Document:

Employee Matters Agreement

 EXHIBIT 10.6 
 EMPLOYEE MATTERS AGREEMENT 
 BETWEEN 
 HALLIBURTON COMPANY 
 and 
 KBR, INC. 
 Dated November 20, 2006 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I DEFINITIONS
	  	3
		
	 ARTICLE II GENERAL PRINCIPLES
	  	7
	 SECTION 2.1
	  	KBR Plans	  	7
	 SECTION 2.2
	  	Halliburton Plans	  	7
		
	 ARTICLE III DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS
	  	9
	 SECTION 3.1
	  	Halliburton’s Obligations for Domestic Plans	  	9
	 SECTION 3.2
	  	Pension Indemnification	  	10
		
	 ARTICLE IV HEALTH AND WELFARE PLANS; OTHER BENEFITS
	  	10
	 SECTION 4.1
	  	Participation in and General Administration of Welfare Plans	  	10
	 SECTION 4.2
	  	Retiree Medical	  	10
	 SECTION 4.3
	  	Vacation	  	10
	 SECTION 4.4
	  	COBRA and HIPAA	  	11
	 SECTION 4.5
	  	Leave of Absence and FMLA	  	11
	 SECTION 4.6
	  	Workers’ Compensation	  	11
	 SECTION 4.7
	  	Perquisites	  	11
		
	 ARTICLE V EQUITY AND OTHER COMPENSATION
	  	11
	 SECTION 5.1
	  	Executive and Non-Qualified Plans	  	11
	 SECTION 5.2
	  	1993 Stock and Incentive Plan	  	12
	 SECTION 5.3
	  	Employee Stock Purchase Plans	  	13
	 SECTION 5.4
	  	Management Performance Pay Plan and Annual Performance Pay Plan	  	13
	 SECTION 5.5
	  	Deduction under Section 83(h) of the Code	  	13
		
	 ARTICLE VI SEVERANCE AND STATUTORY SEPARATION LIABILITIES
	  	14
	 SECTION 6.1
	  	Severance and Statutory Separation Liabilities	  	14
		
	 ARTICLE VII INDEMNIFICATION
	  	14
	 SECTION 7.1
	  	Indemnification by Halliburton	  	14
	 SECTION 7.2
	  	Indemnification by KBR	  	15
		
	 ARTICLE VIII CERTAIN TRANSITION MATTERS
	  	15
	 SECTION 8.1
	  	Transition Services Agreement	  	15
	 SECTION 8.2
	  	Requests for IRS and DOL Opinions	  	15
	 SECTION 8.3
	  	Consent of Third Parties	  	15
	 SECTION 8.4
	  	Tax Cooperation	  	15
	 SECTION 8.5
	  	Plan Returns	  	16
	 SECTION 8.6
	  	Plan and Trust Separation	  	16
		
	 ARTICLE IX EMPLOYMENT-RELATED MATTERS
	  	16
	 SECTION 9.1
	  	Terms of KBR Employment	  	16

  

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	 SECTION 9.2
	  	Non-Termination of Employment; No Third-Party Beneficiaries	  	16
		
	 ARTICLE X GENERAL PROVISIONS
	  	17
	 SECTION 10.1
	  	Effect if IPO does not Occur	  	17
	 SECTION 10.2
	  	Limitation of Liability	  	17
	 SECTION 10.3
	  	Relationship of Parties	  	17
	 SECTION 10.4
	  	Incorporation of Separation Agreement Provisions	  	17
	 SECTION 10.5
	  	Governing Law	  	18
	 SECTION 10.6
	  	Severability	  	18
	 SECTION 10.7
	  	Amendment	  	18
	 SECTION 10.8
	  	Assignment	  	18
	 SECTION 10.9
	  	No Strict Construction; Cooperation of the Parties	  	18
	 SECTION 10.10
	  	Termination	  	19
	 SECTION 10.11
	  	Conflict	  	19
	 SECTION 10.12
	  	Counterparts	  	19

  

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 EMPLOYEE MATTERS AGREEMENT 
 This EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is entered into as of the 20th day of November, 2006 by and between Halliburton Company, a Delaware corporation (“Halliburton”), and
KBR, Inc., a Delaware corporation (“KBR”). 
 WHEREAS, the Board of Directors of Halliburton has determined that it is in
the best interests of Halliburton and its shareholders to make an initial public offering (“IPO”) of shares of KBR common stock, par value $0.001 per share; 
 WHEREAS, in order to effectuate the foregoing, Halliburton and KBR have entered into a Master Separation Agreement, dated as of the date hereof (the
“Separation Agreement”), which provides, among other things, subject to the terms and conditions thereof, for the Separation, the IPO, and the execution and delivery of certain other agreements, including this Agreement, in order to
facilitate and provide for the foregoing; and 
 WHEREAS, in order to ensure an orderly transition under the Separation Agreement it will be
necessary for Halliburton and KBR to allocate between them assets, liabilities and responsibilities with respect to certain employee compensation, benefit plans and programs, and certain employment matters. 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties, intending to be legally bound,
agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Wherever used in this Agreement, the following terms shall have the meanings indicated below, unless a different
meaning is plainly required by the context. The singular shall include the plural, unless the context indicates otherwise. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Separation Agreement.
Headings of sections are used for convenience of reference only, and in case of conflict, the text of this Agreement, rather than such headings, shall control: 
 “Agreement” means this Employee Matters Agreement and all amendments made hereto from time to time. 
 “Benefit Liabilities” means all claims, causes of action, demands, liabilities, debts or damages (known or unknown) related to (i) any Plans, (ii) any arrangements or services that are the
subject of this Agreement, and (iii) all employment matters, including but not limited to claims arising under foreign law and federal, state or local statute, claims in connection with workers’ compensation or “whistle blower”
statutes and/or contract, tort, defamation, slander, wrongful termination or any other state or federal regulatory, statutory or common law or local ordinance. 
 “Board(s)” means the Board of Directors of Halliburton and/or the Board of Directors of KBR, as the context indicates. 
  

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 “Canadian Plans” means the Halliburton Group Canada Inc. Profit Sharing Pension Plan,
the Halliburton Group Canada Inc. Retirement Income Plan, the Halliburton Group Canada Inc. Registered Retirement Savings Plan, the Halliburton Group Canada Inc. Non-registered Retirement Savings Plan and any other plans intended to provide
retirement benefits maintained in Canada by Halliburton or any of its Subsidiaries for the benefit of Halliburton Employees and in which any KBR Employee participates as of the IPO Closing Date. 
 “COBRA” means the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended from time to time, and as codified in Section 4980B of the Code and ERISA Sections 601 through 608. 
 “Code” means the Internal Revenue Code of 1986, as amended from time to time. 
 “Deconsolidation
Date” shall have the meaning set forth in the Tax Sharing Agreement. 
 “DOL” means the United States Department of
Labor. 
 “Energy Services Group” means Halliburton Energy Services, Inc., a Delaware corporation, and its Subsidiaries.

 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. 
 “FMLA” means the Family and Medical Leave Act of 1993, as amended from time to time. 
 “Group” shall have the meaning set forth in the Separation Agreement. 
 “Halliburton” means Halliburton Company, a Delaware corporation. In all such instances in which “Halliburton” is referred to
in this Agreement, it shall also be deemed to include a reference to each member of the Halliburton Group, unless it specifically provides otherwise. 
 “Halliburton Business” shall have the meaning set forth in the Separation Agreement. 
 “Halliburton Employee” means any individual who is employed in the Halliburton Business during the relevant time period. 
 “Halliburton Group” shall have the meaning set forth in the Separation Agreement. 
 “Halliburton
Non-Qualified Plans” means the Halliburton Elective Deferral Plan, the Halliburton Company Supplemental Executive Retirement Plan, the Halliburton Company Benefit Restoration Plan, the Dresser Industries Inc. Deferred Compensation Plan, the
ERISA Excess Benefit Plan for Dresser Industries Inc., the ERISA Compensation Limit Benefit Plan for 

  

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Dresser Industries Inc., and any other plan, other than the Halliburton Qualified Plans, maintained by Halliburton or any of its Subsidiaries for the purpose
of providing retirement benefits to any Halliburton Employee and in which any KBR Employee participates as of the IPO Closing Date. 
 “Halliburton Qualified Plans” means the Halliburton Retirement & Savings Plan, the Halliburton Savings Plan, the Halliburton Retirement Plan, the Pension Plan for United Steelworkers Local 6312 Guiberson, the
Pension Plan for Participants of Certain Consolidated Discontinued Operations, the Pension Plan for Inactive Participants, the Petroleum and Minerals Operations Retirement Plan, the Retirement Plan for the USWA AFL-CIO on Behalf of the Local 6580,
the Pension Plan for Hourly Employees of Axelson Operations, the Bariod Union Retirement Program, and any other plan intended to qualify under Section 401(a) of the Code maintained by Halliburton or any of its Subsidiaries for the benefit of
Halliburton Employees and in which any KBR Employee participates as of the IPO Closing Date. 
 “IPO” has the meaning set
forth in the Recitals hereof, as the same is further described in the Separation Agreement. 
 “IPO Closing Date” means the
first date on which the proceeds of any sale of KBR Common Stock to the underwriters in the IPO are received. 
 “IRS” means
the United States Internal Revenue Service. 
 “KBR” means KBR, Inc., a Delaware corporation. In all such instances in which
KBR is referred to in this Agreement, it shall also be deemed to include a reference to each member of the KBR Group, unless it specifically provides otherwise; KBR shall be solely responsible to Halliburton for ensuring that each member of the KBR
Group complies with the applicable terms of this Agreement. 
 “KBR Business” shall have the meaning set forth in the
Separation Agreement. 
 “KBR Common Stock” shall have the meaning set forth in the Separation Agreement. 
 “KBR Employee” means any individual who is employed in the KBR Business during the relevant time period. 
 “KBR Group” shall have the meaning set forth in the Separation Agreement. 
 “KBR Pension Plans” means the Brown & Root, Inc. Employees’ Retirement and Savings Plan, the Brown & Root, Inc.
Hourly Employees’ Pension Plan, the Brown & Root, Inc. Hourly Employees’ 401(k) Plan, the Halliburton NUS Corporation Employees’ Profit Sharing Plan, the Kellogg Brown & Root, Inc. Retirement and Savings Plan, the
Halliburton NUS Corporation Employees’ Pension Plan, the Kellogg Brown & Root UK Limited Pension Plan, the MW Kellogg Limited Pension Scheme, the Devonport Dockyard Pension Scheme, and any other plan maintained by KBR or any of its
Subsidiaries for the purpose of providing retirement benefits to any KBR Employee. 
  

