(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.
| | 2016 PROXY STATEMENT43 |
Table of Contents
EXECUTIVE COMPENSATION TABLES
(2)
The dates presented in this column represent the daterespective dates on which the awards were granted by ConocoPhillips for grants prior to the spin-off from ConocoPhillips, and by Phillips 66 for all other awards. The awards granted prior to the spin-off were converted to Phillips 66 equity awards in connection with the spin-off and in accordance with the Employee Matters Agreement and remain subject to the same general terms and conditions.
(3)
(3)The options shown in this column vested and became exercisable in 20152017 or prior years (although under certain termination circumstances, the options may still be forfeited). Options become exercisable in one-third increments on the first, second and third anniversaries of the grant date.
(4)
(4)Represents the final one-third of the February 7, 2013 grant, which became exercisable on February 7, 2016. In the case of Mr. Maxwell, all options became exercisable upon his retirement at the beginning of 2016.
(5)Represents the final two-thirds of the February 6, 2014 grant, half of which became exercisable on February 6, 2016 and the other half of which will become exercisable on February 6, 2017. In the case of Mr. Maxwell, all options became exercisable upon his retirement at the beginning of 2016.
(6)Represents the February 3, 2015 grant. One-third of the grant became exercisable on February 3, 2016, one-third will become exercisable on February 3, 2017, and one-third will become exercisable on February 3, 2018. In the case of Mr. Maxwell, all options became exercisable upon his retirement at the beginning of 2016.
(7)These amounts include unvested restricted stock and RSUs awarded under the PSP for performance periods ending on or before December 31, 2014 and awarded as annual awards. All awards for performance periods endingthat ended on or before December 31, 2014 continue to have restrictions upon transferability. Restrictions on PSP awards for performance periods endingthat ended on or before December 31, 20122010 lapse upon separation from service. Restrictions on PSP awards for later performance periods lapse five years from the grant date unless the NEO elected prior to the beginning of the performance period to defer lapsing of the restrictions until separation from service. Awards are subject to forfeiture if, prior to lapsing, the NEO separates from service for a reason other than death, disability, layoff, retirement after reaching age 55 with five years of service, or after a change of control, although the Compensation Committee has the authority to waive forfeiture. The awards have no voting rights, but do entitle the holder to receive dividend equivalents in cash. The value of the awards reflects the closing price of our common stock, as reported on the NYSE, on December 31, 201529, 2017 ($81.80)101.15). These amounts also include the awards under the PSP for the performance period that ended December 31, 2015 and paid out in cash in February 2016, as follows: Mr. Garland, 163,419 units valued at $12,484,002; Ms. Johnson, 30,258 units valued at $2,378,884; Mr. Maxwell, 40,744 units valued at $3,203,293; Mr. Taylor, 55,009 units valued at $4,324,808; and Mr. Ziemba, 34,816 units valued at $2,737,234.
(5)
(8)Reflects potential awards from ongoing performance periods under the PSP for performance periods ending December 31, 20162018 and December 31, 2017.2019. These awards are shown at maximum levels;target; however, there is no assurance that awards will be granted at, below or above target after the end of the relevant performance periods, as the determination to make a grant and the amount of any grant is within the judgment of the Compensation Committee. Until an actual grant is made, these unearned awards pay no dividend equivalents. The value of these unearned awards reflects the closing price of our common stock, as reported on the NYSE, on December 31, 201529, 2017 ($81.80)101.15).
OPTION EXERCISES AND STOCK VESTED FOR
20152017
The following table summarizes the value received from stock option exercises and stock grants vested during
2015: | | | | | | | | | | | | | |
| | OPTION AWARDS | | STOCK AWARDS | |
|---|
NAME
| | NUMBER OF
SHARES
ACQUIRED ON
EXERCISE
(#)
| | VALUE REALIZED
ON EXERCISE
($)
| | NUMBER OF
SHARES
ACQUIRED ON
VESTING
(#)
| | VALUE REALIZED
ON VESTING
($)
| |
|---|
| | | | | | | | | | | | | | |
Mr. Garland | | | — | | | — | | | 24,808 | | | 1,977,818 | |
Ms. Johnson | | | — | | | — | | | 4,181 | | | 318,677 | |
Mr. Maxwell | | | — | | | — | | | 4,165 | | | 331,864 | |
Mr. Taylor | | | — | | | — | | | 2,452 | | | 195,486 | |
Mr. Ziemba | | | 74,467 | | | 5,256,366 | | | — | | | — | |
| | | | | | | | | | | | | | |
44 2016 PROXY STATEMENT | | | | OPTION AWARDS | | | STOCK AWARDS(1) | |
| | NAME | | | NUMBER OF SHARES
ACQUIRED ON EXERCISE
(#) | | | VALUE REALIZED
UPON EXERCISE
($) | | | NUMBER OF SHARES
ACQUIRED ON VESTING
(#) | | | VALUE REALIZED
UPON VESTING
($) | |
| | Greg Garland | | | — | | | — | | | 168,612 | | | 15,397,642 | |
| | Robert Herman | | | — | | | — | | | 33,029 | | | 2,973,062 | |
| | Paula Johnson | | | — | | | — | | | 31,245 | | | 2,910,325 | |
| | Kevin Mitchell | | | — | | | — | | | 60,844 | | | 5,338,637 | |
| | Tim Taylor | | | — | | | — | | | 53,299 | | | 5,064,448 | |
(1)
Stock awards include RSUs that vested during the year, as well as the PSP 2015-2017 award that vested on December 31, 2017, and was paid out in cash in early 2018. The PSP awards were as follows: Mr. Garland 99,964 units valued at $9,970,589; Mr. Herman 17,579 units valued at $1,753,361; Ms. Johnson 21,248 units valued at $2,119,314; Mr. Mitchell 14,760 units valued at $1,472,189; and Mr. Taylor 40,978 units valued at $4,087,219.
