Phillips 66 Savings Planhrcpdocctr.phillips66.com/HR_P66_Comm/Benefits/SPD/SPD_SavingsP… ·...

Phillips 66Savings Plan

TULSA, OKLAHOMA

To celebrate their nickname “Oil Capital of the World,” a giant roustabout was built on the Tulsa Fairgrounds in 1953 and the statue was dubbed “The Golden Driller.”

ROUTE 66 AT 36°07'53"N 95°56'14"W

TULSA, OKLAHOMA

Once hailed as the “Oil Capital of the World,”

Tulsa is the second-largest city in Oklahoma

and the 45th-largest city in the United States.

In 1927, Tulsa businessman Cyrus Avery

established the Highway 66 Association in

Tulsa and became known as the “Father

of Route 66.”

This book provides you with a summary plan description (SPD) of the Phillips 66 Savings Plan. It’s an overview of certain terms and conditions, rather than a description of every detail of the plan. It’s written in clear, everyday language that’s designed to help you understand how the plan works.

Every effort has been made to ensure the accuracy of the information provided in this SPD. However, if there’s any discrepancy or conflict between this SPD and the terms of the official plan document, the official plan document will control. Phillips 66 reserves the right to amend, change or terminate the plan at any time without notice, at its sole discretion. Nothing in this SPD creates an employment contract between the company or its subsidiaries or affiliates and any employee.

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Contributing to your future ..............................2

Here’s the big picture .......................................4

Eligibility and enrollment .................................5Am I eligible? .................................................... 5How do I enroll? ............................................... 5

Automatic enrollment for new employees .... 6Moving up to 5% ......................................... 6

How the plan works ..........................................6What’s the difference between Before-tax,

Roth 401(k) and After-tax? ........................... 9How much can I contribute? .......................... 10

What are the IRS maximum limits? ............ 11Can I roll over money from another eligible

savings or retirement plan? ................... 12How much does the company contribute? ..... 13

How does the company match work? ....... 13What do I do to get a Success Share

contribution? ......................................... 14When am I vested in my account? ................. 14How can I make the most of my savings? ...... 15

Do I get to decide how my money is invested? .......................................................... 16

How can I choose my investments? ............... 16Investing 101 .................................................. 17Why diversification matters............................. 17How do I change my investment elections? ... 19

Can I take a loan from this plan?................... 19

Can I take money out of this plan while I’m still employed? ..........................................21

Taking money out for hardship ....................... 22

How do I take money out of the plan after I’ve left the company? ....................................22

How do I request a distribution? ..................... 23When will my distribution be paid to me? ....... 23Required minimum distributions starting at

age 70½ .................................................... 24

Do I pay taxes? ................................................25How do I roll over my lump-sum

distribution? ............................................... 27

What if I have a balance in the Phillips 66 Stock Fund? .....................................................28

How do I name a beneficiary? .......................28What if I don’t name a beneficiary? ................ 28

What happens if … ..........................................29I go on a military leave of absence? ................ 29I die? .............................................................. 29

What other important information do I need to know? .................................................29

Administrative information .............................. 29ERISA information .......................................... 30Agent for service of legal process .................. 31Transfers from and to other plans ................... 31Changes or termination of the plan ................ 31Plan expenses ............................................... 31Assignment of benefits ................................... 32

How do I file a claim?......................................32How do I appeal a claim denial? .................... 33Payments to a minor or legally incompetent

person ....................................................... 34Lost participants and beneficiaries ................. 34

What are my rights under ERISA? .................34Receive information about your plan and

benefits ..................................................... 34Prudent action by plan fiduciaries .................. 34Enforce your rights ......................................... 35

Who administers the plan? ............................36

Contacts ...........................................................37

Glossary ...........................................................38

PHILLIPS 66 SAVINGS PLAN


Contributing to your futureIt’s easy to focus on the present and worry about the future later. But that’s not a good plan for retirement. Especially when the Phillips 66 Savings Plan (“plan”) can make saving for retirement easier.

Take a look!

The plan can help all of these employees. The plan is a 401(k) plan that helps

you save for retirement through regular deductions from your paycheck. It offers

tax savings, company matching and Success Share contributions, a choice of

investment options, and, under certain circumstances, access to your money

even while you’re still employed.

To get the most out of the plan, you

need to make some decisions. Read

on to see how you can put the plan

to work for you. Consider it a

contribution to your future!

AliceAt age 40, Alice has already built a healthy balance in the plan, but she’s thinking about dropping out for a while to save up for a down payment on a house.

RobertoAt age 48, Roberto wonders how he can pay for his children’s college education AND save for retirement. Even with his wife’s paycheck, it seems impossible.

MarjorieMarjorie is 25, and brand new to Phillips 66. She’s still paying off student loans, and her budget is stretched. But she’s determined to start saving now for retirement. She’s just not sure how to begin.

A couple of technical things

The official name of this plan is the “Phillips 66 Savings Plan.” But in this SPD, it’s called the “plan.”

When we say “Phillips 66,” the “company,” “we” or “our,” we mean both Phillips 66 Company, Phillips 66 Pipeline LLC and, in some contexts, any other affiliated companies where Phillips 66 owns at least 80% of the affiliate.



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Here’s the big picture

Do I have to contribute?

You decide whether you want to contribute to the plan or not.

Your participation in the plan allows you to enjoy tax-deferred savings and company contributions. So if you don’t contribute, you’re turning down money from the company for your retirement.

Do I need to enroll?

See page 5

As a new employee, you’ll be automatically enrolled in the plan at a 3% before-tax contribution rate.

In addition, your new hire contribution rate will have an automatic annual increase election of 1% set so your before-tax contribution increases by 1% each January until it reaches 5%.

You can increase, decrease or stop your deferral or annual increase election or change your investment selections at any time.

Who contributes?

See pages 10 – 14

You do — and if you contribute to the plan, the company will match your contributions dollar-for-dollar (up to 5% of your pay!).

And your contribution of at least 1% of your pay also makes you eligible to receive an additional discretionary contribution from the company called Success Share. The target for the Success Share is 2% of your pay for each pay period in which you make at least a 1% contribution. However, it could range from 0% to 6% based on management discretion.

How much can I contribute?

See page 10

You can contribute from 1% to 75% of your pay, up to limits set each year by the IRS.

How is my money invested?

See page 16

You have a choice of investment options, with tools and resources to help you decide where your money goes.

When am I vested?

See page 14

Immediately. That means your entire account balance is yours, including the company contributions.

When can I use my savings?

See page 22

You can keep saving and growing your money until you retire. At that time, you can choose to receive your money in cash, through monthly payments, or by rolling it over into another retirement plan or Individual Retirement Account (IRA). You can also choose to leave it in the plan for a while.

Even before you retire, you can take a loan from your account (see page 19) or take part of it out as a withdrawal under certain circumstances (see page 21). Beware though, taxes and penalties may apply to any early withdrawal.

That’s the big picture. There’s a lot more to the plan though, so don’t stop reading now!

Don’t miss!• The Glossary starting on page 38 for details about some of the terms used in this SPD.

• Contacts on page 37 for Vanguard’s phone numbers, web and street addresses and hours of operations.


Eligibility and enrollment

AM I ELIGIBLE?You’re eligible if you’re an active employee on the U.S. dollar payroll of one of the following companies:

• Phillips 66 Company

• Phillips 66 Pipeline LLC

You’re NOT eligible if …• You’re a leased employee.

• You’re a union employee whose collective bargaining agreement doesn’t provide for participation in this plan.

• You’re not on a direct U.S. dollar payroll (providing services under contract), whether or not you’re determined to be an independent contractor or common-law employee.

HOW DO I ENROLL?

If you’re enrolled in the plan, you’re strongly encouraged to name a beneficiary. See page 28 to see how.

If you weren’t enrolled automatically (see page 6), contact Vanguard online or by phone as shown below. You can enroll at any time, and your contributions will begin as soon as administratively possible. There are three different ways to enroll:

Online If you have never registered with Vanguard, go to www.vanguard.com/register.

Then enroll online at www.vanguard.com/enroll.

You can also find the Vanguard site links through HR Express on the Phillips 66 intranet site.

• To enroll online, you’ll need the plan number (099066) and your Social Security number, birth date and home ZIP Code.

• If you don’t have a Social Security number, use your six-digit employee number preceded by “999” (e.g., 999-12-3456).

VOICE® Network

Call Vanguard’s 24-hour interactive VOICE® Network at (800) 523-1188.

Telephone representative

Call a Vanguard Participant Services associate at (800) 523-1188 weekdays from 7:30 a.m. to 8:00 p.m., Central time.



Automatic enrollment for new employeesIf you’re new to the company, you’ll be automatically enrolled as soon as administratively possible. This enables you to be eligible for matching and Success Share contributions.

• Your initial contribution rate will be 3% of pay, contributed on a before-tax basis.

• You can change your contribution rate or change to Roth or after-tax savings, or any combination of the three (before-tax, Roth or after-tax).

