Conocophillips Co – ‘DEF 14A’ for 12/31/94

As of:  Friday, 3/31/95   ·   For:  12/31/94   ·   Accession #:  78214-95-10   ·   File #:  1-00720

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Definitive Proxy Solicitation Material   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Solicitation Material                26    137K 

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Schedule 14A            

Proxy Statement Pursuant to Section 14(a) of the          
Securities Exchange Act of 1934           

Filed by Registrant                          [X]                      
Filed by a Party other than the Registrant   [ ]                      

Check the appropriate box:                                            
[ ]  Preliminary Proxy Statement                                      
[X]  Definitive Proxy Statement                                       
[ ]  Definitive Additional Materials                                  
[ ]  Soliciting Material Pursuant to Section 240.14a-11(c)            
or Section 240.14a-12                                   

PHILLIPS PETROLEUM COMPANY          
------------------------------------------------        
(Name of Registrant as Specified In Its Charter)        

------------------------------------------------        
(Name of Person(s) Filing Proxy Statement)        

Payment of Filing Fee (Check appropriate box):                        
[X]  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),         
or 14a-6(j)(2).                                         
[ ]  $500 per each party to the controversy pursuant to               
Exchange Act Rule 14a-6(i)(3).                          
[ ]  Fee computed on table below per Exchange Act Rules               
14a-6(i)(4) 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:                                             

------------------------------------------------- 
4) Proposed maximum aggregate value of transaction:     

------------------------------------------------- 

[ ] 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:                                          

-----------------------------                     

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                                                 DEFINITIVE COPY

PHILLIPS PETROLEUM COMPANY      

NOTICE OF       
1995 ANNUAL MEETING       
MAY 8, 1995       
and PROXY STATEMENT       

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PHILLIPS PETROLEUM COMPANY                                                      
BARTLESVILLE, OKLAHOMA 74004                                                    

OFFICE OF THE CHAIRMAN                                                          

March 31, 1995                                                                  

Dear Stockholder:                                                               

You are cordially invited to the Annual Meeting of Phillips Petroleum Company   
to be held in the Adams Building, 4th Street and Keeler Avenue, Bartlesville,   
Oklahoma, on Monday, May 8, 1995, commencing at 10 a.m. local time. Your        
attendance will provide you with an opportunity to hear management's report     
on the operations and meet the directors and representatives of the Company.    

The Secretary's formal notice of the meeting and the Proxy Statement            
accompany this letter and describe the matters on which action will be taken.   

In addition to the election of 14 directors, you are asked to vote on three     
other proposals. Proposal 1 is by the Company to approve the independent        
auditors. Proposal 2 is sponsored by six stockholders and asks the Company to   
endorse the CERES Principles. Proposal 3 is sponsored by one stockholder and    
asks the Company to adopt a policy on the use of preferred stock. Our Board     
of Directors unanimously recommends that you vote For Proposal 1 and Against    
Proposal 2 and Proposal 3.                                                      

It is important that your views be represented at the meeting whether or not    
you are able to attend. Accordingly, we respectfully request that you sign,     
date and promptly return your proxy in the enclosed postage-paid envelope.      

On behalf of the directors and employees of Phillips Petroleum Company, we      
express our appreciation to you, the owners of this Company, for your           
continued support and interest.                                                 

Sincerely,                                                                      

/s/ W. W. Allen                                                                 
------------------------------------                                            
W. W. Allen                                                                     
Chairman and Chief Executive Officer                                            

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PHILLIPS PETROLEUM COMPANY                                                      
BARTLESVILLE, OKLAHOMA 74004                                                    

NOTICE OF ANNUAL MEETING to be held May 8, 1995                                 

To the Stockholders:                                                            

The Annual Meeting of Stockholders will be held at the Adams Building, 4th      
Street and Keeler Avenue, Bartlesville, Oklahoma, on Monday, May 8, 1995, at    
10 a.m. local time, for the purposes of considering and voting on the           
following matters as described in the attached Proxy Statement:                 

Election of 14 directors (pages 7 through 9);                         

Proposal of the Company:                                              
-----------------------                                               
Proposal 1.  To approve the designation of Ernst & Young LLP as 
  independent auditors for 1995 (page 20);

Proposals of Stockholders:                                            
-------------------------                                             
Proposal 2.  To endorse the CERES Principles (pages 20          
through 21);                          

   Proposal 3.  To adopt a policy on the use of preferred stock (pages
21 through 23); and                   

Any other matters that may properly come before the meeting (page 23).

Only stockholders of record at the close of business March 17, 1995, will be    
entitled to vote at this meeting.                                               

A copy of the Company's Annual Report containing financial data and a summary   
of operations for 1994 is being mailed to the Company's stockholders with       
this Proxy Statement.                                                           

By Order of the Board of Directors,                                             

/s/ Dale J. Billam                                                              
------------------                                                              
Dale J. Billam                                                                  
Secretary                                                                       

Dated March 31, 1995                                                            

IMPORTANT:                                                                      

Please sign, date and promptly mail the enclosed proxy in the accompanying      
postage-paid envelope. If you wish to vote in accordance with the Company's     
recommendations, it is not necessary to specify your choice but your proxy      
must be signed and returned. In any event, your prompt response is requested    
and your cooperation will be appreciated.                                       

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PHILLIPS PETROLEUM COMPANY                                                      
BARTLESVILLE, OKLAHOMA 74004                                                    

March 31, 1995                                                                  

PROXY STATEMENT             

SOLICITATION                                                                    

Your proxy is solicited by the Board of Directors and all costs of              
solicitation will be borne by the Company. Your proxy will be voted as you      
direct and may be revoked by you at any time before it is voted by filing       
with the Secretary an instrument revoking it, by executing a later-dated        
proxy or by voting in person by ballot at the meeting. This Proxy Statement     
and Proxy Card are first being mailed on or about March 31, 1995, to            
stockholders of record as of March 17, 1995.                                    

Georgeson & Co. Inc. has been engaged by the Company to solicit proxies for     
this Annual Meeting from brokers, banks and other institutional holders, and    
individual holders of record. The fee for this service, payable one-half at     
the commencement of solicitation and the balance at its completion, is          
$16,000, plus the reimbursement of certain out-of-pocket costs. In addition     
to solicitation by mail, officers, directors and employees of the Company may   
solicit proxies by telephone, facsimile or personal contact.                    

CONFIDENTIAL VOTING                                                             

It is the policy of the Company that all proxies, ballots, and voting           
tabulations that identify stockholders be kept confidential, except where       
disclosure may be required by applicable law, where stockholders write          
comments on their proxy cards, and where disclosure is expressly requested by   
a stockholder, and in limited circumstances such as a proxy contest or other    
solicitation of proxies based on an opposition proxy statement or any matter    
requiring for stockholder approval the vote of more than a majority of the      
shares present at any meeting. The Company has engaged Chemical Bank as         
tabulators of all proxies and ballots, and has appointed two persons who are    
employees of Chemical Bank to be Inspectors of Election.                        

VOTING SECURITIES AND PRINCIPAL HOLDERS                                         

The Company's only class of voting securities is its $1.25 par value common     
stock. There were 261,663,753 shares outstanding at the close of business       
February 28, 1995. The record date for stockholders entitled to vote at this    
meeting is March 17, 1995. Each share is entitled to one vote.                  

The number of shares of the Company's common stock beneficially owned as of     
February 28, 1995, by any person or group known to own five percent or more,    
and by each of the directors and nominees, and by all directors and officers    
of the Company as a group, is shown in the tables "Security Ownership of        
Certain Beneficial Owners," and "Security Ownership of Management,"             
respectively, on pages 9 through 11 after the information on nominees for       
directors.                                                                      

VOTE REQUIRED FOR ELECTION OF DIRECTORS AND                                     
ADOPTION OF COMPANY AND STOCKHOLDER PROPOSALS                                   

Under the Company's Bylaws, the holders of a majority of the issued and         
outstanding shares of the common stock, present in person or represented by     
proxy at the Annual Meeting, will constitute the quorum for all purposes        
unless otherwise provided by law. Where a quorum is present, the affirmative    
vote of a majority of the stock represented at the meeting is required for      
the election of the directors, and the adoption of Proposals 1, 2 and 3. For    
purposes of determining whether the directors have been elected or a proposal   
has received a majority vote, abstentions are the equivalent of a negative      
vote.                                                                           

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NOMINEES FOR ELECTION AS DIRECTORS                                              

The number of directors to be elected is 14. The designated proxy holders of    
the Company intend, unless otherwise instructed, to vote all proxies for the    
election of the following 14 nominees, to hold office for the ensuing year or   
until their successors are elected. The term of each present director will      
expire concurrently with the election of directors at the 1995 Annual           
Meeting. If any nominee is unable or unwilling to serve, the Company, through   
the designated proxy holders, reserves discretionary authority to vote for a    
substitute. The Company has no reason to believe that any nominee will be       
unable or unwilling to serve if elected. The following provides information     
about each nominee as of February 28, 1995, including data on the nominees'     
business backgrounds for the past five years, and the names of public           
companies and other selected entities for which they also serve as directors.   

Photo of        W. W. Allen, 58, is Chairman of the Board of Directors          
Mr. Allen       and Chief Executive Officer of the Company, a position he       
appears in      assumed in May 1994. He previously was President and            
this space      Chief Operating Officer, beginning in December 1991; Senior     
        Vice President responsible for worldwide exploration and
        production beginning in July 1989; and Vice President of
          International Exploration and Production beginning January
            1988. He is a director of the Federal Reserve Bank of Kansas
   City. Mr. Allen became a director in December 1989.

Photo of        Norman R. Augustine, 59, is Chairman of the Board of            
Mr. Augustine   Directors and Chief Executive Officer of Martin Marietta        
appears in      Corporation, a position he has held since April 1988. He        
this space      is a director of The Procter & Gamble Company. Mr. Augustine    
became a director in January 1989.              

