Summary of FOREST OIL CORP

Entry into a Material Definitive Agreement, Financial Statements and Exhibits

Item 1.01. Entry into a Material Definitive Agreement.

On May 11, 2009, the Compensation Committee ("Committee") of the Board of Directors (the "Board") of Forest Oil Corporation ("Forest") approved Forest's 2009 Annual Incentive Plan (the "2009 Plan"), including the performance criteria and specific measures and goals for Forest's executive officers and all other participants. Under the 2009 Plan, any incentive rewards will be tied to five performance criteria: Total Shareholder Return, Cash Cost (such as lease operating expense, transportation expense, and total general and administrative expense), Business Unit Performance Objectives, Production, and Rate of Return on Capital Investments. Each of the performance criteria included in the 2009 Plan is tied to a percentage of the participant's target bonus, which is expressed as a percentage of a participant's base salary. In addition to the target level, the 2009 Plan includes completion percentages for a range of performance levels, starting at a minimum threshold level, which is equal to 25% of the target level, up to an outstanding performance level, which is equal to 200% of the target level.

The 2009 Plan is administered by the Committee and the President and Chief Executive Officer (for all participant awards other than his own award), although certain administrative aspects of the 2009 Plan may be delegated to the Vice President of Human Resources. Participation in the 2009 Plan is determined by the President and Chief Executive Officer. The Committee is responsible for determining the achievement of any of the completion levels. No awards will be made under the 2009 Plan unless the minimum 25% completion threshold is achieved for the total plan. Any modifications to the 2009 Plan must be approved by the Committee. The 2009 Plan is attached to this report as Exhibit 10.1.