Elements Newsletter

Chevron Phillips Chemical Profit Sharing Plan Payout and Variable Annuity Benefit Enhancement

Chevron Phillips Chemical is pleased and proud to announce that it has awarded its employees with a 4% Profit Sharing payout, and a 7% Variable Annuity Benefit enhancement for 2007.

We believe that these benefits are a very important part of your overall compensation package and have provided Q&As on www.benefitium.com to help you better understand these benefits. These profit sharing enhancements are applicable to all participating Chevron Phillips Chemical employees (other than Chevron Phillips Puerto Rico Core employees); salaried Performance Pipe employees; and Performance Pipe employees paid on an hourly basis at Reno and Knoxville hired prior to January 1, 2004.

Profit Sharing contributions will vary from year to year depending upon Chevron Phillips Chemical’s performance and its ability to support additional contributions, based on that performance. There may be years in which there is no profit sharing match.

The following chart shows the basic Chevron Phillips Chemical employer match plus the 4% Profit Sharing contribution scenarios forthe 2007 plan year.

If you are a participant in the 401(k) Plan, the Profit Sharing payout was posted to your 401(k) account by end of March. The Variable Annuity Benefit enhancement will be posted to your retirement account sometime during the second quarter. We’ll keep you posted on the exact date.

Interested in estimating your benefit now? You can receive an estimate of your Chevron Phillips Chemical retirement benefit by logging onto the Fidelity NetBenefits website at http://netbenefits.com. You will be able to log in to your account and receive estimates based on different retirement scenarios you input (such as retirement date, salary projection, etc.), review frequently asked questions and request forms.

And don’t forget! You can view your 401(k) balances, process transactions — such as loans and withdrawals — and make 401(k) investment election and deferral changes by logging onto the Fidelity NetBenefits website at http://netbenefits.com. You can contact Fidelity directly by calling the Chevron Phillips Chemical Pension and Savings Service Center at 1-866-771-5225.

Congratulations on another successful year, keep up the good work!

Retirement and Brain Age: What You Should Know

More and more, there’s talk of "brain age," but what is it, and why should we care? Let’s take a look at one of the things that probably concerns you most: planning for your retirement. As you approach retirement, you need to make investment and other choices that best suit your goals, both short and long term. Meanwhile, you also want to maintain your current standard of living, get the most from tax laws, and have a good estate-planning strategy. There’s a lot of gray matter at work to accomplish all that!

Sure, these are complex concerns, but they are not too difficult for the average person to tackle, often with professional advice at some point. Yet we all know folks over 50 who seem to be really confused by personal financial planning matters. In many cases, it’s simply because their brains aren’t working at peak performance.

Let’s be clear on one thing: serious deterioration of mental function is not an unavoidable part of aging, and can be minimized by keeping the brain sharp. Research even shows that individuals who lead mentally stimulating lives through continued learning, interesting leisure activities and occupations (or volunteer work) have reduced risk of developing Alzheimer’s disease. In fact, studies suggest that they have 35% to 40% less risk of manifesting this disease. 35% to 40%! Let that sink in a minute.

At this point, if you’re thinking: "I’d like to learn more about how to get my brain working efficiently," you are on the right track. Curiosity is one of the most important steps toward stimulating your brain. It’s time to get started on the "how to." Diet and exercise are important, but we hear so much about them. So let’s be unconventional and place them last on our "how to lower your brain age" list.

A wise man once said, "If life isn’t fun, you’re doing it wrong." When it comes to brain age, no truer statement was ever made. Here are some rules to an efficient, healthy and, most importantly, happy, brain.

RULE #1: Play

Play cards; play chess; play just about anything and have fun. Puzzles and word games also work to improve the efficiency of your brain’s synapses. Sudoku is the new rage in puzzles. Here are some good, free Sudoku Web sites: www.sudoku.us and www.personalsudoku.com.

Free games and puzzles are available all over the Internet, so just look around. Here are two Web sites that don’t sell anything, but do allow you to donate to good causes:

MSN’s Live Search Club provides a wide variety of games and allows you to accumulate points, which you can donate to your favorite charity or school.

FreeRice.com provides a free, fun way to help the world’s poor while improving yourself. Stretch your mind with increasingly more difficult vocabulary questions, adjusted to your individual level. For every correct answer, rice is donated to the needy by the Web site’s sponsors.

RULE #2: Laugh

Laughter truly is the best medicine. Blood flow to your brain can increase by as much as 22%, which is almost as much as a 15 to 30-minute physical workout. Laughter has other health benefits as well, such as providing a boost to your immune system. But here’s the best part: laughter causes the body to release endorphins, chemicals that can decrease stress, fight depression, and improve your love life.

RULE #3: Learn

Experience new things. Visit new places. Try new foods. Listen to music; try something different. Read, read, read!! Most importantly, if you read mysteries most of the time, try a book on history. Variety is the key to learning and brain stimulation.