Photo of        George B. Beitzel, 66, is a retired Senior Vice President       
Mr. Beitzel     and Director of International Business Machines                 
appears in      Corporation. He is a director of Bankers Trust New York         
this space      Corporation and its subsidiary, Bankers Trust Company;          
      Computer Task Group; FlightSafety International, Inc.;
        Phillips Gas Company, a subsidiary of the Company with a
         series of preferred stock registered under the Securities
     Exchange Act of 1934 and listed on the New York Stock
            Exchange; Roadway Services, Inc.; Rohm and Haas Company; TIG
            Holdings; and Xillix Technologies Corp. Mr. Beitzel became a
director in July 1980.                          

Photo of        David L. Boren, 53, is President of the University of           
Mr. Boren       Oklahoma, a position he assumed in November 1994. He            
appears in      previously served as a United States Senator from the           
this space      State of Oklahoma from November 1979 until November 1994 and    
         is a former Governor of Oklahoma. He is a director of AMR
        Corporation and Texas Instruments Corporation. Mr. Boren
became a director in December 1994.             

Photo of        C. L. Bowerman, 55, is an Executive Vice President              
Mr. Bowerman    responsible for planning and corporate relations and            
appears in      services, a position he assumed in January 1995. He             
this space      previously was Executive Vice President responsible for         
   corporate strategic planning, corporate information
           technology and research and development, beginning in April
        1992; Executive Vice President responsible for corporate
          engineering, corporate strategic planning and research and
    development beginning December 1991; and Senior Vice
         President responsible for refining, marketing, supply and
             transportation beginning in October 1988. Mr. Bowerman became
a director in December 1989.                    

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Photo of        Robert E. Chappell, Jr., 58, is self employed as an             
Mr. Chappell    investment and management consultant. He previously was         
appears in      the Senior Executive Vice President and Chief Investment        
this space      Officer of Metropolitan Life Insurance Company, a position he   
            held from October 1989 through December 1992.  He previously
            served Metropolitan Life Insurance Company as Executive Vice
         President from October 1986 to October 1989. He is also a
       director of First Colony Corporation and Igloo Products
             Corporation. Mr. Chappell became a director in December 1990.

Photo of        Lawrence S. Eagleburger, 64, is Senior Foreign Policy           
Mr. Eagleburger Advisor for Baker, Donelson, Bearman & Caldwell, a              
appears in      Washington, D.C. law firm, a position he assumed in             
this space      January 1993. He previously served as Secretary of State from   
             December 1992 through January 1993, Acting Secretary of State
          from August 1992 to December 1992, and Deputy Secretary of
            State from February 1989 to August 1992. He is a director of
       Dresser Industries; the Institute for Defense Analyses;
            Jefferson Bankshares; Stimpsonite Corporation; and Universal
          Corporation. Mr. Eagleburger became a director in February
1993.                                           

Photo of        James B. Edwards, 67, is President of the Medical               
Mr. Edwards     University of South Carolina, a position he has held            
appears in      since November 1982. He is a director of Brendle's, Inc.;       
this space      Chemical Waste Management, Inc.; Encyclopaedia Britannica,      
           Inc.; Imo Industries Inc.; National Data Corporation; SCANA
             Corporation; and Wachovia Bank of South Carolina N.A. He is a
     former U.S. Secretary of Energy and Governor of South
        Carolina. Mr. Edwards became a director in January 1983.

Photo of        Larry D. Horner, 60, is Chairman of Pacific USA Holdings        
Mr. Horner      Corporation, a position he assumed in August 1994. He           
appears in      previously was a Managing Director of Arnhold and               
this space      S. Bleichroeder, Inc., from April 1991 through July 1994. He    
       previously was a partner in KPMG Peat Marwick, and is a
             former Chairman and Chief Executive of that firm from October
           1984 to December 1990. He is a director of American General
        Corporation; Atlantis Plastics, Inc.; Charterhouse Group
             International Limited and the First Eagle Fund International.
Mr. Horner became a director in May 1991.       

Photo of        J. J. Mulva, 48, is President and Chief Operating Officer       
Mr. Mulva       of the Company, a position he assumed in May 1994.              
appears in      Previously he was an Executive Vice President of the            
this space      Company and its Chief Financial Officer from January 1994       
             through April 1994; Senior Vice President and Chief Financial
       Officer beginning in May 1993; Vice President and Chief
          Financial Officer beginning in March 1993; Vice President,
        Treasurer and Chief Financial Officer beginning in March
             1990; and Vice President and Treasurer beginning in September
          1988. He is Chairman of the Board of Directors of Phillips
         Gas Company. Mr. Mulva became a director in January 1994.

Photo of        Randall L. Tobias, 52, is Chairman and Chief Executive          
Mr. Tobias      Officer of Eli Lilly and Company, a position he assumed         
appears in      in July 1993. He previously was Vice Chairman of American       
this space      Telephone and Telegraph Company from September 1986 to June     
        1993. He is a director of Kimberly-Clark Corporation and
        Knight-Ridder, Inc. Mr. Tobias became a director in July
1992.                                           

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Photo of        Victoria J. Tschinkel, 47, is a Senior Consultant to            
Mrs. Tschinkel  Landers & Parsons, a Tallahassee, Florida law firm, a           
appears in      position she assumed in 1987. She previously served as          
this space      Secretary of the Florida Department of Environmental            
     Regulation from 1981 to 1987. Mrs. Tschinkel became a
director in July 1993.                          

Photo of        Kathryn C. Turner, 47, is Chairperson and Chief Executive       
Ms. Turner      Officer of Standard Technology, Inc., an engineering and        
appears in      manufacturing firm she founded in 1985. She is a director       
this space      of Carpenter Technology Corporation. Ms. Turner became a        
director in January 1995.                       

Photo of        J. L. Whitmire, 54, is an Executive Vice President of the       
Mr. Whitmire    Company responsible for worldwide exploration and               
appears in      production, a position he assumed in January 1994.              
this space      Previously he was Senior Vice President for worldwide           
          exploration and production beginning in December 1991; and
          Vice President of North America Exploration and Production
         beginning January 1988. Mr. Whitmire became a director in
January 1994.                                   

Mr. E. Douglas Kenna, a current director, is retiring as director, having       
reached mandatory retirement age. In July 1994, Mr. D. J. Tippeconnic, a        
director and Executive Vice President, resigned from the Board and the          
Company.                                                                        

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                                 

           Name and Address of        Amount and Nature of  Percent of
Title of Class  Beneficial Owner           Beneficial Ownership  Class          
--------------  -------------------------  --------------------  ----------     
Common          Bankers Trust Company      Direct (1)  Indirect    22.65%       
P. O. Box 1855             ----------- -------- 
Church Street Station      59,199,802   54,974  
New York, New York, 10008                       

(1) 53,543,859 were held by the Bank as Trustee under the Company's Thrift      
and Long-Term Stock Savings Plans with shared voting power; 2,005,860   
were held in trust accounts for which the Bank possessed sole voting and
investment power; 36,547 were held in trust accounts for which the Bank 
possessed voting and investment power shared with others; 3,613,536 were
 held in trust accounts for which the Bank possessed sole investment power
but no voting power; 54,974 were held in trust accounts for which the   
Bank possessed sole voting power but no investment power; and none were 
owned outright. The Bank has disclaimed beneficial ownership of the     
shares it holds as record owner for the Thrift and Long-Term Stock      
Savings Plans.                                                          

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SECURITY OWNERSHIP OF MANAGEMENT  
Phillips Petroleum Company  
Securities  
--------------------------------  
          Amount and Nature of
          Beneficial Ownership
Title         Name of             --------------------                        
of Class   Beneficial Owner        Direct(1)   Indirect    Percent of Class     
-------- -----------------------   --------- ----------    -----------------    
Directors and Nominees(2)                                     
-------------------------                                     
Common   W. W. Allen                 165,726          -     less than 1%        
Common   Norman R. Augustine           6,200          -     less than 1%        
Common   George B. Beitzel            66,379 59,254,776 (3) less than 1% (3)    
Common   David L. Boren                1,000          -     less than 1%        
Common   C. L. Bowerman              141,942        654     less than 1%        
Common   Robert E. Chappell, Jr.       4,500          -     less than 1%        
Common   Lawrence S. Eagleburger       2,163          -     less than 1%        
Common   James B. Edwards              9,138          -     less than 1%        
Common   Larry D. Horner               3,500          -     less than 1%        
Common   E. Douglas Kenna             12,599          -     less than 1%        
Common   J. J. Mulva                 142,272          -     less than 1%        
Common   Randall L. Tobias             4,000          -     less than 1%        
Common   Victoria J. Tschinkel         2,052          -     less than 1%        
Common   Kathryn C. Turner             1,000          -     less than 1%        
Common   J. L. Whitmire              111,208          -     less than 1%        

Executive Officers                                            
------------------                                            
Common   R. G. Ceconi                 58,958          -     less than 1%        
Common   K. L. Hedrick                56,678          -     less than 1%        
Common   J. L. Howe                   89,221          -     less than 1%        
Common   J. C. Mihm                  114,448        633     less than 1%        
Common   T. C. Morris                 86,572          -     less than 1%        
Common   M. J. Panatier               32,855          -     less than 1%        
Common   W. G. Paul                   89,185      3,111     less than 1%        
Common   B. J. Price                  39,783          -     less than 1%        
          --------- ----------
All directors, nominees and                                                     
executive officers                                                              
as a group (23 in group)           1,241,379 59,259,174     less than 1%        
                                                      direct, 22.65%
                                                    indirect (3)

(1)  Direct ownership includes shares which may be acquired under options       
within 60 days of the record date.                                    

(2)  The shares stated as being beneficially owned by each nominee do not       
  include shares beneficially owned by the other companies on whose boards
of directors the nominees, directors or officers serve. (The list of  
nominees for directors on pages 7 through 9 contains the names of the 
  other companies for which the nominees serve as directors.) Each nominee
disclaims beneficial ownership of all such shares.                    

