Table of Contents

As filed with the Securities and Exchange Commission on April 13, 2007
Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
KBR, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)	 	20-4536774
(I.R.S. Employer Identification Number)	
 	 	 	
601 Jefferson Street
Suite 3400
Houston, Texas
(Address of principal executive offices)	 	77002
(Zip code)	
 
KBR, Inc. Transitional Stock Adjustment Plan
KBR Dresser Deferred Compensation Plan
(Full title of the plans)
 
Andrew D. Farley
Senior Vice President, General Counsel and Secretary
601 Jefferson Street
Suite 3400
Houston, Texas 77002
(713) 753-3011
(Name and address, including zip code, and telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE

 	Title of	 	 	 	 	 	Proposed maximum	 	 	Proposed maximum	 	 	Amount of	 	
 	securities to be	 	 	Amount to be	 	 	offering price per	 	 	aggregate offering	 	 	Registration	 	
 	registered	 	 	registered	 	 	share	 	 	price	 	 	Fee	 	
 	Common Stock, par value $0.001 per share	 	 	2,982,972 (1)(2)	 	 	$	20.965	(3)	 	 	$	62,538,008	 	 	 	$	1,920	(3)	 	

			
(1)	 	Pursuant to Rule 416 under the Securities Act of 1933, this Registration Statement also covers an indeterminate number of additional shares as may become issuable under the plans pursuant to the anti-dilution provisions thereof.	
 		
(2)	 	The shares of KBR, Inc. common stock being registered hereby include (a) 2,901,202 shares to be offered under the KBR, Inc. Transitional Stock Adjustment Plan and (b) 81,770 shares to be offered under the KBR Dresser Deferred Compensation Plan.	
 		
(3)	 	Estimated pursuant to Rule 457(c) and Rule 457(h) solely for the purpose of computing the registration fee and based upon the average of the high and low sales price of the common stock reported on the New York Stock Exchange on April 10, 2007.	

   

 
TABLE OF CONTENTS

									
Introductory Statement	
Part I	
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS	
Part II	
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT	
	Item 3. Incorporation of Documents by Reference.	
	Item 4. Description of Securities.	
	Item 5. Interests of Named Experts and Counsel.	
	Item 6. Indemnification of Directors and Officers.	
	Item 7. Exemption from Registration Claimed	
	Item 8. Exhibits	
	Item 9. Undertakings	
SIGNATURES	
POWER OF ATTORNEY	
EXHIBIT INDEX	
KBR Dresser Deferred Compensation Plan	
Opinion of Baker Botts L.L.P.	
Consent of KPMG LLP - Houston, Texas	
Consent of KPMG - Adelaide, South Australia	

Table of Contents
Introductory Statement
     KBR, Inc. is filing this Registration Statement on Form S-8 relating to its common stock, par value $0.001 per share, issuable pursuant to the terms of the KBR, Inc. Transitional Stock Adjustment Plan and the KBR Dresser Deferred Compensation Plan.
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
     Note: The document(s) containing the plan information required by Item 1 of Form S-8 and the statement of availability of registrant information and any other information required by Item 2 of Form S-8 will be sent or given to participants as specified by Rule 428 under the Securities Act of 1933, as amended (the “Securities Act”). In accordance with Rule 428 and the requirements of Part I of Form S-8, such documents are not being filed with the Securities and Exchange Commission (the “SEC”) either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act. KBR, Inc. (the “Company”) shall maintain a file of such documents in accordance with the provisions of Rule 428. Upon request, the Company shall furnish to the SEC or its staff a copy or copies of all of the documents included in such file.
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Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
I tem 3. Incorporation of Documents by Reference.
     This Registration Statement incorporates by reference the following documents which have been filed by the Company with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (File No. 001-33146):

 	1.	 	The Company’s Annual Report on Form 10-K for the year ended December 31, 2006;	
 		
 	2.	 	The Company’s Current Reports on Form 8-K as filed with the SEC on March 2, 2007, March 20, 2007 and April 6, 2007; and	
 		
