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Exhibit 10.2
 
FORM OF RESTRICTED STOCK UNIT AGREEMENT
 
AGREEMENT by and between KBR, Inc., a Delaware corporation (the “Company”) and
___________ (“Employee”) made effective as of the date of the delivery of shares
for the closing of the initial public offering of the Company (the “Grant
Date”).
 
 
1.
Grant of Restricted Stock Units.

 
(a)           Units.  Pursuant to the KBR, Inc. 2006 Stock and Incentive Plan
(the “Plan”) units evidencing the right to receive __________ shares of the
Company’s common stock (“Stock”), are awarded to Employee, subject to the
conditions of the Plan and this Agreement (the “Restricted Stock Units”).
 
(b)           Plan Incorporated.  Employee acknowledges receipt of a copy of the
Plan, and agrees that this award of Restricted Stock Units shall be subject to
all of the terms and conditions set forth in the Plan, including future
amendments thereto, if any, pursuant to the terms thereof, which Plan is
incorporated herein by reference as a part of this Agreement.  Except as defined
herein, capitalized terms shall have the same meanings ascribed to them under
the Plan.
 
2.           Terms of Restricted Stock Units.  Employee hereby accepts the
Restricted Stock Units and agrees with respect thereto as follows:
 
(a)           Forfeiture of Restricted Stock Units.  In the event of termination
of Employee’s employment with the Company or any employing Subsidiary of the
Company for any reason other than (i) normal retirement on or after age
sixty-five, (ii) death or (iii) disability (disability being defined as being
physically or mentally incapable of performing either the Employee’s usual
duties as an Employee or any other duties as an Employee that the Company
reasonably makes available and such condition is likely to remain continuously
and permanently, as determined by the Company or employing Subsidiary), or
except as otherwise provided in the last two sentences of subparagraph (c) of
this Paragraph 2, Employee shall, for no consideration, forfeit all Restricted
Stock Units to the extent they are not fully vested.
 
(b)           Assignment of Award.  The Restricted Stock Units may not be sold,
assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or disposed of.
 
(c)           Vesting Schedule.  The Restricted Stock Units shall vest in
accordance with the following schedule provided that Employee has been
continuously employed by the Company from the date of this Agreement through the
applicable vesting date.
 
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Vesting Date
 
Vested Percentage of Total Number
of Restricted Stock Units
 
1st Anniversary of Grant Date
    20 %
2nd Anniversary of Grant Date
    40 %
3rd Anniversary of Grant Date
    60 %
4th Anniversary of Grant Date
    80 %
5th Anniversary of Grant Date
    100 %

Notwithstanding the foregoing, the Restricted Stock Units shall become fully
vested on the earlier of (i) the occurrence of a Corporate Change (as such term
is defined in the Plan), or (ii) the date Employee’s employment with the Company
is terminated by reason of death, disability (as determined above) or normal
retirement on or after age sixty-five.  In the event Employee’s employment is
terminated for any other reason, including retirement prior to age sixty-five
with the approval of the Company or employing Subsidiary, the Committee which
administers the Plan (the “Committee”) or its delegate, as appropriate, may, in
the Committee’s or such delegate’s sole discretion, approve the acceleration of
the vesting of any or all Restricted Stock Units still subject to restrictions,
such vesting acceleration to be effective on the date of such approval or
Employee’s termination date, if later.
 
(d)           Shareholder Rights.  Employee shall have no rights to dividends,
dividend equivalents or any other rights of a shareholder with respect to shares
of Stock subject to this Award unless and until such time as the Award has been
settled by the transfer of shares of Stock to Employee.
 
(e)           Settlement and Delivery of Shares.  Payment of vested Restricted
Stock Units shall be made as soon as administratively practicable after vesting,
but in no event later than thirty days after the vesting date.  Settlement will
be made by payment in shares of Stock.  Notwithstanding the foregoing, the
Company shall not be obligated to deliver any shares of Stock if counsel to the
Company determines that such sale or delivery would violate any applicable law
or any rule or regulation of any governmental authority or any rule or
regulation of, or agreement of the Company with, any securities exchange or
association upon which the Stock is listed or quoted.  The Company shall in no
event be obligated to take any affirmative action in order to cause the delivery
of shares of Stock to comply with any such law, rule, regulation or agreement.
 
3.           Withholding of Tax. The Committee may make such provisions as it
may deem appropriate for the withholding of any taxes which it determines is
required in connection with this Award.  Unless the Committee provides
otherwise, the Company shall reduce the number of shares of Stock that would
have otherwise been delivered to Employee by a number of shares of Stock having
a Fair Market Value equal to the amount required to be withheld.
 
4.           Employment Relationship.  For purposes of this Agreement, Employee
shall be considered to be in the employment of the Company as long as Employee
remains an employee of the Company, a Parent Corporation or Subsidiary of the
Company, or a corporation or a Parent Corporation or subsidiary of such
corporation assuming or substituting a new award for this Award.  Any question
as to whether and when there has been a termination of such employment, and the
cause of such termination, shall be determined by the Committee, or its
delegate, as appropriate, and its determination shall be final.
 
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5.           Committee’s Powers.  No provision contained in this Agreement shall
in any way terminate, modify or alter, or be construed or interpreted as
terminating, modifying or altering any of the powers, rights or authority vested
in the Committee or, to the extent delegated, in its delegate pursuant to the
terms of the Plan or resolutions adopted in furtherance of the Plan, including,
without limitation, the right to make certain determinations and elections with
respect to the Restricted Stock Units.
 
6.           Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Employee.
 
7.           Compliance with Law.  Notwithstanding anything to the contrary
herein, the Company shall not be obligated to issue any Stock in connection with
a Restricted Stock Unit, at any time, if the offering or issuance of the Stock,
or if acceptance of the Stock by an Employee, violates or is not in compliance
with any laws, rules or regulations of the United States or any state or
country.
 
8.           Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
 
9.           Section 409A.  Notwithstanding anything in this Agreement to the
contrary, if any provision in this Agreement would result in the imposition of
an applicable tax under Section 409A of the Code and related regulations and
United States Department of the Treasury pronouncements (“Section 409A”), that
provision will be reformed to avoid imposition of the applicable tax and no
action taken to comply with Section 409A shall be deemed to adversely affect
Employee’s rights under this Agreement.
 
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an officer thereunto duly authorized, and Employee has executed this Agreement,
all as of the date first above written.
 
 

 
KBR, INC. 
                   
By:
 
                        
Employee 

 
 
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