How To Exercise Your Stock Option

Transcription

1 Your ConocoPhillips Equity Award Program

2 What s Inside Page Award Types in Brief Accessing Your Information Online The Home Page Opening Your Merrill Lynch Brokerage Account Viewing Your Grant Information Modeling and Exercising Selling Stock Account Statements Your Participant/Tax Profile Plan Information Service Fees Glossary This brochure is a general description of equity awards and Merrill Lynch s AwardChoice equity plan services for participants. Your equity awards are subject to the terms and conditions of your company s plan, any agreement between you and your company covering your equity awards, and/or the prospectus provided to you by your company. Any transactions in connection with your plan in your Merrill Lynch brokerage account are subject to the terms and conditions of that account. This brochure does not constitute an offer or invitation to buy any securities. Any offer to buy securities from your company would be made only by a prospectus in accordance with the Securities Act of 1933 as amended. Refer to the accompanying materials for information provided by your company about your specific program.

3 Managing Your ConocoPhillips Equity Award Program Information Online Merrill Lynch s secure Benefits OnLine Web site is your resource for managing and monitoring your ConocoPhillips Equity Award Program information. Through Benefits OnLine you have direct access to the tools, information and services you need to make the most of your equity awards. Benefits OnLine provides: Secure access to your award information, Modeling capabilities for estimating the value of your awards, Easy and convenient exercise transactions, and Grant summary and transaction history to help you manage your awards. This brochure is designed to help guide you in accessing your account online, opening your Merrill Lynch brokerage account, and understanding the resources available to you on the Web site. You can use Benefits OnLine to manage all of your Equity Program awards. To get started, review this brochure carefully and access Benefits OnLine to familiarize yourself with the Web site. In addition, you will need to open a Merrill Lynch Wealth Management Limited Individual Investor Account (LIIA). The LIIA is a self-directed, non-interest bearing brokerage account for use with your ConocoPhillips awards (see instructions on page 8 for how to open your account). Access and Support Virtually 24 Hours a Day, Seven Days a Week Online and On the Telephone Benefits OnLine: (Active employees can also seamlessly access Benefits OnLine through the HR Express portal) or Participant Service Representatives and Interactive Voice Response (IVR) System: (877) STK-Plan or (877) If you are calling from an ETN-equipped office location, you can also dial ETN Outside the U.S., Puerto Rico and Canada, use the AT&T country code plus the toll-free number or dial direct: (609)

4 Award Types In Brief The ConocoPhillips Equity Program includes several different types of equity awards, including: Stock Options, Stock Appreciation Rights, Restricted Stock, and Restricted Stock Units/Performance Share Units. Depending on the awards you are granted, you may have one or more of these award types in your account. An overview of each award type follows. For more information about the awards, visit the HR Express portal. Stock Options Stock Options give you the right to purchase Company stock at a specific price over a stated option term. Upon exercise, U.S. participants will recognize ordinary income (W-2) equal to the difference between the fair market value of the Company s stock on the date of exercise and the grant price, multiplied by the number of options exercised. Generally, this income is subject to immediate tax withholding at the point of exercise, with any appreciation in value above the fair market value on the date of exercise treated as a capital gain when the stock is ultimately sold. In non-u.s. locations, tax implications may vary. Before you can exercise your Stock Options, you must wait until the stock options become both vested and exercisable, in accordance with the terms and conditions of each particular grant. This waiting period is sometimes called the vesting period. Once the vesting period has passed, you may exercise your Stock Options at any time until they expire, subject to the terms of the award. Incentive Stock Options (ISOs) also give you the right to purchase Company stock at a specific price over a stated option term. Generally, an ISO entitles you to favorable tax treatment if the acquired shares are held for at least one year from the date of exercise and two years from the grant date. If you adhere to the required holding period, the difference between the sale price and grant price will be taxed at a capital gains rate. However, if you choose to sell all or a portion of the shares before the expiration of the applicable holding periods, you may recognize ordinary income and will be taxed accordingly. Exercise of an ISO may result in an alternative minimum tax (AMT) adjustment. (Consult your tax advisor about your individual tax situation, as neither Merrill Lynch nor ConocoPhillips provides tax advice.) 2

