Document:

ex10_5.htm

    
      

    

    Exhibit
      10.5

    KBR,
      INC.

    TRANSITIONAL
      STOCK ADJUSTMENT PLAN

    NONSTATUTORY
      STOCK OPTION AWARD

    

    for

    

    ________________________

    (“Employee”)

    

    As
      a result of the consummation of the
      Exchange Offer by Halliburton Company (“Halliburton”) to dispose of its
      remaining interest in KBR, Inc., a Delaware corporation (the “Company”),
      Halliburton and the Company have become independent separate
      companies.  Halliburton and the Company have adopted the KBR,
      INC. TRANSITIONAL STOCK ADJUSTMENT PLAN (the “Plan”) to convert options
      to purchase shares of Halliburton common stock (the “Halliburton Options”)
      issued under the HALLIBURTON COMPANY 1993 STOCK
      AND INCENTIVE PLAN ("Halliburton Plan") into options to purchase shares
      of the Company’s common stock, par value $0.001 per share (“KBR Common Stock”),
      in accordance with the applicable adjustment provisions of the Halliburton
      Plan
      as a result of the separation of Halliburton and the Company.

    

    In
      accordance with the terms of the
      Plan, Employee is entitled to receive option(s) to purchase a number of shares
      of KBR Common Stock, determined by a formula set forth in the Plan, in lieu
      of
      outstanding Halliburton Option(s).  Employee is entitled to option(s)
      to purchase a number of shares of KBR Common Stock under the Plan, as set forth
      on Exhibit A hereto (the “KBR Options”), pursuant to the terms described
      herein.

    

    Capitalized
      terms used and not
      otherwise defined herein will have the meaning given thereto in the
      Plan.

    

    1.  General
      Terms of KBR Options.  Except to the extent otherwise in
      conflict as provided below, the KBR Options shall be subject to all of the
      terms
      and conditions contained in the corresponding original grant(s) of Halliburton
      Options, as evidenced by the agreement(s) granting such Halliburton Options,
      pursuant to the Halliburton Plan.

    

    (a)           Converted
      Shares.  In accordance with the Plan, Employee’s
      Halliburton Options set forth on Exhibit A are converted into KBR Options
      identified on Exhibit A, and at the option price(s) so identified.

    

    (b)           Plan
      Incorporated.  The KBR Options 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.

    

    2.           KBR
      Options.  The KBR Options are subject to the following
      terms:

    

    (a)           Change
      in Control.  For all purposes concerning the KBR Options
      hereunder, the definition for Change in Control shall be the definition in
      the
      Plan.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (b)           KBR
      Option Price.  The purchase price of KBR Common Stock to
      be paid by Employee pursuant to the exercise of the KBR Options shall be the
      applicable share price as indicated on Exhibit A.

    

    (c)           Non-transferability.  The
      KBR Options are not transferable otherwise than by will or the laws of descent
      and distribution or pursuant to a “qualified domestic relations order” as
      defined by the Code and may be exercised during Employee’s lifetime only by
      Employee, Employee’s guardian or legal representative or a transferee under a
      qualified domestic relations order.  Upon any attempt to transfer,
      assign, pledge, hypothecate or otherwise dispose of the KBR Option or of such
      rights contrary to the provisions hereof or in the Plan, or upon the levy of
      any
      attachment or similar process upon the KBR Option or such rights, the KBR Option
      and such rights shall immediately become null and void.  The KBR
      Option may be exercised only while Employee remains an employee of the Company,
      subject to any exceptions, as provided in the original agreement granting such
      Halliburton Option.

    

    3.           Exercise
      of KBR Options.  Subject to the earlier expiration of the
      applicable KBR Option as herein provided, the KBR Options may be exercised,
      by
      providing notice of exercise in the manner specified by the Company from time
      to
      time, but, except as otherwise provided herein, the KBR Option shall not be
      exercisable for more than a percentage of the aggregate number of shares of
      KBR
      Common Stock offered by the KBR Option determined by the number of full years
      from the date of grant of the applicable Halliburton Option to the date of
      such
      exercise, in accordance with the schedule as contained in the agreement granting
      such Halliburton Option.

    

    To
      clarify, each KBR Option will
      continue to vest in accordance with the terms and conditions of the agreement
      granting such corresponding Halliburton Option; provided that Employee has
      been
      continuously employed by Halliburton or the Company from the original date
      the
      applicable Halliburton Option was granted through the lapse
      date.  Prior to the Effective Date, a Participant’s employment or
      service with the Company, Halliburton or any of their respective Subsidiaries
      shall be deemed to be employment or service with the Company for all purposes
      hereunder and under the agreement granting the Halliburton Option(s) and from
      and after the Effective Date, a Participant’s employment or service with the
      Company or any of its Subsidiaries shall be deemed to be employment or service
      with the Company for all purposes under such award.  The Effective
      Date, as defined in the Plan, is indicated on Exhibit A.  

