KBR, INC. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by KBR, Inc. on December 11, 2006. The report discloses the execution of settlement agreements regarding the departure of two Senior Vice Presidents, effective December 1, 2006, with the agreements becoming effective on December 13, 2006, subject to revocation rights.
Key Financial Metrics
The filing does not provide general financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. It focuses exclusively on the specific severance and compensation packages for departing officers.
Material Changes and Executive Departures
Two Senior Vice Presidents resigned and elected early retirement effective December 1, 2006:
- Louis J. Pucher (Senior Vice President, Energy and Chemicals): Resigned effective December 1, 2006.
- James H. Lehmann (Senior Vice President, Legal): Terminated effective December 1, 2006.
Compensatory Arrangements and Settlement Details
Both executives received severance packages including accrued vacation, lump-sum payments, stock options, restricted stock, and performance-based compensation. Values indicated are as of December 5, 2006.
| Component | Louis J. Pucher | James H. Lehmann |
|---|---|---|
| Accrued Vacation Pay | $44,996.16 | $62,814.61 |
| Lump Sum Severance | $354,500.00 | $290,000.00 |
| Stock Options (Value) | $1,472,358.85 (92,070 options) | $160,118.40 (11,280 options) |
| Restricted Stock (Value) | $2,165,258.79 (65,199 shares) | $1,592,452.71 (47,951 shares) |
| Performance Unit Program (2004) | $128,000.00 | $96,000.00 |
| Outplacement Services | $7,500.00 | $7,500.00 |
| Other Services | N/A | $7,500.00 (Financial Services) |
| 2006 Annual Incentive | Prorated (to be determined post-2006) | Prorated (to be determined post-2006) |
Outlook, Risks, and Contingencies
The filing notes that the effective date of the agreements is December 13, 2006, contingent upon neither executive exercising their right of revocation. No other risks, contingencies, or forward-looking guidance regarding company operations are provided in this document.
Investor Verification Checklist
- Verify the total cash and equity value of the severance packages against the company's quarterly compensation expense reporting.
- Confirm whether the executives exercised their right of revocation prior to December 13, 2006.
- Monitor future filings for the final determination of the prorated 2006 Annual Performance Pay for both executives.
- Assess the impact of losing two Senior Vice Presidents in Energy/Chemicals and Legal on ongoing operations and litigation management.