• You can also choose to drop out of the plan completely.

Keep in mind that you need to contribute at least 1% to the plan each pay period to maximize the Success Share contribution. And, you can maximize the company match if you increase your contribution to at least 5% each pay period. That way, your savings will grow faster from the company matching and Success Share contributions!

Moving up to 5%You’re encouraged to contribute at least 5% of your pay to the plan to take advantage of the maximum company matching contribution available. The 5% can consist of any combination of before-tax, Roth or after-tax contributions.

To make that happen, beginning on January 1, 2014, if you’re contributing less than 5%, your before-tax contribution percentage will be automatically bumped up 1% each January until you’re contributing 5% in total to the plan. Of course, if you don’t want to have your contribution rate raised, you can opt out of this auto-increase.

How the plan worksThe plan consists of:

• Thrift — which includes:

– Your contributions — with tax advantages described later in this Summary Plan Description (SPD); and

– The company’s matching contribution — the company will match your contributions dollar-for-dollar (up to 5% of your pay!).

º Both your and the company’s contributions are made each pay period.

º You must contribute at least 5% of your pay each pay period in order to receive the maximum company match.

• Success Share — which is a discretionary company contribution.

– Success Share contributions are made in cash twice a year to your Thrift account. The amount will range from 0% to 6% of your pay. The target contribution is 2%.

– You must contribute at least 1% of your pay to Thrift if you want to qualify for a Success Share contribution. If you don’t contribute, or if you don’t contribute each pay period, you miss out on all or part of this valuable benefit! You’ll receive the maximum Success Share contribution if you contribute at least 1% of your pay to Thrift each pay period.

Your one-stop source for information

Vanguard has set up a customized website for Phillips 66 employees. Just go to http://phillips66.vanguard-education.com/ekit to learn about:

• The plan in general

• Your investment options

• How to enroll

• How to manage your account

http://phillips66.vanguard-education.com/ekit



The combination of your contributions, the company’s matching and Success Share contributions — plus your investment earnings — will help you prepare for retirement.

Before getting into the details, let’s circle back to Roberto and Marjorie, who were introduced on page 3. Roberto, age 48, and Marjorie, age 25, were both thinking of joining the plan.

Let’s assume they did join and that they both contributed every year until their retirement at age 65. For Roberto, that means 17 years of contributions versus Marjorie’s 40 years.

For this example, let’s also assume:

• Both Roberto and Marjorie earned $60,000 per year and that their pay stayed the same throughout their career.

• They both contributed 5% of their pay to the plan.

• The company’s Success Share contribution worked out to 2% per year.

• They earned 3% tax-deferred income on their investments, compounded annually.

Here’s what their account balances would look like at age 65.*

* These examples are for illustrative purposes only and aren’t a guarantee of your investment earnings or of the company’s contributions to the plan.

Account balance at age 65

Roberto Marjorie

$600,000

$500,000

$400,000

$300,000

$200,000

$100,000

$0

$20,400$34,283

$51,000

$51,000

$156,683

$48,000

$254,889

$120,000

$120,000

$542,889

Investment income

Success Share

Company match

Employee contribution



A couple of things probably caught your eye:

• Roberto’s and Marjorie’s contributions were only a small part of their total account balance. Most of their balance was the company’s matching and Success Share contributions and their investment earnings.

• Even though they earned the same 3% on their investments, Marjorie’s investment earnings were more than seven times higher than Roberto’s ($254,889 versus $34,283)!

– That’s due to compounded earnings, where Marjorie was earning money on each year’s contributions PLUS on the money that was already in her account.

– Roberto had the same compounded earnings, but he had only 17 years of it versus Marjorie’s 40 years. This is why it’s so important to start contributing as early as possible in your career! The longer the money is in your account, the greater the compounding.

Roberto’s and Marjorie’s examples show how your account can grow in four ways:

• Employee contributions (page 10).

• Company matching contributions (page 13).

• Company Success Share contributions (page 14).

• Investment earnings (page 16).

But before getting into that, let’s discuss the three ways you can contribute to the plan …



WHAT’S THE DIFFERENCE BETWEEN BEFORE-TAX, ROTH 401(K) AND AFTER-TAX?When you contribute to the plan, you choose before-tax, Roth 401(k) and/or traditional after-tax savings, in any combination. Here are the major differences:

Before-tax savings

Roth 401(k) after-tax savings

Traditional after-tax savings

Do my contributions reduce my taxable income each year?

Yes No No

Are my investment earnings taxable?

Your earnings grow on a tax-deferred basis; taxes are delayed until you take a distribution from the plan

No Your earnings grow on a tax-deferred basis; taxes are delayed until you take a distribution from the plan

Do I pay taxes when I take money out of the plan from:

My contributions? Yes No* No**

Investment earnings on my contributions?

Yes No* Yes

Company contributions?

Yes Yes, because company contributions are not taxed when contributed

Yes

Investment earnings on company contributions?

Yes Yes, because these earnings are related to the company contributions

Yes

See “How do I roll over my lump-sum distribution?” on page 27 to see how you can postpone taxes on money you take out of the plan.

* You must have held your Roth 401(k) account for at least five years and be at least age 59½ or have died or become disabled at the time the money is taken out of the plan.

** Generally some portion of your distribution will be taxable. Distributions are generally required to include a pro-rata portion of before-tax and after-tax contributions from your account, which means that a portion of each distribution will be taxable. However, pre-1987 after-tax contributions are not subject to the general rule and may be distributed prior to the before-tax contributions. Regardless, the after-tax contribution that you already made and paid taxes on will not be taxed again. For more information, you should contact Vanguard.


$

Which type of savings is right for you? We can’t answer that question for you since so many factors are involved, including:

• Your tax bracket now and your anticipated tax bracket when you retire.

• Your other sources of retirement income.

• How many years you have until retirement.

That said, www.vanguard.com and http://phillips66.vanguard-education.com/ekit offers tools and information to help you understand your options. Information is also available through many other print and online resources.

What kind of tax advice can you expect from Vanguard?

None. And this is an important point. While Vanguard and the company can explain your options, neither provides tax advice. That’s why it’s a good idea to have your own financial or tax advisor to whom you can turn with your questions.

HOW MUCH CAN I CONTRIBUTE?Once you decide on your type of savings, you need to pick your contribution percentage. You can contribute from 1% to 75% of pay,* in whole percentages (no fractions), up to the dollar limits set by the IRS each year. You can start, stop or change this percentage at any time.

If you were contributing less than 3% of pay on January 1, 2013, you were bumped up to 3% on that date. After that date, if you’re contributing less than 5%, your before-tax contribution rate will go up by 1% of pay each January until you reach 5%.

* “Pay” is defined in the Glossary.

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What are the IRS maximum limits?401(k) provisions like those found in the plan come with some great tax breaks — but also some strict limits that must be followed. The IRS limits the amount you can save each year — and the limits often change each year. The most recent three years of annual limits are posted on hr.phillips66.com. For 2013, these limits are:

2013 Calendar Year Limits

Your before-tax and Roth 401(k) contributions combined*

• If you’re under age 50

• If you’re age 50 or older as of the end of the year (includes $5,500 in catch-up contributions; see page 12)

• $17,500

• $23,000

Total annual additions

This includes your contributions (before-tax, Roth and after-tax) as well as the company’s matching and Success Share contributions


• If you’re age 50 or older as of the end of the year (includes $5,500 in catch-up contributions; see page 12)

• $51,000

• $56,500

Maximum pay

Maximum pay considered for plan purposes $255,000

* This limit applies to all amounts you’ve contributed to 401(k) plans in 2013, including any other employer’s plan. If you make before-tax and/or Roth 401(k) contributions to two unrelated employers’ plans in a single calendar year that are greater than the annual limit (say, because you’re a new hire), contact Vanguard.

If the total of your before-tax and Roth 401(k) contributions to the plan reach the annual IRS limit before the end of the year, any contributions you have from that point on will automatically be converted to traditional after-tax contributions for the rest of the year. (Note: Your contributions to unrelated employer’s plans are not tracked.) Before-tax and Roth 401(k) contributions will start again with your first paycheck in January of the next year.

IRS non-discrimination limits

The IRS limits contributions to qualified retirement plans made by highly compensated employees. If you’re a highly compensated employee, in order to comply with this non-discrimination limit, the Plan Benefits Administrator may change your before-tax and/or Roth 401(k) contributions to after-tax contributions, reduce your contribution percentage or refund the excess contributions during the following year. You’ll be notified if such changes impact you.



If you’re age 50 or older, you can contribute more!

As you get a little closer to retirement, you may find that your savings aren’t quite what you had hoped they would be. Fortunately, the IRS offers a way for you to add more money to your retirement savings.

If you are or will be age 50 or older as of December 31, you can contribute an additional $5,500 to the plan. That means your maximum contribution is $23,000 rather than $17,500 for 2013. This additional $5,500 is called a “catch-up” contribution, and the exact amount allowed may change each year.

