Document:

ex10_1.htm

    
      

    

    Exhibit
      10.1

     

    KBR,
      INC.

     

    2006
      STOCK AND INCENTIVE PLAN

    (As
      Amended June 27, 2007)

    

    I.           PURPOSE

     

    The
      purpose of the KBR, Inc. 2006 Stock and Incentive Plan (the “Plan”) is to
      provide a means whereby KBR, Inc., a Delaware corporation (the “Company”), and
      its Subsidiaries may attract, motivate and retain highly competent employees
      and
      to provide a means whereby selected employees can acquire and maintain stock
      ownership and receive cash awards, thereby strengthening their concern for
      the
      long-term welfare of the Company.  The Plan is also intended to
      provide employees with additional incentive and reward opportunities designed
      to
      enhance the profitable growth of the Company over the long term.  A
      further purpose of the Plan is to allow awards under the Plan to Non-employee
      Directors in order to enhance the Company’s ability to attract and retain highly
      qualified Directors.  Accordingly, the Plan provides for granting
      Incentive Stock Options, Options which do not constitute Incentive Stock
      Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock
      Unit Awards, Performance Awards, Stock Value Equivalent Awards, or any
      combination of the foregoing, as is best suited to the circumstances of the
      particular employee or Non-employee Director as provided herein.  The
      Plan is effective as of the closing date of the IPO as defined later in this
      document.

     

    II.           DEFINITIONS

     

    The
      following definitions shall be applicable throughout the Plan unless
      specifically modified by any paragraph:

     

    
      	
               

            	
              (a)

            	
              “Award”
                means, individually or collectively, any Option, Stock Appreciation
                Right,
                Restricted Stock Award, Restricted Stock Unit Award, Performance
                Award or
                Stock Value Equivalent Award.

            

    

     

    
      	
               

            	
              (b)

            	
              “Award
                Document” means the relevant award agreement or other document containing
                the terms and conditions of an
                Award.

            

    

     

    
      	
               

            	
              (c)

            	
              “Beneficial
                Owners” shall have the meaning set forth in Rule 13d-3 promulgated under
                the Exchange Act.

            

    

     

    
      	
               

            	
              (d)

            	
              “Board”
                means the Board of Directors of KBR,
                Inc.

            

    

     

    
      	
               

            	
              (e)

            	
              “Change
                of Control Value” means, for the purposes of Paragraph (f) of Article
                XIII, the amount determined in Clause (i), (ii) or (iii), whichever
                is
                applicable, as follows: (i) the per share price offered to stockholders
                of
                the Company in any merger, consolidation, sale of assets or dissolution
                transaction, (ii) the per share price offered to stockholders of
                the
                Company in any tender offer or exchange offer whereby a Corporate
                Change
                takes place or (iii) if a Corporate Change occurs other than as described
                in Clause (i) or Clause (ii), the fair market value per share determined
                by the Committee as of the date determined by the Committee to be
                the date
                of cancellation and surrender of an Award.  If the consideration
                offered to stockholders of the Company in any transaction described
                in
                this Paragraph (e) consists of anything other than cash, the Committee
                shall determine the fair cash equivalent of the portion of the
                consideration offered which is other than
                cash.

            

    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (f)

            	
              “Code”
                means the Internal Revenue Code of 1986, as amended.  Reference
                in the Plan to any section of the Code shall be deemed to include
                any
                amendments or successor provisions to such section and any regulations
                under such section.

            

    

     

    
      	
               

            	
              (g)

            	
              “Committee”
                means, prior to the closing date of the IPO, the committee selected
                by the
                board of directors of Halliburton to administer the Plan in accordance
                with Paragraph (a) of Article IV of the Plan and on and after the
                closing
                date of the IPO, the committee selected by the Board to administer
                the
                Plan in accordance with Paragraph (a) of Article IV of the
                Plan.

            

    

     

    
      	
               

            	
              (h)

            	
              “Common
                Stock” means the Common Stock, par value $0.001 per share, of the
                Company.

            

    

     

    
      	
               

            	
              (i)

            	
              “Company”
                means KBR, Inc., a Delaware
                corporation.

            

    

     

    
      	
               

            	
              (j)

            	
              “Corporate
                Change” shall conclusively be deemed to have occurred on a Corporate
                Change Effective Date if an event set forth in any one of the following
                paragraphs shall have occurred:

            

    

     

    
      	
               

            	
              (i)

            	
              any
                Person is or becomes the Beneficial Owner, directly or indirectly,
                of
                securities of the Company (not including in the securities beneficially
                owned by such Person any securities acquired directly from the Company
                or
                its affiliates) representing 20% or more of the combined voting power
                of
                the Company’s then outstanding securities (the “Outstanding Company Voting
                Securities”) provided, however, that for purposes of this subsection (i),
                the following acquisitions shall not constitute a Corporate
                Change:  (1) an acquisition of securities effected in connection
                with a distribution of any class of common stock of the Company to
                shareholders of Halliburton in a transaction (including any distribution
                in exchange for shares of capital stock or other securities of
                Halliburton) intended to qualify as a tax-free distribution under
                Section 355 of the Code (a “Tax-Free Spin Off”), (2) any acquisition
                by Halliburton Company or any of its affiliates excluding the Company
                and
                its Subsidiaries (collectively, “Halliburton Companies”), (3) any
                acquisition from Halliburton Companies pursuant to a public offering
                of
                securities registered under a registration statement filed with the
                Securities and Exchange Commission, or (4) any acquisition immediately
                following which Halliburton Companies have beneficial ownership of
                at
                least 50% or more of the Outstanding Company Voting Securities; provided
                that any such acquisition that, but for this clause (4), would otherwise
                constitute a Corporate Change under this Section II.(j)(i) shall
                be deemed
                to be a Corporate Change at the time that Halliburton Companies no
                longer
                have beneficial ownership of at least 50% or more of the Outstanding
                Company Voting Securities, if such individual, entity or group that
                made
                such acquisition continues to own 20% or more of the Outstanding
                Company
                Voting Securities following such time that Halliburton Companies
                no longer
                have such beneficial ownership; or

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (ii)

            	
              the
                following individuals cease for any reason to constitute a majority
                of the
                number of Directors then serving: individuals who, on the date hereof,
                constitute the Board and any new Director (other than a Director
                whose
                initial assumption of office is in connection with an actual or threatened
                election contest relating to the election of Directors of the Company)
                whose appointment or election by the Board or nomination for election
                by
                the Company’s stockholders was approved or recommended by a vote of at
                least two-thirds (2/3) of the Directors then still in office who
                either
                were Directors on the date hereof or whose appointment, election
                or
                nomination for election was previously so approved or recommended
                (the
                “Incumbent Board); provided, however, that for purposes of this
                Section II.(j)(ii), any individual becoming a Director subsequent to
                the date hereof whose election, or nomination for election by the
                Company’s shareholders, was approved by either (a) a vote of at least a
                majority of the Directors then comprising the Incumbent Board or
                (b)
                Halliburton, shall be considered as though such individual were a
                member
                of the Incumbent Board, but excluding, for this purpose, any such
                individual whose initial assumption of office occurs as a result
                of an
                actual or threatened election contest with respect to the election
                or
                removal of Directors or other actual or threatened solicitation of
                proxies
                or consents by or on behalf of a Person other than either Halliburton
                or
                the Board; or

            

    

     

    
      	
               

            	
              (iii)

            	
              there
                is consummated a merger or consolidation of the Company or any direct
                or
                indirect Subsidiary of the Company with any other corporation, other
                than
                (A) a merger or consolidation which would result in the voting securities
                of the Company outstanding immediately prior to such merger or
                consolidation continuing to represent (either by remaining outstanding
                or
                by being converted into voting securities of the surviving entity
                or any
                parent thereof), in combination with the ownership of any trustee
                or other
                fiduciary holding securities under an employee benefit plan of the
                Company
                or any Subsidiary of the Company, at least 50% of the combined voting
                power of the securities of the Company or such surviving entity or
                any
                parent thereof outstanding immediately after such merger or consolidation,
                or (B) a merger or consolidation effected to implement a recapitalization
                of the Company (or similar transaction) in which no Person is or
                becomes
                the Beneficial Owner, directly or indirectly, of securities of the
                Company
                (not including in the securities beneficially owned by such Person
                any
                securities acquired directly from the Company or any of its affiliates
                other than in connection with the acquisition by the Company or any
                of its
                affiliates of a business) representing 20% or more of the combined
                voting
                power of the Company’s then outstanding securities;
                or

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (iv)

            	
              the
                stockholders of the Company approve a plan of complete liquidation
                or
                dissolution of the Company, other than in connection with the transfer
                of
                all or substantially all of the assets of the Company to the Halliburton
                Companies, or there is consummated an agreement for the sale, disposition,
                lease or exchange by the Company of all or substantially all of the
                Company’s assets, other than a sale, disposition, lease or exchange by the
                Company of all or substantially all of the Company’s assets to the
                Halliburton Companies or to an entity, at least 50% of the combined
                voting
                power of the voting securities of which are owned by stockholders
                of the
                Company in substantially the same proportions as their ownership
                of the
                Company immediately prior to such
                sale.

