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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[ X ] Annual Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1999
OR
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number: 1-13515
Full title of the plan and name of issuer of the securities held
pursuant to the plan and the address of its principal executive office:
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
and
FOREST OIL CORPORATION
1600 Broadway
Suite 2200
Denver, Colorado 80202
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Exhibits.
23. Consent of Independent Auditors to incorporation by reference in Form S-8.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee of the Retirement Savings Plan of Forest Oil
Corporation has duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
RETIREMENT SAVINGS PLAN OF
FOREST OIL CORPORATION
Dated: June 27, 2000 By: /s/ Joan C. Sonnen
-------------------------------------
Joan C. Sonnen, Member of the
Administrative Committee of
the Retirement Savings Plan of
Forest Oil Corporation
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RETIREMENT SAVINGS PLAN OF
FOREST OIL CORPORATION
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1999 AND 1998
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
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RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
TABLE OF CONTENTS
<TABLE>
----------------------------------------------------------------------------------------------------------
<S> <C>
INDEPENDENT AUDITORS' REPORT..................................................................... 1
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS -
December 31, 1999 and 1998.................................................................. 2
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS -
Years Ended December 31, 1999 and 1998...................................................... 3
NOTES TO FINANCIAL STATEMENTS - December 31, 1999 and 1998....................................... 4
SUPPLEMENTAL SCHEDULES
1 SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1999.......................................................... 10
</TABLE>
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INDEPENDENT AUDITORS' REPORT
THE PARTICIPANTS AND ADMINISTRATIVE COMMITTEE
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION:
We have audited the accompanying statements of net assets available for plan
benefits of the Retirement Savings Plan of Forest Oil Corporation as of December
31, 1999 and 1998, and the related statements of changes in net assets available
for plan benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
Retirement Savings Plan of Forest Oil Corporation as of December 31, 1999 and
1998, and the changes in net assets for the years then ended in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes as of December 31, 1999 is presented for purposes of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements for
the year ended December 31, 1999 and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG LLP
Denver, Colorado
May 19, 2000
1
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RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
1999 1998
----------- ------------
<S> <C> <C>
ASSETS:
Investments, at fair value:
Forest Oil Corporation Common Stock $ 1,543,479 1,141,286
Participant-directed mutual funds 19,498,463 14,798,867
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21,041,942 15,940,153
Other investments:
Loans to participants 266,414 236,804
Cash and short-term investments 16,652 13,432
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Total investments 21,325,008 16,190,389
LIABILITIES:
Forfeitures available to the Company to reduce
future contributions 1,657 22,221
Stock purchase payables 7,034 9,165
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Total liabilities 8,691 31,386
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Net assets available for plan benefits,
including distributions payable to
participants of $45,618 in 1999 and
$240,220 in 1998 $21,316,317 16,159,003
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</TABLE>
See accompanying notes to financial statements.
2
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RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
================================================================================================
1999 1998
------------ ------------
<S> <C> <C>
Additions:
Contributions:
Company $ 518,423 551,304
Participants 1,020,661 1,024,755
Dividend and interest income 1,436,930 647,099
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2,976,014 2,223,158
Net appreciation in fair value of investments,
including realized and unrealized gains and losses 3,526,348 79,244
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Total additions 6,502,362 2,302,402
Deductions:
Distributions to participants 1,365,612 773,893
Change in value of forfeited contributions (20,564) 8,465
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Total deductions 1,345,048 782,358
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Increase in net assets available for
plan benefits 5,157,314 1,520,044
Net assets available for plan benefits at beginning of year 16,159,003 14,638,959
------------ ------------
Net assets available for plan benefits at end of year $ 21,316,317 16,159,003
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</TABLE>
See accompanying notes to financial statements.
3
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RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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(1) DESCRIPTION OF THE PLAN
The Retirement Savings Plan of Forest Oil Corporation (the Plan) is a
profit sharing, defined contribution plan which includes a cash or
deferred arrangement under Section 401(k) of the Internal Revenue Code.
The Plan is available to any employee of Forest Oil Corporation and its
affiliates (the Company) that have adopted the Plan.
