<PAGE>   1
                                                                    EXHIBITS 4-J





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                              DECLARATION OF TRUST





                             Phillips 66 Capital VI





                            Dated as of May 22, 1998





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                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                    <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
   Section 1.1     Definitions.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
   Section 2.1     Name.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
   Section 2.2     Office.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
   Section 2.3     Purpose.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
   Section 2.4     Authority.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
   Section 2.5     Title to Property of the Trust.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
   Section 2.6     Powers of the Trustees.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
   Section 2.7     Filing of Certificate of Trust.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
   Section 2.8     Duration of Trust.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
   Section 2.9     Responsibilities of the Sponsor.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
   Section 2.10    Declaration Binding on Securities Holders.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III TRUSTEES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
   Section 3.1     Trustees.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
   Section 3.2     Regular Trustees.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
   Section 3.3     Delaware Trustee.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
   Section 3.4     Property Trustee.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
   Section 3.5     Not Responsible for Recitals or Sufficiency of Declaration.  . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV LIMITATION OF LIABILITY OF  HOLDERS OF SECURITIES, TRUSTEES OR OTHERS  . . . . . . . . . . . . . . . . . . . 8
   Section 4.1     Exculpation.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
   Section 4.2     Fiduciary Duty.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
   Section 4.3     Indemnification.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   Section 4.4     Outside Businesses.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
ARTICLE V AMENDMENTS, TERMINATION, MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
   Section 5.1     Amendments.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
   Section 5.2     Termination of Trust.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
   Section 5.3     Governing Law.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
   Section 5.4     Headings.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
   Section 5.5     Successors and Assigns.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
   Section 5.6     Partial Enforceability.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
   Section 5.7     Counterparts.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
</TABLE>





<PAGE>   3
                              DECLARATION OF TRUST
                                       OF
                             Phillips 66 Capital V
                                  May 22, 1998

                 DECLARATION OF TRUST ("Declaration") dated and effective as of
May 22, 1998 by the Trustees (as defined herein), the Sponsor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;

                 WHEREAS, the Trustees and the Sponsor desire to establish a
trust (the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer; and

                 NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will
beheld in trust for the exclusive benefit of the holders, from time to time, of
the securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.

                                   ARTICLE I
                                  DEFINITIONS

                 Section 1.1      Definitions.

                 Unless the context otherwise requires:

                        (a)  Capitalized terms used in this Declaration but not
                             defined in  the preamble above have the
                             respective meanings assigned to them in this
                             Section 1.1;

                        (b)  a term defined anywhere in this Declaration has the
                             same  meaning throughout;

                        (c)  all references to "the Declaration" or "this
                             Declaration" are  to this Declaration of
                             Trust as modified, supplemented or  amended
                             from time to time;

                        (d)  all references in this Declaration to Articles and
                             Sections  are to Articles and Sections of
                             this Declaration unless  otherwise specified;
                             and

                        (e)  a reference to the singular includes the plural and
                             vice  versa.





                                     - 1  -
<PAGE>   4
                 "Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.

                 "Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.

                 "Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time, or any successor legislation.

                 "Commission" means the Securities and Exchange Commission.

                 "Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be setout
in any amendment to this Declaration.

                 "Company Indemnified Person" means (a) any Regular Trustee;(b)
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any employee or agent of the Trust or its Affiliates.

                 "Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates and (b) any holder of Securities.

                 "Debenture Issuer" means the Parent in its capacity as the
issuer of the Debentures under the Indenture.

                 "Debentures" means the series of Debentures to be issued by
the Debenture Issuer and acquired by the Trust.

                 "Debenture Trustee" means [The Bank of New York, a New York
banking corporation], as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.

                 "Delaware Trustee" has the meaning set forth in Section 3.1.

                 "Exchange Act"  means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.

                 "Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).

                 "Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.

                 "Indenture" means the indenture to be entered into between the
Parent and the Debenture Trustee and any indenture supplemental thereto
pursuant to which the Debentures are to be issued.





                                     - 2  -
<PAGE>   5
                 "Parent" means Phillips Petroleum Company, a Delaware
corporation or any successor entity in a merger.

                 "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

                 "Preferred Security" means a security representing an
undivided beneficial interest in the assets of the Trust with such terms as
maybe set out in any amendment to this Declaration.