            

    

     

    Notwithstanding
      the foregoing, a “Corporate Change” shall not be deemed to have occurred by
      virtue of the consummation of any transaction or series of integrated
      transactions immediately following which the record holders of the Common Stock
      of the Company immediately prior to such transaction or series of transactions
      continue to have substantially the same proportionate ownership in an entity
      which owns all or substantially all of the assets of the Company immediately
      following such transaction or series of transactions.

     

    
      	
               

            	
              (k)

            	
              “Corporate
                Change Effective Date” shall mean:

            

    

     

    
      	
               

            	
              (i)

            	
              the
                first date that the direct or indirect ownership of 20% or more combined
                voting power of the Company’s outstanding securities results in a
                Corporate Change as described in clause (i) of such definition above;
                or

            

    

     

    
      	
               

            	
              (ii)

            	
              the
                date of the election of Directors that results in a Corporate Change
                as
                described in clause (ii) of such definition;
                or

            

    

     

    
      	
               

            	
              (iii)

            	
              the
                date of the merger or consideration that results in a Corporate Change
                as
                described in clause (iii) of such definition;
                or

            

    

     

    
      	
               

            	
              (iv)

            	
              the
                date of stockholder approval that results in a Corporate Change as
                described in clause (iv) of such
                definition.

            

    

     

    
      	
               

            	
              (l)

            	
              “Director”
                means an individual serving as a member of the
                Board.

            

    

     

    
      	
               

            	
              (m)

            	
              “Exchange
                Act” means the Securities Exchange Act of 1934, as
                amended.

            

    

     

    
      	
               

            	
              (n)

            	
              “Fair
                Market Value” means, as of any specified date, the closing price of the
                Common Stock on the New York Stock Exchange (or, if the Common Stock
                is
                not then listed on such exchange, such other national securities
                exchange
                on which the Common Stock is then listed) on that date, or if no
                prices
                are reported on that date, on the last preceding date on which such
                prices
                of the Common Stock are so reported or, in the sole discretion of
                the
                Committee for purposes of determining the Fair Market Value of the
                Common
                Stock at the time of exercise of an Option or a Stock Appreciation
                Right,
                such Fair Market Value shall be the prevailing price of the Common
                Stock
                as of the time of exercise.   If the Common Stock is not
                then listed or quoted on any national securities exchange but is
                traded
                over the counter at the time a determination of its Fair Market Value
                is
                required to be made hereunder, its Fair Market Value shall be deemed
                to be
                equal to the average between the reported high and low sales prices
                of
                Common Stock on the most recent date on which Common Stock was publicly
                traded.  If the Common Stock is not publicly traded at the time
                a determination of its value is required to be made hereunder, the
                determination of its Fair Market Value shall be made by the Committee
                in
                such manner as it deems
                appropriate.

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (o)

            	
              “Halliburton”
                means Halliburton Company, a Delaware
                corporation.

            

    

     

    
      	
               

            	
              (p)

            	
              “Holder”
                means an employee or Non-employee Director of the Company who has
                been
                granted an Award.

            

    

     

    
      	
               

            	
              (q)

            	
              “IPO”
                means the first registered underwritten public offering of shares
                of
                Common Stock of the Company.

            

    

     

    
      	
               

            	
              (r)

            	
              “Immediate
                Family” means, with respect to a particular Holder, the Holder’s spouse,
                parent, brother, sister, children and grandchildren (including adopted
                and
                step children and grandchildren).

            

    

     

    
      	
               

            	
              (s)

            	
              “Incentive
                Stock Option” means an Option within the meaning of Section 422 of the
                Code.

            

    

     

    
      	
               

            	
              (t)

            	
              “Minimum
                Criteria” means a Restriction Period that is not less than three (3) years
                from the date of grant of a Restricted Stock Award or Restricted
                Stock
                Unit Award.

            

    

     

    
      	
               

            	
              (u)

            	
              “Non-employee
                Director” means a member of the Board who is not an employee or former
                employee of the Company or its
                Subsidiaries.

            

    

     

    
      	
               

            	
              (v)

            	
              “Option”
                means an Award granted under Article VII of the Plan and includes
                both
                Incentive Stock Options to purchase Common Stock and Options which
                do not
                constitute Incentive Stock Options to purchase Common
                Stock.

            

    

     

    
      	
               

            	
              (w)

            	
              “Option
                Agreement” means a written agreement between the Company and a Holder with
                respect to an Option.

            

    

     

    
      	
               

            	
              (x)

            	
              “Optionee”
                means a Holder who has been granted an
                Option.

            

    

     

    
      	
               

            	
              (y)

            	
              “Parent
                Corporation” shall have the meaning set forth in Section 424(e) of the
                Code.

            

    

     

    
      	
               

            	
              (z)

            	
              “Performance
                Award” means an Award granted under Article XI of the
                Plan.

            

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (aa)

            	
              “Person”
                shall have the meaning given in Section 3(a)(9) of the Exchange Act,
                as
                modified and used in Sections 13(d) and 14(d) thereof, except that
                such
                term shall not include (i) Halliburton or its subsidiaries or the
                Company
                or any of its Subsidiaries, (ii) a trustee or other fiduciary holding
                securities under an employee benefit plan of Halliburton, or the
                Company
                or any of their affiliates, (iii) an underwriter temporarily holding
                securities pursuant to an offering of such securities, or (iv) a
                corporation owned, directly or indirectly, by the stockholders of
                Halliburton or the Company in substantially the same proportions
                as their
                ownership of stock of the Halliburton or the
                Company.

            

    

     

    
      	
               

            	
              (bb)

            	
              “Plan”
                means the KBR, Inc. 2006 Stock and Incentive
                Plan.

            

    

     

    
      	
               

            	
              (cc)

            	
              “Restricted
                Stock Award” means an Award granted under Article IX of the
                Plan.

            

    

     

    
      	
               

            	
              (dd)

            	
              “Restricted
                Stock Award Agreement” means a written agreement between the Company and a
                Holder with respect to a Restricted Stock
                Award.

            

    

     

    
      	
               

            	
              (ee)

            	
              “Restricted
                Stock Unit” means a unit evidencing the right to receive one share of
                Common Stock or an equivalent value equal to the Fair Market Value
                of a
                share of Common Stock (as determined by the Committee) that is restricted
                or subject to forfeiture
                provisions.

            

    

     

    
      	
               

            	
              (ff)

            	
              “Restricted
                Stock Unit Award” means as Award granted under Article X of the
                Plan.

            

    

     

    
      	
               

            	
              (gg)

            	
              “Restricted
                Stock Unit Award Agreement” means a written agreement between the Company
                and a Holder with respect to a Restricted Stock Unit
                Award.

            

    

     

    
      	
               

            	
              (hh)

            	
              “Restriction
                Period” means a period of time beginning as of the date upon which a
                Restricted Stock Award or Restricted Stock Unit Award is made pursuant
                to
                the Plan and ending as of the date upon which the Common Stock subject
                to
                such Award is issued (if not previously issued), no longer restricted
                or
                subject to forfeiture provisions.