To determine what percentage you should defer to include the catch-up contribution in your plan, just divide the higher allowed total by your annual pay, and multiply by 100. This will be the new contribution percentage you should enter on the Vanguard site in order to take advantage of the maximum catch-up contributions.

For example …

Rebecca turns age 50 in 2013, and her pay is $92,000 per year. She wants to contribute the full $23,000 in 2013. To figure out her contribution percentage, she divides $23,000 by $92,000, and then multiplies that by 100 to determine her contribution percentage of 25% for 2013 ($23,000 ÷ $92,000 x 100 = 25).

Can I roll over money from another eligible savings or retirement plan?Yes! In addition to contributing through your current paycheck, you may also roll over the following into this plan at any time:*

• Before-tax and after-tax money from a former employer’s 401(k) or other eligible plan.

• Before-tax money from an Individual Retirement Account (IRA).

• Distributions from another company-sponsored savings or retirement plan (for example, any rollover-eligible distribution from the Phillips 66 Retirement Plan).

In order to qualify as an eligible rollover contribution into the plan:

• The rollover must be made directly from the other plan, or occur on or before the 60th day after the distribution from the other plan was received by you;

• The distribution must qualify as an eligible rollover distribution under IRS regulations;

• The amount rolled over can’t include any loans taken from the other plan; and

• Any non-taxable portion of the distribution must be identified so that it can be accounted for separately under this plan.

You direct how your rollover contributions are invested among the plan’s various investment options. See Do I get to decide how my money is invested? on page 16 for details.

Contact Vanguard to request a Qualified Rollover form.

* Rollover contributions aren’t available to non-spousal beneficiaries.


HOW MUCH DOES THE COMPANY CONTRIBUTE?The company matches a portion of your savings and may also make a separate Success Share contribution with respect to periods when you’re actively contributing to Thrift.

If you’re contributing … The company contributes …

From 1% to 75% of your pay A dollar-for-dollar (100%) match on the first 5% of pay you save each pay period.*

PLUS

At least 1% of your pay Success Share contribution of 0% to 6% of your pay during each six-month period. Please see page 14 for more details on Success Share contributions.

* The company does not make year-end “true-up” contributions.

As with your own savings, you choose how the company contributions are invested. See page 16.

How does the company match work?Each pay period, the company contributes $1 for every $1 you contribute to the plan, up to 5% of your pay. If you don’t contribute at least 5% each pay period, you’re just throwing that money away.

Remember Alice from page 3? She’s thinking about ending her contributions so she can save up to buy a house. Well, let’s see how much money Alice, who earns $50,000 per year, would lose if she did that:

If Alice …

Contributes 3% Contributes 5% Contributes 10%

Alice’s annual contributions

$1,500 ($50,000 x 3%) $2,500 ($50,000 x 5%) $5,000 ($50,000 x 10%)

Annual company match

$1,500 ($50,000 x 3%) $2,500 ($50,000 x 5%) $2,500 ($50,000 x 5%)

Total $3,000 $5,000 $7,500

If Alice stops contributing, she’ll lose $1,500 per year at a 3% contribution rate and $2,500 at a 5% or higher contribution rate! And that’s on top of any Success Share contributions the company might make. (Alice has another option though. See page 19 to learn how she can take a loan from the plan.)



What do I do to get a Success Share contribution?You need to contribute at least 1% of your pay to Thrift each pay period.

At the end of each six-month period, the company may make a Success Share contribution into the account of everybody who contributed to Thrift during that six-month period. The contribution may range from 0% to 6% of pay, depending on management discretion. The target contribution is 2%.

If the Success Share contribution for the six-month period is 2%, your Success Share contribution will be 2% of your compensation for each pay period you contributed to Thrift during the six-month period, regardless of whether you’ve contributed 1% to the plan or 20%. The only way you won’t get a contribution is if you contributed nothing, or if the company doesn’t make a Success Share contribution for that six-month period!

A couple of details:

• Success Share contributions are made in cash to your Thrift account, and are invested based on your current Thrift account deferrals.

• Contributions are pro-rated based on your participation during each six-month period.

Company contributions in lieu of pension (CILP) (applies to certain former TOSCO employees)If you’re a former Tosco employee who is eligible for CILP contributions under this plan, the company will contribute an amount equal to 5% of your base pay and scheduled overtime pay each pay period as a CILP contribution whether or not you’re making contributions.

You’re 100% vested in your CILP contributions. CILP contributions are eligible for withdrawal only after termination from employment. CILP contributions are not eligible for plan loans. Rehired former Tosco employees are not eligible for CILP.

WHEN AM I VESTED IN MY ACCOUNT?Great news: Immediately!

Vesting is the right to the money the company paid into your account. Many companies require that you work there for a few years before you are vested in the company contributions. But at Phillips 66, you’re always 100% vested in all contributions to your account, including the company’s match and Success Share contributions.


HOW CAN I MAKE THE MOST OF MY SAVINGS?First: Save more. Let’s put all the pieces of the plan together for Alice:

If Alice …

Annual pay: $50,000 Contributes 3% Contributes 5% Contributes 10%

Alice’s annual contributions $1,500 $2,500 $5,000

Annual company match $1,500 $2,500 $2,500

Annual Success Share contribution (assuming two six-month periods at 2%)

$1,000 $1,000 $1,000

Total $4,000 $6,000 $8,500

At the 5% contribution level, Alice contributes $2,500 but ends up with $6,000 in total contributions! It’s even higher at the 10% contribution level. That’s how you build a nest egg!

Second: Start early and keep contributing. As the example on page 7 showed, the earlier you start, the more time you’ll have for your savings to grow.

Third: Learn a bit about investing so you can choose your investments wisely. This is important because you’re in charge of choosing your investments. Any investment earnings will add to your savings, but there’s also the risk of losing money. See page 16 for more on the plan’s investment options.

Do I get to decide how my money is invested?Yes. In fact, it’s your responsibility, and you should consult with an investment advisor.

When your contributions come out of your paycheck, they go into your Vanguard account. The company match and Success Share also go into this account. You choose investment options for your account and can change your elections at any time.

If you don’t make an investment election, your contributions and the company’s contributions will be invested in the Vanguard Target Retirement Fund with a target date closest to your 65th birthday.

Like any money you invest, you can gain or lose value based on how your investments do. Therefore, having a sound investment strategy is important.

HOW CAN I CHOOSE MY INVESTMENTS?You can find a list of the plan’s investment funds by:

• Visiting the plan website at http://phillips66.vanguard-education.com/ekit.

• Using www.vanguard.com or the automated VOICE® Network at (800) 523-1188 24-hours- a-day. You can also reach the Vanguard site through HR Express on the Phillips 66 intranet site.

• Calling a Vanguard Participant Services associate at (800) 523-1188 weekdays from 7:30 a.m. to 8:00 p.m., Central time.

You can choose to invest in one or more of the plan’s investment funds. You’ll invest in whole percentages that need to add up to 100%. The list of investments may change from time to time.





What resources can I find on the Vanguard site?There’s a wealth of information about your plan investment options — and investing in general — on www.vanguard.com and http://phillips66.vanguard-education.com/ekit, including:

• A short summary of each of the plan’s investment options, which includes the fund’s investment objectives, strategies, risk and performance. To help you compare risk, each summary includes an “overall risk level” number ranging from 1 (conservative) to 5 (aggressive).

• Updated information on past investment returns for each investment option.

• A detailed prospectus for each option (available on www.vanguard.com only).

• General education about investing — including diversification, risk and return, retirement planning, estate planning and other general financial information.

Whether you’re new to investing or are a seasoned professional, be sure to take advantage of these resources! If you’d like, you can also call Vanguard.

INVESTING 101When it comes to investing for your future, there are a few fundamental strategies that experts recommend following:

• Create a diversified portfolio that gradually becomes more conservative over time.

• Keep your costs as low as possible. The plan includes several extremely low-cost investment options.

• Rebalance your portfolio once or twice a year. (“Rebalancing” simply means that you bring your portfolio back to your desired asset mix — for example, 60% stocks and 40% bonds.)

• Remember that you’re investing for the long term. Don’t make frequent changes in your investment strategy in reaction to short-term changes in the stock market.

WHY DIVERSIFICATION MATTERSAs the saying goes, “don’t put all your eggs in one basket.” This is especially true when investing for retirement. Maintaining a mix of stocks, bonds and short-term investments in your plan account can help manage your investment risk.

This “diversification” is a key principle of sound investing. The idea is that when one type of asset is doing poorly, another may be doing well. For example, if your stock funds are losing value, your bond funds may be going up or holding steady. Of course, the opposite may also occur, where your bond funds lose value while your stock funds are going up. And there may be times when it seems that every type of investment is losing value.

How much of your account you should allocate to the different asset classes depends on you — your financial goals, your tolerance for risk, your other assets and needs, and how much time you have until retirement.






Creating a diversified portfolioTo help you build a diversified portfolio, the plan investment options are classified into three groups.

Target Retirement Funds

Investing in the Target Retirement Fund is a simple way to build a diversified portfolio.