5 Award Types In Brief (continued) Exercise Methods Once you are ready to exercise your Stock Options, you must choose an exercise method. The method you choose will depend on how you wish to fund the purchase of your shares and whether you wish to receive cash or shares as a result of your exercise transaction. Cash Purchase Exercise You acquire all shares from your exercise request. You pay exercise costs, including option cost reimbursement and taxes, and all of the purchased shares are credited to your Limited Individual Investor Account (LIIA). You fund your Cash Purchase exercise by sending a check or wiring funds to Merrill Lynch or having sufficient funds in your LIIA account prior to placing your exercise order. Cashless Exercise You may also exercise your options without any initial cash outlay. There are two methods of Cashless exercise: Cashless Hold Merrill Lynch sells enough shares to cover all exercise costs, including option cost reimbursement, taxes and fees. The remaining shares are held in your LIIA. Cashless Sell Merrill Lynch sells all the shares of stock issued with your exercise, covering all exercise costs, including option cost reimbursement, taxes and fees, and sends you a check, wires the net proceeds to your bank account, or credits the net proceeds to your LIIA. A Market Order lets you sell shares of stock issued upon exercise at the first available sale price as soon as market conditions allow. A Limit Order lets you set the price at which you want your options exercised. If the stock reaches or exceeds the price you set while the order is in effect, your exercise or sale is completed subject to market conditions. If the price is not met, your order will be cancelled and your options will remain available for future exercise. A Day Limit Order remains in effect for the current trading day only. A Good till Cancelled Limit Order remains in effect for 30 calendar days following the date of entry. If your order is entered after market hours, but prior to 12 midnight (ET), the 30-day count begins on the second business day after the order is entered. You may receive partial execution of the sale order you place, resulting in only a portion of your stock options being exercised. Once your exercise has been entered, you should check the exercise confirmation on Benefits OnLine to determine the number of stock options exercised. You may need to re-enter the order for the balance of the options not exercised. Market and Limit Orders. Prior to entering a Cashless exercise request, you must decide if you wish to place a Market Order or a Limit Order. Merrill Lynch will execute all sale orders subject to market conditions. Sale orders entered in connection with a Stock Option exercise that cannot be filled in their entirety will receive partial execution. Please be sure to review your exercise confirmation to determine if your order has been executed in its entirety. 3

6 Award Types In Brief (continued) Stock Swap Exercise With a Stock Swap exercise transaction, you pay your exercise costs (option cost reimbursement and taxes) using shares of Company stock that you have owned for at least six months. You attest that you own the shares you are swapping or tendering, and you keep the certificates or other ownership documents with respect to the transaction. The number of shares with a value equal to the net gain of your exercise is credited by ConocoPhillips to your LIIA. Keep in mind that only full shares (not fractional shares) can be purchased with a Stock Swap exercise. To exercise your Stock Options using this method, you will need to call a Participant Service Representative at (877) or, from outside the U.S. Puerto Rico, or Canada, (609) To learn more about when you can exercise vested Stock Options, refer to your grant award package, log on to Benefits OnLine, or contact Merrill Lynch. Stock Appreciation Rights (SARs) SARs tie your benefit to the performance of the Company s stock, but may not provide the full rights associated with shareholder status. The gain from a SAR is based only on the increase in value per share between the grant date of the award and the date of exercise. The gain from a SAR will be paid in cash. In the U.S., the gain from a SAR is taxed as ordinary income and is subject to withholding on the date of exercise. In non-u.s. locations, tax implications may vary. 1 Before you can exercise SARs, you must wait until the SARs become both vested and exercisable, in accordance with the terms and conditions of each particular grant. This waiting period is sometimes called the vesting period. Once the vesting period has passed, you may exercise them at any time until the SARs expire, subject to the terms of the award. To learn more about when you can exercise vested SARs, refer to your grant award package, log on to Benefits OnLine, or contact Merrill Lynch. Restricted Stock A Restricted Stock award is a grant of actual shares of Company stock recorded under your name in the ConocoPhillips shareholder records. A Restricted Stock grant is subject to certain restrictions and vesting requirements. As a Restricted Stock recipient, you are entitled to vote your restricted shares and receive dividends when declared by the Company for payment to shareholders. During the vesting period, Restricted Stock may not be sold, pledged, transferred or assigned, and the shares can be forfeited back to the Company if the conditions for vesting are not met. When the conditions have been met, the restrictions on transfer will usually lapse, and you will own unrestricted shares of Company stock that you may sell or transfer. 1 Consult your tax advisor about your individual tax implications. Neither Merrill Lynch nor ConocoPhillips provides tax advice. 4