            

    

     

    
      	
               

            	
              (ii)

            	
              “Spread”
                means, in the case of a Stock Appreciation Right, an amount equal
                to the
                excess, if any, of the Fair Market Value of a share of Common Stock
                on the
                date such right is exercised over the exercise price of such Stock
                Appreciation Right.

            

    

     

    
      	
               

            	
              (jj)

            	
              “Stock
                Appreciation Right” means an Award granted under Article VIII of the
                Plan.

            

    

     

    
      	
               

            	
              (kk)

            	
              “Stock
                Appreciation Rights Agreement” means a written agreement between the
                Company and a Holder with respect to an Award of Stock Appreciation
                Rights.

            

    

     

    
      	
               

            	
              (ll)

            	
              “Stock
                Value Equivalent Award” means an Award granted under Article XII of the
                Plan.

            

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

    

     

    
      	
            	
              (mm)

            	
              “Subsidiary”
                means a company (whether a corporation, partnership, joint venture
                or
                other form of entity) in which the Company or a corporation in which
                the
                Company owns a majority of the shares of capital stock, directly
                or
                indirectly, owns a greater than 50% equity interest, except that
                with
                respect to the issuance of Incentive Stock Options the term “Subsidiary”
                shall have the same meaning as the term “subsidiary corporation” as
                defined in Section 424(f) of the
                Code.

            

    

     

    
      	
               

            	
              (nn)

            	
              “Successor
                Holder” shall have the meaning given such term in Paragraph (f) of Article
                XV.

            

    

     

    III.           EFFECTIVE
      DATE AND DURATION OF THE PLAN

     

    The
      Plan
      shall be effective as of the closing date of the IPO.  Subject to the
      provisions of Article XIII, the Plan shall remain in effect until all Options
      and Stock Appreciation Rights granted under the Plan have been exercised or
      expired by reason of lapse of time, all restrictions imposed upon Restricted
      Stock Awards and Restricted Stock Unit Awards have lapsed and all Performance
      Awards and Stock Value Equivalent Awards have been satisfied; provided, however,
      that, notwithstanding any other provision of the Plan, Awards shall not be
      granted under the Plan after November 20, 2016.

     

    IV.           ADMINISTRATION

     

    
      	
               

            	
              (a)

            	
              Composition
                of Committee.  The Plan shall be administered by the
                Committee.

            

    

     

    
      	
               

            	
              (b)

            	
              Powers.  The
                Committee shall have authority, in its discretion, to determine which
                eligible individuals shall receive an Award, the time or times when
                such
                Award shall be made, whether an Incentive Stock Option, nonqualified
                Option or Stock Appreciation Right shall be granted, the number of
                shares
                of Common Stock which may be issued under each Option, Stock Appreciation
                Right, Restricted Stock Award and Restricted Stock Unit Award, and
                the
                value of each Performance Award and Stock Value Equivalent
                Award.  The Committee shall have the authority, in its
                discretion, to establish the terms and conditions applicable to any
                Award,
                subject to any specific limitations or provisions of the
                Plan.  In making such determinations the Committee may take into
                account the nature of the services rendered by the respective individuals,
                their responsibility level, their present and potential contribution
                to
                the Company’s success and such other factors as the Committee in its
                discretion shall deem relevant.

            

    

     

    
      	
               

            	
              (c)

            	
              Additional
                Powers.  The Committee shall have such additional powers as
                are delegated to it by the other provisions of the
                Plan.  Subject to the express provisions of the Plan, the
                Committee is authorized to construe the Plan and the respective Award
                Documents executed thereunder, to prescribe such rules and regulations
                relating to the Plan as it may deem advisable to carry out the Plan,
                and
                to determine the terms, restrictions and provisions of each Award,
                including such terms, restrictions and provisions as shall be requisite
                in
                the judgment of the Committee to cause designated Options to qualify
                as
                Incentive Stock Options, and to make all other determinations necessary
                or
                advisable for administering the Plan.  The Committee may correct
                any defect or supply any omission or reconcile any inconsistency
                in any
                Award Document relating to an Award in the manner and to the extent
                the
                Committee shall deem expedient to carry the Award into
                effect.  The determinations of the Committee on the matters
                referred to in this Article IV shall be
                conclusive.

            

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (d)

            	
              Delegation
                of Authority.  The Committee may delegate some or all of
                its power to the Chief Executive Officer of the Company as the Committee
                deems appropriate; provided, however, that (i) the Committee may
                not
                delegate its power with regard to the grant of an Award to any person
                who
                is a “covered employee” within the meaning of Section 162(m) of the Code
                or who, in the Committee’s judgment, is likely to be a covered employee at
                any time during the period an Award to such employee would be outstanding;
                (ii) the Committee may not delegate its power with regard to the
                selection
                for participation in the Plan of an officer or other person subject
                to
                Section 16 of the Exchange Act or decisions concerning the timing,
                pricing
                or amount of an Award to such an officer or other person and (iii)
                any
                delegation of the power to grant Awards shall be permitted by applicable
                law.

            

    

     

    
      	
               

            	
              (e)

            	
              Engagement
                of an Agent.  The Company may, in its discretion, engage an
                agent to (i) maintain records of Awards and Holders’ holdings under
                the Plan, (ii) execute sales transactions in shares of Common Stock
                at the
                direction of Holders, (iii) deliver sales proceeds as directed by
                Holders,
                and (iv) hold shares of Common Stock owned without restriction by
                Holders,
                including shares of Common Stock previously obtained through the
                Plan that
                are transferred to the agent by Holders at their
                discretion.  Except to the extent otherwise agreed by the
                Company and the agent, when an individual loses his or her status
                as an
                employee or Non-employee Director of the Company, the agent shall
                have no
                obligation to provide any further services to such person and the
                shares
                of Common Stock previously held by the agent under the Plan may be
                distributed to the person or his or her legal
                representative.

            

    

     

    V.           GRANT
      OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK AWARDS, RESTRICTED
      STOCK
      UNIT AWARDS, PERFORMANCE AWARDS AND STOCK VALUE EQUIVALENT AWARDS; SHARES
      SUBJECT TO THE PLAN

     

    
      	
               

            	
              (a)

            	
              Award
                Limits.  The Committee may from time to time grant Awards
                to one or more individuals determined by it to be eligible for
                participation in the Plan in accordance with the provisions of Article
                VI.  The aggregate number of shares of Common Stock that may be
                issued under the Plan shall not exceed 10,000,000 shares, of which
                no more
                than 3,500,000 may be issued in the form of Restricted Stock Awards
                or
                Restricted Stock Unit Awards, or pursuant to Performance
                Awards.  Notwithstanding anything contained herein to the
                contrary, the number of Option shares or Stock Appreciation Rights,
                singly
                or in combination, together with shares or share equivalents under
                Performance Awards granted to any Holder in any one calendar year,
                shall
                not in the aggregate exceed 500,000.  The cash value determined
                as of the date of grant of any Performance Award not denominated
                in Common
                Stock granted to any Holder for any one calendar year shall not exceed
                $10,000,000.  Any shares which remain unissued and which are not
                subject to outstanding Options or Awards at the termination of the
                Plan
                shall cease to be subject to the Plan, but, until termination of
                the Plan,
                the Company shall at all times reserve a sufficient number of shares
                to
                meet the requirements of the Plan.  Shares shall be deemed to
                have been issued under the Plan only to the extent actually issued
                and
                delivered pursuant to an Award.  To the extent that an Award
                lapses or the rights of its Holder terminate or the Award is paid
                in cash,
                any shares of Common Stock subject to such Award shall again be available
                for the grant of an Award.  The aggregate number of shares which
                may be issued under the Plan shall be subject to adjustment in the
                same
                manner as provided in Article XIII with respect to shares of Common
                Stock
                subject to Options then outstanding.  The 500,000-share limit on
                Stock Options, Stock Appreciation Rights Awards and Performance Awards
                denominated in shares to a Holder in any calendar year shall be subject
                to
                adjustment in the same manner as provided in Article
                XIII.  Separate stock certificates shall be issued by the
                Company for those shares acquired pursuant to the exercise of an
                Incentive
                Stock Option and for those shares acquired pursuant to the exercise
                of any
                Option which does not constitute an Incentive Stock Option.  The
                Committee may from time to time adopt and observe such procedures
                concerning the counting of shares against the Plan maximum as it
                may deem
                appropriate.