RULE #4: Reminisce

Anyone younger than you can probably learn from hearing about your successes and failures. You benefit from the enormous amount of memory stimulation that goes on in your brain. So stroll down memory lane; tell stories about your youth; reminisce about your honeymoon; even tell stories about the funny things that happened last week. Storytelling is good for your brain, and it’s fun!

RULE #5: Eat Right and Exercise

What can possibly be said about exercise that you haven’t already heard? It’s good for you; it’s great for you! Get up and exercise 15 to 30 minutes at least three times a week. Put on a little sunblock and get outside! The sun is good for you, and the fresh air is even better.

A healthy diet is good for your brain. Eat lots of leafy greens, increase omega-3 fats (found mostly in fish), and increase the antioxidants in your diet. You should also be aware that there is a definite correlation between a high-sugar diet and Alzheimer’s. So keep your sugar intake down, and decrease your risk of brain-related diseases. So that’s it ... a mere five rules to a better, younger brain. Of course, you’ll be able to make wiser financial planning decisions. But there’s more to retirement than your 401(k), and a sharp mind is the key to living life to its fullest. Just remember: "If life isn’t fun, you’re doing it wrong."

New Benefit: Will Preparation Services

No matter what your age, marital status or financial situation, a will is one of the most important documents you’ll ever create. A carefully crafted will expresses your wishes and provides for the people and organizations that are most important to you. There’s no time like the present to prepare a will and enjoy the peace of mind that comes with knowing you’re prepared.

If you have elected Supplemental Group Life Insurance coverage through Chevron Phillips Chemical’s benefits program, you are eligible for a new Will Preparation Service offered through MetLife. This benefit covers the legal costs associated with having a will prepared and/or updated when you use an attorney who participates in the Hyatt Legal Plans’ network of attorneys.

The Will Preparation Service covers the attorney’s fees for participating employees and their spouses for:

• Telephone and office consultations to discuss the preparation or updating of the will;
• Preparation of the will;
• Updating of the will; and
• Preparation of codicils (which are amendments to the will).

You will meet face-to-face with a participating attorney and receive personal assistance throughout the process. The benefit covers the costs of preparing or updating your will — no matter how simple or complex — as many times as you want. There is no limit to the number of times a will can be prepared or updated!

To use the Will Preparation Service, call Hyatt Legal Plans’ Client Service Center at 1-800-821-6400. Provide them the Company name (Chevron Phillips Chemical Company), group number (116910) and your Social Security number. They will then help you find participating attorneys in your geographic area. There are no claim forms or co-payments required when using a participating network attorney.

WHO IS ELIGIBLE FOR THIS NEW BENEFIT?

Employees who have elected Supplemental Group Life Insurance and their spouses are eligible to access the Will Preparation Service.

HOW MUCH DOES IT COST?

You do not pay any fees for the preparation or updating of wills, as long as you use a participating network attorney.

WHAT IF I WANT TO USE MY OWN ATTORNEY OR ANOTHER ATTORNEY NOT IN THE HYATT LEGAL PLANS’ NETWORK?

You can retain an attorney outside of the network and receive reimbursement up to a set dollar limit. To use this reimbursement feature, contact the Hyatt Legal Plans’ Client Service Center at 1-800-821-6400 to request authorization and the fee reimbursement claim forms. You will be responsible for any fees that exceed the reimbursable amount.

WHAT DOES A WILL GENERALLY CONSIST OF?

Wills generally name beneficiaries, indicate specific gifts, name an executor of the estate, name guardians for minor children and may even cancel debts owed. Any testamentary trust, which is a trust set up in a will to take effect after death, is also covered under this benefit.

WHAT IS NOT COVERED?

The Will Preparation Service benefit does not cover costs associated with preparing living trusts (trusts that take effect during a person’s lifetime), powers of attorney or living wills. These are legal documents that are separate from a will.

Diabetes America — How to Use This Wellness Resource

Chevron Phillips Chemical employees enrolled in either medical plan option can access Diabetes America, an established network of diabetes care and management centers across the state of Texas.

Diabetes America offers a variety of personalized treatment and educational programs, including medical treatment, diabetes education, nutritional counseling, and exercise and lifestyle instruction. When you visit a Diabetes America treatment center, you’re only responsible for a $10 copay under the Core option (for the Cost-Saver option, your deductible and coinsurance amount will apply) for the services you receive.

WHERE IS DIABETES AMERICA?

The organization has grown from one original center in Houston to twelve centers across Texas in the Houston, Dallas/Fort Worth, Corpus Christi and San Antonio areas. And they are still growing! The newest centers will open in Humble, TX on March 13 and The Woodlands, TX on April 17. Plans to expand to even more locations around the country are in the works.

