Edgar Filing: CONOCOPHILLIPS

Definitive Proxy Statement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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ConocoPhillips

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LOGO

NOTICE OF 2012 ANNUAL STOCKHOLDERS MEETING

AND PROXY STATEMENT

March 28, 2012

Dear ConocoPhillips Stockholder:

On behalf of your Board of Directors and management, you are cordially invited to attend the Annual Meeting of Stockholders to be held at the Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas, on Wednesday, May 9, 2012, at 9:00 a.m. CDT.

Your vote is important. Whether or not you plan to attend the Annual Meeting, please vote as soon as possible. You may vote on the Internet, by telephone, or, if this proxy statement was mailed to you, by completing and mailing the enclosed traditional proxy card. Please review the instructions on the proxy card or the electronic proxy material delivery notice regarding each of these voting options. Please note that submitting a proxy using any one of these methods will not prevent you from attending the meeting and voting in person. You will find information regarding the matters to be voted on at the meeting in the proxy statement.

In addition to the formal items of business to be brought before the meeting, there will be a report on ConocoPhillips’ operations during 2011 followed by a question and answer period.

As you may know, we are progressing plans to effect the repositioning of the Company into two leading energy companies. We currently expect the repositioning to be completed before the Annual Meeting. If this occurs, we will continue to hold the Annual Meeting as planned and it will serve as the first Annual Meeting of the repositioned independent upstream company, ConocoPhillips. We look forward to seeing you on May 9^th.

Sincerely,

LOGO

J. J. Mulva

Chairman of the Board, President and

Chief Executive Officer

LOGO

Ryan Lance

Designated Chairman of the Board and

Chief Executive Officer

TABLE OF CONTENTS



Notice of 2012 Annual Meeting of Stockholders			1

About the Annual Meeting			2

Corporate Governance Matters and Communications with the Board			7

Board Leadership Structure			8

Board Risk Oversight			9

Code of Business Ethics and Conduct			9

Related Party Transactions			9

Nominating Processes of the Committee on Directors’ Affairs			10

Election of Directors and Director Biographies (Proposal 1)			11

Audit & Finance Committee Report			21

Proposal to Ratify the Appointment of Ernst & Young LLP (Proposal 2)			22

Executive Compensation

Role of the Human Resources and Compensation Committee			24

Human Resources and Compensation Committee Report			25

Compensation Discussion and Analysis			26

Stock Performance Graph			42

Executive Compensation Tables			43

Executive Severance and Changes in Control			60

Advisory Approval of Executive Compensation (Proposal 3)			66

Non-Employee Director Compensation			67

Equity Compensation Plan Information			73

Stock Ownership

Holdings of Major Stockholders			75

Section 16(a) Beneficial Ownership Reporting Compliance			75

Securities Ownership of Officers and Directors			76

Stockholder Proposals (Proposals 4-8)			77

Submission of Future Stockholder Proposals			92

Available Information			92

Appendix A – Financial Information			A-1

NOTICE OF 2012 ANNUAL MEETING OF STOCKHOLDERS

Time	9:00 a.m. (CDT) on Wednesday, May 9, 2012

Place

Omni Houston Hotel at Westside

13210 Katy Freeway

Houston, Texas 77079

Items of Business

To elect Directors (page 11);

To ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for 2012 (page 22);

To provide an advisory approval of the compensation of our Named Executive Officers (page 66);

To consider and vote on five stockholder proposals (pages 77 through 91); and

To transact other business properly coming before the meeting.

Who Can Vote

You can vote if you were a stockholder of record as of March 12, 2012.

Voting by Proxy

Please submit a proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. You may submit your proxy:

- Over the Internet

- By telephone, or

- By mail.

Date of Mailing

This notice and the proxy statement are first being mailed to stockholders on or about March 28, 2012.

By Order of the Board of Directors

LOGO

Janet Langford Kelly

Corporate Secretary

About the Annual Meeting

Who is soliciting my vote?

The Board of Directors of ConocoPhillips is soliciting your vote at the 2012 Annual Meeting of ConocoPhillips’ stockholders.

How does the Board recommend that I vote my shares?

The Board’s recommendation can be found with the description of each item in this proxy statement. In summary, the Board recommends a vote:

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FOR the Board’s proposal to elect nominated Directors;

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FOR the Board’s proposal to ratify the appointment of Ernst & Young LLP as ConocoPhillips’ independent registered public accounting firm for 2012;

•

FOR the advisory approval of the compensation of the Company’s Named Executive Officers;

•

AGAINST each of the stockholder proposals.

Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board of Directors.

Who is entitled to vote?

You may vote if you were the record owner of ConocoPhillips common stock as of the close of business on March 12, 2012. Each share of common stock is entitled to one vote. As of March 12, 2012, we had 1,273,115,130 shares of common stock outstanding and entitled to vote. There is no cumulative voting.

How many votes must be present to hold the meeting?

Your shares are counted as present at the Annual Meeting if you attend the meeting and vote in person or if you properly return a proxy by Internet, telephone or mail. In order for us to hold our meeting, holders of a majority of our outstanding shares of common stock as of March 12, 2012, must be present in person or by proxy at the meeting. This is referred to as a quorum. Abstentions and broker non-votes will be counted for purposes of establishing a quorum at the meeting.

What is a broker non-vote?

If a broker does not have discretion to vote shares held in street name on a particular proposal and does not receive instructions from the beneficial owner on how to vote those shares, the broker may return the proxy card without voting on that proposal. This is known as a broker non-vote. Broker non-votes will have no effect on the vote for any matter properly introduced at the meeting.

How many votes are needed to approve each of the proposals?

Each of the director nominees and all proposals submitted require the affirmative “FOR” vote of a majority of those shares present in person or represented by proxy at the meeting and entitled to vote on the proposal.

How do I vote?

You can vote either in person at the meeting or by proxy without attending the meeting.

This proxy statement, the accompanying proxy card and the Company’s 2011 Summary Annual Report to Stockholders are being made available to the Company’s stockholders on the Internet at www.proxyvote.com through the notice and access process. The year 2011 consolidated financial statements and auditors’ report, management’s discussion and analysis of financial condition and results of operations, information concerning the quarterly financial data for the past two fiscal years, and other information are provided in Appendix A to this proxy statement.

To vote by proxy, you must do one of the following:

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Vote over the Internet (instructions are on the proxy card);

•

Vote by telephone (instructions are on the proxy card); or

•

If you elected to receive a hard copy of your proxy materials, fill out the enclosed proxy card, date and sign it, and return it in the enclosed postage-paid envelope.

If you hold your ConocoPhillips stock in a brokerage account (that is, in “street name”), your ability to vote by telephone or over the Internet depends on your broker’s voting process. Please follow the directions on your proxy card or voter instruction form carefully.

Even if you plan to attend the meeting, we encourage you to vote your shares by proxy. If you plan to vote in person at the Annual Meeting and you hold your ConocoPhillips stock in street name, you must obtain a proxy from your broker and bring that proxy to the meeting.

How do I vote if I hold my stock through ConocoPhillips’ employee benefit plans?

If you hold your stock through ConocoPhillips’ employee benefit plans, you must either:

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Vote over the Internet (instructions are in the email sent to you or on the notice and access form);

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Vote by telephone (instructions are on the notice and access form); or

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If you received a hard copy of your proxy materials, fill out the enclosed voting instruction form, date and sign it, and return it in the enclosed postage-paid envelope.

You will receive a separate voting instruction form for each employee benefit plan in which you have an interest. Please pay close attention to the deadline for returning your voting instruction form to the plan trustee. The voting deadline for each plan is set forth on the voting instruction form. Please note that different plans may have different deadlines.

Can I change my vote?

Yes. You can change or revoke your vote at any time before the polls close at the Annual Meeting. You can do this by:

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Voting again by telephone or over the Internet prior to 11:59 p.m. Eastern Daylight Time on May 8, 2012;

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Signing another proxy card with a later date and returning it to us prior to the meeting;

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Sending our Corporate Secretary a written document revoking your earlier proxy; or

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Voting again at the meeting.

Who counts the votes?

We have hired Broadridge Financial Solutions, Inc. to count the votes represented by proxies and cast by ballot, and Jim Gaughan of Carl T. Hagberg and Associates has been appointed to act as Inspector of Election.

Will my shares be voted if I don’t provide my proxy and don’t attend the Annual Meeting?

If you do not provide a proxy or vote your shares held in your name, your shares will not be voted.

If you hold your shares in street name, your broker may be able to vote your shares for certain “routine” matters even if you do not provide the broker with voting instructions. Only the ratification of Ernst & Young LLP as our independent registered public accounting firm for 2012 is considered to be a routine matter.

If you do not give your broker instructions on how to vote your shares the broker will return the proxy card without voting on proposals not considered “routine.” This is a broker non-vote. Without instructions from you, the broker may not vote on any proposals other than the ratification of Ernst & Young LLP as our independent registered public accounting firm for 2012.

As more fully described on your proxy card, if you hold your shares through certain ConocoPhillips employee benefit plans and do not vote your shares, your shares (along with all other shares in the plan for which votes are not cast) may be voted pro rata by the trustee in accordance with the votes directed by other participants in the plan who elect to act as a fiduciary entitled to direct the trustee of the applicable plan on how to vote the shares.

How are votes counted?

For all proposals, you may vote “FOR,” “AGAINST,” or “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote “AGAINST.”

What if I return my proxy but don’t vote for some of the matters listed on my proxy card?

If you return a signed proxy card without indicating your vote, your shares will be voted “FOR” the director nominees listed on the card, “FOR” the ratification of Ernst & Young LLP as ConocoPhillips’ independent registered public accounting firm, “FOR” the approval of the compensation of our Named Executive Officers, and “AGAINST” each of the stockholder proposals.

Could other matters be decided at the Annual Meeting?

We are not aware of any other matters to be presented at the meeting. If any matters are properly brought before the Annual Meeting, the persons named in your proxies will vote in accordance with their best judgment. Discretionary authority to vote on other matters is included in the proxy.

Who can attend the meeting?

The Annual Meeting is open to all holders of ConocoPhillips common stock. Each stockholder is permitted to bring one guest. No cameras, recording equipment, large bags, briefcases or packages will be permitted in the Annual Meeting, and security measures will be in effect to provide for the safety of attendees.

Do I need a ticket to attend the Annual Meeting?

Yes, you will need an admission ticket or proof of ownership of ConocoPhillips stock to enter the meeting. If your shares are registered in your name, you will find an admission ticket attached to the proxy card sent to you. If your shares are in the name of your broker or bank or you received your materials electronically, you will need to bring evidence of your stock ownership, such as your most recent brokerage statement. All stockholders will be required to present valid picture identification. IF YOU DO NOT HAVE VALID PICTURE IDENTIFICATION AND EITHER AN ADMISSION TICKET OR PROOF THAT YOU OWN CONOCOPHILLIPS STOCK, YOU MAY NOT BE ADMITTED INTO THE MEETING.

How can I access ConocoPhillips’ proxy materials and annual report electronically?

This proxy statement, the accompanying proxy card and the Company’s 2011 Summary Annual Report are being made available to the Company’s stockholders on the Internet at www.proxyvote.com through the notice and access process. Most stockholders can elect to view future proxy statements and annual reports over the Internet instead of receiving paper copies in the mail.

If you own ConocoPhillips stock in your name, you can choose this option and save us the cost of producing and mailing these documents by checking the box for electronic delivery on your proxy card, or by following the instructions provided when you vote by telephone or over the Internet. If you hold your ConocoPhillips stock through a bank, broker or other holder of record, please refer to the information provided by that entity for instructions on how to elect to view future proxy statements and annual reports over the Internet.

If you choose to view future proxy statements and annual reports over the Internet, you will receive a Notice of Internet Availability next year containing the Internet address to use to access our proxy statement and annual report. Your choice will remain in effect unless you change your election following the receipt of a Notice of Internet Availability. You do not have to elect Internet access each year. If you later change your mind and would like to receive paper copies of our proxy statements and annual reports, you can request both by phone at (800) 579-1639, by email at sendmaterial@proxyvote.com and through the Internet at www.proxyvote.com. You will need your 12 digit control number located on your Notice of Internet Availability to request a package. You will also be provided with the opportunity to receive a copy of the proxy statement and annual report in future mailings.

Will my vote be kept confidential?

The Company’s Board of Directors has a policy that all stockholder proxies, ballots, and tabulations that identify stockholders are to be maintained in confidence. No such document will be available for examination, and the identity and vote of any stockholder will not be disclosed, except as necessary to meet legal requirements and allow the inspectors of election to certify the results of the stockholder vote. The policy also provides that inspectors of election for stockholder votes must be independent and cannot be employees of the Company. Occasionally, stockholders provide written comments on their proxy card that may be forwarded to management.

What is the cost of this proxy solicitation?

Our Board of Directors has sent you this proxy statement. Our directors, officers and employees may solicit proxies by mail, by email, by telephone or in person. Those persons will receive no additional compensation for any solicitation activities. We will request banking institutions, brokerage firms, custodians, trustees, nominees and fiduciaries to forward solicitation materials to the beneficial owners of common stock held of record by those entities, and we will, upon the request of those record holders, reimburse reasonable forwarding expenses. We will pay the costs of preparing, printing, assembling and mailing the proxy materials used in the solicitation of proxies. In addition, we have hired Alliance Advisors to assist us in soliciting proxies, which it may do by telephone or in person. We anticipate paying Alliance Advisors a fee of $12,000, plus expenses.

Why did my household receive a single set of proxy materials?

Securities and Exchange Commission (SEC) rules permit us to deliver a single copy of an annual report and proxy statement to any household not participating in electronic proxy material delivery at which two or more stockholders reside, if we believe the stockholders are members of the same family. This benefits both you and the Company, as it eliminates duplicate mailings that stockholders living at the same address receive and it reduces our printing and mailing costs. This rule applies to any annual reports, proxy statements, proxy statements combined with a prospectus or information statements. Each stockholder will continue to receive a separate proxy card or voting instruction card. Your household may have received a single set of proxy materials this year. If you prefer to receive your own copy now or in future years, please request a duplicate set by phone at (800) 579-1639, through the Internet at www.proxyvote.com, by email at sendmaterial@proxyvote.com, or by writing to ConocoPhillips, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If a broker or other nominee holds your shares, you may continue to receive some duplicate mailings. Certain brokers will eliminate duplicate account mailings by allowing stockholders to consent to such elimination, or through implied consent if a stockholder does not request continuation of duplicate mailings. Since not all brokers and nominees may offer stockholders the opportunity this year to eliminate duplicate mailings, you may need to contact your broker or nominee directly to discontinue duplicate mailings to your household.

Corporate Governance Matters and Communications with the Board

The Committee on Directors’ Affairs and our Board annually review the Company’s governance structure to take into account changes in SEC and New York Stock Exchange (NYSE) rules, as well as current best practices. Our Corporate Governance Guidelines, posted on the Company’s Internet site under the “Governance” caption and available in print upon request (see “Available Information” on page 92), address the following matters, among others: director qualifications, director responsibilities, Board committees, director access to officers, employees and independent advisors, director compensation, Board performance evaluations, director orientation and continuing education, and Chief Executive Officer (CEO) evaluation and succession planning.

The Corporate Governance Guidelines also contain director independence standards, which are consistent with the standards set forth in the NYSE listing standards, to assist the Board in determining the independence of the Company’s directors. The Board has determined that each director, except Mr. Mulva, meets the standards regarding independence set forth in the Corporate Governance Guidelines and is free of any material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). In making such determination, the Board specifically considered the fact that many of our directors are directors, retired officers and stockholders of companies with which we conduct business. In addition, some of our directors serve as employees of, or consultants to, companies which do business with ConocoPhillips and its affiliates (as further described in “Related Party Transactions” on page 9). Finally, some of our directors may purchase retail products (such as gasoline, fuel additives or lubricants) from the Company. In all cases, it was determined that the nature of the business conducted and the interest of the director by virtue of such position were immaterial both to the Company and to such director.

The Board of Directors maintains a process for stockholders and interested parties to communicate with the Board. Stockholders and interested parties may write or call our Board of Directors by contacting our Corporate Secretary, Janet Langford Kelly, as provided below:

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Mailing Address: Corporate Secretary ConocoPhillips P.O. Box 4783 Houston, TX 77210-4783

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Phone Number: (281) 293-3075

Relevant communications are distributed to the Board or to any individual director or directors, as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, the Board has requested that certain items that are unrelated to its duties and responsibilities be excluded, such as: business solicitations or advertisements; junk mail and mass mailings; new product suggestions; product complaints; product inquiries; resumes and other forms of job inquiries; spam; and surveys. In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will be excluded. Any communication that is filtered out is made available to any outside director upon request.

Recognizing that director attendance at the Company’s Annual Meeting can provide the Company’s stockholders with an opportunity to communicate with Board members about issues affecting the Company, the Company actively encourages its directors to attend the Annual Meeting of Stockholders. In 2011, all of the Company’s directors, other than Mr. Shackouls who retired from the Board in 2011, attended the Annual Meeting.

Board Leadership Structure

Chairman and CEO Roles

ConocoPhillips is focused on the Company’s corporate governance practices and values independent board oversight as an essential component of strong corporate performance to enhance stockholder value. Our commitment to independent oversight is demonstrated by the fact that all of our directors, except Mr. Mulva, are independent. In addition, all members of the Audit and Finance Committee, Committee on Directors’ Affairs, Human Resources and Compensation Committee and Public Policy Committee are independent.

While the Board retains the authority to separate the positions of Chairman and CEO if it deems appropriate in the future, the Board currently believes it is in the best interests of the Company’s stockholders to combine them. Doing so places one person in a position to guide the Board in setting priorities for the Company and in addressing the risks and challenges the Company faces. The Board believes that, while its independent directors bring a diversity of skills and perspectives to the Board, the Company’s CEO, by virtue of his day-to-day involvement in managing the Company, is best suited to perform this unified role.

The Board believes there is no single organizational model that is the best and most effective in all circumstances. As a consequence, the Board periodically considers whether the offices of Chairman and CEO should be combined and who should serve in such capacities. The Board specifically considered whether the offices of Chairman and CEO should be combined following the repositioning and concluded doing so continues to be in the best interests of the Company and its stockholders. The Board will continue to reexamine its corporate governance policies and leadership structures on an ongoing basis to ensure that they continue to meet the Company’s needs.

Independent Director Leadership

The Board believes that its current structure and processes encourage its independent directors to be actively involved in guiding the work of the Board. The Chairs of the Board’s Committees establish their agendas and review their committee materials in advance, communicating directly with other directors and members of management as each deems appropriate. Moreover, each director is free to suggest agenda items and to raise matters at Board and Committee meetings that are not on the agenda.

Our Corporate Governance Guidelines require that the independent directors meet in executive session at every meeting. As Chairman of the Committee on Directors Affairs, Mr. Auchinleck presides at executive sessions of the independent directors. Each executive session may include, among other things, (1) a discussion of the performance of the Chairman and the Chief Executive Officer, (2) matters concerning the relationship of the Board with the management directors and other members of senior management, and (3) such other matters as the non-employee directors deem appropriate. No formal action of the Board is taken at these meetings, although the non-employee directors may subsequently recommend matters for consideration by the full Board. The Board may invite guest attendees for the purpose of making presentations, responding to questions by the directors, or providing counsel on specific matters within their areas of expertise. In addition to chairing the executive sessions, Mr. Auchinleck leads the discussion with our CEO following the independent directors’ executive sessions, participates in the discussion of CEO performance with the Human Resources and Compensation Committee, and ensures that the Board’s self-assessments are done annually.

Each year, the Board completes a self-evaluation and Mr. Auchinleck discusses the results of the self-evaluation with the full Board and, individually, with each director. This allows for direct feedback by independent directors and enables Mr. Auchinleck to speak on their behalf in conversations with management about the Board’s role and informational needs. Mr. Auchinleck is also available to meet during the year with individual directors about any other areas of interest or concern they may have.

Board Risk Oversight

While the Company’s management is responsible for the day-to-day management of risks to the Company, the Board has broad oversight responsibility for the Company’s risk management programs. In this oversight role, the Board is responsible for satisfying itself that the risk management processes designed and implemented by the Company’s management are functioning as intended, and that necessary steps are taken to foster a culture of risk-adjusted decision-making throughout the organization. In carrying out its oversight responsibility, the Board has delegated to individual Board Committees certain elements of its oversight function. In this context, the Board delegated authority to the Audit and Finance Committee to facilitate coordination among the Board’s Committees with respect to oversight of the Company’s risk management programs. As part of this authority, the Audit and Finance Committee regularly discusses the Company’s risk assessment and risk management policies to ensure that our risk management programs are functioning properly. Additionally, the Chairman of the Audit and Finance Committee meets with the Chairs of the other Board Committees each year to discuss the Board’s oversight of the Company’s risk management programs. The Board receives regular updates from its Committees on individual areas of risk, such as updates on financial risks from the Audit and Finance Committee, health, safety and environmental risks from the Public Policy Committee and compensation program risks from the Human Resources and Compensation Committee. The Board exercises its oversight function with respect to all material risks to the Company, which are identified and discussed in the Company’s public filings with the SEC.