NON-EMPLOYEE DIRECTOR COMPENSATION
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE
Phillips 66 benchmarks its non-employee
Directordirector compensation design and pay levels against a group of peer companies. The Company targets the median of this peer group for all elements of non-employee
Directordirector compensation.
The following table summarizes the compensation for our non-employee Directorsdirectors for 20152017 (for compensation paid to our sole employee Director,director, Mr. Garland, please see "EXECUTIVE COMPENSATION TABLESExecutive Compensation Tables" beginning on page 40):.
| | NAME | | | FEES EARNED OR
PAID IN CASH(1)
($) | | | STOCK
AWARDS(2)
($) | | | OPTION
AWARDS
($) | | | NON-EQUITY
INCENTIVE PLAN
COMPENSATION
($) | | | CHANGE IN PENSION VALUE
AND NONQUALIFIED
DEFERRED COMPENSATION
EARNINGS
($) | | | ALL OTHER
COMPENSATION(3)
($) | | | TOTAL
($) | |
| | Gary K. Adams | | | 135,000 | | | 200,001 | | | — | | | — | | | — | | | 1,146 | | | 336,147 | |
| | J. Brian Ferguson | | | 150,000 | | | 200,001 | | | — | | | — | | | — | | | 343 | | | 350,344 | |
| | William R. Loomis, Jr. | | | 145,000 | | | 200,001 | | | — | | | — | | | — | | | 20,412 | | | 365,413 | |
| | John E. Lowe | | | 145,000 | | | 200,001 | | | — | | | — | | | — | | | 15,095 | | | 360,096 | |
| | Harold W. McGraw III | | | 135,000 | | | 200,001 | | | — | | | — | | | — | | | 353 | | | 335,354 | |
| | Denise L. Ramos | | | 135,000 | | | 200,001 | | | — | | | — | | | — | | | 8,039 | | | 343,040 | |
| | Glenn F. Tilton | | | 185,000 | | | 200,001 | | | — | | | — | | | — | | | 22,940 | | | 407,941 | |
| | Victoria J. Tschinkel | | | 135,000 | | | 200,001 | | | — | | | — | | | — | | | 22,702 | | | 357,703 | |
| | Marna C. Whittington | | | 150,000 | | | 200,001 | | | — | | | — | | | — | | | 22,372 | | | 372,373 | |
| | | | | | | | | | | | | | | | | | | | | | |
NAME
| | FEES
EARNED
OR PAID
IN CASH
($)(1)
| | STOCK
AWARDS
($)(2)
| | OPTION
AWARDS
($)
| | NON-EQUITY
INCENTIVE PLAN
COMPENSATION
($)
| | CHANGE IN PENSION
VALUE AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS ($)
| | ALL OTHER
COMPENSATION
($)(3)
| | TOTAL
($)
| |
|---|
| | | | | | | | | | | | | | | | | | | | | | | |
J. Brian Ferguson | | | 135,000 | | | 170,010 | | | — | | | — | | | — | | | 2,777 | | | 307,787 | |
William R. Loomis, Jr. | | | 140,000 | | | 170,010 | | | — | | | — | | | — | | | 33,342 | | | 343,352 | |
John E. Lowe | | | 120,000 | | | 170,010 | | | — | | | — | | | — | | | 10,400 | | | 300,410 | |
Harold W. McGraw III | | | 182,500 | | | 170,010 | | | — | | | — | | | — | | | 356 | | | 352,866 | |
Glenn F. Tilton | | | 122,500 | | | 170,010 | | | — | | | — | | | — | | | 16,547 | | | 309,057 | |
Victoria J. Tschinkel | | | 135,000 | | | 170,010 | | | — | | | — | | | — | | | 15,964 | | | 320,974 | |
Marna C. Whittington | | | 125,000 | | | 170,010 | | | — | | | — | | | — | | | 20,072 | | | 315,082 | |
| | | | | | | | | | | | | | | | | | | | | | | |
(1)- Reflects
20152017 base cash compensation of $115,000$125,000 payable to each non-employee Director.director. In 2015,2017, non-employee Directorsdirectors serving in specified committee positions also received the additional cash compensation described above.previously. Compensation amounts reflect adjustments related to various changes in committee assignments by Board members throughout the year, if any. Amounts shown include any amounts that were voluntarily deferred to the Director Deferral Plan, received in Phillips 66 common stock, or received in RSUs. Mr. Tilton elected to defer his cash compensation.
(2)
(2)Amounts represent the grant date fair market value of RSUs. Under our non-employee Directordirector compensation program, non-employee Directorsdirectors received a 20152017 grant of RSUs with an aggregate value of $170,000$200,000 on the date of grant, based on the average of the high and low prices for Phillips 66 common stock, as reported on the NYSE, on such date. These grants are made in whole shares with fractional share amounts rounded up, resulting in shares with a value of $170,010$200,001 being granted on January 15, 2015.
