Exhibit10.2

Kaiser Aluminum 2018-2020 Long-Term Incentive Plan
Management Objective:
The applicable measurable performance objective:
 
 
 
 
Ÿ
for 30% of the Performance Shares is the percentile ranking (“Relative TSR
Ranking”) of the total shareholder return (“TSR”) of Kaiser Aluminum Corporation
(the “Company”) over the period from January 1, 2018 through December 31, 2020
(the “Performance Period”) compared to the TSR of companies listed on Annex
I hereto (each, a “Peer Company”), each of which is a member of the S&P 600
Small Cap Materials Sector index, over the Performance Period;
 
 
 
 
Ÿ
for 40% of the Performance Shares is the cost performance (“Cost Performance”)
of the Company, measured against the Company’s total controllable cost (“Total
Controllable Cost”), over the Performance Period; and
 
 
 
 
Ÿ
for 30% of the Performance Shares is the economic value added performance (“EVA
Performance”) of the Company, measured by the consolidated adjusted pre-tax
operating income of the Company (“PTOI”) less a capital charge, over the
Performance Period.
 
 
 
 
TSR Performance Objective
 
 
 
 
The Relative TSR Ranking will be based on the Company’s relative stock
performance against the Peer Companies, with any dividends being treated as
being reinvested on the applicable ex-dividend date.
 
 
 
 
The beginning and ending share prices are determined using the 20 trading day
averages preceding the beginning and the end of the applicable performance
period, respectively.
 
 
 
 
Any Peer Company that is acquired during the Performance Period shall be omitted
from the peer group and will not be included in determining the Relative TSR
Ranking.
 
 
 
 
Any Peer Company that files for bankruptcy, or that has its shares delisted from
its primary stock exchange because it fails to meet the exchange listing
requirements (other than as a result of its acquisition), during the Performance
Period shall remain in the peer group and will be ranked last for purposes of
determining the Relative TSR Ranking.
 
 
 

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The Relative TSR Ranking target is the 50th percentile (the “Target TSR
Ranking”). The payout for TSR performance at the target level (a multiplier of
1.00x) is 50% of the applicable Performance Shares. The threshold performance
required to potentially earn Performance Shares is a Relative TSR Ranking at the
25th percentile. The payout for TSR performance at the threshold level (a
multiplier of 0.50x) is 25% of the applicable Performance Shares. If the
Relative TSR Ranking is below the 25th percentile, no Performance Shares will be
earned. If the Relative TSR Ranking is greater than the 90th percentile,
Performance Shares will be earned at the maximum level. The payout for
performance at the maximum level (a multiplier of 2.00x) is 100% of the
applicable Performance Shares.
 
 
 
 
The multiplier for Performance Shares based on TSR Percentile Ranking will be
determined by straight line interpolation between the measuring points based on
the Relative TSR Ranking as follows:
 
 
 
 
 
 
 
 
TSR Percentile Ranking
<25th percentile
  25th percentile
  50th percentile
  75th percentile
≥90th percentile
Multiplier
   0.00x
   0.50x
   1.00x
   1.50x
   2.00x
 
 
 
 
If the TSR of the Company over the Performance Period is negative, then the
multiplier shall be capped at 1.00x.
 
 
 
 
Cost Performance Objective
 
 
 
 
The Company’s Cost Performance is measured as a percentage of the average annual
increase or decrease in Total Controllable Cost over the Performance Period as
compared with the Total Controllable Cost for 2017. The baseline reflects 2017
costs/performance flexed for volume and mix.
 
 
 
 
 
 
 
 
 
Total Controllable Cost shall equal the sum of the Company’s (1) controllable
variable conversion cost (“Variable Cost”) and (2) controllable plant overhead
and selling, general and administrative expenses (“Overhead Cost”) as more fully
described to the Company’s compensation committee (the “Committee”).
 
 
 
 
The Cost Performance target is a 0% annualized cost increase requiring the
offset of underlying inflation (the “Target Cost Performance”). The payout for
Cost Performance at the target level (a multiplier of 1.00x) is 50% of the
applicable Performance Shares. If the Cost Performance is equal to or greater
than a 3% annualized cost increase, no Performance Shares will be earned. If the
Cost Performance equals or exceeds a 3% annualized cost reduction, Performance
Shares will be earned at the maximum level. The payout for performance at the
maximum level (a multiplier of 2.00x) is 100% of the applicable Performance
Shares.
 
 
 
 
 
 
 
 

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The multiplier for Performance Shares based on Cost Performance will be
determined by a straight line interpolation based on Cost Performance as
follows:
 
 
 
 
 
 
 
 
Cost Performance

 ≥3% annualized cost increase
   0% annualized cost increase
 ≥3% annualized cost reduction
Multiplier

   0.00x
   1.00x
   2.00x
 
 
 
 
 
 
 
 
 
EVA Performance Objective
 
 
 
 
For each year of the Performance Period, EVA will equal (1) PTOI less (2) 15% of
adjusted net assets as of the end of the immediately preceding year (“Net
Assets”).
 