    

    4.           Withholding
      of Tax.  To the extent that the exercise of a KBR Option
      or the disposition of shares of KBR Common Stock acquired by exercise of a
      KBR
      Option results in compensation income to Employee for federal or state income
      tax purposes, Employee shall deliver to the Company at the time of such exercise
      or disposition such amount of money or shares of KBR Common Stock as the Company
      may require to meet its withholding obligation under applicable tax laws or
      regulations, and, if Employee fails to do so, the Company is authorized to
      withhold from any cash or KBR Common Stock remuneration then or thereafter
      payable to Employee any tax required to be withheld by reason of such resulting
      compensation income.  Upon an exercise of a KBR Option, the Company is
      further authorized in its discretion to satisfy any such withholding requirement
      out of any cash or shares of KBR Common Stock distributable to Employee upon
      such exercise.

     

    
      
        
        

      

      
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    5.           Status
      of KBR Options.  The Company shall not be obligated to
      issue any KBR Common Stock pursuant to any KBR Option at any time, when the
      offering of the KBR Common Stock covered by such KBR Option has not been
      registered under the Securities Act of 1933, as amended (the “Act”) and such
      other country, federal or state laws, rules or regulations as the Company deems
      applicable and, in the opinion of legal counsel for the Company, there is no
      exemption from the registration.  The Company intends to use its best
      efforts to ensure that no such delay will occur.  In the event
      exemption from registration under the Act is available upon an exercise of
      a KBR
      Option, Employee (or the person permitted to exercise such KBR Option in the
      event of Employee’s death or incapacity), if requested by the Company to do so,
      will execute and deliver to the Company in writing an agreement containing
      such
      provisions as the Company may require to assure compliance with applicable
      securities laws.

    

    Employee
      agrees that the shares of KBR
      Common Stock which Employee may acquire by exercising a KBR Option will not
      be
      sold or otherwise disposed of in any manner which would constitute a violation
      of any applicable securities laws, whether federal or state.  Employee
      also agrees (i) that the certificates representing the shares of KBR Common
      Stock purchased under a KBR Option may bear such legend or legends as the
      Company deems appropriate in order to assure compliance with applicable
      securities laws, (ii) that the Company may refuse to register the transfer
      of
      the shares of KBR Common Stock purchased under a KBR Option on the stock
      transfer records of the Company if such proposed transfer would in the opinion
      of counsel satisfactory to the Company constitute a violation of any applicable
      securities law and (iii) that the Company may give related instructions to
      its
      transfer agent, if any, to stop registration of the transfer of the KBR Common
      Stock purchased under a KBR Option.

    

    6.           Employment
      Relationship.  For purposes of the KBR Options, Employee
      shall be considered to be in the employment of the Company as long as Employee
      remains an employee of either the Company, any successor corporation or a parent
      or subsidiary corporation (as defined in section 424 of the Code) of the Company
      or any successor corporation.  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 Compensation Committee of the Company
      (“Compensation Committee”) or the Chief Executive Officer of the Company (the
“CEO”), as appropriate, and such determination shall be final.

    

    7.           Governance
      by the Compensation Committee.  The KBR Options converted
      hereunder will hereby be governed by the Compensation Committee or the CEO,
      as
      appropriate, and no longer governed by Halliburton.  No provision
      contained herein 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 Compensation Committee or the CEO 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 KBR Options.

    

    8.           Binding
      Effect.  This award shall be binding upon and inure to
      the benefit of any successors to the Company and all persons lawfully claiming
      under Employee.

    

    9.           Governing
      Law.  This award shall be governed by, and construed in
      accordance with, the laws of the State of Texas.

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF,
      the Company has caused this document to be executed by its officer thereunto
      duly authorized evidencing the terms authorized by the Transitional Stock
      Adjustment Plan adopted February 26, 2007.

    

    

    
      	 	 	KBR,
              INC.
	 	 	 
	 	 	 
	 	
              By:

            	
               

            

    

     

     

    4ex10_6.htm

    
      

    

    Exhibit
      10.6

    KBR,
      INC.