Code of Business Ethics and Conduct

ConocoPhillips has adopted a worldwide Code of Business Ethics and Conduct for Directors and Employees designed to help directors and employees resolve ethical issues in an increasingly complex global business environment. Our Code of Business Ethics and Conduct applies to all directors and employees, including the CEO and the Chief Financial Officer. Our Code of Business Ethics and Conduct covers topics including, but not limited to, conflicts of interest, insider trading, competition and fair dealing, discrimination and harassment, confidentiality, payments to government personnel, anti-boycott laws, U.S. embargos and sanctions, compliance procedures and employee complaint procedures. Our Code of Business Ethics and Conduct is posted on our Internet site under the “Governance” caption. Stockholders may also request printed copies of our Code of Business Ethics and Conduct by following the instructions located under the caption “Available Information” on page 92.

Related Party Transactions

Our Code of Business Ethics and Conduct requires that all directors and executive officers promptly bring to the attention of the General Counsel and, in the case of directors, the Chairman of the Committee on Directors’ Affairs or, in the case of executive officers, the Chairman of the Audit and Finance Committee, any transaction or relationship that arises and of which she or he becomes aware that reasonably could be expected to constitute a related party transaction. Any such transaction or relationship is reviewed by the Company’s management and the appropriate Board Committee to ensure that it does not constitute a conflict of interest and is reported appropriately. Additionally, the Committee on Directors’ Affairs conducts an annual review of related party transactions between each of our directors and the Company (and its subsidiaries) and makes recommendations to the Board

regarding the continued independence of each board member. In 2011, there were no related party transactions in which the Company (or a subsidiary) was a participant and in which any director or executive officer (or their immediate family members) had a direct or indirect material interest. The Committee on Directors’ Affairs also considered relationships which, while not constituting related party transactions where a director had a direct or indirect material interest, nonetheless involved transactions between the Company and a company with which a director is affiliated, whether through employment status or by virtue of serving as director. Included in its review were ordinary course of business transactions with companies employing a director, including ordinary course of business transactions with The McGraw-Hill Companies, of which Mr. McGraw serves as Chairman, President and Chief Executive Officer, and Lowe’s Companies, Inc., of which Mr. Niblock serves as Chairman of the Board and Chief Executive Officer. The Committee determined that there were no transactions impairing the independence of any director.

Nominating Processes of the Committee on Directors’ Affairs

The Committee on Directors’ Affairs (the “Committee”) comprises four non-employee directors, all of whom are independent under NYSE listing standards and our Corporate Governance Guidelines. The Committee identifies, investigates and recommends director candidates to the Board with the goal of creating balance of knowledge, experience and diversity. Generally, the Committee identifies candidates through business and organizational contacts of the directors and management. Our By-Laws permit stockholders to nominate candidates for director election at a stockholders meeting whether or not such nominee is submitted to and evaluated by the Committee on Directors’ Affairs. Stockholders who wish to submit nominees for election at an annual or special meeting of stockholders should follow the procedures described on page 92. The Committee will consider director candidates recommended by stockholders. If a stockholder wishes to recommend a candidate for nomination by the Committee, he or she should follow the same procedures set forth above for nominations to be made directly by the stockholder. In addition, the stockholder should provide such other information as it may deem relevant to the Committee’s evaluation. Candidates recommended by the Company’s stockholders are evaluated on the same basis as candidates recommended by the Company’s directors, CEO, other executive officers, third-party search firms or other sources.

Election of Directors and Director Biographies

(Proposal 1 on the Proxy Card)

What am I voting on?

You are voting on a proposal to elect nominees to a one-year term as directors of the Company.

What will happen if the repositioning occurs prior to the Annual Meeting?

It is expected that the repositioning of the Company into a pure-play upstream company, ConocoPhillips, and a downstream company, Phillips 66, will occur prior to the 2012 Annual Meeting. Upon completion of the repositioning, Mr. Mulva intends to retire as Chairman, President and CEO, Messrs. Duberstein, McGraw and Mulva and Mmes. Harkin, Tschinkel and Turner will retire as directors and Mr. McGraw and Ms. Tschinkel will join the Board of Phillips 66. The nominations of these directors will only be put to a vote of stockholders if the repositioning has not occurred prior to the Annual Meeting. Mr. Lance’s nomination is contingent upon completion of the repositioning and will only be put to a vote of stockholders if the repositioning has occurred prior to the Annual Meeting. In the event the repositioning does not occur prior to the Annual Meeting, Messrs. Duberstein, McGraw and Mulva and Mmes. Harkin, Tschinkel and Turner, if elected, will continue to serve as directors and will resign at such time as the repositioning is complete.

What is the makeup of the Board of Directors and how often are the members elected?

Our Board of Directors currently has 14 members. Upon completion of the repositioning, the size of the Board is expected to be reduced to 9 members, with Messrs. Duberstein, McGraw and Mulva and Mmes. Harkin, Tschinkel and Turner retiring and Mr. Lance joining the Board. Directors are elected at the Annual Meeting of Stockholders every year. Any director vacancies created between annual stockholder meetings (such as by a current director’s death, resignation or removal for cause or an increase in the number of directors) may be filled by a majority vote of the remaining directors then in office. Any director appointed in this manner would hold office until the next election. If a vacancy resulted from an action of our stockholders, only our stockholders are entitled to elect a successor. Under the Company’s Corporate Governance Guidelines, each director is required to retire at the next annual stockholders’ meeting of the Company following his or her 72^nd birthday. In 2012, to aid in the transition following the repositioning, the Board waived this requirement with respect to Mr. Reilly. If elected, Mr. Reilly will serve an additional one year term.

What if a nominee is unable or unwilling to serve?

That is not expected to occur. If it does and the Board does not elect to reduce the size of the Board, shares represented by proxies will be voted for a substitute nominated by the Board of Directors.

How are directors compensated?

Please see our discussion of director compensation beginning on page 67.

How often did the Board meet in 2011?

The Board of Directors met ten times in 2011. Each director attended at least 75 percent of the aggregate of:

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the total number of meetings of the Board (held during the period for which she or he has been a director); and

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the total number of full-committee meetings held by all Committees of the Board on which she or he served (during the periods that she or he served).

Do the Board committees have written charters?

Yes. The charters for our Audit and Finance Committee, Executive Committee, Human Resources and Compensation Committee, Committee on Directors’ Affairs and Public Policy Committee can be found on ConocoPhillips’ Web site at www.conocophillips.com under the “Governance” caption (accessed through the “Investor Relations” link). Stockholders may also request printed copies of our Board Committee charters by following the instructions located under the caption “Available Information” on page 92.

What are the Committees of the Board?


Committee	Members		Principal Functions	Number of Meetings in 2011
Audit and Finance	James E. Copeland, Jr.* Mohd H. Marican Robert A. Niblock Harald J. Norvik Victoria J. Tschinkel	•	Discusses with management, the independent auditors, and the internal auditors the integrity of the Company’s accounting policies, internal controls, financial statements, financial reporting practices, and select financial matters, covering the Company’s capital structure, complex financial transactions, financial risk management, retirement plans and tax planning.		13
		•	Reviews significant corporate risk exposures and steps management has taken to monitor, control and report such exposures.
		•	Monitors the qualifications, independence and performance of our independent auditors and internal auditors.
		•	Monitors our compliance with legal and regulatory requirements and corporate governance, including our Code of Business Ethics and Conduct.
		•	Maintains open and direct lines of communication with the Board and our management, internal auditors and independent auditors.
Executive	James J. Mulva* Richard H. Auchinleck James E. Copeland, Jr. Ruth R. Harkin William E. Wade, Jr.	•	Exercises the authority of the full Board between Board meetings on all matters other than (1) those matters expressly delegated to another committee of the Board, (2) the adoption, amendment or repeal of any of our By-Laws and (3) matters which cannot be delegated to a committee under statute or our Certificate of Incorporation or By-Laws.		—
Human Resources and Compensation	William E. Wade, Jr.* Harold W. McGraw III Kathryn C. Turner	•	Oversees our executive compensation policies, plans, programs and practices.		11
Human Resources and Compensation		•	Assists the Board in discharging its responsibilities relating to the fair and competitive compensation of our executives and other key employees.
		•	Annually reviews the performance (together with the Directors’ Affairs Committee) and sets the compensation of the CEO.
Directors’ Affairs	Richard H. Auchinleck* Richard L. Armitage Harold W. McGraw III Kathryn C. Turner	•	Selects and recommends director candidates to the Board to be submitted for election at the Annual Meeting and to fill any vacancies on the Board.		6
Directors’ Affairs		•	Recommends committee assignments to the Board.
		•	Reviews and recommends to the Board compensation and benefits policies for our non-management directors.
		•	Reviews and recommends to the Board appropriate corporate governance policies and procedures for our Company.
		•	Conducts an annual assessment of the qualifications and performance of the Board.
		•	Reviews and reports to the Board annually on the performance of, and succession planning for, the CEO.
		•	Together with the Human Resources and Compensation Committee, annually reviews the performance of the CEO.
Public Policy	Ruth R. Harkin* Kenneth M. Duberstein William K. Reilly	•	Advises the Board on current and emerging domestic and international public policy issues.		6
	Ruth R. Harkin* Kenneth M. Duberstein William K. Reilly	•	Assists the Board in the development and review of policies and budgets for charitable and political contributions.

*	Committee Chairperson

What criteria were considered by the Committee on Directors’ Affairs in selecting the nominees?

In selecting the 2012 nominees for director, the Committee on Directors’ Affairs sought candidates who possess the highest personal and professional ethics, integrity and values, and are committed to representing the long-term interests of the Company’s stockholders. In addition to reviewing a candidate’s background and accomplishments, the Committee reviewed candidates for director in the context of the current composition of the Board and the evolving needs of the Company’s businesses. The Committee also considered the number of boards on which the candidate already serves. It is the Board’s policy that at all times at least a substantial majority of its members meets the standards of independence promulgated by the NYSE and the SEC, and as set forth in the Company’s Corporate Governance Guidelines. The Committee also seeks to ensure that the Board reflects a range of talents, ages, skills, diversity, and expertise, particularly in the areas of accounting and finance, management, domestic and international markets, leadership, and oil and gas related industries, sufficient to provide sound and prudent guidance with respect to the Company’s operations and interests. The Board seeks to maintain a diverse membership, but does not have a separate policy on diversity. The Board also requires that its members be able to dedicate the time and resources necessary to ensure the diligent performance of their duties on the Company’s behalf, including attending Board and applicable committee meetings.

The following are some of the key qualifications and skills the Committee on Directors’ Affairs considered in evaluating the director nominees. The individual biographies below provide additional information about each nominee’s specific experiences, qualifications and skills.

CEO experience. We believe that directors with experience as CEO of public corporations provide the Company with valuable insights. These individuals have a demonstrated record of leadership qualities and a practical understanding of organizations, processes, strategy, risk and risk management and the methods to drive change and growth. Through their service as top leaders at other organizations, they also bring valuable perspective on common issues affecting both their company and ConocoPhillips.

Financial reporting experience. We believe that an understanding of finance and financial reporting processes is important for our directors. The Company measures its operating and strategic performance by reference to financial targets. In addition, accurate financial reporting and robust auditing are critical to the Company’s success. We seek to have a number of directors who qualify as audit committee financial experts, and we expect all of our directors to be financially knowledgeable.

Industry experience. We seek to have directors with experience as executives or directors or in other leadership positions in the energy industry. These directors have valuable perspective on issues specific to the Company’s business.

Global experience. As a global, integrated energy company, the Company’s future success depends, in part, on its success in growing its businesses outside the United States. Our directors with global business or international experience provide valued perspective on our operations.

Environmental experience. The perspective of directors who have experience within the environmental regulatory field is valued as we implement policies and conduct operations in order to ensure that our actions today will not only provide the energy needed to drive economic growth and social well-being, but also secure a stable and healthy environment for tomorrow.

Who are this year’s nominees?

The following directors are standing for annual election this year to hold office until the 2013 Annual Meeting of Stockholders. It is expected that the repositioning of the Company into a pure-play upstream company, ConocoPhillips, and a downstream company, Phillips 66, will occur prior to the 2012 Annual Meeting. Upon completion of the repositioning, Mr. Mulva intends to retire as Chairman, President and CEO, Messrs. Duberstein, McGraw and Mulva and Mmes. Harkin, Tschinkel and Turner will retire as directors and Mr. McGraw and Ms. Tschinkel will join the Board of Phillips 66. The nominations of these directors will only be put to a vote of stockholders if the repositioning has not occurred prior to the Annual Meeting. Mr. Lance’s nomination is contingent upon completion of the repositioning and will only be put to a vote of stockholders if the repositioning has occurred prior to the Annual Meeting. In the event the repositioning does not occur prior to the Annual Meeting, Messrs. Duberstein, McGraw and Mulva and Mmes. Harkin, Tschinkel and Turner, if elected, will continue to serve as directors and will resign at such time as the repositioning is complete. Included below is a listing of each nominee’s name, age, tenure and qualifications.


		Richard L. Armitage, 66, Director since March 2006 Mr. Armitage has served as President of Armitage International since March 2005. He is a former U.S. Deputy Secretary of State and held a wide variety of high ranking U.S. diplomatic positions from 1989 to 1993 including: Special Mediator for Water in the Middle East; Special Emissary to King Hussein of Jordan during the 1991 Gulf War; and Ambassador, directing U.S. assistance to the newly independent states of the former Soviet Union. He served as Assistant U.S. Secretary of Defense for International Security Affairs from 1983 to 1989. He serves on the boards of ManTech International Corporation and Transcu, Ltd. Skills and Qualifications: Mr. Armitage’s experience in a wide range of high ranking diplomatic positions makes him uniquely qualified to provide valuable insight and expertise in the context of the Company’s global operations with substantial governmental interface. Mr. Armitage has specific expertise in many of the Company’s key operating regions. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Richard H. Auchinleck, 60, Director since August 2002 Mr. Auchinleck began his service as a director of Conoco Inc. in 2001 prior to its merger with Phillips Petroleum Company in 2002. He served as President and Chief Executive Officer of Gulf Canada Resources Limited from 1998 until its acquisition by Conoco in 2001. Prior to his service as CEO, he was Chief Operating Officer of Gulf Canada from 1997 to 1998 and Chief Executive Officer for Gulf Indonesia Resources Limited from 1997 to 1998. Mr. Auchinleck currently serves on the boards of Enbridge Commercial Trust and Telus Corporation and previously served on the board of Red Mile Entertainment Inc. from 2005 to 2008. Skills and Qualifications: Mr. Auchinleck has served as a director of ConocoPhillips and its predecessors since Gulf Canada Resources was acquired by Conoco in 2001. His extensive experience in the industry and as a CEO of an energy company provides him with valuable insights into the Company’s business. In addition, Mr. Auchinleck has extensive industry experience in Canada, the location of many key Company assets and operations. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.


		James E. Copeland, Jr., 67, Director since February 2004 Mr. Copeland served as Chief Executive Officer of Deloitte & Touche and Deloitte Touche Tohmatsu from 1999 to 2003. Mr. Copeland formerly served as Senior Fellow for Corporate Governance with the U.S. Chamber of Commerce and as a Global Scholar with the Robinson School of Business at Georgia State University. Mr. Copeland is currently a member of the boards of Equifax Inc. and Time Warner Cable Inc. and previously served on the board of Coca Cola Enterprises from 2003 to 2008. Skills and Qualifications: As the former CEO of one of the “Big Four” accounting firms, Mr. Copeland provides a wealth of financial and accounting expertise. In addition, Mr. Copeland’s experience as a CEO at a large, global corporation allows him to provide valuable insights on managing a global business. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Kenneth M. Duberstein, 67, Director since August 2002 Mr. Duberstein began his service as a director of Conoco Inc. in 2000 prior to its merger with Phillips Petroleum Company in 2002. He has served since 1989 as Chairman and Chief Executive Officer of the Duberstein Group, a strategic planning and consulting company. Prior to this, Mr. Duberstein was the White House Chief of Staff from 1988 to 1989 and Deputy Chief of Staff in 1987 to President Ronald Reagan. Mr. Duberstein currently serves on the boards of Dell Inc., The Boeing Company, Mack-Cali Realty Corporation, and The Travelers Companies, Inc. Mr. Duberstein’s nomination will be put to a vote at the Annual Meeting only if the repositioning has not occurred prior to May 9, 2012. Upon completion of the repositioning, Mr. Duberstein will resign as a director of ConocoPhillips. Skills and Qualifications: Mr. Duberstein’s extensive experience, including serving as White House Chief of Staff, allows him to provide valuable expertise on governmental matters, particularly in the United States. Mr. Duberstein has extensive global and domestic strategic advisory experience which allows him to provide valuable insights into the Company’s global strategic plans. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Ruth R. Harkin, 67, Director since August 2002 Ms. Harkin began her service as a director of Conoco Inc. in 1998 prior to its merger with Phillips Petroleum Company in 2002. Ms. Harkin served as Senior Vice President, International Affairs and Government Relations of United Technologies Corporation (UTC) and was Chair of United Technologies International, UTC’s international representation arm, from June 1997 to February 2005. She also is a former President and Chief Executive Officer of the Overseas Private Investment Corporation. Ms. Harkin currently serves on the board of AbitibiBowater Inc. She previously served on the Board of Bowater Incorporated from 2005 to 2007. She is a member of the Board of Regents of the State of Iowa. Ms. Harkin’s nomination will be put to a vote at the Annual Meeting only if the repositioning has not occurred prior to May 9, 2012. Upon completion of the repositioning, Ms. Harkin will resign as a director of ConocoPhillips. Skills and Qualifications: Ms. Harkin’s extensive experience in advising international corporations on foreign investments and government affairs provides the Company with valuable insight applicable to its global operations. The Board believes her experience and expertise in these matters make her well qualified to serve as a member of the Board.


		Ryan M. Lance, 49, Senior Vice President, Exploration & Production—International Mr. Lance will become Chairman, President and CEO of ConocoPhillips following the repositioning. He was appointed to his current position of Senior Vice President, Exploration and Production—International, in May 2009. Prior to that, he served as President, Exploration and Production—Asia, Africa, Middle East and Russia/Caspian since April 2009; President, Exploration and Production—Europe, Asia, Africa and the Middle East from 2007 to 2009; Senior Vice President, Technology in 2007; and Senior Vice President, Technology and Major Projects since 2006. Mr. Lance’s nomination will be put to a vote at the Annual Meeting only if the repositioning has occurred prior to May 9, 2012. Skills and Qualifications: Mr. Lance’s future service as President and CEO of ConocoPhillips makes him well qualified to serve both as a director and Chairman of the Board following the repositioning. Mr. Lance’s extensive experience in the industry as an executive in our exploration and production businesses, and as the global representative of ConocoPhillips will make his service as a director invaluable to the Company. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Mohd H. Marican, 59, Director since December 2011 Tan Sri Marican was the former President and Chief Executive Officer of the Malaysian national oil company, PETRONAS, from 1995 to 2010. He served as Senior Vice President of finance for PETRONAS from 1989 to 1995 and a partner in the accounting firm of Hanafiah Raslan and Mohamed (Touche Ross & Co) from 1980 to 1989. He currently serves as a director of Sembcorp Industries, Sembcorp Marine, Lambert Energy Advisory and Singapore Power. Skills and Qualifications: Tan Sri Marican’s extensive experience in the industry and as a CEO of an international energy company headquartered in the Asia Pacific region provides him with valuable insights into the Company’s businesses. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Harold W. McGraw III, 63, Director since September 2005 Mr. McGraw currently serves as Chairman, President and Chief Executive Officer of The McGraw-Hill Companies. Prior to his service as Chairman, he served as President and Chief Executive Officer of The McGraw-Hill Companies from 1998 to 2000 and President and Chief Operating Officer of The McGraw-Hill Companies from 1993 to 1998. Mr. McGraw currently serves on the boards of The McGraw-Hill Companies and United Technologies Corporation. Mr. McGraw’s nomination will be put to a vote at the Annual Meeting only if the repositioning has not occurred prior to May 9, 2012. Upon completion of the repositioning, Mr. McGraw will resign as a director of ConocoPhillips and will join the Phillips 66 Board. Skills and Qualifications: As an active CEO of a large, global public company with a significant role in the financial reporting industry, Mr. McGraw’s experience allows him to provide the Company with valuable financial and operational expertise. In addition, with experience in operations worldwide, he is well-qualified to advise the Company on its global operations. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.