(3)  The shares shown as indirectly owned by Mr. Beitzel include shares         
directly and indirectly owned by Bankers Trust Company on whose Board 
 Mr. Beitzel serves and whose ownership is set forth in the table at the
  bottom of page 9. Mr. Beitzel disclaims beneficial ownership of all such
shares.                                                               

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SECURITY OWNERSHIP OF MANAGEMENT  
Phillips Gas Company  
Securities (1)  
--------------------------------  
                   Amount and Nature
                 of Beneficial
                 Ownership (1)
                 Name of       --------------------      Percent
Title of Class     Beneficial Owner    Direct    Indirect      of Class     
------------------  ------------------ --------   ---------     ------------    
Directors and                           
Nominees                                
------------------                      
Series A Preferred  W. W. Allen               -         500 (2) less than 1%    
Series A Preferred  George B. Beitzel     1,000           -     less than 1%    
Series A Preferred  J. J. Mulva             475       1,070 (2) less than 1%    
Series A Preferred  J. L. Whitmire        1,400           -     less than 1%    

Executive Officers                      
------------------                      
Series A Preferred  R. G. Ceconi              -       1,000 (2) less than 1%    
Series A Preferred  K. L. Hedrick         1,000           -     less than 1%    
Series A Preferred  J. C. Mihm                -          19     less than 1%    
Series A Preferred  M. J. Panatier        1,600           -     less than 1%    
Series A Preferred  W. G. Paul            1,500           -     less than 1%    
Series A Preferred  B. J. Price             200           -     less than 1%    
                  --------   ---------

All directors, nominees and executive                                           
officers as a group (10 in group)         7,175       2,589     less than 1%    

(1)  Table shows only those directors, nominees and executive officers who      
own shares.                                                           

(2)  Messrs. Allen, Ceconi, Mihm and Mulva have disclaimed beneficial           
ownership of all such shares.                                         

COMPENSATION COMMITTEE INTERLOCKS                                               
AND INSIDER PARTICIPATION                                                       

Members of the Compensation Committee are Norman R. Augustine, George B.        
Beitzel, Larry D. Horner, Randall L. Tobias and Victoria J. Tschinkel. The      
Company had no interlocking relationship during the last fiscal year.           

GENERAL INFORMATION                                                             
RELATING TO THE BOARD OF DIRECTORS                                              

The Board of Directors                                                          

The business and affairs of the Company are managed under the direction of      
the Board of Directors. To assist it in carrying out its duties, the Board      
has delegated certain authority to five committees. The Board of Directors      
held eight meetings in 1994. Attendance by the current directors at meetings    
of the Board and of the Committees on which they served averaged over           
96 percent in calendar year 1994.                                               

Committees of the Board                                                         

The Audit Committee, the Compensation Committee, the Committee on Directors'    
Affairs, the Executive Committee and the Public Policy Committee are the        
standing committees of the Board of Directors. Membership is as follows:        

Compen-      Directors'             Public            
Audit        sation       Affairs     Executive  Policy                         
-------------------------------------------------------------                   
Chappell*    Horner*      Beitzel*    Allen*     Eagleburger*                   
Augustine    Augustine    Edwards     Augustine  Boren                          
Boren        Beitzel      Kenna       Horner     Chappell                       
Eagleburger  Tobias                   Kenna      Edwards                        
Horner       Tschinkel                Mulva      Kenna                          
Tobias                                           Tschinkel                      
Turner                                           Turner                         
---------------                                                                 
* Chairman                                                                      

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The Audit Committee recommends to the Board the independent auditors to be      
engaged by the Company, reviews the scope of their engagement, including the    
remuneration to be paid, and reviews on a continuing basis the independence     
of the auditors. The Committee reviews with the independent auditors, the       
Controller, the General Auditor, the General Counsel, the Chief Financial       
Officer and other appropriate Company personnel: (1) the Company's general      
policies and procedures with respect to audits and accounting and financial     
controls; (2) the general accounting and reporting principles and practices     
applied in preparing the Company's financial statements and conducting          
financial audits; (3) the interim and year-end financial statements and any     
certification, report or opinion which the independent auditors propose to      
render in connection with such statements; (4) the extent to which the          
Company has implemented changes suggested by the internal audit staff, the      
independent auditors or the Committee; and (5) the adequacy of the Company's    
accounting practices and internal control structure. The Committee may direct   
the General Counsel, the independent auditors and the internal audit staff to   
inquire into and report to it on any matter having to do with the Company's     
business affairs. The Committee also monitors compliance with the Company's     
Code of Business Ethics, Conduct and Responsibility and oversees the            
activities of the Corporate Compliance and Ethics Committee. The Audit          
Committee held five meetings in 1994.                                           

The Compensation Committee recommends for Board approval the salaries for the   
Chairman of the Board of Directors and Chief Executive Officer and the          
President, and approves salaries for other officers who are members of the      
Board of Directors and for employees who earn $200,000 or above. The            
Committee makes recommendations to the Board with respect to proposals for      
the application of new benefits, incentive plans or programs to officers who    
are also directors and the application of amendments to existing plans or       
programs which would significantly increase such officers' compensation. The    
Compensation Committee held six meetings in 1994.                               

The Committee on Directors' Affairs, formerly known as the Nominating           
Committee, recommends to the Board qualified candidates for election as         
directors and nominates candidates to the Board committees. The Committee       
welcomes suggestions from stockholders about qualified candidates. A            
stockholder wishing to submit a recommendation to the Committee may do so by    
writing Dale J. Billam, Secretary, Phillips Petroleum Company, Bartlesville,    
Oklahoma 74004. The Nominating Committee held six meetings in 1994.             

The Executive Committee, when the Board is not in session, may exercise all     
power and authority of the Board in the management and business of the          
Company, subject to the limitations imposed by the Bylaws. The Committee has    
the authority to review and approve proposed corporate action when the Board    
is not in session and may advise the Board of any recommendations of the        
Committee regarding any proposed corporate action presented to the Board. The   
Executive Committee held four meetings in 1994.                                 

The Public Policy Committee advises management and the Board of Directors (i)   
in response to current and emerging public policy issues, and (ii) in the       
development and review of policies and budgets in respect of contributions,     
including, but not limited to, contributions to organizations whose primary     
purpose is charitable, civic, cultural or educational. In order to carry out    
these duties, the Committee (a) identifies, evaluates and monitors the          
social, political, environmental, occupational, safety and health trends,       
issues and concerns, domestic and foreign, which affect or could affect the     
Company's business activities and performance; (b) reviews information from     
management and approves recommendations to assist in the formulation and        
adoption of policies, programs and practices concerning the matters set forth   
in (a) above, including, but not limited to ecological and environmental        
protection, employee safety, ethical business conduct, consumer affairs,        
alcohol and drug abuse, equal opportunity matters and government relations;     
and (c) monitors and evaluates on an on-going basis the Company's compliance    
with such policies, programs and practices. The Committee also has the          
authority to authorize the use of Company funds for political contributions     
on behalf of the Company, if and to the extent permitted by law. The Public     
Policy Committee held six meetings in 1994.                                     

COMPENSATION OF DIRECTORS AND NOMINEES                                          

Compensation of non-employee directors consists of $10,000 and 1,000 shares     
of Phillips common stock per year, plus $2,000 per year for each Board          
committee membership, $950 for each Board meeting attended, and $700 for the    
committee chairman or $500 for a committee member for each committee meeting    
attended. Non-employee directors may elect to defer all or part of their cash   
compensation. The future payment of this deferred compensation has been pre-    
funded in a special trust designated for this purpose.                          

These directors also participate in the Non-Employee Director Retirement        
Plan. This plan provides for monthly payments to each non-employee director     
who retires from Board service. Each monthly payment is equal to one-twelfth    
of the annual cash retainer paid for Board service (currently $10,000) plus     
the average, calculated on a formula which includes daily and monthly           
computations, of the fair market value of the 1,000 shares of stock during      
the twelve months immediately prior to the non-employee director's              
retirement. These payments continue for the number of years equal to each       
director's years of Board service. If a retired non-employee director should    
die prior to the completion of the payment period, the director's surviving     
spouse will receive the remainder of the payments unless such spouse dies       
prior to the end of the payment period. Plan payments have been pre-funded by   
the Company in a special trust designated for this purpose. Prior to            
retirement the Company also provides $200,000 of life insurance for each non-   
employee director.                                                              

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EXECUTIVE COMPENSATION                                                          

The following Summary Compensation Table sets forth compensation information    
for services performed in 1994, 1993 and 1992 for those persons who were at     
December 31, 1994, the Chief Executive Officer, the four most highly            
compensated officers, and the retired Chief Executive Officer of the Company.   

SUMMARY COMPENSATION TABLE                                                      

         Annual Compensation
         ---------------------------------
                              Other Annual
Name and                      Salary     Bonus   Compensation                   
Principal Position   Year        ($)       ($)            ($)                   
------------------   ----   --------   -------   ------------                   

W. W. Allen          1994    681,333   899,766              0                   
Chairman of the      1993    448,250   275,235              0                   
Board & CEO          1992    392,000   180,000              0                   
(Effective 5/1/94)                                                              

C. L. Bowerman       1994    337,000   260,354              0                   
Executive Vice       1993    325,250   155,876              0                   
President            1992    307,000    98,180              0                   

J. J. Mulva          1994    415,750   511,710              0                   
President &          1993    289,417   126,226              0                   
COO                  1992    258,250    90,740              0                   

W. G. Paul           1994    402,000   250,002              0                   
Sr. Vice President   1993    388,000   152,736              0                   
& General Counsel    1992    369,000   127,730              0                   

J. L. Whitmire       1994    374,917   285,830              0                   
Executive Vice       1993    292,500   137,256              0                   
President            1992    263,000    92,470              0                   

C. J. Silas          1994    336,667   404,842              0                   
Chairman of the      1993    935,000   612,514              0                   
Board & CEO          1992    865,000   437,488              0                   
(Retired 5/1/94)                                                                

SUMMARY COMPENSATION TABLE (Cont.)      