    TRANSITIONAL
      STOCK ADJUSTMENT PLAN

    RESTRICTED
      STOCK AWARD

    

    for

    

    ________________________

    (“Employee”)

    

    As
      a result of the consummation of the
      Exchange Offer by Halliburton Company (“Halliburton”) to dispose of its
      remaining interest in KBR, Inc., a Delaware corporation (the “Company”),
      Halliburton and the Company have become independent separate
      companies.  Halliburton and the Company have adopted the KBR,
      INC. TRANSITIONAL STOCK ADJUSTMENT PLAN (the “Plan”) to convert
      restricted shares of Halliburton common stock (the “Halliburton Restricted
      Shares”) issued under the HALLIBURTON COMPANY 1993
      STOCK AND INCENTIVE PLAN ("Halliburton Plan") into restricted shares of
      the Company’s common stock in accordance with the applicable adjustment
      provisions of the Halliburton Plan as a result of the separation of Halliburton
      and the Company.

    

    In
      accordance with the terms of the
      Plan, Employee is entitled to receive a number of restricted shares of the
      Company’s common stock, par value $0.001 per share (“KBR Common Stock”),
      determined by a formula set forth in the Plan, in lieu of outstanding
      Halliburton Restricted Shares.  Employee is entitled to a number of
      restricted shares of KBR Common Stock under the Plan, as set forth on Exhibit
      A
      hereto (the “KBR Restricted Shares”), pursuant to the terms described
      herein.

    

    Capitalized
      terms used and not
      otherwise defined herein will have the meaning given thereto in the
      Plan.

    

    1.  General
      Terms of KBR Restricted Shares.  Except to the extent
      otherwise in conflict as provided below, the KBR Restricted Shares shall be
      subject to all of the terms and conditions contained in the corresponding
      original grant(s) of Halliburton Restricted Shares, as evidenced by the
      agreement(s) granting such Halliburton Restricted Shares, pursuant to the
      Halliburton Plan.

    

    (a)           Converted
      Shares.  In accordance with the Plan, Employee’s
      Halliburton Restricted Shares set forth on Exhibit A are converted into the
      number of KBR Restricted Shares identified on Exhibit A.  The KBR
      Restricted Shares shall be issued as hereinafter provided in Employee’s name
      subject to certain restrictions thereon.

    

    (b)           Plan
      Incorporated.  This award of KBR Restricted Shares 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.

     

    
      
        
        

      

      
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    2.           KBR
      Restricted Shares.  The KBR Restricted Shares are subject
      to the following terms:

    

    (a)           Forfeiture
      Restrictions.  The KBR Restricted Shares may not be sold,
      assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
      or disposed of to the extent then subject to the Forfeiture Restrictions (as
      hereinafter defined), and in the event of termination of Employee’s employment
      with the Company or employing Subsidiary for any reason that does not result
      in
      the lapse of those restrictions, Employee shall, for no consideration, forfeit
      to the Company all KBR Restricted Shares to the extent then subject to the
      Forfeiture Restrictions.  The prohibition against transfer and the
      obligation to forfeit and surrender KBR Restricted Shares to the Company upon
      termination of employment are herein referred to as “Forfeiture
      Restrictions.”  The Forfeiture Restrictions shall be binding upon and
      enforceable against any transferee of KBR Restricted Shares.

    

    (b)           Lapse
      of Forfeiture Restrictions.  The Forfeiture Restrictions
      shall lapse as to the KBR Restricted Shares in accordance with the same schedule
      and conditions as specified in Employee’s agreement(s) granting Halliburton
      Restricted Shares, provided that Employee has been continuously employed by
      Halliburton or the Company from the original date the Halliburton Restricted
      Shares were granted through the lapse date.  Prior to the Effective
      Date, a Participant’s employment or service with the Company, Halliburton or any
      of their respective Subsidiaries shall be deemed to be employment or service
      with the Company for all purposes hereunder and under the agreement granting
      the
      Halliburton Restricted Shares and from and after the Effective Date, a
      Participant’s employment or service with the Company or any of its Subsidiaries
      shall be deemed to be employment or service with the Company for all purposes
      under such award.  The Effective Date, as defined in the Plan, is
      indicated on Exhibit A. 

    

    (c)           Change
      in Control.  For all purposes concerning the award(s)
      hereunder, the definition for Change in Control shall be the definition in
      the
      Plan.