 	3.	 	The description of the Company’s common stock, par value $0.001 per share (“Common Stock”), contained in the Company’s Registration Statement on Form 8-A as filed with the SEC on November 9, 2006, as such description may be amended from time to time.	
     All documents filed by the Company with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered by this Registration Statement have been sold, or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part of this Registration Statement from the date of filing such documents.
     Any statement contained in this Registration Statement, in any amendment to this Registration Statement or in a document incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that such statement is modified or superseded by a statement contained in any subsequently filed supplement to this Registration Statement or in any document that also is incorporated by reference herein. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
I tem 4. Description of Securities.
     Not applicable.
I tem 5. Interests of Named Experts and Counsel .
     Not applicable.
I tem 6. Indemnification of Directors and Officers.
     Delaware law permits a corporation to adopt a provision in its certificate of incorporation eliminating or limiting the personal liability of a director, but not an officer in his or her capacity as such, to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except that such provision shall not eliminate or limit the liability of a director for (1) any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) liability under section 174 of the Delaware General Corporation Law (the “DGCL”) for unlawful payment of dividends or stock purchases or redemptions or (4) any transaction from which the director derived an improper personal benefit. Our certificate of incorporation provides that, to the fullest extent of Delaware law, none of our directors will be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director.
     Under Delaware law, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any type of proceeding, other than an action by or in the right of the corporation, because he or she
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is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other entity, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such proceeding if: (1) he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and (2) with respect to any criminal proceeding, he or she had no reasonable cause to believe that his or her conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that a person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal proceeding, had reasonable cause to believe that his or her conduct was unlawful. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit brought by or in the right of the corporation because he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other entity, against expenses, including attorneys’ fees, actually and reasonably incurred in connection with such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made if the person is found liable to the corporation unless, in such a case, the court determines the person is nonetheless entitled to indemnification for such expenses. A corporation must also indemnify a present or former director or officer who has been successful on the merits or otherwise in defense of any proceeding, or in defense of any claim, issue or matter therein, against expenses, including attorneys’ fees, actually and reasonably incurred by him or her. Expenses, including attorneys’ fees, incurred by a director, officer, employee or agent, in defending civil or criminal proceedings may be paid by the corporation in advance of the final disposition of such proceedings upon, in the case of a current director or officer, receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. The Delaware law regarding indemnification and the advancement of expenses is not exclusive of any other rights a person may be entitled to under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
     Section 174 of the DGCL provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.
     Our bylaws generally provide for mandatory indemnification of directors and officers to the fullest extent permitted by law. We also entered into indemnification agreements with our directors in the form filed as an exhibit to our Registration Statement on Form S-1, as amended (Registration No. 333-133302), that generally provide for mandatory indemnification to the fullest extent permitted by law.
     Delaware law also provides that a corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other entity, against any liability asserted against and incurred by such person, whether or not the corporation would have the power to indemnify such person against such liability. We maintain, at our expense, insurance policies that insure our officers and directors, subject to customary exclusions and deductions, against specified liabilities that may be incurred in those capacities.
I tem 7. Exemption from Registration Claimed
     Not applicable.
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I tem 8. Exhibits
 	 	 	 	 	
Exhibit	 	 	
Number	 	Description	
 	4.1*	 	 	Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, as amended (Registration No. 333-133302) (the “Form S-1”))	
 	 	 	 	 	
 	4.2*	 	 	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Form S-1)	
 	 	 	 	 	
 	4.3*	 	 	Form of specimen common stock certificate (incorporated by reference to Exhibit 4.1 to the Form S-1)	
 	 	 	 	 	
 	4.4*	 	 	KBR, Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K for the year ended December 31, 2006)	
 	 	 	 	 	
 	4.5	 	 	KBR Dresser Deferred Compensation Plan	
 	 	 	 	 	
 	5.1	 	 	Opinion of Baker Botts L.L.P.	
 	 	 	 	 	
 	23.1	 	 	Consent of KPMG LLP — Houston, Texas	
 	 	 	 	 	
 	23.2	 	 	Consent of KPMG — Adelaide, South Australia	
 	 	 	 	 	
 	23.3	 	 	Consent of Baker Botts L.L.P. (included in exhibit 5.1)	
 	 	 	 	 	
 	24.1	 	 	Power of Attorney (included on the signature page of this Registration Statement)	

*	 	Incorporated by reference as indicated.	
I tem 9. Undertakings
     (a) The undersigned registrant hereby undertakes:
     (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
     (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
     (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933 if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
     (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
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      Provided, however , that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement.
     (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
     (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
     (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
     (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
     Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on April 13, 2007.
 	 	 	 	 	
 	KBR, INC.
 	 	
 	By:  	/s/ William P. Utt  	 	
 	 	William P. Utt 	 	
 	 	President and Chief Executive Officer 	 	
 	
POWER OF ATTORNEY
     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andrew D. Farley and Deidre L. Shearer, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in his name place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, any registration statement for the same offering filed pursuant to Rule 462(b) under the Securities Act of 1933 and any and all amendments (including post-effective amendments) thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
     Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated on April 13, 2007.
 	 	 	
Signature	 	Title	
 	 	 	
/s/ William P. Utt
 
William P. Utt	 	President, Chief Executive Officer and Director
(Principal Executive Officer and Director)	
 	 	 	
/s/ Cedric W. Burgher
 
Cedric W. Burgher	 	Senior Vice President and Chief Financial Officer
(Principal Financial Officer)	
 	 	 	
/s/ John W. Gann, Jr.
 