              Long-Term Compensation
              --------------------------------------
                      Awards             Payouts
              -------------------------  -----------
                         Restricted     Securities    Long-Term  All Other
                              Stock     Underlying    Incentive    Compen-
Name and                      Award(s)   Options/SARs       Payout     sation   
Principal Position   Year       (1)($)            (#)          ($)    (2) ($)   
------------------   ----   ----------   ------------  ----------- ----------   

W. W. Allen          1994            0         59,706        - (3)      4,770   
Chairman of the      1993            0         54,154  136,898 (4)      5,499   
Board & CEO          1992            0              0  119,430 (5)      8,820   
(Effective 5/1/94)                                                              

C. L. Bowerman       1994            0         27,069        - (3)      4,770   
Executive Vice       1993            0         31,467  114,489 (4)      5,499   
President            1992            0              0   82,380 (5)      8,820   

J. J. Mulva          1994            0         34,300        - (3)      4,770   
President &          1993            0         25,504  111,134 (4)      5,499   
COO                  1992            0              0   48,120 (5)      8,820   

W. G. Paul           1994            0         30,343        - (3)      4,770   
Sr. Vice President   1993            0         35,229  159,307 (4)      5,475   
& General Counsel    1992            0              0  137,970 (5)      8,677   

J. L. Whitmire       1994            0         29,335        - (3)      4,770   
Executive Vice       1993            0         25,504   68,648 (4)      5,499   
President            1992            0              0   58,290 (5)      8,820   

C. J. Silas          1994            0        116,589        - (3)      1,905   
Chairman of the      1993            0        127,044  538,038 (4)      5,499   
Board & CEO          1992            0              0  453,720 (5)      8,343   
(Retired 5/1/94)                                                                

(1)  The Company has not made any outright grants of restricted stock to any    
executive during any of the periods covered by the table. The Company 
 settled awards under its 1985 and 1987 annual incentive plans and under
all long-term incentive plans since 1986 by distributing to award     
recipients shares of restricted stock which are not transferable prior
to death, disability or retirement at age 62 for corporate officers,  
unless restrictions are earlier lapsed by the Committee. The aggregate
number of such restricted shares held at December 30, 1994, and the   
market value of such shares on that date (calculated according to SEC 
regulation without regard to the restrictions and the resulting       
inability of the named executives to realize such values at such time)
were: Mr. Allen, 18,132 shares, $597,223; Mr. Bowerman, 47,385 shares,
 $1,560,743; Mr. Mulva, 28,043 shares, $923,666; Mr. Paul, 0 shares, $0;
Mr. Whitmire, 28,019 shares, $922,876; Mr. Silas, 0 shares, $0.       

(2)  Includes Company contributions to the Thrift Plan for the benefit of       
participants and the value of the shares allocated to Long-Term Stock 
Savings Plan participants as of the respective valuation dates.       

(3)  No decision has been made on awards for performance under the Strategic    
Incentive Plan Performance Period from 1991-1994.                     

(4)  Value of the restricted stock on the date of the award for performance     
under the Strategic Incentive Plan Performance Period from 1990-1993. 

(5)  Value of the restricted stock on the date of the award for performance     
under the Strategic Incentive Plan Performance Period from 1989-1992. 

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OPTIONS/SAR GRANTS IN LAST FISCAL YEAR                                          

Stock options granted during 1994 to the Chief Executive Officer, the four      
most highly compensated officers and the retired Chief Executive Officer of     
the Company are reflected in the following Option/SAR Grants in Last Fiscal     
Year table.                                                                     

Individual Grants             
-----------------------------------------------------------------------         
Number of                         
Securities     % of Total           
Underlying   Options/SARs   Exercise
Options/SARs     Granted to    or Base  
                Granted   Employees in      Price   Expiration
Name                         (#)    Fiscal Year     ($/Sh)         Date         
------------------  ------------   ------------   --------   ----------         

W. W. Allen               51,945           3.40%     30.32     01/09/04         
                  7,761            .51%     34.82     09/12/04

C. L. Bowerman            27,069           1.77%     30.32     01/09/04         

J. J. Mulva               23,439           1.53%     30.32     01/09/04         
                  3,847            .25%     29.32     02/14/04
                  7,014            .46%     34.82     09/12/04

W. G. Paul                30,343           1.99%     30.32     01/09/04         

J. L. Whitmire            25,488           1.67%     30.32     01/09/04         
                  3,847            .25%     29.32     02/14/04

C. J. Silas              116,589 (2)       7.63%     30.32     01/09/04         
------------------  ------------   ------------   --------   ----------         

Total Stockholders(3)        N/A            N/A        N/A          N/A         

OPTIONS/SAR GRANTS IN LAST FISCAL YEAR (Cont.)        

   Potential Realizable Value at
   Assumed Annual Rates of Stock
    Price Appreciation for Option Term (1)
     ---------------------------------------------
Name                      0% ($)          5% ($)          10% ($)               
------------------  ------------   -------------   --------------               

W. W. Allen                    0         990,591        2,509,982               
                0         169,966          430,658

C. L. Bowerman                 0         516,206        1,307,974               

J. J. Mulva                    0         446,982        1,132,572               
                0          70,939          179,770
                0         153,607          389,207

W. G. Paul                     0         578,641        1,466,174               

J. L. Whitmire                 0         486,056        1,231,580               
                0          70,939          179,770

C. J. Silas                    0       2,223,352        5,633,580               
------------------  ------------   -------------   --------------               

Total Stockholders(3)          0   4,802,676,000   12,168,519,300               

(1)  "Potential realizable value" is disclosed in response to SEC rules which   
 require such disclosure for illustration only. The values disclosed are
not intended to be, and should not be interpreted by stockholders as  
representations or projections of the future value of the Company's   
stock or of the stock price.                                          

(2)  Of the 116,589 options granted 77,726 options were cancelled at            
retirement for a net of 38,863 stock options outstanding from the     
original grant. The "potential realizable value" for the net stock    
options is $741,117 and $1,877,860 for the 5 percent and 10 percent   
assumed annual rates of price appreciation.                           

(3)  To lend perspective to the illustrative "potential realizable value," if   
  the Company's stock price increased 5 percent or 10 percent per year for
 10 years from January 1, 1994, (disregarding dividends and assuming for
purpose of the calculation a constant number of shares outstanding),  
 the total increase in the value of all shares outstanding at January 1,
1994, is shown above as "potential realizable value" for Total        
Stockholders.                                                         

TEN-YEAR OPTION/SAR REPRICING                                                   

There have been no options or stock appreciation right repricings during the    
last 10 years for the Chief Executive Officer, for any of the four most         
highly compensated officers, or for the retired Chief Executive Officer of      
the Company as reflected in the following Ten-Year Option/SAR Repricing         
table.                                                                          

                   Number of    Market                       Length of
                  Securities     Price  Exercise              Original
                  Underlying  of Stock     Price                Option
                    Options/   at Time   At Time                  Term
                        SARs        of        of      New    Remaining
                    Repriced Repricing Repricing Exercise   at Date of
                  or Amended or Amend- or Amend-    Price Repricing of
Name              Date        (#)  ment ($)  ment ($)      ($)    Amendment     
----------------- ---- ---------- --------- --------- -------- ------------     
W. W. Allen          -          0         -         -        -            -     
C. L. Bowerman       -          0         -         -        -            -     
J. J. Mulva          -          0         -         -        -            -     
W. G. Paul           -          0         -         -        -            -     
J. L. Whitmire       -          0         -         -        -            -     
C. J. Silas          -          0         -         -        -            -     

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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR                             
AND FISCAL YEAR-END OPTION/SAR VALUE                                            

The following table shows the number of shares acquired and the net value       
realized from exercising stock options during 1994 and the number and value     
of exercisable and unexercisable stock options granted under the 1986 Stock     
Plan, the 1990 Stock Plan and the Omnibus Securities Plan at fiscal year-end    
1994 for the Chief Executive Officer, the four most highly compensated          
executive officers and the retired Chief Executive Officer of the Company.      

                         Number of
                                          Securities          Value of
                                          Underlying       Unexercised
                                         Unexercised      In-the-Money
                                        Options/SARs      Options/SARs
                                           at Fiscal         at Fiscal
                Number of                   Year-End    Year-End($)(2)
Shares   Net Value              
                 Acquired    Realized    Exercisable/     Exercisable/
Name               on Exercise     ($) (1)   Unexercisable    Unexercisable     
-----------------  -----------   ---------   -------------   --------------     
                                               67,015          811,779
W. W. Allen             18,546     344,913         103,770          481,571     

                                               42,088          406,220
C. L. Bowerman           8,700     158,775          53,748          279,796     

                                               67,197          983,690
J. J. Mulva                  0           0          55,667          242,679     

                                               42,124          369,218
W. G. Paul               1,086      16,828          60,555          315,941     

                                               36,634          398,299
J. L. Whitmire           8,338     176,365          50,746          248,375     

                                              205,415        2,377,370
C. J. Silas              4,075      30,298         145,228          935,115     

(1)  Net value realized is the market price on the date of exercise less the    
option price times the number of shares exercised under the option.   

(2)  Based on $32.9375, the fair market value of the Company's common stock     
on December 30, 1994.                                                 

LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR                             

The following table shows Long-Term Incentive Plan awards established under     
the Omnibus Securities Plan during 1994 for the Chief Executive Officer, the    
four most highly compensated executive officers and the retired Chief           
Executive Officer of the Company.                                               

                                        Estimated Future Payouts Under
                         Performance    Non-Stock Price--Based Plans
                             or Other   ------------------------------
                          Period        Number of Shares (1)
Until 
              Number of    Maturation   Threshold    Target    Maximum
Name              Shares (#)     or Payout     (#) (2)       (#)        (#)     
----------------- ----------   -----------   ---------    ------   --------     
W. W. Allen (3)       10,596      12/31/96       5,298    10,596     21,192     
C. L. Bowerman         4,810      12/31/96       2,405     4,810      9,620     
J. J. Mulva (3)        5,900      12/31/96       2,950     5,900     11,800     
W. G. Paul             5,196      12/31/96       2,598     5,196     10,392     
J. L. Whitmire (3)     5,241      12/31/96       2,620     5,241     10,482     
C. J. Silas           20,717(4)   12/31/96      10,358(4) 20,717(4) 41,434(4)   

(1)  At the end of the three-year performance period, from January 1, 1994,     
 through December 31, 1996, the Compensation Committee will evaluate the
Company's performance to determine the extent to which target awards  
have been earned. The Company's performance will be measured by total 
 stockholder return compared to the total stockholder return of the peer
group of eight integrated oil companies used in the Performance Graph.

