January 2013

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FREQENTLY ASKED QUESTIONS

Q.What does it mean to “lapse restrictions”?

A.A lapsing refers to removing the restrictions on your RSU award and delivering unrestricted shares of COP stock into your brokerage account at Merrill Lynch that you can now hold or sell.

Q.Why does my award no longer appear in HR Express after the restrictions are removed?

A.HR Express only reflects awards that remain restricted under the Company’s equity programs.

Q.The terms and conditions of my RSU award shows a grant price of $70 and the stock is now trading at $60. Does this mean it has no value?

A.No. The grant date price determined the number of RSUs awarded. The grant date price does not impact the future value nor does it function asa strike price or exercise price that you would see in a stock option. The value of your RSU award at any given point in time is the current value of COP stock times the number of units awarded. Once the restrictions are removed and the unrestricted shares are delivered into your brokerage account, the value continues to fluctuate with the COP stock price until you sell the stock.

Q.What happens to my RSUs if I leave the company prior to the lapsing schedule?

A.The treatment of your RSUs upon termination depends on the grant, reason for leaving and timing of termination (see Summary of Termination Rules in the Key Employee Award Terms and Conditions).

Q. At what rate will taxes be withheld?

A.The company will withhold only the shares of stock needed to satisfy the minimum required tax withholding required by applicable laws and regulations. The withholding tax obligation includes, but is not limited to, federal, state, and local taxes or applicable non-U.S. taxes.

Q.Will capital gains rates apply to future gains/losses on any shares sold through Merrill Lynch?

A. In general, capital gains rates will apply. In the U.S., your holding period for the stock starts on the date the restrictions lapse for each increment, not on the date the RSUs were granted. The cost basis is the fair market value (FMV) on the lapsing date as noted on the confirmation statement you will receive via mail from Merrill Lynch. Consult your tax advisor.

Q.Will the sale of future shares sold through Merrill Lynch be subject to commissions?

A. Yes, a single per share fee for each transaction will be charged based on the total number of shares transacted. For additional information on commission rates, please refer to “Managing Your ConocoPhillips Equity Award Program Account Online” documentation online at under “Individual/Plan Information” on the CommunicationsCenter tab.

Q.I am 55 years old and have already been notified and have paid FICA taxes on my RSU grant. Will the tax be withheld again when the restrictions lapse?

A.No, taxes that have already been paid will not be withheld on the lapsing date. Current IRS regulations require FICA taxes be paid on the value of all restricted stock units when a U.S. participant no longer has a substantial risk of forfeiture which includes reaching age 55 with 5 years of service under certain RSU programs. In these cases, the company will pay the taxes on behalf of the employee and recover such payment by payroll deductions over the next six months.

Q.My salary grade level is 19, 20 or 21. Can I defer the income associated with the lapsing of my restricted stock units?

A.No, you cannot defer the income associated with the lapsing of the restricted stock units. Although, as a matter of policy, we cannot offer tax advice, in future years, you may want to consider deferral of salary or VCIP equal to the estimated taxable income from the RSUs. Consult your tax advisor.

Neither Merrill Lynch nor ConocoPhillips 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 U.S or International local tax penalties. Please consult your own independent advisor as to any tax, accounting or legal statements made herein regarding the tax liability arising from an RSU award grant and delivery.

The material in this letter is intended to be accurate, but if there is any discrepancy between this material and the official Terms and Conditions of the award, the official Terms and Conditions will apply.