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 “Participating Company” means: (a) Halliburton; (b) any Person (other than an
individual) that Halliburton has approved for participation in, has accepted participation in, or which is participating in, a Plan sponsored by Halliburton; or (c) any Person (other than an individual) that, by the terms of such a Plan,
participates in such a Plan sponsored by Halliburton or any employees of which, by the terms of such a Plan, participate in a Plan. 
 “Pension Schemes” means the Kellogg Brown & Root (UK) Ltd Pension Plan, the M.W. Kellogg Limited Pension Plan and the Devonport Royal Dockyard Pension Scheme. 
 “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof. 
 “Plan” depending on the context, may mean any plan, policy, program, payroll practice, arrangement, contract, annuity contract, trust, insurance policy, or any agreement or funding vehicle providing compensation or benefits
to employees, dependents of employees or former employees or non-employee and employee directors of Halliburton, KBR or any member of the Halliburton Group or the KBR Group. “Plan,” when immediately preceded by “Halliburton,”
means a Plan sponsored by Halliburton or a member of the Halliburton Group. When immediately preceded by “KBR,” “Plan” means a Plan sponsored by KBR or a member of the KBR Group. 
 “QDRO” means a domestic relations order which qualifies under Section 414(p) of the Code and ERISA Section 206(d) and which
creates or recognizes an alternate payee’s right to, or assigns to an alternate payee, all or a portion of the benefits payable to a participant under a plan qualified under Section 401(a) of the Code. 
 “SEC” means the United States Securities and Exchange Commission. 
 “Separation” shall have the meaning set forth in the Separation Agreement. 
 “Separation Agreement” means the Master Separation Agreement between Halliburton Company and KBR, Inc. 
 “Subsidiary” shall have the meaning set forth in the Separation Agreement. 
 “Tax Sharing Agreement” shall have the meaning set forth in the Separation Agreement. 
 “Transferred Halliburton Employee” means any individual who was previously employed in the KBR Business and then was transferred to work
in the Halliburton Business on or prior to the IPO Closing Date and remained employed in the Halliburton Business as of the IPO Closing Date or did not return to work in the KBR Business prior to the IPO Closing Date. 
 “Transferred KBR Employee” means any individual who was previously employed in the Halliburton Business and then was transferred to work
in the KBR Business on or prior to the IPO Closing Date and remained employed in the KBR Business as of the IPO Closing Date or did not return to work in the Halliburton Business prior to the IPO Closing Date. 
  

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 “Transition Services Agreement” means the Transition Services Agreement, which is
attached as an exhibit to the Separation Agreement. 
 ARTICLE II 
 GENERAL PRINCIPLES 
 SECTION 2.1 KBR Plans. 
 (a) Non-Duplication of Benefits. Halliburton and KBR shall mutually agree, if necessary, on methods and procedures, including
amending the respective Plan documents, to prevent employees of the KBR Group from receiving duplicate benefits from the Halliburton Plans and the KBR Plans. 
 (b) Service Credit. Except as specified otherwise in this Agreement or as required by applicable law, with respect to KBR
Employees, each KBR Plan in existence on the IPO Closing Date shall provide that all service with the Halliburton Group as of the IPO Closing Date shall receive full recognition and credit and be taken into account under such KBR Plan to the same
extent as if such service occurred with the KBR Group, except to the extent that duplication of benefits would result. The service crediting provisions shall be subject to any respectively applicable “service bridging,” “break in
service,” “employment date” or “eligibility date” rules under the KBR Plans. 
 (c) Beneficiary
Designations. Subject to Section 8.3 of this Agreement, all beneficiary designations made by the KBR Employees for the Halliburton Plans shall be transferred to and be in full force and effect under the corresponding KBR Plans until such
time, if ever, that any such beneficiary designation is replaced or revoked by the KBR Employee who made the beneficiary designation. If no such beneficiary designations are on file, the terms of the applicable KBR Plan shall control. 
 (d) KBR Under No Obligation to Maintain Plans. Except as specified otherwise in this Agreement, nothing in this Agreement shall
preclude KBR, at any time, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any KBR Plan, any benefit under any KBR Plan or any trust, insurance policy or funding vehicle related to any KBR
Plan (to the extent permitted by law) in accordance with the applicable governing plan documents. 
 (e) Halliburton
Participation in KBR Plans. Unless the prior written consent of KBR is obtained, Halliburton Employees shall not participate in any KBR Plans. 
 SECTION 2.2 Halliburton Plans. 
 (a) KBR’s Participation in Halliburton Plans. After the IPO
Closing Date, KBR shall continue to be a Participating Company in the Halliburton Company 2002 Employee Stock Purchase Plan, the Halliburton Company 2002 Non-Qualified Stock Purchase Plan, the Halliburton Company UK Employee Share Purchase Plan, the
Halliburton Elective Deferral Plan, the Halliburton Company Supplemental Executive 

  

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Retirement Plan, the Halliburton Company Benefit Restoration Plan, the Halliburton Group Canada Inc. Retirement Income Plan, the Halliburton Group Canada
Inc. Registered Retirement Savings Plan and the Halliburton Group Canada Inc. Non-registered Retirement Savings Plan for the period of time specified in this Agreement, subject to the terms and conditions provided in said Plans and in Articles V and
VIII of this Agreement. Except as otherwise provided in this Section 2.2(a) or unless the prior written consent of Halliburton is obtained, KBR shall not participate in any Halliburton Plans. To the extent contemplated by this Agreement,
Halliburton may also provide benefits to KBR Employees under the terms of the Halliburton Company 1993 Stock and Incentive Plan, the Dresser Industries Inc. Deferred Compensation Plan, the ERISA Excess Benefit Plan for Dresser Industries Inc., the
ERISA Compensation Limit Benefit Plan for Dresser Industries Inc., the Halliburton Group Canada Inc. Profit Sharing Pension Plan, the Halliburton Management Performance Pay Plan and the Halliburton Annual Performance Pay Plan. As of the
Deconsolidation Date, unless the prior written consent of Halliburton is obtained, KBR shall not participate in any Halliburton Plans. 
 (b) Halliburton’s General Obligations as Plan Sponsor. Halliburton shall continue to administer, or cause to be administered, in accordance with their terms and applicable law, the Halliburton Plans
specifically identified in Section 2.2(a), and shall have the sole and absolute discretion and authority to interpret said Halliburton Plans, as set forth therein, subject to the specific arrangements provided in this Agreement. 
 (c) KBR’s General Obligations as Participating Company. With respect to any Halliburton Plan or program that provides benefits
to a KBR Employee, KBR will cooperate with Halliburton on a timely basis with respect to such Plans or programs, and KBR shall comply with the terms as set forth in such Plans or any procedures adopted pursuant thereto, including (without
limitation): (i) assisting in the administration of claims, to the extent requested by the claims administrator of said Halliburton Plan; (ii) cooperating fully with Halliburton Plan auditors; (iii) the provision of payroll processing
support; (iv) the qualification and administration of QDROs; (v) preserving the confidentiality of all financial arrangements Halliburton has or may have with any entity or individual with whom Halliburton has entered into an agreement
relating to said Halliburton Plan; and (vi) preserving the confidentiality of participant information to the extent not specified otherwise in this Agreement. In addition, KBR shall provide, or cause to be provided, all participant information
that is necessary or appropriate for the efficient and accurate administration of each Halliburton Plan or program that provides benefits to a KBR Employee during the respective period applicable to such Plan. Halliburton and its respective
authorized agents shall, subject to applicable laws of confidentiality and data protection, be given reasonable and timely access to, and may make copies of, all information relating to the subjects of this Agreement in the custody of the other
party or its agents, to the extent necessary or appropriate for the administration of said Plans or programs. 
 (d)
Reporting and Disclosing Communications to Participants. While KBR is a Participating Company in the Halliburton Plans, Halliburton shall take, or cause to be taken, all actions necessary or appropriate to facilitate the distribution of all
Halliburton Plan-related communications and materials to participating KBR Employees and their 

  

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beneficiaries, including (without limitation) notices and enrollment material for the Halliburton Plan. KBR shall provide all information needed by
Halliburton to facilitate such Halliburton Plan-related communications. KBR shall take, or cause to be taken, all actions necessary or appropriate to facilitate the distribution of all KBR Plan-related communications and materials to participating
KBR Employees and their beneficiaries. 
 (e) Halliburton Under No Obligation to Maintain Plans. Except as specified
otherwise in this Agreement, nothing in this Agreement shall preclude Halliburton, at any time, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any Halliburton Plan, any benefit under any
Halliburton Plan or any trust, insurance policy or funding vehicle related to any Halliburton Plan (to the extent permitted by law) in accordance with the applicable governing plan documents. 
 ARTICLE III 
 DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS 
 SECTION 3.1 Halliburton’s Obligations for Domestic Plans. 
 (a) Generally. Halliburton hereby affirmatively covenants that, to the extent permitted by law, the Halliburton Qualified Plans
shall provide that, effective as of the date on which KBR is no longer a member of the “controlled group” of corporations of Halliburton (as defined in Section 414(b) of the Code), a participant in said Plans who is employed in the
KBR Business shall be deemed to have terminated his or her employment under said Plans and, if otherwise eligible under said Plans, shall be eligible to receive a distribution of benefits in accordance with the terms and conditions of said Plans. In
addition, Halliburton hereby affirmatively covenants that the Halliburton Qualified Plans shall provide that, effective as of the date on which KBR is no longer a member of the “controlled group” of corporations of Halliburton (as defined
in Section 414(b) of the Code), affected employees who participate in the Halliburton Qualified Plans shall be entitled to defer the receipt of their accrued benefits under said Plans, to roll over their accrued benefit amount under said Plans
to another eligible retirement plan, or to receive a distribution under said Plans, all subject to the terms and conditions of said Plans and to any taxation and early withdrawal penalties. 
 (b) Transfer of Sponsorship. The parties acknowledge that Halliburton is designated as the sponsor with respect to the Halliburton
NUS Corporation Employees’ Profit Sharing Plan (the “NUS Profit Sharing Plan”) and the Halliburton NUS Corporation Employees’ Pension Plan (the “NUS Pension Plan”), which plans provide benefits solely to
KBR employees. On or before the Deconsolidation Date, Halliburton and KBR hereby agree to transfer the sponsorship of the NUS Profit Sharing Plan, the NUS Pension Plan and any other KBR Pension Plan (as applicable) from Halliburton to KBR.
Furthermore, from and after the Deconsolidation Date, KBR shall have the sole obligation to provide to KBR Employees any benefits to which such employees are entitled under the NUS Profit Sharing Plan and the NUS Pension Plan, and Halliburton shall
be relieved from all obligation or liability for the provision of such benefits to KBR Employees; provided, however, that to the extent any such benefits are funded in a trust 

  

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maintained by Halliburton, such trust shall be divided between Halliburton and KBR as contemplated in Section 8.6 hereof. 
 (c) Effect on KBR Employees. This Section 3.1 and a KBR Employee’s termination for purposes of the Halliburton Qualified
Plans shall have no effect on any KBR Employee’s participation in the KBR Qualified Plans. 
 SECTION 3.2 Pension
Indemnification. KBR agrees to indemnify Halliburton on a continuing basis against any costs, expenses, penalties, fines or liabilities incurred or suffered by Halliburton (A) in relation to any and all pension liabilities of any member of
the KBR Group, including, without limitation, KBR Holdings Limited, Kellogg Brown and Root (UK) Limited, Devonport Management Limited and MW Kellogg Ltd., and (B) in relation to the Pension Schemes, including, but not limited to (i) any
costs, expenses, penalties, fines, or liabilities to contribute or to provide support which are levied, imposed or incurred pursuant to Sections 38 to 58 of the Pensions Act 2004 as a consequence of KBR or any person connected or associated with KBR
participating in the Pension Schemes and (ii) any debt which shall be owing or shall become due from Halliburton in respect of KBR’s participation in the Pension Schemes as a result of the operation of Section 75 or Section 75A
of the Pensions Act 1995 or otherwise. Notwithstanding the foregoing, the indemnity in this Section 3.2 shall not apply to any costs, expenses, penalties, fines or liabilities incurred or suffered by Halliburton with respect to any Halliburton
Employee. 
 ARTICLE IV 
 HEALTH
AND WELFARE PLANS; OTHER BENEFITS 
 SECTION 4.1 Participation in and General Administration of Welfare Plans. Effective as of the IPO
Closing Date, Halliburton will provide, to the extent applicable, welfare benefit plans to employees employed in the Halliburton Business and KBR will provide, to the extent applicable, welfare plans to employees employed in the KBR Business, and
each shall be solely responsible for the cost of providing such benefits. Each of Halliburton and KBR shall be individually responsible for claims for benefits filed under their respective welfare benefit plans. 
 SECTION 4.2 Retiree Medical. To the extent a KBR Employee is entitled to retiree medical benefits under a plan or arrangement maintained by the
Energy Services Group, Halliburton shall cause the Energy Services Group to provide or continue to provide such retiree medical benefits to such retirees; provided, however, that the Energy Services Group shall have the sole and absolute discretion
and authority to interpret said plan or arrangement or amend or terminate said plan or arrangement. Nothing in this Agreement shall obligate KBR to establish, maintain or continue to sponsor a medical benefits plan for retired employees. Halliburton
or the appropriate member of the Halliburton Group shall be responsible for the cost of providing the benefits under this Section 4.2. 
 SECTION 4.3 Vacation. Effective from and after the IPO Closing Date through the Deconsolidation Date, Halliburton shall pay to any Halliburton Employee who transfers employment to a member of the KBR Group a cash payment in
satisfaction of such employee’s accrued vacation pay in the Halliburton Company Vacation Pay Plan, and KBR shall pay to any KBR Employee who transfers employment to a member of the Halliburton Group a 
  

