<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
</TABLE>
<TABLE>
<S> <C>
FOREST OIL CORPORATION
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
FOREST OIL CORPORATION
1600 BROADWAY, SUITE 2200
DENVER, CO 80202
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 2000
------------------------
To the Shareholders of
FOREST OIL CORPORATION:
As a shareholder of Forest Oil Corporation, a New York corporation (the
"Company"), you are invited to be present in person or to be represented by
proxy at the Annual Meeting of Shareholders, to be held at 1600 Broadway, Suite
590, Denver, Colorado, on Wednesday, May 10, 2000, at 10:00 a.m., M.D.T., for
the following purposes:
1. To elect three Class I directors, three Class II directors and four
Class III directors;
2. To approve an amendment to the Company's By-Laws which would change the
classification and terms of office of the Company's directors and allow
the Board of Directors to establish the number of directors by resolution
from time to time;
3. To consider and vote upon the ratification of the appointment of KPMG
LLP as independent auditors for the Company for the fiscal year ending
December 31, 2000; and
4. To transact such other business as may be properly brought before the
meeting and any adjournments thereof.
Shareholders of the Company of record at the close of business on March 24,
2000 are entitled to vote at the meeting and all adjournments thereof.
A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY MUST BE
REPRESENTED AT THE MEETING TO CONSTITUTE A QUORUM. THEREFORE, ALL SHAREHOLDERS
ARE URGED EITHER TO ATTEND THE MEETING OR TO BE REPRESENTED BY PROXY. IF A
QUORUM IS NOT PRESENT AT THE MEETING, A VOTE FOR ADJOURNMENT WILL BE TAKEN AMONG
THE SHAREHOLDERS PRESENT OR REPRESENTED BY PROXY. IF A MAJORITY OF THE
SHAREHOLDERS PRESENT OR REPRESENTED BY PROXY VOTE FOR ADJOURNMENT, IT IS THE
COMPANY'S INTENTION TO ADJOURN THE MEETING UNTIL A LATER DATE AND TO VOTE
PROXIES RECEIVED AT SUCH ADJOURNED MEETING(S).
SHAREHOLDERS OF RECORD CAN VOTE THEIR SHARES USING THE INTERNET OR THE
TELEPHONE. INSTRUCTIONS FOR USING THESE CONVENIENT SERVICES ARE SET FORTH ON THE
ENCLOSED PROXY CARD. OF COURSE, YOU ALSO MAY VOTE YOUR SHARES BY COMPLETING AND
RETURNING THE ACCOMPANYING PROXY CARD IN THE ENCLOSED BUSINESS REPLY ENVELOPE.
If you later find that you can be present or for any other reason desire to
revoke your proxy, you may do so at any time before the voting.
By order of the Board of Directors
[LOGO]
JOAN C. SONNEN
SECRETARY
March 31, 2000
<PAGE>
PROXY STATEMENT
OF
FOREST OIL CORPORATION
1600 BROADWAY, SUITE 2200
DENVER, COLORADO 80202
March 31, 2000
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Forest Oil Corporation ("Forest" or the "Company") of
proxies to be voted at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held on Wednesday, May 10, 2000, at 1600 Broadway, Suite 590, Denver,
Colorado, at 10:00 a.m., M.D.T., and at any adjournment thereof. Each holder of
record at the close of business on March 24, 2000 of shares of the Company's
Common Stock, Par Value $.10 Per Share (the "Common Stock"), will be entitled to
one vote for each share so held. As of March 7, 2000, there were 53,843,732
shares of Common Stock issued and outstanding. The Company will reimburse
brokers, custodians and fiduciaries for reasonable expenses incurred by them in
forwarding proxy material to beneficial owners of Common Stock. The costs of the
solicitation will be borne by the Company.
Shares may be voted over the Internet, by telephone or by completing and
returning the enclosed proxy card. Shares represented by properly executed
proxies received by the Company at or prior to the Annual Meeting will be voted
according to the instructions indicated. Unless contrary instructions are given,
the persons named on the proxy intend to vote the shares so represented for
(i) election of the nominess for directors, (ii) approval of an amendment to the
Company's By-Laws which would change the classification and terms of office of
the Company's directors and allow the Board of Directors to establish the number
of directors by resolution from time to time, and (iii) ratification of the
appointment of KPMG LLP as the Company's independent auditors for the fiscal
year ending December 31, 2000. As to any other business which may properly come
before the meeting, the persons named on the proxy will vote according to their
judgment. The proxy may be revoked prior to the meeting by written notice to the
Secretary of the Company at 1600 Broadway, Suite 2200, Denver, Colorado 80202,
or by written or oral notice to the Secretary at the Annual Meeting at any time
prior to being voted. This Proxy Statement and the Proxy Card enclosed herewith
are expected to be first sent to shareholders of the Company on or about
March 31, 2000.
If a quorum is not present at the meeting, a vote for adjournment will be
taken among the shareholders present or represented by proxy. If a majority of
the shareholders present or represented by proxy vote for adjournment, it is the
Company's intention to adjourn the meeting until a later date and to vote
proxies received at such adjourned meeting(s).
Under the laws of New York, the Company's state of incorporation, "votes
cast" at a meeting of shareholders by the holders of shares entitled to vote are
determinative of the outcome of the matter subject to vote. Abstentions and
broker non-votes will not be considered "votes cast" based on the Company's
understanding of state law and New York Stock Exchange (the "NYSE")
requirements. A "broker non-vote" occurs if a broker or other nominee does not
have discretionary authority and has not received instructions with respect to a
particular item. Shareholders may not cumulate their votes.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The Board of Directors has approved and recommends that the shareholders
approve the amendment to the Company's By-Laws described in Proposal No. 2
below, which would divide the Board into three classes with terms of three years
each and allow the Board to establish the number of directors from time to time
by resolution passed by a majority of the whole Board, provided that the number
of directors shall not be less than six or more than fifteen. In accordance with
the proposed amendment to the By-Laws, the
1
<PAGE>
persons named below are nominated as directors of the Company in the classes and
for the terms indicated.
Each class of directors will be elected for a term expiring at the Annual
Meeting to be held either one, two or three years after the date of their
election. A majority of the votes represented at the Annual Meeting by shares of
Common Stock entitled to vote is required to elect a director.
The persons named as proxies in the enclosed proxy, who have been so
designated by the Board of Directors, intend to vote for the election of all
nominees referred to below as directors unless otherwise instructed in the
proxy.
Certain information concerning such nominees, as well as the other current
directors, is set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION,
AGE AND POSITIONS WITH COMPANY
YEARS OF SERVICE AND BUSINESS EXPERIENCE DIRECTOR
NAME WITH COMPANY DURING LAST FIVE YEARS SINCE
- ---- ---------------- --------------------------------------------- --------
<S> <C> <C> <C>
CLASS I NOMINEES--TERMS EXPIRING AT THE ANNUAL SHAREHOLDERS' MEETING IN 2001
J. J. Simmons, III 75 - 3 President of The Simmons Company, a 1997
consulting firm. Vice Chairman of the
Surface Transportation Board from 1995 to
1996 and prior thereto Commissioner--Vice
Chairman of the U.S. Interstate Commerce
Commission. Member of the Audit Committee.
Michael B. Yanney 66 - 8 Director and Chairman of the Board of America 1992
First Investments, Inc. Chairman and Chief
Executive Officer of the America First
Companies, L.L.C. Director of Burlington
Northern Santa Fe Corporation, Level 3
Communications, Inc. and RCN Corporation.
