exv10w25






Exhibit 10.25




NEWFIELD EXPLORATION COMPANY

2011 ANNUAL INCENTIVE COMPENSATION PLAN




     This 2011 Annual Incentive Compensation (this “2011 Plan”) of Newfield Exploration Company, a
Delaware corporation (the “Company”), was adopted by the Board of Directors (the “Board”) of the
Company effective as of November 9, 2010.



Recitals:



          WHEREAS, effective for the Performance Period beginning on January 1, 1993, the Board adopted
the 1993 Annual Incentive Plan (the “1993 Plan”), which plan had a purpose substantially similar to
this 2011 Plan;




          WHEREAS, effective for the Performance Period beginning January 1, 2003, the Board adopted the
2003 Annual Incentive Plan (the “2003 Plan”) and terminated the 1993 Plan effective as of December
31, 2002;




          WHEREAS, effective January 1, 2005, the Board adopted the First Amended and Restated 2003
Incentive Plan (“First Amended 2003 Plan”) to provide for the termination of the 2003 Plan upon a
change of control, to conform the 2003 Plan to legislation affecting deferred compensation
arrangements and to amend the 2003 Plan in other respects;




          WHEREAS, effective July 27, 2007, the Board adopted the Second Amended and Restated 2003
Incentive Plan (the “Second Amended 2003 Plan”) to further amend and restate the First Amended 2003
Plan to incorporate certain further changes to comply with Section 409A of the Internal Revenue
Code of 1986 and to conform the definition of Change of Control in the First Amended 2003 Plan to
the definition used in other arrangements;




          WHEREAS, the Board now desires to terminate the Second Amended 2003 Plan effective as of
December 31, 2010, although any awards granted under the 2003 Plan, the First Amended 2003 Plan or
the Second Amended 2003 Plan shall remain in effect in accordance with the applicable terms and
conditions; and




          WHEREAS, the Board believes it to be in the best interests of the Company and its employees to
adopt this 2011 Plan effective beginning January 1, 2011;




          NOW, THEREFORE, in consideration of the foregoing and for the purpose described below,
effective as of the date first written above, the Board hereby adopts this 2011 Plan as set forth
herein.




I.

Purpose



          This 2011 Plan is intended to provide a means whereby employees of the Company and its
Subsidiaries may develop a sense of proprietorship and personal involvement in the development and
financial success of the Company and its Subsidiaries, to attract and retain employees of
outstanding competence and ability and to encourage them to remain with and devote their best
efforts to the business of the Company and its Subsidiaries, and to reward such employees for
outstanding performance, thereby advancing the interests of the Company and aligning employee
interests with those of the Company’s stockholders. To this end, the 2011 Plan provides a means of
annually rewarding participants based on the overall performance of the Company and its business
units and, where appropriate, on a participant’s personal performance.









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II.

Definitions




          Where the following words and phrases appear in this 2011 Plan, they shall have the respective
meanings set forth below unless their context clearly indicates to the contrary:





	 	a)	 	“Award” means an amount granted to an Eligible Employee pursuant to Article V that is
payable on or before March 1 following the Performance Period.
	 
	 	b)	 	“Board” means the Board of Directors of the Company.
	 
	 	c)	 	“Change of Control” means the occurrence of any of the following:






	 	i.	 	the Company is not the surviving Person in any merger, consolidation or other
reorganization (or survives only as a subsidiary of another Person);
	 
	 	ii.	 	the consummation of a merger or consolidation of the Company with another
Person pursuant to which less than 50% of the outstanding voting securities of the
surviving or resulting corporation are issued in respect of the capital stock of the
Company;
	 
	 	iii.	 	the Company sells, leases or exchanges all or substantially all of its assets
to any other Person;
	 
	 	iv.	 	the Company is to be dissolved and liquidated;
	 
	 	v.	 	any Person, including a “group” as contemplated by Section13(d)(3) of the
Securities Exchange Act of 1934, acquires or gains ownership or control (including the
power to vote) of more than 50% of the outstanding shares of the Company’s voting
stock (based upon voting power); or
	 
	 	vi.	 	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.