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cash payment in satisfaction of such employee’s interest in the Kellogg Brown & Root Hour Accumulation and Use Plan, each such payment to be
paid as soon as practicable but no later than 45 calendar days after such transfer of employment. A Halliburton Employee’s service with the KBR Group prior to such employee’s transfer of employment to Halliburton on or before the
Deconsolidation Date shall be considered for purposes of determining the amount of vacation accruals to which such employee is entitled under the applicable Halliburton policies or plans. A KBR Employee’s service with the Halliburton Group
prior to such employee’s transfer of employment on or before the Deconsolidation Date to KBR shall be considered for purposes of determining the amount of vacation accruals to which such employee is entitled under the applicable KBR policies or
plans. 
 SECTION 4.4 COBRA and HIPAA. Halliburton and KBR shall each be responsible, respectively, for compliance with the health
care continuation coverage requirements of COBRA and the portability requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) with respect to their respective health and welfare benefit plans.

 SECTION 4.5 Leave of Absence and FMLA. KBR hereby acknowledges that KBR shall be responsible for administering leaves of absence
and complying with FMLA with respect to KBR Employees. Halliburton shall have the right to conduct an audit of KBR’s compliance with FMLA at any time prior to date on which KBR is no longer a member of the “controlled group” of
corporations of Halliburton (as defined in Section 414(b) of the Code). KBR shall continue to make available in connection with the audit all documents and other information that Halliburton reasonably requires. Halliburton shall determine, in
its sole discretion, the performance standards, audit methodology, auditing policy and quality measures and reporting requirements. 
 SECTION 4.6 Workers’ Compensation. KBR hereby acknowledges that KBR has been and shall continue to be responsible for the administration, costs and funding of workers’ compensation claims for KBR Employees prior to the IPO
Closing Date, and KBR hereby agrees to assume the administration, costs and funding of workers’ compensation claims with respect to Transferred KBR Employees. 
 SECTION 4.7 Perquisites. From and after the IPO Closing Date, Halliburton shall have no obligations to provide perquisites to KBR Employees, including, but not limited to, employee physicals, financial
counseling or country club or social club memberships. 
 ARTICLE V 
 EQUITY AND OTHER COMPENSATION 
 SECTION 5.1 Executive and Non-Qualified Plans.

 (a) Generally. As of the IPO Closing Date, a participant in any of the Halliburton Non-Qualified Plans who is a KBR
Employee will continue to participate in said Halliburton Non-Qualified Plans; provided, however, that either KBR or Halliburton may designate a date upon which such KBR Employees cease participation in the Halliburton Non-Qualified Plans by written
notice to the other provided at least 30 days 

  

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prior to the designated date of termination of participation. If not earlier terminated, such KBR Employees’ participation in the Halliburton
Non-Qualified Plans shall terminate as of the Deconsolidation Date, except as otherwise provided in this Agreement. Upon the Deconsolidation Date, the KBR Employees’ benefits under the Halliburton Non-Qualified Plans shall be governed by the
terms of said Plans. 
 (b) Division of Obligations. During the period beginning on the IPO Closing Date and ending as
of the Deconsolidation Date, KBR hereby covenants and agrees to reimburse Halliburton for any expenses or accruals of benefits or interest under the Halliburton Non-Qualified Plans with respect to KBR Employees participating in the Halliburton
Non-Qualified Plans, such reimbursement to be paid no later than 30 calendar days after the receipt by KBR of a memorandum that shall set forth in reasonable detail for the period covered: (i) the expenses incurred and the benefits or interest
accrued, (ii) the basis for the calculation of such amounts, and (iii) such additional information as KBR may reasonably request at least 30 days in advance of the memorandum. If any portion of the amount attributable to benefit or
interest accruals reimbursed by KBR is no longer payable under the terms of the underlying Halliburton Non-Qualified Plan, Halliburton shall refund to KBR the amount of such reimbursement. Effective as of the Deconsolidation Date, KBR shall have the
sole obligation to provide to KBR Employees any benefits to which such employees are entitled under the Halliburton Elective Deferral Plan, the Halliburton Company Supplemental Executive Retirement Plan, the Halliburton Company Benefit Restoration
Plan and the ERISA Excess Benefit Plan for Dresser Industries Inc., and Halliburton shall be relieved from all obligation or liability for the provision of such benefits to KBR Employees; provided, however, that to the extent any assets associated
with the liabilities for these plans are held in a trust maintained by Halliburton, such trust shall be divided between Halliburton and KBR as contemplated in Section 8.6 hereof. 
 (c) The Dresser Industries Inc. Deferred Compensation Plan. The parties acknowledge that certain active KBR Employees participate
in the Dresser Industries Inc. Deferred Compensation Plan. Effective as of the Deconsolidation Date, KBR hereby agrees to assume all obligations and liabilities under the Dresser Industries Inc. Deferred Compensation Plan related to the benefits of
the KBR Employees who are active as of the Deconsolidation Date. KBR hereby agrees to create a nonqualified deferred compensation plan (the “Assumed Plan”) to reflect such assumed obligations and liabilities. KBR hereby agrees to
indemnify Halliburton against any costs, expenses, penalties, fines or liabilities incurred or suffered by Halliburton as a result of any actions KBR may take or fail to take under the Assumed Plan. 
 SECTION 5.2 1993 Stock and Incentive Plan. Certain KBR Employees have been granted options and/or restricted stock under the Halliburton Company
1993 Stock and Incentive Plan and participate in the Performance Unit Program under said Plan. No awards will be made under said Plan to KBR Employees after the effective date of this Agreement. The parties agree that all Halliburton Employees and
KBR Employees participating in the 2004-2006 performance cycle under the Performance Unit Program as of the IPO Closing Date shall be deemed to have remained employed through the entire 2004-2006 performance cycle for the purpose of determining
earned reward amounts under the Performance Unit Program. As of the 
  

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date that KBR ceases to be a “Subsidiary” as defined in said Plan (the “Plan Divestiture Date”), KBR Employees holding options
and/or restricted stock granted under said Plan, or participating in the Performance Unit Program under said Plan, will be considered terminated from employment, and, except as otherwise provided herein, such options, restricted stock or performance
units will be governed by the terms of the applicable award agreement and terms of said Plan. With respect to options and restricted stock awards (with restrictions that have not yet lapsed as of the Plan Divestiture Date) held by KBR Employees
under the 1993 Stock and Incentive Plan, such options and restricted stock awards shall be converted upon the Plan Divestiture Date to options and restricted stock awards covering KBR common stock with terms, and in a manner, approved by the
Compensation Committee of the Board of Halliburton and consented to by the KBR Board (or its compensation committee, if one has been established). Halliburton hereby contributes to the capital of KBR all of Halliburton’s right, title and
interest to all shares of restricted KBR stock granted under said Plan that are hereafter forfeited to Halliburton under said Plan following the Plan Divestiture Date. 
 SECTION 5.3 Employee Stock Purchase Plans. Effective as of January 1, 2007, KBR Employees shall cease to be eligible to participate in the Halliburton Company 2002 Employee Stock Purchase Plan, the
Halliburton Company 2002 Non-qualified Stock Purchase Plan and the Halliburton Company UK Employee Share Purchase Plan. 
 SECTION 5.4
Management Performance Pay Plan and Annual Performance Pay Plan. Prior to the IPO Closing Date, the Halliburton Management Performance Pay Plan and the Halliburton Annual Performance Pay Plan each provide separate metrics with respect to the
Halliburton Business and the KBR Business for determining the qualification for and amount of awards under said Plans. Effective after the IPO Closing Date, if a Transferred KBR Employee is assigned new metrics with respect to the KBR Business for
determining the qualification for and amount of awards under said Plans, said employee’s award under said Plans shall be determined pro-rata with respect to Halliburton and KBR metrics based upon said employee’s time of service for the
Halliburton Group and the KBR Group. KBR agrees to pay the full amount of any compensation payable to a KBR Employee with respect to said Plans, and Halliburton agrees to reimburse KBR for the pro-rata portion of such compensation that corresponds
to such employee’s time of service for the Halliburton Group. KBR Employees shall not be eligible to participate in the Halliburton Management Performance Pay Plan or the Halliburton Annual Performance Pay Plan after December 31, 2006.

 SECTION 5.5 Deduction under Section 83(h) of the Code. The deduction attributable to equity-based compensation permitted under
Section 83(h) of the Code including, without limitation, the deduction attributable to the grant of stock, the vesting of restricted stock, the purchase of stock at a discount under a plan described in Section 5.3, and the exercise of
stock options shall generally be allocated to the employer as of the date the amount is includible in the employee’s income, and the taxable income associated with the compensation shall be reported by such employer. Where the issuer or payor
of such compensation is in the Halliburton Group or the KBR Group and the employer is in the other Group, the employer will make a payment, or series of payments (including such payments reflected in intercompany accounts), to the issuer or payor
equal to the amount of the corresponding tax deduction(s). 
  

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 ARTICLE VI 
 SEVERANCE AND STATUTORY SEPARATION LIABILITIES 
 SECTION 6.1 Severance and Statutory Separation
Liabilities. On and after the IPO Closing Date, Halliburton shall be solely responsible for any payments of severance pay benefits or separation benefits required by applicable law, including without limitation the costs associated with plans
under which such benefits are provided (“Severance Benefits”), with respect to Halliburton Employees, and KBR shall be solely responsible for any payments of Severance Benefits with respect to KBR Employees, in each case without
regard to whether such Severance Benefits are attributable to such employee’s service for a prior employer. 
 ARTICLE VII 
 INDEMNIFICATION 
 SECTION 7.1
Indemnification by Halliburton. Except as otherwise provided in this Agreement, Halliburton shall, for itself and as agent for each member of the Halliburton Group, indemnify, defend (or, where applicable, pay the defense costs for) and hold
harmless KBR and its Subsidiaries from and against any and all Benefit Liabilities that any third party seeks to impose upon KBR or its Subsidiaries, or which are imposed upon KBR or its Subsidiaries, if and to the extent such Benefit Liabilities
relate to, arise out of or result from any of the following items (without duplication): 
 (a) any acts or omissions or
alleged acts or omissions by or on behalf of any member or person employed by a member of the Halliburton Group in the conduct of the Halliburton Business; 
 (b) any claim by an officer of any member of the Halliburton Group (who is an officer as of the IPO Closing Date) against any member or employee of any member of the KBR Group; and 
 (c) any breach by Halliburton or any member or individual employed by a member of the Halliburton Group of this Agreement. 
 In the event that any member of the Halliburton Group makes a payment to KBR or its Subsidiaries hereunder, and the Benefit Liability on account of which
such payment was made is subsequently diminished, either directly or through a third-party recovery, KBR will promptly repay (or will procure a KBR Subsidiary to promptly repay) such member of the Halliburton Group the amount by which the payment
made by such member of the Halliburton Group exceeds the actual cost of the associated indemnified Benefit Liability. 
  

