Elements Newsletter

Investment ABCs

No matter what your age, how much money you have or whether the stock market’s up or down, it’s always smart to put your money to work. While it’s tempting to hold on to your cash in volatile economic times, the truth is that if you simply set it aside, inflation will gradually eat away at it and you’ll end up losing money.

GETTING STARTED

How do you get started if you’re new to investing? Well, first of all, you need an investment strategy that reflects your retirement goals, how much time you have before you retire and how much financial risk you are willing to assume. Two important risk factors to consider are:

• Investment risk: The chance you take on how much an investment will go up or down in value (also referred to as “volatility”).
• Inflation risk: The risk that your money will lose its buying power because goods and services have increased in cost.

Investment options that involve a greater degree of risk have historically shown greater returns. At the same time, investment options that entail lower risk have yielded a lower rate of returns. While every type of investment involves some level of risk, you can help lower your level of risk through diversification and asset allocation:

• Diversification is the strategy of allocating your money across a variety of investment vehicles.
• Asset allocation is the strategy of distributing your money among a mix of investment vehicles that carry different levels of risk.

BASIC GUIDELINES FOR INVESTING

There’s no such thing as the perfect investment strategy, but there are some guidelines you can follow to keep on a sensible path to saving for retirement:

1. Start early. It’s never too soon to start investing. Even if it’s just 3% of your pay in Chevron Phillips Chemical’s 401(k) Savings and Profit-Sharing Plan, you’re taking a step to saving for retirement.
2. Find a tax shelter. Savings vehicles like Chevron Phillips Chemical’s 401(k) Savings and Profit-Sharing Plan allow you to set aside pre-tax money for investments and earn money on those investments tax-free.
3. Spread your risk around. Remember that diversification and asset allocation are two proven strategies for helping you manage investment risk.
4. Practice dollar cost averaging. Dollar cost averaging is the process of investing the same amount of money, at regular intervals, over a long period of time. With this approach, you buy more shares when the market is down and fewer shares when the market is up. In doing so, you cut your average cost per share. Contributing to Chevron Phillips Chemical’s 401(k) Savings and Profit-Sharing Plan is an example of dollar cost averaging.
5. Think long term. It’s tempting to shift your money around each time the market goes up or down. Although it’s important to adjust your investments occasionally to stay on track with your financial goals, long-term strategies generally provide the greatest return overall.
6. Monitor your investments. No matter how safe you think your investments are, it’s still important to pay attention to their performance and make adjustments if needed.
7. Look at the big picture. An investment’s most recent performance is no guarantee of future results. So when you are assessing an investment, it’s a good idea to review its performance over time.
8. Don’t play it too safe. While it’s certainly reasonable to be conservative when the market is volatile, don’t put yourself in a position where you’re losing money to inflation.
9. Match your investments to your financial goals. Your investment strategy will change over time, depending on your personal financial goals. For example, your strategy for retirement 20 years from now will be different from your strategy when retirement’s just around the corner. When you’re younger, you can generally afford to have a more aggressive portfolio than when you’re ready to begin drawing on your retirement income.
10. Do your homework. Be an informed investor. Read annual reports, prospectuses and financial publications so that you understand the investments available to you — their investment goals, past performance and fund managers. Financial websites, such as Fidelity’s www.401k.com, are also good resources for helping you build your investment knowledge.

An Overview of Chevron Phillips Chemical’s 401(k) Savings and Profit-Sharing Plan and Retirement Plan

Chevron Phillips Chemical wants you to have a secure, comfortable retirement, so we offer two resources for helping you build your financial future: the 401(k) Savings and Profit-Sharing Plan and the Retirement Plan:

401(K) SAVINGS AND PROFIT-SHARING PLAN

A 401(k) plan is one of the easiest and most convenient ways to save for your future, and with Chevron Phillips Chemical’s 401(k) Savings and Profit-Sharing Plan, you receive a two-fold benefit:

1. A 401(k) component lets you set aside a percentage of your income to save for retirement, while reducing your current income taxes.
2. A profit-sharing component lets you share in Chevron Phillips Chemical’s success by receiving tax-deferred employer contributions based on the Company’s profits.