• The Target Retirement Funds are designed for investors expecting to retire around the year indicated in each fund’s name. For example, if you expect to retire around 2040, you’d choose the Target Retirement 2040 Fund.

• Each fund is comprised of two or more funds and holds a diversified mix of stocks and bonds. The investment mix gradually becomes more and more conservative as you near retirement.

• The investment manager takes care of all rebalancing. However, you should still check in from time-to-time to make sure the mix is still right for you.

Index funds If you want to be more involved in the management of your plan investments, you can also build a low-cost diversified portfolio by investing in the plan’s index funds.

• To do so, decide on your asset mix (the mix of stocks, bonds and more conservative investments you want in your portfolio), and allocate your money among the applicable index funds.

• Remember to rebalance your portfolio once or twice a year to keep your desired asset mix.

Actively managed funds

The plan’s actively managed funds can help you to further diversify and fine tune your portfolio to your specific needs.

• Actively managed fund managers use research and other tools to select the stocks or bonds in their portfolios.

• As with the index funds, you need to decide on your asset mix, allocate your investments among your chosen funds, and periodically rebalance your portfolio.

• Investment costs for actively managed funds tend to be higher than for the other investment options.

You can also invest in the Phillips 66 Stock Fund. This fund is separate from the three categories shown above. Funds that hold the common stock of a single company, such as the Phillips 66 Stock Fund, are generally considered a higher risk investment than a fund that holds many different stocks, such as actively managed funds described above. The advantage of an actively managed fund is that not all of the stocks within a fund will have price movements in the same direction at the same time, and this reduces investment risk when compared to a single stock.

You don’t need to select your funds from only one group; you can “mix and match” your funds from among all of the groups. Whichever funds you choose, you’re always responsible for selecting and monitoring your investment choices to ensure they continue to meet your investment objectives.


HOW DO I CHANGE MY INVESTMENT ELECTIONS?You can make changes to your investments at any time through Vanguard. You can:

• Change the way future/new money is invested (“current contributions”); and

• Change the way your existing balances are invested (“exchanges”).

These are two different processes through your account at Vanguard.

Current contributionsContact Vanguard to change how your current and future savings are invested at any time. These changes will take place as soon as administratively possible for all future contributions.

Existing account balancesYou can change how your existing account is invested by “exchanging” into or out of any investment option available under the plan. Keep in mind that rules and restrictions apply to some exchanges:

• The cutoff time for exchanges is 1:00 p.m. Central time for the Phillips 66 Stock Fund and 3:00 p.m. Central time for all of the other funds.

• If you transfer money out of a fund, you can’t transfer it back into the fund for 60 calendar days. This restriction doesn’t apply to:

– The Vanguard Prime Money Market Fund or the Stable Value Fund;

– Shares purchased from payroll contributions or company contributions, loan repayments, dividend or capital gains distributions; or

– Written requests for transfers submitted to Vanguard via U.S. mail. (Requests sent via fax or email are subject to the restriction.)

• You can’t transfer money directly from the Stable Value Fund to the Vanguard Prime Money Market Fund or Vanguard Inflation-Protected Securities Fund. Instead, you need to complete a two-step process:

– Transfer the money out of the Stable Value Fund into any fund other than the Vanguard Prime Money Market Fund or Vanguard Inflation-Protected Securities Fund and leave it there for 90 days; then

– Take that money out of the second fund and transfer it into the Vanguard Prime Money Market Fund or Vanguard Inflation-Protected Securities Fund.

Contact Vanguard for more information and/or to make an exchange. Your exchange will be processed as soon as possible.

Can I take a loan from this plan?Remember Alice, who wants to drop out of the plan so she can save for a house? We’ve already talked about how she would lose out on company matching and Success Share contributions if she did that.

Well, there’s no need for her to forgo those contributions. She can continue to save through the plan. Then, when she’s ready to buy, she can borrow the money for her down payment from her own plan account — and pay herself back, with interest.

When you take out a loan, your money comes out of your plan account and is paid to you. You repay your loan over time through payroll deductions, and your repayments and interest go back into your plan account.



Here’s a quick summary. Your loan documentation will contain complete details. As with any loan, be sure you read and understand the terms of the loan before taking one from the plan.

Who can take a loan?*

Active employees who have at least $2,000 in their plan account. (Former employees, beneficiaries or alternate payees aren’t eligible.)

Minimum loan amount

$1,000

Maximum loan amount

50% of your account balance, up to an aggregate amount of $50,000 (or less if you have had an outstanding plan loan in the past 12 months; call Vanguard for details).

Maximum number of outstanding loans at a time

Three (including one home loan).

How long you have to repay your loan

• Up to 58 months for a general purpose loan.

• Up to 238 months for purchase of a principal residence (your main home).

You can always repay your loan in full sooner without penalty.

While you’re an active employee, you pay yourself back through payroll deductions in equal amounts.

If you’re on a leave of absence, loan payments are suspended if you’re not receiving full pay while on an active duty military leave. For any other type of leave, check your leave policy for repayment information.

If you leave the company, you’ll need to make repayments through automatic electronic debits (ACH) over the period of time remaining.

Fee to apply (per loan)

$35 when applying online or through the Vanguard VOICE® system.

$85 when applying by phone with personal assistance from a Vanguard associate.

Maintenance fee (per year)

$20 per loan.

Interest rate The “national prime rate” plus 1% as of the end of the previous month.

Your interest rate is determined at the time you apply for your loan, and it will remain in effect for the entire term of your loan.

Note: The interest paid is not tax deductible.

To request a loan or for more information

Contact Vanguard.

* You can’t take a loan if the Plan Benefits Administrator has received a qualified domestic relations order and a final determination on that order hasn’t yet been made. In addition, you may not be able to take a loan if you’ve defaulted on a previous plan loan. Contact Vanguard for details.


WHAT IF I MISS A LOAN PAYMENT?Your loan is considered in default if you fail to make a loan payment within 60 days after its due date (in accordance with your loan’s repayment schedule). At that point, your outstanding principal loan balance will be treated as a deemed distribution or as a withdrawal that:

• Is reported to the IRS as taxable income on IRS Form 1099-R;• May be taxable income for you in the calendar year of the default; and• May also be subject to a 10% early withdrawal penalty if you’re under age 59½.

In addition, in most instances, you won’t be allowed to take any new loans from the plan.

Can I take money out of this plan while I’m still employed?As shown below, under certain circumstances, you may be allowed to take your money out of the plan while you are still employed.

Type of contribution What you can take out What you should know

Before-tax and Roth 401(k)

• Your entire account balance, if you’re at least age 59½ or totally disabled.

• The amount required to meet your financial need, if you qualify for a hardship withdrawal.

• Nothing, if you’re not yet age 59½ and don’t qualify for a hardship withdrawal.

• If you take a hardship withdrawal (see page 22), you can’t contribute to the plan for six months or receive company matching or Success Share contributions with respect to that same period.

• For all other types of withdrawals, you can continue your plan contributions.

• For a withdrawal due to total disability, you must prove your disability through a doctor’s certification or Social Security disability determination.

Traditional after-tax

Your entire account balance. You can continue your plan contributions.

Company contributions

Everything the company has contributed to your account (company matching and Success Share contributions).

You can continue your plan contributions.

Rollover The entire amount you rolled into the plan (including investment earnings on that amount).

You can continue your plan contributions.

You may owe taxes and penalties on any money you withdraw from the plan. For more information, see Do I pay taxes? on page 25 and the Special Tax Notice Regarding Plan Payments that’s available from Vanguard.

It’s strongly recommended that you talk to your tax or financial advisor before initiating a withdrawal.



TAKING MONEY OUT FOR HARDSHIPYou can take out some or all of the money in your before-tax or Roth 401(k) contribution account if you’re an employee (salary grade level 18 and below) and suffer a “financial hardship” as described below. The IRS has strict rules about what is a hardship for this purpose. Hardship withdrawals can be made only in cash.

To request a hardship withdrawal, contact Vanguard to obtain a hardship withdrawal form. Complete, sign and return the form and other requested paperwork to Vanguard for approval.

For your hardship withdrawal to be approved, it must be for one or more of the following reasons:

• Costs directly related to buying your principal residence (main home) — not including mortgage, refinance or paying off a current mortgage or earnest deposits.

• Payments necessary to prevent your eviction from your main home or to prevent the foreclosure of the mortgage on your main home.

• Health care expenses for you or your dependent that aren’t reimbursed by someone else. If expenses have not already been paid, you’ll need:

– The service provider’s written statement, showing fees for the services to be performed; and

– A copy of the “predetermination of benefits” form from your health care insurance provider showing the portion of such fee that would not be reimbursed by your health coverage as of the date of the form.

• Tuition, room and board expenses and other education fees for the current term or the next 12 months of post-high school education for you or your eligible dependent.

• Burial or funeral expenses for your parent, spouse, child or eligible dependent who recently died.

• Expenses to repair damage to your main home that would qualify for a casualty loss deduction (contact Vanguard for details).