                 "Regular Trustee" means any Trustee other than the Delaware
Trustee and the Institutional Trustee (as hereinafter defined).

                 "Securities" means the Common Securities and the Preferred
Securities.

                 "Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.

                 "Sponsor" means the Parent in its capacity as sponsor of the
Trust.

                 "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.

                                   ARTICLE II
                                  ORGANIZATION

                 Section 2.1      Name.

                 The Trust created by this Declaration is named "Phillips
66 Capital VI."  The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.

                 Section 2.2      Office.

                 The address of the principal office of the Trust is c/o
Phillips Petroleum Company, Phillips Building, Bartlesville, Oklahoma 74004.
At any time, the Regular Trustees may designate another principal office.

                 Section 2.3      Purpose.

                 The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as





                                     - 3  -
<PAGE>   6
otherwise limited herein, to engage in only those other activities necessary,
or incidental thereto.  The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.

                 Section 2.4      Authority.

                 Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust.  An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust.  In
dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to bind
the Trust.  Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Regular Trustees as set forth in this
Declaration.

                 Section 2.5      Title to Property of the Trust.

                 Legal title to all assets of the Trust shall be vested in the
Trust.

                 Section 2.6      Powers of the Trustees.

                 The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:

                          (a)     to issue and sell the Preferred Securities
and the Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and, provided
further, that there shall be no interests in the Trust other than the
Securities and the issuance of the Securities shall be limited to a one-time,
simultaneous issuance of both Preferred Securities and Common Securities;

                          (b)     in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:

                                  (i)      execute and file with the Commission
                          a registration statement on Form S-3 prepared by the
                          Sponsor, including any amendments thereto in relation
                          to the Preferred Securities;

                                  (ii)     execute and file any documents
                          prepared by  the Sponsor, or take any acts as
                          determined by the Sponsor to  be necessary in order
                          to qualify or register all or part of  the Preferred
                          Securities in any State in which the Sponsor has
                          determined to qualify or register such Preferred
                          Securities  for sale;

                                  (iii)    execute and file an application,
                          prepared  by the Sponsor, to the New York Stock
                          Exchange or any other  national stock exchange or





                                     - 4  -
<PAGE>   7
                          the Nasdaq Stock Market's National  Market for
                          listing upon notice of issuance of any Preferred
                          Securities;

                                  (iv)     execute and file with the Commission
                          a  registration statement on Form 8-A, including any
                          amendments  thereto, prepared by the Sponsor relating
                          to the registration  of the Preferred Securities
                          under Section 12(b) of the  Exchange Act; and

                                  (v)      execute and enter into an
                          underwriting  agreement and pricing agreement
                          providing for the sale of the  Preferred Securities;

                          (c)     to employ or otherwise engage employees and
                 agents (who may be designated as officers with titles) and
                 managers, contractors, advisors, and consultants and provide
                 for reasonable compensation for such services;

                          (d)     to incur expenses which are necessary or
                 incidental to carry out any of the purposes of this
                 Declaration; and

                          (e)     to execute all documents or instruments,
                 perform all duties and powers, and do all things for and on
                 behalf of the Trust in all matters necessary or incidental to
                 the foregoing.

                 Section 2.7      Filing of Certificate of Trust.

                 On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the State
of Delaware.

                 Section 2.8      Duration of Trust.

                 The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.

                 Section 2.9      Responsibilities of the Sponsor.

                 In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:

                          (a)     to prepare for filing by the Trust with the
Commission a registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;

                          (b)     to determine the States in which to take
appropriate action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust,
as the





                                     - 5  -
<PAGE>   8
Sponsor deems necessary or advisable in order to comply with the applicable
laws of any such States;

                          (c)     to prepare for filing by the Trust an
application to the New York Stock Exchange or any other national stock exchange
or the Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities;

                          (d)     to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the registration of
the class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and

                          (e)     to negotiate the terms of an underwriting
agreement and pricing agreement providing for the sale of the Preferred
Securities.

                 Section 2.10     Declaration Binding on Securities Holders.

                 Every Person by virtue of having become a holder of a Security
or any interest therein in accordance with the terms of this Declaration, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Declaration.

                                  ARTICLE III
                                    TRUSTEES

                 Section 3.1      Trustees.

