Plan Highlights - Vanguard

Plan Highlights

Phillips 66 Savings Plan (099066)

This material has been designed to give you a general description of the main features of the Phillips 66 Savings Plan. For more information, visit /sites/phillips66/index.html, refer to the Summary Plan Description (SPD), or contact Vanguard.

Provision

Eligibility and Enrollment

Description

Generally, you are eligible to participate in the plan on the first day you are employed with the company. You will be automatically enrolled at a default contribution rate of 3% of your eligible pay on a before-tax basis. Your contributions will automatically be invested in the Vanguard Target Retirement Trust with the target date closest to the year you will reach age 65. You are immediately vested in all amounts contributed to your account.

Investments in Target Retirement Trusts are subject to the risks of their underlying funds. The year in the trust name refers to the approximate year (the target date) when an investor in the trust would retire and leave the workforce. The trust will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Trust is not guaranteed at any time, including on or after the target date.

You are also enrolled in the automatic annual increase feature. This feature automatically increases your before-tax contribution rate by one percentage point each January and continues to increase your rate each year until you reach 5% of your eligible pay. You can opt out of this annual increase feature or change your election percentage at any time by contacting Vanguard.

You may access your account in the following ways:

? Online at retirementplans. You must register for online access to manage your account. To register, go to register. You will need your plan number, which is 099066. If you have an individual account at Vanguard in addition to your plan account, you will need your individual account number to register. Once registered you will have 24-hour access to your account, as well as investment and financial planning information. You can also access Vanguard through HR Express on the Phillips 66 intranet site.

? By phone at 800-523-1188. Get 24-hour access to your account and investment option information through the interactive VOICE? Network. Or speak with a Vanguard Participant Services associate for help with transactions and answers to your questions weekdays from 7:30 a.m. to 8 p.m., Central time.

Provision Beneficiaries

Description

Be sure to name beneficiaries for your plan account. Properly designating beneficiaries ensures that, when you die, your hard-earned savings are distributed according to your wishes.

After you register for online access, you can designate beneficiaries online as outlined below. To designate or update your beneficiary information, follow these simple steps:

1. Log on to your account at retirementplans. 2. Click My Profile. (If you have multiple accounts at Vanguard, you may need to select

Employer plans first.) 3. Click Beneficiaries.

Or go to , download the beneficiary designation form, and return it to Vanguard. You may also call Vanguard Participant Services at 800-523-1188 to obtain a copy of the form. Associates are available weekdays from 7:30 a.m. to 8 p.m., Central time.

Your Contributions and IRS Limits

You can choose from the following contribution types:

? Before-tax contributions. ? Roth 401(k) after-tax contributions. ? Traditional after-tax contributions. ? Any combination of the above.

IRS Limits

The IRS limits your annual before-tax and Roth after-tax contributions. For the current IRS contribution limits, go to contributionlimits.

If your total before-tax or Roth contributions under Thrift reach the annual IRS limit before the year's end, any additional before-tax or Roth contributions will automatically be converted to traditional after-tax contributions for the remainder of the year. Before-tax and Roth contributions to Thrift will resume with your first paycheck in January of the next year. Note: If you stop contributions to your account after reaching the IRS before-tax or Roth limit, you will have to contact Vanguard the following January to restart them. Your contributions will not resume automatically.

Thrift

Your Contributions

You can contribute from 1% to 75% of eligible pay on a before-tax, Roth after-tax, or traditional after-tax basis, or any combination, up to the IRS annual limits. Phillips 66 will contribute $1 to your account for every $1 you contribute each pay period, up to 5% of your eligible pay. The company matching contributions will be allocated according to your current investment selection.

Employee Catch-up contributions. Starting the year in which you reach age 50, you can make additional contributions to the plan over and above certain plan or IRS limits. You can make catch-up contributions on a before-tax or Roth basis, as part of your overall Thrift contribution.

Calculating Your Contribution Percentage

The example below shows how to calculate your Thrift contribution percentage, assuming $80,000 eligible pay and maximizing your before-tax and/or Roth contributions.

Step 1: Determine the amount you wish to contribute:

IRS limit on before-tax and Roth contributions IRS limit for catch-up contributions Total contributions

Under age 50 $17,500 Not applicable $17,500

Age 50 or older $17,500 $5,500 $23,000

Step 2: Divide your total contribution amount by your annual pay.