7 Award Types In Brief (continued) Restricted Stock (continued) Merrill Lynch will notify you prior to restrictions lapsing, informing you of the upcoming event and any actions that may be required on your part. Once the restrictions have lapsed, a transaction confirmation will be mailed to your attention. It is important to retain this confirmation. When you are granted Restricted Stock, you are not usually taxed immediately; however, certain payroll taxes may be due. Any dividends paid prior to vesting are taxed at the time of payment as additional compensation income. When the restrictions lapse and the Restricted Stock vests, you will have compensation income equal to the fair market value of the stock at the time of vesting. 1 To learn more about your Restricted Stock award, refer to your grant award package, log on to Benefits OnLine, or contact Merrill Lynch. Restricted Stock Units/ Performance Share Units A Restricted Stock Unit/Performance Share Unit award is an unsecured promise to deliver shares of Company stock subject to certain terms and conditions. A Restricted Stock Unit grant is subject to certain restrictions and vesting requirements. Restricted Stock Units are not actual shares of stock and, therefore, do not carry voting rights. Some Restricted Stock Units may make dividend equivalent payments when dividends are paid upon the stock of the Company, although this depends on the terms of the particular award. Under the ConocoPhillips Performance Share Program, a particular type of restricted stock unit, called a Performance Share Unit, is granted. This discussion of Restricted Stock Units also applies to Performance Share Units. Any dividend equivalents paid prior to vesting generally are taxed at the time of payment as additional compensation income. Restricted Stock Units are subject to forfeiture if the conditions for vesting are not met. In addition, Restricted Stock Units may not be sold, pledged, transferred or assigned during the vesting period. Merrill Lynch will notify you prior to your restrictions lapsing, informing you of the upcoming event and any actions that may be required on your part. Once the restrictions have lapsed, a transaction confirmation will be mailed to your attention. It is important to retain this confirmation. When you are granted Restricted Stock Units, you are not taxed immediately; however, certain payroll taxes may be due. Generally, when the restrictions lapse and the Restricted Stock Units vest, you will have additional compensation income equal to the fair market value of the stock at the time of vesting. 1 Upon receipt of the final distribution, you own the shares of ConocoPhillips stock freely with no restrictions on sales or transfer of ownership. To learn more about your Restricted Stock Unit award, refer to your grant award package, log on to Benefits OnLine, or contact Merrill Lynch. 1 Consult your tax advisor about your individual tax implications. Neither Merrill Lynch nor ConocoPhillips provides tax advice. 5

8 Accessing Your Information Online To access your information online, visit Benefits OnLine International ml.com Enter your User ID and Password The first time you access the site Follow the Create User ID link to create a User ID and Password. You will need your personal identification number (PIN), which will be mailed to you shortly under separate cover, and your U.S. Social Security number or internal verification number if you do not have a U.S. Social Security number. On subsequent visits Use the User ID and Password you created. Secure Login User ID Remember me Password (Case Sensitive) Login Create User ID Reset your Password Forgot your Password The information you are accessing is personal and confidential. We suggest you log out when you finish viewing your data. Need help logging in? View Demo Help Bank of America and Merrill Lynch are joining forces. 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Add Benefits OnLine to your Favorites Click Here View Current Issue >> About Merrill Lynch The Advantages of Dollar Cost Averaging Multi-Lingual Capabilities You can also access your account Secure Login information in several languages other User ID than English. Remember me To get started, select the Benefits OnLine Password (Case Sensitive) International link at the top of the Welcome Page and follow the prompts. Login Lost PIN/Getting Your PIN Create User ID Reset your Password Forgot your Password The information you are accessing Privacy Statement Terms & Conditions Enter your Company s trading symbol below, or simply click Go to login. To access the interactive Voice Response System, you will need to use your Social Security/Account Number and your six to twelve character Password. If you need to bookmark this page, please make sure to save the generic address, Numbers appearing in the address should not be saved. Merrill Lynch, Pierce, Fenner & Smith Incorporated is a registered broker-dealer and a wholly-owned subsidiary of Bank of America Corporation. Trading Symbol: COP Go Securities Products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value. 6 Merrill Lynch is one of the world s largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of investing, asset management and other financial products and services. As your plan provider, we can help you achieve financial success by Benefits Benefits OnLine International ml.com ml.com providing advice and guidance with investment solutions for all stages of your life. 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9 The Home Page Once you log on to Benefits OnLine, the Home Page will appear. Here you will find two ways to get to the information you need. A series of tabs across the top provides access to much of the information you ll need. Under the Equity Plans tab, you can quickly link to program information, grant information, your personal profile, exercise and modeling tools, brokerage account details, and research. A Quick Links feature at the top right lets you establish quick links to the pages you visit most often. Logout Help Sitemap Home Advice & Planning Markets My Accounts Equity Plans My Home Message Center Investment Holdings Sitemap Account Preferences ConocoPhillips Portfolio Asset Allocation Download to Quicken ConocoPhillips Equity Program* $27, LIIA $0.00 Total Market Value: Resource Center $27, Are you financially prepared? Financial preparedness has benefits at every stage of your life. Discover six things you can do to get-and keep-your financial house in order. Borrowing trouble... Let s consider the long-term consequences of borrowing against your 401(k) balance or taking a hardship withdrawal-the cost may surprise you. Exit Strategies If you re leaving your employer for a new job or for retirement, here s what you need to know before you make a decision about your retirement savings. It's not only what you're saving for... it's when There are many factors to consider when deciding how to invest for the future. Your future income needs, your comfort with investment risk, and the assets you have available to invest are all important considerations. Get Quote: Enter Symbol Select Quick Links (Edit) Message Center Alerts Announcements Important Notice on... More On the Home Page Under the Message Center, you may find special information related to your equity awards. Under Alerts, you ll see time-sensitive information about actions you may need to take, such as opening a brokerage account or acting on expiring grants. Under My Accounts, you ll see the total market value of your ConocoPhillips awards. If you have already opened your Merrill Lynch brokerage account, you ll also see that balance in this section. *Values for equity awards represent potential value based on closing price from the previous business day. Total market value may include potential income of unvested awards. Related Links Statements Merrill Lynch OnLine Merrill Lynch Direct Privacy Statement Terms & Conditions Call Us Glossary FAQs Merrill Lynch, Pierce, Fenner & Smith Incorporated is a registered broker-dealer and a wholly-owned subsidiary of Bank of America Corporation. Securities Products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value. Merrill Lynch makes available investment products and services sponsored, managed, provided or distributed by companies that are affiliates of or in which Bank of America Corporation has an economic interest, including Columbia Management, BlackRock, and Nuveen Investments. Copyright 2009 Merrill Lynch, Pierce, Fenner & Smith Incorporated All rights reserved. Member, Securities Investor Protection Corporation (SIPC). 7