                 The number of Trustees initially shall be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor.  The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that the number of Trustees shall in no event be less than two
(2);provided further that one Trustee, in the case of a natural person, shall
be a person who is a resident of the State of Delaware or that, if not a
natural person, is an entity which has its principal place of business in the
State of Delaware (the "Delaware Trustee"); provided further that there shall
be at least one trustee who is an employee or officer of, or is affiliated with
the Parent (a "Regular Trustee").

                 Section 3.2      Regular Trustees.

                 The initial Regular Trustees shall be:

                                  T.C. Morris
                                  John A. Carrig
                                  R.B. Gisi



                          (a)     Except as expressly set forth in this
Declaration, any power of the Regular Trustees may be exercised by, or with the
consent of, anyone such Regular Trustee.





                                     - 6  -
<PAGE>   9
                          (b)     Unless otherwise determined by the Regular
Trustees, and except as otherwise required by the Business Trust Act, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 2.6 provided, that, the registration statement
referred to in Section 2.6(b)(i), including any amendments thereto, shall be
signed by a majority ofthe Regular Trustees; and

                          (c)     a Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Regular Trustees have power and authority to cause the Trust to execute
pursuant to Section 2.6.

                 Section 3.3      Delaware Trustee.

                 The initial Delaware Trustee shall be:

                        The Bank of New York (Delaware)



                 Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees described in this Declaration.  The Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act.  Notwithstanding anything herein to the
contrary, the Delaware Trustee shall not be liable for the acts or omissions to
act of the Trust or of the Regular Trustees except such acts as the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act and except for the gross negligence or
willful misconduct of the Delaware Trustee.

                 Section 3.4      Property Trustee.

                 Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint another trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the Institutional
Trustee and the Delaware Trustee.

                 Section 3.5      Not Responsible for Recitals or Sufficiency
of Declaration.

                 The recitals contained in this Declaration shall be taken as
the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness.  The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof The
Trustees make no representations as to the validity or sufficiency of this
Declaration.





                                     - 7  -
<PAGE>   10
                                   ARTICLE IV
     LIMITATION OF LIABILITY OF  HOLDERS OF SECURITIES, TRUSTEES OR 
                                 OTHERS


                 Section 4.1      Exculpation.

                          (d)     No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or bylaw, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions; and

                          (e)     an Indemnified Person shall be fully
protected in relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
Person as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to holders of Securities might properly be
paid.

                 Section 4.2     Fiduciary Duty.

                          (a)     To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration.  The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;

                          (b)     unless otherwise expressly provided herein:

                          (i)     whenever a conflict of interest exists or
                 arises between Covered Persons; or

                          (ii)    whenever this Declaration or any other
                 agreement contemplated herein or therein provides that an
                 Indemnified Person shall act in a manner that is, or provides
                 terms that are, fair and reasonable to the Trust or any holder
                 of Securities,

the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to





                                     - 8  -
<PAGE>   11
such conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles.  In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise;
and



                          (c)     whenever in this Declaration an Indemnified
Person is permitted or required to make a decision:

                          (i)     in its "discretion" or under a grant of
                 similar authority, the Indemnified Person shall be entitled to
                 consider such interests and factors as it desires, including
                 its own interests, and shall have no duty or obligation to
                 give any consideration to any interest of or factors affecting
                 the Trust or any other Person; or

                          (ii)    in its "good faith" or under another
                 express standard, the Indemnified Person shall act under such
                 express standard and shall not be subject to any other or
                 different standard imposed by this Declaration or by
                 applicable law.

                 Section 4.3      Indemnification.

                          (a)     (i)  The Debenture Issuer shall indemnify, to
the full extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and  reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful.  The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did  not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to  believe that his conduct was unlawful

                          (ii)    The Debenture Issuer shall indemnify, to the
                 full extent permitted by law, any Company Indemnified Person
                 who was or is a party or is threatened to be made a party to
                 any threatened, pending or completed action or suit by or in
                 the right of the Trust to procure   a judgment in its favor by
                 reason of the fact that he is or was a Company Indemnified
                 Person against expenses (including attorneys' fees) actually
                 and reasonably incurred by him in connection with the defense
                 or settlement of such action or suit if he acted in good faith
                 and in a





                                     - 9  -
<PAGE>   12
                 manner he reasonably believed to be in or not opposed to the
                 best interests of the Trust and except that no such
                 indemnification shall be made in respect of any claim, issue
                 or matter as to which such Company Indemnified Person shall
                 have been adjudged to be liable to the Trust unless and only
                 to the extent that the Court of Chancery of Delaware or the
                 court in which such action or suit was brought shall determine
                 upon application that, despite the adjudication of liability
                 but in view of all the circumstances of the case, such person
                 is fairly and reasonably entitled to indemnity for such
                 expenses which such Court of Chancery or such other court
                 shall deem proper.