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 SECTION 7.2 Indemnification by KBR. Except as otherwise provided in this Agreement, KBR shall, for
itself and as agent for each member of the KBR Group, indemnify, defend (or, where applicable, pay the defense costs for) and hold harmless Halliburton and its Subsidiaries from and against any and all Benefit Liabilities that any third party seeks
to impose upon Halliburton or its Subsidiaries, or which are imposed upon Halliburton or its Subsidiaries, if and to the extent such Benefit Liabilities relate to, arise out of or result from any of the following items (without duplication):

 (a) any acts or omissions or alleged acts or omissions by or on behalf of any member or person employed by a member of the
KBR Group in the conduct of the KBR Business; 
 (b) any claim by an officer of any member of the KBR Group (who is an officer
as of the IPO Closing Date) against any member or employee of any member of the Halliburton Group; and 
 (c) any breach by
KBR or any member or individual employed by a member of the KBR Group of this Agreement. 
 In the event that any member of the KBR Group
makes a payment to Halliburton or its Subsidiaries hereunder, and the Benefit Liability on account of which such payment was made is subsequently diminished, either directly or through a third-party recovery, Halliburton will promptly repay (or will
cause a Halliburton Subsidiary to promptly repay) such member of the KBR Group the amount by which the payment made by such member of the KBR Group exceeds the actual cost of the indemnified Benefit Liability. 
 ARTICLE VIII 
 CERTAIN TRANSITION MATTERS

 SECTION 8.1 Transition Services Agreement. On or about the date hereof, Halliburton and KBR shall enter into the Transition
Services Agreement covering the provisions of various services to be provided by Halliburton and its affiliates to KBR. The provisions of this Agreement shall be subject to the provisions of such Transition Services Agreement and to the extent that
any provision in this Agreement is inconsistent with a provision in the Transition Services Agreement the provision in the Transition Services Agreement shall control. 
 SECTION 8.2 Requests for IRS and DOL Opinions. Halliburton and KBR shall make such applications to regulatory agencies, including, without limitation, the IRS and the DOL, as may be necessary or appropriate.
Halliburton and KBR shall cooperate fully with one another on any issue relating to the transactions contemplated by this Agreement for which Halliburton and/or KBR elects to seek a determination letter or private letter ruling from the IRS, an
advisory opinion from the DOL or similar opinion or ruling from any other regulatory agency, domestic or foreign. 
 SECTION 8.3 Consent
of Third Parties. If any provision of this Agreement is dependent on the consent of any third party (such as a vendor) and such consent is withheld, Halliburton and KBR shall use their commercially reasonable best efforts to implement the
applicable provisions of this Agreement. If any provision of this Agreement cannot be implemented due to the failure of such third party to consent, Halliburton and KBR shall negotiate in good faith to implement the provision in a mutually
satisfactory manner. 
 SECTION 8.4 Tax Cooperation. In connection with the interpretation and administration of this Agreement,
Halliburton and KBR shall take into account the agreements and policies established pursuant to the Separation Agreement and the Tax Sharing Agreement. 
  

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 SECTION 8.5 Plan Returns. Plan Returns shall be filed or caused to be filed by Halliburton or KBR,
as the case may be, in accordance with the principles established in the Tax Sharing Agreement. For purposes of this Section 8.5, “Plan Returns” means any return, report, certificate, form or similar statement or document
required to be filed with a government agency with respect to an employee benefit plan or program, domestic or foreign. 
 SECTION 8.6
Plan and Trust Separation. Either Halliburton or KBR may give notice of termination of their participation in the master trust and other plans or trusts, including international trusts or schemes or their equivalents, maintained for the
purpose of funding benefits or arrangements maintained by Halliburton and KBR (“Trusts”) and such Trusts shall be separated with respect to the Halliburton and KBR Plans. The parties shall work together in good faith to complete
such separation on commercially reasonable terms and conditions and within a reasonable time period, not to exceed eighteen (18) months from the date of notice, taking into consideration the best interests of the Plan participants as determined
by the appropriate plan sponsor or fiduciary, including without limitation the appointment of trustees and establishment of trust agreements. Halliburton and KBR understand that the Trusts separately account for the assets of each Halliburton Plan
and KBR Plan, and upon separation of such Trusts, the assets allocated to each Plan shall be transferred to a trust or funding arrangement established for such Plan in accordance with the directions of the appropriate plan sponsor or fiduciary. In
the event a Trust does not separately account for the assets of each Halliburton Plan and KBR Plan, the separation will be implemented in a way that equitably and fairly reflects the assets or benefits payable under the terms of such Plan. In
addition, to the extent any of the Canadian Plans provide benefits to both Halliburton Employees and KBR Employees, KBR agrees to cooperate with Halliburton to facilitate the separation of the Canadian Plans. In the event of disagreement among the
parties with respect to a Trust separation, such disagreement shall be settled in accordance with the provisions of Article VII of the Separation Agreement, which includes binding arbitration as its final step. 
 ARTICLE IX 
 EMPLOYMENT-RELATED MATTERS

 SECTION 9.1 Terms of KBR Employment. Employees of the KBR Group may be required to execute a new agreement regarding confidential
information and proprietary developments in a form approved by KBR. In addition, nothing in this Agreement, the Separation Agreement, the Transition Services Agreement or the Tax Sharing Agreement should be construed to change the at-will status of
any of the employees of any member of the Halliburton Group or the KBR Group. 
 SECTION 9.2 Non-Termination of Employment; No Third-Party
Beneficiaries. No provision of this Agreement shall be construed to create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part of any KBR Employee or other future, present or former employee of
Halliburton, KBR, the Halliburton Group or the KBR Group under any Halliburton Plan or KBR Plan or otherwise. Without limiting the generality of the foregoing: (a) except as otherwise provided in this Agreement or applicable provisions of the
Plans, neither the IPO, the Separation nor the termination of the Participating Company status of KBR or any member of the KBR Group shall cause any employee to be deemed to have incurred a termination of employment; and (b) except as 

  

 -16- 

 
otherwise provided in this Agreement, no transfer of employment between the Halliburton Group and the KBR Group before the IPO Closing Date shall be deemed a
termination of employment for any purpose hereunder. 
 ARTICLE X 
 GENERAL PROVISIONS 
 SECTION 10.1 Effect if IPO does not Occur. Subject to Section 10.10, if the
IPO does not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of the IPO Closing Date, or otherwise in connection with the IPO, shall not be taken or occur except to the extent specifically agreed
by the parties. 
 SECTION 10.2 Limitation of Liability. TO THE EXTENT THAT HALLIBURTON OR ANY MEMBER OF THE HALLIBURTON GROUP
PROVIDES SERVICES UNDER THIS AGREEMENT TO KBR, AND SUCH SERVICES ARE NOT OTHERWISE ADDRESSED IN THE TRANSITION SERVICES AGREEMENT, SUCH SERVICES SHALL BE PERFORMED WITH THE SAME GENERAL DEGREE OF CARE AS WHEN PERFORMED WITHIN THE HALLIBURTON
ORGANIZATION. KBR HEREBY EXPRESSLY WAIVES ANY RIGHT KBR MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW, OR IN EQUITY IN THE EVENT OF ANY NON-PERFORMANCE, INADEQUATE
PERFORMANCE, FAULTY PERFORMANCE OR OTHER FAILURE OR BREACH BY HALLIBURTON OR ANY MEMBER OF THE HALLIBURTON GROUP UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE) OF
HALLIBURTON OR ANY MEMBER OF THE HALLIBURTON GROUP OR ANY OTHER PERSON OR ENTITY INVOLVED IN THE PROVISION OF SERVICES AND WHETHER DAMAGES ARE ASSERTED IN CONTRACT OR TORT, UNDER FEDERAL, STATE OR FOREIGN LAWS OR OTHER STATUTE OR OTHERWISE;
PROVIDED, HOWEVER, THAT THE FOREGOING WAIVER SHALL NOT EXTEND TO COVER, AND HALLIBURTON SHALL BE RESPONSIBLE FOR, SUCH LOSSES CAUSED BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF HALLIBURTON, ANY MEMBER OF THE HALLIBURTON GROUP OR ANY THIRD PARTY
SERVICE PROVIDER HEREUNDER. 
 SECTION 10.3 Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the
parties or any third party as creating a fiduciary relationship, a relationship of principal and agent, partnership or joint venture between the parties, the understanding and agreement being that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other than the relationship set forth herein. This Agreement shall be binding upon and inure solely to the benefit of and be enforceable by each party and its respective
successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 
 SECTION 10.4 Incorporation of Separation Agreement Provisions. If a dispute, claim or controversy results from or arises out of or in connection
with this Agreement, 

  

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the parties agree to use the procedures set forth in Article VII of the Separation Agreement in lieu of other available remedies, to resolve same. The
provisions of Sections 9.1 (Limitation of Liability) and 9.5 (Notices) of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth
herein (references in this Section 10.4 to an “Article” or a “Section” shall mean Articles or Sections of the Separation Agreement, and, except as expressly set forth herein, references in the material incorporated herein by
reference shall be references to the Separation Agreement). 
 SECTION 10.5 Governing Law. To the extent not preempted by applicable
federal law, this Agreement shall be governed by, construed and interpreted in accordance with the laws of the State of Delaware, irrespective of the choice of law principles of the State of Delaware, as to all matters, including matters of
validity, construction, effect, performance and remedies. 
 SECTION 10.6 Severability. If any term or other provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible and in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest possible
extent. 
 SECTION 10.7 Amendment. Halliburton and KBR may mutually agree to amend the provisions of this Agreement at any time or
times, either prospectively or retroactively, to such extent and in such manner as the Boards mutually deem advisable. Each Board may delegate its amendment power, in whole or in part, to one or more Persons or committees as it deems advisable.

 SECTION 10.8 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by a
party without the prior written consent of the other party, except that the any party may at any time assign any or all of its rights or obligations hereunder to one of its wholly owned subsidiaries (but no such assignment shall relieve such party
of any of its obligations under this Agreement). 
 SECTION 10.9 No Strict Construction; Cooperation of the Parties. The language this
Agreement uses shall be deemed to be the language the parties hereto have chosen to reflect their mutual intent, and no rule of strict construction or presumption based upon the party that has drafted this Agreement shall be applied against any
party hereto. The parties acknowledge that the names used for Plans under this Agreement may not be the sole name designated for such Plans, but the parties acknowledge and agree to recognize the Plans under the names used herein. To the extent that
issues arise related to the subject matter hereof that are not specifically addressed by this Agreement, the parties will cooperate to address such issues in the same manner and using the same principles provided in this Agreement. 
  