John W. Gann, Jr.	 	Vice President and Chief Accounting Officer
(Principal Accounting Officer)	
 	 	 	
/s/ Loren K. Carroll
 
Loren K. Carroll	 	Director	
 	 	 	
/s/ Jeffrey E. Curtiss
 
Jeffrey E. Curtiss	 	Director	
 	 	 	
/s/ John R. Huff
 
John R. Huff	 	Director	
 	 	 	
/s/ Richard J. Slater
 
Richard J. Slater	 	Director	
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EXHIBIT INDEX
 	 	 	 	 	
Exhibit	 	 	
Number	 	Description	
 	4.1*	 	 	Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, as amended (Registration No. 333-133302) (the “Form S-1”))	
 	 	 	 	 	
 	4.2*	 	 	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Form S-1)	
 	 	 	 	 	
 	4.3*	 	 	Form of specimen common stock certificate (incorporated by reference to Exhibit 4.1 to the Form S-1)	
 	 	 	 	 	
 	4.4*	 	 	KBR, Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K for the year ended December 31, 2006)	
 	 	 	 	 	
 	4.5	 	 	KBR Dresser Deferred Compensation Plan	
 	 	 	 	 	
 	5.1	 	 	Opinion of Baker Botts L.L.P.	
 	 	 	 	 	
 	23.1	 	 	Consent of KPMG LLP — Houston, Texas	
 	 	 	 	 	
 	23.2	 	 	Consent of KPMG — Adelaide, South Australia	
 	 	 	 	 	
 	23.3	 	 	Consent of Baker Botts L.L.P. (included in exhibit 5.1)	
 	 	 	 	 	
 	24.1	 	 	Power of Attorney (included on the signature page of this Registration Statement)	

*	 	Incorporated by reference as indicated.	
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Exhibit 4.5
KBR DRESSER
DEFERRED COMPENSATION PLAN

 