10 Opening Your Merrill Lynch Brokerage Account Before you can conduct transactions in any of your ConocoPhillips equity-based awards, you need to open a Merrill Lynch Wealth Management Limited Individual Investor Account (LIIA). The LIIA is a self-directed, noninterest bearing brokerage account primarily used to: Exercise Stock Options, Settle lapsing Restricted Stock and Restricted Stock Units, and Hold and sell ConocoPhillips stock. This is a separate account from any other Merrill Lynch brokerage account you may have. There are five easy steps involved in opening your LIIA online. Just complete the information in each step, and then submit your application. Keep in mind that it can take up to 72 hours to open a LIIA. Logout Help Sitemap Home Advice & Planning Markets Equity Plans Grant Information Individual/Plan Information Model/Exercise Sell Stock Brokerage ConocoPhillips Equity Plans > Individual/Plan Information > Open an Account Open an Account Merrill Lynch offers a choice of accounts to meet the needs of equity award recipients. Available account types include: (Your choices may be limited if you are an officer of your company. For additional information or assistance with establishing a Merrill Lynch brokerage account visit the Merrill Lynch Contact Center for contact information.) Limited Individual Investor Account a self-directed limited brokerage account. Merrill Lynch offers a Limited Individual Investor Account, a limited brokerage account for you to maintain or sell company stock resulting from an equity award transaction (option exercise, restricted stock settlement) and process any subsequent sales of company stock. A limited brokerage account offers you a streamlined account opening process with quick, easy-to-follow instructions to get you started. Get Quote: Enter Symbol Select Quick Links (Edit) To Open Your Brokerage Account Select Equity Plans, then Individual/ Plan Information and choose Open an Account. Then, click on the Open Limited Individual Investor Account button. The site will guide you through the brokerage account opening process. If you would like additional information about establishing a self-directed Limited Individual Investor Account, call Merrill Lynch at (877) (in the U.S., Canada and Puerto Rico) or (609) (outside the U.S., Canada and Puerto Rico). Please select the Equity Program recordkeeping account you wish to link to and then click Open Limited Individual Investor Account. COP Open Limited Individual Investor Account Already Have a Merrill Lynch Brokerage Account? You ll still need to establish a LIIA for your ConocoPhillips Equity Program awards. This account must be in your name only. You can, however, link all of your other Merrill Lynch accounts with your LIIA so that you can manage them all together by calling (800) and following the prompts. Please have your account numbers available. 8

11 Viewing Your Grant Information Information about your grants can be found in the Grant Information section of the site. To access this section, click Equity Plans from the Home Page, then Grant Information. Logout Help Sitemap Grant Information When you access the Grant Information section you will see the total value of your unvested and vested awards. These values are calculated using the previous trading day s closing price for ConocoPhillips stock. Helpful Hint By clicking on any magnifying glass symbol you can access more detail about the item adjacent to that symbol. Home Advice & Planning Markets Equity 401(k) Plans Grant Information Individual/Plan Information Model/Exercise Sell Stock Brokerage ConocoPhillips Equity Plans > Grant Information > Balances Balances for Participant, Joe Equity Plan Accounts Plan Name ConocoPhillips Equity Award Program Total Brokerage Accounts Account Number Account Registration Unvested/ Account Unexercisable Type Value SOP $24,406 Cash Balance $24,406 Money Accounts Account Selection Vested Value $11,835 $11,835 Priced Investments COP LIIA $0 $0 $999 Total All Accounts Potential Income Achieved (Unpaid Value) $2,883 $2,883 Market Balance Total Market Value $39,124 $39,124 Total Program Value $0 $999 $0 $0 $999 $0 $999 Get Quote: Enter Symbol Select Quick Links (Edit) Total Brokerage and Vested Equity Plan Value $12,834 Total All $12,834 Employees Subject to Pre-Clearance If you are a control person, insider or any employee who is subject to a pre-clearance policy (e.g., officer or director), you must contact appropriate Legal or Executive Compensation personnel before conducting transactions. The Merrill Lynch Global Corporate and Institutional Advisory Services group, designated to serve the specific needs of control persons, insiders and pre-clearance individuals, will work with you and the Company s Executive Compensation and Legal Departments to assist you. You will have full inquiry access to Benefits OnLine but will need to contact either Executive Compensation or Merrill Lynch at (877) STK-PLAN or (877) to open your Merrill Lynch brokerage account or to facilitate exercises or other market transactions. 9

