Document:

Form of Intellectual Property Matters Agreement

 Exhibit 10.7 
  
  
  
  
 FORM OF 
  
 INTELLECTUAL PROPERTY MATTERS AGREEMENT 
  
 BETWEEN 
  
 HALLIBURTON COMPANY 
  
 and 
  
 KBR, INC. 
  
 Dated
                            , 2006 
  
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	ARTICLE I DEFINITIONS 	  	1
		
	ARTICLE II OWNERSHIP OF INTELLECTUAL PROPERTY 	  	7
	 SECTION 2.1
	  	KBR’s Ownership	  	7
	 SECTION 2.2
	  	Halliburton’s Ownership	  	7
	 SECTION 2.3
	  	KBR Marks and Halliburton Marks	  	7
		
	ARTICLE III LICENSES TO HALLIBURTON 	  	8
	 SECTION 3.1
	  	KBR Patents	  	8
	 SECTION 3.2
	  	KBR Licensed Other IP	  	8
	 SECTION 3.3
	  	KBR Third Party Patents	  	8
	 SECTION 3.4
	  	Technology Fees	  	8
	 SECTION 3.5
	  	Retained Rights	  	9
	 SECTION 3.6
	  	Reports; Audit Right	  	9
		
	ARTICLE IV LICENSES TO KBR 	  	10
	 SECTION 4.1
	  	Halliburton Patents	  	10
	 SECTION 4.2
	  	Halliburton Licensed Other IP	  	10
	 SECTION 4.3
	  	Halliburton Third Party Patents	  	10
	 SECTION 4.4
	  	Retained Rights	  	10
		
	ARTICLE V OTHER AGREEMENTS	  	10
	 SECTION 5.1
	  	Conflict	  	10
	 SECTION 5.2
	  	Software License Agreement	  	10
		
	ARTICLE VI MAINTENANCE AND ENFORCEMENT 	  	11
	 SECTION 6.1
	  	Prosecution and Maintenance of IP Rights	  	11
	 SECTION 6.2
	  	Enforcement of IP Rights	  	11
		
	ARTICLE VII CONFIDENTIALITY 	  	11
	 SECTION 7.1
	  	Confidentiality	  	11
	 SECTION 7.2
	  	Equitable Relief	  	12
		
	ARTICLE VIII WARRANTIES AND INDEMNIFICATION 	  	12
	 SECTION 8.1
	  	No Representation or Warranty	  	12
	 SECTION 8.2
	  	Indemnification by Halliburton	  	12
	 SECTION 8.3
	  	Indemnification by KBR	  	13
	 SECTION 8.4
	  	Procedures for Indemnification of Third Party Claims	  	13
	 SECTION 8.5
	  	Mitigation of Damages	  	15
		
	ARTICLE IX TERM AND TERMINATION 	  	15
	 SECTION 9.1
	  	Term	  	15
	 SECTION 9.2
	  	Termination	  	15

  
  

 i 

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

  
  

 ii 

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

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

 2 

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

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

 3 

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

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

  

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

  

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

  

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

  

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

 

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

  

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

  

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

  

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

  

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

  

 4 

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

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

	 	(A)	 	exploration for hydrocarbons; 

  

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

  

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

  

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

  

	 	(E)	 	hydrocarbon reservoir engineering or modeling; 

  

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

  

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

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

 5 

 “KBR Third Party Patents” means those patents that are not owned by Halliburton or KBR
but to which KBR has rights under a license agreement with a third party immediately prior to the IPO Closing Date. 
  
 “Losses” shall have the meaning set forth in the Separation Agreement. 
  
 “Oil and Gas Producing Companies” means those Persons whose principal business is the production and sale
of oil and gas, and excludes, without limitation, those Persons whose principal business is the provision of engineering and/or construction services and those Persons whose principal business is the provision of upstream oilfield services.

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

  
 “Software License Agreements” shall have the
meaning set forth in Section 5.2. 
  
 “Third Party
Claims” shall have the meaning set forth in Section 8.4(a). 
  
 “Upgrade Technology” means the field upgrade technologies identified in Attachment B hereto including, without limitation, ROSETM Technology. For the avoidance of doubt, Upgrade Technology is a
subset of KBR Patents and KBR Other IP. 
  
  

 6 

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

 7 

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

 8 

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

 9 

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

  

 10 

 
otherwise explicitly stated in the Software License Agreements, all data associated with or contained in the software assigned or licensed under the Software
License Agreements shall be treated as follows: (a) data primarily related to activities in the KBR Fields of Use prior to the IPO Closing Date (“KBR Data”) shall be considered KBR Other IP hereunder and (b) all such data
other than KBR Data shall be considered Halliburton Other IP hereunder. 
  
 ARTICLE VI 
 MAINTENANCE AND ENFORCEMENT 
  
 SECTION 6.1 Prosecution and Maintenance of IP Rights. The party who is the owner of any of the IP Rights shall, during the term of this Agreement,
be responsible for all actions and costs relating to the prosecution, protection, and maintenance of such IP Rights, including without limitation prosecuting patent applications and maintaining existing and future patents. The IP Rights subject to
this Agreement shall include all rights which result from any application, prosecution, protection or maintenance of the IP Rights. 
  