TABLE OF CONTENTS
 	 	 	 	 	 	 	 	 	
I.	 	PURPOSE OF PLAN	 	 	1	 	
II.	 	DEFINITIONS AND CONSTRUCTION	 	 	1	 	
 	 	2.1	 	Definitions	 	 	1	 	
 	 	2.2	 	Number and Gender	 	 	3	 	
 	 	2.3	 	Headings	 	 	3	 	
 	 	2.4	 	Effect Upon Other Plans	 	 	3	 	
III.	 	ADMINISTRATION	 	 	3	 	
 	 	3.1	 	Administration by the Committee; Right to Delegate; Indemnity	 	 	3	 	
 	 	3.2	 	Required Vote; Meetings	 	 	4	 	
 	 	3.3	 	Powers and Duties	 	 	4	 	
 	 	3.4	 	Unit Price	 	 	4	 	
 	 	3.5	 	Expenses	 	 	5	 	
IV.	 	UNIT STOCK BENEFITS AND CASH BENEFITS	 	 	5	 	
 	 	4.1	 	Dividend Equivalents on Unit Stock Benefits	 	 	5	 	
 	 	4.2	 	Interest on Cash Benefit	 	 	5	 	
 	 	4.3	 	Corporate Changes	 	 	5	 	
 	 	4.4	 	Unilateral Termination	 	 	5	 	
V.	 	BENEFITS	 	 	5	 	
 	 	5.1	 	Valuation	 	 	5	 	
 	 	5.2	 	Conversion From Unit Stock Benefit to Cash Benefit	 	 	6	 	
 	 	5.3	 	Medium of Payment	 	 	6	 	
 	 	5.4	 	Election of Options	 	 	6	 	
 	 	5.5	 	Payment of Dividend Equivalents and Interest	 	 	7	 	
 	 	5.6	 	Death or Disability	 	 	7	 	
 	 	5.7	 	To Whom Payments are Made	 	 	7	 	
 	 	5.8	 	Forfeiture	 	 	7	 	
VI.	 	MISCELLANEOUS	 	 	7	 	
 	 	6.1	 	Elections	 	 	7	 	
 	 	6.2	 	Reserves	 	 	7	 	
 	 	6.3	 	Withholding	 	 	8	 	
 	 	6.4	 	Plan Not to Constitute Contract of Employment	 	 	8	 	
 	 	6.5	 	Nontransferability and Nonassignability	 	 	8	 	
 	 	6.6	 	Amendment, Suspension or Termination	 	 	8	 	
 	 	6.7	 	Reliance Upon Information	 	 	8	 	
 	 	6.8	 	Governing Law	 	 	9	 	
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KBR DRESSER
DEFERRED COMPENSATION PLAN
           WHEREAS , Dresser Industries, Inc. established the Dresser Industries, Inc. Deferred Compensation Plan, hereinafter referred to as the “Plan,” effective August 19, 1965, for the benefit of certain of its employees;
           WHEREAS , deferrals under the Plan have ceased and no new Participant may join the Plan;
           WHEREAS , Halliburton Company and Dresser Industries, Inc. merged effective September 29, 1998;
           WHEREAS , Halliburton Company determined that it would be appropriate and desirable for Halliburton to separate the business and assets of KBR, Inc. (the “Company”) and its subsidiaries, from the business and assets of Halliburton and its other subsidiaries through an initial public offering of the common stock of the Company; and
           WHEREAS , the Company desires to assume all liabilities and continue the benefits for its employees who are participants under the Plan;
           WHEREAS , the Company desires to continue the Plan, intending thereby to provide an uninterrupted and continuing program of benefits for its employees who are also Plan participants;
           NOW THEREFORE , the Plan is hereby restated in its entirety as follows with no interruption in time, effective as of the Effective Date:
I. PURPOSE OF PLAN
          The purposes of this Plan are to (i) provide greater incentive for employees to attain and maintain the highest standards of performance; (ii) retain employees of outstanding competence; (iii) further the identity of interests of such employees with those of the Company’s stockholders generally; and (iv) reward such employees for outstanding performance.
II. DEFINITIONS AND CONSTRUCTION
      2.1 Definitions . Where the following words and phrases are used in this Plan, they shall have the respective meanings set forth below, unless the context clearly, indicates to the contrary:
          (a) “Benefits” means the net, unforfeited amounts, including Interest and Dividend Equivalents to be paid to a Participant (or the estate or beneficiary of a Participant) under the Plan.
          (b) “Benefit Payment Option” means one of the schedules specifying the timing of the payment of a Participant’s Benefit under the Plan as set forth in Section 5.4 of the Plan.
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          (c) “Board” means the Board of Directors of the Company
          (d) “Cash Benefit” means the amount credited in a dollar “amount under the Plan on behalf of a Participant as a result of such Participant’s Deferred Compensation and any Interest credited thereon.
          (e) “Committee” means the administrative committee appointed by the Compensation Committee to administer the Plan.
          (f) “Compensation Committee” means the Compensation Committee of the Board.
          (g) “Company” means KBR, Inc. and its wholly-owned subsidiaries.
          (h) “Crediting Date” means the January 15 next following the end of the Fiscal Year for which the credit is awarded or, if such January 15 is not a business day, the next business day.
          (i) “Deconsolidation Date” means the date upon which an event reduces the amount of Company stock owned directly or indirectly by Halliburton Company to be less than the amount required for Halliburton Company to control the Company within the meaning of Section 1504(a)(2) of the Internal Revenue Code.
          (j) “Deferred Compensation” means amounts deferred under the terms of the Plan prior to the Effective Date.
          (k) “Disability” means such an absence of physical or mental powers in a Participant so as to render him incapable of competently performing his duties for the Company.
          (l) “Dividend Equivalent” means, with respect to a particular Unit Stock Benefit, the sum of (i) the total amount of cash dividends that would have been payable during the preceding calendar year on the shares of Unit Stock under such Unit Stock Benefit had such shares been outstanding during the preceding calendar year and (ii) any Dividend Equivalent with respect to such Unit Stock Benefit carried forward from the preceding Crediting Date in accordance with the terms of Section 4.1.
          (m) “Effective Date” means the Deconsolidation Date. The original effective date of the Dresser Industries, Inc. Deferred Compensation Plan was August 1, 1965.
          (n) “Fiscal Year” means the fiscal year of the Company.
          (o) “Interest” means simple interest credited on a Participant’s Cash Benefit as of each Crediting Date. The rate of Interest shall be based on the annual savings account rate of a major bank as designated from time to time by the Committee as of the December 31 next preceding the applicable Crediting Date.
          (p) “Participant” means an individual who is contingently entitled to Benefits under the Plan. Participation in the Plan is available only to an individual who was a Participant
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in the Plan on the Effective Date. No other individuals shall be eligible to become Participants in the Plan.