Under age 50 Age 50 or older

$17,500 / $80,000 = 0.21875

22%

--

2

$23,000 / $80,000 = 0.2875

--

29%

Provision Success Share Company Contribution

Rollovers

Investment Options Advice Services

Dividend Distribution Options for the Phillips 66 Stock Fund*

Description

As the name implies, Success Share reflects your potential to share in the Company's success. Success Share provides a twice-per-year discretionary cash contribution to your Thrift account. The contribution percentage will be determined by senior management and will be from 0% to 6% of eligible pay with a target contribution of 2%. Eligible employees must contribute at least 1% of eligible pay to Thrift in order to be eligible to receive Success Share contributions. Success Share contributions will be based only on your eligible pay for those pay periods in which you contributed to Thrift. You can find more information about Success Share online at .ekit/sites/phillips66/index.html.

You may roll over before-tax, Roth after-tax, and traditional after-tax money from a former employer's 401(k) or other eligible plan, as well as before-tax money from an IRA, into the plan at any time. Contact Vanguard for instructions. Note: If you do not make an investment election for your rollover contribution, your money will be invested in the Vanguard Target Retirement Trust with the target date closest to the year you will reach age 65.

You may choose funds from the plan's current investment options. For brief descriptions of each investment option, refer to your plan's funds in the "Invest Your Savings" section of the plan's online enrollment kit at .

No matter what your retirement investing needs are, Vanguard's advice, education, and all-in-one investment options can help. We can even do most of the work for you.

Follow these steps to view your plan's advice, education, and all-in-one investment options online:

1. Log on to your account at retirementplans. 2. On your homepage, click the Review my performance tab and select Get help planning

for retirement. 3. Select Let Vanguard Help or Do It Yourself and review your options.

Note: If you have multiple accounts at Vanguard, you may need to select Employer plans after you log on. If you have multiple employer plan accounts, select the plan you'd like to view.

Dividends are payments to shareholders and are distributed from current earnings or accumulated profits.

Dividends received from Phillips 66 stock are automatically reinvested to purchase additional shares of Phillips 66 stock. The money will remain tax-deferred and help your account grow.

Dividend pass-through: If you wish to receive stock dividends in cash, you may contact Vanguard up to three days before a dividend payment date to elect a cash distribution. You will receive a check and the amount of the dividend will be reported on a Form 1099-R. Your election to receive a cash distribution for dividends, if declared, will continue each quarter unless you revoke your election at least three business days before any dividend payment date.

Because the Phillips 66 Stock Fund concentrates on a single stock, it is considered riskier than a diversified stock fund.

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Provision Changing Your Investments or Contributions

Loans

Description

Contact Vanguard online or by phone to make the following changes:

? Exchanges. Generally, you may make exchanges into or out of any investment fund at any time, subject to established trading policies. Please refer to "Important information about fund restrictions" on page 6, the fund prospectus, or the SPD for more information on exchange policies.

? Investment allocation changes. You can change how new contributions are invested at any time. Allocation changes are effective immediately.

? Payroll deduction percentage changes. You can change the amount you contribute anytime. Changes will be reflected in your paycheck as soon as administratively practicable.

Although the plan is designed for long-term savings, you can borrow from your account.

Following are some of the loan provisions:

? Minimum amount: $1,000. ? Maximum amount: 50% of your account balance up to $50,000 (or less if you have had an

outstanding plan loan in the past 12 months). ? Maximum outstanding loans: three. ? Repayment: up to 58 months for a general purpose loan; up to 238 months for a loan taken

to purchase a principal residence. ? Application fee:

>> $35 for each loan initiated through retirementplans or the VOICE Network. >> $85 for each loan initiated through a Vanguard Participant Services associate.

? Maintenance fee: $20 per year. ? Interest rate: prime rate plus 1%.

To request a loan, contact Vanguard online or by phone.

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Provision Withdrawals*

Description

You may withdraw money from your account under certain circumstances:

? Anytime--You can withdraw your traditional after-tax contributions and company contributions. ? Upon reaching age 59? or becoming totally disabled--You may withdraw all of your

account assets when you reach age 59? or become totally disabled. You must have a physician's certification or Social Security Administration determination of total disability. ? Upon termination of employment--You may withdraw your entire account. ? In the event of a hardship (as defined by the plan)--You may withdraw before-tax and Roth contributions as needed to satisfy your hardship. >> Hardship withdrawals will result in a six-month suspension from making contributions

or receiving company contributions. >> You must first exhaust other options, including plan loans.

To make a withdrawal, contact Vanguard online or by phone. For more information about the types of withdrawals available, contact Vanguard or refer to the SPD.

Distributions*

You are eligible to receive your account balance upon retirement, termination of employment, or total and permanent disability. You may do any of the following:

? Leave it in the plan if your balance is more than $1,000. You must begin taking required minimum distributions by April 1 following the year you turn age 70?.