            

    

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (b)

            	
              Stock
                Offered.  The stock to be offered pursuant to the grant of
                an Award may be authorized but unissued Common Stock or Common Stock
                previously issued and reacquired by the
                Company.

            

    

     

    VI.           ELIGIBILITY

     

    Awards
      made pursuant to the Plan may be granted to individuals who, at the time of
      grant, are employees of the Company or any Parent Corporation or Subsidiary
      of
      the Company or are Non-employee Directors.  An Award may also be
      granted to a person who has agreed to become an employee of the Company or
      any
      Parent Corporation or Subsidiary of the Company within the subsequent three
      (3)
      months.  An Award made pursuant to the Plan may be granted on more
      than one occasion to the same person, and such Award may include an Incentive
      Stock Option, an Option which is not an Incentive Stock Option, an Award of
      Stock Appreciation Rights, a Restricted Stock Award, a Restricted Stock Unit
      Award, a Performance Award, a Stock Value Equivalent Award or any combination
      thereof.  Each Award shall be evidenced in such manner and form as may
      be prescribed by the Committee.

     

    VII.           STOCK
      OPTIONS

     

    
      	
               

            	
              (a)

            	
              Stock
                Option Agreement.  Each Option shall be evidenced by an
                Option Agreement between the Company and the Optionee which shall
                contain
                such terms and conditions as may be approved by the
                Committee.  The terms and conditions of the respective Option
                Agreements need not be identical.  Specifically, an Option
                Agreement may provide for the payment of the option price, in whole
                or in
                part, by the delivery of a number of shares of Common Stock (plus
                cash if
                necessary) having a Fair Market Value equal to such option
                price.

            

    

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (b)

            	
              Option
                Period.  The term of each Option shall be as specified by
                the Committee at the date of grant; provided that, in no case, shall
                the
                term of an Option exceed ten (10)
                years.

            

    

     

    
      	
               

            	
              (c)

            	
              Limitations
                on Exercise of Option.  An Option shall be exercisable in
                whole or in such installments and at such times as determined by
                the
                Committee.

            

    

     

    
      	
               

            	
              (d)

            	
              Option
                Price.  The purchase price of Common Stock issued under
                each Option shall be determined by the Committee, but such purchase
                price
                shall not be less than the Fair Market Value of Common Stock subject
                to
                the Option on the date the Option is
                granted.

            

    

     

    
      	
               

            	
              (e)

            	
              Options
                and Rights in Substitution for Stock Options Granted by Other
                Corporations.  Options and Stock Appreciation Rights may be
                granted under the Plan from time to time in substitution for stock
                options
                and Stock Appreciation Rights held by employees of corporations who
                become, or who became prior to the effective date of the Plan, employees
                of the Company or of any Subsidiary as a result of a merger or
                consolidation of the employing corporation with the Company or such
                Subsidiary, or the acquisition by the Company or a Subsidiary of
                all or a
                portion of the assets of the employing corporation, or the acquisition
                by
                the Company or a Subsidiary of stock of the employing corporation
                with the
                result that such employing corporation becomes a
                Subsidiary.

            

    

     

    
      	
               

            	
              (f)

            	
              Repricing
                Prohibited.  Except for adjustments pursuant to Article
                XIII, the purchase price of Common Stock for any outstanding Option
                granted under the Plan may not be decreased after the date of grant
                nor
                may an outstanding Option granted under the Plan be surrendered to
                the
                Company as consideration for the grant of a new Option with a lower
                purchase price.  Any other action that is deemed to be a
                repricing under any applicable rule of the New York Stock Exchange
                shall
                be prohibited.

            

    

     

    VIII.                      STOCK
      APPRECIATION RIGHTS

     

    
      	
               

            	
              (a)

            	
              Stock
                Appreciation Rights.  A Stock Appreciation Right is the
                right to receive an amount equal to the Spread with respect to a
                share of
                Common Stock upon the exercise of such Stock Appreciation
                Right.  Stock Appreciation Rights may be granted in connection
                with the grant of an Option, in which case the Option Agreement will
                provide that exercise of Stock Appreciation Rights will result in
                the
                surrender of the right to purchase the shares under the Option as
                to which
                the Stock Appreciation Rights were exercised.  Alternatively,
                Stock Appreciation Rights may be granted independently of Options
                in which
                case each Award of Stock Appreciation Rights shall be evidenced by
                a Stock
                Appreciation Rights Agreement between the Company and the Holder
                which
                shall contain such terms and conditions as may be approved by the
                Committee.  The terms and conditions of the respective Stock
                Appreciation Rights Agreements need not be identical.  The
                Spread with respect to a Stock Appreciation Right may be payable
                either in
                cash, shares of Common Stock with a Fair Market Value equal to the
                Spread
                or in a combination of cash and shares of Common Stock.  Upon
                the exercise of any Stock Appreciation Rights granted hereunder,
                the
                number of shares reserved for issuance under the Plan shall be reduced
                only to the extent that shares of Common Stock are actually issued
                in
                connection with the exercise of such
                Right.

            

    

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (b)

            	
              Exercise
                Price.  The exercise price of each Stock Appreciation Right
                shall be determined by the Committee, but such exercise price shall
                not be
                less than the Fair Market Value of a share of Common Stock on the
                date the
                Stock Appreciation Right is
                granted.

            

    

     

    
      	
               

            	
              (c)

            	
              Exercise
                Period.  The term of each Stock Appreciation Right shall be
                as specified by the Committee at the date of grant; provided that,
                in no
                case, shall the term of a Stock Appreciation Right exceed ten (10)
                years.

            

    

     

    
      	
               

            	
              (d)

            	
              Limitations
                on Exercise of Stock Appreciation Right.  A Stock
                Appreciation Right shall be exercisable in whole or in such installments
                and at such times as determined by the
                Committee.

            

    

     

    
      	
               

            	
              (e)

            	
              Repricing
                Prohibited.  Except for adjustments pursuant to Article
                XIII, the exercise price of a Stock Appreciation Right may not be
                decreased after the date of grant nor may an outstanding Stock
                Appreciation Right granted under the Plan be surrendered to the Company
                as
                consideration for the grant of a new Stock Appreciation Right with
                a lower
                exercise price.  Any other action that is deemed to be a
                repricing under any applicable rule of the New York Stock Exchange
                shall
                be prohibited.

            

    

     

    IX.           RESTRICTED
      STOCK AWARDS

     

    
      	
               

            	
              (a)

            	
              Restricted
                Period To Be Established by the Committee.  At the time a
                Restricted Stock Award is made, the Committee shall establish the
                Restriction Period applicable to such Award; provided, however, that,
                except as set forth below and as permitted by Paragraph (b) of this
                Article IX, such Restriction Period shall not be less than the Minimum
                Criteria.  An Award which provides for the lapse of restrictions
                on shares applicable to such Award in equal annual installments over
                a
                period of at least three (3) years from the date of grant shall be
                deemed
                to meet the Minimum Criteria.  The foregoing notwithstanding,
                with respect to Restricted Stock Awards and Restricted Stock Unit
                Awards
                of up to an aggregate of 500,000 shares (subject to adjustment as
                set
                forth in Article XIII), the Minimum Criteria shall not apply and
                the
                Committee may establish such lesser Restriction Periods applicable
                to such
                Awards as it shall determine in its discretion.  Subject to the
                foregoing, each Restricted Stock Award may have a different Restriction
                Period, in the discretion of the Committee.  The Restriction
                Period applicable to a particular Restricted Stock Award shall not
                be
                changed except as permitted by Paragraph (b) of this Article or by
                Article
                XIII.