The following rules apply to hardship withdrawals:

• The amount you take out from your before-tax and/or Roth 401(k) savings can’t be more than what you contributed to those sources (investment earnings cannot be taken in a hardship withdrawal).

• The amount you take out can’t be more than what you need for your hardship. However, you may increase the amount to cover any federal, state or local income taxes or penalties that may result from the withdrawal, as long as it is within the overall limits allowed for a hardship withdrawal.

• You must have already taken out other plan money available to you, including other kinds of distributions and loans from this plan, before you can take a hardship withdrawal.

How do I take money out of the plan after I’ve left the company?You can take your money out of the plan at any time after your employment ends or if you’re a beneficiary of a plan participant who died. This is called a “distribution.”

If any portion of your distribution is eligible for a rollover but is instead paid to you, the distribution may be subject to:

• Mandatory 20% federal income tax withholding on the taxable portion. State tax withholding may also apply.

• A 10% early withdrawal penalty if you’re under age 59½ at the time of the distribution. (Under current law, this 10% federal tax penalty would not apply if you end employment with the company during or after the year you reach age 55.)


You may be able to avoid withholding and penalties by making a direct rollover into another qualified plan or Individual Retirement Account (IRA), as described in How do I roll over my lump-sum distribution? on page 27.

For more information, see the Special Tax Notice Regarding Plan Payments that’s available from Vanguard. It’s strongly recommended that you talk to your tax or financial advisor before choosing the way your benefit is paid.

HOW DO I REQUEST A DISTRIBUTION?After your employment ends, Vanguard will mail a termination kit to your home address. This kit contains detailed information about your distribution options, tax consequences, rollover options, etc., including the Special Tax Notice Regarding Plan Payments.

To request a distribution, contact Vanguard as shown in the kit. Payment will be made as soon as administratively possible.

WHEN WILL MY DISTRIBUTION BE PAID TO ME?It depends on the value of your plan account.

Regardless of your account value, you can roll all or part of your plan distribution into another tax-qualified plan or IRA. By doing so, you postpone paying taxes and avoid early withdrawal penalties. See How do I roll over my lump-sum distribution? on page 27 for details.

If your account value is $1,000 or lessIf the value of your account is $1,000 or less after you leave the company, your benefit will be paid to you in a lump sum. No other form of payment is available.

Note: Different rules apply if you have an outstanding loan from the plan. Contact Vanguard for details.

If your account value is greater than $1,000You have a couple of options, as shown below.

You can leave your money in the plan

If you choose to leave your money in the plan after you leave the company:

• You’ll be able to make changes to your investment elections, repay any loans (through electronic debit) and get other information about your account through Vanguard.

• You won’t be able to contribute to the plan.

• By law, you’ll have to begin taking money out of the plan no later than April 1 in the year after you reach age 70½. See Required minimum distributions starting at age 70½ on page 24.



You can take your money in a lump sum or in installment payments

If you elect a lump-sum distribution, your money will be paid to you in one single cash payment, less a minimum of 20% estimated federal income tax withholding and any required state and local withholding. These payments can be made to you:

• In cash (via check); or

• In a combination of cash and/or Phillips 66, ConocoPhillips or DuPont stock.

You can choose installment payments if you’re a former employee or a surviving spouse beneficiary of a plan participant. There are two installment payment options:

Fixed dollar installments

A series of payments based on a dollar amount you select. Payments are made until your account balance is paid in full or you reach age 70½, at which time required minimum distributions may begin. See Required minimum distributions starting at age 70½ below.

Life expectancy installments

A series of payments that are based on your life expectancy or on the combined life expectancy of you and your beneficiary.

Payments are calculated based on IRS life expectancy tables.

With installment payments:

• You can elect monthly, quarterly, semiannual or annual payments.

• Taxes may be withheld from each payment. See Do I pay taxes? on page 25.

• Payments are taken pro rata from all your investment options. For example, if 90% of your money is in the Target Retirement 2020 Fund and 10% is in the Money Market Fund, 90% of your installment payment comes out of your Target Retirement 2020 Fund shares and 10% comes from your Money Market Fund shares.

• If you’re rehired, your installment payments can continue, but your payments won’t change due to any new contributions you make to the plan. (You’ll make a new, separate distribution election for those contributions when you leave the company again.)

• You can change or revoke your installment election at any time.

REQUIRED MINIMUM DISTRIBUTIONS STARTING AT AGE 70½If you’re not an active employee, you must start taking at least some of your money out of the plan no later than April 1 in the year after you reach age 70½ in order to comply with IRS rules. These payments to you are called “required minimum distributions” (RMDs).

RMDs are payments based on your life expectancy or the combined life expectancy of you and your beneficiary using the Internal Revenue Service’s life expectancy tables.

If you’re still an active employee when you reach age 70½, you’re not required to take a distribution until April 1 following the calendar year in which your employment ends.

Contact Vanguard for more information.


Do I pay taxes?Yes, all or part of your retirement benefit is taxable. You may need to pay federal and (if applicable) state and/or local income taxes on payments from the plan, depending on how your benefit is paid.

First, a quick review. Depending on how you contributed to the plan, money you take from the plan will be taxable or non-taxable as follows:

Taxable Non-taxable

Before-tax savings • Your contributions

• Company contributions

• Investment earnings on your contributions and the company’s contributions

Roth 401(k) after-tax savings


• Investment earnings on the company’s contributions

• Your contributions

• Investment earnings on your Roth contributions*

Traditional after-tax savings**


• Investment earnings on your contributions and the company’s contributions

• Your contributions

Rollover contributions These may be taxable or non-taxable, depending on how they were classified when you rolled these funds into the Savings Plan

* Investment earnings are non-taxable if you’ve held your Roth 401(k) account for at least five years and are at least age 59½ or have died or become disabled at the time the money is taken out of the plan. Otherwise, they’re taxable.

** Generally some portion of your distribution will be taxable. Distributions are generally required to include a pro-rata portion of before-tax and after-tax contributions from your account, which means that a portion of each distribution will be taxable. However, pre-1987 after-tax contributions are not subject to the general rule and may be distributed prior to the before-tax contributions. Regardless, the after-tax contribution that you already made and paid taxes on will not be taxed again. For more information, you should contact Vanguard.



When you take money out of the plan:

If you take your money as … Taxes and penalties …

Installment payments

Under current law, federal, state and/or local income taxes, as applicable, may be withheld from each payment at required income tax rates.

A lump sum • 20% federal income tax will be withheld.

• If you’re under age 59½, a 10% early withdrawal federal tax penalty may also apply, but this amount will not be withheld. Under current law, this 10% federal tax penalty would not apply if you end employment with the company during or after the year in which you reach age 55.*

• State and local taxes and penalties may also apply.

• But … you can avoid some or all of the withholding and tax penalties by electing a direct rollover, as described on page 27.

* The penalty does not apply to distributions made on account of permanent and total disability and for certain medical expenses. You should consult your personal financial or tax advisor for guidance.

For more information, see the Special Tax Notice Regarding Plan Payments that’s available from Vanguard. You’ll also receive this Notice when you apply to begin your benefit. It is strongly recommended that you talk to your tax or financial advisor before choosing the way your benefit is paid or when your benefit begins.


HOW DO I ROLL OVER MY LUMP-SUM DISTRIBUTION?You can roll over your lump-sum distribution to a tax qualified retirement plan such as an IRA or another employer’s plan that accepts rollovers. If the rollover includes any company stock that may still be in your account, your rollover may include shares of stock.

When you elect a direct rollover:

• Mandatory tax withholding doesn’t apply to the amount that’s rolled over; and

• You’ll postpone paying taxes on the amount rolled over until it’s eventually distributed from the plan receiving the rollover.

There are two ways to do a rollover.

With a direct rollover

• You tell Vanguard to make part or all of your distribution payable directly to the trustee, custodian of the IRA or administrator of the other tax qualified plan.

• No taxes are withheld on the amount of a direct rollover.

With an indirect rollover

• You get a check for the distribution made payable to you.

• Taxes (federal and any applicable state/local withholding) are withheld from your distribution.

• You can choose to roll over part or all of the distribution into another plan. You must make this election and deposit the money within 60 days after you get the check.

• If you want to roll over the entire amount of your distribution, you’ll need to replace any taxes withheld with money from some other source.

• You’re responsible for following all applicable guidelines to make sure you complete the indirect rollover within the 60-day deadline.

Marco’s total lump-sum distribution was $250,000. 20% was withheld, so the check he received was for $200,000. If he decides to do an indirect rollover within 60 days, he can:

• Just roll over the $200,000 (the $50,000 will be taxed as a plan distribution); or

• Roll over the $200,000, plus $50,000 from another source. If he does that, he gets to postpone taxes on the entire $250,000. (The 20% withheld will be treated as federal income taxes paid when he files his federal income tax return for the year.)



What if I have a balance in the Phillips 66 Stock Fund?You can request that dividends paid on your Phillips 66 Stock Fund shares be paid directly to you or reinvested into the Phillips 66 Stock Fund. Contact Vanguard for more information or to make this election.