12 Modeling and Exercising One of the Web site s most useful tools is the ability to model your exercise prior to conducting transactions related to your equity awards. To get started, click Equity Plans from the Home Page, then Model/Exercise. If you have not yet opened a Limited Individual Investor Account (brokerage account), this tab will read Model only. Logout Help Sitemap Get Quote: Enter Symbol Sitemap Edit ord k Look up Home Advice & Planning Markets Equity Plans Grant Information Individual/Plan Information Model/Exercise Sell Stock Brokerage Home Advice & Planning Markets Equity Plans ConocoPhillipsGrant Information Individual/Plan Information Model/Exercise Brokerage Equity Plans > Model/Exercise Equity Plans Model/Exercise Model/Exercise For For Joe Participant Select a Transaction Type to Model: Cashless Sell Sell Select Grants to to Display: All All Vested Grants Select Vested Grant(s) and Quantity to Model: Select Grants Grant to to Model Type/ Expiration / Unvested/ Potential Options Select Grant Grant Grant Last Date Options Options Unexercisable Vested Income to to All Date Price Code to Exercise Granted Exercised*** Quantity Quantity (Vested) Model 01/10/ /10/2012 1, ,500 $11,835 $2.74 NQ /23/ /06/ /23/ /06/2015 1, ,500 1,248 $0 $0 $5.00 $14.51 NQ To Model and Exercise Select Select Quick Links the (Edit) transaction type (e.g., Cashless Sell) and then select the awards you want to transact (e.g., All Vested Grants). Select the specific awards you wish to model, then adjust the modeling criteria. ***Includes options cancelled and expired. Enter Modeling Criteria Last Price:**$10.63 **Price information is as of 4:00:00 PM and is is a real time quote for information purposes only. The accuracy of of this Enter Estimated Market Price To Model data is not warranted. Refresh Withhold Shares for Taxes for NQ grants only View your complete Tax Profile Start Over Calculate Results Modeling Results Grant Grant Date Date Grant Price Price Grant Type/ Grant Code Options Modeled Stock Sale - Option Proceeds Cost - Taxes - Fees Fees -- Commissions Select Select Grant Grant = Net Net to to Proceeds Proceeds Exercise Exercise 05/23/ /23/2008 $5.00 $5.00 NQ NQ $10, $10, $4, $4, $1, $1, $0.06 $0.06 $29.95 $29.95 $3, $3, Totals 994 $10, $4, $1, $0.06 $29.95 $3, Totals 994 $10, $4, $1, $0.06 $29.95 $3, NOTE: These figures are estimates only for grant exercise modeling purposes. Actual results may vary. Each exercise must be entered as a NOTE: These figures are estimates only for grant exercise modeling purposes. Actual results may vary. Each exercise must be entered as a separate order and commission will be charged on each exercise for related stock sales. separate order and a commission will be charged on each exercise for related stock sales. Continue Continue To To Exercise Exercise Select Calculate Results to view the results of your model. To enter different modeling criteria, simply click Start Over. If you select Continue to Exercise, the screens that follow will direct you through the order and distribution process. Proceeds Proceeds Costs to Exercise Costs to Exercise Stock Sale Proceeds Stock Sale Proceeds $10, $10, Option Cost Option Cost $4, $4, Less Total Cost to Exercise Less Total Cost to Exercise $6, $6, Taxes Taxes $1, $1, Less Fees Commissions Less Fees & Commissions $30.01 $30.01 Total Cost to Exercise Total Cost to Exercise $6, $6, Net Proceeds Net Proceeds $3, $3, Approximate Shares Sold to Cover Costs Approximate Shares Sold to Cover Costs Commissions & Fees Commissions & Fees $33, $33, Fees Fees $0.06 $0.06 Commissions Commissions $29.95 $29.95 NOTE: These figures are estimates only for grant exercise modeling purposes. Actual results may vary. Each exercise must be entered as a separate NOTE: order and These a commission figures are will estimates be charged only on for each grant exercise for modeling related purposes. stock sales. Actual results may vary. Each exercise must be entered as a separate order and a commission will be charged on each exercise for related stock sales. If this information is correct, please enter your Password and click Submit to complete this transaction. If this information is correct, please enter your Password and click Submit to complete this transaction. Password Password Go back to the Exercise Modeling screen Submit Go back to the Exercise Modeling screen Submit You will receive an order number verifying that Merrill Lynch has received your order. You will receive an order number verifying that Merrill Lynch has received your order. Before you exercise, you will see a summary of your transaction. As an added security measure, you will be asked to re-enter your Password. Click Submit within 90 seconds or your request will time out. Once your transaction is completed, you will receive a confirmation of your transaction. 10