Chairman of the Compensation Committee.
Member of the Nominating Committee.
Philip F. Anschutz 60 - 5 Director and Chairman of the Board of The 1995
Anschutz Corporation ("TAC") and Anschutz
Company, the corporate parent of TAC, for
more than the last five years, and President
of TAC and Anschutz Company until December
1996. Director and Chairman of the Board of
Qwest Communications International Inc.
since February 1997, and Director and
Chairman of the Board of Directors of Qwest
Communications Corporation from November
1993 until September 1997. Director and Vice
Chairman of Union Pacific Corporation since
September 1996. Director and Non-Executive
Chairman of Southern Pacific Rail
Corporation ("SPRC") from 1993 to September
1996. Member of the Nominating Committee.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION,
AGE AND POSITIONS WITH COMPANY
YEARS OF SERVICE AND BUSINESS EXPERIENCE DIRECTOR
NAME WITH COMPANY DURING LAST FIVE YEARS SINCE
- ---- ---------------- --------------------------------------------- --------
<S> <C> <C> <C>
CLASS II NOMINEES--TERMS EXPIRING AT THE ANNUAL SHAREHOLDERS' MEETING IN 2002
Craig D. Slater 43 - 5 President of Anschutz Investment Company 1995
since August 1997. Executive Vice President
of TAC since April 1999 and of Anschutz
Company since May 1999. Vice President of
Acquisitions and Investments of both TAC and
Anschutz Company from August 1995 until
April and May, 1999, respectively. Corporate
Secretary of TAC and Anschutz Company from
1991 to 1996, and other positions with TAC
and Anschutz Company from 1988 to 1995.
Director of Qwest Communications
International Inc. since February 1997 and
Director of Qwest Communications Corporation
since November 1996. Director of Internet
Communications Corporation since September
1996. Member of the Executive Committee and
the Compensation Committee.
Cortlandt S. Dietler 78 - 3 Chairman of TransMontaigne Inc. since April 1996
1995. Chief Executive Officer of
TransMontaigne Inc. from April 1995 to
October 1999. Director of TransMontaigne
Inc., Hallador Petroleum Company, Key
Production Company, Inc. and Carbon Energy
Corporation. Member of the Compensation
Committee.
James H. Lee 51 - 9 Managing Partner, Lee, Hite & Wisda Ltd., a 1991
private oil and gas consulting firm. Member
of the Executive Committee. Chairman of the
Audit Committee.
CLASS III NOMINEES--TERMS EXPIRING AT THE ANNUAL SHAREHOLDERS' MEETING IN 2003
Robert S. Boswell 50 - 14 Chairman of the Board since March 2000. Chief 1985
Executive Officer since December 1995 and
President from November 1993 until March
2000. Chief Financial Officer until December
1995. Member of the Executive Committee and
the Nominating Committee. Director of
C.E. Franklin Ltd.
Cannon Y. Harvey 59 - 1 Director, President and Chief Operating 1999
Officer of TAC and Anschutz Company since
December 1996. Executive Vice
President--Finance and Law of SPRC from
February 1995 until September 1996. Director
of Qwest Communications International Inc.
since February 1997.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION,
AGE AND POSITIONS WITH COMPANY
YEARS OF SERVICE AND BUSINESS EXPERIENCE DIRECTOR
NAME WITH COMPANY DURING LAST FIVE YEARS SINCE
- ---- ---------------- --------------------------------------------- --------
<S> <C> <C> <C>
William L. Britton 65 - 4 Partner in the law firm of Bennett Jones. 1996
Director of Akita Drilling Ltd., ATCO Ltd.,
ATCO Gas, Canadian Utilities Limited,
CanUtilities Holdings Ltd. and ATCO
Pipelines. Member of the Audit Committee.
Dod A. Fraser 49 - 0 Managing Director and former Group Executive 2000
of the global oil and gas group of Chase
Securities, Inc., a subsidiary of The Chase
Manhattan Bank, from August 1995 to January
2000. Prior thereto General Partner, Lazard
Freres & Co. Member of the National
Petroleum Council, an advisory committee to
the United States Secretary of Energy.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH ABOVE.
PROPOSAL NO. 2--APPROVAL OF AMENDMENT TO BY-LAWS WHICH WOULD CHANGE THE
CLASSIFICATION AND TERMS OF OFFICE OF THE COMPANY'S DIRECTORS AND ALLOW THE
BOARD TO ESTABLISH THE NUMBER OF DIRECTORS
The Company's By-Laws provide that the Board of Directors be divided into
four classes as nearly equal in number as possible whose terms of office expire
at different times in annual succession. Currently the number of directors is
established at ten. The affirmative vote of the holders of at least two-thirds
of all outstanding shares on March 24, 2000, the record date for the Annual
Meeting, is required to amend the Company's By-Laws to change the classification
and terms of office of the Company's directors and allow the Board to establish
the number of directors from time to time by resolution passed by a majority of
the whole Board, provided that the number of directors shall not be less than
six or more than fifteen.
In November 1998 the Company commenced trading on the NYSE. The NYSE
requires that listed companies have no more than three classes of directors with
terms of office no longer than three years. The NYSE requested that Forest
change the number of classes and length of terms at its first shareholder
meeting held after June 9, 1999. Accordingly, the Board of Directors has
unanimously approved an amendment to the Company's By-Laws which divides the
Board into three classes with terms of three years each and allows the Board to
establish the number of directors from time to time by resolution passed by a
majority of the whole Board, provided that the number of directors shall not be
less than six or more than fifteen. The full text of the amendment is set forth
in Annex A hereto.
The persons named as proxies in the enclosed proxy, who have been so
designated by the Board of Directors, intend to vote for the amendment to the
Company's By-Laws which would change the classification and terms of office of
each director and allow the Board to establish the number of directors from time
to time by resolution unless otherwise instructed in the proxy. Approval by the
holders of two-thirds of the outstanding Shares of Common Stock is required to
approve the amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO
THE COMPANY'S BY-LAWS WHICH WOULD CHANGE THE CLASSIFICATION AND TERMS OF OFFICE
OF THE COMPANY'S DIRECTORS AND ALLOW THE BOARD TO ESTABLISH THE NUMBER OF
DIRECTORS FROM TIME TO TIME BY RESOLUTION, AS DESCRIBED ABOVE AND AS SET FORTH
IN ANNEX A HERETO WHICH IS DESIGNATED AS PROPOSAL NO. 2 ON THE ENCLOSED PROXY.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows, as of March 7, 2000, the number of shares of the
Company's Common Stock beneficially owned by each director and nominee, each of
the executive officers named in the Summary Compensation Table set forth under
the caption "Executive Compensation" below, and all directors and executive
officers as a group. Unless otherwise indicated, each of the persons has sole
voting power and sole investment power with respect to the shares beneficially
owned by such person.
<TABLE>
<CAPTION>
COMMON STOCK(1)
---------------------------
NAME OF INDIVIDUAL OR NUMBER OF PERCENT
NUMBER IN GROUP SHARES OF CLASS(2)
- --------------------- ---------- -----------
<S> <C> <C>
Philip F. Anschutz.......................................... 19,737,063(3) 36.7%
Robert S. Boswell........................................... 382,868(4) *
William L. Britton.......................................... 4,541 *
Cortlandt S. Dietler........................................ 5,041 *
Forest D. Dorn.............................................. 447,255(5) *
Dod A. Fraser............................................... 5,000 *
Cannon Y. Harvey............................................ 5,077(6) *
David H. Keyte.............................................. 187,913(7) *
James W. Knell.............................................. 75,708(8) *
James H. Lee................................................ 10,786 *
J. J. Simmons III........................................... 2,164 *
Craig D. Slater............................................. 9,875(6) *
Michael B. Yanney........................................... 4,375(9) *
All directors and executive officers as a group (16 persons,
including the 13 named above)............................. 21,028,827(10) 39.0%
</TABLE>
- ------------------------
* The percentage of shares beneficially owned does not exceed one percent of
the outstanding shares of the class.