            

    

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (b)

            	
              Other
                Terms and Conditions.  Common Stock awarded pursuant to a
                Restricted Stock Award shall be represented by a stock certificate
                registered in the name of the Holder of such Restricted Stock Award
                or, at
                the option of the Company, in the name of a nominee of the
                Company.  The Holder shall have the right to receive dividends
                during the Restriction Period, to vote the Common Stock subject thereto
                and to enjoy all other stockholder rights, except that (i) the Holder
                shall not be entitled to possession of the stock certificate until
                the
                Restriction Period shall have expired, (ii) the Company shall retain
                custody of the stock during the Restriction Period, (iii) the Holder
                may
                not sell, transfer, pledge, exchange, hypothecate or otherwise dispose
                of
                the stock during the Restriction Period, and (iv) a breach of the
                terms
                and conditions established by the Committee pursuant to the Restricted
                Stock Award shall cause a forfeiture of the Restricted Stock
                Award.  At the time of such Award, the Committee may, in its
                sole discretion, prescribe additional terms, conditions or restrictions
                relating to Restricted Stock Awards, including, but not limited to,
                rules
                pertaining to the termination of a Holder’s service (by retirement,
                disability, death or otherwise) prior to expiration of the Restriction
                Period as shall be set forth in a Restricted Stock Award
                Agreement.

            

    

     

    
      	
               

            	
              (c)

            	
              Payment
                for Restricted Stock.  A Holder shall not be required to
                make any payment for Common Stock received pursuant to a Restricted
                Stock
                Award, except to the extent otherwise required by law and except
                that the
                Committee may, in its discretion, charge the Holder an amount in
                cash not
                in excess of the par value of the shares of Common Stock issued under
                the
                Plan to the Holder.

            

    

     

    
      	
               

            	
              (d)

            	
              Miscellaneous.  Nothing
                in this Article shall prohibit the exchange of shares issued under
                the
                Plan (whether or not then subject to a Restricted Stock Award) pursuant
                to
                a plan of reorganization for stock or securities in the Company or
                another
                corporation a party to the reorganization, but the stock or securities
                so
                received for shares then subject to the restrictions of a Restricted
                Stock
                Award shall become subject to the restrictions of such Restricted
                Stock
                Award.  Any shares of stock received as a result of a stock
                split or stock dividend with respect to shares then subject to a
                Restricted Stock Award shall also become subject to the restrictions
                of
                the Restricted Stock Award.

            

    

     

    X.           RESTRICTED
      STOCK UNIT AWARDS

     

    
      	
               

            	
              (a)

            	
              Restricted
                Period To Be Established by the Committee.  At the time a
                Restricted Stock Unit Award is made, the Committee shall establish
                the
                Restriction Period applicable to such Award; provided, however, that
                except as set forth below and as permitted by Paragraph (b) of this
                Article X, such Restriction Period shall not be less than the Minimum
                Criteria.  An Award which provides for the lapse of restrictions
                applicable to such Award in equal annual installments over a period
                of at
                least three (3) years from the date of grant shall be deemed to meet
                the
                Minimum Criteria.  The foregoing notwithstanding, with respect
                to Restricted Stock Awards and Restricted Stock Unit Awards of up
                to an
                aggregate of 500,000 shares (subject to adjustment as set forth in
                Article
                XIII), the Minimum Criteria shall not apply and the Committee may
                establish such lesser Restriction Periods applicable to such Awards
                as it
                shall determine in its discretion.  Subject to the foregoing,
                each Restricted Stock Unit Award may have a different Restriction
                Period,
                in the discretion of the Committee.  The Restriction Period
                applicable to a particular Restricted Stock Unit Award shall not
                be
                changed except as permitted by Paragraph (b) of this Article or by
                Article
                XIII.

            

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (b)

            	
              Other
                Terms and Conditions.  At the time of a Restricted Stock
                Unit Award, the Committee may, in its sole discretion, prescribe
                additional terms, conditions or restrictions relating to the Restricted
                Stock Unit Award, including, but not limited to, rules pertaining
                to the
                termination of a Holder’s service (by retirement, disability, death or
                otherwise) prior to expiration of the Restriction Period as shall
                be set
                forth in a Restricted Stock Unit Award Agreement.  Cash dividend
                equivalents may be paid during, or may be accumulated and paid at
                the end
                of, the Restriction Period with respect to a Restricted Stock Unit
                Award,
                as determined by the Committee.  The Committee, in its sole
                discretion, may provide for the deferral of a Restricted Stock Unit
                Award.  If a payment of cash or issuance of Common Stock is to
                be made on a deferred basis, the Committee shall establish whether
                interest or dividend equivalents shall be credited on the deferred
                amounts
                and any other terms and conditions applicable
                thereto.

            

    

     

    
      	
               

            	
              (c)

            	
              Payment
                for Restricted Stock Unit.  A Holder shall not be required
                to make any payment for Common Stock received pursuant to a Restricted
                Stock Unit Award, except to the extent otherwise required by law
                and
                except that the Committee may, in its discretion, charge the Holder
                an
                amount in cash not in excess of the par value of the shares of Common
                Stock issued under the Plan to the
                Holder.

            

    

     

    
      	
               

            	
              (d)

            	
              Restricted
                Stock Units in Substitution for Units or Restricted Stock Granted
                by Other
                Corporations.  Restricted Stock Unit Awards may be granted
                under the Plan from time to time in substitution for restricted stock
                units or restricted stock held by employees of corporations who become,
                or
                who became prior to the effective date of the Plan, employees of
                the
                Company or of any Subsidiary as a result of a merger or consolidation
                of
                the employing corporation with the Company or such Subsidiary, or
                the
                acquisition by the Company or a Subsidiary of all or a portion of
                the
                assets of the employing corporation, or the acquisition by the Company
                or
                a Subsidiary of stock of the employing corporation with the result
                that
                such employing corporation becomes a
                Subsidiary.

            

    

     

    XI.     PERFORMANCE
      AWARDS

     

    
      	
               

            	
              (a)

            	
              Performance
                Period.  The Committee shall establish, with respect to and
                at the time of each Performance Award, a performance period over
                which the
                performance applicable to the Performance Award of the Holder shall
                be
                measured.

            

    

     

    
      	
               

            	
              (b)

            	
              Performance
                Awards.  Each Performance Award may have a maximum value
                established by the Committee at the time of such
                Award.

            

    

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (c)

            	
              Performance
                Measures.  A Performance Award granted under the Plan that
                is intended to qualify as qualified performance-based compensation
                under
                Section 162(m) of the Code shall be awarded contingent upon the
                achievement of one or more performance measures.  The
                performance criteria for Performance Awards shall consist of objective
                tests based on the following: earnings, cash flow, cash value added
                performance, stockholder return and/or value, revenues, operating
                profits
                (including EBITDA), net profits, earnings per share, stock price,
                cost
                reduction goals, debt to capital ratio, financial return ratios,
                profit
                return and margins, market share, working capital and customer
                satisfaction.  The Committee may select one criterion or
                multiple criteria for measuring performance.  Performance
                criteria may be measured on corporate, subsidiary or business unit
                performance, or on a combination thereof.  Further, the
                performance criteria may be based on comparative performance with
                other
                companies or other external measure of the selected performance
                criteria.  A Performance Award that is not intended to qualify
                as qualified performance-based compensation under Section 162(m)
                of the
                Code shall be based on achievement of such goals and be subject to
                such
                terms, conditions and restrictions as the Committee or its delegate
                shall
                determine.

            

    

     

    
      	
               

            	
              (d)

            	
              Payment.  Following
                the end of the performance period, the Holder of a Performance Award
                shall
                be entitled to receive payment of an amount, not exceeding the maximum
                value of the Performance Award, if any, based on the achievement
                of the
                performance measures for such performance period, as determined by
                the
                Committee in its sole discretion.  Payment of a Performance
                Award (i) may be made in cash, Common Stock or a combination thereof,
                as
                determined by the Committee in its sole discretion, (ii) shall be
                made in
                a lump sum or in installments as prescribed by the Committee in its
                sole
                discretion, and (iii) to the extent applicable, shall be based on
                the Fair
                Market Value of the Common Stock on the payment date.  If a
                payment of cash or issuance of Common Stock is to be made on a deferred
                basis, the Committee shall establish whether interest or dividend
                equivalents shall be credited on the deferred amounts and any other
                terms
                and conditions applicable thereto.

            

    

     

    
      	
               

            	
              (e)

            	
              Termination
                of Service.  The Committee shall determine the effect of
                termination of service during the performance period on a Holder’s
                Performance Award.