Notwithstanding the foregoing, the definition of “Change of Control” shall not include (A) any
merger, consolidation, reorganization, sale, lease, exchange, or similar transaction involving
solely the Company and one or more Persons that were wholly owned, directly or indirectly, by the
Company immediately prior to such event and (B) any event that is not a “change in control event”
within the meaning of Section 409A.





	 	f)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	g)	 	“Committee” means the Compensation & Management Development Committee of the Board.
	 
	 	h)	 	“Company” means Newfield Exploration Company and its successors.
	 
	 	i)	 	“Effective Date” means January 1, 2011.
	 
	 	j)	 	“Eligible Employee” means, with respect to a particular Performance Period, each
employee of the Company or a Subsidiary who was (i) employed by the Company or a
Subsidiary on both October 1 and December 31 of such Performance Period and (ii)
recommended by the Chief Executive Officer of the Company to receive an Award.
	 
	 	k)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended.
	 
	 	l)	 	“Incentive Pool” means the aggregate amount to be awarded with respect to a
particular Performance Period as determined pursuant to Article IV.
	 
	 	m)	 	“Performance Period” means any calendar year beginning on or after January 1, 2011.
	 
	 	n)	 	“Person” means any individual, partnership, corporation, limited liability company,
trust, incorporated or unincorporated organization or association or other legal entity of
any kind.
	 
	 	o)	 	“ Section 409A” means Section 409A of the Code and any applicable regulations or
rulings thereunder.
	 
	 	p)	 	“Subsidiary” means any entity that is consolidated with the Company for financial
accounting purposes in accordance with generally accepted accounting principles.




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III.

Administration of Plan




     This 2011 Plan shall be administered by the Committee. The Committee is authorized to
interpret this 2011 Plan and may from time to time adopt such rules and regulations, consistent
with the provisions of this 2011 Plan, as it may deem advisable to carry out this 2011 Plan. All
determinations made by the Committee under this 2011 Plan, and all interpretations of this 2011
Plan by the Committee, shall be final and binding on all interested parties.



IV.

Determination of Incentive Pool



     The amount of the Incentive Pool for a particular Performance Period shall be determined in
good faith by the Committee on an annual basis, taking into consideration various factors,
including, without limitation, earnings per share, total shareholder return, cash return on
capitalization, increased revenue, revenue ratios, net income, stock price, market share, return on
equity, return on assets, return on capital, return on capital compared to cost of capital, return
on capital employed, return on invested capital, shareholder value, net cash flow, operating
income, earnings before interest and taxes, cash flow, cash flow from operations, cost reductions,
cost ratios, profit after tax, performance relative to a peer group and amounts recommended by the
Chief Executive Officer or any consultant engaged by the Committee. As soon as administratively
feasible immediately before or immediately after the end of a Performance Period, the Committee
shall determine the amount of the Incentive Pool with respect to such Performance Period. If the
financial information for such Performance Period is not final at the time that the Committee meets
to determine the amount of the Incentive Pool, the Committee may use the then best available
estimates of such financial information to determine the amount of the Incentive Pool. Such
determination shall be in writing and shall be filed with the appropriate records of the Company.



V.

Grant of Awards



     At any time and from time to time after the determination of the Incentive Pool with respect
to a Performance Period and prior to the February 28 following the end of such Performance Period,
the Committee shall grant Awards to those Eligible Employees that the Committee, in its discretion,
determines should receive Awards. The amount of such Awards shall be determined by the Committee
in its discretion and shall not exceed, in the aggregate, the Incentive Pool. The Committee shall
consider the recommendations of the Chief Executive Officer of the Company in making such
determinations.



VI.