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 SECTION 10.10 Termination. This Agreement may be terminated at any time prior to the IPO Closing
Date by Halliburton in its sole discretion (without the approval of KBR). This Agreement may be terminated at any time after the IPO Closing Date by mutual consent of Halliburton and KBR. In the event of termination pursuant to this Section, no
party shall have any liability of any kind under this Agreement to the other party. 
 SECTION 10.11 Conflict. In the event of any
conflict between the provisions of this Agreement and the Separation Agreement or any Plan, the provisions of this Agreement shall control. In the event of any conflict between the provisions of this Agreement and the Transition Services Agreement,
the provisions of the Transition Services Agreement shall control. 
 SECTION 10.12 Counterparts. This Agreement may be executed in
two or more counterparts each of which shall be deemed to be an original, but all of which together shall constitute but one and the same Agreement. 
  

 -19- 

 IN WITNESS WHEREOF, each of the parties has caused this Employee Matters Agreement to be executed on its
behalf by its officers thereunto duly authorized on the day and year first above written. 
  

			
	HALLIBURTON COMPANY
		
	By:	 	/s/ C. Christopher Gaut
	Name:	 	C. Christopher Gaut
	Title:	 	Executive Vice President and Chief Financial Officer
	
	KBR, INC.
		
	By:	 	/s/ William P. Utt
	Name:	 	William P. Utt
	Title:	 	President & CEO

  

 -20-Intellectual Property Matters Agreement

 EXHIBIT 10.7 
 INTELLECTUAL PROPERTY MATTERS AGREEMENT 
 BETWEEN 
 HALLIBURTON COMPANY 
 and 
 KBR, INC. 
 Dated November 20, 2006 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I DEFINITIONS
	  	1
		
	 ARTICLE II OWNERSHIP OF INTELLECTUAL PROPERTY
	  	7
	 SECTION 2.1
	  	KBR’s Ownership	  	7
	 SECTION 2.2
	  	Halliburton’s Ownership	  	7
	 SECTION 2.3
	  	KBR Marks and Halliburton Marks	  	7
		
	 ARTICLE III LICENSES TO HALLIBURTON
	  	8
	 SECTION 3.1
	  	KBR Patents	  	8
	 SECTION 3.2
	  	KBR Licensed Other IP	  	8
	 SECTION 3.3
	  	KBR Third Party Patents	  	8
	 SECTION 3.4
	  	Technology Fees	  	8
	 SECTION 3.5
	  	Retained Rights	  	9
		
	 ARTICLE IV LICENSES TO KBR
	  	10
	 SECTION 4.1
	  	Halliburton Patents	  	10
	 SECTION 4.2
	  	Halliburton Licensed Other IP	  	10
	 SECTION 4.3
	  	Halliburton Third Party Patents	  	10
	 SECTION 4.4
	  	Retained Rights	  	10
		
	 ARTICLE V OTHER AGREEMENTS
	  	10
	 SECTION 5.1
	  	Conflict	  	10
	 SECTION 5.2
	  	Software License Agreement	  	10
		
	 ARTICLE VI MAINTENANCE AND ENFORCEMENT
	  	11
	 SECTION 6.1
	  	Prosecution and Maintenance of IP Rights	  	11
	 SECTION 6.2
	  	Enforcement of IP Rights	  	11
		
	 ARTICLE VII CONFIDENTIALITY
	  	11
	 SECTION 7.1
	  	Confidentiality	  	11
	 SECTION 7.2
	  	Equitable Relief	  	12
		
	 ARTICLE VIII WARRANTIES AND INDEMNIFICATION
	  	12
	 SECTION 8.1
	  	No Representation or Warranty	  	12
	 SECTION 8.2
	  	Indemnification by Halliburton	  	12
	 SECTION 8.3
	  	Indemnification by KBR	  	13
	 SECTION 8.4
	  	Procedures for Indemnification of Third Party Claims	  	13
	 SECTION 8.5
	  	Mitigation of Damages	  	15
		
	 ARTICLE IX TERM AND TERMINATION
	  	15
	 SECTION 9.1
	  	Term	  	15
	 SECTION 9.2
	  	Termination	  	15

  

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	 ARTICLE X GENERAL PROVISIONS
	  	16
	 SECTION 10.1
	  	Effect if IPO does not Occur	  	16
	 SECTION 10.2
	  	Relationship of Parties	  	16
	 SECTION 10.3
	  	Incorporation of Separation Agreement Provisions	  	16
	 SECTION 10.4
	  	Governing Law; Jurisdiction	  	16
	 SECTION 10.5
	  	Severability	  	17
	 SECTION 10.6
	  	Amendment	  	17
	 SECTION 10.7
	  	Assignment	  	17
	 SECTION 10.8
	  	No Strict Construction	  	17
	 SECTION 10.9
	  	Further Assurances	  	17
	 SECTION 10.10
	  	Counterparts	  	17

  

 -ii- 

 INTELLECTUAL PROPERTY MATTERS AGREEMENT 
 This INTELLECTUAL PROPERTY MATTERS AGREEMENT (this “Agreement”) is entered into as of the 20th day of November, 2006 by and between Halliburton
Company, a Delaware corporation (“Halliburton”), and KBR, Inc., a Delaware corporation (“KBR”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I hereof or in
the Master Separation Agreement (as defined below). 
 WHEREAS, the Board of Directors of Halliburton has determined that it is in the best
interests of Halliburton and its shareholders to make an initial public offering (“IPO”) of shares of KBR common stock; 
 WHEREAS,
in order to effectuate the foregoing, Halliburton and KBR have entered into a Master Separation Agreement, dated as of the date hereof (the “Separation Agreement”), which provides, among other things, subject to the terms and conditions
thereof, for the Separation, the IPO, and the execution and delivery of certain other agreements, including this Agreement, in order to facilitate and provide for the foregoing; and 
 WHEREAS, in order to facilitate implementation of the Separation Agreement, Halliburton, on behalf of itself and the Halliburton Group (as defined
below), and KBR, on behalf of itself and the KBR Group (as defined below), are entering into this Agreement to allocate between them assets, liabilities and responsibilities with respect to certain intellectual property. 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties, intending to be legally bound,
agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Wherever used in this Agreement, the following terms shall have the meanings indicated below, unless a different
meaning is plainly required by the context. The singular shall include the plural, unless the context indicates otherwise. Headings of sections are used for convenience of reference only, and in case of conflict, the text of this Agreement, rather
than such headings, shall control: 
 “Action” means any demand, action, suit, countersuit, arbitration, inquiry, proceeding
or investigation by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal. 
 “Agreement” means this Intellectual Property Matters Agreement and all amendments made hereto from time to time. 
 “Appropriate Members of the Halliburton Group” shall have the meaning set forth in Section 8.2. 
  

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 “Appropriate Members of the KBR Group” shall have the meaning set forth in
Section 8.3. 
 “Change of Control” means that as the result of an event or series of events, one or more parties
unaffiliated with KBR or Halliburton, acquires 50% or more of the ownership or control, direct or indirect, of KBR or Halliburton. 
 “Coal Gasification Field of Use” means the fields of business and operations, whether or not previously conducted by Halliburton or KBR, related to the engineering, construction and operation of facilities for coal
gasification. 
 “Coal Gasification Technology” means the coal gasification technologies identified in Attachment A hereto.
For the avoidance of doubt, Coal Gasification Technology is a subset of KBR Patents and KBR Other IP. 
 “Coal Producing and
Processing Companies” means those Persons whose business includes the production, sale or processing of coal, and excludes, without limitation, those Persons whose principal business is the provision of engineering and/or construction
services and those Persons whose principal business is the provision of upstream oilfield services. 
 “Confidential IP
Information” shall have the meaning set forth in Section 7.1 hereof. 
 “Field Processing Field of Use” means
the fields of business and operations, whether or not previously conducted by Halliburton or KBR, related to the engineering, construction and operation of facilities for the upgrading of hydrocarbons or non-hydrocarbons associated with production
from subterranean formations via wells, and disposition of hydrocarbon and non-hydrocarbon byproduct materials, all of the foregoing when performed generally proximate to the location from which the hydrocarbons and/or non-hydrocarbons are produced
in conjunction with an integrated customer project which additionally includes upstream field development activities (e.g., one or more of well construction; formation or reservoir evaluation; completion; production enhancement, monitoring,
and/or optimization). To be clear, the Field Processing Field of Use comprises the engineering, construction and operation of facilities for the upgrading of hydrocarbons or non-hydrocarbons as aforesaid and does not comprise the upstream field
development activities associated therewith, and also does not comprise the refining of hydrocarbons beyond the scope of the Upgrade Technology. 
 “Government and Infrastructure Persons” means Persons of the kind and type with which KBR conducts business through its Government and Infrastructure segment as of the IPO Closing Date, and excludes those Persons whose
principal business is the provision of upstream oilfield services. 
 “Halliburton” means Halliburton Company, a Delaware
corporation. In all such instances in which “Halliburton” is referred to in this Agreement, it shall also be deemed to include a reference to each or any member of the Halliburton Group, unless it specifically provides otherwise;
Halliburton shall be solely responsible to KBR for ensuring that each member of the Halliburton Group complies with the applicable terms of this Agreement. 
  

 - 2 - 

 “Halliburton Fields of Use” means (a) the fields of the business and operations
conducted by Halliburton on the IPO Closing Date, (b) all fields of use other than the KBR Fields of Use, (c) the Field Processing Field of Use, (d) the Coal Gasification Field of Use, and (e) the Riser Field of Use. 

“Halliburton Group” shall have the meaning set forth in the Separation Agreement. 
 “Halliburton Indemnitees” shall have the meaning set forth in Section 8.3. 
 “Halliburton Licensed Other IP” means all Halliburton Other IP used by KBR prior to the IPO Closing Date. 
 “Halliburton Marks” means all trademarks, service marks, logos, trade names, business names and trade dress owned by Halliburton
immediately prior to the IPO Closing Date. 
 “Halliburton Other IP” means all intellectual property (including, without
limitation, trade secrets, copyrights, and know-how) owned by Halliburton immediately prior to the IPO Closing Date, but excluding the Halliburton Patents and the Halliburton Marks. 
 “Halliburton Patents” means those patents and patent applications which are owned by Halliburton immediately prior to the IPO Closing
Date. 
 “Halliburton Third Party Patents” means those patents that are not owned by Halliburton or KBR but to which
Halliburton has rights under a license agreement with a third party immediately prior to the IPO Closing Date. 
 “Indemnifying
Party” shall have the meaning set forth in Section 8.4(a). 
 “Indemnitee” shall have the meaning set forth in
Section 8.4(a). 
 “IP Rights” means the Halliburton Patents, Halliburton Marks, Halliburton Licensed Other IP, KBR
Patents, KBR Marks, and KBR Licensed OtherIP. 
 “IPO” has the meaning set forth in the Recitals hereof, as the same is
further described in the Separation Agreement. 
 “IPO Closing Date” means the first date on which the proceeds of any sale
of KBR Common Stock to the underwriters in the IPO are received. 
 “KBR” means KBR, Inc., a Delaware corporation. In all
such instances in which KBR is referred to in this Agreement, it shall also be deemed to include a reference to each or any member of the KBR Group, unless it specifically provides otherwise; KBR shall be solely responsible to Halliburton for
ensuring that each member of the KBR Group complies with the applicable terms of this Agreement. 
 “KBR Data” shall have
the meaning set forth in Section 5.2. 
  