Highlights of the plan include:

• Employee contributions: You can save from 1% to 40% (16% if you are a highly compensated employee) of your eligible earnings, up to federal limits, on a pre-tax basis (Pre-Tax Contribution Account), after-tax basis (Medical Savings Account) and Roth 401(k) basis.
• Annual Increase Program: This program allows you to automatically increase your Chevron Phillips Chemical 401(k) Plan contributions each year. You simply elect the amount of the increase (as a percentage of pay) and the date you want the increase to take effect each year. Then, each year on the designated date, your contributions will automatically increase by the percentage you’ve elected.
• Company-matching contributions: To help your savings grow, Chevron Phillips Chemical matches your pre-tax and Roth 401(k) contributions — up to 6% of your pay — at 75¢ on the dollar.
• Profit-sharing contributions: Based on Chevron Phillips Chemical’s performance, the Company may also add profit-sharing contributions to your account. Depending on Chevron Phillips Chemical’s performance, this amount may range from $0 up to $1 for every $1 you contributed to the plan during the year on either a pre-tax basis or Roth 401(k) basis, up to 8% of eligible earnings.
• Choice of investments: You can invest contributions in a wide array of investment funds to suit your financial goals, including 25 core funds and a “mutual fund window” which allows you to pick from thousands of other mutual funds.
• Tax-deferred earnings: You pay no taxes on investment earnings until you withdraw your money from the plan.
• Access to your funds: While you’re employed with Chevron Phillips Chemical, you can access your plan accounts through a loan provision, a regular withdrawal feature and a hardship withdrawal feature.
• Vesting: You are immediately vested (have ownership) in your employee contributions, and are 100% vested in Company-matching and profit-sharing contributions after three (3) years of service.
• Portability: If you leave Chevron Phillips Chemical, you can elect to:
• Take the value of your vested accounts as a cash lump sum or in installments,
• Leave the money in the plan, or
• Roll the money over to another tax-advantaged plan or an IRA.

RETIREMENT PLAN

To help boost your savings at retirement, Chevron Phillips Chemical offers the Chevron Phillips Chemical Retirement Plan. The plan is fully funded by Chevron Phillips Chemical. The benefit you may receive at retirement is based on two components (a Career Average Pay Benefit and a Variable Annuity Benefit), and is a factor of:

• Your compensation over time,
• How many years you work for the Company,
• Your age at retirement, and
• The performance of financial markets over time.

Plan highlights include:

• Vesting: You become 100% vested in your retirement benefit after three (3) years of service.
• Choice of payment options: Your retirement benefits can be paid as an annuity that provides monthly income over your lifetime (and the lifetime of your spouse or other beneficiary, if elected), or as a one-time lump sum.

NEED MORE INFORMATION?

To find out more about Chevron Phillips Chemical’s Savings and Retirement plans and how they benefit you, call the Pension and Savings Service Center at 1-866-771-5225 to:

• Talk to a representative (7:30 a.m. – 8:00 p.m. Central time), or
• Access the automated phone system (24 hours a day).

Money Myths

You can also log on to Fidelity’s interactive website at www.netbenefits.com.

Our beliefs about money, similar to our views about health, relationships and other important aspects of daily living, are often shaped by what we’ve learned growing up — in our family, at school and from other key influences in our lives. Some of these concepts, however, are not always true and can actually prevent us from handling our finances effectively. Here are some of the more common money “myths” and the truth behind them:

MYTH: I don’t have enough money to start investing.

TRUTH: With the Chevron Phillips Chemical 401(k) Savings and Profit-Sharing Plan, you can start investing with a very small percentage of your pay. Let’s say your annual income is $40,000. If you begin contributing 3% of your pay ($1,200 a year or $23 per week), you’re investing in your future for the price of that daily hamburger or fancy cup of coffee.

MYTH: When the stock market takes a dive, I’m better off cashing out and cutting my losses.

TRUTH: History shows that when the stock market is volatile, it’s better to ride it out, than to put your cash under a mattress. In fact, some investors take advantage of stock market lows to invest in quality companies at a bargain price.

MYTH: I’m young — I have plenty of time to save for retirement.

TRUTH: The best time to start saving is when you’re young, because you have more years for your investments to earn interest. For example, if you’re 25 years old and save just $100 a month at an annual interest rate of 6.5%, compounded monthly, you’d have close to $36,000 in just 20 years and $115,000 by the time you’re 65.*

* Assumes a marginal tax rate of 40%.

MYTH: I’m old — it’s too late to start saving now.

TRUTH: It’s never too late to start saving for retirement and with Chevron Phillips Chemical’s 401(k) Savings and Profit-Sharing Plan, you have a convenient tool for investing your money and building your retirement savings. Every dollar you save puts you one step closer to a more secure retirement, so if you’re a “late starter,” don’t delay any further!

MYTH: If things get bad, I can always file for bankruptcy.

TRUTH: Going bankrupt is not the same thing as pushing a “reset” button on your finances. Filing for bankruptcy stays on your credit record for 10 years and can impact your ability to get a loan. If you’re in serious debt, you’re better off consulting with a financial planner to look at alternate options for resolving your money issues.

Working with a Financial Planner

When it comes to money matters, sometimes it helps to turn to a professional, such as a financial planner. A financial planner can provide advice on meeting your personal financial needs, such as planning for retirement, buying a house, starting a college fund for your children, managing taxes and distributing your estate.