13 Selling Stock Online Through Benefits OnLine you can also sell any of your ConocoPhillips shares held in your Merrill Lynch brokerage account. To get started, click Equity Plans from the Home Page, then Sell Stock. Logout Help Sitemap Get Quote: Enter Symbol Home Advice & Planning Markets ConocoPhillips Equity Plans > Sell Stock Sell Stock ConocoPhillips - Price $10.00 Price information is as of 1:47:10 PM Security Description Equity Plans Grant Information Individual/Plan Information Model/Exercise Sell Stock Brokerage Security Symbol Share Amount Share Value Selling Your Stock Select On Quick the Links initial (Edit) Sell Stock screen you will see the number of Company shares in your account. To proceed, click on the magnifying glass, which will bring you to the next Sell Stock screen. Logout Help Sitemap ÇonocoPhillips COP 277 $2,770 Get Quote: Enter Symbol Total 277 $2,770 Home Advice & Planning Markets Equity Plans Note: Fractional shares will be sold on the 3rd Thursday of every month within the Merrill Lynch My Home Message Center Investment Holdings Sitemap tractional share purge process. Account Preferences ABC Company Select Quick Links (Edit) Sell Stock Shares Available to Sell: 277 Symbol: Quantity: Enter your Stock Sale Order Information Order fees: Market Time Day COP 150 Limit Limit Price 12 (Last Price $10.00)* *Price Information is as of 1:48:20PM Select your Net Proceeds Distribution Method. GTC (Good till Cancelled) The section allows you to choose how you would like to receive the net cash from your transaction and the currency that you would like to receive the proceeds in. Check Wire Transfer Please Select Wire Instructions to use Enter the number of shares you want to sell. Select your Order Type: Market or Limit Order. If you select Limit, you will also need to enter a Limit Price and choose either a Day Order or a GTC (Good till Cancelled) Order. Choose how you would like to receive proceeds. To proceed with your order, select Proceed With Sale. Proceeds to remain in brokerage account (US Dollars only) Currency USD, US Dollar Transfer Proceeds to an alternate Merrill Lynch account. Enter Alternate Account Number In some circumstances orders entered near the market close may not reach the market in time for execution. Go back Proceed With Sale 11

14 Account Statements Merrill Lynch keeps you informed about all your ConocoPhillips equity awards, your brokerage account holdings and all your transactions. You will receive annual recordkeeping statements covering the status of your awards. If you have any brokerage activity, brokerage statements with information about your transactions and cash or securities held in your account will be sent to you on a monthly basis. If you have no activity in your brokerage account, you will receive a quarterly statement. You will also receive trade confirmations when you exercise your awards or conduct other transactions. Logout Help Sitemap Home Advice & Planning Markets Equity Plans Grant Information Individual/Plan Information Model/Exercise Sell Stock Brokerage ConocoPhillips Equity Plans > Grant Information > Transaction Statements Statements Please select the statement criteria and click Continue to view your statement. Statement Criteria Last 12 Months Prior Calendar Year Custom Month From: October To: Day Year December Account History Get Quote: Enter Symbol For your convenience, a record of your statements and confirmations is available online. To access your statements, select Equity Plans from the Home Page, then Grant Information, then Statements. Select Quick Links (Edit) You can then choose to view your statements for: The past 12 months The prior calendar year A period of your choosing Reset Continue 12