(2)  The Company's total stockholder return must be above the bottom quartile   
when compared with the peer group (threshold performance) before any  
award can be approved. If the threshold performance is achieved, the  
Committee expects to approve awards at the threshold level which is   
fifty percent of the target number of shares established for the      
 performance period.The actual awards earned can range from 0 percent to
200 percent of the target awards.                                     

(3)  In addition, target awards for the Performance Period established in       
1993 were increased to reflect promotions as follows Mr. Allen, 960   
shares; Mr. Mulva, 1,207 shares and Mr. Whitmire, 576 shares.         

(4)  The number of shares for C. J. Silas will be prorated to 2,301 shares      
   and 1,150 shares, 2,301 shares and 4,602 shares for threshold, target and
 maximum number of shares, respectively, based on the four months he was
an employee during the performance period.                            

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COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS ON EXECUTIVE COMPENSATION         

The Company's executive compensation program is administered by the             
Compensation Committee of the Board of Directors (the "Committee").  The        
Committee is composed of the directors named below, all of whom are             
independent directors who are not employees and who qualify as disinterested    
persons for purposes of Rule 16b-3 adopted under the Securities Exchange        
Act of 1934.                                                                    

The executive compensation programs are designed to motivate all executives     
to work as a team to maximize long-term shareholder value and achieve           
industry safety leadership.                                                     

Executive compensation decisions made by the Committee are based on a           
combination of quantitative and qualitative measures. During 1994, the          
quantitative measures employed included: relative total return to               
shareholders; improved safety performance through reduced rates of recordable   
injuries and chargeable vehicle accidents and through the implementation of     
improved safety systems; relative return on equity; relative return on          
assets; performance against pre-established financial measures; targets for     
finding and development costs and for reserve replacement; as well as           
internal performance objectives. The Committee also uses qualitative measures   
of performance such as experience, ability to develop and implement strategic   
plans, leadership in the industry and community, and social responsibility.     

The Committee recognizes that the Company's businesses are extremely capital    
intensive, requiring large investments, in most cases over a number of years,   
before tangible financial returns are achieved. In addition, in the short-      
term, the Company's prospects and performance as measured by its share price    
can be significantly affected by commodity price movements and geopolitical     
factors over which the Company and its management have no control. Therefore,   
the Committee evaluates the quantitative and qualitative measures, but may      
use discretion in recognizing performance achievements and value enhancement.   

Section 162(m) of the Internal Revenue Code requires establishment of           
performance-based standards for the deduction of certain compensation to any    
individual in excess of $1 million per year. The stock options granted by       
the Committee under prior shareholder approved plans are exempt from this       
provision. No officer of the Company is expected to receive compensation in     
1995 which will result in non-deductibility of such compensation expense to     
the Company. The Committee has elected to defer a decision to qualify other     
elements of compensation under Section 162(m) of the Internal Revenue Code.     

By design, the executive compensation program is variable, based on             
performance and results in an opportunity for earnings through performance      
over a longer term. The Company's objective in so doing is to provide a         
greater percentage of the total compensation of its executives through          
variable or "at-risk" compensation arrangements under the Annual Incentive      
Compensation Plan ("AICP"), stock options and through awards under the Long-    
Term Incentive Plan.                                                            

Executive Compensation Actions for 1994                                         

Salaries                                                                        
--------                                                                        
In its February 1994 meeting, the Committee recommended to the Board of         
Directors salary increases to be effective May 1, 1994, for Mr. Allen upon      
his election to the offices of Chairman of the Board and Chief Executive        
Officer and for Mr. Mulva upon his election to the offices of President and     
Chief Operating Officer. The recommendations, which were unanimously adopted    
by the non-employee members of the Board of Directors, were based on, without   
assigning relative weight to any of the factors: (i) a comparison of            
Mr. Allen's and Mr. Mulva's salaries to those of chief executive officers and   
presidents, respectively, of other companies in the petroleum industry,         
including those in the peer group by which the Company evaluates its            
stockholder return performance, (ii) Mr. Allen's and Mr. Mulva's leadership     
in directing key strategic corporate decisions, (iii) their key leadership      
role in implementing cost containment strategies, and (iv) their industry and   
national public service. Also at the February meeting, Mr. Mulva's and          
Mr. Whitmire's salaries were adjusted in recognition of their election to the   
Board.                                                                          

The Committee reviewed and approved salaries for all employees with annual      
salaries of $200,000 or above except for the Chairman of the Board and the      
President in which cases the Committee recommends their salaries to the Board   
of Directors for consideration. With the exception of the Chairman of the       
Board and the President, executive salaries were increased in October 1994 as   
part of a Company-wide merit salary program affecting salaried employees. In    
determining executive salaries, without assigning relative weight to any        
factor, the committee considers the responsibilities of the executive's         
position, the relative success with which the executive employee carries out    
those responsibilities and their salary within the range for their job grade    
classification.                                                                 

Annual Incentive Compensation Program                                           
-------------------------------------                                           
The Committee administers the AICP, which provides an opportunity for the       
award of annual bonuses. Under the AICP, a threshold of Company financial       
performance must be met before awards are approved. For 1994, this threshold    
was generation of not less than $900 million in cash from operating             
activities. The AICP also employs annual objectives, which the Committee        
establishes each year. For 1994, the Committee set three Company-wide           
objectives: (i) total stockholder return for 1994 greater than the median       
stockholder return of the oil industry peer group used by the Company to        
measure its stockholder return performance as listed in the Performance         
Graph; (ii) generation of $1.5 billion cash from operating activities plus      
asset sales; and (iii) meeting pre-established safety targets for recordable    
injury rate and chargeable accidents involving Company vehicles.                

The Committee establishes targets each year for individual AICP awards on the   
basis of a percentage of salary which varies according to the employee's job    
grade classification under the Company's job evaluation system. The target      
awards are established using internally generated data and data obtained from   
independent third party consultants, and are intended to be at the mean of      
peer companies if performance objectives are met. For 1994, the target          
percentages varied from 12 percent of                                           

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salary for the beginning level of AICP eligibility to 65 percent of salary      
for the Chairman of the Board of Directors. The target percentages are          
prorated in recognition of promotions during the year. The Committee is         
authorized under the terms of the AICP to approve individual awards from zero   
to two hundred percent of target for the award year.                            

Mr. Allen's and Mr. Mulva's AICP awards are based on overall corporate          
performance. Awards to all other AICP participants reflect the performance of   
business units or staff groups with which they are related, as well as          
corporate performance. In February 1995, the Committee approved cash            
incentive compensation awards from 101.5 percent to 185 percent, based on a     
review of the Company's 1994 Corporate and Business Unit performance. In        
determining the amount of the incentive compensation award paid to Mr. Allen    
and the other named executive officers, the Compensation Committee considered   
that the cash generated from operating activities exceeded the threshold. The   
objective for cash from operating activities plus asset sales exceeded the      
target by $65 million. The Company's total return to stockholders, which        
assumes reinvested dividends, was 17 percent, which placed the Company first    
compared to the eight peer companies; and rates for recordable injury rates     
and chargeable vehicle accidents matched record lows, making 1994 the           
Company's all-around safest year. For Mr. Allen and the other named executive   
officers, the awards are set forth in the Summary Compensation Table.           

Stock Options                                                                   
-------------                                                                   
It is the Committee's practice to consider the grant of stock options in        
January of each year. All grants to date have been made at the fair market      
value of the Company's stock on the date of the grant. The number of shares     
subject to options at the date of each grant is set using internally            
generated information and information from independent third party              
consultants to achieve option grants which approximate those granted by peer    
companies to persons in corresponding positions. The number of shares subject   
to option grants varies based on job grade classification and salary. The       
grants in January 1994 ranged from the number of shares equal in market value   
at the grant date to 75 percent of annual salary for the lowest level of        
eligibility to the number of shares equal in market value at the grant date     
to 350 percent of annual salary for the Chairman and Chief Executive Officer.   
It is also the Committee's practice to consider supplemental stock option       
grants in recognition of promotions during the year to reflect the promoted     
executive's new job grade classification and salary. Additional stock option    
grants were made in recognition of promotions during 1994 for Messrs. Allen,    
Mulva and Whitmire. For Mr. Allen and the other named executive officers the    
stock option grants are set out in the Options/SAR Grants in Last Fiscal Year   
table.                                                                          

Long-Term Incentive Programs                                                    
----------------------------                                                    
The Committee is currently administering two different long-term incentive      
programs under the former 1990 Stock Plan and the Omnibus Securities Plan,      
both of which were approved by shareholders. It has been the Committee's        
practice each year to establish a three-year or four-year performance period,   
at the end of which performance for the period is measured against pre-         
determined objectives and awards, if any, are made.                             