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 “KBR Fields of Use” means (a) the fields of the business and operations conducted
by KBR on the IPO Closing Date, (b) except as otherwise specifically provided in the Separation Agreement, the fields of any terminated, divested or discontinued business or operation that at the time of such termination, divestiture or
discontinuation was conducted by KBR, (c) the Field Processing Field of Use, (d) the Coal Gasification Field of Use, (e) the Riser Field of Use, and (f) the fields of the following global engineering, procurement, construction,
technology and other services provided to energy and industrial customers and government entities worldwide: 
  

	 	(i)	construction, maintenance, procurement, training and logistics services for government or military operations, facilities and installations; 

  

	 	(ii)	civil engineering, construction, consulting and project management services for state and local government agencies and private industries; 

  

	 	(iii)	integrated security solutions, including threat definition assessments, mitigation and consequence management; design, engineering and program management; construction and delivery;
and physical security, operations and maintenance; 

  

	 	(iv)	dockyard, military or aircraft facilities operation and management, with services that include design, construction, surface/subsurface/airborne fleet maintenance, nuclear
engineering and refueling, and weapons engineering; 

  

	 	(v)	privately financed initiatives such as a facility, service or infrastructure for a government client, and the ownership, operation and maintenance of same; 

 

	 	(vi)	engineering and construction capabilities, including global engineering execution centers, as well as engineering, construction and program management of liquefied natural gas,
gas-to-liquids (“GTL”), ammonia, fertilizers, petrochemicals, crude oil refineries, power generation facilities and natural gas plants; 

  

	 	(vii)	oil and gas facilities engineering, marine technology and project management; 

  

	 	(viii)	operations, maintenance and start-up services to the oil and gas, petrochemical, forest product, power and commercial markets; 

  

	 	(ix)	technology licensing in the areas of: ammonia, fertilizers and synthesis gas; petrochemicals; refining; upgrading of hydrocarbons; chemicals and polymers in non-oil field services
industries; subsea risers; and coal monetization at the surface and associated downstream processing; and 

  

	 	(x)	 consulting services in the form of expert technical and management advice that includes studies, conceptual and detailed engineering, project 

  

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management, construction supervision and design, and construction verification or certification in upstream, midstream and downstream markets.

 Notwithstanding the above, “KBR Fields of Use” excludes the following fields of product or service delivery and technology
licensing (including, without limitation, software and data processing): 
  

	 	(A)	exploration for hydrocarbons; 

  

	 	(B)	products used in well construction or within a well; 

  

	 	(C)	services relating to a well or proximate geological formation; 

  

	 	(D)	products or services relating to production and/or production optimization from one or more wells and/or reservoirs, including, without limitation, the RTO field of the intellectual
properties assigned January 1, 2005 from Kellogg Brown and Root, Inc. to Landmark Graphics Corporation of the Halliburton Group under Contract Number 2005-COM-028432, but not including design or installation of surface or sea-bottom facilities;

  

	 	(E)	hydrocarbon reservoir engineering or modeling; 

  

	 	(F)	any of consulting services, project management, and/or supervision, in relation to any of hydrocarbon exploration, well construction, production from one or more wells and/or
hydrocarbon reservoirs; and 

  

	 	(G)	any of the chemical compositions patented and owned by Halliburton. 

 “KBR Group” shall have the meaning set forth in the Separation Agreement. 
 “KBR
Indemnitees” shall have the meaning set forth in Section 8.2. 
 “KBR Licensed Other IP” means the KBR Other
IP used by Halliburton prior to the IPO Closing Date, the Upgrade Technology, the Riser Technology, and the Coal Gasification Technology. 
 “KBR Marks” means all trademarks, service marks, logos, trade names, business names and trade dress owned by KBR immediately prior to the IPO Closing Date. 
 “KBR Other IP” means all intellectual property (including, without limitation, trade secrets, copyrights, and know-how) owned by KBR
immediately prior to the IPO Closing Date, but excluding all KBR Patents and KBR Marks. 
 “KBR Patents” shall mean those
patents and patent applications which are owned by KBR immediately prior to the IPO Closing Date and any patents claiming any of the Upgrade Technology, Riser Technology, or Coal Gasification Technology. 
  

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 “KBR Third Party Patents” means those patents that are not owned by Halliburton or KBR
but to which KBR has rights under a license agreement with a third party immediately prior to the IPO Closing Date. 
 “Losses” shall have the meaning set forth in the Separation Agreement. 
 “Oil and Gas Producing
Companies” means those Persons whose principal business is the production and sale of oil and gas, and excludes, without limitation, those Persons whose principal business is the provision of engineering and/or construction services and
those Persons whose principal business is the provision of upstream oilfield services. 
 “Refining or Industrial Processing
Companies” means those Persons whose principal business is the refining of hydrocarbons and sale of refined products, or Persons whose principal business is other industrial processing and whose products are included in the KBR Fields of
Use, and excludes, without limitation, those Persons whose principal business is the provision of upstream oilfield services. 
 “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof. 
 “Riser Field of Use” means the fields of business and operations,
whether or not previously conducted by Halliburton or KBR, related to the engineering, construction and operation of subsea riser facilities. 
 “Riser Technology” means the KBR Patents and KBR Other IP covering subsea risers, their interface to other equipment (including, without limitation, either subsea or on platforms), riser construction, operation,
installation, removal, and any riser related services, and specifically including KBR’s “Compliant Vertical Access Riser” technology, owned by KBR on or before the effective date of the Intellectual Property Matters Agreement. For the
avoidance of doubt, Riser Technology is a subset of KBR Patents and KBR Other IP. 
 “ROSETM Technology” means the
Residuum Oil Supercritical Extraction heavy oil technology of KBR identified on Attachment B hereto. 
 “Separation” shall
have the meaning set forth in the Separation Agreement. 
 “Separation Agreement” means the Master Separation Agreement
between Halliburton Company and KBR, Inc. entered into as of November 20, 2006. 
 “Software License Agreements” shall have
the meaning set forth in Section 5.2. 
 “Third Party Claims” shall have the meaning set forth in Section 8.4(a).

 “Upgrade Technology” means the field upgrade technologies identified in Attachment B hereto including, without
limitation, ROSETM Technology. For the avoidance of doubt, Upgrade Technology is a subset of KBR Patents and KBR Other IP. 
  

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 ARTICLE II 
 OWNERSHIP OF INTELLECTUAL PROPERTY 
 SECTION 2.1 KBR’s Ownership. Halliburton expressly
acknowledges that, as between the parties, KBR is the sole and exclusive owner of the KBR Patents, the KBR Other IP, and the KBR Marks, and Halliburton agrees that it shall do nothing inconsistent with such ownership. KBR shall exercise full control
over KBR Patents, KBR Other IP, and the KBR Marks, which includes (a) the right to sell or transfer its ownership interests in the KBR Patents, KBR Other IP, and the KBR Marks, provided that any such sale or transfer shall be made subject to
Halliburton’s rights under this Agreement, and (b) the right to abandon its proprietary rights in the trade secrets and know how which are part of the KBR Other IP by disclosure or otherwise. Halliburton shall not claim or assert any right
of ownership in or to the KBR Patents, KBR Other IP, or the KBR Marks and shall not initiate any litigation, administrative proceeding or regulatory or other action that could destroy, damage, or impair in any way the ownership or rights of KBR in
and to the KBR Patents, KBR Other IP or the KBR Marks and shall not assist any other Person in doing the same. 
 SECTION 2.2
Halliburton’s Ownership. KBR expressly acknowledges that, as between the parties, Halliburton is the sole and exclusive owner of the Halliburton Patents, Halliburton Other IP, and the Halliburton Marks, and KBR agrees that it shall do
nothing inconsistent with such ownership. Halliburton shall exercise full control over Halliburton Patents, Halliburton Other IP and the Halliburton Marks, which includes (a) the right to sell or transfer its ownership interests in the
Halliburton Patents, Halliburton Other IP, and the Halliburton Marks provided that any such sale or transfer shall be made subject to KBR’s rights under this Agreement, and (b) the right to abandon its proprietary rights in the trade
secrets and know how which are part of the Halliburton Other IP by disclosure or otherwise. KBR shall not claim or assert any right of ownership in or to the Halliburton Patents, Halliburton Other IP, or Halliburton Marks and shall not initiate any
litigation, administrative proceeding or regulatory or other action that could destroy, damage, or impair in any way the ownership or rights of Halliburton in and to the Halliburton Patents, the Halliburton Other IP or the Halliburton Marks and
shall not assist any other Person in doing the same. 
 SECTION 2.3 KBR Marks and Halliburton Marks. Immediately upon the IPO Closing
Date, KBR shall cease all use of the Halliburton Marks, including without limitation any such use on KBR’s websites, and Halliburton shall cease all use of the KBR Marks, including without limitation any such use on Halliburton’s websites.
KBR shall not adopt any trademarks, service marks, logos, trade names, business names, or trade dress confusingly similar to the Halliburton Marks, and Halliburton shall not adopt any trademarks, service marks, logos, trade names, business names or
trade dress confusingly similar to the KBR Marks. Notwithstanding the above, KBR agrees that Halliburton may continue, after the IPO Closing Date, to use the term “Kellogg,” “KBR” or “Kellogg Brown & Root” as
part of the name of one Halliburton Group entity that will serve as a holding company and will not directly provide any goods or services. 
  

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 ARTICLE III 
 LICENSES TO HALLIBURTON 
 SECTION 3.1 KBR Patents. Subject to the terms and conditions set forth in
this Agreement (and, with respect to the Coal Gasification Technology, to the extent permitted under its current agreements with Southern Company Services, Inc. (“Southern”) and the United States Department of Energy (“DOE”)),
KBR hereby grants to Halliburton a royalty-free, non-exclusive, worldwide license in the Halliburton Fields of Use to all rights available under the KBR Patents, limited only by Halliburton’s confidentiality and non-use obligations hereunder.
Halliburton shall have the right to grant sublicenses under such KBR Patents in the Halliburton Fields of Use (and with respect to the Coal Gasification Technology, to the extent permitted under KBR’s current agreements with Southern and DOE)
only to Oil and Gas Producing Companies and Coal Producing and Processing Companies, and subject to Section 3.4. Except as otherwise provided in this Agreement, the license in this Section 3.1 shall remain in effect for the life of such
KBR Patents. 
 SECTION 3.2 KBR Licensed Other IP. Subject to the terms and conditions set forth in this Agreement, KBR hereby grants
to Halliburton a royalty-free, non-exclusive, worldwide license in the Halliburton Fields of Use (and with respect to the Coal Gasification Technology, to the extent permitted under KBR’s current agreements with Southern and DOE) to all rights
available under the KBR Licensed Other IP, limited only by Halliburton’s confidentiality and non-use obligations hereunder. Halliburton shall have the right to grant sublicenses only to Oil and Gas Producing Companies and Coal Producing and
Processing Companies under such KBR Licensed Other IP in the Halliburton Fields of Use (and with respect to the Coal Gasification Technology, to the extent permitted under KBR’s current agreements with Southern and DOE), subject to
Section 3.4, for such Oil and Gas Producing Companies’ and Coal Producing and Processing Companies’ use of products or services that are provided by Halliburton and embody the KBR Licensed Other IP. Except as otherwise provided in
this Agreement, the license in this Section 3.2 shall remain in effect for the life of such KBR Licensed Other IP. 
 SECTION 3.3 KBR
Third Party Patents. Upon the request of Halliburton and to the extent permitted under KBR’s license agreements with third parties and under its current agreements with Southern and DOE, KBR shall grant to Halliburton a sublicense to the
KBR Third Party Patents in the Halliburton Fields of Use to the full extent, and on the most favorable terms, allowed under KBR’s license agreements. Except as otherwise provided in this Agreement, any such sublicense shall remain in effect so
long as KBR’s right to grant sublicenses remains in effect. 
 SECTION 3.4 Upgrade Technology, Riser Technology and Coal Gasification
Technology Fees. Halliburton acknowledges that KBR may charge its customers license and engineering fees in connection with the design and use of the Upgrade Technology, Riser Technology and the Coal Gasification Technology. In the event of
(a) a sub-license under the Upgrade Technology or Riser Technology from Halliburton to an Oil and Gas Producing Company or a Coal Producing and Processing Company to practice the Upgrade Technology or Riser Technology,
(b) Halliburton’s use of the Riser Technology in the Riser Field of Use, (c) Halliburton’s use of the Upgrade Technology in the Field Processing Field of Use, (d) a sub- license under the Coal Gasification Technology from
Halliburton to a Coal Producing and 