            

    

     

    XII.    STOCK
      VALUE
      EQUIVALENT AWARDS

     

    
      	
               

            	
              (a)

            	
              Stock
                Value Equivalent Awards.  Stock Value Equivalent Awards are
                rights to receive an amount equal to the Fair Market Value of shares
                of
                Common Stock or rights to receive an amount equal to any appreciation
                or
                increase in the Fair Market Value of Common Stock over a specified
                period
                of time, which vest over a period of time as established by the Committee,
                without payment of any amounts by the Holder thereof (except to the
                extent
                otherwise required by law) or satisfaction of any performance criteria
                or
                objectives.  Each Stock Value Equivalent Award may have a
                maximum value established by the Committee at the time of such
                Award.

            

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (b)

            	
              Award
                Period.  The Committee shall establish, with respect to and
                at the time of each Stock Value Equivalent Award, a period over which
                the
                Award shall vest with respect to the
                Holder.

            

    

     

    
      	
               

            	
              (c)

            	
              Payment.  Following
                the end of the determined period for a Stock Value Equivalent Award,
                the
                Holder of a Stock Value Equivalent Award shall be entitled to receive
                payment of an amount, not exceeding the maximum value of the Stock
                Value
                Equivalent Award, if any, based on the then vested value of the
                Award.  Payment of a Stock Value Equivalent Award (i) shall be
                made in cash, (ii) shall be made in a lump sum or in installments
                as
                prescribed by the Committee in its sole discretion, and (iii) shall
                be
                based on the Fair Market Value of the Common Stock on the payment
                date.  Cash dividend equivalents may be paid during, or may be
                accumulated and paid at the end of, the determined period with respect
                to
                a Stock Value Equivalent Award, as determined by the
                Committee.  If payment of cash is to be made on a deferred
                basis, the Committee shall establish whether interest shall be credited,
                the rate thereof and any other terms and conditions applicable
                thereto.

            

    

     

    
      	
               

            	
              (d)

            	
              Termination
                of Service.  The Committee shall determine the effect of
                termination of service during the applicable vesting period on a
                Holder’s
                Stock Value Equivalent Award.

            

    

     

    XIII.    RECAPITALIZATION
      OR
      REORGANIZATION

     

    
      	
               

            	
              (a)

            	
              After
                the closing date of the IPO, except as hereinafter otherwise provided,
                in
                the event of any recapitalization, reorganization, merger, consolidation,
                combination, exchange, stock dividend, stock split, extraordinary
                dividend
                or divestiture (including a spin-off) or any other change in the
                corporate
                structure or shares of Common Stock occurring after the date of the
                grant
                of an Award, the Committee shall, in its discretion, make such adjustment
                as to the number and price of shares of Common Stock or other
                consideration subject to such Awards as the Committee shall deem
                appropriate in order to prevent dilution or enlargement of rights
                of the
                Holders.

            

    

     

    
      	
               

            	
              (b)

            	
              The
                existence of the Plan and the Awards granted hereunder shall not
                affect in
                any way the right or power of the Board or the stockholders of the
                Company
                to make or authorize any adjustment, recapitalization, reorganization
                or
                other change in the Company’s capital structure or its business, any
                merger or consolidation of the Company, any issue of debt or equity
                securities having any priority or preference with respect to or affecting
                Common Stock or the rights thereof, the dissolution or liquidation
                of the
                Company or any sale, lease, exchange or other disposition of all
                or any
                part of its assets or business or any other corporate act or
                proceeding.

            

    

     

    
      	
               

            	
              (c)

            	
              The
                shares with respect to which Options, Stock Appreciation Rights or
                Restricted Stock Units may be granted are shares of Common Stock
                as
                presently constituted, but, after the closing date of the IPO, if,
                and
                whenever, prior to the expiration of an Option, Stock Appreciation
                Rights
                or Restricted Stock Unit Award, the Company shall effect a subdivision
                or
                consolidation of shares of Common Stock or the payment of a stock
                dividend
                on Common Stock without receipt of consideration by the Company,
                the
                number of shares of Common Stock with respect to which such Award
                relates
                or may thereafter be exercised (i) in the event of an increase in
                the
                number of outstanding shares shall be proportionately increased,
                and, as
                applicable, the purchase price per share shall be proportionately
                reduced,
                and (ii) in the event of a reduction in the number of outstanding
                shares
                shall be proportionately reduced, and, as applicable, the purchase
                price
                per share shall be proportionately
                increased.

            

    

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (d)

            	
              After
                the closing date of the IPO, if the Company recapitalizes or otherwise
                changes its capital structure, thereafter upon any exercise of an
                Option
                or Stock Appreciation Rights or payment in settlement of a Restricted
                Stock Unit Award theretofore granted, the Holder shall be entitled
                to
                purchase or receive, as applicable, under such Award, in lieu of
                the
                number of shares of Common Stock as to which such Award relates or
                shall
                then be exercisable, the number and class of shares of stock and
                securities and the cash and other property to which the Holder would
                have
                been entitled pursuant to the terms of the recapitalization if,
                immediately prior to such recapitalization, the Holder had been the
                holder
                of record of the number of shares of Common Stock then covered by
                such
                Award (or, if a cash payment would otherwise be payable, an amount
                determined by reference to the value attributable
                thereto).

            

    

     

    
      	
               

            	
              (e)

            	
              In
                the event of a Corporate Change, unless an Award Document otherwise
                provides, as of the Corporate Change Effective Date (i) any outstanding
                Options and Stock Appreciation Rights shall become immediately vested
                and
                fully exercisable, (ii) any restrictions on Restricted Stock Awards
                or
                Restricted Stock Unit Awards shall immediately lapse, (iii) all
                performance measures upon which an outstanding Performance Award
                is
                contingent shall be deemed achieved and the Holder shall receive
                a payment
                equal to the maximum amount of the Award he or she would have been
                entitled to receive, prorated to the Corporate Change Effective Date,
                and
                (iv) any outstanding cash Awards including, but not limited to, Stock
                Value Equivalent Awards shall immediately vest and be paid based
                on the
                vested value of the Award.

            

    

     

    
      	
               

            	
              (f)

            	
              In
                the relevant Award Document, the Committee may provide that, no later
                than
                two (2) business days prior to any Corporate Change referenced in
                Clause (ii), (iii) or (iv) of the definition thereof or ten (10)
                business
                days after any Corporate Change referenced in Clause (i) of the definition
                thereof, the Committee may, in its sole discretion, (i) require the
                mandatory surrender to the Company by all or selected Optionees of
                some or
                all of the outstanding Options held by such Optionees (irrespective
                of
                whether such Options are then exercisable under the provisions of
                the
                Plan) as of a date (before or after a Corporate Change) specified
                by the
                Committee, in which event the Committee shall thereupon cancel such
                Options and pay to each Optionee an amount of cash per share equal
                to the
                excess, if any, of the Change of Control Value of the shares subject
                to
                such Option over the exercise price(s) under such Options for such
                shares,
                (ii) require the mandatory surrender to the Company by all or selected
                Holders of Stock Appreciation Rights of some or all of the outstanding
                Stock Appreciation Rights held by such Holders (irrespective of whether
                such Stock Appreciation Rights are then exercisable under the provisions
                of the Plan) as of a date (before or after a Corporate Change) specified
                by the Committee, in which event the Committee shall thereupon cancel
                such
                Stock Appreciation Rights and pay to each Holder an amount of cash
                equal
                to the Spread (if any) with respect to such Stock Appreciation Rights
                with
                the Fair Market Value of the Common Stock at such time to be deemed
                to be
                the Change of Control Value, or (iii) require the mandatory surrender
                to
                the Company by selected Holders of Restricted Stock Awards, Restricted
                Stock Unit Awards or Performance Awards of some or all of the outstanding
                Awards held by such Holder (irrespective of whether such Awards are
                vested
                under the provisions of the Plan) as of a date (before or after a
                Corporate Change) specified by the Committee, in which event the
                Committee
                shall thereupon cancel such Awards and pay to each Holder an amount
                of
                cash equal to the Change of Control Value of the shares, if the Award
                value is determined by the full value of shares of Common Stock,
                or an
                amount of cash equal to the value of the Award at such time, if the
                Award
                is not determined on that basis.