          (q) “Plan” means the KBR Dresser Deferred Compensation Plan, which is based on the terms of, and is a continuation of, the Dresser Industries, Inc. Deferred Compensation Plan as adopted by the board of directors of Dresser Industries, Inc. on August 1, 1965 and as amended and restated by Halliburton Company. The applicable terms of that plan have been herein preserved and continued for employees of the Company and its subsidiaries.
          (r) “Unit Price” means, with respect to a Crediting Date, 75% of the average of the daily closing prices of Unit Stock on the New York Stock Exchange for the calendar month immediately prior to such Crediting Date, or such higher percentage of such average as may be determined by the Compensation Committee from time to time, in accordance with the terms of Section 3.4; provided however, that with respect to Unit Stock Benefits on behalf of a Participant who has terminated employment with the Company, 100% shall be substituted, for the foregoing percentage with respect to each Crediting Date after the Crediting Date following such Participant’s termination of employment.
          (s) “Unit Stock” means shares of common stock of the Company.
          (t) “Unit Stock Benefit” means the number of shares of Unit Stock credited on behalf of a Participant as a result of such Participants’ Deferred Compensation, and any Dividend Equivalents credited-thereon.
      2.2 Number and Gender . Wherever appropriate herein, words used in the singular shall be considered to include the plural, and words used in the plural shall be considered to include the singular. The masculine gender, where appearing in this Plan, shall be deemed to include the feminine gender.
      2.3 Headings . The headings of Articles, Sections, and Paragraphs herein are included solely for convenience. If there is any conflict between such headings and the text of this Plan, the text shall control. All references to Articles, Sections, and Paragraphs are to this Plan unless otherwise indicated.
      2.4 Effect Upon Other Plans . Except to the extent provided herein, nothing in this Plan shall be construed to affect the provisions of any other plan maintained by the Company.
III. ADMINISTRATION
      3.1 Administration by the Committee; Right to Delegate; Indemnity . This Plan shall be administered by the Committee. The Committee may appoint committees, individuals, or any other agents as it deems advisable and may delegate to any of such appointees any or all of the powers and duties of the Committee hereunder. In the event the Committee delegates any or all of its powers and duties under the foregoing sentence, the Committee may specify the manner in which such powers and duties shall be performed. The Company shall indemnify and hold harmless each member of the Committee against any and all expenses and liabilities arising out of his or her administrative functions or fiduciary responsibilities, including any expenses and liabilities that are caused by or result from an act or omission constituting the negligence of
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such member in the performance of such functions or responsibilities, but excluding expenses and liabilities that are caused by or result from such member’s own gross negligence or willful misconduct. Expenses against which such member shall be indemnified hereunder shall include, without limitation, the amounts of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted or a proceeding brought or settlement thereof.
      3.2 Required Vote; Meetings . The Committee shall adopt such rules and procedures for the conduct of its business and for the administration of the Plan as it deems advisable and shall have authority to take any and all action necessary to implement such rules and procedures. A Committee member who is a Participant may vote and take actions on all Committee matters, including, without limitation, matters that may directly affect such Committee member and matters that may affect such Committee member in a manner differently from or inconsistently with other Participants. All actions taken by the Committee must be approved by an affirmative vote of a majority of all Committee members. The Committee may take any action without a meeting upon written consent signed by all of the Committee members. Committee members may participate in a meeting by means of conference telephone or similar communications equipment through which all participating persons can instantly communicate with each other.
      3.3 Powers and Duties . The Committee shall supervise the administration and enforcement of this Plan according to the terms and provisions hereof and shall have the sole discretionary authority and all of the powers necessary to accomplish such duties. Without limiting the generality of the foregoing, the Committee shall have all of the powers and duties specified for it under the Plan, including, without limitation, the power, right, or authority: (a) from time to time to establish rules and procedures for the administration of the Plan which are not inconsistent with the provisions of the Plan, and any such rules and procedures shall be effective as if included in the Plan, (b) to construe in its discretion all terms, provisions, conditions, and limitations of the Plan, (c) to correct any defect or to supply any omission or to reconcile any inconsistency that may appear in the Plan in such manner and to such extent as the Committee shall deem appropriate, (d) to make a determination in its discretion as to the right of any person to a payment and the amount of such payment and to prescribe procedures to be followed by distributees in obtaining such payment, and (e) to make all other determinations necessary or advisable for the administration of the Plan. All decisions, determinations, and actions made or taken by the Committee and its delegates with respect to the Plan and any Benefits under the Plan shall be final, including, and conclusive upon all persons and shall not be subject to appeal. The Committee and its delegates shall, in their sole discretion exercised in good faith (which for purposes of this Section 3.3, shall mean the application of reasonable business judgment), make such decisions or determinations and take such actions, and all such decisions, determinations, and actions by the Committee and its delegates shall be final, binding, and conclusive upon all persons and shall not be subject to appeal. If a Participant disagrees with any decision, determination, or action made or taken by the Committee or its delegates, then the dispute will be limited to whether the Committee satisfied their duty to make such decision or determination or take such action in good faith.
      3.4 Unit Price . From time to time, the Compensation Committee may substitute any percentage in excess of 75% for such figure in determining the Unit Price as set forth in the definition of Unit Price herein; provided however, that any such determination must be made
 4 