 
 
 
 
 
 
 
 
In determining EVA for a particular year:
 
 
 
 
Net Assets will equal total assets less total liabilities of our Consolidated
financial statements, subject to adjustments to:
 
 
 
 
Ÿ
remove discontinued operations and legacy environmental accruals;
 
Ÿ
remove VEBA related assets and liabilities;
 
Ÿ
exclude financing items;
 
Ÿ
exclude capital expenditures in progress at prior year end;
 
Ÿ
add prorated value of current year capital projects or acquisitions larger than
1% of prior year Net Assets except to the extent necessary to avoid over-stating
Net Assets;
 
Ÿ
exclude income tax related assets and liabilities;
 
Ÿ
exclude mark-to-market assets and liabilities relating to hedging activities
except for those relating to option premiums;
 
Ÿ
exclude cash, cash equivalents and short-term investments; and
 
Ÿ
address other items as recommended by the Company’s Chief Executive Officer and
approved by the Committee.
 
 
 

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PTOI will be adjusted to:
 
 
 
 
Ÿ
exclude non-cash LIFO inventory charges (benefits);
 
Ÿ
exclude non-cash mark to market and lower of cost or market adjustments;
 
Ÿ
amortize the following non-recurring activities over three calendar years with
the first year being the year of the initial charge if the value exceeds one
percent of prior year Net Assets:
 
 
- Restructuring charges;
 
 
- Gains or losses resulting from asset dispositions;
 
 
- Labor stoppage costs; and
 
 
- Asset impairment charges;
 
Ÿ
exclude discontinued operations and legacy environmental income and expenses;
 
Ÿ
exclude unrealized mark-to-market gains (losses) related to hedging activities;
 
Ÿ
exclude VEBA related income and expense;
 
Ÿ
exclude workers compensation gains (expenses) caused by changes in the discount
rate; and
 
Ÿ
address other items as recommended by the Company’s Chief Executive Officer and
approved by the Committee.
 
 
 
 
The EVA Performance target is is an amount specified by the Committee
(the “Target EVA Performance”). The payout for EVA Performance at the target
level (a multiplier of 1.00x) is 50% of the applicable Performance Shares. If
the EVA Performance is equal to or less than the threshold amount specified by
the Committee, no Performance Shares will be earned. If the EVA Performance is
greater than or equal to the maximum EVA performance specified by the Committee,
Performance Shares will be earned at the maximum level. The payout for
performance at the maximum level (a multiplier of 2.00x) is 100% of the
applicable Performance Shares.
 
 
 
 
 
 
 
 
 
The multiplier for Performance Shares based on EVA Performance will be
determined by a straight line interpolation based on EVA Performance as follows:
 
 
 
 
 
 
 
 
EVA Performance

 ≤ [Threshold EVA Performance]
    [Target EVA Performance]
 ≥ [Maximum EVA Performance]
Multiplier

   0.00x
   1.00x
   2.00x
 
 
 
 
 
 
 
 

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Determination of Number of Performance Shares Potentially Earned:
The number of Performance Shares earned, if any, will be determined as follows:
 
 
 
 
Ÿ
Following December 31, 2020, the Committee will approve a multiplier (“LTI
Multiplier”) for each of the performance metrics described above based on the
Company’s performance.

 
 
 
 
Ÿ
The number of Performance Shares earned, if any, will equal the sum of the
product (rounded down to the nearest whole number) of (1) the number of
Performance Shares granted under each performance metric and (2) one-half of the
LTI Multiplier determined based on each of the applicable Company performance
metrics (rounded to the nearest whole percentage point); provided, however, such
number will not exceed the number of Performance Shares granted hereunder.
 
 
 
 
The Committee will approve the LTI Multiplier not later than March 15, 2021.
 
 
 
Administrative Provisions:
Additional administrative provisions are reflected in the terms of the
applicable grant documents.

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Annex I

Peer Company List

AKS
AK Steel Holding Corporation
KRA
Kraton Corporation
ASIX
AdvanSix Inc.
KS
Kapstone Paper and Packaging Corporation
AVD
American Vanguard Corporation
KWR
Quaker Chemical Corporation
BCC
Boise Cascade Company
LXU
LSB Industries, Inc.
BCPC
Balchem Corporation
MTRN
Materion Corporation
CCC
Calgon Carbon Corporation
MYE
Myers Industries, Inc.
CENX
Century Aluminum Company
NGVT
Ingevity Corporation
CLW
Clearwater Paper Corporation
NP
Neehah, Inc.
DEL
Deltic Timber Corporation
RYAM
Rayonier Advanced Materials Inc.
FF
FutureFuel Corporation
SCL
Stepan Company
FTK
Flotek Industries, Inc.
SHLM
A. Schulman, Inc.
FUL
H.B. Fuller Company
SWM
Schweitzer-Mauduit International, Inc.
GLT
P. H. Glatfelter Company
SXC
SunCoke Energy, Inc.
HAYN
Haynes International, Inc.
TG
Tredegar Corporation
HWKN
Hawkins, Inc.
TMST
TimkenSteel Corporation
IOSP
Innospec Inc.
USCR
U.S. Concrete, Inc.
IPHS
Innophos Holdings, Inc.
ZEUS
Olympic Steel, Inc.
KOP
Koppers Holdings Inc.