While anyone can provide services as a financial planner, it’s best to work with someone who has the proper credentials and expertise to dispense financial advice, such as a Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC) or Personal Financial Specialist (PFS).

Keep in mind that certification alone does not guarantee that a particular financial planner will be right for you. As with anyone you hire to help you with money matters, take care to research that individual’s background and credentials before enlisting his or her services.

Working successfully with a financial planner requires a little planning on your part. Here are some steps to take when consulting with a financial planner:

1. Know your financial goals: Write down your own short- and long-term financial goals. Have a clear vision of where you want to be, in five (5) years, as well as 20 years. What significant lifestyle changes (personal and professional) do you anticipate during this time? How will these changes affect your finances?
2. Take stock of your own financial savvy: Be realistic about your own knowledge and comfort level regarding money. Are you good at managing your money or do you live paycheck to paycheck? Are you an experienced investor or intimidated by even purchasing a Certificate of Deposit? Knowing your own abilities and limitations when it comes to managing money will help you identify how a financial planner can best assist you.
3. Set realistic expectations: A financial planner can only dispense advice. He or she cannot predict the market or guarantee that all your investments will make money.
4. Check in to review your progress: It’s a good idea to schedule periodic follow ups with your financial planner, so you can chart your progress and discuss any obstacles to reaching your goals.
5. Provide updates on any changes: Be sure to notify your financial planner of any changes to your situation that may impact your financial situation. He or she may want to adjust your financial plan as a result of these changes to keep you on track with your financial goals.

Keep in mind that a financial planner, like a personal trainer, is there to guide, assist and keep you focused on your goals. In the end, you are responsible for executing your financial plan and making decisions regarding your money.

Perception vs. Reality: 360° Process Offers Full Circle Feedback

Feedback is based upon the theory that only when people acknowledge their present level of functioning are they able to change and develop. It’s why a coach records an athlete — to obtain an accurate, real-time picture of performance. Similarly, in business organizations, the 360° Feedback Process is utilized to obtain a complete picture of how a manager’s performance is perceived by and impacts a number of people.

Re-launched in January 2009, Chevron Phillips Chemical’s 360° Feedback Process provides the Company’s senior leaders and their direct reports with the opportunity to receive performance critique from their supervisors, peers, direct reports and customers.* This process helps participants gain clarity regarding their effectiveness as a leader. And in turn, the information gathered will help managers become stronger leaders within the organization.

* 360° Feedback participation is determined by the Company. For more information, visit nSight > Departments > HR > Careers > 360° Feedback Process or contact your HR Business Partner.

HOW IT WORKS

The 360° Feedback Process works like this:

1. Participants will receive an email notification explaining the process and asking them to access the 360° Feedback website.
2. Participant completes self-assessment.
3. Participant selects 4 – 8 respondents (inside or outside the Company) to provide feedback.
4. Respondents anonymously complete the feedback process online and submit their responses to an external consultant. To protect anonymity, the information respondents provide is compiled with the participant’s self-assessment data into a personalized feedback report. If a supervisor has less than three (3) direct reports all responses will be grouped together to ensure that confidentiality is maintained.
5. The external consultant compiles the results and shares a feedback report with the participant via email.
6. If the participant has not been through this process in the past, they attend an Extraordinary Leader workshop where they will learn how to interpret their results and develop an action plan to address the feedback. For those that have previously been through the process, they can interpret the data and develop an action plan based on previous experience, or they can ask their HR Business Partner for assistance.
7. The participant shares their results/action plan with his or her manager as well as the selected respondents.

WHY IT WORKS

First, the results of Chevron Phillips Chemical’s 360° Feedback Process are intended to help participants identify and build on unique strengths (rather than focusing on improvement areas). Second, the 360° Feedback Process provides an opportunity to provide honest, anonymous feedback in a non-threatening manner. The 360° Feedback Process takes subjectivity, threat and defensiveness out of the equation. The discussion focuses less on whose view is right or wrong. Instead, it focuses on why there is a gap between self-perception and group perception, what it could mean and how it can be closed.

“This opens up immensely fruitful, open discussions — and ultimately — improved performance,” said Maricela Caballero, Corporate HR Manager.

Third, the 360° Feedback Process is not linked to performance rating. It’s designed to obtain additional feedback to improve effectiveness, build skills and improve competencies.

“Understanding where you are today with respect to your competencies and strengths directly affects your ability to successfully manage others. Knowing this, you can get the power of perception working for you rather than against you,” explained Caballero.

Cell Phone Policy Update

Starting in 2009, Chevron Phillips Chemical will no longer reimburse employees for the use of personal cellular telephones, Smartphones or similar electronic equipment when used for Company business. All Chevron Phillips Chemical business should be conducted on a Company-issued cellular telephone or Smartphone.