(1) Amounts reported also include shares held for the benefit of certain
directors and executive officers by the trustee of the Company's Retirement
Savings Plan Trust as of December 31, 1999.
(2) Based on the number of shares outstanding as of March 7, 2000.
(3) Includes 19,733,688 shares owned of record by The Anschutz Corporation and
certain of its subsidiaries, of which Mr. Anschutz is the Chairman of the
Board and a Director. Mr. Anschutz may be deemed to beneficially own such
shares based on his affiliation with The Anschutz Corporation.
(4) Includes 300,000 shares that Robert S. Boswell has the vested right to
purchase pursuant to options granted under the Stock Incentive Plan, 10,000
shares that Robert S. Boswell has the vested right to purchase pursuant to
options granted outside of the Stock Incentive Plan, and 21,512 shares of
restricted stock awarded outside of the Stock Incentive Plan. Does not
include 45 shares held by Robert S. Boswell's wife or 1,766 shares held by
his children, of which shares Mr. Boswell disclaims beneficial ownership.
(5) Includes 113,000 shares that Forest D. Dorn has the vested right to purchase
pursuant to options granted under the Stock Incentive Plan, and 1,644 shares
(net of shares surrendered for tax withholding) of restricted stock also
awarded under the Stock Incentive Plan. Also includes 280,000 shares that
the Estate of William L. Dorn (of which Forest D. Dorn is co-executor) has
the vested right to purchase pursuant to options granted under the Stock
Incentive Plan, 31,224 shares held by the Estate of William L. Dorn, and 33
shares held of record by Forest D. Dorn as custodian for the benefit of one
of his minor children, of which shares Mr. Dorn disclaims beneficial
ownership. Does
5
<PAGE>
not include 1,725 shares held by Forest D. Dorn's wife or 5,192 shares held
by his children, of which shares Mr. Dorn disclaims beneficial ownership.
(6) Does not include 19,733,688 shares owned of record by The Anschutz
Corporation and certain of its subsidiaries. Mr. Harvey and Mr. Slater are
both officers of The Anschutz Corporation.
(7) Includes 153,500 shares that David H. Keyte has the vested right to purchase
pursuant to options granted under the Stock Incentive Plan and 10,756 shares
of restricted stock also awarded under the Stock Incentive Plan. Does not
include 2,000 shares held by his children, of which shares Mr. Keyte
disclaims beneficial ownership.
(8) Includes 59,000 shares that James W. Knell has the vested right to purchase
pursuant to options granted under the Stock Incentive Plan, and 2,466 shares
(net of shares surrendered for tax withholding) of restricted stock also
awarded under the Stock Incentive Plan.
(9) Does not include 3,400 shares held by Michael B. Yanney's wife in her
retirement savings trust, or 3,000 shares held by Torrey Lake Charitable
Remainder Trust, of which shares Mr. Yanney disclaims beneficial ownership.
(10) Includes 151,161 shares held by three executive officers (other than those
named in the table) who have the vested right to purchase such shares
pursuant to options granted under the Stock Incentive Plan, and 3,699 shares
(net of shares surrendered for tax withholding) of restricted stock awarded
to these executive officers under the Stock Incentive Plan.
BOARD OF DIRECTORS AND COMMITTEES
During 1999, the Board of Directors met on seven occasions. The Board of
Directors has appointed four committees: the Executive Committee, the Audit
Committee, the Compensation Committee and the Nominating Committee. Only two
members of each committee are necessary to constitute a quorum. During 1999, the
Executive Committee met formally five times and acted by written consent ten
times. The Executive Committee meets informally on a monthly basis. Robert S.
Boswell, William L. Dorn, James H. Lee and Craig D. Slater were the members of
the Executive Committee during 1999.
The Compensation Committee determines executive compensation, including the
selection of individual employees to be granted awards from among those eligible
under the Stock Incentive Plan, establishes the amount of such awards, and
reports its actions to the Board of Directors. The Compensation Committee met
formally one time and acted by written consent five times during 1999. During
1999, the members of the Compensation Committee were Cortlandt S. Dietler, Craig
D. Slater and Michael B. Yanney.
A Report of the Compensation and Executive Committees regarding Executive
Compensation is set forth below.
The Audit Committee oversees and monitors the Company's independent audit
process and discharges its duties, responsibilities and functions according to a
plan designed to provide assurance to the Board of Directors that the resources
allocated to that process are adequate and utilized effectively. It is also
charged with the responsibility for reviewing all related party transactions for
potential conflicts of interest. The Audit Committee met four times during 1999.
During 1999, the members of the Audit Committee were James H. Lee, William L.
Britton and J.J. Simmons III.
The Nominating Committee is responsible for, among other things, review of
qualifications and recommendations for replacement and/or additional nominees to
the Board of Directors, and recommendation to the Board of policies regarding
directors. The Nominating Committee will not consider nominees recommended by
security holders, and has not established any procedures for such
recommendations. The Nominating Committee acted by written consent one time
during 1999. During 1999, the members of the Nominating Committee were Philip F.
Anschutz, William L. Dorn and Michael B. Yanney.
6
<PAGE>
During 1999, each incumbent director of the Company, except Michael B.
Yanney, attended at least 75% of the aggregate number of meetings of the Board
of Directors and the committees of the Board of Directors on which they served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Cortlandt
S. Dietler, Craig D. Slater and Michael B. Yanney. The Executive Committee
members are Robert S. Boswell, James H. Lee and Craig D. Slater. Robert S.
Boswell is Chairman of the Board and Chief Executive Officer. During 1999 there
were no compensation committee interlocks between the Company and any other
entity. For a description of transactions with Robert S. Boswell, see
"Transactions with Management and Others--Executive Severance Agreements".
DIRECTOR COMPENSATION
Each director who is not an employee of the Company is compensated for
services at the rate of $20,000 annually and, in addition, is paid a fee of
$2,500 for attendance in person at each meeting or series of meetings of the
Board of Directors. The Stock Incentive Plan provides for, among other things,
the payment of a portion of directors' fees in stock. Half of the $20,000 annual
amount is paid at each annual meeting of the shareholders of the Company in
shares of Common Stock, determined by dividing $10,000 by the average of the
fair market values of a share of Common Stock on the 20 consecutive trading days
immediately preceding the date that is three trading days prior to the date of
such meeting.
All directors, whether employees or not, are reimbursed for all costs
incurred by them in their capacities as directors, including the costs of
attending directors' meetings and committee meetings. The nonemployee directors
and the amounts and shares of Common Stock each received during 1999 as
directors were: Philip F. Anschutz received $27,500, $10,000 of which was paid
in the form of 1,077 shares for his services as a director. William L. Britton
received $30,000, $10,000 of which was paid in the form of 1,077 shares for his
services as a director. Cortlandt S. Dietler received $30,000, $10,000 of which
was paid in the form of 1,077 shares for his services as a director. Cannon Y.
Harvey received $30,000, $10,000 of which was paid in the form of 1,077 shares
for his services as a director. James H. Lee received $30,000, $10,000 of which
was paid in the form of 1,077 shares for his services as a director. J. J.