		James J. Mulva, 65, Director since August 2002 Mr. Mulva is the Chairman and Chief Executive Officer of ConocoPhillips, serving in such capacities since 2004 and 2002, respectively. Mr. Mulva currently serves as President and has served in such capacity since 2011 and from 2002 through 2008. Mr. Mulva began his career over 35 years ago with Phillips Petroleum Company. Beginning in 1999 and continuing through its merger with Conoco Inc. in 2002, Mr. Mulva served as Chairman of the Board and Chief Executive Officer of Phillips Petroleum Company. He also served as a member of the Board of Phillips Petroleum Company beginning in 1994 and as the President and Chief Operating Officer of Phillips Petroleum Company from 1994 to June 1999. He currently serves on the board of General Electric Company. Mr. Mulva’s nomination will be put to a vote at the Annual Meeting only if the repositioning has not occurred prior to May 9, 2012. Upon completion of the repositioning, Mr. Mulva intends to resign as Chairman, President and Chief Executive Officer of ConocoPhillips also resigning as a director. Skills and Qualifications: Mr. Mulva’s 35+ year career, first at Phillips Petroleum and, since 2002, as CEO of ConocoPhillips, makes him uniquely and well qualified to serve both as a director and Chairman of the Board. Mr. Mulva’s extensive experience in the industry and as the global representative of ConocoPhillips makes his service as a director invaluable to the Company. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Robert A. Niblock, 49, Director since February 2010 Mr. Niblock is Chairman and Chief Executive Officer of Lowe’s Companies, Inc., a position he has held since January 2005. He also served as Lowe’s President from 2003 to 2006, and joined its board of directors when he was named Chairman and CEO-elect in 2004. Mr. Niblock joined Lowe’s in 1993 and, during his career with the company, has served as Vice President and Treasurer, Senior Vice President, and Executive Vice President and CFO. Before joining Lowe’s, Mr. Niblock had a nine-year career with accounting firm Ernst & Young. Skills and Qualifications: After an extensive search, Mr. Niblock became a member of the Board in 2010. The Committee on Directors’ Affairs valued his experience as a CEO and in financial reporting matters. Mr. Niblock’s experience as an actively-serving CEO of a large public company allows him to provide the Board with valuable operational and financial expertise. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Harald J. Norvik, 65, Director since July 2005 Mr. Norvik currently serves as Chairman of the Board of Telenor ASA. He was Chairman and a partner at Econ Management AS from 2002 to 2008 and was a strategic advisor there from 2008 to 2010. He served as Chairman, President & Chief Executive Officer of Statoil from 1988 to 1999. He currently serves on the boards of Telenor ASA and Petroleum Geo-Services ASA. Skills and Qualifications: As a former CEO of an international energy corporation, Mr. Norvik brings valuable experience and expertise in industry and operational matters. In addition, Mr. Norvik provides valuable international perspective as a citizen of Norway, a country in which the Company has significant operations. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.


		William K. Reilly, 72, Director since August 2002 Mr. Reilly began his service as a director of Conoco Inc. in 1998 prior to its merger with Phillips Petroleum Company in 2002. Since June 1999 he has served as President and Chief Executive Officer of Aqua International Partners, an investment group which finances water improvements in developing countries. He is also a Senior Advisor to TPG Capital. He was Administrator of the U.S. Environmental Protection Agency from 1989 to 1993. Mr. Reilly currently serves on the boards of E. I. du Pont de Nemours and Company and Royal Caribbean Cruises Ltd. Most recently, Mr. Reilly was appointed by President Obama as co-chair of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. Skills and Qualifications: Mr. Reilly’s extensive environmental regulatory experience with the U.S. government makes him well qualified to serve as a member of the Board. Mr. Reilly’s active role in the discussion on environmental issues allows him to provide unique and valuable perspective on matters critical to the Company’s operations. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

		Kathryn C. Turner, 64, Director since August 2002 Ms. Turner began her service as a director of Phillips Petroleum Company in 1995 prior to its merger with Conoco Inc. in 2002. Ms. Turner is currently the Chairperson and Chief Executive Officer of Standard Technology, Inc., a management technology solutions firm she founded in 1985. She currently serves on the board of Carpenter Technology Corporation and served on the board of Schering-Plough Corporation from 2001 to 2009. Ms. Turner’s nomination will be put to a vote at the Annual Meeting only if the repositioning has not occurred prior to May 9, 2012. Upon completion of the repositioning, Ms. Turner will resign as a director of ConocoPhillips. Skills and Qualifications: Ms. Turner’s experience as a CEO in the information technology field positions her to provide valuable insights on the Company’s managerial issues. Ms. Turner’s experience in the information technology field also enables her to provide valuable insights into technology and innovation, which are vital to the Company’s future success. The Board believes her experience and expertise in these matters make her well qualified to serve as a member of the Board.

		Victoria J. Tschinkel, 64, Director since August 2002 Ms. Tschinkel began her service as a director of Phillips Petroleum Company in 1993 prior to its merger with Conoco Inc. in 2002. Ms. Tschinkel served as Director of the Florida Nature Conservancy from 2003 to 2006 and was a Senior Environmental Consultant to Landers & Parsons, a Tallahassee, Florida law firm, from 1987 to 2002. Ms. Tschinkel was the Secretary of the Florida Department of Environmental Regulation from 1981 to 1987. She currently serves as Chairwoman of 1000 Friends of Florida. Ms. Tschinkel’s nomination will be put to a vote at the Annual Meeting only if the repositioning has not occurred prior to May 9, 2012. Upon completion of the repositioning, Ms. Tschinkel will resign as a director of ConocoPhillips and will join the Phillips 66 Board. Skills and Qualifications: Ms. Tschinkel’s extensive environmental regulatory experience makes her well qualified to serve as a member of the Board. In addition, her relationships and experience working within the environmental community position her to advise the Board on the impact of our operations in sensitive areas. The Board believes her experience and expertise in these matters make her well qualified to serve as a member of the Board.

William E. Wade, Jr., 69,

Director since March 2006

Mr. Wade served as a director of Burlington Resources Inc. from 2001 through the time of its acquisition by ConocoPhillips in 2006. Mr. Wade served as President of Atlantic Richfield Company from 1998 to 1999 and Executive Vice President of Atlantic Richfield Company from 1993 to 1998. Prior to this, he served in a series of management positions with Atlantic Richfield Company beginning in 1968.

Skills and Qualifications: Mr. Wade’s extensive experience in senior management within the industry and in areas of significant Company operations makes him uniquely and well qualified to serve as a member of the Board. Mr. Wade’s prior service as a director of Burlington Resources Inc. also provides him with valuable insights in the assets acquired as part of the acquisition of that company. The Board believes his experience and expertise in these matters make him well qualified to serve as a member of the Board.

What vote is required to approve this proposal?

Each nominee requires the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal.

What if a director nominee does not receive a majority of votes cast?

Our By-Laws require directors to be elected by the majority of the votes cast with respect to such director (i.e., the number of votes cast “for” a director must exceed the number of votes cast “against” that director). If a nominee who is serving as a director is not elected at the Annual Meeting and no one else is elected in place of that director, then, under Delaware law, the director would continue to serve on the Board as a “holdover director.” However, under our By-Laws, the holdover director is required to tender his or her resignation to the Board. The Committee on Directors’ Affairs then would consider the resignation and recommend to the Board whether to accept or reject the tendered resignation, or whether some other action should be taken. The Board of Directors would then make a decision whether to accept the resignation taking into account the recommendation of the Committee on Directors’ Affairs. The director who tenders his or her resignation will not participate in the Board’s decision. The Board is required to publicly disclose (by a press release, a filing with the SEC or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from the date of the certification of the election results. In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors.

What does the Board recommend?

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH NOMINEE STANDING FOR ELECTION FOR DIRECTOR.

Audit and Finance Committee Report

The Audit and Finance Committee (the “Audit Committee”) assists the Board in fulfilling its responsibility to provide independent, objective oversight for ConocoPhillips’ financial reporting functions and internal control systems. The Audit Committee currently comprises five non-employee directors. The Board has determined that the members of the Audit Committee satisfy the requirements of the NYSE as to independence, financial literacy and expertise. The Board has determined that at least one member, James E. Copeland, Jr., is an audit committee financial expert as defined by the SEC. The responsibilities of the Audit Committee are set forth in the written charter adopted by ConocoPhillips’ Board of Directors and last amended on December 2, 2009, and which is available on our Web site www.conocophillips.com under the caption “Governance.” One of the Audit Committee’s primary responsibilities is to assist the Board in its oversight of the integrity of the Company’s financial statements. The following report summarizes certain of the Committee’s activities in this regard for 2011.

Review with Management. The Audit Committee has reviewed and discussed with management the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, and management’s assessment of the effectiveness of the Company’s internal control over financial reporting, as of December 31, 2011, included therein.

Discussions with Independent Registered Public Accounting Firm. The Audit Committee has discussed with Ernst & Young LLP, independent registered public accounting firm for ConocoPhillips, the matters required to be discussed by standards of the Public Company Accounting Oversight Board. The Audit Committee has received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting Oversight Board, and has discussed with that firm its independence from ConocoPhillips.

Recommendation to the ConocoPhillips Board of Directors. Based on its review and discussions noted above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in ConocoPhillips’ Annual Report on Form 10-K for the year ended December 31, 2011.

THE CONOCOPHILLIPS AUDIT AND FINANCE COMMITTEE

James E. Copeland, Jr., Chairman

Mohd H. Marican

Robert A. Niblock

Harald J. Norvik

Victoria J. Tschinkel

Proposal to Ratify the Appointment of Ernst & Young LLP

(Item 2 on the Proxy Card)

What am I voting on?

You are voting on a proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2012. The Audit and Finance Committee has appointed Ernst & Young to serve as the Company’s independent registered public accounting firm.

What services does the independent registered public accounting firm provide?

Audit services of Ernst & Young for fiscal year 2011 included an audit of our consolidated financial statements, an audit of the effectiveness of the Company’s internal control over financial reporting, and services related to periodic filings made with the SEC. Additionally, Ernst & Young provided certain other services as described in the response to the next question. In connection with the audit of the 2011 financial statements, we entered into an engagement agreement with Ernst & Young that sets forth the terms by which Ernst & Young will perform audit services for us. That agreement is subject to alternative dispute resolution procedures.

How much was the independent registered public accounting firm paid for 2011 and 2010?

Ernst & Young’s fees for professional services totaled $23.1 million for 2011 and $19.8 million for 2010. Ernst & Young’s fees for professional services included the following:

•

Audit Services—fees for audit services, which relate to the fiscal year consolidated audit, the audit of the effectiveness of internal controls, quarterly reviews, registration statements, comfort letters, statutory and regulatory audits and accounting consultations, were $16.8 million for 2011 and $17.0 million for 2010.

•

Audit-Related Services—fees for audit-related services, which consisted of audits in connection with proposed or consummated dispositions, benefit plan audits, other subsidiary audits, special reports, and accounting consultations, were $5.0 million for 2011 and $2.0 million for 2010.

•

Tax Services—fees for tax services, consisting of tax compliance services and tax planning and advisory services, were $1.3 million for 2011 and $0.8 million for 2010.

•

Other Services—fees for other services were negligible in 2011 and 2010.

The Audit and Finance Committee has considered whether the non-audit services provided to ConocoPhillips by Ernst & Young impaired the independence of Ernst & Young and concluded they did not.

The Audit and Finance Committee has adopted a pre-approval policy that provides guidelines for the audit, audit-related, tax and other non-audit services that may be provided by Ernst & Young to the Company. The policy (a) identifies the guiding principles that must be considered by the Audit and Finance Committee in approving services to ensure that Ernst & Young’s independence is not impaired; (b) describes the audit, audit-related, tax and other services that may be provided and the non-audit services that are prohibited; and (c) sets forth pre-approval requirements for all

permitted services. Under the policy, all services to be provided by Ernst & Young must be pre-approved by the Audit and Finance Committee. The Audit and Finance Committee has delegated authority to approve permitted services to the Committee’s Chair. Such approval must be reported to the entire Committee at the next scheduled Audit and Finance Committee meeting.

Will a representative of Ernst & Young be present at the meeting?

Yes, one or more representatives of Ernst & Young will be present at the meeting. The representatives will have an opportunity to make a statement if they desire and will be available to respond to appropriate questions from the stockholders.

What vote is required to approve this proposal?

Approval of this proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the proposal. If the appointment of Ernst & Young is not ratified, the Audit and Finance Committee will reconsider the appointment.

What does the Board recommend?

THE AUDIT AND FINANCE COMMITTEE RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2012.

EXECUTIVE COMPENSATION

Role of the Human Resources and Compensation Committee

Authority and Responsibilities

The Human Resources and Compensation Committee (HRCC) of the Board of Directors of ConocoPhillips is responsible for providing independent, objective oversight for ConocoPhillips’ executive compensation programs and determining the compensation of anyone who meets our definition of a “Senior Officer.” Currently, our internal guidelines define a Senior Officer as an employee who is a senior vice president or higher, an executive who reports directly to the CEO, or any other employee considered an officer under Section 16(b) of the Securities Exchange Act of 1934. As of December 31, 2011, the Company had 19 Senior Officers. All of the officers shown in the compensation tables that follow are Senior Officers. In addition, the HRCC acts as plan administrator of the compensation programs and benefit plans for Senior Officers and as an avenue of appeal for current and former Senior Officers regarding disputes over compensation and benefits.

One of the HRCC’s responsibilities is to assist the Board in its oversight of the integrity of the Company’s “Compensation Discussion and Analysis” found starting on page 26 of this proxy statement. That report summarizes certain of the HRCC’s activities during 2011 and 2012 concerning compensation earned during 2011.

A complete listing of the authority and responsibilities of the HRCC is set forth in the written charter adopted by ConocoPhillips’ Board of Directors and last amended on December 2, 2009, which is available on our Web site www.conocophillips.com under the caption “Governance.”

Members

The HRCC currently consists of three members. The members of the HRCC and the member to be designated as Chair, like the members and Chairs of all of the Board Committees, are reviewed and recommended annually by the Committee on Directors’ Affairs to the full Board. The Board of Directors has final approval of the committee structure of the Board. The only pre-existing requirements for service on the HRCC are that members of the HRCC must meet the independence requirements for “non-employee” directors under the Securities Exchange Act of 1934, for “independent” directors under the NYSE listing standards, and for “outside” directors under the Internal Revenue Code.

Meetings

The HRCC has regularly scheduled meetings in association with each regular Board meeting and meets by teleconference between such meetings as necessary to discharge its duties. The HRCC reserves time at each regularly scheduled meeting to review matters in executive session with no members of management or management representatives present except as specifically requested by the HRCC. Additionally, the Committee meets jointly with the Committee on Directors’ Affairs at least annually to evaluate the performance of the CEO. In 2011, the HRCC had six regularly scheduled meetings and five meetings via teleconference. More information regarding the HRCC’s activities at such meetings can be found in the “Compensation Discussion and Analysis” beginning on page 26.

Continuous Improvement

The HRCC is committed to a process of continuous improvement in exercising its responsibilities. To that end, the HRCC also:

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Receives ongoing training regarding best practices for executive compensation;

•

Regularly reviews its responsibilities and governance practices in light of ongoing changes in the legal and regulatory arena and trends in corporate governance, which review is aided by the Company’s management and consultants, independent compensation consultants, and, when deemed appropriate, independent legal counsel;

•

Annually reviews its charter and proposes any desired changes to the Board of Directors;

•

Annually conducts a self-assessment of its performance that evaluates the effectiveness of the Committee’s actions and seeks ideas to improve its processes and oversight; and

•

Regularly reviews and assesses whether the Company’s executive compensation programs are having the desired effects and do not encourage an inappropriate level of risk.

Human Resources and Compensation Committee Report

Review with Management. The Human Resources and Compensation Committee (HRCC) has reviewed and discussed with management the “Compensation Discussion and Analysis” presented in this proxy statement starting on page 26. Members of management with whom the HRCC discussed the “Compensation Discussion and Analysis” included the Company’s Chief Executive Officer, Chief Financial Officer, Chief Administrative Officer, and Vice President, Human Resources.

Discussion with Independent Executive Compensation Consultant. The HRCC has discussed with Cogent Compensation Partners (“Cogent”), an independent executive compensation consulting firm, the executive compensation programs of the Company, as well as specific compensation decisions made by the HRCC. Cogent was retained directly by the HRCC, independent of the management of the Company. The HRCC has received written disclosures from Cogent confirming no other work has been performed for the Company by Cogent, has discussed with Cogent its independence from ConocoPhillips, and believes Cogent to have been independent of management.

Recommendation to the ConocoPhillips Board of Directors. Based on its review and discussions noted above, the HRCC recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in ConocoPhillips’ proxy statement on Schedule 14A (and, by reference, included in ConocoPhillips’ Annual Report on Form 10-K for the year ended December 31, 2011).

THE CONOCOPHILLIPS HUMAN RESOURCES AND COMPENSATION COMMITTEE

William E. Wade, Jr., Chairman

Harold W. McGraw III

Kathryn C. Turner

Compensation Discussion and Analysis

This Compensation Discussion and Analysis, or CD&A, explains how we compensate our Chief Executive Officer and certain other officers of ConocoPhillips (the “Named Executive Officers”). The CD&A is divided into two sections:

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2011 Executive Compensation—A Summary & Analysis (beginning on p. 26)

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ConocoPhillips Executive Compensation Program Structure (beginning on p. 30)

2011 Executive Compensation—A Summary & Analysis

Executive Summary

2011 Compensation Decisions

In 2011, the Company experienced solid operational results and successfully executed on its strategic plans. The Company also operated safely, maintaining its performance at record 2010 levels. The continued positive reception to the Company’s three-year strategic plan announced in 2010 was reflected in its 11% total shareholder return in 2011. In addition, the Company experienced operational success as demonstrated in its improvement in return and cash return on capital employed, the highest relative to its peers in 2011. The HRCC evaluated the Company’s one-year performance under the criteria utilized under the Variable Cash Incentive Program (VCIP) and determined corporate performance under such measures was 150% of target. For each of our Named Executive Officers, other than Mr. Mulva, whose award is based solely on corporate performance, the HRCC determined that the combined corporate and respective award unit performance merited base awards of between 132% and 153% of target. The HRCC also evaluated the Company’s three-year performance under the criteria utilized under the Performance Share Program (PSP) and determined corporate performance under such measures merited base awards of 165% of target. Finally, the HRCC approved individual adjustments under the VCIP and PSP programs ranging from 0% to 25% for the Named Executive Officers. This reflected the HRCC’s evaluation of the performance of Company’s management and the effectiveness with which the Company executed its long-term strategy.

2011 CEO Pay Mix

The following chart shows the mix of different elements of the CEO’s compensation in 2011, excluding changes in pension value. With 91% of Mr. Mulva’s pay coming in the form of incentive compensation, the HRCC believes the CEO’s pay structure is well aligned with the long-term interests of the Company’s stockholders.

LOGO

Analysis of 2011 Executive Compensation

The following is a discussion and analysis of the decisions of the HRCC in compensating our Named Executive Officers in 2011.

In determining performance-based compensation awards for our Named Executive Officers for performance periods concluding in 2011, the HRCC began by considering overall Company performance, including the following accomplishments and operating conditions:

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The development and implementation of a strategic plan to enhance the Company’s operating and financial position;

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120% organic reserve replacement in 2011, excluding the impact of acquisitions and dispositions;

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Achievement of barrel of oil equivalent (BOE) production and capacity utilization targets;

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Significant progress in high grading the Company’s asset portfolio while strengthening liquidity;

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Successful exploration efforts;

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Maintenance of HSE results at record 2010 levels; and

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Advancement of the Company’s succession plans.

The Committee then considered any adjustments to the awards under our three performance-based compensation programs (VCIP, Stock Option Program and PSP) in accordance with their terms and pre-established criteria, while retaining the discretion to adjust awards based solely on the Committee’s determination of appropriate payouts.

As a result, the Committee made the following award decisions under the Company’s performance-based compensation programs.

2011 VCIP Awards

In determining award payouts under VCIP for 2011, the Committee considered the following performance criteria:

-	Company Performance for 2011—In 2011, our VCIP program used both quantitative and qualitative performance measures relating to the Company as a whole, including:

Ranking 4th in relative annual total stockholder return compared with our performance-measurement peer group (ExxonMobil, Royal Dutch Shell, BP, Total, and Chevron);

Ranking 1st in percentage change and 2nd in absolute change in improvement in relative annual adjusted return on capital employed compared with the same peer group noted above;

Ranking 1st in percentage and absolute change in relative annual adjusted cash return on capital employed compared with the same peer group noted above;

Ranking 2nd in relative adjusted cash contribution per BOE compared with the same peer group noted above;

Our health, safety and environmental performance; and

Advancement and support of our key strategic initiatives and plans.