In April 1994 the Committee approved awards under the Strategic Incentive       
Plan Performance Period V ("SIP V"). SIP V covered the period from January 1,   
1990 through December 31, 1993. A target award for each individual had been     
established at the outset of the performance period, based on a percentage of   
salary varying according to job grade classification. Supplemental target       
awards were approved for individuals who were promoted during the performance   
period to positions with higher job grade classifications. For SIP V, target    
awards were based upon 22 percent of salary for the lowest level of             
eligibility to 65 percent of salary for the Chairman and Chief Executive        
Officer.                                                                        

The Committee approved awards for SIP V at 10 percent above the target award    
level. The awards for SIP V were based on the Company ranking fourth of ten     
in the peer group for Total Shareholder Return, second of ten for Return on     
Equity, and seventh of ten for Return on Assets. These rankings were made for   
purposes of SIP V on the Company's position within the range of returns for     
the peer group and not on the market capitalization weighted basis required     
in the performance graph presented in this proxy statement. Also, the peer      
group for awards under the Strategic Incentive Plan included one additional     
company not in the peer group used in the performance graph in this proxy       
statement for evaluation of the Company's shareholder return performance.       
This additional company ceased to be an integrated oil and gas company and      
was removed from the peer group for purposes of the Proxy Statement             
Performance Graph and for measurement of future performance under the Long      
Term Incentive Plan.                                                            

The Committee also employed internal performance measures with pre-determined   
objectives for SIP V. Those objectives met included completion of a foreign     
chemicals and plastics processing facility, replacement of more than 100        
percent of hydrocarbon reserves produced during the four-year period, and       
restoration of high density polyethylene manufacturing capacity at the          
Company's Houston Chemical Complex. An additional objective, which was met,     
was maintenance of finding costs for hydrocarbon reserves in the lowest         
quartile of a peer group (which includes three additional companies, as well    
as those companies in the shareholder return peer group). In addition, the      
Committee evaluated performance against certain internal performance measures   
which it does not disclose in this report because of its view that the          
standards and the Company's performance involve confidential commercial or      
business information, which if disclosed would have an adverse effect on the    
Company.                                                                        

The value of the awards, which were settled in restricted stock for Mr. Allen   
and the other named executive officers, for SIP V are set forth on the line     
for 1993 in the Summary Compensation Table.                                     

Under the Strategic Incentive Plan portion of the Company's former 1990 Stock   
Plan there is one remaining performance period January 1, 1991, through         
December 31, 1994, with respect to which the Committee will make a decision     
about awards. The 1990 Stock Plan has been discontinued and no further          
performance periods will be established under it.                               

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Upon completion of the remaining Strategic Incentive Plan performance period,   
the only continuing form of long-term incentive program will be the Long-Term   
Incentive Plan under the Company's Omnibus Securities Plan. The Committee       
established the second performance period of the plan, which extends from       
January 1, 1994, through December 31, 1996. Target awards for Mr. Allen and     
the other named executive officers were established as presented in the Long-   
Term Incentive Plan Awards in Last Fiscal Year table and were based on a        
percentage of salary varying according to job grade classification and the      
price of the Company's stock at the beginning of the performance period.        
Supplemental target awards, which are included in the target awards listed in   
the table, were approved in recognition of promotions during the year. Actual   
awards, if any, will be determined by the Committee at the end of the           
performance period based on the single measurement of the Company's relative    
total shareholder return compared with the peer group by which the Company      
evaluates its stockholder return performance. Before awards may be granted      
the Company's total shareholder return must be above the bottom quartile when   
compared with the industry peer group.                                          

THE COMPENSATION COMMITTEE                                                      

Larry D. Horner, Chairman                                                       
Norman R. Augustine                                                             
George B. Beitzel                                                               
Randall L. Tobias                                                               
Victoria J. Tschinkel                                                           

PERFORMANCE GRAPH                                                               

The following graph shows the Company's total return to stockholders compared   
to the S&P 500 Index and a peer group of eight integrated oil companies over    
the five-year period from December 31, 1989, through December 31, 1994.         

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN*                    
Among Phillips Petroleum, S&P 500 Index, and Peer Group Index**                 

*  Total return assumes dividend reinvestment                                 
**  Amoco, Chevron, Exxon, Mobil, Texaco, Amerada Hess, ARCO, Unocal            

[Proxy Graph appears in this space]                   

Assumes $100 invested on 12/31/89 in Phillips Common Stock, S&P 500 Index and   
Peer Group Index                                                                

A table of the data points used in the graph:                                   

    1990   1991   1992   1993   1994
    ----   ----   ----   ----   ----
(1)  PHILLIPS PETROLEUM   $107    103    113    135    158                      

(2)  S&P 500 INDEX          97    126    135    149    150                      

(3)  PEER GROUP INDEX      106    116    122    138    145                      

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The Retirement Income Plan, in which all active eligible employees (including   
executive officers) participate, does not require participant contributions.    
Benefits are computed in accordance with several formulas. Officers,            
including executive officers, generally receive benefits under a final          
average earnings formula. Benefits are based on length of service, a            
participant's annual salary and awards paid under the Annual Incentive          
Compensation Plan. Normal retirement age is 65. A participant may retire as     
early as age 55 and receive a reduced benefit. Benefits for a retiring          
employee are paid in the form of a straight-life annuity or one of several      
other forms of equivalent actuarial value. One executive officer of the         
Company has elected to be covered by a supplemental plan which provides for     
retirement after age 62 but before age 65. It supplements retirement by         
calculating benefits as if the retiring officer had continued to be employed    
until age 65. All other executive officers have indicated to the Company an     
intention to retire at age 62.                                                  

The following table shows the maximum estimated straight-life annual benefits   
payable at normal retirement age to employees in the higher salary              
classifications, prior to reductions required by the plan for Social Security   
benefits.                                                                       

PENSION PLAN TABLE    

Estimated Annual Retirement Benefits    
Under Final Average Earnings Formula (1) (2)  

Annual Average of                                                       
Highest 3 Consecutive                                                       
Calendar Years' Salary      Years of Credited Service at Normal Retirement  
and AICP Awards in 10 Years  ------------------------------------------------   
Preceding Retirement(3)          10        15        20        25        30 
---------------------------  --------  --------  --------  --------  --------   
$  450,000                     72,000   108,000   144,000   180,000   216,000   
650,000                    104,000   156,000   208,000   260,000   312,000
850,000                    136,000   204,000   272,000   340,000   408,000
1,150,000                    184,000   276,000   368,000   460,000   552,000  
1,450,000                    232,000   348,000   464,000   580,000   696,000  
1,750,000                    280,000   420,000   560,000   700,000   840,000  
1,950,000                    312,000   468,000   624,000   780,000   936,000  

PENSION PLAN TABLE (Cont.)    

Estimated Annual Retirement Benefits    
Under Final Average Earnings Formula (1) (2)  

Annual Average of                                                       
Highest 3 Consecutive             Years of Credited Service                 
Calendar Years' Salary              at Normal Retirement                    
and AICP Awards in 10 Years    ------------------------------------             
Preceding Retirement(3)              35          40            45           
---------------------------    ----------   ----------   ----------             
$  450,000                        252,000      288,000      324,000             
650,000                        364,000      416,000      468,000          
850,000                        476,000      544,000      612,000          
1,150,000                        644,000      736,000      828,000            
1,450,000                        812,000      928,000    1,044,000            
1,750,000                        980,000    1,120,000    1,260,000            
1,950,000                      1,092,000    1,248,000    1,404,000            

(1)  As required by the Internal Revenue Code of 1986, as amended, the          
retirement plan may not provide annual benefits exceeding a maximum   
amount, or include in benefit computations, compensation in excess of 
the amount specified in the Internal Revenue Code. Also, participation
in the Company's AICP deferral program and voluntary salary reduction 
program may cause a reduction in retirement plan benefits. Additional 
amounts, if required to provide the total benefits indicated in the   
 table, would be made by supplemental Company payments. The Company also
maintains, as a recruiting tool, a supplemental plan under which      
officers and other executives who are hired during mid-career may     
  receive retirement income in excess of that which their shorter Credited
  Service would provide under the retirement plan. However, total benefits
under this supplemental plan and the retirement plan will not exceed  
 benefits obtainable under the retirement plan by a full career employee
at similar salary levels. These supplemental benefits have been       
partially pre-funded by the Company in a special trust designated for 
this purpose.                                                         

(2)  With respect to the executive officers named in the Summary Compensation   
Table, their years of credited service as of February 28, 1995, for   
retirement purposes are: W. W. Allen, 35 years; C. L. Bowerman,       
33 years; J. J. Mulva, 23 years; W. G. Paul, 15 years; J. L. Whitmire,
 26 years; and C. J. Silas, 42 years. See the Summary Compensation Table
for their current covered compensation.                               

(3)  AICP Awards are shown under the heading "Bonus" in the Summary             
Compensation Table.                                                   

TERMINATION OF EMPLOYMENT                                                       
and                                                                             
CHANGE-IN-CONTROL ARRANGEMENTS                                                  

The Work Force Stabilization Plan authorized on April 26, 1988, provides that   
all employees of the Company, including executive officers, who are laid off    
(as defined in the plan) within two years following a change of control of      
the Company will be entitled to severance benefits equal to four weeks' pay     
for each year of service, subject to a maximum of 104 weeks. "Pay" is           
determined by adding the employee's current base salary, regularly scheduled    
overtime pay and most recent Annual Incentive Compensation Plan award (or       
target award, if greater).                                                      

Company-sponsored medical, dental and life insurance programs would be          
continued for affected employees. The period of time which severance benefits   
cover would be added to service for purposes of retirement plan calculations,   
and all affected employees would be immediately vested. In addition, affected   
employees would be entitled to require the Company to purchase their            
principal residences under a formula-pricing arrangement intended to protect    
them from loss of value, and would be entitled to reimbursement of legal        
expenses incurred in connection with any claim for benefits under the plan.     

A change of control would take place if there is either (i) an acquisition      
(other than directly from the Company) of 20 percent or more of the             
beneficial interest in the Company's voting stock by a party other than the     
Company, a subsidiary or a Company-sponsored benefit plan, or (ii) a change     
in the Board of Directors as a result of which the current directors            
(together with the successors which they nominate or approve for nomination)    
cease to be a majority of the Board.                                            

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PROPOSAL 1 - BY THE COMPANY                                                     

The Board of Directors unanimously recommends a vote FOR adoption of the        
following resolution, which will be presented at the meeting:                   

------------------------------------------------                

RESOLVED, that the Board of Directors' designation of Ernst & Young LLP to      
serve as the independent auditors to audit the books, records and accounts of   
the Company for the 1995 fiscal year be and hereby is approved.                 