Even if you don’t live in Texas or close to a Diabetes America facility, you can still benefit from this service by requesting educational materials or using the telephone hotline described below.

WHAT EXACTLY CAN DIABETES AMERICA DO FOR ME?

Whether you’ve recently been diagnosed with diabetes, have had diabetes for a while and have ongoing diabetes management needs, or need preventive care because you’ve been diagnosed as pre-diabetic, Diabetes America can help. The expert staff at Diabetes America work with your current physician to develop a personalized diabetes care plan that compliments and reinforces the plan you may already have from your treating physician — they don’t replace your personal doctor.

Each center functions as a "one-stop-shop" for individuals with diabetes, offering a team of diabetes doctors, nutritionists and educators under one roof. In addition to center-based medical care and education, available services include a full-service on-site pharmacy to fulfill patient’s prescription needs, a 24/7 telephone hotline service, and an advisory service that focuses on healthy lifestyles and non-surgical weight management.

For more information about Diabetes America and the services it offers, visit www.diabetesamerica.com. Beginning January 1, you can also schedule appointments online or by calling 1-866-MY-DIABETES (1-866-693-4223).

Did You Know?

Some Interesting Facts You Might Not Know About Medication

• The average cost of developing and bringing a new prescription drug to market is $802 million. It usually takes between 10 and 15 years to develop and bring a new medication to market.
• Over 90% of drugs entering clinical trials fail to make it to market.
• Large drug manufacturers spend twice as much on advertising and marketing than they do on research.
• Each year in the United States, more than 160 million prescriptions are written for antibiotics. Humans consume 235 million doses of antibiotics annually. It is estimated that 20%-50% of that use is unnecessary.
• Caffeine is one of the safest "drugs" known. It is not addicting, the lethal dose is very high, and it has no toxic effects on body organs. People who are sensitive to caffeine, however, can have altered heart rate with higher doses.
• By law, when a physician prescribes drugs for a patient, the physician is required to ensure that the patient is fully informed of the drugs risks and benefits and consents to the drug therapy with full informed knowledge. Statistics show that this occurs in less than 20% of the patient population.
• Inappropriate prescribing and uninformed use of prescriptions cost healthcare systems billions of dollars worldwide yearly.
• Prescription drugs are fast exceeding the cost of physician services.

Don’t Forget to Turn In Your FSA Receipts

You have until March 31, 2008 to file a claim against your Health Care Spending Account for eligible health care expenses incurred during 2007. If Aetna does not receive your request by the last day in March, any money remaining in your account is forfeited. For information on how to file a claim, visit www.benefitium.com and click on Benefit Summaries > Flexible Spending Accounts > How to File a Claim.

Health for Life

New Foods for Dieters

What’s new out there for dieters? Feeling a little bored with your food choices? Here are some new and tasty products you might want to try!

Salad Sprays: Not to be confused with flavor sprays, adding a flavor without calories, these are real salad dressing with about 1 calorie per spray. You need about 10-15 sprays for a side salad. Good not only on salads, but also fresh and steamed vegetables and as a quick marinade. The flavors range from vinaigrette, to honey mustard, to Asian.

xFreeze Dried Fruit: We’re not talking dried fruit here, which is highly caloric and easy to consume a lot of, with plenty of calories. This is fruit which has ALL the water removed, and must be "rehydrated" in your mouth. Sort of like the texture of cotton candy. From berries to pineapple to mangoes, these are a great portable treat, and a form of what you might call "nature’s candy."

Jerky: Many of us know beef jerky and look for leanest varieties. The newest products range from turkey jerky to buffalo and ostrich jerky to salmon and tuna jerky. Check them out — dry and chewy, the extra chewing to consume is a great stress reliever for many!

Exotic Grains: If the thought of whole wheat sounds boring, try some of the newest grains, with a great nutty flavor, and packed with protein and fiber. Products like hemp, amaranth, millet, quinoa, and spelt are found in most markets and provide a lot of variety for these heart-healthy grains. The fiber and protein boost allows a small serving with great contentment.

Career Navigator Now Even More User-Friendly

In mid-February, Career Navigator was upgraded to include a number of user-friendly enhancements designed to make the candidate experience smoother and more transparent.

The first enhancement is the addition of a "My Submissions" page that will display prior jobs you have applied for and the status of each application ("application being reviewed," "applicant not a fit at this time," or "position filled").

Another new feature is the "Job Cart," which works much like an online shopping cart. Your Job Cart holds any jobs that you have viewed and for which you may want to apply. You can store them in the cart until you make a decision.

Other new features include:

• Mouse-over pop-up job descriptions that eliminate that extra "click" when gathering additional information about the listing.
• A "progression bar" that shows you how many screens you still need to complete to reach the end of the application process.

"From an HR perspective, this new upgrade will help us better measure, analyze and align our workforce for improved business performance," explained Maricela Caballero, Learning & Development and Strategic Staffing Manager.