Based on such review, management recommended, and the Committee concluded, that the Company’s performance under these measures in 2011 merited award of 150% of the targeted amount. This compared with VCIP corporate award performance of 180% in 2010, 111% in 2009, 70% in 2008, 140% in 2007 and 142% in 2006.

Business Unit Performance in 2011—In determining award unit performance, management’s determinations of performance by the Company’s award units under their performance criteria were reviewed and approved by the Committee. Each executive’s award was tied to the operational or staff award unit over which they had responsibility weighted to reflect their time of service within such unit. The Committee determined that the combined corporate and award unit performance merited base awards of between 132% and 153% of target for each of our Named Executive Officers, other than Mr. Mulva. As noted under “Business Unit Performance Criteria” beginning on page 39, Mr. Mulva’s award, as CEO, is based on individual and overall Company performance.

Individual Performance Adjustments—Finally, the Committee considered individual adjustments for each Named Executive Officer’s 2011 VCIP award based upon a subjective review of the individual’s impact on the Company’s financial and operational success during the year. The Committee considered the totality of the executive’s performance in deciding the individual adjustments. Based on the foregoing, the Committee approved individual performance adjustments of between 0% and 25% for each of our Named Executive Officers. The individual adjustments for these officers reflect the Committee’s recognition of these individuals’ contributions to the strong 2011 operational performance of their respective operating or staff units.

Stock Option Awards

Although the Committee retains discretion to adjust stock option awards by up to 30 percent from the specified target, the Committee did not elect to exercise such discretion with respect to the Stock Option Awards granted in February 2011.

PSP Awards (2009-2011 Performance Period)

In December 2008, the Committee established the seventh performance period under the PSP, for the three-year period beginning January 1, 2009, and ending December 31, 2011 (PSP VII). In February 2012, in determining awards under the PSP for this period, the Committee considered quantitative and qualitative performance measures relating to the Company as a whole, including:

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Ranking 3rd in relative total stockholder return compared with our performance-measurement peer group (ExxonMobil, Royal Dutch Shell, BP, Total, and Chevron), with only a 0.3% return separating the top three performers in this group;

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Ranking 5th in relative annual adjusted return on capital employed compared with the same peer group noted above;

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Ranking 2nd in percentage change and absolute change in improvement in relative annual adjusted return on capital employed compared with the same peer group noted above;

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Ranking 2nd in relative adjusted cash contribution per BOE compared with the same peer group noted above;

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Our health, safety and environmental performance;

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Implementation of the Company’s strategic plans;

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Financial management;

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Climate change initiatives;

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Enhancement of reputation;

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Culture and diversity initiatives;

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Opportunity capture; and

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Leadership development and succession planning.

Based on this review, the Committee determined that the Company’s performance under the stated criteria during the three-year performance period merited award of 165% of the targeted amount. This compared with three-year performance under the PSP of 140% for the 2008-2010 period, 60% for the 2007-2009 period, 110% for the 2006-2008 period, 175% for the 2005-2007 period and 180% for the 2004-2006 period. With respect to individual adjustments, similar to the 2011 VCIP program, the Committee considered PSP individual adjustments for each Named Executive Officer in recognition of the individual’s personal leadership and contribution to the Company’s financial and operational success over the three-year performance period. Based on the foregoing, the Committee approved individual performance adjustments of between 15% and 25% for such Named Executive Officers.

2011 Say on Pay Vote Result and Engagement

In 2011, the advisory vote on executive compensation was approved by the Company’s stockholders. A significant number of shareholders voted against the advisory approval of the Company’s 2011 executive compensation. Since then, the Company actively engaged in dialogue with a significant number of large stockholders who voted against such approval to understand their concerns with the Company’s compensation programs. The Company continues to maintain a regular dialogue with its investors on numerous subject matters including compensation. As a result of this engagement process, the Company learned, while these stockholders are generally pleased with the Company’s compensation programs and believe such programs are well-aligned with long-term company performance, several stockholders had concerns regarding the appropriateness of certain discrete elements of our executive compensation program, primarily the provision of excise tax gross-ups under our Change in Control Severance Plan. The HRCC has considered the viewpoints of these stockholders and, in recognition of the significant transformation occurring as ConocoPhillips is repositioned as two separate companies, intends to undertake a thorough review of its executive compensation programs following the expected completion of the repositioning in the second quarter of 2012. It is expected that the equivalent committee of the Board of Phillips 66 will undertake a similar review of its executive pay programs. In deciding what changes to make to its executive compensation programs, the deliberations of the HRCC of ConocoPhillips and equivalent committee of the Board of Phillips 66 will be informed by the conversations the Company has had with its investors following the 2011 advisory vote on executive compensation, by current market practices and investor concern over certain pay practices. It is expected, at minimum, any program changes will provide for the elimination of excise tax gross-ups for future participants under the Change in Control Severance Plan and the Phillips 66 equivalent of such plan.

2012 Target Compensation

In addition to determining the 2011 compensation payouts, the HRCC established the targets for 2012 compensation for our Named Executive Officers under our four primary compensation programs. As discussed under “Performance-Based Pay Programs” beginning on page 34, with the exception of salary, the targeted amounts shown below are performance-based and, therefore, actual amounts received under such programs, if any, may differ from these targets.


Name	Salary			2012 VCIP Target Value			2012 Stock Option Award Target Value			PSP Target Value⁽¹⁾			Total 2012 Target Compensation
J.J. Mulva		$	1,500,000		$	2,025,000		$	6,487,500		$	6,487,500		$	16,500,000
G.C. Garland			776,000			690,640			1,280,400			1,280,400			4,027,440
A.J. Hirshberg			776,000			690,640			1,280,400			1,280,400			4,027,440
R.M. Lance			776,000			690,640			1,280,400			1,280,400			4,027,440
J.W. Sheets			639,000			530,370			1,006,425			1,006,425			3,182,220

(1)

As discussed under “Effects of the Repositioning on Compensation Programs” on page 40, while the HRCC has not set target levels for long-term incentive compensation for 2012 under either the PSP or any replacement arrangements, since the PSP or replacement arrangements are expected to provide 50% of the targeted long-term incentive compensation for our executives, we have shown that value in the table above.

ConocoPhillips Executive Compensation Program Structure

The Objectives and Process of Compensating Our Executives

Our Goals: Our goals are to attract, retain and motivate high-quality employees and to maintain high standards of principled leadership so that we can responsibly deliver energy to the world and provide sustainable value for our stakeholders, now and in the future.

Our Philosophy: We believe that our ability to responsibly deliver energy and to provide sustainable value is driven by superior individual performance. We believe that a company must offer competitive compensation to attract and retain experienced, talented and motivated employees. Moreover, we believe employees in leadership roles within the organization are motivated to perform at their highest levels when performance-based pay is a significant portion of their compensation.

Our Principles: To achieve our goals, we implement our philosophy through the following guiding principles:

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Establish target compensation levels that are competitive with those of other companies with whom we compete for executive talent;

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Create a strong link between executive pay and Company performance;

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Encourage prudent risk taking by our executives;

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Motivate performance by considering specific individual accomplishments in determining compensation;

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Retain talented individuals with the Company until retirement; and

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Integrate all elements of compensation into a comprehensive package that aligns goals, efforts, and results throughout the organization.

The Human Resources and Compensation Committee

The HRCC is responsible for all compensation actions related to our Senior Officers, including all of our Named Executive Officers. Although the Committee’s charter permits it to delegate authority to subcommittees or other Board Committees, the Committee made no such delegations in 2011.

Compensation Program Design

Our executive compensation programs take into account marketplace compensation for executive talent, internal pay equity with our employees, past practices of the Company, corporate, business unit and individual results and the talents, skills and experience that each individual executive brings to ConocoPhillips. Our Named Executive Officers each serve without an employment agreement. At the time of Mr. Hirshberg’s employment, as an incentive to his acceptance of an employment offer and in recognition of forgone compensation from his prior employer, the Company entered into a letter agreement with Mr. Hirshberg. A discussion of this agreement is set forth on page 62 under Other Arrangements. All compensation for these officers is set by the Committee as described below.

The HRCC begins by establishing target levels of total compensation for our Senior Officers for a given year. Once an overall target compensation level is established, the Committee considers the weighting of each of our primary compensatory programs (Base Salary, VCIP, Stock Option Program and PSP) within the total targeted compensation.

Salary Grade Structure

Management, with the assistance of outside compensation consultants, thoroughly examines the scope and complexity of jobs throughout ConocoPhillips and studies the competitive compensation practices for such jobs. As a result of this work, management develops a compensation scale under which all positions are designated with specific “grades.” For our executives, the base salary midpoint increases as the salary grade increases, but at a lesser rate than increases in target incentive compensation percentages. The result is an increased percentage of “at risk” compensation as the executive’s grade is increased. Any changes in compensation for our Senior Officers resulting from a change in salary grade are approved by the HRCC.

Benchmarking

With the assistance of our outside compensation consultants, we set target compensation by referring to multiple relevant compensation surveys that include but are not limited to large energy companies. We then compare that information to our salary grade targets (both for base salary and for incentive compensation) and make any changes needed to bring the cumulative target for each salary grade to broadly the 50th percentile for similar positions as indicated by the survey data.

For our Named Executive Officers, we conduct benchmarking, using available data, for each individual position. For example, although we determine targets by benchmarking against other large, publicly held energy companies, we often use broader measures, such as mid-sized publicly held energy companies and other large, publicly held companies outside the energy industry, in setting targets for our executives. The Committee’s independent consultant, Cogent Compensation Partners, then reviews and independently advises on the conclusions reached as a result of this benchmarking, and the Committee uses the results of these surveys as a factor in setting compensation structure and targets relating to our Named Executive Officers.

The HRCC’s use of primary peer groups in the context of our compensation programs generally falls into two broad categories: setting compensation targets and measuring Company performance.

Setting Compensation Targets

In setting total compensation targets and targets within each individual program the HRCC used the following peer group for benchmarking purposes—Exxon Mobil Corporation, Royal Dutch Shell plc, BP p.l.c., and Chevron Corporation, with emphasis on the Company’s domestic peers particularly in setting CEO target compensation.

The HRCC also utilized a second group of peer companies for benchmarking the compensation of ConocoPhillips’ Named Executive Officers—Valero Energy Corporation, Marathon Oil Corporation, Occidental Petroleum Corporation, and, for the CEO and staff executives, the other non-financial companies in the Fortune 50, including those outside the energy industry.

ConocoPhillips utilizes these peer groups in setting compensation targets because these companies are broadly reflective of the industry in which it competes for business opportunities and for executive talent, and because these peers provide a good indicator of the current range of executive compensation.

Measuring Performance

We believe our performance is best measured against the largest publicly held, international, integrated oil and gas companies against which we compete in our business operations. Therefore, for our performance-based programs, the Committee assesses our actual performance for a given period by using ExxonMobil, Royal Dutch Shell, BP, Total, and Chevron as our primary benchmarking peer group.

Developing Performance Measures

We have attempted to develop performance metrics that assess the performance of the Company relative to its primary peer group rather than assessing absolute performance. We do so because we believe absolute performance can be affected positively or negatively by industry-wide factors over which our executives have no control, such as prices for crude oil and natural gas. We have selected multiple metrics, as described below, because we believe no one metric is sufficient to capture the performance we are seeking to drive, and any metric in isolation is unlikely to promote the well-rounded executive performance necessary to enable us to achieve long-term success. The Committee reassesses performance metrics periodically.

Internal Pay Equity

We believe our compensation structure provides a framework for an equitable compensation ratio between executives, with higher targets for jobs at salary grades having greater duties and responsibilities. Taken as a whole, our compensation program is designed so that the individual target level rises as salary grade level increases, with the portion of performance-based compensation rising as a percentage of total targeted compensation. One result of this structure is that an executive’s actual total compensation as a multiple of the total compensation of his or her subordinates is designed to increase in periods of above-target performance and decrease in times of below-target performance. In addition, the HRCC also reviews the compensation of Senior Officers periodically to ensure officers with similar levels of responsibilities are compensated equitably.

Alignment of Interests—Stock Holding Requirements

We place a premium on aligning the interests of executives with those of our stockholders. Our Stock Ownership Guidelines require executives to own stock and/or have an interest in restricted stock units valued at a multiple of base salary, ranging from 1.8 times salary for lower-level executives, to 6 times salary for the CEO. Employees have five years from the date they become subject to these Guidelines to comply. The multiple of equity held by each of our Named Executive Officers exceeds our established guidelines for his or her position. Company policies prohibit our executives from trading in derivatives of the Company’s stock.

In addition, we have historically required our executives to hold restricted stock units received under the PSP, and under predecessor programs, until death, disability, retirement, layoff, or severance after a change in control. The units were generally forfeited if an executive voluntarily left the Company’s employ when not retirement eligible. We were informed by our compensation consultants that this was a highly unusual feature. In light of this fact, the Committee considered our programs and determined, for performance periods beginning in 2009, restrictions on restricted stock unit awards under the PSP will lapse five years from the anniversary of the issuance of the units, although Senior Officers may elect to defer the lapsing of such restrictions. The Committee believes this change ensures our executives maintain their focus on long-term performance, while also allowing the Company’s programs to be more competitive with those of our peers.

Risk Assessment

The Company has considered the risks associated with each of its executive and broad-based compensation programs and policies. As part of the analysis, the Company considered the performance measures used and described under the section entitled “Measuring our Performance under our Compensation Programs” beginning on page 37, as well as the different types of compensation, the varied performance measurement periods and the extended vesting schedules utilized under each incentive compensation program for both executives and other employees. As a result of this review, the Company has concluded the risks arising from the Company’s compensation policies and practices for its employees are not reasonably likely to have a material adverse effect on the Company. As part of the Board’s oversight of the Company’s risk management programs, the HRCC conducts an annual review of the risks associated with the Company’s executive and broad-based compensation programs. The HRCC, the HRCC’s independent consultant and the Company’s compensation consultant noted their agreement with management’s conclusion that the risks arising from the Company’s compensation policies and practices for its employees are not reasonably likely to have a material adverse effect on the Company.

Statutory and Regulatory Considerations

In designing our compensatory programs, we consider and take into account the various tax, accounting and disclosure rules associated with various forms of compensation. The HRCC also reviews and considers the deductibility of executive compensation under section 162(m) of the Internal Revenue Code and designs its deferred compensation programs with the intent that they comply with section 409A of the Internal Revenue Code. The Committee seeks to preserve tax deductions for executive compensation. However, the Committee has awarded compensation that might not be fully tax deductible when it believes such grants are nonetheless in the best interests of our stockholders.

Option Pricing

When the Committee grants options to its Named Executive Officers, the Company uses an average of the stock’s high and low prices on the date of grant (or the preceding business day, if the

markets are closed on the date of grant) to determine the exercise price of the options. Option grants are generally made at the HRCC’s February meeting (the date of which is determined at least a year in advance) or, in the case of new hires, on the date of commencement of employment or the date of Committee approval, whichever is later.

Independent Consultants

The Committee retained Cogent Compensation Partners (Cogent) to serve as its independent executive compensation consultant in 2011. The Committee has adopted specific guidelines for outside compensation consultants, which (1) require that work done by such consultants for the Company at management’s request be approved in advance by the Committee; (2) require a review of the advisability of replacing the independent consultant after a period of five years; and (3) prohibit the Company from employing any individual who worked on the Company’s account for a period of one year after leaving the employ of the independent consultant. Cogent has provided an annual attestation of its compliance with these guidelines.

The Committee strongly discourages Company proposals to retain the Committee’s independent consultant for any work other than advising the Committee and does not approve any work proposed by the Company that it believes would compromise the consultant’s independence. No work proposals for Cogent were submitted by management in 2011 and no fees were paid to Cogent by the Company other than for their services as an independent consultant to the Committee.

The Types of Compensation We Provide Our Executives

Base Salary

Base salary is a major component of the compensation for all of our salaried employees, although it becomes a smaller component as an employee rises through the ConocoPhillips salary grade structure. Base salary is important to give an individual financial stability for personal planning purposes. There are also motivational and reward aspects to base salary, as base salary can be increased or decreased to account for considerations such as individual performance and time in position.

Performance-Based Pay Programs

Annual Incentive—The VCIP is an annual incentive program that is broadly available to our employees throughout the world, and it is our primary vehicle for recognizing Company, business unit, and individual performance for the past year. We believe that having an annual “at risk” compensation element for all employees, including executives, gives them a financial stake in the achievement of our business objectives and therefore motivates them to use their best efforts to ensure the achievement of those objectives. We believe that measuring and rewarding performance on an annual basis in a compensation program is appropriate because, like our primary peers and other public companies, we measure and report our business accomplishments annually. Additionally, our valuation is derived, in part, from comparisons of these annual results with those of our primary peers and relative to prior annual periods. We also believe that one year is a time period over which all employees who participate in the program can have the opportunity to establish and achieve their specified goals. The base award is weighted equally for corporate and business unit performance for the Named Executive Officers other than the CEO, and solely on corporate performance for the CEO. The HRCC has discretion to adjust the base award up or down based on individual performance and makes its decision on individual performance adjustments based on the input of the CEO for all Named Executive Officers (other than for himself).

Long-Term Incentives—Our primary long-term incentive compensation programs for executives are the Stock Option Program and the PSP.

Our program targets generally provide approximately 50 percent of the long-term incentive award in the form of stock options and 50 percent in the form of restricted stock units awarded under the PSP.

Stock Option Program—The Stock Option Program is designed to maximize medium- and long-term stockholder value. The practice under this program is to set option exercise prices at not less than 100 percent of the Company stock’s fair market value at the time of the grant. Because the option’s value is derived solely from an increase in the Company’s stock price, the value of a stockholder’s investment in the Company must appreciate before an option holder receives any financial benefit from the option. Our stock options have three-year vesting provisions and ten-year terms in order to incentivize our executives to increase the Company’s share price over the long term.

Performance Share Program—The PSP rewards executives based on their individual performances and the performance of the Company over a three-year period. Each year the Committee establishes a three-year performance period over which it compares the performance of the Company with that of its performance-measurement peer group using pre-established criteria. Thus, in any given year, there are three overlapping performance periods. Use of a multi-year performance period helps to focus management on longer-term results.

Each executive’s individual award under the PSP is subject to a potential positive or negative performance adjustment at the end of the performance period. Although the HRCC maintains final discretion to adjust compensation in accordance with any extraordinary circumstances that may arise, and has done so in the past, program guidelines generally result in an award range between 0 to 200 percent of target. Final awards are based on the Committee’s subjective evaluation of the Company’s performance relative to the established metrics (discussed below under the heading “Measuring Our Performance under Our Compensation Programs”) and of each executive’s individual performance. The Committee considers input from the CEO with respect to Senior Officers, including all Named Executive Officers other than himself. Targets for participants whose salary grades are changed during a performance period are prorated for the period of time such participant remained in each relevant salary grade.

The combination of the Stock Option Program, the PSP, and the PSP’s extended restricted stock unit holding periods provides a comprehensive package of medium and long-term compensation incentives for our executives that align their interests with those of our long-term stockholders. Such extended holding periods also enable the Company to more readily withdraw awards should circumstances arise that merit such action. To date, no Named Executive Officers have been subject to reductions or withdrawals of prior grants or payouts of restricted stock, restricted stock units or stock option awards.

Other Possible Awards—ConocoPhillips may make awards outside the Stock Option Program or the PSP (off-cycle awards). Off-cycle awards (also commonly referred to as “ad hoc” or “special purpose” awards) are granted outside the context of our regular compensation programs. Currently, off-cycle awards are granted to certain incoming executive personnel, typically on the first day of employment, for one or more of the following reasons: (1) to induce an executive to join the Company (occasionally replacing compensation the executive will lose by leaving the prior employer); (2) to induce an executive of an acquired company to remain

with the Company for a certain period of time following the acquisition; or (3) to provide a pro-rata equity award to an executive who joins the Company during an ongoing performance period for which he or she is ineligible under the standard PSP or Stock Option Program provisions. In these cases, the HRCC has sometimes approved a shorter period for restrictions on transfers of restricted stock units than those issued under the PSP or Stock Option Program. Pursuant to the Committee’s charter, any off-cycle awards to Senior Officers must be approved by the HRCC. No such awards were made to Named Executive Officers in 2011.