Investment options available to participants during the years ended
December 31, 1999 and 1998 are as follows:
<TABLE>
<S> <C>
Forest Oil Corporation Common Stock Common stock of Forest Oil Corporation
Morley GIC Fund Collective trust consisting of guaranteed
insurance contracts
Janus Fund Mutual fund consisting primarily of common
stock and similar equity securities
Harbor International Fund Mutual fund consisting of non-U.S. equity
securities
Dodge & Cox Balanced Fund Mutual fund consisting primarily of common
stock and bonds
Heartland Value Fund Mutual fund consisting primarily of equity
securities with market capitalizations of less
than $300,000,000
Pimco Total Return Fund Mutual fund consisting of fixed income
securities with a portfolio duration of three
to six years
Chesapeake Institutional Fund Mutual fund consisting primarily of common and preferred
stocks and convertible securities of medium and
large capitalization companies
Vanguard S&P 500 Index Fund Mutual fund consisting primarily of common stocks in the
same proportions as the S&P 500 Index (new
investment option effective January 1, 1999)
</TABLE>
Employees enrolled in the Plan may elect to defer from 1% to 15% of their
compensation, subject to defined limits, on a pre-tax basis as a contribution to
the Plan (Deferred Compensation Contribution). Each month, the Company
contributes an amount equal to the Deferred Compensation Contributions made by
or on behalf of each participant limited to 5% of the participant's compensation
(Company Matching Contribution). At the sole discretion of the Executive
Committee of the Forest Oil Corporation Board of Directors, the Company Matching
4
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(1) DESCRIPTION OF THE PLAN (CONTINUED)
Contribution may be made in cash, in shares of Forest Oil Corporation
Common Stock, or in any combination of cash and shares of Forest Oil
Corporation Common Stock.
Prior to January 1, 1996, pursuant to the Forest Oil Corporation Annual
Incentive Plan (the Incentive Plan), the Company could contribute, for
each Plan Year, a Company Profit-Sharing Contribution determined at the
sole discretion of the Executive Committee of the Company's Board of
Directors. The Company Profit-Sharing Contribution, if any, was in
addition to the Company Matching Contribution and was allocated among
certain qualifying participants based on compensation. The Incentive Plan
was suspended effective January 1, 1996.
Company matching and profit-sharing contributions made for a
participant's account are vested under certain conditions, including a
graduated schedule whereby full vesting occurs upon the completion of
five years of service. Nonvested Company matching and profit-sharing
contributions are subject to forfeiture under certain conditions and
forfeited balances are available to reduce succeeding Company matching
contributions to the Plan. The Company used $34,575 of forfeitures in
1999 to reduce Company matching contributions. There were no forfeitures
used to reduce matching contributions in 1998.
Participants are fully vested in their own contributions at all times.
Expenses associated with the administration and investment activities of
the Plan are paid by the Company.
The Company maintains the right to terminate or amend the Plan at any
time. In the event of a termination or partial termination of the Plan,
or complete discontinuance of Company matching contributions to the Plan,
the balances of the affected members under the Plan as of the date of the
termination or discontinuance shall become fully vested and
nonforfeitable. The total amount in each participant's accounts shall be
distributed as the Administrative Committee shall direct, to the
participant or for the participant's benefit, or shall continue to be
held in trust for the participant's benefit.
The foregoing description of the Plan provides only general information.
Participants should refer to the Summary Plan Description for a more
complete description of the Plan's provisions. Copies of the Summary Plan
Description are available from the Administrative Committee of the Plan.
5
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(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the accrual
basis of accounting.
In the course of preparing the financial statements of the Plan,
management makes various assumptions and estimates to determine the
reported amounts of assets, liabilities and changes in net assets
available for plan benefits, and in the disclosures of commitments and
contingencies. Changes in these assumptions and estimates will occur as a
result of the passage of time and the occurrence of future events and,
accordingly, actual results could differ significantly from amounts
estimated.
VALUATION OF INVESTMENTS
For financial reporting purposes, investments are recorded at fair value
based on quoted market prices or, in the case of the Morley GIC Fund,
based on the contract values of the underlying guaranteed investment
contracts. Purchases and sales of securities are recorded on the trade
date. Gains or losses on sales of investments are based on the difference
between sales proceeds and the cost of the investment determined on an
average unit cost basis.
Investments in the Morley GIC Fund are based on contract value because
the contracts are fully benefit-responsive. As such, participants may
direct the withdrawal or transfer of all or a portion of their
investments at contract value. The fair value of the investments in the
Morley GIC Fund is estimated to be approximately equal to the contract
value at December 31, 1999 and 1998. The crediting interest rate was
approximately 6.33% as of December 31, 1999 and 1998, respectively.
Investments in the Morley GIC Fund, the Janus Fund, the Harbor
International Fund, the Dodge & Cox Balanced Fund, the Heartland Value
Fund, the Pimco Total Return Fund, the Chesapeake Institutional Fund and
the Vanguard S&P 500 Index Fund are represented by units. The average
unit value for each fund is computed by dividing the number of units
outstanding into the total value of the fund. The total value of each
fund at any given time consists of the market value of the investments
held in the fund, including any income retained on such investments.
6
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(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOANS TO PARTICIPANTS
Pursuant to the terms of the Plan, loans may be made to the extent of 50%
of a participant's vested interest in all accounts, limited to $50,000.