"From an employee perspective, these new features in Career Navigator will help you better manage your career path, ensure you are kept up-to-date regarding your status in the hiring process and quicken the application and hiring process. We think this upgrade will go a long way in ensuring that we continue to put the right people in the right positions — and that’s a win-win for everyone."

HR’s Plans for Keeping Us Competitive

The idea that good employees are hard to find — and even harder to keep — is a universal lament. So when HR Leadership recently unveiled their long-term strategy, it was no surprise that much of it was focused on global staffing initiatives.

"At its most basic function, HR’s main goal is to link human needs and business needs," explained Maricela Caballero, Learning & Development and Strategic Staffing Manager. "Every program, initiative or strategy we develop must ensure that Chevron Phillips Chemical has:

• a diverse, talented, skilled and stable global workforce;
• effective people management processes; and
• strong leadership willing to do what it takes to keep employees engaged."

HR’s long-term strategy focuses on six key areas: workforce planning, recruiting and retention, career development and performance management, employee engagement, rewards and recognition, and knowledge retention and transfer. A brief overview of plans for each area is outlined on the next page.

WORKFORCE PLANNING

HR is evaluating a workforce planning model that will analyze current and future labor needs and will help devise a strategy to reduce shortages and surpluses.

RECRUITING & RETENTION

The Company is shifting its recruiting practices from reactionary to proactive. Some of the strategies under advisement include the implementation of an employee referral bonus program, formal socialization programs and the potential of employing retirees on a part-time basis. Additionally, HR is looking at specific strategies aimed at Baby Boomers, Gen X’ers, and Millenials.

CAREER DEVELOPMENT & PERFORMANCE MANAGEMENT

Moving forward, employees will play a bigger role in their own career development. The new Career Development section of the Performance Management process is a perfect example of how employees can get more involved. Additionally, succession planning and international assignment training are focus areas for the near future.

EMPLOYEE ENGAGEMENT

HR is enhancing first line supervisor training to include the development of skills vital to maintaining an engaged workforce. They are also developing strategies for fostering an inclusive, welcoming and supportive work environment.

REWARDS & RECOGNITION

The focus will continue to remain on benchmarking the competitiveness of our programs. In the future, technology will play a large role in enhancing the delivery of the Company’s variable incentive programs, salary adjustments and merit processing.

KNOWLEDGE RETENTION & TRANSFER

A strategy is being developed to ensure timely knowledge transfer between new hires and experienced employees. One of the options under consideration is a program for retaining experienced employees in more flexible work environments (job sharing, part-time, temporary assignments) in order to ensure valuable information is passed on to the next generation of leaders.

"To stay competitive, we must attract, retain, and develop a diverse workforce. Our long-term HR plan sets the stage for us to do just that," said Don Kremer, VP of Human Resources.

New 2008 Instructor-Led Courses Announced

Looking to build on your professional skills? Be sure to check out the Corporate Learning & Development 2008 Schedule of Classes on the Learning & Development website. For 2008, we will be hosting 14 instructor-led courses covering topics such as:

• Leadership;
• Building Relationships & Trust;
• Conflict Resolution;
• Economic Analysis & Model Training;
• Managing Multiple Projects, Objectives, & Deadlines;
• Presentation Skills; and more.

Additionally, a new course on Essentials of Communicating with Diplomacy and Professionalism has been added. All classes will be held in or around Houston and will be taught by experienced instructors with proven, real-world experience in the subjects they teach.

These courses are designed to help you enhance your current strengths and acquire new competencies. As you develop your 2008 performance and development objectives, you may want to consider how these courses can help you achieve your goals. Why not take some time to look through the listing today and then talk to your supervisor about which instructor-led courses may be right for you.

This year, you will be able to enroll in your chosen courses via Chevron Phillips Chemical’s Learning Management System (LMS). Once you register, your supervisor will be asked to approve the registration via LMS before you are officially enrolled in a class. Once approved in LMS by your supervisor, you will receive an enrollment e-mail confirmation via LMS that will include the course logistics.

For enrollment instructions and to review the course listing, visit nSight > Departments > Human Resources > Learning & Development > Instructor-Led Training.

Can’t find your W-2?

It’s happened to everyone at one time or another. You sit down to do your taxes and realize that you have no idea where you put your W-2. Luckily, you can download a copy of your 2007 W-2 from the W-2 website at https://w2.adp.com or through Chevron Phillips Chemical’s Employee Self Service site at http://hr.cpchem.net/ESS/Home.aspx. And, if while reviewing your W-2, you realize the number of withholding allowances for 2008 will change, be sure to file a new W-4. The new 2008 W-4 forms can be found on the IRS website at www.irs.gov/pub/irs-pdf/fw4.pdf. Once completed, be sure to send your new W-4 to the Employee Service Center.