15 Your Participant/Tax Profile My Information Under the Individual/Plan Information tab you will find My Information. This is where you can confirm your personal profile, including demographic information, your ID number, account number and other information. If you need to update any of this information, contact HR Connections at (877) or ETN (if you are calling from an ETN-equipped office location). Plan Information Home Advice & Planning Markets ConocoPhillips Equity Plans > Individual/Plan Information > Communications Center Communications Center Equity Plans Grant Information Individual/Plan Information Model/Exercise Sell Stock Brokerage Select forms and communications are available in Format for download and printing. If you do not have Adobe Reader, download Here. Forms W8-BEN Revised July 2007 Individual Investor Acct Code 1960 Rev. W9 Limited Individual Investor Acct - US Limited Individual Investor Acct non - US Plan Documents ConocoPhillips - LTIP amended & restated ConocoPhillips - Stock Plan Plan Brochures 2008 Federal Income Tax Guide for Equity Stock Sale Tutorial Cashless Sell Exercise Tutorial Date Added 07/24/ /23/ /29/ /11/ /11/2008 Date Added 07/07/ /07/2008 Date Added 01/17/ /14/ /14/2008 Home Advice & Planning Markets ConocoPhillips Equity Plans > Individual/Plan Information > Participant/Tax Profile Name Address Participant/Tax Profile Joe Participant 123 Any Street Any City, Any State Participant ID: Officer: Social Security #: Status Code: Brokerage Account #: Date of Birth: Phone #: Fax #: W-9 on File: Tax Jurisdiction: XXXXX0049 No XXXXX0049 Active COP (609) Equity Plans Grant Information Individual/Plan Information Model/Exercise Sell Stock Brokerage Logout Help Sitemap Get Quote: Enter Symbol Communications Center - Yes Domestic Under Individual/Plan Information you can Select Quick Links (Edit) also access the Communications Center. Here you ll find various forms and documents related to the ConocoPhillips Equity Program, such as tax forms, plan documents and communication brochures. The plan documents, including any prospectus or grant agreement, posted in the Benefits OnLine Communications Center are prepared and made available to you by ConocoPhillips, not Merrill Lynch. Logou Get Quote: En Select Quick L Agreements and Disclosures General Plan Information Terms and Conditions for Benefits OnLine Data Privacy for Non-US Benefits OnLine Users Date Added 02/20/ /20/ /20/

16 Service Fees Commission Rate Merrill Lynch charges ConocoPhillips participants discounted commissions for shares sold simultaneously in connection with a Cashless exercise. There is no fee associated with a Cash Purchase or Stock Swap exercise. Merrill Lynch will assess the following commission fees in connection with Cashless exercises of ConocoPhillips stock options. Merrill Lynch will also assess the following commission fees in connection with subsequent sales of ConocoPhillips stock. Cashless Exercises Transacted via Benefits OnLine: Commission rate of $0.03 per share. Cashless Exercises Transacted via a Participant Service Representative or the Global Corporate and Institutional Advisory Services group: Number of Shares Transacted Commission Rate Postage & Handling 1 to 24,999 $0.05 per share $ ,000 to 49,999 $0.04 per share $ ,000 and up $0.03 per share $5.35 Note: A single per share fee for each transaction will be charged based on the total number of shares transacted. For example, if you exercise 30,000 shares in one transaction, the commission rate will be $0.04 per share on all shares in the transaction. Participants exercising large blocks of shares (e.g., 10,000 or more) may benefit by consulting a Merrill Lynch representative prior to executing the transaction. Large blocks of shares executed through Merrill Lynch s Special Equities Trading group may result in a more favorable execution price when compared to the online system. 14

17 Service Fees (continued) Other Fees 2 Service Wire Transfer Non-U.S. Dollar Check Stock Certificate/ DRS Registration Requests SEC Transaction Fee Brokerage Account Transfer Duplicate Statements and Confirmations Account Limited Individual Investor Account (LIIA Cost $7.50 (if requested through the AwardChoice system, which may be accessed through Benefits OnLine, or by contacting a Participant Service Representative or Merrill Lynch Financial Advisor). Wires may not be available in all currencies. Requests made outside of these service channels are subject to retail brokerage wire transfer fees. $15.00 (if requested through the AwardChoice system, which may be accessed through Benefits OnLine, a Participant Service Representative or a Merrill Lynch Financial Advisor). Checks may not be available in all currencies. Requests made outside of these channels are subject to retail brokerage check fees. Please contact a Participant Service Representative for fees associated with these requests. Fees vary depending on your company s participation in the Direct Registration System (DRS) at the Depository Trust Company. Fee assessed and paid to the Securities and Exchange Commission (SEC) on each stock sale. As of April 1, 2010, the fee is $ for each $1, or fraction thereof. This fee is subject to change by the SEC. As an active participant in the ConocoPhillips Equity Program, there is no fee to transfer assets to another broker. $5.00 for each additional hard copy requested from Merrill Lynch, excluding two most recent statements/confirmations. Duplicate statements and confirmations are available online at no cost to you. Cost As an active participant in the ConocoPhillips Equity Program, you are not charged an account fee to maintain company stock holdings. Active participants include anyone with grants and options outstanding or eligible to receive future grants. If you are no longer an active participant and you maintain a balance (cash or securities), you are subject to an annual account fee of $65 (and a low balance fee of $15 per quarter if the balance of the account is below $20,000). Speak with a Participant Service Representative for more information. Commissions and account fees for transactions and services unrelated to ConocoPhillips equity awards are subject to standard Merrill Lynch rates. Please speak with a Merrill Lynch representative for more information. 2 You will be subject to the applicable fees, terms and conditions associated with the retail brokerage account established in connection with your equity award program. All brokerage account fees are subject to change upon notification to you. 15