 SECTION 6.2 Enforcement of IP Rights. In the event that a party learns that any IP Rights licensed to it hereunder are being infringed or used
improperly or without authorization by any Person, such party shall promptly notify the owner of such IP Rights. The owner of the infringed IP Rights shall decide in its sole and exclusive discretion what action to take or not to take in response.
The owner shall have the right to act to terminate any infringement, including, without limitation, prosecuting a lawsuit or other legal proceeding at its own expense, and such party may retain in full any and all recovery it may receive as a result
of its actions to terminate such infringement. The licensee of any IP Rights hereunder agrees to reasonably cooperate with the owner of such IP Rights in connection with any actions of the owner to enforce or defend its IP Rights. 
  
 ARTICLE VII 
 CONFIDENTIALITY 
  
 SECTION 7.1 Confidentiality. Notwithstanding anything to the contrary in the Separation Agreement, Halliburton and KBR shall hold and shall each cause their respective officers, employees, agents, consultants and advisors to hold, in
strict confidence and not to use, disclose or release without the prior written consent of the other party, any and all Confidential IP Information (as defined herein) of the other party; provided, that the parties may use the other party’s
Confidential IP Information pursuant to Sections 3.1, 3.2, 4.1, and/or 4.2, and may disclose, or may permit disclosure of, the other party’s Confidential IP Information under confidentiality and nonuse obligations which are at least as strict
as those provided in this Agreement (a) to their respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such information and are informed of their obligation to hold
such information confidential to the same extent as is applicable to the parties and in respect of whose failure to comply with such obligations, Halliburton or KBR, as the case may be, will be responsible, (b) to their customers who are Oil
and Gas Producing Companies or Refining or Industrial Processing Companies or Government and Infrastructure Persons to the extent reasonably necessary for such customers’ use of products or services that are provided under this Agreement by
Halliburton or KBR, as the case may be, and that embody Confidential IP Information, or (c) to the extent Halliburton or KBR is 

  

 11 

 
compelled to disclose any such Confidential IP Information by judicial or administrative process or, in the opinion of legal counsel, by other requirements
of law. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential IP Information is made pursuant to clause (c) above, Halliburton or KBR, as the case may be, shall promptly notify the other of the
existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which both parties will cooperate in seeking to obtain. In the event that such appropriate protective
order or other remedy is not obtained, the party whose Confidential IP Information is required to be disclosed shall or shall cause the other party to furnish, or cause to be furnished, only that portion of the Confidential IP Information that is
legally required to be disclosed. As used in this Section 7.1, “Confidential IP Information” shall mean all proprietary, technical or operational information, data or material relating to intellectual property, including
without limitation all trade secrets and know-how, of one party which, prior to or following the IPO Closing Date, has been disclosed by Halliburton, on the one hand, or KBR, on the other hand, in written, oral (including by recording), electronic,
or visual form to, or otherwise has come into the possession of, the other, including pursuant to any other provision of this Agreement (except to the extent that such Confidential IP Information can be shown to have been (i) in the public
domain through no fault of such party, (ii) later lawfully acquired from other sources by the party to which it was furnished or (iii) created independently by such party without the benefit of Confidential IP Information; provided,
however, in the case of (ii) that such sources did not provide such Confidential IP Information in breach of any confidentiality obligations). Notwithstanding anything to the contrary set forth herein, Halliburton, on the one hand, and KBR, on
the other hand, shall be deemed to have satisfied their obligations hereunder with respect to Confidential IP Information if they exercise the same degree of care (but no less than a reasonable degree of care) as they take to preserve
confidentiality for their own similar confidential intellectual property information. 
  
 SECTION 7.2 Equitable Relief. Each party acknowledges that a breach of its obligations under Section 7.1 may cause the other party irreparable and significant harm and that, in addition to any other
remedies available to it, such party may seek immediate injunctive relief without the need for posting any bond in connection therewith. 
  
 ARTICLE VIII 
 WARRANTIES AND INDEMNIFICATION

  
 SECTION 8.1 No Representation or Warranty. Halliburton
and KBR make no representations or warranties of any kind, express or implied, with respect to any of the IP Rights licensed hereunder, all of which are provided “AS IS”, and neither party makes any representations or warranties as to the
completeness, sufficiency or accuracy of any IP Rights licensed hereunder, or the freedom from infringement of third party rights by the exercise of any IP Rights licensed hereunder. 
  
