Statements and memo regarding rape allegations

The following are statements from KBR and a memo sent to KBR employees related to the allegations of rape and a cover-up by former employee Jamie Leigh Jones.

KBR STATEMENT REGARDING THE JONES AND BARKER LITIGATION

The safety and security of all employees remains KBR's top priority. Our commitment in this regard is unwavering.

The litigation involving both Ms. Jones and Ms. Barker is ongoing. As such it would be inappropriate to comment on the specifics of either case. KBR intends to vigorously defend the allegations raised in each case, which we believe are without merit.

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KBR STATEMENT REGARDING INTERNAL INVESTIGATIONS CONDUCTED ON EACH CASE:

KBR remains committed to providing a safe working environment for all employees. KBR initiated investigations into the assault allegations raised at the time but we were instructed to cease by government authorities because they where assuming sole responsibility for the criminal investigations.

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KBR STATEMENT REGARDING ITS DISPUTE RESOLUTION PROGRAM:

KBR employees are its greatest asset. As such, KBR is committed to maintaining a professional and productive work environment for all employees.

The arbitration process is a method for resolving employee disputes quickly and efficiently, without the delays and expense often associated with litigation. KBR remains committed to ensuring this process is fair.

It should be noted that arbitration is the last step of a four part process under the KBR Dispute Resolution Program ("DRP"). This process includes a meeting with the employee's supervisor, or open door option, internal mediation within the company, and mediation with an outside mediator. Arbitration is the final step in this process. The vast majority of employee conflicts, fully 96%, are resolved without resort to arbitration. Those matters which do proceed to arbitration follow well established rules and procedures that allow both sides to be heard and provides both sides with equal rights in the selection of the arbitrator. DRP arbitrations are private proceedings but transcripts can be requested by either party and the claimant is not bound by confidentiality.

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MEMO FROM KBR CHAIRMAN TO EMPLOYEES:

TO: All KBR Employees

FROM: Bill Utt, Chairman, President and CEO

SUBJECT: Recent media coverage

There continues to be extensive media coverage regarding litigation involving a former KBR subsidiary employee, Ms. Jamie Jones. As transparency is a KBR core value, I want share with you our perspective of the situation.

First and foremost, KBR in no way condones or tolerates any form of sexual harassment. The safety and security of all employees remains KBR's top priority. That commitment is unwavering. Further, each employee is expected to adhere to KBR's Code of Business Conduct guidelines and when violations occur, immediate and appropriate disciplinary action is taken. Any and all allegations related to inappropriate sexual behavior are taken seriously and are investigated immediately. In response to Ms. Jones' allegations, an investigative process was initiated in Ms. Jones' case and was subsequently taken over by government authorities, in accordance with their procedures.

While the allegations raised by Ms. Jones are serious, after a review of the case KBR noted inaccuracies in the accounts of the incident in question, and disputes portions of Ms. Jones' version of the facts. We have expressed our position in detail to the Equal Employment Opportunity Commission (EEOC) and some of this information is now public.

We will continue to defend the Company in the legal process and remain committed to ensuring the arbitration process is fair.

Thank you for your continued support of KBR.