 

prior to the end of the Fiscal Year immediately preceding the Crediting Date to which such Unit Price shall apply.
      3.5 Expenses . All expenses of the administration of the Plan shall be borne by the Company or its affiliate that employs the Participant.
IV. UNIT STOCK BENEFITS AND CASH BENEFITS
      4.1 Dividend Equivalents on Unit Stock Benefits . On or before each Crediting Date, there shall be ascertained (a) the balance of each Unit Stock Benefit and (b) the Dividend Equivalent attributable to such Unit Stock Benefit for the preceding calendar year. As of each Crediting Date, each Unit Stock Benefit shall be credited with a whole number of shares of Unit Stock that is equal to (x) the Dividend Equivalent determined under the foregoing sentence, divided by (y) the applicable Unit Price; provided however, any fractional shares shall be disregarded and the amount of any remaining Dividend Equivalent attributable to such fractional shares shall be carried forward and added to the Dividend Equivalent calculated with respect to the next succeeding Crediting Date.
      4.2 Interest on Cash Benefit . As of each Crediting Date, the balance of each Participant’s Cash Benefit shall be credited with Interest.
      4.3 Corporate Changes . If the Company at any time increases or decreases proportionately to all holders of shares of its common stock then outstanding, whether by stock dividend, stock split, consolidation of shares, or in any other manner the number of all of its outstanding shares of such common stock held by such holders, then all Unit Stock Benefits theretofore credited and unforfeited shall be correspondingly increased or decreased with respect to the number of shares of such common stock represented thereby. In the event of a merger or consolidation of the Company with or into another corporation or the sale of substantially all of the assets of the Company, the Compensation Committee shall make an appropriate equitable adjustment to all Unit Stock Benefits.
      4.4 Unilateral Termination . Notwithstanding any other provision of the Plan to the contrary, in the event a Participant’s employment with the Company is terminated by unilateral decision of such Participant, no Dividend Equivalents or Interest shall be credited to any Unit Stock Benefits or Cash Benefit on behalf of such Participant in respect of dividends paid or Interest attributable to the period of time after such Participant’s termination of employment.
V. BENEFITS
      5.1 Valuation . When it is necessary under the Plan to determine the value on any date of shares of Unit Stock, the value shall be the product of the number of shares of Unit Stock to be valued and the average of the daily closing prices of a share of the Unit Stock on the New York Stock Exchange during the preceding calendar month. The value of a Participant’s Benefits on any date shall be the sum of (a) the dollar amount of such Participant’s Cash Benefit and (b) the dollar value, as determined above, of any Benefits held in shares of Unit Stock on behalf of such Participant under the Plan.
 5 

 

      5.2 Conversion From Unit Stock Benefit to Cash Benefit . Prior to the Effective Date, each Participant had the opportunity to elect the manner in which his Unit Stock Benefit will be invested and paid following his termination of employment, either (a) continuing an all Unit Stock Benefit, (b) converting to an all Cash Benefit, or (c) continuing a specified percentage as a Unit Stock Benefit with the remainder converting to a Cash Benefit. A Participant who did not make such an election prior to the Effective Date shall be deemed to have elected to have 50% of his Unit Stock Benefit converted to a Cash Benefit following his termination of employment. Such election may be changed by a Participant prior to his termination of employment with the Company by written notice thereof filed with the Committee; provided however, that such change can only increase the percentage to be continued as a Unit Stock Benefit, but cannot decrease such percentage. If a Participant has an election in effect to convert all or a percentage of his Unit Stock Benefit to a Cash Benefit, such conversion shall occur on the Crediting Date next following the Participant’s termination of employment with the Company based on the applicable Unit Price for such Crediting Date. Such conversion shall occur after the crediting of Dividend Equivalents for such Crediting Date pursuant to Section 4.1. If less than all of a Participant’s Unit Stock Benefit is to be converted to a Cash Benefit, the number of whole shares of Unit Stock to be converted shall be determined by multiplying the total shares of Unit Stock credited to the Participant as of the applicable Crediting Date by the percentage to be converted to a Cash Benefit with any fraction of a share of Unit Stock resulting from such calculation to remain as a Unit Stock Benefit.
      5.3 Medium of Payment . All Cash Benefits under the Plan shall be paid in cash. All Unit Stock Benefits under the Plan shall be paid in Unit Stock.
      5.4 Election of Options . A Participant’s Benefits shall be paid under one or more of the Benefit Payment Options herein as timely elected by a Participant; provided, however, that in the absence of a valid election, a Participant’s benefits shall be paid under Option A. Payment of a Participant’s Benefits, or a portion thereof, credited through the first Crediting Date following the calendar year of a Participant’s termination of employment with the Company, shall commence as of the first Crediting Date following the calendar year of the Participant’s termination of employment and shall be paid in equal annual installments over a period of time determined in accordance with one of the following Benefit Payment Options:
           Option A . Ten years, or
           Option B . Five years, or
           Option C . Fifteen years, or
           Option D . Twenty years
as elected by such Participant. A Participant’s payment election hereunder may be made or revoked at any time or times prior to the termination of the Participant’s employment with the Company by written notice thereof filed with the Committee. The preceding notwithstanding, if, as of any Crediting Date following a Participant’s termination of employment with the Company, the value of such Participant’s Benefits is $50,000 or less; the Committee, in its discretion, may
 6 

 