52 2016 PROXY STATEMENT | | |
Table of Contents
NON-EMPLOYEE DIRECTOR COMPENSATION
17, 2017.(3)Includes the amounts attributable to the following:
| | | | | | | | | | | | | |
NAME
| | PERSONAL USE OF
COMPANY AIRCRAFT
($)(a)
| | MISCELLANEOUS
PERQUISITES AND TAX
REIMBURSEMENTS
($)(b)
| | MATCHING GIFT
AMOUNTS
($)(c)
| | TOTAL
($)
| |
|---|
| | | | | | | | | | | | | | |
Mr. Ferguson | | | 1,821 | | | 956 | | | — | | | 2,777 | |
Mr. Loomis | | | 2,578 | | | 10,764 | | | 20,000 | | | 33,342 | |
Mr. Lowe | | | — | | | 3,150 | | | 7,250 | | | 10,400 | |
Mr. McGraw | | | — | | | 356 | | | — | | | 356 | |
Mr. Tilton | | | — | | | 1,547 | | | 15,000 | | | 16,547 | |
Ms. Tschinkel | | | — | | | 964 | | | 15,000 | | | 15,964 | |
Dr. Whittington | | | 1,803 | | | 3,269 | | | 15,000 | | | 20,072 | |
| | | | | | | | | | | | | | |
(a)On occasion, the Company may request Directors to invite guests to accompany them on business trips, Directors may be asked to accompany executives on business trips other than Board meetings, or a Director or guest may be returned to a location other than their home. When these situations occur and we are required to impute income to the Director, incremental costs to Phillips 66, if any, are reported in this table. The incremental costAll Other Compensation is determined by calculating the variable costs for each aircraft during the year, dividing that amount by the total numbermade up primarily of miles flown by the aircraft, and multiplying the result by the miles flown for personal use during the year.
(b)The amounts shown primarily reflect payments by us relating to certain taxes incurred by the Directors. These payments primarily occur when we request family members or other guests to accompany a Director to a Company function and, as a result, the Director is deemed to make personal use of Company assets such as Company aircraft and thereby incurs imputed income. In such circumstances, if the Director is imputed income in accordance with the applicable tax laws, we will generally reimburse the Director for the increased tax costs. The amounts shown include gifts received for their role as members of the Board of Directors.
(c)We maintain a Matching Gift Program under which we match certain gifts by Directorsdirectors to charities and educational institutions (excluding certain religious, political, fraternal, or athletic organizations) that are tax-exempt under Section 501(c)(3) of the Internal Revenue CodeIRC or meet similar requirements under the applicable law of other countries.countries that we match under our Matching Gifts Program (Mr. Loomis $15,000; Mr. Lowe $10,500; Mr. Tilton $15,000; Ms. Tschinkel $15,000, and Dr. Whittington $15,000). For active Directors,directors, the program matches up to $15,000 with regard to each program year. The amounts shown reflect the actual payments made by us in 2015. Mr. Loomis made certain2017. All Other Compensation also includes any personal flights, automobile transportation expenses, smaller gifts in the fourth quarter of 2014 that were matched by the(such as books, ornaments, and jackets) as well as associated tax protection, and tax assistance when we request family members or other guests to accompany a director to a Company in 2015 in addition to his 2015 contributions. Mr. Garland is eligible for the program as an executive of the Company, rather thanfunction and, as a Director. Information onresult, the valuedirector is deemed to make personal use of matching gifts for Mr. Garland is shown in the "Summary Compensation Table" on page 40Company assets such as Company aircraft and the notes to that table.
thereby incurs imputed income. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table lists outstanding equity grants for each non-employee Director as of December 31, 2015:
| | | | | | | | | | | | | | | | | | | |
NAME
| | GRANT
DATE
| | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
EXERCISABLE
| | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
UNEXERCISABLE
| | OPTION
EXERCISE
PRICE ($)
| | OPTION
EXPIRATION
DATE
| | NUMBER OF
SHARES OR
UNITS OF STOCK
THAT HAVE NOT
VESTED (#)
| |
|---|
| | | | | | | | | | | | | | | | | | | | |
Mr. Ferguson
| | | — | | | — | | | — | | | — | | | — | | | 12,698 | |
Mr. Loomis
| | | — | | | — | | | — | | | — | | | — | | | 14,545 | |
Mr. Lowe
| | | — | | | — | | | — | | | — | | | — | | | 12,698 | |
Mr. McGraw
| | | — | | | — | | | — | | | — | | | — | | | 30,804 | |
Mr. Tilton
| | | — | | | — | | | — | | | — | | | — | | | 12,698 | |
Ms. Tschinkel
| | | — | | | — | | | — | | | — | | | — | | | 11,571 | |
Dr. Whittington
| | | — | | | — | | | — | | | — | | | — | | | 12,698 | |
| | | | | | | | | | | | | | | | | | | |
OPTION EXERCISES AND STOCK VESTED FOR 2015