------------------------------------------------                

Upon the recommendation of the Audit Committee, the Board of Directors has      
designated Ernst & Young LLP, Certified Public Accountants, for the purpose     
stated above and, in accordance with the Bylaws of the Company, has directed    
that a vote of stockholders be taken to determine their approval or             
disapproval.                                                                    

As provided in the Company's Bylaws, in the event of stockholder disapproval,   
the Board must then determine whether to replace the independent auditors       
before the end of the current year and shall designate other independent        
auditors for the following year.                                                

Ernst & Young LLP, which has served as the Company's independent auditors       
since 1949, is familiar with the Company's operations, accounting policies      
and procedures and is, in the Company's opinion, well-qualified to act in       
this capacity. Representatives of Ernst & Young LLP will be present at the      
meeting to make any statement they desire and to answer questions directed to   
them.                                                                           

PROPOSAL 2 - BY STOCKHOLDERS                                                    

The Franciscan Health System, One MacIntyre Drive, Aston, Pennsylvania 19014-   
1196, which states it is the owner of 2,900 shares, has given notice through    
Ruth Goodwin, OSF, Senior Vice President, Mission & Ministry, of its            
intention to present the following resolution at the meeting which is co-       
sponsored by the General Board of Church and Society of the United Methodist    
Church, 100 Maryland Avenue, N.E., Washington, D.C. 20002, which states it is   
the owner of 3,200 shares.                                                      

ENDORSEMENT OF THE CERES PRINCIPLES FOR PUBLIC ENVIRONMENTAL ACCOUNTABILITY     

WHEREAS WE BELIEVE:                                                             
The responsible implementation of a sound, credible environmental policy        
increases long-term shareholder value by raising efficiency, decreasing         
clean-up costs, reducing litigation, and enhancing public image and product     
attractiveness;                                                                 

Adherence to public standards for environmental performance gives a company     
greater public credibility than following standards created by industry         
alone. For maximum credibility and usefulness, such standards should reflect    
what investors and other stakeholders want to know about the environmental      
records of their companies;                                                     

Companies are increasingly being expected by investors to do meaningful,        
regular, comprehensive and impartial environmental reports. These help          
investors and the public to understand environmental progress and problems;     

Uniform standards for environmental reports permits comparisons of              
performance over time. It also allows companies to attract new capital from     
investors seeking investments which are environmentally responsible and         
responsive and which minimize risk of environmental liability.                  

WHEREAS:                                                                        
The Coalition for Environmentally Responsible Economies (CERES) -- which        
comprises large institutional investors (including shareholders of this         
Company) with $160 billion in stockholdings, public interest representatives,   
and environmental experts -- consulted with corporations and produced           
comprehensive public standards for both environmental performance and           
reporting. Over 80 companies, including Sun [Oil], General Motors,              
H. B. Fuller, Polaroid, and Arizona Public Service Company have endorsed the    
CERES Principles to demonstrate their commitment to public environmental        
accountability. Fortune-500 endorsers speak enthusiastically about the          
benefits that flow from working with CERES:  increasing public credibility;     
adding `value' to the company's environmental initiatives; and advancing        
the company's own environmental plans and agenda.                               

In endorsing the CERES Principles, a company commits to work                    
toward:                                                                         

1.  Protection of the biosphere                                       
2.  Sustainable use of natural resources                              
3.  Waste reduction and disposal                                      
4.  Energy conservation                                               
5.  Risk reduction                                                    
6.  Safe products and services                                        
7.  Environmental restoration                                         
8.  Informing the public                                              
9.  Management commitment                                             
10.  Audits and reports                                                 

[Full text of the CERES Principles and accompanying CERES Report Form           
obtainable from CERES, 711 Atlantic Avenue, Boston MA 02110, tel: 617/451-      
0927].                                                                          

The CERES Principles were also proposed by the Women's Division, The General    
Board of Global Ministries, The United Methodist Church, 15th Floor, 475        
Riverside Drive, New York, New York 10115; The Sisters of Charity, BVM, BVM     
Center, 1100 Carmel Drive, Dubuque, Iowa 52001; Mercy Consolidated Assets       
Management Program, 20 Washington Square North, New York, New York 10011; and   
the Rabbinical Pension Board, 192 Lexington Avenue, New York, New York 10016-   
6823; each of whom has advised this Company that they were the owner of at      
least $1,000 worth of the Company's common stock, held for at least one year.   

------------------------------------------------                

RESOLVED:  Shareholders request the Company to endorse the CERES Principles     
as a part of its commitment to be publicly accountable for its environmental    
impact.                                                                         

------------------------------------------------                

SUPPORTING STATEMENT                                                            

Concerned investors are asking the Company to be publicly accountable for its   
environmental impact, including collaborating with this corporate-              
environmental-investor-community coalition to develop:  standards for           
environmental                                                                   

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performance and disclosure; methods for measuring progress toward these         
goals; and a format for public reporting of progress. We believe this is        
comparable to the European Community regulation for voluntary participation     
in verified and publicly-reported eco-management and auditing.                  

We invite our Company to endorse the CERES Principles by (1) stating its        
endorsement in a letter signed by a senior officer; (2) committing to           
implement the Principles; and (3) annually publishing an environmental report   
in the format of the CERES Report. This will complement -- not supplant --      
internal corporate environmental policies and procedures.                       

Without such public scrutiny, corporate environmental policies and reports      
lack the critical component of adherence to standards upheld by management      
and stakeholders alike. Shareholders are asked to vote FOR this resolution to   
encourage our Company to demonstrate environmental leadership and               
accountability.                                                                 

STATEMENT IN OPPOSITION                                                         

The Company recommends a vote AGAINST adoption of this proposal by              
stockholders.                                                                   

This is the third time that the co-sponsor and associated groups have           
proposed the CERES Principles (or its predecessor, the Valdez Principles) for   
consideration by stockholders. On each of the two previous occasions, the       
stockholders have overwhelmingly rejected the proposal. The Company again       
recommends a vote against this proposal.                                        

Proponents of the proposal call for the Company to demonstrate its              
environmental commitment and responsibility according to a format to be         
negotiated with them as representatives of all stockholders. The Company,       
however, believes that it is, and should remain, responsible to all             
stockholders and not a self-appointed group. Further, the Company has           
demonstrated its genuine commitment to sound environmental policies through     
(1) responsible operations throughout the world, and (2) publishing and         
distributing, in 1993 and 1994, a comprehensive report of its actual            
environmental performance. The Company believes that every aspect of the        
CERES Principles is included both in the Company's policies and its             
performance.                                                                    

As stated in previous years, the Company supports public environmental          
reporting. We were a founding member of the Public Environmental Reporting      
Initiative (PERI). The PERI reporting guidelines were developed as a            
voluntary effort by a number of companies following discussions with            
environmental and investor groups, some of which are CERES participants. A      
copy of the Company's 1994 report, which includes quantitative information      
related to our actual environmental, safety and health performance, is          
available to all stockholders and the public at large. The proponents of        
CERES would have you believe that each company who agrees to adopt the CERES    
Principles would produce a report that would be comparable; however, there is   
nothing that would prevent the proponents from changing the requirements, as    
they have done in the past.                                                     

In 1990, the Company adopted a set of environmental goals called the            
Principles of Performance, which complement its health, environmental and       
safety policies and provide for the diversity of our business. In addition to   
the Company's own standards, the Principles of Performance reflect various      
governmental agency regulations and recommended management practices from       
several major industrial organizations, including The Chemical Manufacturers    
Association's Responsible Care(r) Initiative, the American Petroleum            
Institute's STEP(r)(Strategies for Today's Environmental Partnership) program,  
The National Petroleum Refiners' Association BEST(r) (Building Environmental    
Stewardship Tools) program, and the International Chamber of Commerce's         
Charter For Sustainable Development. Not only do these programs represent       
policy commitments by the Company, but most include specific performance        
reporting.                                                                      

The Company believes strongly in the importance of performance and              
accountability in environmental matters. Clearly, the Board and Company         
management also recognize its importance to the value of the Company and to     
all its stockholders. A committee of the Board, the Public Policy committee,    
composed entirely of outside directors, has direct oversight of the Company's   
environmental policies, practices and performance. The Company's Management     
Committee, composed of Senior Management executives, is the primary body        
within the management of the Company responsible for health, safety and         
environmental policy. The Company's corporate-level staff, led by the Vice      
President Health, Environment and Safety, is responsible for formulating and    
recommending policy and implementing plans, as well as providing expert         
assistance to the operating units. Further, it is the policy and philosophy     
of the Company that all employees, as a part of their work assignments, have    
the responsibility to protect the environment.                                  

Finally, the Company believes that in publishing its environmental policies,    
plans and results annually, the Company is being responsible and accountable    
to its stockholders and the public.                                             

Accordingly, the Board of Directors unanimously recommends a vote AGAINST       
this proposal.                                                                  

PROPOSAL 3 - BY STOCKHOLDER                                                     

The College Retirement Equities Fund ("CREF"), 730 Third Avenue, New York, NY   
10017-3206 which states it is the owner of 1,952,117 shares, has given notice   
through Peter C. Clapman, Senior Vice President and Chief Counsel,              
Investments of CREF, of its intention to present the following resolution at    
the meeting:                                                                    

CREF SHAREHOLDER RESOLUTION                                                     

WHEREAS, the Company's Board of Directors has authority under the Company's     
charter to issue one or more classes of so-called "blank check" preferred       
stock, having such voting and other rights as the Board, in its sole            
discretion, may determine:                                                      

WHEREAS, the Board may be able to deter unsolicited acquisition offers by       
placing blank check preferred in friendly hands without seeking shareholder     
approval;                                                                       

WHEREAS, Delaware's anti-takeover statute enhances the Board's ability to       
deter unsolicited takeover bids by placing a block of blank check preferred     
in friendly hands;                                                              

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WHEREAS, such use of blank check preferred by the Board could deprive           
shareholders of the opportunity to consider valuable offers for their stock;    

-----------------------------------------------                 

RESOLVED that the shareholders request that the Board: Adopt a policy of        
seeking shareholder approval prior to placing preferred stock with any person   
or group except for the purpose of raising capital in the ordinary course of    
business or making acquisitions and without a view to effecting a change in     
voting power.                                                                   

-----------------------------------------------                 

SUPPORTING STATEMENT                                                            

I.  The Board can limit shifts in control of the Company by placing a block     
of preferred stock in friendly hands without shareholder approval.              