direct that such Benefits be paid in full as soon as administratively feasible on or after such Crediting Date.
      5.5 Payment of Dividend Equivalents and Interest . At the time of each annual installment payment pursuant to each of the Benefit Options, Interest and Dividend Equivalents shall be paid with respect to each Participant’s unpaid and unforfeited Unit Stock Benefits and Cash Benefits under the Plan since the previous Crediting Date. The amount of such payments shall be calculated using the methodology set forth in Section 4.1 and Section 4.2.
      5.6 Death or Disability . In the event of a Participant’s death or Disability, the Committee may, in its sole discretion and upon proof of the financial necessity of the person or persons to whom such Participant’s Benefits are payable, vary the number and amount of installments to be paid with respect to such Benefits.
      5.7 To Whom Payments are Made . Payments of a Participant’s Benefits shall be made to the Participant if living. Unless otherwise requested in writing by Participant in the event of a Participant’s death, payments will be made to the beneficiary designated by the Participant for the purpose of receiving life insurance benefits under the Company’s group life insurance plan. In the event no beneficiary is designated by the Participant either in writing or for the purpose of receiving such life insurance benefits, or if the designated beneficiary does not survive the Participant, such Participant’s Benefits will be paid to his personal representatives or to the person appointed by will to receive said benefits. This provision does not affect the timing or amount of payments to be made hereunder, but only affects to whom payments are to be made.
      5.8 Forfeiture . Notwithstanding any other provision herein to the contrary, in the event a Participant takes or allows some action or omission resulting in damage or competitive injury to the Company then, unless such action or omission shall have been taken or allowed in good faith and without reasonable cause to believe that it was improper or illegal, the Compensation Committee may terminate all subsequent crediting of Interest and Dividend Equivalents to the Participant, and, in addition, the Compensation Committee may terminate and forfeit all or any part of such Participant’s Benefits hereunder, or suspend payment of such Benefits, as it may deem appropriate in its sole discretion and such termination, forfeiture, and/or suspension shall be binding and not subject to appeal.
VI. MISCELLANEOUS
      6.1 Elections . The Committee shall have the right to refuse to accept any election made hereunder by a Participant but such refusal shall be made not later than thirty (30) days after the last date prescribed hereunder for making such election. If for any reason the Committee deems it advisable, it may require any election hereunder to be made at a time earlier than that otherwise fixed in the Plan.
      6.2 Reserves . The Company shall be under no obligation to reserve, segregate or earmark any cash, stock, or other property for the payment of any Benefits under this Plan. No Participant shall have any right whatsoever in any cash, stock or other property which may be set aside under the Plan.
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      6.3 Withholding . During the time a Participant’s employed with the Company, the Company shall deduct from such Participant’s wages any amounts required to be withheld by the Company with respect to the accrual of a Participant’s benefits hereunder. Further, there shall be deducted from each payment of Participant’s Benefits under the Plan any taxes required to be withheld by the Company in respect of such payment. The Company shall have the right to reduce any payment to be made in cash or other property by the amount of such cash or property sufficient to provide the amount of said taxes. In lieu of a deduction, the Committee may permit the Participant to pay or reimburse the Company for said taxes.
      6.4 Plan Not to Constitute Contract of Employment . Neither the adoption of the Plan nor its operation shall in any way affect the right of the Company to dismiss or discharge a Participant at any time, nor give an employee a right to participate in any incentive compensation, plan of the Company.
      6.5 Nontransferability and Nonassignability . Except as hereinafter provided, no rights under the Plan shall be assignable or transferable, or subject to encumbrances, pledge, or charge of any nature, except that a Participant may designate a beneficiary to receive such Participant’s Benefits upon Participant’s death as otherwise provided herein. Plan provisions to the contrary notwithstanding, (a) the Committee shall comply with the terms and provisions of an order that satisfies the requirements for a “qualified domestic relations order” as such term is defined in section 206(d)(3)(B) of the Employee Retirement Income Security Act of 1974, as amended, including an order that requires distributions to an alternate payee prior to a Participant’s “earliest retirement age” as such term is defined in section 206(d)(3)(E)(ii) of such Act, and (b) no Benefits shall be payable until and unless any and all amounts representing debts or other obligations owed to the Company by the Participant with respect to whom such amount would otherwise be payable shall have been fully paid.
      6.6 Amendment, Suspension or Termination . The Compensation Committee may amend, suspend or terminate the Plan in whole or in part, except that no amendment, suspension or termination shall reduce any Benefits credited to a Participant prior to the date of such amendment, suspension, or termination, or Benefits to be credited in the future based on amounts previously credited to a Participant, provided, that any amendment to or change in the Plan adopted by the Compensation Committee which will significantly increase Benefits under the Plan or substantially alter the general principles of the Plan shall not become effective unless ratified by the affirmative votes of the holders of a majority of the voting shares of the Company at an annual or a special meeting of the shareholders called for such purpose.
      6.7 Reliance Upon Information . The Committee and its delegates may rely upon any information supplied to them by an officer of the Company, the Company’s legal counselor, or by the Company’s independent public accountants in connection with the administration of the Plan, and shall not be liable for any decision or action in reliance thereon. No Participant, or any person claiming through him shall have any right or interest in the Plan or any Benefits hereunder unless and until all the terms, conditions, a provisions of the Plan that affect such Participant or such other person shall have been complied with as specified herein. The Participant shall complete such forms and furnish such information as the Committee may require in the administration of the Plan.
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      6.8 Governing Law . The place of administration of the Plan shall be conclusively deemed to be within the State of Delaware; and the validity, construction, interpretation and effect of the Plan and all rights of any and all persons having or claiming any interest therein shall be governed by the laws of the State of Delaware.
 	 	 	 	 	
 	 	KBR, INC.	
 	 	 	 	 	