The following table summarizes the value received from stock option exercises and stock grants vested in 2015:
| | | | | | | | | | | | | |
NAME
| | NUMBER OF
SHARES
ACQUIRED ON
EXERCISE
(#)
| | VALUE REALIZED
ON EXERCISE
($)
| | NUMBER OF
SHARES
ACQUIRED ON
VESTING
(#)
| | VALUE REALIZED
ON VESTING
($)
| |
|---|
| | | | | | | | | | | | | | |
Mr. Ferguson | | | — | | | — | | | — | | | — | |
Mr. Loomis | | | — | | | — | | | — | | | — | |
Mr. Lowe | | | — | | | — | | | — | | | — | |
Mr. McGraw | | | — | | | — | | | — | | | — | |
Mr. Tilton | | | — | | | — | | | — | | | — | |
Ms. Tschinkel | | | — | | | — | | | 1,306 | | | 77,850 | |
Dr. Whittington | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | |
2018 PROXY STATEMENT 57
| | 2016 PROXY STATEMENT53 |
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information about Phillips 66 common stock that may be issued under all existing equity compensation plans as of December 31, 2015:2017:
| | PLAN CATEGORY | | | NUMBER OF SECURITIES TO
BE ISSUED UPON EXERCISE
OF OUTSTANDING OPTIONS,
WARRANTS AND
RIGHTS(1,2)
(a) | | | WEIGHTED-AVERAGE
EXERCISE PRICE OF
OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS(3)
(b) | | | NUMBER OF SECURITIES REMAINING AVAILABLE
FOR FUTURE ISSUANCE UNDER EQUITY
COMPENSATION PLANS (EXCLUDING
SECURITIES REFLECTED IN COLUMN (a))(4)
(c) | |
| | Equity compensation plans approved by security holders | | | 10,521,382 | | | 58.34 | | | 35,673,784 | |
| | Equity compensation plans not approved by security holders | | | 0 | | | 0 | | | 0 | |
| | Total | | | 10,521,382 | | | 58.34 | | | 35,673,784 | |
| | | | | | | | | | |
Plan category
| | NUMBER OF SECURITIES
TO BE ISSUED UPON
EXERCISE OF
OUTSTANDING
OPTIONS, WARRANTS
AND RIGHTS(1,2)
(a)
| | WEIGHTED-AVERAGE
EXERCISE PRICE OF
OUTSTANDING OPTIONS,
WARRANTS AND RIGHTS(3)
(b)
| | NUMBER OF SECURITIES REMAINING
AVAILABLE FOR FUTURE ISSUANCE UNDER
EQUITY COMPENSATION PLANS (EXCLUDING
SECURITIES REFLECTED IN COLUMN (a))(4)
(c)
| |
|---|
| | | | | | | | | | | |
Equity compensation plans approved by security holders | | | 12,746,393 | | $ | 41.27 | | | 40,694,393 | |
Equity compensation plans not approved by security holders | | | — | | | — | | | — | |
| | | | | | | | | | | |
Total | | | 12,746,393 | | $ | 41.27 | | | 40,694,393 | |
| | | | | | | | | | | |
(1)- Includes awards issued under the Omnibus Stock and Performance Incentive Plan of Phillips 66 and awards issued under the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66.
(2)
(2)Includes an aggregate of 5,431,7394,838,855 Incentive Stock Options and Nonqualified Stock Options issued to employees, 28,00510,539 Restricted Stock Awards granted under historical long-term incentiveLTI plans, and 3,556,826 Performance Share Units.2,558,278 PSUs. The number of securities to be issued includes 3,729,823 Restricted Stock Units,3,113,710 RSUs, of which 212,731226,874 were issued to non-employee Directors.directors. Some awards held by ConocoPhillips employees at our spin-off were adjusted or substituted with a combination of ConocoPhillips and Phillips 66 equity. Awards representing a total of 13,071,435 shares were issued to ConocoPhillips employees, of which 3,841,9642,567,745 remain outstanding as of December 31, 2015.2017. The awards issued to ConocoPhillips employees are included in the outstanding awards listed above.
(3)
(3)The weighted-average exercise price reflects the weighted-average price for outstanding Incentive Stock Options and Nonqualified Stock Options only. It does not include stock awards outstanding.
(4)
(4)Total includes forfeited shares under the Omnibus Stock and Performance Incentive Plan of Phillips 66 that are now available for grant under the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66.
STOCK OWNERSHIP
HOLDINGS OF MAJOR SHAREHOLDERS
Holdings of Major Shareholders
The following table sets forth information regarding persons who we know to be the beneficial owners of more than five percent of our issued and outstanding common stock (as of the date of such shareholder's Schedule 13Gshareholder’s most recent ownership filing with the SEC):
| | | | | COMMON STOCK | |
| | NAME AND ADDRESS | | | NUMBER OF
SHARES | | | PERCENT OF
CLASS | |
| | Berkshire Hathaway Inc.(1)
3555 Farnam Street
Omaha, Nebraska 68131 | | | 45,689,892 | | | 9.8% | |
| | The Vanguard Group(2)
100 Vanguard Blvd.
Malvern, PA 19335 | | | 31,919,497 | | | 6.8% | |
| | BlackRock, Inc.(3)
55 East 52nd Street
New York, NY 10055 | | | 27,591,749 | | | 5.9% | |
| | | | | | | |
| | COMMON STOCK | |
|---|
NAME AND ADDRESS
| | NUMBER OF SHARES
| | PERCENT OF CLASS
| |
|---|
| | | | | | | | |
Berkshire Hathaway Inc.(1)
3555 Farnam Street
Omaha, Nebraska 68131 |
| | 75,550,745 | | | 14.32% | |
BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055 | | | 28,243,947 | | | 5.35% | |
The Vanguard Group(3)