18 Glossary Award Commission Control Person Exercise Exercise Date Exercise Period Expiration Date Fair Market Value (FMV) Grant Date Grant Price Grant Terms Incentive Stock Options (ISOs) Market Price Option Spread The issuance of a grant under one of ConocoPhillips equity compensation programs. Fee due Merrill Lynch for the sale or purchase of shares or other securities through your Merrill Lynch brokerage account. Any individual who, directly or indirectly, controls the management and activities of a publicly held company. Use of an option to purchase shares of stock at the grant price directly from the issuer. Also, use of a Stock Appreciation Right to receive the value from an increase in the share price from the grant date. Date your exercise request is processed. The time between your vesting and expiration dates, during which you may exercise your Stock Options or Stock Appreciation Rights. Date after which your options and Stock Appreciation Rights may no longer be exercised under the terms of ConocoPhillips plans and of each particular award. Price ConocoPhillips uses to value your stock on the day you exercise. Date on which an award is approved. Price per share that you pay to purchase stock under the terms of your grant. The terms of your grant as detailed by ConocoPhillips. Grant terms may include the type of award, life of the award, vesting criteria, restrictions on transferability and effects of change in employment status. An Incentive Stock Option (ISO) gives you the right to purchase ConocoPhillips stock at a specific price over a stated option term. Generally, an ISO entitles you to favorable tax treatment if the acquired shares are held for at least one year from the date of exercise and two years from the grant date. Current trading price of ConocoPhillips stock. Difference between the grant price and ConocoPhillips designated Fair Market Value. 16

19 Glossary Performance Share Units Performance Share Units (PSUs) represent an award that is based on the (PSUs) attainment of ConocoPhillips pre-defined performance goals over a given performance period. PSUs are subject to forfeiture if the conditions for achievement or vesting are not met. In addition, PSUs may not be sold, pledged, transferred or assigned during the vesting period. PSUs are a form of Restricted Stock Units. Restricted Stock Restricted Stock Units (RSUs) Shareholder Stock Appreciation Rights (SARs) Stock Option Vested Options Vesting Vesting Period A Restricted Stock award is a grant of actual shares of ConocoPhillips stock recorded under your name in ConocoPhillips shareholder records. As a recipient of such an award, you are entitled to vote your restricted shares and receive dividends when declared by the Company for payment to shareholders. During the vesting period, Restricted Stock may not be sold, pledged, transferred or assigned, and the shares can be forfeited back to ConocoPhillips if the conditions for vesting are not met. A Restricted Stock Unit (RSU) award is an unsecured promise to receive a future delivery of shares subject to certain terms and conditions. RSUs are not actual shares of stock and, therefore, do not carry voting rights. Depending on the terms of the award, RSUs may or may not include rights for payment of dividend equivalents. In addition, RSUs may not be sold, pledged, transferred or assigned during the vesting period. Owner of record of ConocoPhillips equity securities entitled to dividends and voting rights. Stock Appreciation Rights (SARs) tie your benefit to the performance of ConocoPhillips stock, but may not provide the full rights associated with shareholder status. The gain from a SAR is based only on the increase in value per share between the grant date of the award and the date of exercise. Right to purchase a specific number of shares at a set price for a defined period of time. Options available to you for exercise, subject to the terms of the award and the applicable ConocoPhillips plan. The right to ownership of an award, subject to the terms of the award and of the applicable ConocoPhillips plan. For Stock Options and Stock Appreciation Rights, the waiting period before an option grant is available or may be exercised, subject to the terms of the award and the applicable ConocoPhillips plan. For Performance Share Units, Restricted Stock Units and Restricted Stock, the period during which restrictions on transferability apply. 17

20 This booklet contains summaries of the plans and programs as they exist at the time of final editing of the book, March While every effort has been made to assure the accuracy of the book, if there is any conflict between the information in the book and the official documents governing the plans and programs, the official documents will control. Nothing in the book is intended to create or affect an employment relationship between ConocoPhillips, or its subsidiaries and affiliates, and any person. The sponsors of the plans and programs have reserved the right to amend or terminate any plan or program at any time, at the sole discretion of each, in accordance with the terms of the plan or program. Neither ConocoPhillips nor Merrill Lynch and its representatives provide tax, accounting or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state or local tax penalties. Please consult your own independent advisor as to any tax, accounting or legal statements made herein. Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), a registered broker-dealer and Member SIPC. Unless otherwise noted, all trademarks and registered trademarks are the property of Merrill Lynch & Co., Inc