 	 	By	 	/s/ William P. Utt 	
 	 	 	 	 	
 	 	 	 	William P. Utt 	
 	 	 	 	President and Chief Executive Officer	
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Exhibit 5.1
 	 	 	 	 	
	 	ONE SHELL PLAZA
910 LOUISIANA
HOUSTON, TEXAS
77002-4995
 
TEL +1 713.229.1234
FAX +1 713.229.1522
www.bakerbotts.com	 	AUSTIN
DALLAS
DUBAI
HONG KONG
HOUSTON
LONDON
MOSCOW
NEW YORK
RIYADH
WASHINGTON	
April 13, 2007

KBR, Inc.
601 Jefferson Street
Houston, Texas 77002
Ladies and Gentlemen:
     As set forth in the Registration Statement on Form S-8 (the “ Registration Statement ”) to be filed by KBR, Inc., a Delaware corporation (the “ Company ”), with the Securities and Exchange Commission (the “ Commission ”) under the Securities Act of 1933, as amended (the “ Act ”), relating to the issuance of up to 2,982,972 shares (the “ Shares ”) of the Company’s common stock, par value $0.001 per share, pursuant to the KBR, Inc. Transitional Stock Adjustment Plan and the KBR Dresser Deferred Compensation Plan (the “ Plans ”), certain legal matters in connection with the Shares are being passed upon for you by us. At your request, this opinion is being furnished to you for filing as Exhibit 5.1 to the Registration Statement.
     In our capacity as your counsel in the connection referred to above, we have examined the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of the Company, in each case as amended to date, and originals, or copies certified or otherwise identified, of the Plans, corporate records of the Company, including minute books of the Company as furnished to us by the Company, certificates of public officials and of representatives of the Company, statutes and other instruments and documents as a basis for the opinions hereinafter expressed. In giving such opinions, we have relied on certificates of officers of the Company and of public officials with respect to the accuracy of the factual matters contained in such certificates. In making our examination, we have assumed that all signatures on all documents examined by us are genuine, that all documents submitted to us as originals are accurate and complete, that all documents submitted to us as copies are true and correct copies of the originals thereof and that all information submitted to us was accurate and complete. In addition, we have assumed for purposes of this opinion that the consideration received by the Company for the Shares will be not less than the par value of the Shares.
     On the basis of the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, we are of the opinion that, in the case of Shares originally issued by the Company when issued by the Company pursuant to the provisions of the respective Plan following due authorization of a particular award thereunder by the Board of Directors of the Company or a duly constituted and acting committee thereof (the “ Board ”) as provided in and in accordance with the respective Plan, the Shares issuable pursuant to such award will have been duly authorized by all necessary corporate action on the part of the Company; and, upon issuance and delivery of such Shares from time to time pursuant to the terms of such award for the consideration established pursuant to the terms of the respective Plan and otherwise in

 

 
accordance with the terms and conditions of such award, including, if applicable, the lapse of any restrictions relating thereto, the satisfaction of any performance conditions associated therewith and any requisite determinations by or pursuant to the authority of the Board as provided therein, and, in the case of stock options, the exercise thereof and payment for such Shares as provided therein, such Shares will be validly issued, fully paid and nonassessable.
     This opinion is limited in all respects to the General Corporation Law of the State of Delaware, as in effect on the date hereof.
     We hereby consent to the filing of this opinion of counsel as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act and the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Baker Botts L.L.P.

 

Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of KBR, Inc.:
We consent to the incorporation by reference in the registration statement on Form S-8 of KBR, Inc., to be filed on or about April 13, 2007, of our reports dated February 26, 2007, with respect to the consolidated balance sheets of KBR, Inc. and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of operations, shareholders’ equity and cash flows, for each of the years in the three-year period ended December 31, 2006, and the related financial statement schedule (Schedule II), which reports appear in the December 31, 2006, Annual Report on Form 10-K of KBR, Inc. Our reports refer to a change in method of accounting for stock-based compensation plans as of January 1, 2006, and a change in method of accounting for defined benefit and other post retirement plans as of December 31, 2006.
/s/ KPMG LLP
Houston, Texas
April 11, 2007

Exhibit 23.2
Consent of Independent Auditors
The Board of Directors and Shareholders of KBR, Inc.:
We consent to the incorporation by reference in the registration statement on Form S-8 of KBR, Inc., to be filed on or about April 13, 2007, of our report dated 26 February 2007, with respect to the combined balance sheet of Asia Pacific Transport Joint Venture Consortium (“the Consortium”) as of 30 June 2006, and the related combined income statement and statements of changes in equity and cash flows for the year then ended, which report appears in the December 31, 2006, Annual Report on Form 10-K of KBR, Inc. Our report refers to a change in method of accounting for financial instruments as of 1 July 2005 and contains an explanatory paragraph that states that the Consortium has suffered recurring losses from operations and has a net accumulated deficit that raise substantial doubt about its ability to continue as a going concern. The combined financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ KPMG
Adelaide, South Australia
April 11, 2007