How do I name a beneficiary?

To name a beneficiary, go online at www.vanguard.com. Log on to your account, select the My Profile tab and click Beneficiaries. Note: If you also have a non-retirement account with Vanguard, you may need to select Employer Plan before you click the My Profile tab.

You need to name (or “designate”) a beneficiary for your account to receive your money in case you die before your entire account balance has been distributed to you.

• If you’re married, your spouse is your beneficiary.

– If you want to name anyone other than your spouse to be your beneficiary, your spouse must agree to the designation in writing (witnessed by a notary public).

– Beneficiary designations made prior to your marriage are void upon your marriage.

– If your spouse is your beneficiary, the designation is void if you get divorced or legally separated or your marriage is annulled.

• If you’re not married, you can name anyone you wish to be your beneficiary.

You can name one or more persons, a trust or an estate as your beneficiary (subject to the spousal consent rules). You can also name a contingent beneficiary who would receive your plan benefit if your primary beneficiary dies before you do. You can change beneficiaries at any time.

The plan will use your most recent designation, provided it was received prior to your death. Beneficiary designations are effective as of the date of receipt and acceptance by Vanguard and make all previous designations invalid.

WHAT IF I DON’T NAME A BENEFICIARY?If you don’t name a beneficiary — or if all of your named beneficiaries die before you — your beneficiary will be determined in the following order:

• Your surviving spouse;

• Your surviving natural or legally adopted children in equal shares; or

• Your estate.


What happens if …

I GO ON A MILITARY LEAVE OF ABSENCE?If you go on a military leave of absence, you can continue contributing through regular payroll deductions if you receive pay during your absence. If not, you can suspend your contributions while on leave. Those contributions can be made up when you return to work through payroll deductions, and company matching and Success Share contributions will be applied to those contributions.

If you have an outstanding loan from the plan, your loan payments are suspended if you’re not receiving full pay from the company.

I DIE?If you die while you have a balance in your plan account, your beneficiary on file will receive your account.

If your beneficiary’s account balance is $1,000 or less, that amount must be paid out as a distribution. This will happen automatically, minus estimated withholding, as explained in Do I pay taxes? on page 25.

If the beneficiary’s account balance is more than $1,000:

• If the beneficiary is your surviving spouse, he or she can leave the money in the plan until the later of:

– December 31 of the year in which you would have reached age 70½; or

– December 31 of the year following the year of your death.

• All other beneficiaries can leave the money in the plan until December 31 of the year containing the fifth anniversary of your death or your surviving spouse beneficiary’s death.

If your beneficiary decides to leave the money in the plan, he or she can:

• Continue to access his or her account through Vanguard; and

• Request a distribution of all or part of the account at any time.

In some cases your beneficiary may be able to roll over the distribution to an Individual Retirement Account (IRA) or another qualified plan. See How do I roll over my lump-sum distribution? on page 27 or contact Vanguard for more information.

What other important information do I need to know?

ADMINISTRATIVE INFORMATIONThe plan name, plan sponsor and identification number are:

Phillips 66 Savings Plan Phillips 66 Company c/o Benefits Department P.O. Box 4428 Houston, TX 77210

Employer ID#: 37-1652702



ERISA INFORMATIONHere’s some general information about the plan that’s required by the Employee Retirement Income Security Act of 1974 (ERISA).

Phillips 66 Savings Plan

Type of plan Employee pension benefit plan described in Section 3(2) of ERISA. Also a defined contribution plan described in Section 3(34) of ERISA, an ERISA section 404(c) plan and a profit sharing plan. Certain parts of the plan are an Internal Revenue Code section 401(k) plan, a stock bonus plan and an employee stock ownership plan (ESOP).

Plan number 002

Vanguard plan number 099066

Plan year January 1 – December 31

Plan funding/sources of contributions

The plan is funded by a combination of employee and company contributions.

All contributions go into trust funds. The trust funds are administered by Vanguard and investment managers. All plan expenses are paid from the trust fund unless paid by the company. Fund operating expenses for the investment funds are deducted from the applicable fund’s gross income.

Plan trustees Custodial trustee for the Stable Value Fund:State Street Bank and Trust Company

Trustee for all other purposes under the plan:Vanguard Fiduciary Trust Company 100 Vanguard Boulevard Malvern, PA 19355


AGENT FOR SERVICE OF LEGAL PROCESSFor disputes arising from this plan, legal process may be served on the General Counsel of Phillips 66 Company at the following address:

General Counsel of Phillips 66 Company 3010 Briarpark Drive Houston, TX 77042

Service of legal process may also be made upon Vanguard or the plan administrators at their addresses.

TRANSFERS FROM AND TO OTHER PLANSIn connection with a company transaction, you can transfer your accounts in another company’s tax qualified plan into this plan, or your accounts in this plan to another 401(a) qualified plan, in a direct plan-to-plan transfer that satisfies all requirements of ERISA and the Internal Revenue Code.

These transfers from and to other plans include transactions of corporate or other entity merger, disposition, acquisition or joint venture, and other types of transfer, as long as they are approved in advance by the Plan Benefits Administrator.

CHANGES OR TERMINATION OF THE PLANThe company reserves the right to amend, modify or terminate this plan at any time. Any company that succeeds this company as its sponsor may amend, modify or terminate this plan at any time or continue this plan as its own separate plan. A change in this plan cannot reduce the interest you had in the plan on the date the change becomes effective.

Any identifiable unit or group of employees may be excluded from this plan, either before or after those employees become participants. If this is done, employees in the unit or group who are not participants won’t be able to participate in this plan, and those employees who are already participants will no longer be able to contribute to this plan. However, they will have all other rights of a participant under this plan as to their plan account on the date they are excluded. For example, they can make withdrawals or exchanges among investment funds.

PLAN EXPENSESThe trust fund is required to pay all expenses necessary for the operation of this plan, including the trustee’s fees and expenses, unless the company chooses to pay these expenses. The trust fund also pays brokerage fees, commissions, stock transfer taxes and other charges and expenses related to the purchase or sale of securities, and they are charged to the appropriate investment fund. Any investment fund operating expenses are deducted from that fund’s gross income. You can find more information about plan expenses from the prospectus for each fund or the annual fee disclosure, which are available through Vanguard.



ASSIGNMENT OF BENEFITSYour interest in the plan may not be assigned or alienated. However, payment of benefits under the plan will be made in accordance with a “qualified domestic relations order.”

A qualified domestic relations order is a judgment, decree or court order (including approval of a property settlement agreement) that:

• Pertains to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent.

• Is made pursuant to a state domestic relations law (including community property laws).

• Meets a series of specific criteria set forth in both ERISA and the Internal Revenue Code.

If Vanguard receives a certified court order that awards part of your interest in the plan to another person, you’ll be notified and given a copy of the plan’s procedures for determining whether the order is a qualified domestic relations order.

A qualified domestic relations order creates rights for a person known as an “alternate payee.” The alternate payee may become entitled to part or all of your benefit under the plan. The order may also grant a former spouse rights normally provided to a surviving spouse under the plan, preventing a later spouse from having full spousal rights. You may also request, at any time and without charge, a copy of the plan’s qualified domestic relations order procedures by contacting Vanguard.

How do I file a claim?If benefits are denied and you believe you have a claim against the plan, you should mail or deliver a statement in writing to the Plan Benefits Administrator (see page 36) explaining the reasons for your claim. Provide as much information about the basis for your claim as you can.

The Plan Benefits Administrator will notify you of the approval or denial of your claim within:

• 45 days from receipt of your claim involving a determination of disability. If additional time is needed to render a decision, two additional 30-day periods may be taken, and written notice of those extensions will be provided prior to the end of the preceding period.

• 90 days from receipt of any other type of claim. If additional time is needed to render a decision, an additional 90-day period may be taken, and written notice of this extension will be provided prior to the end of the initial period.

For a claim involving a determination of disability:

• If a period of time is extended due to your failure to submit information necessary for a claim decision, you’ll be notified of this in writing and given at least 45 days to provide the information.

• In that event, the deadline for making the decision will be extended by the length of time that passes between the date you were notified that more information is needed and the date the Plan Benefits Administrator receives your response to the request for more information.


If your request to begin benefits (or other claim) is denied, the Plan Benefits Administrator will notify you in writing with:

• Specific reason(s) for the denial.

• References to the plan provisions that support the denial.

• A description of any additional materials or information that is necessary to complete the claim, and an explanation of why the material is necessary.

• An explanation of the plan’s claims review procedures and the applicable time limits.

• A statement of your right to bring a civil action under ERISA section 502(a) within three years following denial of your claim on review.

HOW DO I APPEAL A CLAIM DENIAL?

Appeals must be filed within:• 180 days of your receipt of a claim denial

involving a determination of disability.

• 60 days of your receipt of any other type of claim denial.

If you believe your claim was incorrectly denied, you may appeal in writing to the Savings Plan Committee within the deadlines shown in the box above. You may submit written comments, documents, records and other information.