            

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (g)

            	
              Except
                as hereinbefore expressly provided, the issuance by the Company of
                shares
                of stock of any class or securities convertible into shares of stock
                of
                any class, for cash, property, labor or services, upon direct sale,
                upon
                the exercise of rights or warrants to subscribe therefor, or upon
                conversion of shares or obligations of the Company convertible into
                such
                shares or other securities, and in any case whether or not for fair
                value,
                shall not affect, and no adjustment by reason thereof shall be made
                with
                respect to, the number of shares of Common Stock subject to Awards
                theretofore granted, the purchase price per share of Common Stock
                subject
                to Options or the calculation of the Spread with respect to Stock
                Appreciation Rights.

            

    

     

    XIV.    AMENDMENT
      OR
      TERMINATION OF THE PLAN

     

    The
      Board
      in its discretion may terminate the Plan or alter or amend the Plan or any
      part
      thereof from time to time; provided that no change in the Plan may be made
      which
      would impair the rights of the Holder in any Award theretofore granted without
      the consent of the Holder, and provided, further, that the Board may not,
      without approval of the stockholders, amend the Plan to effect a “material
      revision” of the Plan, where a “material revision” includes, but is not limited
      to, a revision that: (a) materially increases the benefits accruing to a Holder
      under the Plan, (b) materially increases the aggregate number of securities
      that may be issued under the Plan, (c) materially modifies the requirements
      as to eligibility for participation in the Plan, (d) changes the types of awards
      available under the Plan, or (e) amends or deletes the provisions that prevent
      the Committee from amending the terms and conditions of an outstanding Option
      or
      Stock Appreciation Rights to alter the exercise price.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    XV.    OTHER

     

    
      	
               

            	
              (a)

            	
              No
                Right To An Award.  Neither the adoption of the Plan nor
                any action of the Board or of the Committee shall be deemed to give
                an
                employee or a Non-employee Director any right to be granted an Award
                or
                any other rights hereunder except as may be evidenced by an Award
                Document
                duly executed on behalf of the Company, and then only to the extent
                of and
                on the terms and conditions expressly set forth therein.  The
                Plan shall be unfunded.  The Company shall not be required to
                establish any special or separate fund or to make any other segregation
                of
                funds or assets to assure the payment of any
                Award.

            

    

     

    
      	
               

            	
              (b)

            	
              No
                Employment Rights Conferred.  Nothing contained in the Plan
                or in any Award made hereunder
                shall:

            

    

     

    
      	
               

            	
              (i)

            	
              confer
                upon any employee any right to continuation of employment with the
                Company
                or any Subsidiary; or

            

    

     

    
      	
               

            	
              (ii)

            	
              interfere
                in any way with the right of the Company or any Subsidiary to terminate
                his or her employment at any time.

            

    

     

    
      	
               

            	
              (c)

            	
              No
                Rights to Serve as a Director Conferred.  Nothing contained
                in the Plan or in any Award made hereunder shall confer upon any
                Director
                any right to continue their position as a Director of the
                Company.

            

    

     

    
      	
               

            	
              (d)

            	
              Other
                Laws; Withholding.  The Company shall not be obligated to
                issue any Common Stock pursuant to any Award granted under the Plan
                at any
                time when the offering of the shares covered by such Award has not
                been
                registered under the Securities Act of 1933, such other state and
                federal
                laws, rules or regulations, and non-U.S. laws, rules, or regulations
                as
                the Company or the Committee deems applicable and, in the opinion
                of legal
                counsel for the Company, there is no exemption from the registration
                requirements of such laws, rules or regulations available for the
                issuance
                and sale of such shares.  No fractional shares of Common Stock
                shall be delivered, nor shall any cash in lieu of fractional shares
                be
                paid.  The Company shall have the right to deduct in connection
                with all Awards any taxes required by law to be withheld and to require
                any payments necessary to enable it to satisfy its withholding
                obligations.  The Committee may permit the Holder of an Award to
                elect to surrender, or authorize the Company to withhold, shares
                of Common
                Stock (valued at their Fair Market Value on the date of surrender
                or
                withholding of such shares) in satisfaction of the Company’s withholding
                obligation, subject to such restrictions as the Committee deems
                appropriate.

            

    

     

    
      	
               

            	
              (e)

            	
              No
                Restriction on Corporate Action.  Nothing contained in the
                Plan shall be construed to prevent the Company or any Subsidiary
                from
                taking any corporate action which is deemed by the Company or such
                Subsidiary to be appropriate or in its best interest, whether or
                not such
                action would have an adverse effect on the Plan or any Award made
                under
                the Plan.  No Holder, beneficiary or other person shall have any
                claim against the Company or any Subsidiary as a result of any such
                action.

            

    

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (f)

            	
              Restrictions
                on Transfer.  Except as otherwise provided herein, an Award
                shall not be sold, transferred, pledged, assigned or otherwise alienated
                or hypothecated by a Holder other than by will or the laws of descent
                and
                distribution or pursuant to a “qualified domestic relations order” as
                defined by the Code or Title I of the Employee Retirement Income
                Security
                Act of 1974, as amended, and shall be exercisable during the lifetime
                of
                the Holder only by such Holder, the Holder’s guardian or legal
                representative, a transferee under a qualified domestic relations
                order or
                a transferee as described below.  The Committee may prescribe
                and include in the respective Award Documents hereunder other restrictions
                on transfer.  Any attempted assignment or transfer in violation
                of this section shall be null and void.  Upon a Holder’s death,
                the Holder’s personal representative or other person entitled to succeed
                to the rights of the Holder (the “Successor Holder”) may exercise such
                rights as are provided under the applicable Award Document.  A
                Successor Holder must furnish proof satisfactory to the Company of
                his or
                her rights to exercise the Award under the Holder’s will or under the
                applicable laws of descent and distribution.  Notwithstanding
                the foregoing, the Committee shall have the authority, in its discretion,
                to grant (or to sanction by way of amendment to an existing grant)
                Awards
                (other than Incentive Stock Options) which may be transferred by
                the
                Holder for no consideration to or for the benefit of the Holder’s
                Immediate Family, to a trust solely for the benefit of the Holder
                and his
                Immediate Family, or to a partnership or limited liability company
                in
                which the Holder and members of his Immediate Family have at least
                99% of
                the equity, profit and loss interest, in which case the Award Document
                shall so state.  A transfer of an Award pursuant to this
                Paragraph (f) shall be subject to such rules and procedures as the
                Committee may establish.  In the event an Award is transferred
                as contemplated in this Paragraph (f), such Award may not be subsequently
                transferred by the transferee except by will or the laws of descent
                and
                distribution, and such Award shall continue to be governed by and
                subject
                to the terms and limitations of the Plan and the relevant written
                instrument for the Award and the transferee shall be entitled to
                the same
                rights as the Holder under Articles XIII and XIV hereof as if no
                transfer
                had taken place.  No transfer shall be effective unless and
                until written notice of such transfer is provided to the Committee,
                in the
                form and manner prescribed by the Committee.  The consequences
                of termination of employment shall continue to be applied with respect
                to
                the original Holder, following which the Awards shall be exercised
                by the
                transferee only to the extent and for the periods specified in the
                Plan
                and the related Award Document.  The Option Agreement, Stock
                Appreciation Rights Agreement, Restricted Stock Award Agreement,
                Restricted Stock Unit Award Agreement or other Award Document shall
                specify the effect of the death of the Holder on the
                Award.

            

    

     

    
      	
               

            	
              (g)

            	
              Governing
                Law.  This Plan shall be construed in accordance with the
                laws of the State of Texas, except to the extent that it implicates
                matters which are the subject of the General Corporation Law of the
                State
                of Delaware which matters shall be governed by the latter
                law.

            

    

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (h)

            	
              Foreign
                Awardees.  The Committee may, without amending the Plan,
                grant Awards to eligible persons who are foreign nationals on such
                terms
                and conditions different from those specified in the Plan as may,
                in the
                judgment of the Committee, be necessary or desirable to foster and
                promote
                achievement of the purposes of the Plan and, in furtherance of such
                purposes, the Committee may make such modifications, amendments,
                procedures, subplans and the like as may be necessary or advisable
                to
                comply with the provisions of laws and regulations in other countries
                or
                jurisdictions in which the Company or its Subsidiaries
                operate.