Broadly Available Plans

Our Named Executive Officers participate in the same basic benefits package as our other U.S. salaried employees. This includes retirement, medical, dental, vision, life insurance, expatriate benefits and accident insurance plans, as well as flexible spending arrangements for health care and dependent care expenses.

Other Compensation and Personal Benefits

In addition to our four primary compensation programs, we provide our Named Executive Officers a limited number of additional benefits. In order to provide a competitive package of compensation and benefits, we provide our Named Executive Officers with executive life insurance coverage and defined benefit plans. We also provide other benefits that are designed primarily to minimize the amount of time the Named Executive Officers devote to administrative matters other than Company business, to promote a healthy work/life balance, to provide opportunities for developing business relationships, and to put a human face on our social responsibility programs. All such programs are approved by the HRCC.

-	Comprehensive Security Program—Because our executives face personal safety risks in their roles as representatives of a global, integrated energy company, our Board of Directors has adopted a comprehensive security program for our executives.

Personal Entertainment—We purchase tickets to various cultural, charitable, civic, entertainment and sporting events for business development and relationship-building purposes, as well as to maintain our involvement in communities in which the Company operates. Occasionally, our employees, including our executives, make personal use of tickets that would not otherwise be used for business purposes. We believe these tickets offer an opportunity to increase morale at a very low or no incremental cost to the Company.

Tax Gross-Ups—Certain of the personal benefits received by our executives are deemed to be taxable income to the individual by the Internal Revenue Service. When we believe that such income is incurred for purposes more properly characterized as Company business than personal benefit, we provide further payments to the executive to reimburse the cost of the inclusion of such item in the executive’s taxable income. Most often, these tax gross-up payments are provided for travel by a family member or other personal guest to attend a meeting or function in furtherance of Company business, such as Board meetings, Company-sponsored events, and industry and association meetings where spouses or other guests are invited or expected to attend.

Executive Life Insurance—We maintain life insurance policies and/or death benefits for all of our U.S.-based salaried employees (at no cost to the employee) with a face value approximately equal to the employee’s annual salary. For each of our executives, we maintain an additional life insurance policy and/or death benefits (at no cost to the executive) with a value equal to her or his annual salary. In addition to these two plans, we also provide our executives the option of

purchasing group variable universal life insurance in an amount up to eight times their annual salaries. We believe this is a benefit valued by our executives that can be provided at no cost to the Company.

Defined Contribution Plans—We maintain the following nonqualified defined contribution plans for our executives. These plans allow deferred amounts to grow tax-free until distributed, while enabling the Company to utilize the money for the duration of the deferral period for general corporate purposes.

Voluntary Deferred Compensation Plans—The purpose of our voluntary nonqualified deferred compensation plans is to allow executives to defer a portion of their salary and annual incentive compensation so that such amounts are taxable in the year in which distributions are made.

Make-Up Plans—The purpose of our nonqualified defined contribution make-up plans is to provide benefits that an executive would otherwise lose due to limitations imposed by the Internal Revenue Code on qualified plans.

Defined Benefit Plans—We also maintain nonqualified defined benefit plans for our executives. The primary purpose of these plans is to provide benefits that an executive would otherwise lose due to limitations imposed by the Internal Revenue Code on qualified plans. With regard to our Named Executive Officers, the only such arrangement under which they are entitled to benefits of this type is the Key Employee Supplemental Retirement Plan (KESRP). This plan is designed to replace benefits that would otherwise not be received due to limitations contained in the Internal Revenue Code that apply to qualified plans. The two such limitations that most frequently impact the benefits to employees are the limit on compensation that can be taken into account in determining benefit accruals and the maximum annual pension benefit. In 2011, the former limit was set at $245,000, while the latter was set at $195,000. The KESRP determines a benefit without regard to such limits, and then reduces that benefit by the amount of benefit payable from the related qualified plan, the ConocoPhillips Retirement Plan. Thus, in operation the combined benefits payable from the related plans for the eligible employee equal the benefit that would have been paid if there had been no limitations imposed by the Internal Revenue Code. This design is common among our competitors and we believe that lack of such a plan would put the Company at a great disadvantage in attracting and retaining talented executives. Further information on the KESRP is provided in the Pension Benefits table and notes beginning on page 53.

Severance Plans and Changes in Control

We maintain plans to address severance of our executives in certain circumstances as described under the heading “Executive Severance and Changes in Control” beginning on page 60. The structure and use of these plans are competitive within the industry and are intended to aid the Company in attracting and retaining executives.

Measuring Our Performance under Our Compensation Programs

We use corporate and business unit performance criteria in determining individual payouts. In addition, our programs contemplate that the Committee will exercise discretion in assessing and rewarding individual performance.

Corporate Performance Criteria

We utilize multiple measures of performance under our programs to ensure that no single aspect of performance is driven in isolation. We have employed the following measures of overall Company performance under our performance-based programs:

Relative Total Stockholder Return—Total stockholder return represents the percentage change in a company’s common stock price from the beginning of a period of time to the end of the stated period, and assumes common stock dividends paid during the stated period are reinvested into that common stock. We use a total stockholder return measure because it is the most tangible measure of the value we have provided to our stockholders during the relevant program period. We recognize that total stockholder return is not a perfect measure. It can be affected by factors beyond management’s control and by market conditions not related to the intrinsic performance of the Company. Stockholder return over the short-term can also fail to fully reflect the value of longer-term projects. We seek to mitigate the influence of industry-wide or market-wide conditions on stock price by using total stockholder return relative to our primary peer group.

Relative Adjusted Return on Capital Employed—Our businesses are capital intensive, requiring large investments, in most cases over a number of years, before tangible financial returns are achieved. Therefore, we believe that a good indicator of long-term Company and management performance, both absolute and relative to our primary peer group, is the measure known as return on capital employed (ROCE). Relative ROCE is a measure of the profitability of our capital employed in our business compared with that of our peers. We calculate ROCE as a ratio, the numerator of which is net income plus after-tax interest expense, and the denominator of which is average total equity plus total debt. In calculating ROCE, we adjust the net income of the Company and our peers for certain non-core earnings impacts. For performance periods beginning in 2008, our programs considered our improvement on adjusted ROCE relative to our performance-measurement peer group.

Relative Adjusted Cash Contribution per BOE—Like ROCE, another important measure of operating efficiency and management performance is the Company’s cash contributions per BOE produced by our E&P segment, and per barrel of petroleum products sold by our R&M segment. This measure is another way to compare our operating efficiency in producing and refining/marketing products against that of our performance-measurement peer group. The measure is calculated by dividing the adjusted income from operations plus the depreciation, depletion and amortization attributable to our E&P or R&M segments by the number of BOE produced or barrels of petroleum products sold, respectively. A weighted average of these two segment-level metrics is then calculated, and compared against that of our peers. As with our calculation of adjusted ROCE, we adjust both our own income and that of our peers to reflect certain non-core earnings impacts. We added this metric for performance periods beginning in 2008.

Relative Improvement in Adjusted Cash Return on Capital Employed—Similar to ROCE, adjusted cash return on capital employed (CROCE) measures the Company’s performance in efficiently allocating its capital. However, while ROCE is based on adjusted net income, CROCE is based on cash flow, measuring the ability of the Company’s capital employed to generate cash. CROCE is calculated by dividing adjusted EBIDA (earnings before interest, depreciation and amortization, adjusted for non-core earnings impacts) by average capital employed (total equity plus total debt). Our improvement in CROCE is compared against that of our peers. We added this metric for performance periods under our VCIP beginning in 2010.

Health, Safety and Environmental Performance—We seek to be a good employer, a good community member and a good steward of the environmental resources we manage. Therefore, we incorporate metrics of health, safety and environmental performance in our annual incentive compensation program.

Implementation and Advancement of Strategic Plan—This measure is a subjective analysis of the Company’s progress in implementing its strategic plan over a given performance period. We added this metric for performance periods beginning in 2007, 2008, 2010 and 2011.

Succession Planning/Leadership Development—This measure is a subjective analysis of the Company’s progress in developing and implementing a comprehensive succession plan for senior management, and the development and implementation of a Company-wide program for identifying and developing future leaders within the Company. We added this metric for performance periods beginning in 2007.

Financial Management—This measure is a subjective analysis of the Company’s progress in managing the Company’s capital profile and liquidity needs. We added this metric for performance periods beginning in 2009.

Support of Strategic Corporate Initiatives—This measure is a subjective analysis of our progress in implementing key elements of the Company’s strategic initiatives including, but not limited to, cash returned to stockholders, financial management relationships, climate change, reputation, people/diversity, culture, opportunity capture and execution of Company initiatives. We added this metric for performance periods beginning in 2009.

Business Unit Performance Criteria

There are approximately 100 discrete award units within the Company designed to measure performance and to reward employees according to business outcomes relevant to the award group. Although most employees participate in a single award unit designated for the operational or functional group to which such employee is assigned, a Senior Officer can participate in a blend of the results of more than one of these award units depending on the scope and breadth of his or her responsibilities over the performance period. Moreover, because our CEO is responsible for overall Company performance, his award is based solely on individual and overall Company performance.

Performance criteria are goals consistent with the Company’s operating plan and include quantitative and qualitative metrics specific to each business unit, such as income from continuing operations (adjusted to neutralize the impact of changes in commodity prices), control of costs, health, safety and environmental performance, support of corporate initiatives, and various milestones set by management. At the conclusion of a performance period, management makes a recommendation based on the unit’s performance for the year against its performance criteria. The HRCC then reviews management’s recommendation regarding each award unit’s performance and has discretion to adjust any such recommendation in approving the final awards.

Individual Performance Criteria

Individual adjustments for our Named Executive Officers are approved by the HRCC, based on the recommendation of the CEO (other than for himself). The CEO’s individual adjustment is determined by the Committee taking into account the prior review of the CEO’s performance, which is conducted jointly by the HRCC and the Committee on Directors’ Affairs.

Tax-Based Program Criteria

Our incentive programs are also designed to conform to the requirements of section 162(m) of the Internal Revenue Code, which allows for deductible compensation in excess of $1 million if certain criteria, including the attainment of pre-established performance criteria, are met. In order for a Named Executive Officer to receive any award under either VCIP or PSP certain threshold criteria must be met. This tier of performance measure and methodology is designed to meet requirements for deductibility of these items of compensation under section 162(m) of the Internal Revenue Code. Pursuant to this tier, maximum payments for the performance period under VCIP and PSP are set, but they are subject to downward adjustment through the application of the generally applicable methodology for VCIP and PSP awards previously discussed, so this effectively establishes a ceiling for VCIP and PSP payments to each Named Executive Officer. Threshold performance criteria for VCIP and PSP differed, due primarily to VCIP being a one-year program while PSP is a three-year program. For VCIP, the criteria required that the Company meet one of the following measures as a threshold to an award being made to any Named Executive Officer: (1) Top two-thirds of specified companies in improvement in return on capital employed (adjusted net income); (2) Top two-thirds of specified companies in total stockholder return; (3) Top two-thirds of specified companies in cash per BOE; or (4) Cash from operations (normalized for the impact of asset sales and assumptions made in our budgeting process as to price for oil equivalents and excluding non-cash working capital) of at least $11.301 billion. For PSP, the criteria for the 2009-2011 program period required that the Company meet one of the following measures as a threshold to an award being made to any Named Executive Officer: (1) Top two-thirds of specified companies in improvement in return on capital employed (adjusted net income); (2) Top two-thirds of specified companies in total stockholder return; (3) Top two-thirds of specified companies in cash per BOE; or (4) Cash from operations (normalized for the impact of asset sales and assumptions made in our budgeting process as to price for oil equivalents and excluding non-cash working capital) of at least $39.364 billion. In both cases, the specified companies for comparison were ConocoPhillips, BP, Chevron, ExxonMobil, Royal Dutch Shell, and Total. The performance criteria for this purpose are set by the HRCC and may change from year to year, although the criteria must come from a list of possible criteria set forth in the stockholder-approved 2011 Omnibus Stock and Performance Incentive Plan. The award ceilings are also set by the HRCC each year, although they may not exceed limits set in the stockholder-approved 2011 Omnibus Stock and Performance Incentive Plan. Determination of whether the criteria are met is made by the HRCC after the end of each performance period. Since the merger of companies that created ConocoPhillips in 2002, threshold criteria have always been met and the ceiling has never been reached.

Effects of Repositioning on Compensation Programs

We are in the process of repositioning ConocoPhillips into two pure-play organizations, spinning off Phillips 66 to engage in downstream operations while continuing ConocoPhillips to engage in upstream operations. We expect the spin-off to occur sometime in the second quarter of 2012. As a result, the HRCC has not approved the continuation of the PSP as part of the long-term incentive compensation for our executives, believing that such determination should come from the respective compensation committees of the pure-play organizations after the spin-off. However, the HRCC does anticipate that the respective compensation committees will institute programs similar in purpose, scope, and value to the PSP, but with performance periods and performance criteria set to reflect the new circumstances of each company. Furthermore, the HRCC expects that certain executives, including the CEO, will retire in connection with the spin-off. The HRCC has considered the long-term incentive compensation for those retiring executives and anticipates granting awards later in 2012 to provide for the value foregone by not continuing the PSP. While the HRCC has not set the target levels for long-term incentive compensation for 2012 under either the PSP or any replacement arrangements, we anticipate that the target levels will remain the same when approved. In the event that the

repositioning does not occur, the HRCC will meet to discuss the setting of target levels of compensation in light of the circumstances. Performance periods and performance criteria would be determined at that time.

Another aspect of the PSP is its overlapping three-year performance periods. Performance criteria were set when the performance periods beginning in 2010 and 2011 were initiated. Those performance periods cross over the time that the spin-off is expected to occur which will make measuring performance difficult or less meaningful if the repositioning occurs, as the peer comparison groups will likely be different for the pure-play organizations (affecting the ability to measure performance relative to peers) and the criteria themselves would need to be reassessed in light of the changed circumstances. The HRCC believes that those activities are properly left to the respective compensation committees of the pure-play organizations. The HRCC also believes that it is best situated to determine how well the Company and the Senior Officers, including the Named Executive Officers, performed up to the spin-off; therefore, the HRCC expects that, at or near the effective time of the spin-off, it will grant awards related to the ongoing performance periods that began in 2010 and 2011, prorated to the time of the spin-off and adjusted to take into account the HRCC’s determination of the Company’s performance and the individual performance of the Senior Officers. In the event that the repositioning does not occur, the HRCC will be able to return to its customary timing with regard to this determination.

The Stock Option Program, the other portion of long-term incentive compensation, is less affected by the repositioning than the PSP, because the HRCC has traditionally delivered options having the target compensation value, with no adjustment. The HRCC, therefore, was able to grant Senior Officers, including the Named Executive Officers, options during the customary February timeframe without concern about whether the repositioning will occur as and when expected.

With VCIP, the Company’s short-term incentive program, the HRCC determined target levels and performance criteria at its February 2012 meeting, setting them without regard to the repositioning, but in the knowledge that after the repositioning, the respective compensation committees of the pure-play organizations would revisit the target levels and performance criteria. The HRCC anticipates that it is likely that performance criteria and peer comparison groups more suited to the circumstances of the pure-play organizations would be established at that time.

Stock Performance Graph

This graph shows ConocoPhillips’ cumulative total stockholder return over the five-year period from December 31, 2006, to December 31, 2011. The graph also shows the cumulative total returns for the same five-year period of the S&P 500 Index and our performance peer group of companies consisting of BP, Chevron, ExxonMobil, Royal Dutch Shell, and Total, weighted according to the respective peer’s stock market capitalization at the beginning of each annual period. The comparison assumes $100 was invested on December 31, 2006, in ConocoPhillips stock, in the S&P 500 Index and in ConocoPhillips’ peer group and assumes that all dividends were reinvested.

Five-Year Cumulative Total Stockholder Return

LOGO

Five Years Ended December 31, 2011


		December 31
	Initial	2007		2008		2009		2010		2011
ConocoPhillips	$100.0	$	125.4	$	75.5	$	77.7	$	107.9	$	119.7
Peer Group⁽¹⁾	$100.0	$	122.0	$	93.4	$	99.9	$	103.9	$	117.7
S&P 500	$100.0	$	105.5	$	66.5	$	84.1	$	96.7	$	98.8

⁽¹⁾ Performance Peer Group consists of BP, Chevron, ExxonMobil, Royal Dutch Shell and Total

Executive Compensation Tables

The following tables and accompanying narrative disclosures provide information concerning total compensation paid to the Chief Executive Officer and certain other officers of ConocoPhillips (the “Named Executive Officers”). Please also see our discussion of the relationship between the “Compensation Discussion and Analysis” to these tables under “An Analysis of Compensation Paid to Our Executives” beginning on page 26. The data presented in the tables that follow include amounts paid to the Named Executive Officers by ConocoPhillips or any of its subsidiaries for 2011.

SUMMARY COMPENSATION TABLE

The Summary Compensation Table below reflects amounts earned with respect to 2011 and performance periods ending in 2011. We also provide 2012 target compensation for Named Executive Officers (other than those who have retired) on page 30. We have excluded arrangements that are generally available to our U.S.-based salaried employees, such as our medical, dental, life and accident insurance, disability, and health savings and flexible spending account arrangements, since all of our Named Executive Officers are U.S.-based salaried employees. Based on the salary and total compensation amounts for Named Executive Officers for 2011 shown in the table below, salary accounted for approximately 7.4 percent of the total compensation of the Named Executive Officers and incentive compensation programs (stock awards, option awards, and non-equity incentive plan compensation) accounted for approximately 50.8 percent. For the CEO alone in 2011, salary accounted for approximately 5.4 percent of his total compensation and incentive compensation programs accounted for approximately 62.8 percent of his total compensation. These numbers reflect the emphasis placed by the Company on performance-based pay.


Name and Principal Position	Year		Salary ($)⁽¹⁾		Bonus ($)⁽²⁾		Stock Awards ($)⁽³⁾		Option Awards ($)⁽⁴⁾		Non-Equity Incentive Plan Compensation ($)⁽⁵⁾		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)⁽⁶⁾		All Other Compensation ($)⁽⁷⁾		Total ($)
J.J. Mulva Chairman & CEO		2011	$	1,500,000	$	—	$	7,384,724	$	6,487,950	$	3,543,750	$	8,533,648	$	263,522	$	27,713,594
		2010		1,500,000		—		6,148,572		5,737,680		4,252,500		—		294,143		17,932,895	⁽⁹⁾
		2009		1,500,000		—		5,669,518		5,737,576		1,278,788		—		202,779		14,388,661	⁽⁹⁾
J.A. Carrig⁽⁸⁾ President (retired)		2011		197,500		—		—		—		295,895		—		6,750,086		7,243,481
		2010		1,165,000		—		3,803,787		3,549,780		2,134,979		3,590,672		113,015		14,357,233
		2009		1,145,000		—		3,507,419		3,549,650		1,474,560		2,487,509		133,033		12,297,171
G.C. Garland Senior Vice President, Exploration & Production–Americas		2011		750,500		—		1,361,687		1,197,390		1,105,449		1,462,522		123,887		6,001,435
		2010		173,011		—		2,819,115		—		272,699		2,005,824		26,132		5,296,781
		2009		—		—		—		—		—		—		—		—
A.J. Hirshberg Senior Vice President, Planning and Strategy		2011		750,500		—		1,361,687		1,197,390		1,039,990		5,407,899		176,618		9,934,084
		2010		173,011		9,357,436		4,719,144		—		270,389		359,280		10,910		14,890,170
		2009		—		—		—		—		—		—		—		—
R.M. Lance Senior Vice President, Exploration & Production–International		2011		750,500		—		1,361,687		1,197,390		979,875		1,473,776		152,223		5,915,451
		2010		683,758		—		1,381,976		1,038,960		956,219		634,646		71,529		4,767,088
		2009		649,508		—		996,020		1,008,436		637,117		693,413		53,171		4,037,665
J.W. Sheets Senior Vice President, Finance, and CFO		2011		619,500		—		1,451,661		729,790		784,132		1,473,218		87,404		5,145,705
		2010		496,840		—		880,262		489,060		696,942		699,405		58,571		3,321,080
		2009		461,000		—		468,796		475,150		437,950		616,475		41,707		2,501,078

(1)	Includes any amounts that were voluntarily deferred to the Company’s Key Employee Deferred Compensation Plan.

(2)

Because our primary short-term incentive compensation arrangement for salaried employees (the Variable Cash Incentive Program or VCIP) has mandatory performance measures that must be achieved before there is any payout to Named Executive Officers, amounts paid under VCIP are shown in the Non-Equity Incentive Plan Compensation ($) column of the table, rather than the Bonus ($) column. As an inducement to his employment, the HRCC approved (i) a bonus payment to Mr. Hirshberg of $3,000,000 at his employment on October 6, 2010 and (ii) the creation of a deferred compensation account under the Key Employee Deferred Compensation Plan, credited with $6,357,436, vesting as to 47% on the first anniversary of employment, as to 47% on the second anniversary of employment, and as to the remainder on the third anniversary of employment.