Upon request, you will be provided, free of charge, reasonable access to and copies of all documents, records and other information relevant to your claim. The Savings Plan Committee’s review will take into account all comments, documents, records and other information relating to the claim without regard to whether the information was submitted or considered in the initial claim determination.

The committee will notify you of the approval or denial of your appeal within:

• 45 days from receipt of your request for appeal of claims involving a determination of disability. If additional time is needed to render a decision, an additional 45-day period may be taken, and written notice of this extension will be provided prior to the end of the initial period.

• 60 days from receipt of your request for appeal of any other type of claim. If additional time is needed to render a decision, an additional 60-day period may be taken, and written notice of this extension will be provided prior to the end of the initial period.

If a period of time is extended due to your failure to submit information necessary for a decision, the period for deciding the appeal will be suspended until the date that you provide such additional information to the committee.

The committee’s decision will include:

• Specific reason(s) for the denial.

• References to the plan provisions upon which the decision was based.

• If your appeal involved a determination of disability, the committee’s written decision will also include any internal rule, guideline, protocol or similar criterion that was relied on; and, if applicable, an explanation of the scientific or clinical judgment used by the committee in its determination, applying the terms of the plan to your medical circumstances. Alternatively, the written decision may note that such explanation will be provided free of charge upon request.

• A statement that you can receive copies of, without charge, all documents, records and other information relevant to your claim.

• A statement of your right to bring a legal action under section 502(a) of ERISA within three years after the denial.



PAYMENTS TO A MINOR OR LEGALLY INCOMPETENT PERSONThe Plan Benefits Administrator may allow payments to a conservator, guardian or other individual who is legally responsible for the management of a minor’s or legally incompetent person’s estate.

LOST PARTICIPANTS AND BENEFICIARIESIf the Plan Benefits Administrator can’t locate a participant or beneficiary to whom a payment is due, the participant’s or beneficiary’s account will be forfeited (given up) and used to reduce the plan’s expenses. If that participant or beneficiary later makes a claim to the forfeited account, the amount forfeited will be paid to the participant or beneficiary.

What are my rights under ERISA?As a participant in the plan, you’re entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA), as amended. ERISA provides that all plan participants are entitled to:

RECEIVE INFORMATION ABOUT YOUR PLAN AND BENEFITS• Examine, without charge, at the Plan Benefits

Administrator’s office and at other specified locations, such as work sites and union halls, all documents governing the plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available for review at the Public Disclosure Room of the Employee Benefits Security Administration.

• Obtain, upon written request to the Plan Benefits Administrator, copies of documents governing the operation of the plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description. The Plan Benefits Administrator may make a reasonable charge for the copies.

• Receive a summary of the plan’s annual financial report. The Plan Benefits Administrator is required by law to furnish each participant with a copy of this summary annual report.

• Obtain a statement telling you whether you have a right to receive a benefit at your normal retirement date (age 65), and if so, what your benefit would be at your normal retirement age if you stopped working as of the date of the statement. If you don’t have a right to a benefit, the statement will tell you how many more years you have to work to get a right to a benefit. You must request this statement in writing. The company is not required to give the statement more than once every 12 months. The plan must provide the statement free of charge.

PRUDENT ACTION BY PLAN FIDUCIARIESIn addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the plan. The people who operate the plan, called “fiduciaries” of the plan, have a duty to operate the plan prudently and in the interest of you and other plan participants and beneficiaries. No one, including the company, your union or any other person, may fire you or discriminate against you in any way to prevent you from obtaining benefits under the plan or exercising your rights under ERISA.


ENFORCE YOUR RIGHTSIf your claim for a benefit is denied or ignored, in whole or in part, you have a right to receive a written explanation of the reason for the denial, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce your rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and don’t receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Benefits Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless they were not sent because of reasons beyond the control of the Plan Benefits Administrator.

If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court. In addition, if you disagree with the plan’s decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in federal court. If the plan fiduciaries misuse the plan’s money, or if you’re discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court.

The court will decide who should pay court costs and legal fees. If you’re successful, the court may order the person you have sued to pay these costs and fees. If you lose — for example, if the court finds your claim is frivolous — the court may order you to pay these costs and fees.

Assistance with your questions

If you have any questions about the plan, contact Vanguard or the Plan Benefits Administrator.

If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Benefits Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, DC 20210.

You may obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at (866) 444-3272.



Who administers the plan?Here is a table that reflects who is responsible for each area of administration and their responsibilities.

Plan Administration Responsibilities

Savings Plan Committee

Phillips 66 Company c/o Benefits Department P.O. Box 4428 Houston, TX 77210

(832) 765-1877

The committee is the governing body for the plan. Committee members are appointed by the Board of Directors or its designee.

• Establishing and enforcing rules and procedures for administration of the plan.

• Delegating administrative duties to selected persons and/or third-party administrators.

• Interpreting the plan, including the resolution of ambiguities, inconsistencies and omissions.

• Determining facts and making final, binding decisions as to disputes or appeals under the plan.

The committee has absolute discretion in carrying out its responsibilities.

Plan Benefits Administrator

Manager, Benefits Phillips 66 Company c/o Benefits Department P.O. Box 4428 Houston, TX 77210

(832) 765-1877

The Plan Benefits Administrator is responsible for general administration of the plan, excluding financial management.

• Determining benefits eligibility and payment amounts.

• Initial determination of claims for benefits.

• Initial interpretation and administration of the plan.

• Hiring persons and third-party administrators to provide plan services.

• Communicating benefit rights to plan participants.

• Keeping records relating to the plan, other than those kept by the Plan Financial Administrator, Vanguard, insurance companies and investment managers.

• Preparing and implementing qualified domestic relations order procedures.

• Delegating powers or duties to other persons and third-party administrators as appropriate.

Plan Financial Administrator

Treasurer Phillips 66 Company c/o Benefits Department P.O. Box 4428 Houston, TX 77210

(832) 765-1877

The Plan Financial Administrator is responsible for controlling and managing the assets of the plan.

• Implementing and monitoring the funding of the plan.

• Coordinating activities of Vanguard, insurance companies and investment managers, and requiring them to allow audits and submit reports on their activities.

• Signing trust agreements, insurance contracts and investment advisory agreements.

• Preparing and filing government required reports.

• Keeping records relating to plan benefits and assets.

• Delegating powers or duties to other persons and third-party administrators as appropriate.


ContactsVanguard is ready to answer your questions. Here’s how to reach Vanguard:

Web/email Phone/operating hours Address

www.vanguard.com (800) 523-1188

Spanish: (800) 828-4487

TDD: (800) 523-8004

Participant Services associates are available weekdays from 7:30 a.m. to 8:00 p.m. Central time

U.S. Postal Service

The Vanguard Group Attn: Plan #099066 P.O. Box 1101 Valley Forge, PA 19482-1101

Overnight Delivery

The Vanguard Group Attn: Plan #099066 400 Devon Park Drive Wayne, PA 19087-1815



Glossary

After-tax contributions

Contributions deducted from pay after taxes are withheld. After-tax contributions are included in taxable income reported on your W-2. Any investment earnings associated with your after-tax contributions accumulate tax-deferred. However, the investment earnings are subject to taxation according to the tax laws in effect at the time they are paid to you or your beneficiary.

Before-tax contributions

Contributions deducted from pay before taxes are withheld. Before-tax contributions are excluded from taxable income reported on your W-2. Your current taxes are reduced and any investment earnings on your before-tax contributions accumulate tax-deferred. However, the before-tax contributions and investment earnings are subject to taxation according to the tax laws in effect at the time they are paid to you or your beneficiary.

Committee The governing body of the plan.

ConocoPhillips stock

Shares of ConocoPhillips stock.

ConocoPhillips Stock Fund

An investment fund which contains shares of ConocoPhillips stock.

ConocoPhillips Leveraged Stock Fund

An investment fund consisting of allocated financed shares and other shares acquired by the plan as company contributions and earnings before August 5, 1989.

DuPont stock Shares of DuPont (E.I. du Pont de Nemours and Company, a Delaware corporation) stock.

DuPont Stock Fund

An investment fund which contains shares of DuPont stock held by the trust fund.

Employer Phillips 66 Company and any subsidiary or other entity in which Phillips 66 directly or indirectly has an ownership interest of at least 80%.

ERISA The Employee Retirement Income Security Act of 1974, as amended.

Leveraged Stock Fund

An investment fund consisting of allocated financed shares and other shares acquired by the plan as company contributions and earnings before August 5, 1989.

Participating company, participating companies

The companies that have adopted the plan (the “participating companies”) are:

• Phillips 66 Company.

• Phillips 66 Pipeline LLC.

(continued)


Pay The sum of the following items paid or deemed paid under the company’s payroll system during each pay period prior to the date the employee is terminated according to the company’s personnel system:

• Wages or salary attributable to your regularly scheduled workweek, including regularly scheduled overtime, unscheduled or temporarily scheduled overtime.