 SECTION 8.2 Indemnification by Halliburton. Except as otherwise provided in this Agreement, Halliburton and the
Appropriate Members of the Halliburton Group shall indemnify, defend and hold harmless KBR, each member of the KBR Group and their respective successors and assigns (collectively, the “KBR Indemnitees”), from and against any and all
Losses of the KBR Indemnitees relating to, arising out of or resulting from the Halliburton Business (as 

  

 12 

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

  

 13 

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

 14 

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

  

 15 

 
Infrastructure Person and/or any rights to use by KBR or Halliburton under Sections 3.1, 3.2, 4.1, or 4.2 to which a party has already become committed for a
particular project to an Oil and Gas Producing Company, a Coal Producing and Processing Company, a Refining or Industrial Processing Company, or a Government and Infrastructure Person, shall continue in full force and effect so long as all required
payments are made and the participants in the project(s) continue to abide by all other applicable terms and conditions which survive such termination. 
  
 ARTICLE X 
 GENERAL PROVISIONS 
  
 SECTION 10.1 Effect if IPO does not Occur. If the IPO does not occur,
then all actions and events that are, under this Agreement, to be taken or occur effective as of the IPO Closing Date, or otherwise in connection with the IPO, shall not be taken or occur except to the extent specifically agreed by the parties.

  
 SECTION 10.2 Relationship of Parties. Nothing in this
Agreement shall be deemed or construed by the parties or any third party as creating a fiduciary relationship, a relationship of principal and agent, partnership or joint venture between the parties, the understanding and agreement being that no
provision contained herein, and no act of the parties, shall be deemed to create any relationship between the parties other than the relationship set forth herein. This Agreement shall be binding upon and inure solely to the benefit of and be
enforceable by each party and its respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement. 
  
 SECTION 10.3 Incorporation of
Separation Agreement Provisions. If a dispute, claim or controversy results from or arises out of or in connection with this Agreement, the parties agree to use the procedures set forth in Article VII of the Separation Agreement in lieu of other
available remedies, to resolve same. The provisions of Sections 9.1 (Limitation of Liability) and 9.5 (Notices) of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions
shall apply as if fully set forth herein (references in this Section 10.3 to an “Article” or a “Section” shall mean Articles or Sections of the Separation Agreement, and, except as expressly set forth herein, references in
the material incorporated herein by reference shall be references to the Separation Agreement). 
  
 SECTION 10.4 Governing Law; Jurisdiction. This Agreement shall be governed by, construed and interpreted in accordance with the laws of the United
States and the State of Texas, irrespective of the choice of law principles of the State of Texas, as to all matters, including matters of validity, construction, effect, performance and remedies. The parties hereby agree to submit to the exclusive
jurisdiction of the state and federal courts located in Houston, Texas, in connection with any action or other proceeding relating to this Agreement or the transactions contemplated hereby. Each party irrevocably waives and agrees not to make, to
the fullest extent permitted by law, any objection which it may now or hereafter have to the jurisdiction of any such court or to the laying of venue of any such action or proceeding brought in any such court and any claim that any such action or
proceeding brought in any such court has been brought in an inconvenient forum. 
  

 16 

 SECTION 10.5 Severability. If any term or other provision of this Agreement is determined to be
invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to either party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible and in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest possible extent. 
  
 SECTION 10.6 Amendment. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the parties to this Agreement. 
  
 SECTION 10.7 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by a party without the
prior written consent of the other party, except that either party may at any time assign any or all of its rights or obligations hereunder to one of its wholly owned subsidiaries (but no such assignment shall relieve such party of any of its
obligations under this Agreement). 
  
 SECTION 10.8 No Strict
Construction. The language this Agreement uses shall be deemed to be the language the parties hereto have chosen to reflect their mutual intent, and no rule of strict construction or presumption based upon the party that has drafted this
Agreement shall be applied against any party hereto. 
  
 SECTION
10.9 Further Assurances. The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the
other party may reasonably request for the purpose of carrying out the intent of this Agreement. 
  
 SECTION 10.10 Counterparts. This Agreement may be executed in two or more counterparts each of which shall be deemed to be an original, but all of
which together shall constitute but one and the same Agreement. 
  
  

 17 

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

			
	HALLIBURTON COMPANY
		
	 By:
	 	 
		
	 Name:
	 	 
		
	 Title:
	 	 

  
  

			
	KBR, INC.
		
	 By:
	 	 
		
	 Name:
	 	 
		
	 Title:
	 	 

  

 18Form of 2006 KBR, Inc. Stock and Incentive Plan

 Exhibit 10.23 
 FORM OF 
 KBR, INC. 
 2006 STOCK AND INCENTIVE PLAN 
 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.

  

	 	(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, on or 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 following 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

  

 -2- 

 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

  

	 	(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 

  

 -4- 

 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. 
  

	 	(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                     , 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 

  

 -7- 

 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. 

 

	 	(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 

  

 -8- 

 denominated in Common Stock granted to any Holder for any one calendar year shall not exceed $5,000,000.
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. 
  

	 	(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 

  

 -10- 

 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. 
  

	 	(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 

  

 -12- 

 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. 
  

	 	(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 

  

 -15- 

 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. 
  

	 	(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 

 

 -16- 

 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. 
  

	 	(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-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]