100 Vanguard Blvd.
Malvern, PA 19335 |
| | 31,318,814 | | | 5.94% | |
| | | | | | | | |
(1)- Based solely on an Amendment to Schedule 13G filed with the SEC on February
16, 2016,21, 2018, by Warren E. Buffett on behalf of himself and Berkshire Hathaway Inc., National Indemnity Company, National Liability & Fire Insurance Co., Berkshire Hathaway Assurance Corp., Columbia Insurance Company, Fruit of the LoomBerkshire Hathaway Consolidated Pension Plan Master Trust, Flightsafety International Inc. Retirement Income Plan, GeicoGEICO Corporation Pension Plan Trust, Johns Manville Corporation Master Pension Trust, and General Re Corp. Employee Retirement Trust, as updated by the most recent Form 4 filed by such ownership group dated February 12, 2016, which also added National Fire & Marine Insurance Co., Berkshire Hathaway Homstate Insurance Co., and Berkshire Hathaway SpecialtyHomestate Insurance Co. to the ownership group.Company.
(2)
(2)
Based solely on an Amendment to Schedule 13G filed with the SEC on February 10, 2016,9, 2018, by The Vanguard Group on behalf of itself, Vanguard Fiduciary Trust Company, and Vanguard Investments Australia, Ltd.
(3)
Based solely on an Amendment to Schedule 13G filed with the SEC on January 23, 2018, by BlackRock, Inc. on behalf of itself, BlackRock Advisors, LLC, BlackRock Financial Management, Inc., BlackRock Investment Management, LLC, BlackRock Investment Management (Australia) Limited, BlackRock Investment Management (UK) Ltd, BlackRock (Channel Islands) Ltd., BlackRock (Luxembourg) S.A., BlackRock (Netherlands) B.V., BlackRock Fund Managers Limited,Ltd, BlackRock Life Limited, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Asset Management Schweiz AG, BlackRock (Singapore) Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock International Limited, BlackRock Institutional Trust Company, N.A., BlackRock Japan Co. Ltd., BlackRock Capital Management, Inc., FutureAdvisor, Inc., and BlackRock Asset Management North Asia Limited, and Xulu, Inc.
(3)Based solely on an Amendment to Schedule 13G filed with the SEC on February 11, 2016, by The Vanguard Group on behalf of itself, Vanguard Fiduciary Trust Company, and Vanguard Investments Australia, Ltd.Limited.54 2016 PROXY STATEMENT | | |
STOCK OWNERSHIPOWNERSHIP
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires directors and executive officers of Phillips 66, and persons who own more than 10 percent of a registered class of Phillips 66 equity securities, to file reports of ownership and changes in ownership of Phillips 66 common stock with the SEC and the NYSE, and to furnish Phillips 66 with copies of the forms they file.
To our knowledge, based solely upon a review of the copies of such reports furnished to the Company and written representations of our officers and directors, during the year ended December 31,
2015,2017, all Section 16(a) reports applicable to those officers and directors were filed on a timely basis.
SECURITIES OWNERSHIP OF OFFICERS AND DIRECTORS
The following table sets forth the number of shares of our common stock beneficially owned as of March 11, 2016,12, 2018, by each Phillips 66 Director,director, by each NEO and by all of our directors and executive officers as a group. Together these individuals beneficially own less than one percent of our common stock. The table also includes information about stock options, restricted stock, RSUs and Deferred Stock Units credited to the accounts of our directors and executive officers under various compensation and benefit plans. For purposes of this table, shares are considered to be "beneficially"“beneficially” owned if the person, directly or indirectly, has sole or shared voting or investment power with respect to such shares. In addition, a person is deemed to beneficially own shares if that person has the right to acquire such shares within 60 days of March 11, 2016.12, 2018.