            

    

     

    
      	
               

            	
              (i)

            	
              Section
                409A.  Notwithstanding anything in this Plan to the
                contrary, if any Plan provision or Award under the Plan, or any deferral
                permitted under the Plan, would result in the imposition of an applicable
                tax under Section 409A of the Code and related regulations and Treasury
                pronouncements (“Section 409A”), that Plan provision or Award will be
                reformed, and that deferral provision will be structured, to avoid
                imposition of the applicable tax and no action taken to comply with
                Section 409A shall be deemed to adversely affect the Participant’s rights
                with respect to an Award.

            

    

     

     

    -20-ex10_2.htm

    
      

    

    Exhibit
      10.2

     

    FORM
      OF RESTRICTED STOCK UNIT AGREEMENT

     

    AGREEMENT
      by and between KBR, Inc., a Delaware corporation (the “Company”) and ___________
      (“Employee”) made effective as of the date of the delivery of shares for the
      closing of the initial public offering of the Company (the “Grant
      Date”).

     

    
      	
               

            	
              1.

            	
              Grant
                of Restricted Stock
                Units.

            

    

     

    (a)           Units.  Pursuant
      to the KBR, Inc. 2006 Stock and Incentive Plan (the “Plan”) units evidencing the
      right to receive __________ shares of the Company’s common stock (“Stock”), are
      awarded to Employee, subject to the conditions of the Plan and this Agreement
      (the “Restricted Stock Units”).

     

    (b)           Plan
      Incorporated.  Employee acknowledges receipt of a copy of the
      Plan, and agrees that this award of Restricted Stock Units shall be subject
      to
      all of the terms and conditions set forth in the Plan, including future
      amendments thereto, if any, pursuant to the terms thereof, which Plan is
      incorporated herein by reference as a part of this Agreement.  Except
      as defined herein, capitalized terms shall have the same meanings ascribed
      to
      them under the Plan.

     

    2.           Terms
      of Restricted Stock Units.  Employee hereby accepts the
      Restricted Stock Units and agrees with respect thereto as follows:

     

    (a)           Forfeiture
      of Restricted Stock Units.  In the event of termination of
      Employee’s employment with the Company or any employing Subsidiary of the
      Company for any reason other than (i) normal retirement on or after age
      sixty-five, (ii) death or (iii) disability (disability being defined as being
      physically or mentally incapable of performing either the Employee’s usual
      duties as an Employee or any other duties as an Employee that the Company
      reasonably makes available and such condition is likely to remain continuously
      and permanently, as determined by the Company or employing Subsidiary), or
      except as otherwise provided in the last two sentences of subparagraph (c)
      of
      this Paragraph 2, Employee shall, for no consideration, forfeit all Restricted
      Stock Units to the extent they are not fully vested.

     

    (b)           Assignment
      of Award.  The Restricted Stock Units may not be sold, assigned,
      pledged, exchanged, hypothecated or otherwise transferred, encumbered or
      disposed of.

     

    (c)           Vesting
      Schedule.  The Restricted Stock Units shall vest in accordance
      with the following schedule provided that Employee has been continuously
      employed by the Company from the date of this Agreement through the applicable
      vesting date.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    
      	
              Vesting
                Date

            	 	
              Vested
                Percentage of Total Number

              of
                Restricted Stock Units

            	 
	
              1st
                Anniversary of Grant Date

            	 	 	20	%
	
              2nd
                Anniversary of Grant Date

            	 	 	40	%
	
              3rd
                Anniversary of Grant Date

            	 	 	60	%
	
              4th
                Anniversary of Grant Date

            	 	 	80	%
	
              5th
                Anniversary of Grant Date

            	 	 	100	%

    

    

    Notwithstanding
      the foregoing, the Restricted Stock Units shall become fully vested on the
      earlier of (i) the occurrence of a Corporate Change (as such term is defined
      in
      the Plan), or (ii) the date Employee’s employment with the Company is terminated
      by reason of death, disability (as determined above) or normal retirement on
      or
      after age sixty-five.  In the event Employee’s employment is
      terminated for any other reason, including retirement prior to age sixty-five
      with the approval of the Company or employing Subsidiary, the Committee which
      administers the Plan (the “Committee”) or its delegate, as appropriate, may, in
      the Committee’s or such delegate’s sole discretion, approve the acceleration of
      the vesting of any or all Restricted Stock Units still subject to restrictions,
      such vesting acceleration to be effective on the date of such approval or
      Employee’s termination date, if later.

     

    (d)           Shareholder
      Rights.  Employee shall have no rights to dividends, dividend
      equivalents or any other rights of a shareholder with respect to shares of
      Stock
      subject to this Award unless and until such time as the Award has been settled
      by the transfer of shares of Stock to Employee.

     

    (e)           Settlement
      and Delivery of Shares.  Payment of vested Restricted Stock Units
      shall be made as soon as administratively practicable after vesting, but in
      no
      event later than thirty days after the vesting date.  Settlement will
      be made by payment in shares of Stock.  Notwithstanding
      the foregoing, the Company shall not be obligated to deliver any shares of
      Stock
      if counsel to the Company determines that such sale or delivery would violate
      any applicable law or any rule or regulation of any governmental authority
      or
      any rule or regulation of, or agreement of the Company with, any securities
      exchange or association upon which the Stock is listed or quoted.  The
      Company shall in no event be obligated to take any affirmative action in order
      to cause the delivery of shares of Stock to comply with any such law, rule,
      regulation or agreement.

     

    3.           Withholding
      of Tax. The Committee may make such
      provisions as it may deem appropriate for the withholding of any taxes which
      it
      determines is required in connection with this Award.  Unless the
      Committee provides otherwise, the Company shall reduce the number of shares
      of
      Stock that would have otherwise been delivered to Employee by a number of shares
      of Stock having a Fair Market Value equal to the amount required to be
      withheld.

     

    4.           Employment
      Relationship.  For purposes of this Agreement, Employee
      shall be considered to be in the employment of the Company as long as Employee
      remains an employee of the Company, a Parent Corporation or Subsidiary of the
      Company, or a corporation or a Parent Corporation or subsidiary of such
      corporation assuming or substituting a new award for this Award.  Any
      question as to whether and when there has been a termination of such employment,
      and the cause of such termination, shall be determined by the Committee, or
      its
      delegate, as appropriate, and its determination shall be final.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5.           Committee’s
      Powers.  No provision contained in this Agreement shall
      in any way terminate, modify or alter, or be construed or interpreted as
      terminating, modifying or altering any of the powers, rights or authority vested
      in the Committee or, to the extent delegated, in its delegate pursuant to the
      terms of the Plan or resolutions adopted in furtherance of the Plan, including,
      without limitation, the right to make certain determinations and elections
      with
      respect to the Restricted Stock Units.

     

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

     

    7.           Compliance
      with Law.  Notwithstanding anything to the contrary
      herein, the Company shall not be obligated to issue any Stock in connection
      with
      a Restricted Stock Unit, at any time, if the offering or issuance of the Stock,
      or if acceptance of the Stock by an Employee, violates or is not in compliance
      with any laws, rules or regulations of the United States or any state or
      country.

     

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

     

    9.           Section
      409A.  Notwithstanding anything in this Agreement to the
      contrary, if any provision in this Agreement would result in the imposition
      of
      an applicable tax under Section 409A of the Code and related regulations and
      United States Department of the Treasury pronouncements (“Section 409A”), that
      provision will be reformed to avoid imposition of the applicable tax and no
      action taken to comply with Section 409A shall be deemed to adversely affect
      Employee’s rights under this Agreement.

     

    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
      by an
      officer thereunto duly authorized, and Employee has executed this Agreement,
      all
      as of the date first above written.

     

     

    
      	 	
              KBR,
                INC. 

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	
               

            
	 	 	 
	 	 	 
	 	 	 
	 	  
	 	
              Employee 

            

    

     

     

    3

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