The Company shall notify
Executive in writing at least five days prior to the due date of any response
required with respect to such claim if it plans to contest the claim.  If the Company decides to contest such claim,
Executive shall cooperate fully with the Company in such action; provided,
however, the Company shall bear and pay directly or indirectly all costs and
expenses (including additional interest and penalties) incurred in connection
with such action and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of the Company’s action.  If, as a result of the Company’s action with
respect to a claim, Executive receives a refund of any amount paid by the
Company with respect to such claim, Executive shall promptly pay such refund to
the Company.  If the Company fails to timely
notify Executive whether it will contest such claim or the Company determines
not to contest such claim, then the Company shall immediately pay to Executive
the portion of such claim, if any, which it has not previously paid to
Executive.


 


(b)           On
or before the date upon which a Change of Control occurs (the “Change of
Control Date”), the Compensation Committee shall make a determination under the
Company’s annual incentive plan as to whether bonuses under such plan for the
year during which the Change of Control Date occurs are due based on partial
year results through the Change of Control Date, and, if the Compensation
Committee determines that such bonuses are due, then the Compensation Committee
shall also determine the amount of such bonus that shall be paid to Executive.  On or before the Change of Control Date, the
Company shall pay to Executive the amount of Executive’s bonus that has been
determined by the Compensation Committee in accordance with the preceding
sentence.


 


6.             General.


 


(a)           Term.  The effective date of this Agreement is December 1,
2009.  Within thirty (30) days after June 17,
2010 and within thirty (30) days after each successive thirty (30)-month period
of time thereafter that this Agreement is in effect, the Company shall have the
right to review this Agreement, and in its sole discretion either continue and
extend this Agreement, terminate this Agreement, and/or offer Executive a
different agreement.   The Compensation
Committee (excluding any member of the Compensation Committee who is covered by
this Agreement or by a similar agreement with the Company) will vote on whether
to so extend, 


 


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terminate,
and/or offer Executive a different agreement and will notify Executive of such
action within said thirty-day time period mentioned above.  This Agreement shall remain in effect until
so terminated and/or modified by the Company. 
Failure of the Compensation Committee to take any action within said
thirty days shall be considered as an extension of this Agreement for an
additional thirty-month period of time. 
Notwithstanding anything to the contrary contained in this “sunset
provision”, it is agreed that if a Change of Control occurs while this
Agreement is in effect, then this Agreement shall not be subject to termination
or modification under this “sunset provision”, and shall remain in force for a
period of thirty months after such Change of Control, and if within said thirty
months the contingency factors occur which would entitle Executive to the
benefits as provided herein, this Agreement shall remain in effect in
accordance with its terms.  If, within
such thirty months after a Change of Control, the contingency factors that
would entitle Executive to said benefits do not occur, thereupon this
thirty-month “sunset provision” shall again be applicable with the thirty-day
time period for Compensation Committee action to thereafter commence at the
expiration of said thirty months after such Change of Control and on each
thirty-month anniversary date thereafter.


 


(b)         Indemnification.  If Executive shall obtain
any money judgment or otherwise prevail with respect to any litigation brought
by Executive or the Company to enforce or interpret any provision contained
herein, the Company, to the fullest extent permitted by applicable law, hereby
indemnifies Executive for his reasonable attorneys’ fees and disbursements
incurred in such litigation and hereby agrees (i) to pay in full all such
fees and disbursements and (ii) to pay prejudgment interest on any money
judgment obtained by Executive from the earliest date that payment to him
should have been made under this Agreement until such judgment shall have been
paid in full, which interest shall be calculated at 10% plus the prime or base
rate of interest announced by JPMorgan Chase (or any successor thereto) at its
principal office in New York on a non-compounded basis, and shall change when
and as any such change in such prime or base rate shall be announced by such
bank.  Any reimbursement of reasonable
attorneys’ fees and disbursements required under this Paragraph 6(b) shall
be made not later than the close of Executive’s taxable year following the
taxable year in which Executive incurs the expense; provided, however, that,
upon Executive’s termination of employment with the Company, in no event shall
any additional reimbursement be made prior to the date that is six months after
the date of Executive’s termination of employment to the extent such payment
delay is required under Section 409A(a)(2)(B)(i) of the Code.  In no event shall any reimbursement be made
to Executive for such fees and disbursements incurred after the later of (A) Executive’s
death or (B) the date that is 10 years after the date of Executive’s
termination of employment with the Company.


 


(c)         Payment Obligations Absolute.   The Company’s obligation to pay (or cause one
of its subsidiaries to pay) Executive the amounts and to make the arrangements
provided herein shall be absolute and unconditional and shall not be affected
by any circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company (including its
subsidiaries) may have against him or anyone else.  All amounts payable by the Company (including
its subsidiaries hereunder) shall be paid without notice or demand.  Executive shall not be obligated to seek
other employment in mitigation of the amounts payable or arrangements made
under any provision of this Agreement, and, except as provided in Paragraph 3(b) hereof,
the obtaining of any such other employment shall in no 


 


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event
effect any reduction of the Company’s obligations to make (or cause to be made)
the payments and arrangements required to be made under this Agreement.