| | | | | NUMBER OF SHARES OR UNITS | |
| | NAME OF BENEFICIAL OWNER | | | TOTAL COMMON STOCK
BENEFICIALLY OWNED | | | RESTRICTED/DEFERRED
STOCK UNITS(1) | | | OPTIONS EXERCISABLE
WITHIN 60 DAYS(2) | |
| | Mr. Garland | | | 225,995 | | | 483,918 | | | 645,161 | |
| | Ms. Johnson | | | 37,213 | | | 71,324 | | | 89,999 | |
| | Mr. Mitchell | | | 34,220 | | | 24,538 | | | 40,999 | |
| | Mr. Taylor | | | 73,761 | | | 128,003 | | | 176,232 | |
| | Mr. Herman | | | 26,942 | | | 67,081 | | | 124,066 | |
| | Mr. Adams | | | 4,901 | | | — | | | — | |
| | Mr. Ferguson | | | 234 | | | 20,657 | | | — | |
| | Mr. Loomis(3) | | | 72,582 | | | 22,623 | | | — | |
| | Mr. Lowe | | | 30,000 | | | 20,657 | | | — | |
| | Mr. McGraw(4) | | | 873 | | | 39,942 | | | — | |
| | Ms. Ramos | | | — | | | 5,004 | | | — | |
| | Mr. Tilton | | | 5,900 | | | 20,657 | | | — | |
| | Ms. Tschinkel(5) | | | 42,830 | | | 10,258 | | | — | |
| | Dr. Whittington | | | 2,500 | | | 20,657 | | | — | |
| | Directors and Executive Officers as a Group (15 Persons) | | | 560,879 | | | 958,669 | | | 1,094,056 | |
| | | | | | | | | | |
| | NUMBER OF SHARES OR UNITS | |
|---|
NAME OF BENEFICIAL OWNER
| | TOTAL COMMON STOCK
BENEFICIALLY OWNED
| | RESTRICTED/DEFERRED
STOCK UNITS(1)
| | OPTIONS EXERCISABLE
WITHIN 60 DAYS(2)
| |
|---|
| | | | | | | | | | | |
Mr. Garland | | | 72,577 | | | 676,428 | | | 472,993 | |
Ms. Johnson | | | 17,595 | | | 87,200 | | | 73,574 | |
Mr. Maxwell(3) | | | 32,398 | | | 104,488 | | | 89,751 | |
Mr. Mitchell(3) | | | 5,972 | | | 55,862 | | | 3,300 | |
Mr. Taylor | | | 36,183 | | | 172,262 | | | 136,159 | |
Mr. Ziemba | | | 10,643 | | | 177,254 | | | 225,504 | |
Mr. Ferguson | | | 234 | | | 15,276 | | | — | |
Mr. Loomis | | | 59,902 | | | 17,123 | | | — | |
Mr. Lowe | | | 30,000 | | | 15,276 | | | — | |
Mr. McGraw(4) | | | 873 | | | 33,390 | | | — | |
Mr. Tilton | | | 5,900 | | | 15,276 | | | — | |
Ms. Tschinkel(5) | | | 36,619 | | | 11,399 | | | — | |
Dr. Whittington | | | 2,500 | | | 15,276 | | | — | |
Directors and Executive Officers as a Group (14 Persons)(3) | | | 291,443 | | | 1,408,947 | | | 1,073,495 | |
| | | | | | | | | | | |
(1)- Includes RSUs or Deferred Stock Units that may be voted or sold only upon passage of time.
(2)
(2)Includes beneficial ownership of shares of common stock which may be acquired within 60 days of March 11, 2016,12, 2018, through stock options awarded under compensation plans.
(3)
(3)Effective January 1, 2016, Kevin J. Mitchell replacedIncludes 59,902 shares held by the Loomis Family Trust, for which Mr. MaxwellLoomis serves as our Chief Financial Officer. The holdingstrustee and has voting and investment power. Mr. Loomis disclaims beneficial ownership of Mr. Maxwell, an NEO in this proxy statement, andall securities held by the holdings of Mr. Mitchell, an executive officer as of the record date, are both included in this table. Only Mr. Mitchell's holdings are included in the total for all directors and executive officers as a group.trust.
(4)
(4)Includes 373 shares held on behalf of the Harold W. McGraw Family Foundation, Inc., of which Mr. McGraw serves on the board, or various trusts for the benefit of various family members of Mr. McGraw and for which trusts Mr. McGraw serves as trustee and has voting and investment power. Mr. McGraw disclaims beneficial ownership of all securities held by the foundation and the trusts.
(5)
(5)Includes 85171 shares of common stock owned by the Erika Tschinkel Trust and 31,003 shares of common stock owned jointly with Ms. Tschinkel's spouse.Trust.
| | 2016 PROXY STATEMENT55 |
PROPOSAL 4:
Management Proposal Regarding the Annual Election of Directors
Currently, the Amended and Restated Certificate of Incorporation (the
"Certificate“Certificate of
Incorporation"Incorporation”) of the Company provides for a staggered Board divided into three classes of directors, with each class elected for
a three-year
terms.term.
After considering the advantages and disadvantages of declassification, including the opinion of major investors of the Company and views of commentators, the Board has determined it is in the best interests of the Company and its shareholders to amend the Certificate of Incorporation and the By-Laws of the Company to declassify the Board over the next three years. This will result in a fully declassified Board by the
20192021 Annual Meeting of Shareholders.
THE BOARD RECOMMENDS THAT YOU VOTE
"FOR"“FOR” THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS.
The affirmative vote of the holders of 80 percent of the outstanding shares of
common stock entitled to vote
generally on the election of directors on the Record Date is required to approve this
Proposal.proposal. We submitted this proposal in 2015
and 2016 and, while it received significant support, it did not receive the 80 percent vote required for adoption. Because brokers may not cast a vote on this proposal without your instruction, it is
very important that you vote your shares.
The proposed amendment to the Certificate of Incorporation would eliminate the classification of the Board over a three-year period and provide for the annual election of all directors beginning at the
20192021 Annual Meeting of Shareholders. The proposed amendment to the Certificate of Incorporation would become effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware, which the Company would file promptly following the Annual Meeting if our shareholders approve the amendment. Board declassification would be phased-in over a three-year period, beginning at the
20172019 Annual Meeting of Shareholders, as follows:
•
At the 20162018 Annual Meeting, twothree nominees will be elected to the Board to serve for a three-year period ending at the 20192021 Annual Meeting.
•
•The three Directors elected for three-yearfour directors whose terms expire at the 20142019 Annual Meeting will continue to serve until the 2019 Annual Meeting and nominees for the four director positions expiring at that meeting will be elected for one-year terms ending at the 2020 Annual Meeting.