Simmons, III received $30,000, $10,000 of which was paid in the form of 1,077
shares for his services as a director. Craig D. Slater received $30,000, $10,000
of which was paid in the form of 1,077 shares for his services as a director.
Michael B. Yanney received $25,000, $10,000 of which was paid in the form of
1,077 shares for his services as a director. The payment of fees to directors
for attendance at committee meetings was discontinued in February 1996, except
that Mr. Lee receives $50,000 per year for his service on the Executive
Committee, $25,000 of which was paid in the form of 2,377 shares in 1999.
Mr. Lee's service consists of attendance at monthly meetings and his reviews of
certain oil and gas exploration and development prospects.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
earned during each of the Company's last three fiscal years by the Company's
Chief Executive Officer and each of the Company's four other most highly
compensated executive officers (collectively, the "Named Executive Officers"),
based on salary and bonus earned in 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
----------------------------------- ----------------------------------------
OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPENSATION STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS($)(2) OPTIONS(#) ($)(3)
- --------------------------- -------- --------- -------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert S. Boswell .............. 1999 $350,004 $200,000 $-0- $200,000 450,000 $19,835
Chairman of the Board and 1998 350,004 -0- -0- -0- -0- 20,047
Chief Executive Officer 1997 303,402 57,500 -0- 57,500 -0- 17,535
David H. Keyte ................. 1999 225,000 100,000 -0- 100,000 215,000 11,250
Executive Vice President 1998 225,000 -0- -0- -0- -0- 11,250
and Chief Financial Officer 1997 206,253 37,500 -0- 37,500 -0- 10,313
Forest D. Dorn ................. 1999 182,250 20,000 -0- 20,000 25,000 10,221
Senior Vice President-- 1998 180,000 -0- -0- -0- -0- 10,154
Gulf Coast Region 1997 171,670 25,000 -0- 25,000 40,000 9,950
James W. Knell--(4) ............ 1999 167,475 30,000 -0- 30,000 25,000 8,333
Vice President-Gulf Coast
Region
William L. Dorn(5).............. 1999 262,506 25,000 -0- -0- 125,000 15,685
1998 325,008 -0- -0- -0- -0- 19,028
1997 306,261 32,500 -0- 32,500 -0- 17,935
</TABLE>
- --------------------------
(1) Does not include perquisites and other personal benefits because the value
of these items did not exceed the lesser of $50,000 or 10% of reported
salary and bonus of any of the Named Executive Officers.
(2) In 1999, the following Named Executive Officers received conditional grants
of restricted stock in the following respective share amounts: Robert S.
Boswell 26,891 and David H. Keyte 13,445. The grants are subject to
forfeiture restrictions which lapse 20% annually on January 1, 2000 through
2004.
(3) The 1999 totals include (i) the Company's matching contribution to the
Retirement Savings Plan in the following amounts: Robert S. Boswell $8,000;
David H. Keyte $6,250; Forest D. Dorn $8,000; James W. Knell $8,333, William
L. Dorn $8,000; and (ii) the Company's matching contribution pursuant to
deferred compensation agreements in the following amounts: Robert S. Boswell
$9,500; David H. Keyte $5,000; Forest D. Dorn $1,113; James W. Knell $-0-
William L. Dorn $5,125. The 1999 totals also include the following amounts
attributable to the term life portion of premiums paid by the Company
pursuant to a split dollar insurance arrangement: Robert S. Boswell $2,335;
Forest D. Dorn $1,108 and William L. Dorn $5,125. The remainder of the
premium is not included and does not benefit the Named Executive Officers,
because the Company has the right to the cash surrender value of the policy.
(4) James W. Knell became an officer of the Company on May 12, 1999.
(5) Deceased, February 12, 2000. Mr. Dorn was Chairman of the Board at the time
of his death.
STOCK OPTION GRANTS DURING 1999
The following table provides details regarding stock options granted to the
Named Executive Officers in 1999. In addition, in accordance with rules of the
Securities and Exchange Commission (the "SEC"), there are shown the hypothetical
gains or "option spreads" that would exist for the respective options. These
gains are based on assumed rates of annual compound stock price appreciation of
5% and 10%
8
<PAGE>
from the date the options were granted over the full term of the option. The
Company does not have any outstanding SARs.
STOCK OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION FOR
SECURITIES GRANTED TO OPTION TERM(3)
UNDERLYING OPTIONS EMPLOYEES EXERCISE EXPIRATION -----------------------
NAME GRANTED(#)(1) IN 1999(2) PRICE($/SH) DATE 5%($) 10%($)
- ---- ------------------ ---------- ----------- ----------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Boswell ... 300,000 14.8 $ 7.44 March 23, 2009 1,403,000 3,556,000
150,000 7.4 10.00 December 23, 2009 821,000 2,196,000
David H. Keyte ...... 150,000 7.4 7.44 March 23, 2009 702,000 1,778,000
65,000 3.2 10.00 December 23, 2009 356,000 952,000
Forest D. Dorn ...... 60,000 2.9 7.44 March 23, 2009 281,000 711,000
25,000 1.2 10.00 December 31. 2009 137,000 366,000
James W. Knell ...... 30,000 1.5 7.44 March 31, 2009 140,000 356,000
25,000 1.2 10.00 December 31, 2009 137,000 366,000
William L. Dorn(4) . 100,000 4.9 7.44 March 23, 2009 468,000 1,185,000
25,000 1.2 10.00 December 23, 2009 137,000 366,000
</TABLE>
- --------------------------
(1) The options are subject to a four-year vesting schedule with 20% being
exercisable at date of grant. An additional 20% becomes excercisable on each
succeeding anniversary of the date of grant.
(2) The percentage for each year is the amount granted to each of the Named
Executive Officers as a percent of the total of each issuance granted to all
employees.
(3) These amounts represent certain assumed rates of appreciation based on
actual option term and annual compounding from the date of grant. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and overall stock
market conditions. There can be no assurance that the amounts reflected in
this table will be achieved. These numbers do not take into account
provisions of the options providing for termination of the option following
termination of employment, non-transferability or vesting.
(4) Deceased February 12, 2000.
YEAR-END STOCK OPTION VALUES
The following table shows options exercised and value realized, and the
number of shares covered by both exercisable and non-exercisable stock options
as of December 31, 1999 and their values at such date.
OUTSTANDING STOCK OPTION VALUES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED VALUE OPTIONS AT 12/31/99(#) AT 12/31/99($)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert S. Boswell.......... -0- -0- 290,000 410,000 596,000 1,801,000
David H. Keyte............. -0- -0- 142,000 197,000 297,000 878,000
Forest D. Dorn............. -0- -0- 105,000 102,000 131,000 355,000
James W. Knell............. -0- -0- 56,000 61,000 68,000 208,000
William L. Dorn(1)......... 20,000 175,000 145,000 135,000 171,000 563,000
</TABLE>
- --------------------------
(1) Deceased February 12, 2000. Pursuant to the terms of the applicable stock
option agreements, all options held by William L. Dorn became vested upon
his death and are exercisable by his estate for a period of one year.