Blank check preferred can be issued by the Board for capital raising,           
acquisitions or as an anti-takeover device, without shareholder approval. The   
Board can use blank check preferred as an anti-takeover device to deter         
unsolicited tender offers favorable to shareholders. For example, the Board     
could issue blank check preferred to dilute the stock ownership of, or create   
voting impediments for, an unsolicited acquiror. Since such uses of blank       
check preferred could potentially diminish the value of the shareholders'       
investment and decrease the market price of the Company's shares, shareholder   
approval should be obtained before the Board uses blank check preferred as an   
anti-takeover device.                                                           

II.  Delaware's anti-takeover statute enhances the Board's ability to deter     
takeovers by undertaking blocking transactions.                                 

Delaware's anti-takeover statute enhances the Board's ability to deter a        
takeover by placing blank check preferred in friendly hands. The statute        
provides generally that unless an unsolicited acquiror obtains 85 percent of    
the Company's voting stock in the transaction by which it obtains 15 percent,   
it is barred for three years from consummating a business combination with      
the Company. The Board can thus effectively deter unsolicited bids by placing   
a significant block of blank check preferred in friendly hands, making it       
much harder (if not impossible) for an unsolicited bidder to attain the 85      
percent ownership it needs to be exempted from the Delaware statute.            

III.  Blank check preferred should not be used by the Board to disadvantage     
shareholders without their consent.                                             

The Board's discretionary authority to issue blank check preferred should       
only be exercised for corporate purposes demonstrably in the best interests     
of shareholders. Good corporate governance requires that holders of a           
majority of voting stock approve the use of blank check preferred as a          
deterrent to unsolicited tender offers -- a use that is not necessarily in      
the best interests of shareholders.                                             

STATEMENT IN OPPOSITION                                                         

The Company recommends a vote AGAINST adoption of this proposal by              
stockholders.                                                                   

The stockholders of the Company, at their 1985 Annual Meeting, authorized the   
creation of a class of preferred stock and conferred upon the Board of          
Directors the ability to designate the terms of the preferred stock at the      
time of issue. The CREF proposal seeks to cause that action by our              
stockholders to be overturned. The Board of Directors believes that             
stockholders' interests will be best served by a rejection of the CREF          
proposal.                                                                       

The ability to issue preferred stock with terms designated at the time of       
issue enables the Company to respond promptly and effectively to financing,     
acquisition and other capital opportunities. A Company that lacks the ability   
to act quickly in response to capital market developments can be placed at a    
disadvantage and find itself foreclosed from opportunities to enhance the       
value of its stockholders' investment.                                          

The Company's Board of Directors has demonstrated through its effective         
performance, both under the pressure of real unsolicited offers and in the      
continuing course of effectively leading the Company to solid financial         
performance, that it is able and entitled to maintain its ability to            
determine the basis and terms of issue for the Company's preferred stock.       

The proponent appears to suggest that preferred stock that may have terms       
designated at the time of issue has a particular application as a deterrent     
to unsolicited tender offers. The Company's Board of Directors, having dealt    
with two consecutive unsolicited takeover proposals in 1984-85, is well aware   
of the issues that such proposals present. The Board believes that it           
demonstrated in those situations its commitment to and ability to serve         
effectively the interests of the Company's stockholders. The Board was able     
at that time to use the Company's preferred stock, designating particular       
terms at the time of issue, to deliver extra value to stockholders through a    
recapitalization. If a similar situation were to arise now, and if a hostile    
would-be acquiror were to have the right to vote a significant number of        
shares on the question of whether to issue the preferred shares because of a    
policy such as that suggested by the proponent, the hostile would-be acquiror   
could deny to other holders the right to the value enhancement provided         
by the preferred stock.                                                         

The Board acknowledges the sincerity of the proponent's concern with the        
practice of entrenchment through placement of blocks of voting stock in         
friendly hands, and is aware of reported instances of such actions. But no      
amount of well-meaning concern can justify a vague "policy" that would, if      
the Board gave it binding effect, require the Company to solicit a              
stockholder vote in order to fund its participation in a joint venture with     
preferred stock or create legal uncertainties in a simple financing because     
the Company has not previously issued preferred stock as a financing vehicle.   
Such a result would, in the Board's opinion, punish, and not protect,           
stockholders.                                                                   

Further, the Board believes that any concern over entrenchment through          
placement of preferred stock is unwarranted as to the Company. The current      
Board of Directors, and the Board nominated for election, have a substantial    
majority of independent directors. Under Delaware law, directors have a         
fiduciary responsibility to act in the best interests of the Company and its    
stockholders in all circumstances, including the issue or placement of          
preferred stock. The use of preferred stock in the context of an unsolicited    
takeover proposal is                                                            

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subject to scrutiny under an enhanced standard of care applied by               
the Delaware courts to review directors' actions in such circumstances.         

The Board believes that its ability to issue and designate the terms of         
preferred stock, even in the context of an unsolicited takeover proposal, is    
an important tool to enhance the value of the stockholders' investment. This    
ability enables the Board, while meeting its fiduciary responsibilities, to     
act in the best interests of stockholders with the flexibility and power to     
take advantage of business opportunities as they arise.                         

Accordingly, the Board of Directors unanimously recommends a vote AGAINST       
this proposal.                                                                  

OTHER MATTERS                                                                   

The Company knows of no matters to be presented at the meeting other than       
those included in the Notice preceding this Proxy Statement. If other matters   
should come before the meeting which require a stockholder vote, it is          
intended that the proxy holders will use their own discretion in voting on      
such other matters.                                                             

Information included in this Proxy Statement is as of the date of               
preparation, approximately February 28, 1995, unless otherwise stated.          

DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS                                       

Stockholder proposals intended to be presented at the 1996 Annual Meeting       
must be received at the Company's executive offices in Bartlesville,            
Oklahoma, no later than November 30, 1995, for inclusion in the Company's       
Proxy Statement and form of proxy relating to that meeting.                     

By Order of the Board of Directors,                                             

/s/ Dale J. Billam                                                              
-------------------                                                             
Dale J. Billam                                                                  
Secretary                                                                       

Bartlesville, Oklahoma 74004                                                    
March 31, 1995                                                                  

Stockholders are encouraged to keep their account address up to date and        
promptly deposit their dividend checks to avoid surrender of these funds and    
related stock to their respective states under unclaimed property laws.         

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APPENDIX - FORM OF PROXY              

                                                   DEFINITIVE COPY

PROXY                                                            PROXY          

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS         

PHILLIPS PETROLEUM COMPANY          

Annual Meeting May 8, 1995          

The undersigned hereby appoints W. ALLEN, R. TOBIAS and V. TSCHINKEL as         
proxy holders with power of substitution, or, if all do not act on a            
matter, those who do act, to vote all stock which the undersigned could         
vote at the Company's annual stockholders' meeting to be held at the Adams      
Building, 4th Street and Keeler Avenue, Bartlesville, Oklahoma, on May 8,       
1995, at 10 a.m., and at any adjournment thereof, in the manner stated          
herein as to the following matters and in their discretion on any other         
matters that come before the meeting, all as described in the Notice and        
Proxy Statement.                                                                

This Proxy is Continued on the Reverse Side   
Please Sign on the Reverse Side and Return Promptly   

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This Proxy will be voted or not voted as you direct below. In the absence       
of such direction, it will be voted FOR Directors, and FOR Proposal 1 and       
AGAINST Proposal 2 and Proposal 3.                                              

                   ---
                                    | X | Please mark your
                                  ---  votes as this

Company recommends a vote FOR: ELECTION OF DIRECTORS: Nominees: W. Allen,       
N. Augustine, G. Beitzel, D. Boren, C. Bowerman, R. Chappell, Jr.,              
L. Eagleburger, J. Edwards, L. Horner, J. Mulva, R. Tobias, V. Tschinkel,       
K. Turner, and J. Whitmire.                                                     

VOTE FOR        __         VOTE WITHHELD       __                         
all nominees   |__|        from all nominees  |__|                        
listed above*              listed above                                   

*To withhold authority to vote for any nominee write the nominee's name on      
the space below.                                                              

----------------------------------------                      

Company recommends a vote FOR:       FOR       AGAINST      ABSTAIN             
Proposal 1 to approve the             __          __           __               
designation of the independent       |__|        |__|         |__|              
auditors, Ernst & Young LLP.                                                    

Company recommends a vote AGAINST:    __          __           __               
Proposal 2 to endorse the            |__|        |__|         |__|              
CERES Principles.                                                               

Company recommends a vote AGAINST:    __          __           __               
Proposal 3 to adopt a policy on      |__|        |__|         |__|              
the use of preferred stock.                                                     

                                                          __
                                     I PLAN TO ATTEND THE |__|
                                ANNUAL MEETING

Please mark, date, sign and return this proxy card promptly. To vote in         
accordance with the Company's recommendations no boxes need be checked.         

Dated:______________________, 1995                                              

__________________________________                                              

__________________________________                                              

Signature(s) of Stockholder(s)                                              

Your signature(s) on this proxy form should be exactly the same as the          
name(s) imprinted hereon. Persons signing as executors, administrators,         
trustees, or in similar capacities, should so indicate.                         

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14A’ Filing		Date		First		Last			Other Filings
		12/31/96		16		19			10-K405,  10-K405/A
		11/30/95		24
		5/8/95		2		25
Filed on:		3/31/95		4		24			10-Q,  DEFA14A
		3/17/95		6		7
		2/28/95		7		24
For Period End:		12/31/94		14		19			10-K405,  10-K405/A
		12/30/94		14		16
		5/1/94		17
		1/1/94		15		19
		12/31/93		18					10-K,  10-K/A,  DEF 14A
									List all Filings