(3)

Amounts shown represent the aggregate grant date fair value of awards made under the Performance Share Program (PSP) during each of the years indicated, as determined in accordance with FASB ASC Topic 718. See the “Employee Benefit Plans” section of Note 19 in the Notes to Consolidated Financial Statements in the Company’s 2011 Annual Report on Form 10-K for a discussion of the relevant assumptions used in this determination.

The amounts shown for stock awards are from our PSP or for off-cycle awards, although no off-cycle awards were granted to any of the Named Executive Officers during 2011, 2010, or 2009, except for off-cycle awards to Messrs. Garland and Hirshberg at their employment on October 6, 2010, as discussed further below. These may include awards that are expected to be finalized as late as 2014. The amounts shown for awards from PSP relate to the three-year performance period that began in the years presented. Performance periods under PSP generally cover a three-year period and, as a new performance period has begun each year since the program commenced, there are three overlapping performance periods ongoing at any time.

Amounts shown are targets set for awards for 2011, 2010, and 2009, since it is most probable at the setting of the target for the applicable performance periods that targets will be achieved. If payout was made at maximum levels for company performance and excluding any individual adjustments, the amounts shown would double from the targets shown, although the value of the actual payout would be dependent upon the stock price at the time of the payout. If payout was made at minimum levels, the amounts would be reduced to zero. No adjustment is made to the target shown for prior years based upon any change in probability subsequent to the time the target is set. Changes to targets resulting from promotion or demotion of a Named Executive Officer are shown as awards in the year of the promotion or demotion, even though the awards may relate to a program period that began in an earlier year. Actual payouts with regard to the targets set for 2009 were approved by the HRCC at its February 2012 meeting, at which the Committee determined the payouts to be made to Senior Officers (including the Named Executive Officers) for the performance period that began in 2009 and ended in 2011. Those payouts were as follows (with values shown at fair market value on the date of payout): Mr. Mulva, $18,482,664; Mr. Carrig, $7,597,378; Mr. Garland, $1,541,468; Mr. Hirshberg, $1,477,216; Mr. Lance, $3,219,848; and Mr. Sheets, $1,997,483.

Awards under PSP are made in restricted stock or restricted stock units that will generally be forfeited if the employee is terminated prior to the end of the escrow period set in the award (other than for death or following disability or after a change in control). For target awards for program periods beginning in 2008 and earlier, the escrow period lasts until separation from service, except in the cases of termination due to death, layoff, or retirement, or after disability or a change in control, when the escrow period ends at the exceptional termination event. For target awards for program periods beginning in 2009 and later, the escrow period lasts five years from the grant of the award (which would be more than eight years after the beginning of the program period, when measured including the performance period) unless the employee makes an election prior to the beginning of the program period to have the escrow period last until separation from service instead; except that in the cases of termination due to death, layoff, or retirement, or after disability or a change in control, the escrow period ends at the exceptional termination event. In the event of termination due to layoff or retirement after age 55 with five years of service, a value for the forfeited restricted stock or restricted stock units will generally be credited to a deferred compensation account for the employee for awards made prior to 2005; for later awards, restrictions lapse in the event of termination due to layoff or early retirement after age 55 with five years of service, unless the employee has elected to defer receipt of the stock until a later time.

Messrs. Garland and Hirshberg became employees of ConocoPhillips on October 6, 2010. As inducements to their employment, the HRCC approved the grant of certain restricted stock units to each, effective on the date of employment. Mr. Garland received 16,877 units (valued at $999,962), the restrictions on which lapse as to one-half of the units on the first anniversary of his employment, while the restrictions on the remainder lapse on the second anniversary of his employment. Mr. Hirshberg received 48,945 units (valued at $2,899,991), the restrictions on which lapse on the third anniversary of his employment. Other terms and conditions of the restricted stock unit awards for each officer reflect the standard terms and conditions of restricted stock unit awards under PSP. The amounts for 2010 reflected in the Table include these awards, as well as their target awards under PSP.

(4)

Amounts represent the dollar amount recognized as the aggregate grant date fair value, as determined in accordance with FASB ASC Topic 718. See the “Employee Benefit Plans” section of Note 19 in the Notes to Consolidated Financial Statements in the Company’s 2011 Annual Report on Form 10-K for a discussion of the relevant assumptions used in this determination. All such options were awarded under the Company’s Stock Option Program. Options awarded to Named Executive Officers under that program generally vest in three equal annual installments beginning with the first anniversary from the date of grant and expire ten years after the date of grant. However, in the event that a Named Executive Officer has

attained the early retirement age of 55 with five years of service, the value of the options granted is taken in the year of grant or over the number of months until the executive attains age 55 with five years of service.

Option awards are made in February of each year at a regularly-scheduled meeting of the HRCC. Occasionally, option awards may be made at other times, such as upon the commencement of employment of an individual. In determining the number of shares to be subject to these option grants, the HRCC used a Black-Scholes-Merton-based methodology to value the options.

(5)	Includes amounts paid under VCIP, our primary non-equity short-term incentive arrangement, and includes amounts that were voluntarily deferred to the Company’s Key Employee Deferred Compensation Plan. See also note (2) above.

(6)

Amounts represent the actuarial increase in the present value of the Named Executive Officer’s benefits under all pension plans maintained by the Company determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. Interest rate assumption changes have a significant impact on the pension values with periods of lower interest rates having the effect of increasing the actuarial values reported and vice versa.

(7)

As discussed in Compensation Discussion and Analysis beginning on page 26 of this proxy statement, ConocoPhillips provides its executives with a number of compensation and benefit arrangements. The tables below reflect amounts earned under those arrangements. We have excluded arrangements that are generally available to our U.S.-based salaried employees, such as our medical, dental, life and accident insurance, disability, and health savings and flexible spending account arrangements, since all of our Named Executive Officers are U.S.-based salaried employees. Certain of the amounts reflected below were paid in local currencies, which we value in this table in U.S. dollars using a monthly currency valuation for the month in which costs were incurred. All Other Compensation includes the following amounts, which were determined using actual cost paid by the Company unless otherwise noted:


Name		Personal Use of Company Aircraft^(a)		Automobile Provided by Company^(b)		Home Security^(c)		Annual Physical^(d)		Executive Group Life Insurance Premiums^(e)		Tax Reimbursement Gross-Up^(f)		Relocation^(g)
J.J. Mulva	2011	$	—	$	15,298	$	—	$	—	$	22,860	$	19,904	$	—
	2010		31,274		32,379		—		2,689		11,880		65,045		—
	2009		3,375		14,967		874		1,964		11,880		17,954		—
J.A. Carrig	2011		—		—		—		—		1,019		5,179		—
	2010		—		—		—		—		6,012		—		—
	2009		—		—		—		795		5,908		745		—
G.C. Garland	2011		—		—		—		—		2,072		679		68,389
	2010		—		—		—		—		334		—		15,106
	2009		—		—		—		—		—		—		—
A.J. Hirshberg	2011		—		—		—		—		2,072		5,338		113,761
	2010		—		—		—		—		218		—		—
	2009		—		—		—		—		—		—		—
R.M. Lance	2011		—		—		—		—		1,351		8,199		—
	2010		—		—		—		1,262		1,231		3,521		—
	2009		—		—		—		—		1,169		—		—
J.W. Sheets	2011		—		—		—		—		1,710		5,213		—
	2010		—		—		—		—		1,371		1,825		—
	2009		—		—		—		—		1,272		1,109		—


Name		Expatriate^(h)		Retirement Presentations⁽ⁱ⁾		Post-Employment Payments^(j)		Matching Gift Program^(k)		Matching Contributions Under the Tax-Qualified Savings Plans^(l)		Company Contributions to Non-Qualified Defined Contribution Plans ^(m)
J.J. Mulva	2011	$	—	$	—	$	—	$	15,000	$	32,372	$	158,088
	2010		—		—		—		15,000		14,651		121,225
	2009		—		—		—		18,000		13,947		119,818
J.A. Carrig	2011		—		9,030		6,626,492		17,500		26,096		64,770
	2010		—		—		—		5,000		14,651		87,352
	2009		—		—		—		30,000		13,947		81,638
G.C. Garland	2011		—		—		—		—		32,372		20,375
	2010		—		—		—		—		10,692		—
	2009		—		—		—		—		—		—
A.J. Hirshberg	2011		—		—		—		2,700		32,372		20,375
	2010		—		—		—		—		10,692		—
	2009		—		—		—		—		—		—
R.M. Lance	2011		51,000		—		—		200		32,372		59,101
	2010		5,224		—		—		5,000		14,651		40,640
	2009		—		—		—		—		13,947		38,055
J.W. Sheets	2011		—		—		—		13,500		32,255		34,726
	2010		—		—		—		13,500		15,396		26,479
	2009		—		—		—		5,500		14,107		19,719

(a)

The Comprehensive Security Program of the Company requires that Mr. Mulva fly on Company aircraft, unless a determination is made by the Manager of Global Security that other arrangements are an acceptable risk. Numbers above represent the approximate incremental cost to ConocoPhillips for personal use of the aircraft, including travel for any family member or guest. Approximate incremental cost has been determined by calculating the variable costs for each aircraft during the year, dividing that amount by the total number of miles flown by that aircraft, and multiplying the result by the miles flown for personal use during the year. Included in incremental costs reported are $0 associated with flights to the Company hangar or other locations without passengers, commonly referred to as “deadhead” flights. In 2007, the Company and Mr. Mulva entered into a Time Share Agreement with regard to certain of the Company’s aircraft, pursuant to which Mr. Mulva agreed to reimburse the Company for his personal use of the aircraft, subject to certain limitations required by the Federal Aviation Administration. The amounts shown for incremental costs related to the personal use of an aircraft by Mr. Mulva reflect the net incremental costs to the Company after giving effect to any reimbursements received under the Time Share Agreement. In 2011, the reimbursement from Mr. Mulva was greater than the aggregate incremental cost.

(b)

The value shown in the table represents the approximate incremental cost to the Company of providing and maintaining an automobile, excluding Company security personnel. Approximate incremental cost was calculated using actual expenses incurred during the year. Other executives and employees of the Company may also be required to use Company-provided transportation and security personnel, especially when traveling or living outside of the United States, in accordance with risk assessments made by the Company’s Manager of Global Security.

(c)

The use of a home security system is required as part of ConocoPhillips’ Comprehensive Security Program for certain executives and employees, including the Named Executive Officers noted above, based on risk assessments made by the Company’s Manager of Global Security. Amounts shown represent the approximate incremental cost to ConocoPhillips for the installation and maintenance of the home security system with features required by the Company in excess of the cost of a “standard” system typical for homes in the neighborhoods where the Named Executive Officers’ homes are located. The Named Executive Officer pays the cost of the “standard” system himself. No charges have been incurred under this program since 2009.

(d)

Historically, the Company maintained a program under which costs associated with annual physical examinations of eligible employees, including the Named Executive Officers, were paid for by the Company. This program was discontinued effective at the end of 2010.

(e)

The amounts shown are for premiums paid by the Company for executive group life insurance provided by the Company, with a value equal to the employee’s annual salary. In addition, certain employees of the Company, including

the Named Executive Officers, are eligible to purchase group variable universal life insurance policies for which the employee pays all costs, so that there is no incremental cost to the Company.

(f)

The amounts shown are for payments by the Company relating to certain taxes incurred by the employee. These primarily occur when the Company requests family members or other guests to accompany the employee to Company functions and, as a result, the employee is deemed to make a personal use of Company assets (for example, when a spouse accompanies an employee on a Company aircraft). The Company believes that such travel is appropriately characterized as a business expense and, if the employee is imputed income in accordance with the applicable tax laws, the Company will generally reimburse the employee for any increased tax costs.

(g)

These amounts reflect relocation expenses approved by the HRCC in the offer letter to Mr. Garland and Mr. Hirshberg in connection with their hiring. The amounts were calculated pursuant to the standard relocation policy of the Company.

(h)

These amounts reflect net expatriate benefits under our standard policies for such service outside the United States, and these amounts include payments for increased tax costs related to such expatriate assignments and benefits. Not included in the footnote table are amounts returned to the Company in the normal course of the expatriate tax protection process that may relate to a prior period. These amounts are returned to the Company when they are known or received through the tax reporting and filing process. The amounts noted for Mr. Lance were $0 in 2011, $(176,325) in 2010, and $(314,163) in 2009. Amounts shown in the table above also reflect amended tax equalization and similar payments under our expatriate services policies that were made to and from or on behalf of the Named Executive Officer that were paid or received during 2011 but apply to earnings of prior years, but which were unknown or not capable of being estimated with any reasonable degree of accuracy in prior years.

(i)

These amounts reflect the practice of the Company to make presentations to its retiring employees, especially those of long service. The amounts shown reflect the invoiced cost to the Company.

(j)

Mr. Carrig retired effective March 1, 2011. The amounts presented relate to post-employment payments under the ConocoPhillips Executive Severance Plan and other payments under the Company’s standard retirement policy. Not reflected in the Summary Compensation Table, but included in the “Payments During Last Fiscal Year” column of the Pension Benefits table, are pension benefits to which he was entitled as part of the provisions of Title I of the ConocoPhillips Retirement Plan and the ConocoPhillips Key Employee Supplemental Retirement Plan. Also see footnotes 2 and 3 of the Pension Benefit Table on page 55.

(k)

The Company maintains a Matching Gift Program under which certain gifts by employees to qualified educational or charitable institutions are matched. For executives, the program matches up to $15,000 with regard to each program year. Administration of the program can cause more than $15,000 to be paid in a single fiscal year of the Company, due to processing claims from more than one program year in that single fiscal year. The amounts shown are for the actual payments by the Company during the year. In December 2009, the Board of Directors approved changes in the Matching Gift Program provisions for employees that brought it into parity with the provisions for executives, effective in 2010.

(l)

Under the terms of its tax-qualified defined contribution plans, the Company makes matching contributions and allocations to the accounts of its eligible employees, including the Named Executive Officers.

(m)

Under the terms of its nonqualified defined contribution plans, the Company makes contributions to the accounts of its eligible employees, including the Named Executive Officers. See the narrative, table, and notes to the “Nonqualified Deferred Compensation Table” for further information.

(8)	Mr. Carrig retired from ConocoPhillips effective March 1, 2011. Prior to October 6, 2010, Mr. Carrig served as President and Chief Operating Officer.

(9)

In accordance with SEC rules prohibiting issuers from reporting a negative value in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)” column, Mr. Mulva’s total compensation excludes the effect of a $246,639 decrease in the net present value of Mr. Mulva’s pension benefits in 2010 and a $7,885,466 decrease in the net present value of Mr. Mulva’s pension benefits in 2009. Including the effects of these decreases in value, Mr. Mulva’s total compensation, as reported in the Summary Compensation Table, would have been $17,686,256 in 2010 and $6,503,195 in 2009.

GRANTS OF PLAN-BASED AWARDS TABLE

The Grants of Plan-Based Awards Table is used to show participation by the Named Executive Officers in the incentive compensation arrangements described below.

The columns under the heading Estimated Future Payouts Under Non-Equity Incentive Plan Awards show information regarding the VCIP. The amounts shown in the Table are those applicable to the 2011 program year using a minimum of zero and a maximum of 250 percent of VCIP target for each participant and do not represent actual payouts for that program year. Actual payouts for the 2011 program year were made in February 2012 and are shown in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column.

The columns under the heading Estimated Future Payouts Under Equity Incentive Plan Awards show information regarding PSP. The amounts shown in the Table are those set for 2011 compensation tied to the 2011 through 2013 program period under PSP (PSP IX) and do not represent actual payouts for that program year.

The “All Other Option Awards” column reflects option awards granted under the Stock Option Program. The option awards shown were granted on the same day that the target was approved. For the 2011 program year under the Stock Option Program, targets were set and awards granted at the regularly scheduled February 2011 meeting of the HRCC.


Name	Grant Date⁽¹⁾		Estimated Future Payouts Under Non-Equity Incentive Plan Awards⁽²⁾						Estimated Future Payouts Under Equity Incentive Plan Awards⁽³⁾						All Other Stock Awards: Number of Shares of Stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)⁽⁴⁾		Exercise or Base Price Of Options Awards Average Price ($Sh)⁽⁵⁾		Exercise or Base Price Of Options Awards Closing Price ($Sh)⁽⁶⁾		Grant Date Fair Value of Stock and Options Awards⁽⁷⁾
Name	Grant Date⁽¹⁾		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)										Grant Date Fair Value of Stock and Options Awards⁽⁷⁾
J.J. Mulva			$	—	$	2,025,000	$	5,062,500		—		—		—		—		—	$	—	$	—	$	—
		2/10/2011		—		—		—		—		105,308		210,616		—		—		—		—		7,384,724
		2/10/2011		—		—		—		—		—		—		—		388,500		70.125		70.08		6,487,950
J.A. Carrig				—		217,250		543,125		—		—		—		—		—		—		—		—
G.C. Garland				—		667,945		1,669,863		—		—		—		—		—		—		—		—
		2/10/2011		—		—		—		—		19,418		38,836		—		—		—		—		1,361,687
		2/10/2011		—		—		—		—		—		—		—		71,700		70.125		70.08		1,197,390
A.J. Hirshberg				—		667,945		1,669,863		—		—		—		—		—		—		—		—
		2/10/2011		—		—		—		—		19,418		38,836		—		—		—		—		1,361,687
		2/10/2011		—		—		—		—		—		—		—		71,700		70.125		70.08		1,197,390
R.M. Lance				—		667,945		1,669,863		—		—		—		—		—		—		—		—
		2/10/2011		—		—		—		—		19,418		38,836		—		—		—		—		1,361,687
		2/10/2011		—		—		—		—		—		—		—		71,700		70.125		70.08		1,197,390
J.W. Sheets				—		514,185		1,285,463		—		—		—		—		—		—		—		—
		1/1/2011		—		—		—		—		1,814		3,628		—		—		—		—		123,724
		1/1/2011		—		—		—		—		3,699		7,398		—		—		—		—		252,290
		2/10/2011		—		—		—		—		15,339		30,678		—		—		—		—		1,075,647
		2/10/2011		—		—		—		—		—		—		—		43,700		70.125		70.08		729,790

(1)

The grant date shown is the date on which the HRCC approved the target awards, except with regard to the January 1, 2011 awards shown for Mr. Sheets. With regard to Mr. Sheets, under the terms of the PSP, an adjustment in the target and maximum awards under three on-going performance periods automatically occurred on the effective date of his promotion, which was effective January 1, 2011 and was approved by the HRCC.

(2)

Threshold and maximum awards are based on the program provisions under the VCIP. Actual awards earned can range from zero to 200 percent of the target awards for corporate and business unit performance, with a further possible adjustment of up to 50 percent of the target awards for individual performance. Amounts reflect estimated possible cash payouts under the VCIP after the

close of the performance period. The estimated amounts are calculated based on the applicable annual target and base salary for each Named Executive Officer in effect for the 2011 performance period. If threshold levels of performance are not met, then the payout can be zero. The HRCC also retains the authority to make awards under the program at its discretion, including the discretion to make awards greater than the maximum payout. Actual payouts under the VCIP for 2011 are based on actual base salaries earned in 2011 and are reflected in the “Non-Equity Incentive Plan Compensation ($)” column of the Summary Compensation Table.

(3)

Threshold and maximum are based on the program provisions under the PSP. Actual awards earned can range from zero to 200 percent of the target awards. The HRCC retains the authority to make awards under the program at its discretion, including the discretion to make awards greater than the maximum payout.

(4)	These amounts represent stock options granted during 2011.

(5)

The exercise price is the average of the high and low prices of ConocoPhillips common stock, as reported on the NYSE, on the date of the grant (or on the last preceding date for which there was a reported sale, in the absence of any reported sales on the grant date); therefore, on the grant date, the option has no immediately realizable value and any potential payout reflects an increase in share price after the grant date. The Company’s stockholder-approved 2011 Omnibus Stock and Performance Incentive Plan provides for the use of such an average price in setting the exercise price on options, unless the HRCC directs otherwise. The immediate predecessor plans, the stockholder-approved 2004 and 2009 Omnibus Stock and Performance Incentive Plans, had the same provision. Grants made before May 13, 2009, were made under the 2004 Plan and grants made before May 11, 2011 but after May 12, 2009, were made under the 2009 Plan.

(6)	The closing price is the closing price of ConocoPhillips common stock, as reported on the NYSE, on the date of the grant.