Please talk with your supervisor to determine if you have business needs or job requirements that would make you eligible for a Company-issued cellular device.

If you are approved for a Company-issued device, please contact the IT Helpdesk (cpchd@chevronphillipschemical.com) so they can assist you with the procurement process.

Refer to HR Policy 2700 – Cell Phone/Electronic Equipment for more information.

37 New SkillSoft Courses Added

Looking for a career remodel? Then visit LMS today for 37 brand new SkillSoft online training courses! Chevron Phillips Chemical offers 100 free online courses designed to help you improve both your business and soft skills. Most courses are tied to Chevron Phillips Chemical’s Global Competencies with the Performance Management process. So after you complete your annual review, you can use these courses to help you meet your 2009 goals or complete any learning recommendations.

LEARN AT YOUR OWN PACE

SkillSoft courses are online so you learn at your own speed, studying when and as quickly as you want. You can start a course, bookmark it, and then come back when you have more time.

EARN CREDIT

SkillSoft courses can also help you work toward a variety of continuing professional education, accreditation and college credit options while improving your soft skills.

BECOME YOUR OWN DO-IT-YOURSELF PROJECT

Being an outstanding performer takes more than technical skill. You must also know how to communicate effectively, build relationships and present yourself, Chevron Phillips Chemical and your ideas in a positive and impactful way.

The new e-learning courses in SkillSoft allow you to hone these essential soft skills give yourself a career makeover today!

TO ENROLL IN SKILLSOFT COURSES

1. Visit the SkillSoft website on nSight under HR > Learning & Development.
2. Browse the SkillSoft Course Listings to find courses that interest you.
3. Click on the LMS icon on your desktop.
4. Login to LMS as a Learner/User.
5. On the top navigation bar, go to the Catalog tab and select Advanced Catalog Search.
6. Type SkillSoft in the Title text box and a list of the SkillSoft career development courses appears.
7. Click on Add to Learning Plan to add a course to your Learning Plan.
8. Click on Launch Content to launch a course. It will automatically be added to your Learning Plan.
9. Once you launch the course, click on the name of the course.
10. Click Play this Course.

QUESTIONS?

Contact your local LMS Administrator, Learning & Development contact, or HR Business Partner for more information.

Read This Before You Click “Send”

How many emails do you send a day? 10? 15? 100 or more? If you receive and send 100 emails daily, that adds up to at least 30,000 emails a year (even allowing for downtime, holidays and weekends). Email is a valuable communication vehicle — it’s rapid, convenient, easy to store, and can be widely distributed for immediate impact. However, to be efficient and effective, it must be used judiciously.

How do you ensure you get the most from email? Here are 11 tips to get you started:

• Don’t email when you don’t know what you want. This sounds obvious, but many of us are quick to send or reply to an email before we’re clear about the intent of our message. Think first and ask yourself, “What do I want and am I being clear?” before you click “Send.”
• Don’t respond when angry or emotional. The email format is immediate, searchable, forwardable and permanent. When your emotions are running high, take a moment to consider the reactions of anyone who might read your email, now or in the future.
• Reply on a timely basis. Check your email at least once or twice a day. Reply within 24 hours. Send an acknowledgment if you can’t respond in full. Review your email at the end of the week. Leave an automatic “out of office” message for extended absences.
• If you have replied more than four times, pick up the phone. If you find you’re having difficulty resolving an issue via email, it’s time to pick up the phone.
• Keep your messages short. Respect the recipient’s time. Concise messages are more likely to be read. You can always provide more details in an attachment.
• Keep it professional. Avoid using abbreviations and slang (LOL, bbl, h/o, etc.), ALL CAPS (it’s the equivalent of shouting) and emoticons (such as :-) or ^^^). Standard business language is best.
• Don’t abuse “Reply to all.” Reply directly to the sender without copying others whenever possible. Avoid “flaming” (an extended dispute conducted by email) and creating long email trails.
• Remember email’s lack of privacy. Email at work is public, not private. Avoid making comments, sharing images or forwarding emails not appropriate for the workplace.
• Only reply if you have something valuable to add. Before you reply to an email, ask yourself: Are you adding to the conversation or just making your voice heard?
• Know when the exchange is over. When the conversation has dissolved into one-word replies — “Done.” “Great.” “Perfect.” — then it’s finished. Resist the urge to email back.
• Review your email before sending. Check for clarity, tone, spelling and grammar before sending. Your professionalism is judged by the quality of your email.

Want to brush up on your email etiquette? Take the free online SkillSoft Course COMM0232: Optimizing Email at Work. To sign up for the course, click on the LMS icon on your desktop.