• Holiday pay, pay for vacation time taken, unavoidable absence benefit payments for sickness or injury, shift differentials, premium pay for holidays actually worked and, for certain employees, call-out pay.

• Eligible payments made for special duty, special assignments, shore allowance or shore relief.

• Eligible payments made for temporary upgrades in job classifications that are applicable to work assignments within the facility in which you’re employed.

• Back pay awarded or agreed to by the company to the extent that back benefits are to be granted.

• Amounts you contribute to other company benefit plans (such as your contributions for medical coverage).

• Pay includes and will be adjusted by any amount that is paid, reported or used as an offset under company policies and payroll procedures for Worker’s Compensation and state disability programs, but not for Military Pay.

“Pay” does NOT include:

• Any bonus or other compensation including any variable cash incentive compensation (VCIP) payments.

• Any amount that a non-bargaining unit employee may receive as a result of working extended schedules or “out of classification” jobs during a strike.

Phillips 66 stock, company stock

Shares of common stock, $0.01 par value, issued by Phillips 66.

Phillips 66 Stock Fund

An investment fund which contains shares of Phillips 66 stock held by the trust fund other than those contained in the Leveraged Stock Fund.

Plan year January 1 to December 31 of each calendar year.

Roth 401(k) contributions

Contributions deducted from pay after taxes are withheld but which are eligible for special tax treatment when eventually distributed if certain requirements are satisfied. Roth 401(k) contributions are included in taxable income reported on your W-2. Any investment earnings associated with your Roth 401(k) contributions accumulate tax-deferred. When the associated earnings are eventually paid to you or your beneficiary, they are tax-free when distributed in a qualified distribution. A qualified distribution is a distribution that is made five taxable years after you make your first Roth 401(k) contribution and after you reach age 59½, die or become disabled.

Sources The various types of contributions (plus the earnings or losses on those contributions) to your plan account — including before-tax, after-tax, Roth 401(k), Thrift and Success Share, and rollovers from other plans.

(continued)



Total disability The condition of a participant who is:

• Certified, on a form and in the manner prescribed by the Plan Benefits Administrator, by a physician who is licensed as a Medical Doctor (M.D.) or a Doctor of Osteopathy (D.O.), to be totally and permanently disabled by reason of any medically determinable physical or mental impairment that can be expected to result in death or to be of long-continued and indefinite duration, to the extent that the participant is unable to engage in any substantial gainful activity of the type the participant was engaged in prior to the disability; or

• Determined by the Social Security Administration to be totally and permanently disabled. The participant must provide written proof from the Social Security Administration of the permanent disability.

Trustee The fiduciaries who hold assets in a trust fund under the plan.

Valuation date The day the plan’s investment funds are valued by the trustee; generally, each day that the New York Stock Exchange is open for business.

UPDATE:

Savings PlanSummary of Material Modifications

To all Phillips 66 Savings Plan participants, as well as beneficiaries and alternate payees receiving benefits under the Phillips 66 Savings Plan.

This is a summary of material modification (“SMM”) to the Phillips 66 Savings Plan (“Plan”), as required by law. This SMM, when combined with the summary plan description (“SPD”), summarizes the official Plan text, including amendments through August 1, 2013, and advises you of a change to your SPD. Please read this notice and keep a copy of it in the Updates pocket of your SPD.

The Plan was amended, effective January 1, 2013, to provide that, in addition to active employees, the following classifications of former employees will be eligible to receive a Success Share contribution, based on the former employee’s pay for those pay periods with respect to which the former employee contributed to Thrift:

• a retiree who, on his or her termination date, was either at least

– age 55 with five years of service, or

– age 50 with 10 years of service and a member of the Retirement Plan of Conoco;

• an individual who terminated employment due to

– layoff,

– long-term disability,

– death, or

– transfer between Phillips 66 companies or joint venture affiliates.

Any other individual who is not actively employed by Phillips 66 on the date the Success Share contribution is made to the Plan will not receive a Success Share contribution. Additionally, effective January 1, 2014, interns will no longer be eligible to receive a Success Share contribution.

August 20132013SAVSMM1

UPDATE:


This is a summary of material modifications (“SMM”) to the Phillips 66 Savings Plan (“Savings Plan”) as required by law. This SMM, when combined with the Savings Plan summary plan description (SPD), summarizes the official Savings Plan text, including amendments through January 1, 2014, and advises you of a change to your SPD.

Please read this notice and keep a copy of it in the Updates pocket at the back of your Savings Plan SPD booklet.

CHANGES IN PLAN GOVERNANCE

Effective June 1, 2013, the Savings Plan was amended to reflect the following changes in plan governance:

• The Savings Plan Committee was replaced with a Benefits Committee and an Investment Committee. The Benefits Committee has responsibility for administration of the Savings Plan, including claim denial appeals. The Investment Committee has responsibility for Savings Plan investments.

• The Plan Financial Administrator is the person who occupies the position of Assistant Treasurer, Corporate Finance at Phillips 66.

All of the Plan Administration and Contacts information in the SPD remains unchanged except that “Savings Plan Committee” should be replaced by “Benefits Committee,” and the title of the person serving as Plan Financial Administrator is now the Assistant Treasurer, Corporate Finance rather than the Treasurer. Any claim denial appeals should be addressed to the “Benefits Committee” rather than the “Savings Plan Committee.”

May 2014 2014SAVSMM1

UPDATE:


This is a summary of material modifications (“SMM”) to the Phillips 66 Savings Plan (“Savings Plan”). This SMM (and any previously issued Savings Plan SMMs), when combined with the separate Savings Plan summary plan description (SPD), summarizes the official Savings Plan text, including amendments through January 1, 2016, and advises you of a change to your SPD.

Please read this notice and keep a copy of it in the Updates pocket of your Savings Plan SPD booklet.

NEW ADDRESS FOR VANGUARD CUSTOMIZED PHILLIPS 66 WEBSITE

Go to https://retirementplans.vanguard.com/ekit/sites/phillips66/index.html for information about:

• The plan in general.• Your investment options.• General information on investing.• How to enroll in the Savings Plan.• How to manage your account.

2016 IRS LIMITS

The IRS limits the amount that can be contributed each year. For 2016, these limits are:

2016 Calendar Year Limits

Your before-tax and Roth 401(k) contributions combined*


• If you’re age 50 or older as of the end of the year (includes $6,000 in catch-up contributions)

• $18,000

• $24,000

Total annual additions

This includes your contributions (before-tax, Roth and after-tax) as well as the company’s matching and Success Share contributions


• If you’re age 50 or older as of the end of the year (includes $6,000 in catch-up contributions)

• $53,000

• $59,000

Maximum pay

Maximum pay considered for plan purposes $265,000

* This limit applies to all amounts you’ve contributed to 401(k) plans in 2016, including any other employer’s plan. If you make before-tax and/or Roth 401(k) contributions to two unrelated employers’ plans in a single calendar year that are greater than the annual limit (say, because you’re a new hire), contact Vanguard.

1(continued)

January 2016

UPDATE:


January 20162016SAVSMM1

COMPANY CONTRIBUTIONS IN LIEU OF PENSION (CILP) DISCONTINUED

All CILP contributions were discontinued, effective July 31, 2015. Former Tosco employees who were eligible for CILP contributions began participating in the Cash Balance Account (Title II) of the Phillips 66 Retirement Plan, effective August 1, 2015.

IN-PLAN ROTH CONVERSIONS AVAILABLE

Effective September 1, 2015, Plan participants have the ability to convert their non-Roth contributions and associated earnings (other than loan balances) to Roth contributions within the plan. If you elect an In-Plan Roth Conversion (IPRC), the law requires that you pay taxes in the year in which the IPRC is made on amounts that would otherwise not be taxed until distribution. There will be no fee to complete this conversion.

An IPRC may help participants minimize their taxes at retirement. When a participant age 59½ or older withdraws money from their IPRC account, it’s generally tax free if certain requirements are met.

To initiate an IPRC or for more details, call a Vanguard Participant Services associate at (800) 523-1188.

It is strongly recommended that you talk to your tax or financial advisor before initiating an IPRC.

CHANGE IN PLAN GOVERNANCE

Effective November 2, 2015, the Plan Benefits Administrator for the Savings Plan is the Manager, Total Rewards of Phillips 66 Company or his successor(s). Contact information is as follows:

Manager, Total Rewards Phillips 66 Company c/o Total Rewards Department P.O. Box 4428 Houston, TX 77210

(832) 765-1877

The Plan Administration and Contacts information in the SPD remains unchanged, except that “Benefits Department” should be replaced by “Total Rewards Department.”

Receipt of this information does not guarantee eligibility. Please refer to the summary plan description (SPD) and any summaries of material modifications (SMMs) for details, including information regarding eligibility, benefits provided under the plan, when coverage begins and ends, claims procedures and your legal rights. Phillips 66 reserves the right to amend, change or terminate the plan, any underlying contract or any other program, at any time without notice, at its sole discretion, according to the terms of the plan.

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