 


(d)           Successors.  This Agreement shall be binding upon and
inure to the benefit of the Company and any successor of the Company, by merger
or otherwise.  This Agreement shall also
be binding upon and inure to the benefit of Executive and his estate.  If Executive shall die prior to full payment
of amounts due pursuant to this Agreement, such amounts shall be payable
pursuant to the terms of this Agreement to his estate.


 


(e)           Severability.  Any provision in this Agreement which is
prohibited or unenforceable in any jurisdiction by reason of applicable law
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating or affecting the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


(f)            Non-Alienation.  Executive shall not have any right to pledge,
hypothecate, anticipate or assign this Agreement or the rights hereunder,
except by will or the laws of descent and distribution.


 


(g)           Notices. 
Any notices or other communications provided for in this Agreement shall
be sufficient if in writing.  In the case
of Executive, such notices or communications shall be effectively delivered if
hand-delivered to Executive at his principal place of employment or if sent by
registered or certified mail to Executive at the last address he 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.


 


(h)           Controlling Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Colorado.


 


(i)            Release and Delayed Payment
Restriction.


 


(1)           As a condition to the
receipt of any benefit under Paragraph 3 hereof, Executive shall first execute
a release, in the form established by the Company, releasing the Company, its
shareholders, partners, officers, directors, employees and agents from any and
all claims and from any and all causes of action of any kind or character,
including but not limited to all claims or causes of action arising out of
Executive’s employment with the Company or the termination of such employment.


 


(2)           The release described in
Paragraph 6(i)(1) hereof must be effective and irrevocable within 55 days
after the date of the termination of Executive’s employment with the
Company.  Notwithstanding any provision
in this Agreement to the contrary, if the payment of any amount or benefit
under this Agreement would be subject to additional taxes and interest under Section 409A
of the Code because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of
the Code and the regulations thereunder, then any such payment or benefit that
Executive would otherwise be entitled to during the first six months following
the date of Executive’s termination of employment shall be accumulated and paid
or provided, as 


 


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applicable,
on the date that is six months after the date of Executive’s termination of
employment (or if such date does not fall on a business day of the Company, the
next following business day of the Company), or such earlier date upon which
such amount can be paid or provided under Section 409A of the Code without
being subject to such additional taxes and interest.  If this Paragraph 6(i)(2) becomes
applicable such that the payment of any amount is delayed, any payments that
are so delayed shall accrue interest on a non-compounded basis, from the date
such payment would have been made had this Paragraph 6(i)(2) not applied
to the actual date of payment, at the prime or base rate of interest announced
by JPMorgan Chase Bank (or any successor thereto) at its principal office in
New York on the date of Executive’s termination of employment (or the first
business day following such date if such termination does not occur on a
business day) and shall be paid in a lump sum on the actual date of payment of
the delayed payment amount.  Executive
hereby agrees to be bound by the Company’s determination of its “specified
employees” (as such term is defined in Section 409A of the Code) in
accordance with any of the methods permitted under the regulations issued under
Section 409A of the Code. 
Notwithstanding the preceding provisions of this Paragraph 6(i)(2), if
Executive is entitled to a payment that would otherwise accrue interest at the
Interest Credit Rate pursuant to Paragraph 3(a) but for the application of
the preceding provisions of this Paragraph 6(i)(2), then (i) any interest
that is to accrue with respect to such payment (whether pursuant to Paragraph 3(a) or
this Paragraph 6(i)(2), but subject to Paragraph 4) shall be based on the
Interest Credit Rate and (ii) for any period during which interest is
provided with respect to such payment under both Paragraph 3(a) and this
Paragraph 6(i)(2), interest shall accrue during such period under only one of
such paragraphs.


 


(j)            Full Settlement.  If Executive is entitled to and receives the
benefits provided hereunder, performance of the obligations of the Company
hereunder will constitute full settlement of all claims that Executive might
otherwise assert against the Company on account of his termination of
employment.


 


(k)           Unfunded Obligation.  The obligation to pay amounts under this
Agreement is an unfunded obligation of the Company (including its
subsidiaries), and no such obligation shall create a trust or be deemed to be
secured by any pledge or encumbrance on any property of the Company (including
its subsidiaries).


 


(l)            Not a Contract of Employment.  This Agreement shall not be deemed to
constitute a contract of employment, nor shall any provision hereof affect (a) the
right of the Company (or its subsidiaries) to discharge Executive at will or (b) the
terms and conditions of any other agreement between the Company and Executive
except as provided herein.


 


(m)          Number and Gender.  Wherever appropriate herein, words used in
the singular shall include the plural and the plural shall include the
singular.  The masculine gender where
appearing herein shall be deemed to include the feminine gender.


 


(n)           Entire Agreement.  This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to such subject matter. Without limiting the scope of
the preceding sentence, all understandings and agreements preceding the date of
execution of this Agreement and relating to the subject matter hereof are 


 


10

















 


hereby null and void and of
no further force and effect, including, without limitation, all prior Severance
Agreements, if any, by and between the Company and Executive.  Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.


 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement effective as of the effective date in Paragraph 6(a).


 


 


	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Victor A.
  Wind

  
	
   

  	
  Victor
  A. Wind

  
	
   

  	
   

  
	
   

  	
  “COMPANY”

  
	
   

  	
   

  
	
   

  	
  FOREST
  OIL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H. Craig
  Clark

  
	
   

  	
   

  	
  H.
  Craig Clark

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  



 


11