9
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Common Stock during the five years ended
December 31, 1999 with the cumulative return on the S & P 500 Index and the Dow
Jones Oil--Secondary Index. The Company believes that the Dow Jones
Oil--Secondary Index is meaningful because it is an independent, objective view
of the performance of other similarly sized energy companies. The graph assumes
that $100 was invested in each category on the last trading day of 1993 and that
dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG FOREST OIL CORPORATION, THE S & P 500 INDEX
AND THE DOW JONES OIL--SECONDARY INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
<S> <C> <C> <C> <C> <C> <C>
12/94 12/95 12/96 12/97 12/98 12/99
FOREST OIL CORPORATION $100.00 $125.00 $156.67 $146.67 $75.56 $117.23
S & P 500 $100.00 $137.58 $169.17 $225.61 $290.09 $351.13
DOW JONES OIL - SECONDARY $100.00 $115.70 $142.57 $151.84 $110.88 $125.34
</TABLE>
* $100 INVESTED ON 12/31/94 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
In mid-1995, the Company received significant additional capitalization
through its transactions with The Anschutz Corporation and Joint Energy
Development Investments Limited Partnership, a Delaware limited partnership the
general partner of which is an affiliate of Enron Corp. These transactions
provided the Company with the capital necessary to fund and execute its
operating strategy. The Company believes, therefore, that a review of the
Company's performance relative to the S&P 500 and the Dow Jones Oil--Secondary
indices from mid-1995 to the present is relevant. This graph assumes that $100
was invested in each category on the last trading day of June 1995 and that
dividends were re-invested.
10
<PAGE>
COMPARISON OF 54 MONTH CUMULATIVE TOTAL RETURN*
AMONG FOREST OIL CORPORATION, THE S & P 500 INDEX
AND THE DOW JONES OIL--SECONDARY INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6/95 12/95 6/96 12/96 6/97 12/97 6/98 12/98 6/99 12/99
FOREST OIL CORPORATION $100.00 $173.08 $167.69 $216.92 $180.77 $203.08 $176.15 $104.62 $154.62 $162.31
S & P 500 $100.00 $114.45 $126.00 $140.73 $169.73 $187.68 $220.92 $241.31 $271.19 $292.09
DOW JONES OIL - SECONDARY $100.00 $104.55 $115.92 $128.83 $125.53 $137.21 $128.32 $100.19 $118.05 $113.26
</TABLE>
* $100 INVESTED ON 6/30/95 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
REPORT OF THE COMPENSATION AND EXECUTIVE COMMITTEES ON EXECUTIVE COMPENSATION
The goal of the Compensation and Executive Committees is to design the
Company's executive compensation program to enable the Company to attract,
retain and motivate executive personnel deemed necessary to maximize return to
shareholders. The fundamental concept of the program is to align the amount of
total compensation with an executive's contribution to the success of the
Company in creating shareholder value. The program has the following components:
BASE SALARIES. The Company should offer base salaries sufficient to enable
it to attract, motivate and retain capable executives. In the past, levels
of base compensation have been determined using published compensation
surveys for energy and similar sized companies and information obtained from
compensation consultants. Such surveys or other information may or may not
be used to determine levels of base compensation in the future.
SHORT-TERM INCENTIVES. The Company should offer short-term incentive
compensation annually to reward the Company's executives for achieving
certain predetermined corporate and individual performance objectives. The
incentives may be rewarded in the form of cash bonuses, restricted stock and
stock options, or a combination of the foregoing.
11
<PAGE>
LONG-TERM INCENTIVES. Long-term compensation should comprise a substantial
portion of each executive officer's total compensation. Long-term
compensation provides incentives that encourage the executive officers to
own and hold the Company's stock and tie their long-term economic interests
directly to those of the Company's shareholders. Long-term compensation can
be provided in the form of restricted stock or stock options.
The Compensation Committee's duties include the annual review and approval
of the compensation of the Chairman and Chief Executive Officer, and the
Executive Vice President and Chief Financial Officer; review and determination
of individual elements of compensation for the Company's executive officers;
review of the administration of long-term incentive plans for management and
other employees; and determination of the terms and awards under the Stock
Incentive Plan. The Executive Committee is responsible for determining the
salaries and approving bonus payments for all officers except the Chairman and
Chief Executive Officer, and the Executive Vice President and Chief Financial
Officer.
The Compensation and Executive Committees have studied the limitation on the
deductibility of compensation for federal income tax purposes pursuant to
Section 162(m) of the Internal Revenue Code of 1986, as amended. Compensation
previously awarded to management does not exceed such limitation. However, the
Compensation and Executive Committees may authorize compensation in the future
that results in amounts above the limit if it determines that such compensation
is in the best interests of the Company. In addition, the limitation may affect
the future grant of stock options.
BASE SALARIES. In 1999, the Executive Committee and the Compensation
Committee adjusted base salaries of certain officers to reflect promotions,
changes of responsibilities, and cost of living increases.
SHORT-TERM INCENTIVES. In 1999, the Executive Committee and the
Compensation Committee established a Business Unit Annual Incentive Plan to
provide incentive compensation to certain of the Company's executives and
certain other key employees. Awards under the plan are based upon the success of
business units of the Company in achieving goals for profitability, investment
returns, asset growth and production increases set at the beginning of the year.
The plan also provides for discretionary awards. In December 1999, the Executive
Committee granted bonus awards pursuant to this plan in the amount of $718,250,
of which 50% was paid in the form of restricted stock. The plan has been
continued with revised goals for 2000. Also in December 1999, the Compensation
Committee granted bonus awards totalling $325,000 to Robert S. Boswell, David H.
Keyte and William L. Dorn based upon performance and upon a survey of executive
compensation among peer companies. These awards were paid in cash.
LONG-TERM INCENTIVES. During 1999, the Compensation Committee granted
options aggregating 2,022,500 shares to employees of the Company including
Robert S. Boswell, David H. Keyte and William L. Dorn. The option price in each
case was equal to or closely approximated the closing price of the Common Stock
on the NYSE on the effective date of the grant.
During 1999, the Compensation Committee also granted conditional restricted
stock bonuses to Robert S. Boswell and David H. Keyte totalling $300,000 (40,336
shares). The shares, which vest 20% annually from January 1, 2000 to January 1,
2004, are subject to forfeiture restrictions and also carry restrictions on
transfer and encumbrances.
Date: March 7, 2000.
<TABLE>
<CAPTION>
EXECUTIVE COMMITTEE COMPENSATION COMMITTEE
- ------------------------------------- -------------------------------------
<S> <C>
Robert S. Boswell Michael B. Yanney, Chairman
James H. Lee Cortlandt S. Dietler
Craig D. Slater Craig D. Slater
</TABLE>
12
<PAGE>
PENSION PLAN
The Company's Pension Plan is a qualified, non-contributory defined benefit
plan. On May 8, 1991, the Board of Directors suspended benefit accruals under
the Pension Plan effective as of May 31, 1991.
The following table shows the estimated maximum annual benefits payable upon
retirement at age 65 as a straight life annuity to participants in the Pension
Plan for the indicated levels of average annual compensation and various periods
of service, assuming no future changes in such plan:
<TABLE>
<CAPTION>
ESTIMATED MAXIMUM ANNUAL PENSION
BENEFITS(2)
------------------------------------
YEARS OF SERVICE
------------------------------------
REMUNERATION(1) 10 20 30
- --------------- -------- -------- --------
<S> <C> <C> <C>
$100,000....................................... $36,846 48,060 53,400
200,000....................................... 73,692 96,120 106,800
300,000....................................... 79,282 103,412 114,902
400,000....................................... 79,282 103,412 114,902
</TABLE>
- ------------------------
(1) For each Named Executive Officer, the level of compensation used to
determine benefits payable under the Pension Plan is such officer's base
salary for 1991.
(2) Normal retirement benefits attributable to the Company's contributions are
limited under certain provisions of the Code to $135,000 in 2000, as
increased annually thereafter for cost of living adjustments.