(7)

For equity incentive plan awards, these amounts represent the grant date fair value at target level under PSP as determined pursuant to FASB ASC Topic 718. For option awards, these amounts represent the grant date fair value of the option awards using a Black-Scholes-Merton-based methodology to value the options. Actual value realized upon option exercise depends on market prices at the time of exercise. For other stock awards, these amounts represent the grant date fair value of the restricted stock or restricted stock unit awards determined pursuant to FASB ASC Topic 718. See the “Employee Benefit Plans” section of Note 19 in the Notes to Consolidated Financial Statements in the Company’s 2011 Annual Report on Form 10-K, for a discussion of the relevant assumptions used in this determination.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END


	Option Awards⁽¹⁾											Stock Awards⁽⁶⁾
Name	Number of Securities Underlying Unexercised Options (#) Exercisable⁽²⁾		Number of Securities Underlying Unexercised Options (#) Unexercisable			Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
J.J. Mulva		12,738		—			—		23.550		10/22/2012		—		—		—		—
		413,062		—			—		23.550		10/22/2012		—		—		—		—
		606,000		—			—		24.370		2/10/2013		—		—		—		—
		745,200		—			—		32.810		2/8/2014		—		—		—		—
		392,800		—			—		47.830		2/4/2015		—		—		—		—
		268,800		—			—		59.075		2/10/2016		—		—		—		—
		276,500		—			—		66.370		2/8/2017		—		—		—		—
		296,400		—			—		79.380		2/14/2018		—		—		—		—
		342,133		171,067	⁽³⁾		—		45.470		2/12/2019		—		—		—		—
		163,466		326,934	⁽⁴⁾		—		48.385		2/12/2020		—		—		—		—
		—		388,500	⁽⁵⁾		—		70.125		2/10/2021		—		—		—		—
													3,257,121		237,346,407		232,384		16,933,822
J.A. Carrig⁽⁷⁾		49,662		—			—		23.550		10/22/2012		—		—		—		—
		122,200		—			—		24.370		2/10/2013		—		—		—		—
		126,200		—			—		32.810		2/8/2014		—		—		—		—
		104,600		—			—		47.830		2/4/2015		—		—		—		—
		78,500		—			—		59.075		2/10/2016		—		—		—		—
		80,800		—			—		66.370		2/8/2017		—		—		—		—
		90,300		—			—		79.380		2/14/2018		—		—		—		—
		211,666		105,834	⁽³⁾		—		45.470		2/12/2019		—		—		—		—
		101,133		202,267	⁽⁴⁾		—		48.385		2/12/2020		—		—		—		—
													419,413		30,562,625		30,572		2,227,782
G.C. Garland		—		71,700	⁽⁵⁾		—		70.125		2/10/2021		—		—		—		—
													29,887		2,177,866		39,289		2,862,989
A.J. Hirshberg		—		71,700	⁽⁵⁾		—		70.125		2/10/2021		—		—		—		—
													69,499		5,064,392		39,289		2,862,989
R.M. Lance		22,700		—			—		59.075		2/10/2016		—		—		—		—
		34,900		—			—		66.370		2/8/2017		—		—		—		—
		44,300		—			—		79.380		2/14/2018		—		—		—		—
		30,133		30,067	⁽³⁾		—		45.470		2/12/2019		—		—		—		—
		29,600		59,200	⁽⁴⁾		—		48.385		2/12/2020		—		—		—		—
		—		71,700	⁽⁵⁾		—		70.125		2/10/2021		—		—		—		—
													164,463		11,984,419		45,036		3,281,773
J.W. Sheets		5,238		—			—		23.550		10/22/2012		—		—		—		—
		25,800		—			—		24.370		2/10/2013		—		—		—		—
		29,400		—			—		32.810		2/8/2014		—		—		—		—
		22,400		—			—		47.830		2/4/2015		—		—		—		—
		15,500		—			—		59.075		2/10/2016		—		—		—		—
		17,100		—			—		66.370		2/8/2017		—		—		—		—
		16,900		—			—		79.380		2/14/2018		—		—		—		—
		28,333		14,167	⁽³⁾		—		45.470		2/12/2019		—		—		—		—
		13,933		27,867	⁽⁴⁾		—		48.385		2/12/2020		—		—		—		—
		—		43,700	⁽⁵⁾		—		70.125		2/10/2021		—		—		—		—
													108,798		7,928,110		33,787		2,462,059

(1)

All options shown in the table have a maximum term for exercise of ten years from the grant date. Under certain circumstances, the terms for exercise may be shorter, and in certain circumstances, the options may be forfeited and cancelled. All awards shown in the table have associated restrictions upon transferability.

(2)

The options shown in this column vested and became exercisable in 2011 or prior years (although under certain termination circumstances, the options may still be forfeited). Following the merger of Conoco and Phillips, options become exercisable in one-third increments on the first, second and third anniversaries of the grant date.

(3)	Represents the final one-third vesting of the February 12, 2009 grant, which became exercisable on February 12, 2012.

(4)	Represents the final two-thirds vesting of the February 12, 2010 grant, half of which became exercisable on February 12, 2012, and the other half will become exercisable on February 12, 2013.

(5)	Represents the February 10, 2011 grant, one-third of which became exercisable on February 10, 2012, one-third of which will become exercisable on February 10, 2013 and the final third will become exercisable on February 10, 2014.

(6)

No stock awards were made to the Named Executive Officers in 2011 except as a long-term incentive award under the PSP (shown in the columns labeled “Stock Awards”) or pursuant to elections made by a Named Executive Officer to receive cash compensation in the form of restricted stock units. Amounts above include PSP awards for the three-year performance period ending December 31, 2011 (PSP VII), as follows: Mr. Mulva, 257,168 shares; Mr. Carrig, 105,710 shares; Mr. Garland 21,448 shares; Mr. Hirshberg 20,554 shares; Mr. Lance, 44,801 shares; and Mr. Sheets, 27,793 shares. Stock awards shown in the columns entitled “Number of Shares or Units of Stock That Have Not Vested (#)” and “Market Value of Shares or Units of Stock That Have Not Vested ($)” continue to have restrictions upon transferability. Under the PSP, stock awards are made in the form of restricted stock units or restricted stock, the former having been used in the most recent awards. The terms and conditions of both are substantially the same, requiring restriction on transferability until separation from service from the Company, although for performance periods beginning in 2009, restrictions will lapse five years from the anniversary of the grant date unless the employee has elected prior to the beginning of the performance period to defer the lapsing of such restrictions until separation from service from the Company. Except in cases where the five-year provision applies, forfeiture is expected to occur if the separation is not the result of death, disability, layoff, retirement after the executive has reached the age of 55 with five years of service, or after a change of control, although the HRCC has the authority to waive forfeiture. Restricted stock awards have voting rights and pay dividends. Restricted stock unit awards have no voting rights and pay dividend equivalents. Dividend equivalents, if any, on restricted stock units held are paid in cash or credited to each officer’s account in the form of additional stock units. Neither pays dividends or dividend equivalents at preferential rates. Restricted stock held by the Named Executive Officers prior to November 17, 2001, was converted to restricted stock units prior to the completion of the merger, with the original restrictions still in place. In addition to stock awards actually granted, the Table reflects potential stock awards to Named Executive Officers under ongoing performance periods for the PSP, for the performance periods from 2010 through 2012 and 2011 through 2013. These are shown at target levels in the columns entitled Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) and Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($). There is no assurance that these awards will be granted at, below, or above target after the end of the relevant performance periods, as the determination of whether to make an actual grant and the amount of any actual grant for Named Executive Officers is within the discretion of the HRCC. Until an actual grant is made, these target awards have no voting rights and pay no dividends or dividend equivalents. Stock awards shown reflect the closing price of ConocoPhillips common stock, as reported on the NYSE, on December 30, 2011 ($72.87), the last trading day of 2011.

Amounts presented in “Number of Shares or Units of Stock That Have Not Vested (#)” and “Market Value of Shares or Units of Stock That Have Not Vested ($)” represent restricted stock and restricted stock unit awards granted with respect to prior periods. The plans and programs under which such grants were made provide that awards made in the form of restricted stock and restricted stock units be held in such form until the recipient retires. If such awards immediately vested upon completion of the relevant performance period, as we are informed by our compensation consultant is more typical for restricted stock programs, the amounts reflected in this column would be zero.

(7)

Mr. Carrig retired effective March 1, 2011. With regard to the option awards reflected in the “Option Awards” columns, the terms and conditions generally allow them to be exercised for up to ten years from the date of the initial grant. Grants made in 2009 and 2010 became, or will become, exercisable in one-third increments on the anniversary dates of the grants, and the retirement did not accelerate or terminate that exercisability. With regard to stock awards, target awards under the PSP (the target award levels of which are reflected in the columns entitled “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)” and “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($))” are usually reduced to reflect service for less than the full time of the relevant performance period, subject to the discretion of the HRCC to set actual payout. The amounts shown reflect the prorated target amounts. Restrictions on all outstanding stock awards from earlier performance periods (including the 105,710 shares to Mr. Carrig awarded in February 2012 with regard to PSP for the performance period from 2009 through 2011) will lapse and payout in unrestricted stock based on his election schedule. For the Stock Option Program and PSP, except in cases of death, disability, or demotion, if the employee has participated for less than a year in a program period, awards related to that program period are forfeited.

OPTION EXERCISES AND STOCK VESTED


	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized Upon Exercise ($)		Number of Shares Acquired on Vesting (#)		Value Realized Upon Vesting ($)
J.J. Mulva		3,478,000	$	140,853,640		—	$	—
J.A. Carrig⁽¹⁾		10,200		368,577		194,374		15,147,049
G.C. Garland⁽²⁾		—		—		8,438		537,290
A.J. Hirshberg		—		—		—		—
R.M. Lance		74,809		2,626,684		—		—
J.W. Sheets		—		—		—		—

(1)

Mr. Carrig received restricted stock units and restricted stock awards during his employment. Per the terms and conditions of certain awards, since Mr. Carrig had not reached normal retirement age (age 65), the value of these awards was credited to his Key Employee Deferred Compensation Plan account in lieu of receiving unrestricted shares. Accordingly, upon his retirement, 144,756 restricted stock units and 49,618 shares of restricted stock were canceled and a value of $15,147,049 was credited to his deferred compensation account. Also see note 2 to the Nonqualified Deferred Compensation table on page 59.

(2)

As an inducement to his employment, the HRCC approved a grant of 16,877 restricted stock units to Mr. Garland, effective on the date of employment, the restrictions on which lapse as to one-half of the units on the first anniversary of his employment, while the restrictions on the remainder lapse on the second anniversary of his employment. The amounts reflected represent the lapsing of the one-half of the units on his first anniversary of employment.

PENSION BENEFITS

ConocoPhillips maintains several defined benefit plans for its eligible employees. With regard to U.S.-based salaried employees, the defined benefit plan that is qualified under the Internal Revenue Code is the ConocoPhillips Retirement Plan (CPRP).

The CPRP is a non-contributory plan that is funded through a trust. The CPRP consists of eight titles, each one corresponding to a different pension formula and having numerous other differences in terms and conditions. Employees are eligible for current participation in only one title (although an employee may also have a frozen benefit under one or more other titles), and eligibility is based on heritage company and time of hire. Of the Named Executive Officers, Messrs. Mulva, Carrig, Garland, Lance, and Sheets (having been employees of Phillips) are eligible for, and vested in, benefits under Title I of the CPRP, and Mr. Hirshberg is eligible for benefits under Title II. Title I provides a final average earnings type of pension benefit for eligible employees payable at normal or early retirement from the Company. Under Title I normal retirement occurs upon termination on or after age 65; early retirement can occur at age 55 with five years of service (or if laid off during or after the year in which the participant reaches age 50). Under Title I, early retirement benefits are reduced by five percent per year for each year before age 60 that benefits are paid, but for benefits that commence at age 60 through age 65, the benefit is unreduced. Mr. Mulva was retirement eligible at the end of 2011. Mr. Carrig was eligible for early retirement on his retirement on March 1, 2011. Messrs. Garland, Hirshberg, Lance, and Sheets were not eligible for early retirement at the end of 2011. Under Title I employees become vested in the benefits after five years of service, and all of the Named Executive Officers are vested in their benefits under those Titles. Under Title II, employees become vested in their benefits after three years of service. Mr. Hirshberg is not vested in his benefits under Title II. Titles I and II allow the employee to elect the form of benefit payment from among several annuity types or a single sum payment option, but all of the options are actuarially equivalent.

For Title I, the benefit formula applicable to our eligible Named Executive Officers is the same. Retirement benefits are calculated as the product of 1.6 percent times years of credited service multiplied by the final annual eligible average compensation. Final annual eligible average compensation is calculated using the three highest consecutive years in the last ten calendar years before retirement plus the year of retirement. In each case, such benefits are reduced by the product of 1.5 percent of the annual primary Social Security benefit multiplied by years of credited service, although a maximum reduction limit of 50 percent may apply in certain cases. The formula below provides an illustration as to how the retirement benefits are calculated. For purposes of the formula, “pension compensation” denotes the final annual eligible average compensation described above.

[

1.6%

Pension
Compensation

Years of Credited
Service

]

–

[

1.5%

Annual

Primary SS
Benefit

Years of
Credited
Service

]

Eligible pension compensation generally includes salary and annual incentive compensation. However, under Title I, if an eligible employee receives layoff benefits from the Company, eligible pension compensation includes the annualized salary for the year of layoff, rather than actual salary, and years of credited service are increased by any period for which layoff benefits are calculated. Furthermore, certain foreign service as an employee of Phillips is counted as time and a quarter when determining the service element in the benefit formula under Title I.

Benefits under Title II are based on monthly pay and interest credits to a cash balance account created on the first day of the month after a participant’s hire date. Pay credits are equal to a percentage of total salary and bonus. Participants whose combined years of age and service total less than 44 receive a 6 percent pay credit, those with 44 through 65 receive a 7 percent pay credit, and those with 66 or more receive a 9 percent pay credit. Normal retirement age is 65, but participants may receive their vested benefit upon termination of employment at any age.

Eligible pension compensation under Titles I and II is limited in accordance with the Internal Revenue Code. In 2011, that limit was $245,000. The Internal Revenue Code also limits the annual benefit (expressed as an annuity) available under Titles I and II. In 2011, that limit was $195,000 (reduced actuarially for ages below 62).

In addition, the Company maintains several nonqualified pension plans. These are funded through the general assets of the Company, although the Company also maintains trusts of the type generally known as “rabbi trusts” that may be used to pay benefits under the nonqualified pension plans. The plan available to the Named Executive Officers is the ConocoPhillips Key Employee Supplemental Retirement Plan (KESRP). This plan is designed to replace benefits that would otherwise not be received due to limitations contained in the Internal Revenue Code that apply to qualified plans. The two such limitations that most frequently impact the benefits to employees are the limit on compensation that can be taken into account in determining benefit accruals and the maximum annual pension benefit. In 2011, the former limit was set at $245,000, while the latter was set at $195,000. The KESRP determines a benefit without regard to such limits, and then reduces that benefit by the amount of benefit payable from the related qualified plan, the CPRP. Thus, in operation the combined benefits payable from the related plans for the eligible employee equals the benefit that would have been paid if there had been no limitations imposed by the Internal Revenue Code. Benefits under KESRP are generally paid in a single sum the later of age 55 or six months after retirement. When payments do not begin until after retirement, interest at then current six-month Treasury-bill rates, under most circumstances, will be credited on the delayed benefits. Distribution may also be made upon a determination of death or disability.

Certain foreign service as an employee of Phillips is counted as time and a quarter when determining the service element in the benefit formula under KESRP. Also under KESRP, certain incentive payments approved by the Phillips Board of Directors in 2000 are considered as pension compensation. Otherwise, the benefit formulas under KESRP take into account only actual service with the employer and compensation arising from salary and annual incentive compensation (including annual incentive compensation that is performance-based and is included in the Summary Compensation Table as Non-Equity Incentive Plan Compensation for that reason). The footnotes below provide further detail on extra credited service and compensation.

Mr. Hirshberg was previously an employee of Exxon Mobil Corporation. In connection with his hiring by ConocoPhillips, the Company agreed to provide Mr. Hirshberg with a benefit under KESRP equal to the benefit calculated under KESRP for a participant in Title I of CPRP, reduced by actual benefits payable from CPRP or other ConocoPhillips plans and by estimated benefits payable from the plans of ExxonMobil. Mr. Hirshberg is vested in the benefit payable under KESRP. The Table reflects that benefit, showing only the values payable from the plans of ConocoPhillips, not from the plans of ExxonMobil.

Mr. Lance was an employee of ARCO Alaska, which was acquired by Phillips in 2000. As such, a special provision applies in the calculation of his pension benefits under Title I. First, the Company calculates a benefit under the Title I formula using service with both ARCO and ConocoPhillips, subtracting from the result the value of the benefit under the ARCO plan through the time of the acquisition (for which the BP Retirement Accumulation Plan remains liable, after the acquisition of ARCO by BP and certain plan mergers). Next, the Company calculates a benefit under the Title I formula using only service with ConocoPhillips. The Company compares the results of the two methods and the employee receives the larger benefit. For Mr. Lance, that calculation currently provides a larger benefit under the first method. The Table reflects that benefit, showing only the value payable from the plan of ConocoPhillips, not from the BP Retirement Accumulation Plan.

Except where otherwise noted, assumptions used in calculating the present value of accumulated benefits in the Table are found in Note 19 in the Notes to Consolidated Financial Statements in the Company’s 2011 Annual Report on Form 10-K.


Name	Plan Name	Number of Years Credited Service (#)	Present Value of Accumulated Benefit ($)⁽¹⁾		Payments During Last Fiscal Year ($)
J.J. Mulva⁽²⁾	Title I - ConocoPhillips Retirement Plan	40	$	1,959,838	$	—
	ConocoPhillips Key Employee Supplemental Retirement Plan			68,527,688		—
J.A. Carrig⁽²⁾⁽³⁾	Title I - ConocoPhillips Retirement Plan	35		—		1,825,887

	ConocoPhillips Key Employee Supplemental Retirement Plan			—		28,337,299
G.C. Garland⁽⁴⁾	Title I - ConocoPhillips Retirement Plan	22		793,184		—
	ConocoPhillips Key Employee Supplemental Retirement Plan			2,675,162		—
A.J. Hirshberg⁽⁵⁾	Title II - ConocoPhillips Retirement Plan	1		26,671		—

	ConocoPhillips Key Employee Supplemental Retirement Plan	29		5,740,508		—
R.M. Lance	Title I - ConocoPhillips Retirement Plan	28		602,235		—
	ConocoPhillips Key Employee Supplemental Retirement Plan			4,348,611		—
J.W. Sheets	Title I - ConocoPhillips Retirement Plan	32		1,208,454		—

	ConocoPhillips Key Employee Supplemental Retirement Plan			4,256,304		—

(1)

In determining the present value of the accumulated benefit for each Named Executive Officer, the eligible pension compensation, as defined on pages 53 and 54, used to calculate the amounts above as of December 31, 2011, for each Named Executive Officer is: Mr. Mulva, $23,931,078; Mr. Garland, $1,196,210; Mr. Hirshberg, $1,193,901; Mr. Lance, $4,259,721; and Mr. Sheets, $3,125,758. In determining the present value of the accumulated benefit for Mr. Mulva, this takes into account as an element of pension compensation the value of an off-cycle award of restricted stock and of an off-cycle performance incentive award both approved by the Phillips Compensation Committee in 2000, but with regard to which the performance conditions were met in 2005. The value of the two off-cycle awards included as part of pension compensation for 2005 was $6,278,301 for Mr. Mulva.

(2)

Includes additional credited service for Messrs. Mulva and Carrig of 18.25 and 7.5 months, respectively, related to foreign assignments and for, Mr. Carrig, 15 months additional credited service related to benefits under Title I and an additional 2 months credited service for accrued vacation under normal retirement benefits under Title I. With regard to this additional credited service, the following amount was included in the accumulated benefit shown in the pension table above: Mr. Mulva, $2,684,060.

(3)	Mr. Carrig retired effective March 1, 2011 and received a lump-sum distribution of his qualified and non-qualified pension benefit.

(4)

With regard to Mr. Garland, he became an employee of ConocoPhillips on October 6, 2010. Prior to joining ConocoPhillips, Mr. Garland was President and Chief Executive Officer for Chevron Phillips Chemical Company LLC (CPChem). ConocoPhillips owns a 50 percent interest in CPChem. None of the benefits earned by Mr. Garland as an employee of CPChem are included in the Table. The service credited to Mr. Garland does not include his time of service with CPChem.

However, prior to his service at CPChem, Mr. Garland had been an employee of Phillips Petroleum Company, which became part of ConocoPhillips at merger in 2002. Mr. Garland’s service shown in the Table includes that prior service with Phillips Petroleum Company, in accordance with the standard terms and conditions of the applicable plans.