  

 - 8 - 

 
Processing Company or an Oil and Gas Producing Company to practice the Coal Gasification Technology, or (e) Halliburton’s use of the Coal
Gasification Technology in the Coal Gasification Field of Use, Halliburton will pay to KBR such license and engineering fees agreed to by KBR, being commercially reasonable and consistent with KBR practices at the time, and upon terms and conditions
agreed to by KBR, such terms and conditions also being commercially reasonable and consistent with KBR practices at the time. In the event of Halliburton being a KBR customer (as differentiated from being a licensee, in which case KBR shall include
its license and engineering fees in accordance with the preceding sentence) for KBR’s engineering, construction, and/or operation of facilities utilizing Upgrade Technology, Riser Technology or Coal Gasification Technology, then KBR shall
include said license and engineering fees and terms, which shall be commercially reasonable and consistent with KBR practices at the time, in its pricing to Halliburton. In the event KBR is obligated to pay any third party any amounts due to the use
or sublicense by Halliburton of any rights granted in this Agreement, such amounts being in addition to such license and engineering fees and equally applicable to any party were such party to be in Halliburton’s position, Halliburton shall, at
KBR’s discretion, either pay such amounts on KBR’s behalf to such third party when due, or pay such amounts promptly to KBR. 
 SECTION 3.5 Retained Rights. Except as expressly set forth in Sections 3.1, 3.2 and 3.3 of this Agreement, no other intellectual property rights are granted to Halliburton by KBR hereunder, whether by implication or otherwise, and
KBR hereby reserves all such intellectual property rights it otherwise has, including the right to develop and own intellectual property in the Halliburton Fields of Use. 
 SECTION 3.6 Reports; Audit Right. Halliburton shall provide KBR an annual report on or prior to the first and each subsequent anniversary of the IPO Closing Date describing all activities of Halliburton
relating to the offering to sublicense and/or sublicensing of any rights granted to it under this Agreement to which a fee attaches pursuant to Section 3.4. Halliburton shall maintain for a period of three (3) years following the date of
each royalty report and payment due under this Agreement accurate and complete books and records which support the determination of the royalty payment which was due under this Agreement on the date of that report and payment. Such books and records
shall be kept in accordance with generally accepted accounting principles. Upon twenty (20) days’ written notice, Halliburton shall permit the examination of such records, at KBR’s expense, by the KBR or its designated representative,
at any time during normal business hours throughout the term of this Agreement and for three (3) years following its termination, for the purpose of verifying the payments due hereunder. If any such examination reveals that an error has been
made in Halliburton’s favor in the amount of royalties paid for any calendar year equal to five percent (5%) or more of such payments, then the cost of the audit shall be paid by Halliburton. Any error in royalty payments shall be
corrected by payment of an amount equal to one hundred ten percent (110%) of that which Halliburton has failed to report or pay, within thirty (30) days of receipt by Halliburton of written notice of such failure to pay. 
  

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 ARTICLE IV 
 LICENSES TO KBR 
 SECTION 4.1 Halliburton Patents. Subject to the terms and conditions set forth in
this Agreement, Halliburton hereby grants to KBR a royalty-free, non-exclusive, worldwide license in the KBR Fields of Use to all rights available under the Halliburton Patents, limited only by KBR’s confidentiality and non-use obligations
hereunder. KBR shall have the right to grant sublicenses only to its customers who are Oil and Gas Producing Companies or Refining or Industrial Processing Companies or Coal Producing and Processing Companies or Government and Infrastructure Persons
under the Halliburton Patents in the KBR Fields of Use. Except as otherwise provided in this Agreement, the license in this Section 4.1 shall remain in effect for the life of the Halliburton Patents. 
 SECTION 4.2 Halliburton Licensed Other IP. Subject to the terms and conditions set forth in this Agreement, Halliburton hereby grants KBR a
royalty-free, non-exclusive, worldwide license in the KBR Fields of Use to all rights available under the Halliburton Licensed Other IP, limited only by KBR’s confidentiality and non-use obligations hereunder. KBR shall have the right to grant
sublicenses only to its customers who are Oil and Gas Producing Companies or Refining or Industrial Processing Companies or Coal Producing and Processing Companies or Government and Infrastructure Persons under the Halliburton Licensed Other IP in
the KBR Fields of Use for such customers’ use of products or services that are provided by KBR and embody the Halliburton Licensed Other IP. Except as otherwise provided in this Agreement, the license in this Section 4.2 shall remain in
effect for the life of the Halliburton Licensed Other IP. 
 SECTION 4.3 Halliburton Third Party Patents. Upon the request of KBR and
to the extent permitted under Halliburton’s license agreements with third parties, Halliburton shall grant to KBR a sublicense to the Halliburton Third Party Patents in the KBR Fields of Use to the full extent, and on the most favorable terms,
allowed under Halliburton’s license agreements. Except as otherwise provided in this Agreement, any such sublicense shall remain in effect so long as Halliburton’s right to grant sublicenses remains in effect. 
 SECTION 4.4 Retained Rights. Except as expressly set forth in Sections 4.1, 4.2 and 4.3 of this Agreement, no other intellectual property rights
are granted to KBR by Halliburton hereunder, whether by implication or otherwise, and Halliburton hereby reserves all such intellectual property rights it otherwise has, including without limitation the right to develop and own intellectual property
in the KBR Fields of Use. 
 ARTICLE V 
 OTHER AGREEMENTS 
 SECTION 5.1 Conflict. In the event of any conflict between the provisions of this Agreement and the
Separation Agreement, the provisions of this Agreement shall control. 
 SECTION 5.2 Software License Agreement. The terms and
conditions of this Agreement shall not apply to those Software License Agreements between Halliburton Energy Services, Inc. and Kellogg Brown & Root LLC, dated November 20, 2006, providing licenses for the internal use of certain
administrative software (the “Software License Agreements”). Except as 

  

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otherwise explicitly stated in the Software License Agreements, all data associated with or contained in the software assigned or licensed under the Software
License Agreements shall be treated as follows: (a) data primarily related to activities in the KBR Fields of Use prior to the IPO Closing Date (“KBR Data”) shall be considered KBR Other IP hereunder and (b) all such data
other than KBR Data shall be considered Halliburton Other IP hereunder. 
 ARTICLE VI 
 MAINTENANCE AND ENFORCEMENT 
 SECTION 6.1 Prosecution and Maintenance of IP
Rights. The party who is the owner of any of the IP Rights shall, during the term of this Agreement, be responsible for all actions and costs relating to the prosecution, protection, and maintenance of such IP Rights, including without
limitation prosecuting patent applications and maintaining existing and future patents. The IP Rights subject to this Agreement shall include all rights which result from any application, prosecution, protection or maintenance of the IP Rights.

 SECTION 6.2 Enforcement of IP Rights. In the event that a party learns that any IP Rights licensed to it hereunder are being
infringed or used improperly or without authorization by any Person, such party shall promptly notify the owner of such IP Rights. The owner of the infringed IP Rights shall decide in its sole and exclusive discretion what action to take or not to
take in response. The owner shall have the right to act to terminate any infringement, including, without limitation, prosecuting a lawsuit or other legal proceeding at its own expense, and such party may retain in full any and all recovery it may
receive as a result of its actions to terminate such infringement. The licensee of any IP Rights hereunder agrees to reasonably cooperate with the owner of such IP Rights in connection with any actions of the owner to enforce or defend its IP
Rights. 
 ARTICLE VII 
 CONFIDENTIALITY 
 SECTION 7.1 Confidentiality. Notwithstanding anything to the contrary in the Separation Agreement,
Halliburton and KBR shall hold and shall each cause their respective officers, employees, agents, consultants and advisors to hold, in strict confidence and not to use, disclose or release without the prior written consent of the other party, any
and all Confidential IP Information (as defined herein) of the other party; provided, that the parties may use the other party’s Confidential IP Information pursuant to Sections 3.1, 3.2, 4.1, and/or 4.2, and may disclose, or may permit
disclosure of, the other party’s Confidential IP Information under confidentiality and nonuse obligations which are at least as strict as those provided in this Agreement (a) to their respective auditors, attorneys, financial advisors,
bankers and other appropriate consultants and advisors who have a need to know such information and are informed of their obligation to hold such information confidential to the same extent as is applicable to the parties and in respect of whose
failure to comply with such obligations, Halliburton or KBR, as the case may be, will be responsible, (b) to their customers who are Oil and Gas Producing Companies or Refining or Industrial Processing Companies or Government and Infrastructure
Persons to the extent reasonably necessary for such customers’ use of products or services that are provided under this Agreement by Halliburton or KBR, as the case may be, and that embody Confidential IP Information, or (c) to the extent
Halliburton or KBR is 

  

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compelled to disclose any such Confidential IP Information by judicial or administrative process or, in the opinion of legal counsel, by other requirements
of law. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential IP Information is made pursuant to clause (c) above, Halliburton or KBR, as the case may be, shall promptly notify the other of the
existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which both parties will cooperate in seeking to obtain. In the event that such appropriate protective
order or other remedy is not obtained, the party whose Confidential IP Information is required to be disclosed shall or shall cause the other party to furnish, or cause to be furnished, only that portion of the Confidential IP Information that is
legally required to be disclosed. As used in this Section 7.1, “Confidential IP Information” shall mean all proprietary, technical or operational information, data or material relating to intellectual property, including
without limitation all trade secrets and know-how, of one party which, prior to or following the IPO Closing Date, has been disclosed by Halliburton, on the one hand, or KBR, on the other hand, in written, oral (including by recording), electronic,
or visual form to, or otherwise has come into the possession of, the other, including pursuant to any other provision of this Agreement (except to the extent that such Confidential IP Information can be shown to have been (i) in the public
domain through no fault of such party, (ii) later lawfully acquired from other sources by the party to which it was furnished or (iii) created independently by such party without the benefit of Confidential IP Information; provided,
however, in the case of (ii) that such sources did not provide such Confidential IP Information in breach of any confidentiality obligations). Notwithstanding anything to the contrary set forth herein, Halliburton, on the one hand, and KBR, on
the other hand, shall be deemed to have satisfied their obligations hereunder with respect to Confidential IP Information if they exercise the same degree of care (but no less than a reasonable degree of care) as they take to preserve
confidentiality for their own similar confidential intellectual property information. 
 SECTION 7.2 Equitable Relief. Each party
acknowledges that a breach of its obligations under Section 7.1 may cause the other party irreparable and significant harm and that, in addition to any other remedies available to it, such party may seek immediate injunctive relief without the
need for posting any bond in connection therewith. 
 ARTICLE VIII 
 WARRANTIES AND INDEMNIFICATION 
 SECTION 8.1 No Representation or Warranty.
Halliburton and KBR make no representations or warranties of any kind, express or implied, with respect to any of the IP Rights licensed hereunder, all of which are provided “AS IS”, and neither party makes any representations or
warranties as to the completeness, sufficiency or accuracy of any IP Rights licensed hereunder, or the freedom from infringement of third party rights by the exercise of any IP Rights licensed hereunder. 
 SECTION 8.2 Indemnification by Halliburton. Except as otherwise provided in this Agreement, Halliburton and the Appropriate Members of the
Halliburton Group shall indemnify, defend and hold harmless KBR, each member of the KBR Group and their respective successors and assigns (collectively, the “KBR Indemnitees”), from and against any and all Losses of the KBR
Indemnitees relating to, arising out of or resulting from the Halliburton Business (as 