                          (iii)     To the extent that a Company Indemnified
                 Person shall  be successful on the merits or otherwise
                 (including dismissal of an action without prejudice or the
                 settlement of an action without admission of liability) in
                 defense of any action, suit or proceeding referred to in
                 paragraphs (i) and (ii) of this Section 4.3(a), or in defense
                 of any claim, issue or matter therein, he shall be
                 indemnified, to the full extent permitted by law, against
                 expenses (including attorneys' fees) actually and reasonably
                 incurred by him in  connection therewith.

                          (iv)      Any indemnification under paragraphs (i) 
                 and (ii) of   this Section 4.3(a) (unless ordered by a court)
                 shall be made by the Debenture Issuer only as authorized in the
                 specific case upon a determination that indemnification of the
                 Company Indemnified Person is proper in the circumstances
                 because he has met the applicable standard of conduct set forth
                 in paragraphs (i) and (ii).  Such determination shall be made
                 (1) by the Regular Trustees by a majority vote of a quorum
                 consisting of such Regular Trustees who were not parties to
                 such action, suit or proceeding, (2) if such a quorum is not
                 obtainable, or, even if obtainable, if a quorum of
                 disinterested Regular Trustees so directs, by independent legal
                 counsel in a written opinion, or (3) by the Common Security
                 Holder of the Trust.

                          (v)       Expenses (including attorneys' fees) 
                 incurred by a Company Indemnified Person in defending a civil,
                 criminal, administrative or investigative action, suit or
                 proceeding referred to in paragraphs (i) and (ii) of this
                 Section 4.3(a) shall be paid by the Debenture Issuer in advance
                 of the final disposition of such action, suit or proceeding
                 upon receipt of an undertaking by or on behalf of such Company
                 Indemnified Person to repay such amount if it shall  ultimately
                 be determined that he is not entitled to be indemnified by the
                 Debenture Issuer as authorized in this Section 4.3(a). 
                 Notwithstanding the foregoing, no advance shall be made by the
                 Debenture Issuer if a determination is reasonably and promptly
                 made (i) by the Regular Trustees by a majority vote of a quorum
                 of disinterested Regular Trustees, (ii) if such a quorum is not
                 obtainable, or, even if obtainable, if a quorum of
                 disinterested Regular Trustees so directs, by independent legal
                 counsel in a written opinion or (iii) the Common Security
                 Holder of the Trust, that, based upon the facts known to the
                 Regular Trustees, counsel or the Common Security Holder at the
                 time such determination is made, such Company Indemnified
                 Person acted in bad faith or in a manner that such person did
                 not believe to be in or not opposed to the best interests of
                 the Trust, or, with respect to





                                    - 10  -
<PAGE>   13
                 any criminal proceeding, that such Company Indemnified Person
                 believed or had reasonable cause to believe his conduct was
                 unlawful.  In no event shall any advance be made in instances
                 where the Regular Trustees, independent legal counsel or
                 Common Security Holder reasonably determine that such person
                 deliberately breached his duty to the Trust or its Common or
                 Preferred Security Holders.

                          (vi)      The indemnification and advancement of
                 expenses provided by, or granted pursuant to, the other
                 paragraphs of this Section 4.3(a) shall not be deemed
                 exclusive of any other rights to which those seeking
                 indemnification and advancement of expenses may be entitled
                 under any agreement, vote of stockholders or disinterested
                 directors of the Debenture Issuer or Preferred Security
                 Holders of the Trust or otherwise, both as to action in his
                 official capacity and as to action in another capacity while
                 holding such office.  All rights to indemnification under this
                 Section 4.3(a) shall be deemed to be provided by a contract
                 between the Debenture Issuer and each Company Indemnified
                 Person who serves in such capacity at any time while this
                 Section 4.3(a) is in effect.  Any repeal or modification of
                 this Section 4.3(a) shall not affect any rights or obligations
                 then existing.