•
The three directors elected for three-year terms at the 2017 Annual Meeting will continue to serve until the 2020 Annual Meeting. Nominees for the threeseven expiring director positions expiring at the 20172020 Annual Meeting will be elected for one-year terms ending at the 20182021 Annual Meeting.
•
•The three Directors elected for three-year terms at the 2015 Annual Meeting will continue to serve until the 2018 Annual Meeting. Nominees for the six expiring director positions at the 2018 Annual Meeting will be elected for one-year terms ending at the 2019 Annual Meeting.
•At the
20192021 Annual Meeting, the terms of the
two Directorsthree directors elected for three-year terms in
20162018 and the
six Directorsseven directors elected to one-year terms in
20182020 will all expire, and all nominees presented for election to the Board at the
20192021 Annual Meeting will be elected to one-year terms.
Beginning with the
20192021 Annual Meeting of Shareholders, all
Directorsdirectors will stand for election at each annual meeting of shareholders for a one-year term expiring at the subsequent annual meeting of shareholders. The proposed amendment does not change the present number of
Directorsdirectors or the
Board'sBoard’s authority to change that number and to fill any vacancies or newly created directorships.
Delaware law provides, unless otherwise addressed in the certificate of incorporation, that members of a board that is classified may be removed only for cause. The proposed amendment provides that, once the Board is fully declassified as of the
20192021 Annual Meeting of Shareholders, directors may be removed with or without cause. Before that time, directors serving in a class elected for a three-year term at any annual meeting of shareholders from
20142016 through
20162018 may be removed only for cause. Directors elected for a one-year term at each annual meeting of shareholders from
20172019 through
20182020 may be removed with or without cause.
The proposed Certificate of Amendment to the Certificate of Incorporation is attached to this Proxy Statement as
Appendix AB. If our shareholders approve the proposed amendment to the Certificate of Incorporation, the Board will make certain conforming changes to the Company'sCompany’s By-Laws.56 2016 PROXY STATEMENT | | |
Who is soliciting my vote?
The Board of Directors of Phillips 66 is soliciting proxies to be voted at the
20162018 Annual Meeting of Shareholders of Phillips 66.
You may vote if you were the record owner of Phillips 66 common stock as of the close of business on March
11, 2016,12, 2018, the record date established by the Board of Directors. Each share of common stock is entitled to one vote. As of March
11, 2016,12, 2018, we had
[xx]466,325,141 shares of common stock outstanding and entitled to vote. There is no cumulative voting.
How many shares must be present to hold the meeting?
In order for us to hold our meeting, holders of a majority of our outstanding shares of common stock as of March
11, 2016,12, 2018, must be present in person or by proxy at the meeting. This is referred to as a quorum. 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. Abstentions and broker non-votes will also be counted for purposes of establishing a quorum at the meeting.
What is a broker non-vote?
Applicable rules permit brokers
Brokers are allowed to vote shares held for the benefit of their clients on routine matters wheneven though the brokers have not received voting instructions from the beneficial owner on how to vote those shares.the shares only on routine matters. The ratification of an independent auditor is an example of a routine matter on which brokers may vote in this manner. Brokers
Without voting instructions, brokers may not vote shares held for the benefit of their clients on non-routine
matters. Non-routine matters
such asinclude the election of directors, proposals relating to executive compensation and proposals to amend certificates of incorporation and certain other corporate governance
changes, unless they have received voting instructions from the beneficial owner on how to vote those shares.changes. Shares that are not voted by brokers on non-routine matters are called broker non-votes.
How many votes are needed to approve each of the proposals?
Each of the director nominees requires the affirmative "“FOR"” vote of the majority of the votes cast in person or by proxy at the meeting. All other proposals, except cast.
Proposal 4, require the affirmative "FOR" vote of a majority of those shares present in person or represented by proxy atproposal to declassify the meeting and entitled to vote. Proposal 4Board, requires the affirmative "“FOR"” vote of the holders of 80 percent of the outstanding shares as of stock entitled to vote generally on the election of directors on the Record Date. Accordingly,record date. As a result, a broker non-vote on Proposal 4 has the same effect as a vote against the proposal.
All other proposals require the affirmative “FOR” vote of a majority of shares present in person or represented by proxy at the meeting.
You can vote either
in person at the meeting orby proxy.This proxy statement, the accompanying proxy card and the
Company's 2015Company’s 2017 Annual Report to Shareholders are being made available to the
Company'sCompany’s shareholders on the Internet at
www.proxyvote.comwww.proxyvote.com through the notice and access process. The Company's 2015Company’s 2017 Annual Report to Shareholders contains consolidated financial statements and reports of the independent registered public accounting firm, management'smanagement’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.To vote by proxy, you must do one of the following:
•
Vote over theInternet (instructions are on the proxy card).
•
•Vote bytelephone (instructions are on the proxy card).
•
•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 envelopeenvelope.
If you hold your Phillips 66 stock in a brokerage account (that is, in
"street name"“street name”), your ability to vote by telephone or over the Internet depends on your
broker'sbroker’s voting process. Please follow the directions on your proxy card or voter instruction form carefully.
Even if you plan to attend the Annual 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 Phillips 66
common stock in street name, you must obtain a proxy from your broker and bring that proxy to the meeting.
| | 2016 PROXY STATEMENT57 |
Table of Contents
How do I vote if I hold my stock through a Phillips 66 employee benefit plan?