The amount of the Company's contribution, payment or accrual in respect to
any specified person in the Pension Plan is not and cannot readily be separately
or individually calculated by the Pension Plan actuaries. Annual benefits at
normal retirement are approximately 24% of average annual earnings (excluding
bonuses) for any consecutive 60-month period which produces the highest amount,
in the last 15 years prior to retirement, up to May 31, 1991, when benefit
accruals ceased plus 21% of such earnings prorated over 20 years of credited
service, and 1/39 of 1% of such earnings for each year of credited service in
excess of 20, subject to certain adjustments for lack of plan participation.
There is no Social Security offset. Such benefits are payable for life with a
10 year certain period, or the actuarial equivalent of such benefit.
Because benefit accruals under the Pension Plan were suspended effective
May 31, 1991, the years of credited service for the Named Executive Officers
(except William L. Dorn) are as follows: Robert S. Boswell 2; David H. Keyte 4;
Forest D. Dorn 14; and James W. Knell 4. The estimated annual accrued benefit
payable, based on a life annuity benefit, upon normal retirement for each of
such persons (except William L. Dorn) is: Robert S. Boswell $4,616; David H.
Keyte $5,097; Forest D. Dorn $17,823 and James W. Knell $4,354.
Certain participants in the Pension Plan have been prevented by the limits
of the Code from receiving the full amount of pension benefits to which they
would otherwise have been entitled. Such persons have had benefits credited to
them under a Supplemental Retirement Plan which, together with the benefits
payable under the Pension Plan, equaled the benefit to which they would have
been entitled under the Pension Plan but for such Code limits. The Supplemental
Retirement Plans for each participant were unfunded, non-qualified,
non-contributory benefit plans. Benefits payable vest to the same extent as the
Pension Plan benefits and are unsecured general obligations of the Company.
Benefit accruals under these plans were suspended effective May 31, 1991 in
conjunction with the suspension of benefit accruals under the Pension Plan. The
additional annual accrued benefit payable, based on a life annuity benefit, upon
normal retirement for Robert S. Boswell is $463.
13
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
The Company currently has one class of voting securities outstanding. On
March 7, 2000, there were 53,843,732 shares of Common Stock outstanding, with
each such share being entitled to one vote.
As of March 7, 2000 to the knowledge of the Board of Directors the only
shareholder who owned beneficially more than 5% of the outstanding shares of
Common Stock was:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNERS BENEFICIAL OWNERSHIP OF CLASS
- -------------- ------------------------ -------------------- --------
<S> <C> <C> <C>
Common The Anschutz Corporation 19,737,063(2) 36.7%
Stock(1)..... 2400 Qwest Tower
555 17th Street
Denver, Colorado 80202
</TABLE>
- ------------------------
(1) Based on Schedules 13D and 13G and amendments thereto filed with the SEC and
the Company by the reporting person through March 7, 2000 and the amount of
Common Stock outstanding on such date.
(2) The shares indicated as beneficially owned by The Anschutz Corporation
include 3,375 shares owned by Philip F. Anschutz.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In September 1999 the Company's wholly owned subsidiary Canadian Forest Oil
Ltd. ("Canadian Forest") formed a joint venture with Anschutz to explore lands
in the Yukon Territory and Northwest Territories of Canada. The joint venture
has a term of 65 months and covers an area of mutual interest of approximately
1.6 million acres. Canadian Forest and Anschutz will each own 50% of the joint
venture, which Canadian Forest will operate. Further, Anschutz, during the term
of the agreement, will compensate Canadian Forest for general, technical and
administrative overhead.
Forest purchased exploration concessions in Tunisia and South Africa from
Anschutz as part of a 1998 transaction. Subsequently, Forest (50%) and Anschutz
(50%) acquired additional concessions in Tunisia and South Africa. Effective
October 1, 1999, Forest and Anschutz negotiated terms of an agreement under
which Anschutz repurchased 30% of the original Tunisia and South Africa blocks
sold to Forest and Forest purchased 20% of the new Tunisia and South Africa
concessions from Anschutz. Consideration was based on the original purchase
price paid to Anschutz by Forest and on actual costs incurred by the respective
parties in obtaining the new concessions. Forest's ownership is 70% in the
concessions. Forest will be operator of all four concession blocks and will be
reimbursed for general, technical and administrative overhead. The final
agreement was executed in February, 2000 and resulted in payment to Forest by
Anschutz of approximately $1,700,000.
During 1999, Forest paid $200,846 to The Anschutz Corporation for corporate
transportation services. Charges were based on actual usage.
OTHER TRANSACTIONS. The Company engaged the law firm of Bennett Jones for
legal services in 1999. William L. Britton, a Director of the Company, is a
partner in such firm.
EXECUTIVE SEVERANCE AGREEMENTS. The Company has entered into executive
severance agreements (the "Executive Severance Agreements") with the following
executive officers, in addition to the Named Executive Officers: Joan C. Sonnen,
Neal A. Stanley and Donald H. Stevens. The Executive Severance Agreements
provide for severance benefits for termination without cause and for termination
following a "change of control" of the Company. The Executive Severance
Agreements provide that if an executive's employment is terminated either
(a) by the Company for reasons other than cause or other than as a
14
<PAGE>
consequence of death, disability, or retirement, or (b) by the executive for
reasons of diminution of responsibilities, compensation, or benefits or, in the
case of a change of control, a significant change in the executive's principal
place of employment, the executive will receive certain payments and benefits.
In January 1998, the term of the Executive Severance Agreements was extended
automatically until June 2000.
In the case of termination of an executive's employment which does not occur
within two years of a change of control, these severance benefits include
(a) payment of the executive's base salary for a term of months equal to the
whole number of times that the executive's base salary can be divided by
$10,000, limited to 30 months (such amounts payable will be reduced by 50% if
the executive obtains new employment during the term of payment) and
(b) continued coverage of the executive and any of his or her dependents under
the Company's medical and dental benefit plans throughout the payment term
without any cost to the executive.
If an executive's employment by the Company is terminated under the
circumstances described above within two years after the date upon which a
change of control occurs, the Company would be obligated to take the following
actions after the last day of the executive's employment:
(a) the Company will pay to the executive an amount equal to 2.5 times the
executive's base salary;
(b) the Company will permit the executive and those of his dependents who
are covered under the Company's medical and dental benefit plans to be
covered by such plans without any cost to the executive for a two-year
period of time;
(c) the Company will cause any and all outstanding options to purchase stock
of the Company held by the executive to become immediately exercisable in
full and cause the executive's accrued benefits under any non-qualified
deferred compensation plans to become immediately non-forfeitable; and
(d) if any payment or distribution to the executive, whether or not pursuant
to such agreement, is subject to the federal excise tax on "excess
parachute payments," the Company will be obligated to pay to the
executive such additional amount as may be necessary so that the
executive realizes, after the payment of any income or excise tax on such
additional amount, an amount sufficient to pay all such excise taxes.