Duration, Amendment and Termination




	 	a)	 	The Board shall have the right to amend this 2011 Plan from time to time, to
terminate it entirely or to direct the discontinuance of Awards either temporarily or
permanently. The Board may make any amendment to any outstanding Award that it believes is
necessary or helpful to comply with any applicable law including, without limitation,
Section 409A. However, no amendment, discontinuance or termination of this 2011 Plan shall
operate to annul an outstanding Award unless otherwise provided by the terms of this 2011
Plan. The term of this 2011 Plan shall be from its Effective Date until terminated by the
Board.
	 
	 	b)	 	In furtherance, and not in limitation, of paragraph (a) above, at any time determined
by the Board, this 2011 Plan may be restructured by the Board to, among any other
alterations or changes determined by the Board in its sole discretion, (i) alter the
eligibility requirements for awards under such plan or (ii) provide for a Performance
Period that is shorter or longer.
	 
	 	c)	 	Notwithstanding any provision of this 2011 Plan to the contrary, on the date of a
Change of Control, (i) all Plan bonus obligations accrued to such date on the books of the
Company that are not the subject of previous Awards shall be paid in cash to such
employees of the Company and its




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	 	 	 	Subsidiaries, and in such amounts with respect to each such employee, as the Committee
shall determine in its sole discretion based upon recommendations from the Chief Executive
Officer of the Company and (ii) upon payment of all such Plan obligations, this 2011 Plan
shall terminate.





VII.

Miscellaneous





	 	a)	 	Neither this 2011 Plan nor any grant of Awards under this 2011 Plan shall confer on
any employee the right to continued employment by the Company or any Subsidiary, or affect
in any way the right of the Company or such Subsidiary to terminate the employment of such
employee at any time. Any question as to whether and when there has been a termination of
an employee’s employment and the cause of such termination shall be determined by the
Committee, and its determination shall be final.
	 
	 	b)	 	Except to the extent set forth herein as to the rights of the estates or
beneficiaries of employees to receive payments, Awards under this 2011 Plan are
non-assignable and non-transferable and are not subject to anticipation, adjustment,
alienation, encumbrance, garnishment, attachment or levy of any kind.
	 
	 	c)	 	Neither the establishment of this 2011 Plan nor the granting of Awards shall be
deemed to create a trust. This 2011 Plan and all unpaid awards shall constitute an
unfunded, unsecured liability of the Company to make payments in accordance with the
provisions of this 2011 Plan, and no Person shall have any security or other interest in
any assets of the Company or otherwise.
	 
	 	d)	 	The existence of this 2011 Plan and the Awards granted hereunder shall not affect in
any way the right or power of the Board or the stockholders of the Company to authorize or
consummate any merger or consolidation of the Company, the dissolution or liquidation of
the Company or any sale, lease, exchange or other disposition of all or any part of its
assets or business or any other corporate act or proceeding.
	 
	 	e)	 	Neither the officers nor the directors of the Company nor the members of the
Committee shall under any circumstances have any liability with respect to this 2011 Plan
or its administration except for gross and intentional malfeasance. The officers and
directors of the Company and the members of the Committee may rely upon opinions of
counsel as to all matters, including the creation, operation and interpretation of this
2011 Plan.
	 
	 	f)	 	No portion of this 2011 Plan shall be effective at any time when such portion
violates an applicable state or federal law, regulation or governmental order or directive
that is subject to sanctions, whether direct or indirect.





VIII.

Compliance with Section 409A



     The Company intends that this 2011 Plan by its terms and in operation meet the requirements of
Section 409A so that compensation deferred under this 2011 Plan (and applicable investment
earnings) shall not be included in income under Section 409A. Any ambiguities in this 2011 Plan
shall be construed to effect this intent. If any provision of this 2011 Plan is found to be in
violation of Section 409A, then such provision shall be deemed to be modified or restricted to the
extent and in the manner necessary to render such provision in conformity with Section 409A, or
shall be deemed excised from this 2011 Plan, and this 2011 Plan shall be construed and enforced to
the maximum extent permitted by Section 409A as if such provision had been originally incorporated
in this 2011 Plan as so modified or restricted, or as if such provision had not been originally
incorporated in this 2011 Plan, as the case may be.




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