? Receive it as a single-sum cash payment. ? Roll it over to another employer's eligible plan or an IRA. ? Receive it in installments (monthly, quarterly, semiannually, or annually) based on your

life expectancy.

There are important factors to consider when rolling over assets to an IRA or employer-sponsored plan or leaving assets in an employer retirement plan account. These factors include, but are not limited to, investment options in each type of account, fees and expenses, available services, potential withdrawal penalties, protection from creditors and legal judgments, required minimum distributions, and tax consequences of rolling over employer stock to an IRA.

*Tax implications: You will be responsible for paying any federal, state, local, or foreign taxes on a distribution or withdrawal from pre-tax accounts. A distribution or withdrawal of Roth 401(k) earnings is usually also taxable unless the initial Roth contribution was made more than five years ago and you are at least age 59?. Early withdrawals may be subject to a 10% federal penalty tax. To the extent required by law, Vanguard will make the appropriate withholding for tax purposes.

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Important Information about Fund Restrictions

? Transaction times. The daily cutoff time for transactions involving funds other than individual stock funds is 3 p.m., Central time. The daily cutoff time for transactions involving individual stock funds is 1 p.m., Central time. Trade requests involving stock funds received after 1 p.m., Central time, will receive the next business day's participant transaction price. This earlier cutoff time will allow Vanguard the opportunity to execute trades the same day they are received.

? Frequent-trading policy. You can transfer invested assets into different funds at any time, subject to applicable transaction times and Stable Value Fund exchange rules. When you transfer assets out of a fund, including the Phillips 66 Stock Fund, you may not transfer assets back into that fund within 60 calendar days of your original transfer out. This restriction also applies to reallocation and rebalancing transactions. You can move your money out of any fund at any time (subject to applicable transaction times, and Stable Value Fund exchange rules). The restriction does not apply to the following transactions: ? Purchases of shares by payroll contribution. ? Company contributions. ? Loan repayments. ? Dividend or capital gains distributions. ? Written requests submitted to Vanguard via U.S. mail. (Please note that requests for transfers submitted by fax or wire are not considered written requests and are subject to the 60-day restriction.) Note: The policy applies to all funds in the plan, except Vanguard Prime Money Market Fund and the Stable Value Fund.

For more information on how these policies will affect your transactions, contact Vanguard at 800-523-1188.

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? Stable Value Fund exchange rules. You cannot transfer money directly from the Stable Value Fund to Vanguard Prime Money Market Fund or to Vanguard Inflation-Protected Securities Fund. Any exchanges from the Stable Value Fund must first be made to any fund or funds other than these two funds and remain there for 90 days. After 90 days you can then exchange the money into Vanguard Prime Money Market Fund or Vanguard Inflation-Protected Securities Fund.

For example, if you wanted to transfer money from the Stable Value Fund to Vanguard Prime Money Market Fund, you would do it like this: On January 20, transfer the money from the Stable Value Fund into any of the other funds in the plan except for Vanguard Prime Money Market Fund or Vanguard Inflation-Protected Securities Fund (for instance, into Vanguard Total Bond Market Index Fund). On April 20 or anytime thereafter, transfer the money from Vanguard Total Bond Market Index Fund to Vanguard Prime Money Market Fund.

A note about risk All investing is subject to risk, including the possible loss of the money you invest. While U.S. Treasury or government agency securities provide substantial protection against credit risk, they do not protect investors against price changes due to changing interest rates. Although the market values of government securities are not guaranteed and may fluctuate, these securities are guaranteed as to the timely payment of principal and interest. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. Because the Phillips 66 Stock Fund concentrates on a single stock, it is considered riskier than a diversified stock fund.

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Connect with Vanguard? retirementplans > 800-523-1188

For more information about any fund, including investment objectives, risks, charges, and expenses, call Vanguard at 800-523-1188 to obtain a prospectus. The prospectus contains this and other important information about the fund. Read and consider the prospectus information carefully before you invest. You can also download Vanguard fund prospectuses at .

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund. An investment in a stable value fund is neither insured nor guaranteed by the U.S. government. There is no assurance that the fund will be able to maintain a stable net asset value, and it is possible to lose money by investing in the fund.

Target Retirement Trusts are not mutual funds. They are collective trusts available only to tax-qualified plans and their eligible participants. Investment objectives, risks, charges, expenses, and other important information should be considered carefully before investing. The collective trust mandates are managed by Vanguard Fiduciary Trust Company, a subsidiary of The Vanguard Group, Inc.

Advice is provided by Vanguard Advisers, Inc., a federally registered investment advisor. Eligibility restrictions may apply.

Participant Education P.O. Box 2900 Valley Forge, PA 19482-2900

? 2014 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds. BBBBCVJP 082014

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