Document:

Exhibit
10.1

 

SEVERANCE AGREEMENT

 

SEVERANCE AGREEMENT (the “Agreement”) dated as
of
                  ,
2010 between FOREST OIL CORPORATION, a New York
corporation (the “Company”), with its principal offices located at 707
Seventeenth Street, Suite 3600, Denver, Colorado, and
                                          
(“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

 

1

 

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 

 

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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 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.

 

4

 

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 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 one of the dates provided below (as evidenced by
the initials of Executive and an authorized representative of the Company):

 

(i)            On the date that is 60 days after the date of
Executive’s Involuntary Termination (Initials:
         (Executive)
         (authorized representative of
the Company)); or

 

(ii)           On January 15 of the first calendar year
following the calendar year in which Executive’s Involuntary Termination occurs
(Initials:          (Executive)
         (authorized representative of
the Company)); or

 

(iii)          On January 15 of the second calendar year
following the calendar year in which Executive’s Involuntary Termination occurs
(Initials:          (Executive)
         (authorized representative of
the Company)); or

 

(iv)          On January 15 of the third calendar year
following the calendar year in which Executive’s Involuntary Termination occurs
(Initials:          (Executive)
         (authorized representative of
the Company)); or

 

(v)           On January 15 of the
fourth calendar year following the calendar year in which Executive’s
Involuntary Termination occurs (Initials:
         (Executive)
         (authorized representative of
the Company)); or

 

(vi)          On January 15 of the
fifth calendar year following the calendar year in which Executive’s
Involuntary Termination occurs (Initials:
         (Executive)
         (authorized representative of
the Company)).

 

If
the payment described in the first sentence of this Paragraph 3(a) (other
than a payment described in clause (i) above) will occur after the
Interest Commencement Date (as defined 

 

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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.

 

(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), (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 

 

6

 

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 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 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 Code or
any 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 

 

7

 

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
                  ,
20    .  Within
thirty (30) days after December 17, 2012 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,
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 

 

8

 

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 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 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 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 

 

9

 

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 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 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 

 

10

 

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
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.

 

[Signatures begin on the following page.]

 

11

 

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

 

 

	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Insert
  Name]

  
	
   

  	
   

  
	
   

  	
  “COMPANY”

  
	
   

  	
   

  
	
   

  	
  FOREST
  OIL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  H.
  Craig Clark

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  

 

12Exhibit
10.2

 

SEVERANCE AGREEMENT

 

SEVERANCE AGREEMENT (the “Agreement”) dated as
of
                          ,
2010 between FOREST OIL CORPORATION, a New York
corporation (the “Company”), with its principal offices located at 707
Seventeenth Street, Suite 3600, Denver, Colorado, and
                                          
(“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.

 

(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;

 

Confidential

 

1

 

(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 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

 

2

 

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.

 

(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).

 

3

 

(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 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:

 

4

 

(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 one of the dates provided below (as evidenced by
the initials of Executive and an authorized representative of the Company):

 

(i)            On the date that is 60 days after the date of
Executive’s Involuntary Termination (Initials:
         (Executive)
         (authorized representative of
the Company)); or

 

(ii)           On January 15 of the first calendar year
following the calendar year in which Executive’s Involuntary Termination occurs
(Initials:          (Executive)
         (authorized representative of
the Company)); or

 

(iii)          On January 15 of the second calendar year
following the calendar year in which Executive’s Involuntary Termination occurs
(Initials:          (Executive)         
(authorized representative of the Company)); or

 

(iv)          On January 15 of the third calendar year
following the calendar year in which Executive’s Involuntary Termination occurs
(Initials:          (Executive)
         (authorized representative of
the Company)); or

 

(v)           On January 15 of the
fourth calendar year following the calendar year in which Executive’s
Involuntary Termination occurs (Initials:
         (Executive)
         (authorized representative of
the Company)); or

 

(vi)          On January 15 of the
fifth calendar year following the calendar year in which Executive’s
Involuntary Termination occurs (Initials:
         (Executive)
         (authorized representative of
the Company)).

 

If
the payment described in the first sentence of this Paragraph 3(a) (other
than a payment described in clause (i) above) 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, 

 

5

 

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.

 

(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), (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.

 

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 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 rate shall be announced by such bank.

 

6

 

5.             Certain
Additional Payments by the Company.  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 Code or any 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.

 

6.             General.

 

(a)           Term.  The effective date of this Agreement is
                ,
2010.  Within thirty (30) days after December 17,
2012 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, 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 

 

7

 

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 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 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 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.

 

8

 

(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 

 

9

 

date
of Executive’s termination of employment shall be accumulated and paid or
provided, as 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 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.

 

10

 

(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
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”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Insert
  Name]

  
	
   

  	
   

  
	
   

  	
  “COMPANY”

  
	
   

  	
   

  
	
   

  	
  FOREST
  OIL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  H.
  Craig Clark

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  

 

11

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