Sensitive Transactions
KBR, Inc. and Subsidiary Companies
Corporate Policy
Date: November 10, 2006
Index No.: 3-0005
Purpose:
This Policy advises Directors, Employees and agents of the Company's position regarding sensitive transactions and requires that transactions are executed, and access to assets is permitted, only in accordance with management's authorization.
Policy:
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The Company will conduct its business in compliance with applicable Law (See Corporate Policy 3-0001 with respect to conflicts between United States Law and the Law of another country) and requires all Company Directors, Employees and agents to avoid any activities which could involve the Company in any unlawful practice. Without limiting the generality of the foregoing, the Company's Directors, Employees and agents are strictly prohibited from paying any bribe, kickback or other similar unlawful payment to, or otherwise entering into a sensitive transaction with, any public official, political party or official, candidate for public office or other individual, in any country, to secure any contract, concession or other favorable treatment for the Company. Company Directors, Employees and agents who make such payments are subject to appropriate action by the Company, as well as the legal consequences of applicable Law.
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The term "sensitive transactions" is commonly used to describe a broad range of corporate dealings that are generally considered to be either illegal, unethical, immoral or to reflect adversely on the integrity of management. The transactions are usually in the nature of kickbacks, bribes or payoffs made in order to influence favorably some decision affecting a company's business or for the personal gain of an individual. Any extraordinary payment made from Company funds, including extravagant entertainment or gifts of significant value, for the express purpose of obtaining or retaining business or unduly influencing some matter in favor of the Company could be considered a "sensitive payment". These payments may be considered to be bribes and may result in violation of applicable Law.
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Sensitive transactions may result in violation of United States federal Laws such as domestic anti-bribery Laws, mail fraud and wire fraud statutes, anti-racketeering statutes and the Foreign Corrupt Practices Act (the "FCPA"), as well as state Laws or Laws of other countries in which a subsidiary company has operations. If violations occur, the Company and its officers and Directors as well as Employees directly involved may be subject to fines, imprisonment and civil litigation.
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The Company is required to comply with United States federal securities Laws and with rules and regulations promulgated by the SEC. Therefore, the Company is subject to strict disclosure requirements and must disclose to the public all material information relating to its business affairs and financial condition and conduct which is deemed to reflect on the integrity of its management.
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Sensitive payments may violate the FCPA which prohibits a company from corruptly offering or giving anything of value to: a foreign official, including any person acting in an official capacity for a foreign government or a public international organization; a foreign political party official or political party; or a candidate for foreign political office, in any such case, for the purpose of influencing any act or decision of these officials in their official capacity or in violation of their lawful duties or to secure any improper advantage in order to help a company obtain or retain business or direct business to any person. The FCPA also prohibits the offering or paying of anything of value to any person if it is known that all or part of the payment will be used for the above prohibited actions. For purposes of compliance with this Policy, employees of government-owned corporations are to be considered "foreign officials" and, subject to Policy paragraph 6, any payment to influence a matter in favor of the Company shall be prohibited.
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The Company may be required to make facilitating or expediting payments to an official or employee of a government outside the United States, the purpose of which is to expedite or to secure the performance of routine governmental action by such government official or employee. Such facilitating payments may not be illegal under the FCPA and similar Laws of other countries. Nevertheless, it may be difficult to distinguish a legal facilitating payment from an illegal bribe, kickback or payoff. Accordingly, facilitating payments must be strictly controlled and every effort must be made to eliminate or minimize such payments. Facilitating payments, if required, will be made only in accordance with the advance guidance of the Law Department. Any facilitating payments must be recorded as such in the accounting records of the Company.
Other References:
1. Corporate Policy 3-0006 (Commercial Bribery) should be consulted.
2. Corporate Policy 3-0001 (General Policy Regarding Laws and Business Conduct) should be consulted.
Approved: Board of Directors
November 10, 2006