The Executive Severance Agreements also provide that the Company will pay
legal fees and expenses incurred by an executive to enforce rights or benefits
under such agreements. Under the Executive Severance Agreements, a "change of
control" of the Company would be deemed to occur if, (i) the Company is not the
surviving entity in any merger, consolidation or other reorganization (or
survives only as a subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company); (ii) the Company sells, leases or exchanges all or
substantially all of its assets to any other person or entity (other than a
wholly-owned subsidiary of the Company); (iii) the Company is dissolved and
liquidated; (iv) any person or entity, including a "group" as contemplated by
Section 13(d)(3) of the Exchange Act (except The Anschutz Corporation) acquires
or gains ownership or control (including, without limitation, power to vote) of
more than 40% of the outstanding shares of the Company's voting stock (based
upon voting power); or (v) as a result of or in connection with a contested
election of directors, the persons who were directors of the Company before such
election cease to constitute a majority of the Board of Directors.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC and the New York Stock Exchange. Officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
15
<PAGE>
Based solely on its review of copies of such forms received by it and
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 1, 1999 to March 1, 2000, its officers, directors, and greater than 10%
beneficial owners complied with all applicable filing requirements, except that
each of Forest D. Dorn, James W. Knell, Joan C. Sonnen, Neal A. Stanley and
Donald H. Stevens was late in filing a Form 5 report relating to one transaction
and each of Robert S. Boswell and David H. Keyte was late in reporting a grant
of stock options due to the inadvertent omission of such transaction on a
Form 5 otherwise filed timely by the Company on behalf of Mr. Boswell and
Mr. Keyte, respectively.
PROPOSAL NO. 3--APPOINTMENT OF INDEPENDENT AUDITORS
Subject to ratification by the shareholders of the Company, the Board has
designated the firm of KPMG LLP, Suite 2300, 707 Seventeenth Street, Denver,
Colorado 80202 as independent auditors to examine and audit the Company's
financial statements for the year 2000. This firm has audited the Company's
financial statements for approximately 50 years and is considered to be well
qualified. The designation of such firm as auditors is being submitted for
ratification or rejection at the Annual Meeting. Action by shareholders is not
required under the law for the appointment of independent auditors, but the
ratification of their appointment is submitted by the Board in order to give the
shareholders of the Company the final choice in the designation of auditors. The
Board will be governed by the decision of a majority of the votes entitled to be
cast. A majority of the vote represented at the Annual Meeting by shares of
Common Stock entitled to vote is required to ratify the appointment of
KPMG LLP.
A representative of KPMG LLP will be present at the Annual Meeting with the
opportunity to make a statement if he desires to do so and will also be
available to respond to appropriate questions. A representative of the firm was
present at the last Annual Meeting for the same purpose.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
ADJOURNMENT OF THE ANNUAL MEETING
Approval of Proposal No. 2 regarding an amendment to the Company's By-Laws
which would change the classification and terms of office of the Company's
directors and allow the Board of Directors to establish the number of directors
by resolution from time to time requires the affirmative vote of the holders of
at least two-thirds of all shares outstanding on March 24, 2000, the record
date. Approval of Proposals No. 1 and 3 regarding the election of directors and
the appointment of independent auditors, respectively, require the affirmative
vote of at least a majority of the votes represented at the Annual Meeting by
shares of Common Stock entitled to vote. In the event there is an insufficient
number of shares of Common Stock present in person or by proxy at the Annual
Meeting to approve such proposals, the Board of Directors requests approval to
adjourn the Annual Meeting to a later date. The place and date to which the
Annual Meeting would be adjourned would be announced at the Annual Meeting, but
would in no event be more than 30 days after the date of the Annual Meeting.
16
<PAGE>
SHAREHOLDER PROPOSALS
Any shareholder proposals to be included in the Board of Directors'
solicitation of proxies for the 2001 Annual Meeting of Shareholders must be
received by Joan C. Sonnen, Secretary, at 1600 Broadway, Suite 2200, Denver, CO
80202, no later than December 1, 2000.
GENERAL AND OTHER MATTERS
The Board of Directors knows of no matter, other than those referred to in
this Proxy Statement, which will be presented at the Annual Meeting. However, if
any other matters are properly brought before the meeting or any of its
adjournments, the person or persons voting the proxies will vote them in
accordance with their judgment on such matters. Should any nominee for director
be unwilling or unable to serve at the time of the Annual Meeting, or any
adjournment thereof, the persons named in the proxy will vote it for the
election of such other person for such directorship as the Board of Directors
may recommend unless, prior to the Annual Meeting, the Board of Directors has
eliminated that directorship by reducing the size of the Board of Directors. The
Board of Directors is not aware that any nominee named herein will be unwilling
or unable to serve as a director.
On July 25, 1998, the Company renewed Directors and Officers Liability
coverages designed to indemnify the directors and officers of the Company and
its subsidiaries against certain liabilities incurred by them in the performance
of their duties and also providing for reimbursement in certain cases to the
Company and its subsidiaries for sums paid by them to directors and officers as
indemnification for similar liability. This type of coverage was originally
purchased by the Company on May 24, 1978. The 1998 renewal was for a three-year
period. Primary insurance of $10,000,000 was secured with Executive Risk
Indemnity, Inc. and the excess insurance coverage of $15,000,000 was secured
with Reliance National Insurance Company for a total coverage of $25,000,000.
Aggregate premiums for the 36-month period ending July 25, 2001 were $506,712.
No claims have been filed and no payments have been made to the Company or its
subsidiaries or to any of their directors or officers under this coverage.
The Restated Certificate of Incorporation of the Company limits the personal
liability of the Company's directors to the fullest extent permitted by the New
York Business Corporation Law ("BCL"), as currently formulated or as it might be
revised in the future. The Restated Certificate of Incorporation provides that a
director will not be liable for damages for any breach of duty unless it is
finally established that (a) the director's acts or omissions were in bad faith
or involved intentional misconduct or a knowing violation of law; or (b) the
director personally gained a financial profit or other advantages to which he
was not legally entitled; or (c) the director's acts violated Section 719 of the
BCL which provides that directors who vote for, or concur in, certain types of
corporate action proscribed by the BCL will be jointly and severally liable for
any injury resulting from such action.
The cost of preparing, assembling, and mailing this Proxy Statement, the
enclosed proxy card and the Notice of Annual Meeting will be paid by the
Company. Additional solicitation by mail, telephone, telegraph or personal
solicitation may be done by directors, officers, and regular employees of the
Company. Such persons will receive no additional compensation for such services.
Brokerage houses, banks and other nominees, fiduciaries and custodians nominally
holding shares of Common Stock of record will be requested to forward proxy
soliciting material to the beneficial owners of such shares, and will be
reimbursed by the Company for their reasonable expenses.
INCORPORATION BY REFERENCE. All documents filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Proxy Statement shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of filing thereof. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Proxy Statement to
the extent that a statement contained herein, or in any other subsequently filed
document that also is or is deemed to be incorporated by
17
<PAGE>
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement.
AVAILABLE INFORMATION. UPON REQUEST OF ANY SHAREHOLDER, THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING FINANCIAL STATEMENTS, THE
SCHEDULES AND ANY AMENDMENTS THERETO AND ANY DOCUMENTS INCORPORATED BY REFERENCE
THEREIN WILL BE SENT TO THE SHAREHOLDER WITHOUT CHARGE BY FIRST CLASS MAIL
WITHIN ONE BUSINESS DAY OF RECEIPT OF SUCH REQUEST. ALL REQUESTS SHOULD BE
ADDRESSED TO THE CORPORATE SECRETARY OF FOREST OIL CORPORATION AT
1600 BROADWAY, SUITE 2200, DENVER, COLORADO 80202 OR BY TELEPHONE TO
(303) 812-1400.
You are urged to complete your proxy promptly. You may revoke your proxy at
any time before it is voted. If you attend the Annual Meeting, as we hope you
will, you may vote your shares in person.
