Commercial Bribery

KBR, Inc. and Subsidiary Companies
Corporate Policy

Date: November 10, 2006
Index No.: 3-0006

Purpose:

This Policy prohibits the payment or transfer of Company funds or assets to suppliers or customers in the form of bribes, kickbacks or other payoffs and prohibits Company Directors, Employees and agents from participating in such schemes.

Policy:

  1. The Company prohibits bribes, kickbacks and other payoffs and benefits to suppliers or customers.

  2. The Company also prohibits Directors, Employees and agents from receiving, directly or indirectly from a third party, anything of a significant value (other than salary, wages or other ordinary compensation paid by the Company) in connection with a transaction entered into by the Company.

  3. Bribes, kickbacks and payoffs include, but are not limited to:

    1. gifts of other than nominal value;

    2. cash payments by Directors, Employees or third persons, such as agents, suppliers, customers or consultants, who are reimbursed by the Company;

    3. the uncompensated use of Company services, facilities or property except as may be authorized by the Company; and

    4. loans, loan guarantees or other extensions of credit (except from lending institutions at prevailing rates).

  4. This Policy does not prohibit expenditures of nominal amounts for meals and entertainment of suppliers and customers which are an ordinary and customary business expense, if they are otherwise lawful. These expenditures should be included on expense reports and approved under standard Company procedures.

Other References:

1. Corporate Policy No. 3-0005 (Sensitive Transactions) should be consulted.

Approved: Board of Directors
November 10, 2006