(5)

With regard to Mr. Hirshberg, he became an employee of ConocoPhillips on October 6, 2010. Prior to joining ConocoPhillips, Mr. Hirshberg was employed by Exxon Mobil Corporation and participated in its defined benefit plans. None of the benefits earned by Mr. Hirshberg as an employee of Exxon Mobil Corporation are included in the Table. The service credited to Mr. Hirshberg does not include his time of service with Exxon Mobil Corporation with regard to calculation of his benefit under Title II, but, pursuant to the offer letter and resolutions approved by the HRCC in connection with his hire, service credited to Mr. Hirshberg with regard to calculation of his benefit under KESRP does include his time of service with Exxon Mobil Corporation. This is reflected in the Table by showing different service crediting periods for Mr. Hirshberg with regard to each of the plans. The service crediting period for Title II is also included in the service crediting period for KESRP.

NONQUALIFIED DEFERRED COMPENSATION

ConocoPhillips maintains several nonqualified deferred compensation plans for its eligible employees. Those available to the Named Executive Officers are briefly described below.

The Key Employee Deferred Compensation Plan of ConocoPhillips (KEDCP) is a nonqualified deferral plan that permits certain key employees to voluntarily reduce salary and request deferral of VCIP, or other similar annual incentive compensation program payments that would otherwise be received in the subsequent year. The KEDCP permits eligible employees to defer compensation of up to 100 percent of VCIP and up to 50 percent of salary. All of the Named Executive Officers are eligible to participate in the KEDCP.

Under the KEDCP, for amounts deferred and vested after December 31, 2004, the default distribution option is to receive a lump sum to be paid at least six months after separation from service. Participants may elect to defer payments from one to five years after separation, and to receive annual, semiannual or quarterly payments for a period of up to 15 years. For elections that set a date certain for payment, the distribution will begin in the calendar quarter following the date requested and will be paid out on the distribution schedule elected by the participant.

For amounts deferred prior to January 1, 2005, a one-time revision of the ten annual installment payments schedule is allowed from 365 days to no later than 90 days prior to retirement at age 55 or above or within 30 days after being notified of layoff in the calendar year in which the employee is age 50 or above. Participants may receive distributions in one to 15 annual installments, two to 30 semi-annual installments or four to 60 quarterly installments.

The Defined Contribution Make-Up Plan of ConocoPhillips (DCMP) is a nonqualified restoration plan under which the Company makes employer contributions and stock allocations that cannot be made in the qualified ConocoPhillips Savings Plan (CPSP)—a defined contribution plan of the type often referred to as a 401(k) plan—due to certain voluntary reductions of salary under the KEDCP or due to limitations imposed by the Internal Revenue Code. For 2010, the Internal Revenue Code limited the amount of compensation that could be taken into account in determining a benefit under the CPSP to $245,000. Employees make no contributions to the DCMP.

Under the DCMP, amounts vested after December 31, 2004, will be distributed as a lump sum six months after separation from service, or, at a participant’s election, in one to 15 annual payments, no earlier than one year after separation from service. For amounts vested prior to January 1, 2005, participants may, from 365 days to no later than 90 days prior to termination or within 30 days of being notified of layoff, indicate a preference to defer the value into their account under the KEDCP.

Each participant directs investments of the individual accounts set up for that participant under both the KEDCP and DCMP. Participants may make changes in the investments as often as daily. All ConocoPhillips defined contribution nonqualified deferred compensation plans allow investment of deferred amounts in a broad range of mutual funds or other market-based investments, including ConocoPhillips stock. As market-based investments none of these provide above-market return. Since each executive participating in each plan chooses the investment vehicle or vehicles and may change his or her allocations from time to time (as often as daily), the return on the investment will depend on how well the underlying investment fund performed during the time the executive chose it as an investment vehicle. The aggregate performance of such investment is reflected in the Nonqualified Deferred Compensation Table under the column “Aggregate Earnings in Last Fiscal Year.”

Benefits due under each of the plans discussed above are paid from the general assets of the Company, although the Company also maintains trusts of the type generally known as “rabbi trusts”

that may be used to pay benefits under the plans. The trusts and the funds held in them are assets of ConocoPhillips. In the event of bankruptcy, participants would be unsecured general creditors.


Name	Applicable Plan⁽¹⁾	Beginning Balance		Executive Contributions in Last FY ($)⁽²⁾		Registrant Contributions in Last FY ($)⁽³⁾		Aggregate Earnings in Last FY ($)⁽⁴⁾			Aggregate Withdrawals/ Distributions ($)			Aggregate Balance at Last FYE ($)⁽⁵⁾
J.J. Mulva	Defined Contribution Make-Up Plan of ConocoPhillips	$	4,098,007	$	—	$	158,088	$	456,242		$	—		$	4,712,337
	Key Employee Deferred Compensation Plan of ConocoPhillips		39,831,118		—		—		(162,752	)		—			39,668,366
J.A. Carrig⁽⁶⁾	Defined Contribution Make-Up Plan of ConocoPhillips		1,014,319		—		64,770		101,281			(75,413	)		1,104,957
	Key Employee Deferred Compensation Plan of ConocoPhillips		9,751,367		15,147,049		—		(73,252	)		(3,598,570	)		21,226,594
G.C. Garland	Defined Contribution Make-Up Plan of ConocoPhillips		35,657		—		20,375		3,717			—			59,749
	Key Employee Deferred Compensation Plan of ConocoPhillips		735,027		—		—		58,642			—			793,669
A.J. Hirshberg⁽⁷⁾	Defined Contribution Make-Up Plan of ConocoPhillips		—		—		20,375		(252	)		—			20,123
	Key Employee Deferred Compensation Plan of ConocoPhillips		6,742,766		—		—		(213,151	)		(2,995,829	)		3,533,786
R.M. Lance	Defined Contribution Make-Up Plan of ConocoPhillips		324,409		—		59,101		37,394			—			420,904
	Key Employee Deferred Compensation Plan of ConocoPhillips		1,615,947		—		—		24,235			—			1,640,182
J.W. Sheets	Defined Contribution Make-Up Plan of ConocoPhillips		186,533		—		34,726		21,837			—			243,096
	Key Employee Deferred Compensation Plan of ConocoPhillips		1,756,008		837,759		—		195,106			—			2,788,873

(1)

Our primary defined contribution deferred compensation programs for executives (KEDCP and DCMP) make a variety of investments available to participants. As of December 31, 2011, there were a total of 97 investment options, of which 41 were the same as those available in the Company’s primary tax-qualified defined contribution plan for employees (its 401(k) plan, the ConocoPhillips Savings Plan) and of which 57 were other various mutual fund options approved by an administrator designated by the relevant plan.

(2)

For Mr. Carrig, he received restricted stock unit and restricted stock awards during his employment. Per the terms and conditions of certain awards, since Mr. Carrig had not reached normal retirement age (age 65), the value of these awards were credited to his Key Employee Deferred Compensation Plan account in lieu of receiving unrestricted shares. Accordingly, upon his retirement, 144,756 restricted stock units and 49,618 shares of restricted stock were canceled and a value of $15,147,049 was credited to his deferred compensation account. Also see Footnote 1 to the Option Exercises and Stock Vested table on page 52. For Mr. Sheets this reflects $154,875 in salary and $682,884 in 2010 VCIP deferred in 2011 (included in the 2011 “Salary” and 2010 “Non-Equity Incentive Plan Compensation” columns respectively of the Summary Compensation Table).

(3)	Reflects contributions by the Company under the DCMP in 2011 (included in the “All Other Compensation” column of the Summary Compensation Table on page 43 for 2011).

(4)	None of these earnings is included in the Summary Compensation Table for 2011.

(5)

Reflects contributions by our Named Executive Officers, contributions by the Company, and earnings on balances prior to 2011; plus contributions by our Named Executive Officers, contributions by the Company, and earnings for 2011 (shown in the appropriate columns of this table, with amounts that are included in the Summary Compensation Table for 2011 shown in Footnotes (2), (3) and (4) above).

(6)

Pursuant to the terms and conditions of certain of the awards that were credited to Mr. Carrig’s KEDCP account as discussed in Footnote (2) above, the value was distributed six months after his retirement. As to the distributions from his Defined Contribution Make-Up Plan, the amount reflects 2005 contributions that were distributed six months after his retirement.

(7)

Mr. Hirshberg became an employee of the Company on October 6, 2010. Pursuant to the terms of his offer letter (approved by the HRCC), a KEDCP account was created for Mr. Hirshberg at the time of his employment and credited with $6,357,436. Forty-seven percent of the account balance as of the first anniversary of his employment vested in 2011, 47 percent will vest on the second anniversary of his employment, and the remainder will vest on the third anniversary of his employment. Distributions will occur on the dates of vesting, unless Mr. Hirshberg has made timely elections to delay distribution. He did not elect to delay the distribution regarding the vesting on the first anniversary of his employment.

Executive Severance and Changes in Control

Salary and other compensation for our Named Executive Officers is set by the HRCC, as described in “Compensation Discussion and Analysis” beginning on page 26 of this proxy statement. These officers may participate in the Company’s employee benefit plans and programs for which they are eligible, in accordance with their terms. The amounts earned by the Named Executive Officers for 2011 appear in the various Executive Compensation Tables beginning on page 43 of this proxy statement.

Each of our Named Executive Officers is expected to receive amounts earned during his term of employment unless he voluntarily resigns prior to becoming retirement-eligible or is terminated for cause. Such amounts include:

•

VCIP earned during the fiscal year;

•

Grants pursuant to the PSP for the most-recently completed performance period and ongoing performance periods in which the executive participated for at least one year;

•

Previously granted restricted stock and restricted stock units;

•

Vested stock option grants under the Stock Option Program;

•

Amounts contributed and vested under our defined contribution plans; and

•

Amounts accrued and vested under our pension plans.

While normal retirement age under our benefit plans is 65, early retirement provisions allow benefits at earlier ages if vesting requirements are met, as discussed in the sections of this proxy statement entitled “Pension Benefits” and “Nonqualified Deferred Compensation.” For our compensation programs (VCIP, Stock Option Program, and PSP), early retirement is generally defined to be termination at or after the age of 55 with five years of service.

As of December 31, 2011, Mr. Mulva was retirement eligible under both our benefit plans and our compensation programs. As of December 31, 2011, Messrs. Hirshberg, Garland, Lance, and Sheets had not met the early retirement criteria under either the applicable title of the pension plan or of our compensation programs. Therefore, as of December 31, 2011, a voluntary resignation of Mr. Mulva would have been treated as a retirement. Since Mr. Mulva was then eligible for retirement under these programs, he would be able to resign and retain all awards earned under the PSP and earlier programs. As a result, the awards to Mr. Mulva under such programs are not included in the incremental amounts reflected in the tables below. Please see “Outstanding Equity Awards at Fiscal Year End” beginning on page 50 for more information.

In addition, specific severance arrangements for executive officers, including the Named Executive Officers, are provided under two severance plans of ConocoPhillips: one being the ConocoPhillips Executive Severance Plan (CPESP), available to a limited number of senior executives; and the other being the ConocoPhillips Key Employee Change in Control Severance Plan (CICSP), also available to a limited number of senior executives, but only upon a change in control. These arrangements are described below. Executives are not entitled to participate in both plans as a result of a single event; for example, executives receiving benefits under the CICSP would not be entitled to benefits potentially payable under the CPESP relating to the event giving rise to benefits under the CICSP.

ConocoPhillips Executive Severance Plan

The CPESP covers executives in salary grades generally corresponding to vice president and higher. The CPESP provides that if the Company terminates the employment of a participant in the plan other than for cause, as defined in the plan, upon executing a general release of liability and, if requested by the Company, an agreement not to compete with the Company, the participant will be entitled to:

•

A lump-sum cash payment equal to one-and-a-half or two times the sum of the employee’s base salary and current target VCIP;

•

A lump-sum cash payment equal to the present value of the increase in retirement benefits that would result from the crediting of an additional one-and-a-half or two years to the employee’s number of years of age and service under the applicable retirement plan;

•

A lump-sum cash payment equal to the Company cost of certain welfare benefits for an additional one-and-a-half or two years;

•

Continuation in eligibility for a pro rata portion of the annual VCIP for which the employee is eligible in the year of termination; and

•

Treatment as a layoff under the various compensation and equity programs of the Company—generally, layoff treatment will allow executives to retain awards previously made and continue their eligibility under ongoing Company programs, thus, actual program grants as restricted stock or restricted stock units would vest and the executive would remain eligible for awards attributable to ongoing performance periods under the PSP in which they had participated for at least one year.

The CPESP may be amended or terminated by the Company at any time. Amounts payable under the plan will be offset by any payments or benefits that are payable to the severed employee under any other plan, policy, or program of ConocoPhillips relating to severance, and amounts may also be reduced in the event of willful and bad faith conduct demonstrably injurious to the Company, monetarily or otherwise.

ConocoPhillips Key Employee Change in Control Severance Plan

The CICSP covers executives in salary grades generally corresponding to vice president and higher. The CICSP provides that if the employment of a participant in the plan is terminated by the Company within two years of a “change in control” of ConocoPhillips, other than for cause, or by the participant for good reason, as such terms are defined in the plan, upon executing a general release of liability, the participant will be entitled to:

•

A lump-sum cash payment equal to two or three times the sum of the employee’s base salary and the higher of current target VCIP or previous two years’ average VCIP;

•

A lump-sum cash payment equal to the present value of the increase in retirement benefits that would result from the crediting of an additional two or three years to the employee’s number of years of age and service under the applicable retirement plan;

•

A lump-sum cash payment equal to the Company cost of certain welfare benefits for an additional two or three years;

•

Continuation in eligibility for a pro rata portion of the annual VCIP for which the employee is eligible in the year of termination; and

•

If necessary, a gross-up payment sufficient to compensate the participant for the amount of any excise tax imposed on payments made under the plan or otherwise pursuant to section 4999 of the Internal Revenue Code and for any taxes imposed on this additional payment, although if the applicable payments are not more than 110 percent of the “safe harbor” amount under section 280G of the Internal Revenue Code, the payments are “cut back” to the safe harbor amount rather than a gross-up payment being made.

Upon a change in control, the participant becomes eligible for vesting in all equity awards and lapsing of any restrictions, with continued ability to exercise stock options for their remaining terms. After a change in control, the CICSP may not be amended or terminated if such amendment would be adverse to the interests of any eligible employee, without the employee’s written consent. Amounts payable under the plan will be offset by any payments or benefits that are payable to the severed employee under any other plan, policy, or program of ConocoPhillips relating to severance, and amounts may also be reduced in the event of willful and bad faith conduct demonstrably injurious to the Company, monetarily or otherwise.

Other Arrangements

Mr. Hirshberg became an employee of ConocoPhillips on October 6, 2010. The HRCC approved an offer letter to him which described the terms and conditions of employment, including the fact that he would serve as an at-will employee. The letter also provided certain protections against termination events. He will be considered to have been terminated by the Company if the Company terminates his employment either without cause or if his employment is terminated by mutual agreement or if he initiates the termination of his employment (but only if given good reason to do so), prior to attaining age 55. Any severance benefits to which he may become entitled prior to attainment of age 55 will not be less than the severance benefits provided under the letter, the CPESP, and the CICSP as those plans were in effect on the date of the letter.

Quantification of Severance Payments

The tables below reflect the amount of incremental compensation payable in excess of the items listed above to each of our Named Executive Officers in the event of termination of such executive’s employment other than as a result of voluntary resignation. The amount of compensation payable to each Named Executive Officer upon involuntary not-for-cause termination, for-cause termination, termination following a change-in-control (CIC) (either involuntarily without cause or for good reason) and in the event of the death or disability of the executive is shown below. The amounts shown assume that such termination was effective as of December 31, 2011, and thus include amounts earned through such time and are estimates of the amounts which would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executive’s separation from the Company.

The following tables reflect additional incremental amounts to which each of our Named Executive Officers (other than Mr. Carrig who retired from the Company effective March 1, 2011) would be entitled if their employment were terminated due to the events described above.


Executive Benefits and Payments Upon Termination	Involuntary Not-for-Cause Termination (Not CIC)		For-Cause Termination			Involuntary or Good Reason Termination (CIC)		Death		Disability
J.J. Mulva†
Base Salary	$	3,000,000	$	—		$	4,500,000	$	—	$	—
Short-term Incentive		4,050,000		—			8,296,932		—		—
Variable Cash Incentive Program		—		(2,025,000	)		—		—		—
2009—2011 (performance period)		—		(18,739,832	)		—		—		—
2010—2012 (performance period)		—		(6,173,328	)		—		—		—
2011—2013 (performance period)		—		(2,557,956	)		—		—		—
Restricted Stock/Units from prior performance		—		(2,754,486	)		—		—		—
Stock Options/SARs:
Unvested and Accelerated		—		(13,758,648	)		—		—		—
Incremental Pension		3,163,413		—			4,745,119		—		—
Post-employment Health & Welfare		722,316		—			1,110,212		—		—
Life Insurance		—		—			—		3,000,000		—
280G Tax Gross-up		—		—			—		—		—

		10,935,729		(46,009,250	)		18,652,263		3,000,000		—


Executive Benefits and Payments Upon Termination	Involuntary Not-for-Cause Termination (Not CIC)		For-Cause Termination		Involuntary or Good Reason Termination (CIC)		Death		Disability
G.C. Garland†
Base Salary	$	1,552,000	$	—	$	2,328,000	$	—	$	—
Short-term Incentive		1,381,280		—		2,071,920		—		—
Variable Cash Incentive Program		690,640		—		690,640		690,640		690,640
2009—2011 (performance period)		1,562,916		—		1,562,916		1,562,916		1,562,916
2010—2012 (performance period)		965,309		—		965,309		965,309		965,309
2011—2013 (performance period)		471,688		—		471,688		471,688		471,688
Restricted Stock/Units from inducement grant		614,950		—		614,950		614,950		614,950
Stock Options/SARs:
Unvested and Accelerated		180,415		—		196,817		196,817		196,817
Incremental Pension		2,442,169		—		2,913,242		—		—
Post-employment Health & Welfare		28,625		—		42,037		—		—
Life Insurance		—		—		—		1,552,000		—
280G Tax Gross-up		—		—		3,184,639		—		—

		9,889,992		—		15,042,158		6,054,320		4,502,320


Executive Benefits and Payments Upon Termination	Involuntary Not-for-Cause Termination (Not CIC)		For-Cause Termination			Involuntary or Good Reason Termination (CIC)		Death		Disability
A.J. Hirshberg†
Base Salary	$	1,552,000	$	—		$	2,328,000	$	—	$	—
Short-term Incentive		1,381,280		—			2,071,920		—		—
Variable Cash Incentive Program		690,640		—			690,640		690,640		690,640
Key Employee Deferred Compensation Plan		—		(3,533,787	)		—		—		—
2009—2011 (performance period)		1,497,770		—			1,497,770		1,497,770		1,497,770
2010—2012 (performance period)		965,309		—			965,309		965,309		965,309
2011—2013 (performance period)		471,688		—			471,688		471,688		471,688
Restricted Stock/Units from inducement grant		—		(3,566,622	)		—		—		—
Stock Options/SARs:
Unvested and Accelerated		180,415		—			196,817		196,817		196,817
Incremental Pension		4,320,871		—			4,743,808		—		—
Post-employment Health & Welfare		92,376		—			130,835		—		—
Life Insurance		—		—			—		1,552,000		—
280G Tax Gross-up		—		—			3,469,332		—		—

		11,152,349		(7,100,409	)		16,566,119		5,374,224		3,822,224


Executive Benefits and Payments Upon Termination	Involuntary Not-for-Cause Termination (Not CIC)		For-Cause Termination		Involuntary or Good Reason Termination (CIC)		Death		Disability
R.M. Lance†
Base Salary	$	1,552,000	$	—	$	2,328,000	$	—	$	—
Short-term Incentive		1,381,280		—		2,390,004		—		—
Variable Cash Incentive Program		690,640		—		690,640		690,640		690,640
2009—2011 (performance period)		3,264,649		—		3,264,649		3,264,649		3,264,649
2010—2012 (performance period)		1,223,196		—		1,223,196		1,223,196		1,223,196
2011—2013 (performance period)		471,688		—		471,688		471,688		471,688
Restricted Stock/Units from prior performance		8,294,646		—		8,294,646		8,294,646		8,294,646
Stock Options/SARs:
Unvested and Accelerated		2,453,763		—		2,470,165		2,470,165		2,470,165
Incremental Pension		3,604,433		—		3,860,474		—		—
Post-employment Health & Welfare		96,035		—		135,490		—		—
Life Insurance		—		—		—