If you hold your
common stock through a Phillips 66 employee benefit plan, you must either:
•
Vote over theInternet (instructions are in the email sent to you or on the notice and access form).
•
•Vote bytelephone (instructions are on the notice and access form).
•
•If you elected to receive 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 envelopeenvelope.
You will receive a separate voting instruction form for each employee benefit plan in which you hold Phillips 66
common stock. 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.
How can I revoke my proxy?
You can revoke your proxy by sending written notice of revocation of your proxy to our Corporate Secretary so that it is received prior to 5:00 p.m.
, Central
Daylight Time, on May
3, 2016.8, 2018. The contact information for our Corporate Secretary may be found under COMMUNICATIONS WITH OUR BOARD.
Yes. You can change your vote at any time before the polls close at the Annual Meeting, which will void any earlier vote. You can change your vote by:
•
Voting
voting again by telephone or over the Internet prior to 11:59 p.m., Eastern Daylight Time, on May 3, 20168, 2018;
•
•Signingsigning another proxy card with a later date and returning it to us prior to the meetingmeeting; or
•
•Votingvoting again at the
meetingmeeting.
If you hold your Phillips 66
common stock in street name, you must contact your broker to obtain information regarding changing your voting instructions.
We hired Broadridge Financial Solutions, Inc. to count the votes represented by proxies and cast by ballot, and appointed Jim Gaughan of Carl T. Hagberg and Associates to act as Inspector of Election.
Will my shares be voted if I
don'tdon’t provide my proxy and
don'tdon’t attend the Annual Meeting?
For shares held in your name, if you do not provide a proxy or vote your shares at the Annual Meeting, those shares will not be voted.
If you hold shares in street name, your broker may
be able to vote those shares for
certain "routine"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 fiscal year
20162018 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."that are non-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
2016.2018.
![[MISSING IMAGE: lg_phillips66.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/lg_phillips66.jpg)
![[MISSING IMAGE: ph_greg-garland03.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_greg-garland03.jpg)
![[MISSING IMAGE: ph_wood-river.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_wood-river.jpg)
![[MISSING IMAGE: icon_laptop.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_laptop.jpg){kind=icon}
![[MISSING IMAGE: icon_phone01.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_phone01.jpg){kind=icon}
![[MISSING IMAGE: icon_mail01.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_mail01.jpg){kind=icon}
![[MISSING IMAGE: tv487943_pie-committee.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_pie-committee.jpg)
![[MISSING IMAGE: ph_brian-ferguson02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_brian-ferguson02.jpg)
![[MISSING IMAGE: ph_harold-mcgraw02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_harold-mcgraw02.jpg)
![[MISSING IMAGE: ph_victoria-tschinkel02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_victoria-tschinkel02.jpg)
![[MISSING IMAGE: ph_greg-garland02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_greg-garland02.jpg)
![[MISSING IMAGE: ph_gary-adams02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_gary-adams02.jpg)
![[MISSING IMAGE: ph_john-lowe02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_john-lowe02.jpg)
![[MISSING IMAGE: ph_denise-ramos02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_denise-ramos02.jpg)
![[MISSING IMAGE: ph_william-loomis02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_william-loomis02.jpg)
![[MISSING IMAGE: ph_glenn-tilton02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_glenn-tilton02.jpg)
![[MISSING IMAGE: ph_marna-whittington02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/ph_marna-whittington02.jpg)
![[MISSING IMAGE: icon_oe02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_oe02.jpg){kind=icon}
![[MISSING IMAGE: icon_ind-recognized.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_ind-recognized.jpg){kind=icon}
![[MISSING IMAGE: icon_growth02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_growth02.jpg){kind=icon}
![[MISSING IMAGE: icon_returns02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_returns02.jpg){kind=icon}
![[MISSING IMAGE: icon_arrow01.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_arrow01.jpg){kind=icon}
![[MISSING IMAGE: icon_distributions02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_distributions02.jpg){kind=icon}
![[MISSING IMAGE: icon_high-performing02.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/icon_high-performing02.jpg){kind=icon}
![[MISSING IMAGE: tv487943_pie-target.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_pie-target.jpg)
![[MISSING IMAGE: tv487943_chrt-incentive.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_chrt-incentive.jpg)
![[MISSING IMAGE: tv487943_chrt-vcip.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_chrt-vcip.jpg)
![[MISSING IMAGE: tv487943_bar1.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_bar1.jpg)
![[MISSING IMAGE: tv487943_bar2.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_bar2.jpg)
![[MISSING IMAGE: tv487943_bar3.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_bar3.jpg)
![[MISSING IMAGE: tv487943_bar4.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_bar4.jpg)
![[MISSING IMAGE: tv487943_pie-programs.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_pie-programs.jpg)
![[MISSING IMAGE: tv487943_bar5.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_bar5.jpg)
![[MISSING IMAGE: tv487943_bar6.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_bar6.jpg)
![[MISSING IMAGE: tv487943_bar7.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_bar7.jpg)
![[MISSING IMAGE: tv487943_pc1.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_pc1.jpg)
![[MISSING IMAGE: tv487943_pc2.jpg]](https://files.docoh.com/PRE 14A/0001144204-18-014335/tv487943_pc2.jpg)