Each loan is evidenced by a promissory note. Interest is fixed throughout
the maximum 60-month term of each loan at 1% per annum over the Chase
Manhattan prime rate in effect at the end of the month preceding
inception of the loan. All outstanding loans must be repaid in full
within 90 days following a participant's termination of employment. In
the event of default, the participant is deemed to have made a withdrawal
of the unpaid principal balance.
(3) INVESTMENTS
The Plan's investments are held in a bank-administered trust fund. During
1999 and 1998, the Plan's investments appreciated in fair value
(including realized and unrealized gains and losses) by $3,526,348 and
$79,244.
The fair values of individual investments that represent 5% or more of
the Plan's net assets at December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Forest Oil Corporation Common Stock $ 1,543,479 1,141,286
Morley GIC Fund 1,820,363 1,288,589
Janus Fund 7,778,594 4,806,477
Harbor International Fund 3,579,549 3,607,178
Dodge & Cox Balanced Fund 2,136,415 2,066,650
Heartland Value Fund 1,971,114 2,000,605
Chesapeake Institutional Fund 1,035,980 867,490
</TABLE>
(4) RECONCILIATION TO INTERNAL REVENUE SERVICE (IRS) FORM 5500
Distributions payable to terminated employees are shown as a liability on
IRS Form 5500. For financial statement purposes, all net assets of the
Plan are considered to be available for plan benefits; therefore,
distributions payable to participants are not deducted from total assets
to derive net assets available for plan benefits. Correspondingly,
distributions to participants include only actual amounts paid during
each year for financial statement purposes. For purposes of the IRS Form
5500, distributions include amounts payable to terminated participants.
7
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(4) RECONCILIATION TO INTERNAL REVENUE SERVICE (IRS) FORM 5500 (CONTINUED)
The following is a reconciliation of net assets available for benefits as
shown in the financial statements to amounts shown on Form 5500:
<TABLE>
<CAPTION>
December 31,
1999 1998
---- ----
<S> <C> <C>
Net assets available for plan benefits per the
financial statements $ 21,316,317 16,159,003
Amounts allocated to withdrawing participants (45,618) (240,220)
------------ ------------
Net assets available for benefits per the Form 5500 $ 21,270,699 15,918,783
============ ============
</TABLE>
The following is a reconciliation of benefits paid to participants as
shown in the financial statements to amounts shown on Form 5500:
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998
---- ----
<S>
Benefits paid to participants and the change
in value of forfeited contributions per the <C> <C>
financial statements $ 1,345,048 782,358
Add: Amounts allocated to withdrawing participants
at December 31, 1999 and 1998, respectively 45,618 240,220
Less: Amounts allocated to withdrawing participants
at December 31, 1998 and 1997, respectively (240,220) (251,592)
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Benefits paid to participants per the Form 5500 $ 1,150,446 770,986
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</TABLE>
(5) FEDERAL INCOME TAXES
The IRS has issued a determination letter dated April 24, 1996
indicating that the Plan, as amended, is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and that the trust is therefore
exempt from federal income tax under Section 501(a) of the Code. The Plan
has since been amended. The Plan administrator believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code and that the Plan is qualified and the related
trust continues to be tax-exempt.
8
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(6) FINANCIAL REPORTING
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, ACCOUNTING FOR AND REPORTING OF
CERTAIN DEFINED CONTRIBUTION PLAN INVESTMENTS AND OTHER DISCLOSURE
MATTERS (SOP 99-3). SOP 99-3 simplifies the disclosure for certain
investments and is effective for plan years ending after December 15,
1999, with earlier application encouraged. The Plan adopted SOP 99-3
for the Plan years ending December 31, 1999 and 1998. Accordingly,
information previously required to be disclosed about participant-
directed fund investment programs is not presented in the Plan's
financial statements.
9
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SCHEDULE 1
RETIREMENT SAVINGS PLAN OF FOREST OIL CORPORATION
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
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<TABLE>
<CAPTION>
Number of Current
Description of Investment Shares or Units Value
------------------------------------------ --------------- ------------
<S> <C> <C>
Forest Oil Corporation Common Stock* 117,041 $ 1,543,479
GIC pooled funds -
Morley GIC Fund 86,122 1,820,363
Mutual funds:
Janus Fund 176,586 7,778,594
Harbor International Fund 85,512 3,579,549
Dodge & Cox Balanced Fund 32,513 2,136,415
Heartland Value Fund 54,003 1,971,114
Pimco Total Return Fund 20,367 201,630
Chesapeake Institutional Fund 40,980 1,035,980
Vanguard S&P 500 Index Fund 7,203 974,818
------------
21,041,942
Money market funds -
State Street Short-Term Investment Funds* 16,652 16,652
Loans to participants 266,414
------------
TOTAL INVESTMENTS $ 21,325,008
============
</TABLE>
*Denotes a party in interest.
See accompanying independent auditors' report.
10
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EXHIBIT INDEX
Exhibit 23. Consent of KPMG LLP.