    

    (d)           Certificates.  A
      certificate evidencing the KBR Restricted Shares shall be issued by the Company
      in Employee’s name, or at the option of the Company, in the name of a nominee of
      the Company, pursuant to which Employee shall have voting rights and shall
      be
      entitled to receive all dividends unless and until the KBR Restricted Shares
      are
      forfeited pursuant to the provisions herein, or of the agreement granting the
      Halliburton Restricted Shares.  The certificate shall bear a legend
      evidencing the nature of the KBR Restricted Shares, and the Company may cause
      the certificate to be delivered upon issuance to the Secretary of the Company
      or
      to such other depository as may be designated by the Company as a depository
      for
      safekeeping until the forfeiture occurs or the Forfeiture Restrictions lapse
      pursuant to the terms of the Plan and this award.  Upon request of the
      Compensation Committee of the Company (the “Compensation Committee”) or the
      Chief Executive Officer of the Company (the “CEO”), as appropriate, Employee
      shall deliver to the Company a stock power, endorsed in blank, relating to
      the
      KBR Restricted Shares then subject to the Forfeiture
      Restrictions.  Upon the lapse of the Forfeiture Restrictions without
      forfeiture, the Company shall cause a new certificate or certificates to be
      issued without legend in the name of Employee for the shares upon which
      Forfeiture Restrictions lapsed.  Notwithstanding any other provisions
      herein, the issuance or delivery of any shares of stock (whether subject to
      restrictions or unrestricted) may be postponed for such period as may be
      required to comply with applicable requirements of any national securities
      exchange or any requirements under any law or regulation applicable to the
      issuance or delivery of such shares.  The Company shall not be
      obligated to issue or deliver any shares of stock if the issuance or delivery
      thereof shall constitute a violation of any provision of any law or of any
      regulation of any governmental authority or any national securities
      exchange.

     

    
      
        
        

      

      
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    3.           Withholding
      of Tax.  To the extent that the receipt of the KBR
      Restricted Shares or the lapse of any Forfeiture Restrictions results in income
      to Employee for federal or state income tax purposes, Employee shall deliver
      to
      the Company at the time of such receipt or lapse, as the case may be, such
      amount of money or shares of unrestricted stock as the Company may require
      to
      meet its withholding obligation under applicable tax laws or regulations, and,
      if Employee fails to do so, the Company is authorized to withhold from any
      cash
      or stock remuneration then or thereafter payable to Employee any tax required
      to
      be withheld by reason of such resulting compensation income.

    

    4.           Status
      of Shares.  Employee agrees that the KBR Restricted
      Shares will not be sold or otherwise disposed of in any manner which would
      constitute a violation of any applicable federal or state securities
      laws.  Employee also agrees (i) that the certificates representing the
      KBR Restricted Shares may bear such legend or legends as the Company deems
      appropriate in order to assure compliance with applicable securities laws,
      (ii)
      that the Company may refuse to register the transfer of the KBR Restricted
      Shares on the stock transfer records of the Company if such proposed transfer
      would in the opinion of counsel satisfactory to the Company constitute a
      violation of any applicable securities law and (iii) that the Company may give
      related instructions to its transfer agent, if any, to stop registration of
      the
      transfer of the KBR Restricted Shares.

    

    5.           Employment
      Relationship.  For all purposes herein, Employee shall be
      considered to be in the employment of the Company as long as Employee remains
      an
      employee of either the Company, any successor corporation or a parent or
      subsidiary corporation (as defined in section 424 of the Code) of the Company
      or
      any successor corporation.  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 Compensation Committee or the CEO, as appropriate,
      and such determination shall be final.

    

    6.           Governance
      by the Compensation Committee.  The KBR Restricted Shares
      converted hereunder will hereby be governed by the Compensation Committee or
      the
      CEO, as appropriate, and no longer governed by Halliburton.  No
      provision contained herein 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 Compensation Committee or the CEO
      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 KBR Restricted Shares.

    

    7.           No
      Section 83(b) Election.  Employee shall not make an
      election, under section 83(b) of the Code, to include an amount in income in
      respect of the award of KBR Restricted Shares hereunder.

     

    
      
        
        

      

      
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    8.           Binding
      Effect.  This award shall be binding upon and inure to
      the benefit of any successors to the Company and all persons lawfully claiming
      under Employee.

    

    9.           Governing
      Law.  This award shall be governed by, and construed in
      accordance with, the laws of the State of Texas.

    

    IN
      WITNESS
      WHEREOF, the Company has caused this document to be executed by
      its officer thereunto duly authorized evidencing the terms authorized by the
      Transitional Stock Adjustment Plan adopted February 26, 2007.

    

    

    
      	 	 	
              KBR,
                INC.

            
	 	 	 
	 	
              By

            	
               

            

    

    
 

    4

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