Preview | Elective Deferral Plan |

TABLE OF CONTENTS


I. Definitions and Construction			2
1.1 Definitions			2
1.2 Number and Gender			5
1.3 Headings			5

II. Participation			5
2.1 Participation			5
2.2 Cessation of Active Participation			5

III. Deferral Account Credits; Investment Elections			5
3.1 Base Salary Deferrals			6
3.2 Bonus Compensation Deferrals			6
3.3 Long-Term Incentive Compensation Deferrals			7
3.4 Investment of Deferral Accounts			7

IV. Emergency Withdrawals			8

V. Payment of Benefits			8
5.1 Payment Election Generally			8
5.2 Subsequent Payment Elections			9
5.3 Time of Benefit Payment			9
5.4 Form of Benefit Payment			10
5.5 Total and Permanent Disability			10
5.6 Death			10
5.7 Designation of Beneficiaries			10
5.8 Other Separation from Service			11
5.9 Payment of Benefits			11
5.10 Unclaimed Benefits			11
5.11 No Acceleration of Bonus or Long-Term Incentive Compensation			11

VI. Administration of the Plan			12
6.1 Committee Powers and Duties			12
6.2 Self-Interest of Participants			12
6.3 Claims Review			13
6.4 Employer to Supply Information			13
6.5 Indemnity			14

VII. Administration of Funds			14
7.1 Payment of Expenses			14
7.2 Trust Fund Property			14

VIII. Nature of the Plan			14

IX. Participating Employers			15

X. Miscellaneous			16

(i)


10.1 Not Contract of Employment			16
10.2 Alienation of Interest Forbidden			16
10.3 Withholding			16
10.4 Amendment and Termination			16
10.5 Severability			16
10.6 Governing Laws			17
10.7 Section 409A Compliance			17

APPENDIX A			19

III. Grandfathered Plan Account Credits; Investment Elections			20
3.1 Base Salary Deferrals			20
3.2 Bonus Compensation Deferrals			20
3.3 Long-Term Incentive Compensation Deferrals			20
3.4 Investment of Grandfathered Plan Accounts			20

IV. Withdrawals			21
4.1 Emergency Withdrawals			21
4.2 Non-Emergency Withdrawals			21

V. Payment of Benefits			22
5.1 Payment Election Generally			22
5.2 Subsequent Payment Elections			23
5.3 Time of Benefit Payment			23
5.4 Form of Benefit Payment			23
5.5 Total and Permanent Disability			23
5.6 Death			24
5.7 Other Termination of Employment			24
5.8 Payment of Benefits			24
5.9 No Acceleration of Bonus or Long-Term Incentive Compensation			24

(ii)

KBR ELECTIVE DEFERRAL PLAN

W I T N E S S E T H:

WHEREAS, the Board of Directors of Halliburton Company (Halliburton) has previously adopted the Halliburton Company Elective Deferral Plan, as most recently amended and restated effective May 1, 2002, for the benefit of its employees and the employees of its subsidiaries to aid such employees in making more adequate provision for their retirement; and

WHEREAS, Halliburton plans to take action which will result in KBR, Inc. (the Company) and its subsidiaries ceasing to be a member of the Halliburton controlled group; and

WHEREAS, Halliburton determined that it would be appropriate and desirable for Halliburton to separate the business and assets of 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 provide benefits for certain of its new employees including certain current employees who had previously participated in the HAL Plan, as hereafter defined; and

WHEREAS, pursuant to the terms of the HAL Plan, each Employer thereunder was liable for the benefits related to its employees, and the Company and the Employers hereunder desire to continue to provide to such employees an opportunity to make deferrals of certain amounts, consistent with the provisions of Section 409A of the Internal Revenue Code of 1986 as amended (the Code); and

WHEREAS, the provisions of the HAL Plan, as amended through the Effective Date, will remain in effect for all deferrals prior to the Effective Date; and

WHEREAS, the Company desires to preserve the material terms of the HAL Plan as in effect on December 31, 2004 (the Grandfathered Plan) in order that the Grandfathered Plan qualify as a grandfathered plan for purposes of Section 409A of the Code; and

WHEREAS, certain provisions applicable solely to the Grandfathered Plan are preserved in Appendix A, for purposes of determining the terms applicable to amounts deferred under the Grandfathered Plan, which provisions shall be substituted for the corresponding provisions contained herein.

NOW THEREFORE, the HAL Plan, including the Grandfathered Plan, is hereby continued for Eligible Employees with the terms set forth below, and is hereby renamed the KBR Elective Deferral Plan to read as follows, effective as of the Effective Date:

Definitions and Construction

1.1 Definitions. Where the following words and phrases appear in the Plan, they shall have the respective meanings set forth below, unless their context clearly indicates to the contrary.

(1)		Act: The Employee Retirement Income Security Act of 1974, as amended.

(2)		Affiliate: Any entity of which an aggregate of 50% or more of the ownership interest is owned of record or beneficially, directly or indirectly, by the Company or any other Affiliate.

(3)		Base Salary: The base rate of cash compensation paid by the Employer to or for the benefit of a Participant for services rendered or labor performed while a Participant, including base pay a Participant could have received in cash in lieu of (a) deferrals pursuant to Section 3.1 and (b) contributions made on his or her behalf to any qualified plan maintained by the Employer or to any cafeteria plan under Section 125 of the Code maintained by the Employer.

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