                          (vii)     The Debenture Issuer or the Trust may
                 purchase and maintain insurance on behalf of any person who is
                 or was a Company Indemnified Person against any liability
                 asserted against him and incurred by him in any such capacity,
                 or arising out of his status as such, whether or not the
                 Debenture Issuer would have the power to indemnify him against
                 such liability under the provisions of this Section 4.3(a).

                          (viii)    For purposes of this Section 4.3(a),
                 references to "the Trust" shall include, in addition to the
                 resulting or surviving entity, any constituent entity
                 (including any constituent of a constituent) absorbed in a
                 consolidation or merger, so that any person who is or was a
                 director, trustee, officer or employee of such constituent
                 entity, or is or was serving at the request of such
                 constituent entity as a director, trustee, officer, employee
                 or agent of another entity, shall stand in the same position
                 under the  provisions of this Section 4.3(a) with respect to
                 the resulting or surviving entity as he would have with
                 respect to such constituent entity if its separate existence
                 had continued.

                          (ix)      The indemnification and advancement of
                 expenses provided by, or granted pursuant to, this Section
                 4.3(a) shall, unless otherwise provided when authorized or
                 ratified, continue as to a person who has ceased to be a
                 Company Indemnified Person and shall inure to the benefit of
                 the heirs, executors and administrators of such a person.

                          (b)     The Debenture Issuer agrees to indemnify (i)
the Delaware Trustee, (ii) any Affiliate of the Delaware Trustee, and (iii) any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Delaware





                                    - 11  -
<PAGE>   14
Trustee (each of the Persons in (i) through (iii) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.  The
obligation to indemnify as set forth in this Section 4.3(b) shall survive the
termination of this Declaration.

                 Section 4.4      Outside Businesses.

                 Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper.  No Covered Person, the Sponsor or the Delaware Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity.  Any Covered Person and the Delaware Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for or may act on any committee or body of holders of, securities or
other obligations of the Sponsor or its Affiliates.

                                   ARTICLE V
                     AMENDMENTS, TERMINATION, MISCELLANEOUS

                 Section 5.1      Amendments.

                 At any time before the issue of any Securities, this
Declaration may be amended by, and only by, a written instrument executed by
all of the Regular Trustees and the Sponsor.

                 Section 5.2      Termination of Trust.

                       (a)        The Trust shall terminate and be of no
further force or effect:

                       (i)        upon the bankruptcy of the Sponsor;

                       (ii)       upon the filing of a certificate of
                 dissolution or its equivalent with respect to the Sponsor or
                 the revocation of the Sponsor's charter or of the Trust's
                 certificate of trust;

                       (iii)      upon the entry of a decree of judicial
                 dissolution of the Sponsor, or the Trust; and





                                    - 12  -
<PAGE>   15

                       (iv)       before the issue of any Securities, with  the
                 consent of all of the Regular Trustees and the Sponsor;  and

                       (b)        as soon as is practicable after the
occurrence of an event referred to in Section 5.2(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware.

                 Section 5.3      Governing Law.

                 This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.

                 Section 5.4      Headings.

                 Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.

                 Section 5.5      Successors and Assigns.

                 Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.

                 Section 5.6      Partial Enforceability.

                   If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.


                 Section 5.7      Counterparts.

                 This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.





                                    - 13  -
<PAGE>   16
                 IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.



                                        /s/ T.C. Morris                        
                                        --------------------------------------
                                        Name:  T.C. Morris
                                        Title:  Regular Trustee





                                        /s/ John A. Carrig                     
                                        --------------------------------------
                                        Name:  John A. Carrig
                                        Title  Regular Trustee





                                        /s/ R.B. Gisi                          
                                        --------------------------------------
                                        Name: R.B. Gisi
                                        Title:  Regular Trustee





                                        THE BANK OF NEW YORK (DELAWARE), as
                                        Delaware Trustee





                                        By: /s/ Mary Jane Morrissey           
                                            ----------------------------------
                                            Name:  Mary Jane Morrissey
                                            Title: Authorized Signatory





                                        PHILLIPS PETROLEUM COMPANY, as Sponsor



                                        By: /s/ John A. Carrig 
                                           -------------------------------------
                                           Name: John A. Carrig
                                           Title: Vice President and
                                                  Treasurer 



                                    - 14  -