By order of the Board of Directors
[LOGO]
JOAN C. SONNEN
SECRETARY
March 31, 2000
18
<PAGE>
ANNEX A
Article III of the Company's By-laws shall be amended and stated in its entirety
as follows:
ARTICLE III
DIRECTORS
SECTION 1. The business of the corporation shall be conducted and managed
by a board of directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the
certificate of incorporation or by these by-laws directed or required to be
exercised by the shareholders. The number of directors which shall constitute
the whole board shall not be less than six and not more than fifteen as shall be
established from time to time by resolution passed by a majority of the whole
board of directors, provided that no decrease shall shorten the term of any
incumbent director.
SECTION 2. The directors shall be classified with respect to their terms of
office by dividing them into three (3) classes established by action of the
shareholders or of the board of directors.
At each Annual Meeting of Shareholders, directors to replace those whose
terms expire at such Annual Meeting shall be elected to hold office until the
third succeeding Annual Meeting.
Any director may resign at any time. The board of directors may, by majority
vote of all directors then in office, remove a director for cause. A director
may be removed without cause by the affirmative vote of the holders of
two-thirds of the votes represented by all the outstanding shares entitled to
vote thereon at a meeting of shareholders called for that purpose.
SECTION 3. Except as otherwise provided in the certificate of
incorporation, vacancies occurring in the board of directors shall be filled in
the following manner:
(a) If the vacancy is caused by reason of the removal of a director
without cause, it shall be filled by election at a special meeting of
shareholders entitled to vote on the matter called for that purpose (which
may be the meeting called for the purpose of removing a director), or at any
annual meeting without notice;
(b) If the vacancy occurring in the board of directors is caused in any
other way, or if new directorships are created, all of the directors then in
office, although less than a quorum, may by majority vote choose a successor
or successors, or fill each newly created directorship;
(c) In case the entire board shall die or resign or become incapacitated
to act, any shareholder may call a special meeting in the same manner that
the chief executive officer may call such meetings and directors for the
unexpired term may be elected at such special meeting in the manner
prescribed for their election at annual meetings.
A-1
<PAGE>
FOREST OIL CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of Forest Oil Corporation, a New York
corporation (the "Company"), hereby appoints Robert S. Boswell and Joan C.
Sonnen, or either of them, attorneys, agents and proxies of the undersigned,
with full power of substitution to each of them, to vote all the shares of
Common Stock, par value $.10 per share, of the Company which are entitled to
one vote per share and which the undersigned may be entitled to vote at the
Annual Meeting of Shareholders of the Company to be held at 1600 Broadway,
Suite 590, Denver, Colorado, on Wednesday, May 10, 2000, at 10:00 a.m.,
M.D.T., and at any adjournment of such meeting, with all powers which the
undersigned would possess if personally present:
1. To elect three (3) Class I directors, three (3) Class II directors
and four (4) Class III directors;
2. To approve an amendment to the Company's By-Laws which would change
the classification and terms of office of the Company's directors and
allow the Board of Directors to establish the number of directors by
resolution from time to time;
3. To consider and vote upon the ratification of the appointment of KPMG
LLP as independent auditors for the Company for the fiscal year ending
December 31, 2000; and
4. To vote upon such other matters as may be properly brought before the
meeting or any adjournment thereof hereby revoking all previous proxies
and ratifying all that any of said proxies, their substitutes, or any
of them, may lawfully do by virtue hereof.
If no directions are given, the individuals designated above will vote
for the above proposals and, at their discretion, on any other matter that
may come before the meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement of the Company.
(CONTINUED AND TO BE VOTED, DATED AND SIGNED ON REVERSE SIDE)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
VIEW FUTURE PROXY STATEMENTS AND
ANNUAL REPORTS ON THE INTERNET
You may elect to view all future proxy statements and annual reports on the
Internet instead of receiving them by U.S. mail each year. If you choose
online access to the proxy statement and annual report, you will continue to
receive a proxy card in the mail to use to vote your shares. Future proxy
cards will contain the web site access address and other information
necessary to view the proxy material and to submit your vote online.
To make this election, simply mark the box where indicated on your proxy card
if you are voting by mail. Alternatively, if you vote by telephone or on the
Internet, you may make the election when prompted during the voting process.
See other side for instructions.
If you elect to view the proxy material online and then change your mind, you
may revoke the election by contacting our transfer agent:
ChaseMellon Shareholder Services LLC
85 Challenger Road
Ridgefield Park, NJ 07660
1-800-635-9270
www.chasemellon.com
--------------------
THANK YOU FOR VOTING
--------------------
See other side for voting options.
- -------------------------------------------------------------------------------
<PAGE>
FOREST OIL CORPORATION COMMON STOCK PROXY ONE (1) VOTE PER SHARE
PLEASE MARK VOTES /-/ or /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
No. 1. Election of Directors.
Nominees are : Class I: J.J. Simmons, III, Michael B. Yanney and Philip
F. Anschutz
Class II: Craig D. Slater, Cortlandt S. Dietler and
James H. Lee
Class III: Robert S. Boswell, Cannon Y. Harvey,
William L. Britton and Dod A. Fraser
FOR WITHHELD (To withhold authority to vote for all nominees
check the block market "Withheld". To withhold
/ / / / authority to vote for any individual nominee write
that nominee's name on the space provided below.)
--------------------------------------------------
No. 2. To approve an amendment to the Company's By-Laws which would change
the classification and terms of office of the Company's directors and
allow the Board of Directors to establish the number of directors by
resolution from time to time;
FOR AGAINST ABSTAIN
/ / / / / /
No. 3. Ratification of the Appointment of independent Auditors.
FOR AGAINST ABSTAIN
/ / / / / /
SPECIAL NOTES
By checking the box to the right, I consent to future access of the / /
Annual Report, Proxy Statements, prospectuses and other communications
electronically via the Internet. I understand that the Company will no longer
distribute printed materials to me from any future shareholder meeting until
such consent is revoked. I understand that I may revoke my consent at any
time by contacting the Company's transfer agent, and that costs normally
associated with electronic access, such as usage and telephone charges, will
be my responsibility.
SIGNATURE SIGNATURE DATE
----------------------- ----------------------- ----------
SIGNATURE(S) SHOULD AGREE WITH NAMES ON STOCK CERTIFICATES AS SHOWN HEREIN.
ATTORNEYS, EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS OR CUSTODIANS
SHOULD GIVE FULL TITLE AS SUCH.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
[TELEPHONE PICTURE] VOTE BY TELEPHONE OR INTERNET [COMPUTER PICTURE]
QUICK *** EASY *** IMMEDIATE
YOUR VOTE IS IMPORTANT! -- YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone 24
HOURS A DAY-7 DAYS A WEEK
There is NO CHARGE to you for this call. -- HAVE YOUR PROXY CARD IN HAND.
You will be asked to enter a Control Number, which is located in the
box on the lower right hand corner of this form
OPTION 1: To vote as the Board of Directors recommends on ALL proposals,
press 1
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OPTION 2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
Proposal 1 - To vote FOR ALL nominees, press 1; to
WITHHOLD FOR ALL nominees, press 9
TO WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the instructions
Proposal 2 - To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
The instructions are the same for all remaining proposals.
OR
2. TO VOTE BY INTERNET: Follow the instructions at our Website Address:
http://www.eproxy.com/
-----
OR
3. TO VOTE BY PROXY CARD: Mark, sign and date your proxy card and
return promptly in the enclosed envelope.
NOTE: IF YOU VOTE BY INTERNET OR TELEPHONE,
THERE IS NO NEED TO MAIL BACK YOUR PROXY CARD.
THANK YOU FOR VOTING.