  

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defined in the Separation Agreement), provided that (a) such Losses are in connection with the subject matter of this Agreement and (b) the Losses
do not relate to, arise out of, or result from KBR Indemnitees operating in the Halliburton Field of Use. Halliburton shall not indemnify, defend or hold harmless the KBR Indemnitees for any Losses arising out of KBR’s use of the Halliburton
Patents or Halliburton Other IP. As used in this Section 8.2, “Appropriate Members of the Halliburton Group” means the member or members of the Halliburton Group, if any, whose acts, conduct or omissions or failures to act
caused, gave rise to or resulted in the Loss from and against which indemnity is provided. 
 SECTION 8.3 Indemnification by KBR.
Except as otherwise provided in this Agreement, KBR and the Appropriate Members of the KBR Group shall indemnify, defend and hold harmless Halliburton, each member of the Halliburton Group and their respective successors and assigns, (collectively,
the “Halliburton Indemnitees”) from and against any and all Losses of the Halliburton Indemnitees relating to, arising out of or resulting from the KBR Business (as defined in the Separation Agreement), provided that (a) such
Losses are in connection with the subject matter of this Agreement and (b) the Losses do not relate to, arise out of, or result from Halliburton Indemnitees operating in the KBR Field of Use. KBR shall not indemnify, defend or hold harmless the
Halliburton Indemnitees for any such Losses arising out of Halliburton’s use of the KBR Patents or KBR Other IP. As used in this Section 8.3, “Appropriate Members of the KBR Group” means the member or members of the KBR
Group, if any, whose acts, conduct or omissions or failures to act caused, gave rise to or resulted in the loss from and against which indemnity is provided. 
 SECTION 8.4 Procedures for Indemnification of Third Party Claims 
 (a) If any Person
entitled to indemnification hereunder (“Indemnitee”) shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) who is not a member of the Halliburton Group or the KBR Group of any
claims or of the commencement by any such Person of any action (collectively, a “Third Party Claim”) with respect to which any party (an “Indemnifying Party”) may be obligated to provide indemnification to such
Indemnitee pursuant to this Article VIII, such Indemnitee shall give such Indemnifying Party written notice thereof within twenty (20) days after becoming aware of such Third Party Claim. Any such notice shall describe the Third Party Claim in
reasonable detail. Notwithstanding the foregoing, the failure of any Indemnitee or other Person to give notice as provided in this Section 8.4(a) shall not relieve the related Indemnifying Party of its obligations under this Article VIII,
except to the extent that such Indemnifying Party is actually prejudiced by such failure to give notice. 
 (b) An
Indemnifying Party may elect to defend (and, unless the Indemnifying Party has specified any reservations or exceptions, to seek to settle or compromise), at such Indemnifying Party’s own expense and by such Indemnifying Party’s own
counsel, any Third Party Claim for which indemnification is available under this Article VIII. Within thirty (30) days after the receipt of notice from an Indemnitee in accordance with Section 8.4(a) (or sooner, if the nature of such Third
Party Claim so requires), the Indemnifying Party shall notify the Indemnitee of its election whether the Indemnifying Party will assume responsibility for defending such Third Party Claim, which election 

  

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shall specify any reservations or exceptions. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnitee except as
set forth in the next sentence. In the event that the Indemnifying Party has elected to assume the defense of a Third Party Claim for which indemnification is available under this Article VIII but has specified, and continues to assert, any
reservations or exceptions in such notice, then, in any such case, the reasonable fees and expenses of one separate counsel for all Indemnitees shall be borne by the Indemnifying Party. 
 (c) If an Indemnifying Party elects not to assume responsibility for defending a Third Party Claim for which indemnification is available
under this Article VIII, or fails to notify an Indemnitee of its election as provided in Section 8.4(b), such Indemnitee may defend such Third Party Claim at the cost and expense (including allocated costs of in-house counsel and other
personnel) of the Indemnifying Party. 
 (d) Unless the Indemnifying Party has failed to assume the defense of the Third Party
Claim for which indemnification is available under this Article VIII in accordance with the terms of this Agreement, no Indemnitee may settle or compromise such Third Party Claim without the consent of the Indemnifying Party. 
 (e) No Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third Party Claim without the consent
of an Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other nonmonetary relief to be entered, directly or indirectly, against such Indemnitee. 
 (f) In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third Party Claim under
this Article VIII, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third Party
Claim against any claimant or plaintiff asserting such Third Party Claim or against any other person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense (including allocated costs of
in-house counsel and other personnel) of such Indemnifying Party, in prosecuting any subrogated right, defense or claim. In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying
Party shall so request, the parties shall endeavor to substitute the Indemnifying Party for the named defendant, if at all practicable. If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall
allow the Indemnifying Party to manage the Action as set forth in this Section 8.4 and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a
court, attorneys’ fees, experts’ fees and all other external expenses, and the allocated costs of in-house counsel and other personnel), the costs of any judgment or settlement, and the costs of any interest or penalties relating to any
judgment or settlement. 
  

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 SECTION 8.5 Mitigation of Damages. The parties each agree to attempt to mitigate, and to cause
each of their respective Affiliates to attempt to mitigate, any Losses that such party may suffer as a consequence of any matter giving rise to a right to indemnification under this Article VIII by taking all actions which a reasonable person would
undertake to minimize or alleviate the amount of Losses and the consequences thereof, as if such person would be required to suffer the entire amount of such Losses and the consequences thereof by itself, without recourse to any remedy against
another person, including pursuant to any right of indemnification hereunder. 
 ARTICLE IX 
 TERM AND TERMINATION 
 SECTION 9.1
Term. This Agreement shall be effective as of the IPO Closing Date and shall continue until the last to expire of the KBR Patents or Halliburton Patents. The licenses to use the trade secrets and know-how which are part of the KBR Licensed
Other IP or Halliburton Licensed Other IP shall survive the expiration of this Agreement, except to the extent any such license is earlier terminated under this Article IX. 
 SECTION 9.2 Termination. 
 (a) KBR may terminate this Agreement including any licenses granted in Article III if Halliburton fails to cure a material breach of this Agreement within sixty (60) days after Halliburton’s receipt of written notice of the
alleged breach, specifying the provisions of the Agreement at issue and the actions or omissions alleged to constitute a material breach. 
 (b) Halliburton may terminate this Agreement including any licenses granted in Article IV if KBR fails to cure a material breach of this Agreement within sixty (60) days after KBR’s receipt of written notice
of the alleged breach, specifying the provisions of the Agreement at issue and the actions or omissions alleged to constitute a material breach. 
 (c) KBR may terminate this Agreement including any licenses granted in Article III upon written notice with respect to Halliburton if there has been a Change of Control of Halliburton where the Person acquiring a
controlling interest is a competitor of KBR; provided, however, such termination shall be limited only to the particular entity that has undergone a Change of Control. Halliburton may terminate this Agreement including any licenses granted in
Article IV upon written notice with respect to KBR if there has been a Change of Control of KBR where the Person acquiring a controlling interest is a competitor of Halliburton; provided, however, such termination shall be limited only to the
particular entity that has undergone a Change of Control. 
 (d) The provisions of Articles 6, 7, 8, 9 and 10 shall survive
the earlier termination of this Agreement. 
 (e) Notwithstanding any termination of this Agreement, any sublicense extended
to an Oil and Gas Producing Company, a Coal Producing and Processing Company, a Refining or Industrial Processing Company, or a Government and 

  

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Infrastructure Person and/or any rights to use by KBR or Halliburton under Sections 3.1, 3.2, 4.1, or 4.2 to which a party has already become committed for a
particular project to an Oil and Gas Producing Company, a Coal Producing and Processing Company, a Refining or Industrial Processing Company, or a Government and Infrastructure Person, shall continue in full force and effect so long as all required
payments are made and the participants in the project(s) continue to abide by all other applicable terms and conditions which survive such termination. 
 ARTICLE X 
 GENERAL PROVISIONS 
 SECTION 10.1 Effect if IPO does not Occur. If the IPO does not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of the IPO Closing Date, or otherwise in
connection with the IPO, shall not be taken or occur except to the extent specifically agreed by the parties. 
 SECTION 10.2 Relationship
of Parties. Nothing in this Agreement shall be deemed or construed by the parties or any third party as creating a fiduciary relationship, a relationship of principal and agent, partnership or joint venture between the parties, the understanding
and agreement being that no provision contained herein, and no act of the parties, shall be deemed to create any relationship between the parties other than the relationship set forth herein. This Agreement shall be binding upon and inure solely to
the benefit of and be enforceable by each party and its respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement. 
 SECTION 10.3 Incorporation of Separation Agreement Provisions. If a dispute, claim
or controversy results from or arises out of or in connection with this Agreement, the parties agree to use the procedures set forth in Article VII of the Separation Agreement in lieu of other available remedies, to resolve same. The provisions of
Sections 9.1 (Limitation of Liability) and 9.5 (Notices) of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein (references
in this Section 10.3 to an “Article” or a “Section” shall mean Articles or Sections of the Separation Agreement, and, except as expressly set forth herein, references in the material incorporated herein by reference shall be
references to the Separation Agreement). 
 SECTION 10.4 Governing Law; Jurisdiction. This Agreement shall be governed by, construed
and interpreted in accordance with the laws of the United States and the State of Texas, irrespective of the choice of law principles of the State of Texas, as to all matters, including matters of validity, construction, effect, performance and
remedies. The parties hereby agree to submit to the exclusive jurisdiction of the state and federal courts located in Houston, Texas, in connection with any action or other proceeding relating to this Agreement or the transactions contemplated
hereby. Each party irrevocably waives and agrees not to make, to the fullest extent permitted by law, any objection which it may now or hereafter have to the jurisdiction of any such court or to the laying of venue of any such action or proceeding
brought in any such court and any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum. 
  

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 SECTION 10.5 Severability. If any term or other provision of this Agreement is determined to be
invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to either party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible and in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest possible extent. 
 SECTION 10.6 Amendment. No change or amendment will be made to this Agreement except by an instrument in writing signed on behalf of each of the
parties to this Agreement. 
 SECTION 10.7 Assignment. Neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by a party without the prior written consent of the other party, except that either party may at any time assign any or all of its rights or obligations hereunder to one of its wholly owned subsidiaries (but no such
assignment shall relieve such party of any of its obligations under this Agreement). 
 SECTION 10.8 No Strict Construction. The
language this Agreement uses shall be deemed to be the language the parties hereto have chosen to reflect their mutual intent, and no rule of strict construction or presumption based upon the party that has drafted this Agreement shall be applied
against any party hereto. 
 SECTION 10.9 Further Assurances. The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement.

 SECTION 10.10 Counterparts. This Agreement may be executed in two or more counterparts each of which shall be deemed to be an
original, but all of which together shall constitute but one and the same Agreement. 
  

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 IN WITNESS WHEREOF, each of the parties has caused this Intellectual Property Matters Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and year first above written. 
  

			
	HALLIBURTON COMPANY
		
	By:	 	/s/ C. Christopher Gaut
	Name: 	 	C. Christopher Gaut
	Title: 	 	Executive Vice President and Chief Financial Officer
	
	KBR, INC.
		
	By:	 	/s/ William P. Utt
	Name: 	 	William P. Utt
	Title: 	 	President & CEO

  

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