Exhibit 10.5
EMPLOYMENT AGREEMENT
     EMPLOYMENT AGREEMENT (this “Agreement”) dated as of July 6, 2006, between
KAISER ALUMINUM CORPORATION, a Delaware corporation (the “Company”), and JACK A.
HOCKEMA (the “Executive”).
     The Company wishes to continue to employ the Executive, and the Executive
wishes to continue his employment with the Company, on the terms and conditions
set forth in this Agreement.
     Accordingly, the Company and the Executive hereby agree as follows:

1.   Employment; Duties and Acceptance.

     1.1.     Employment Duties. The Company hereby agrees to employ the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company , in the capacity of president and chief
executive officer of the Company and to perform such other duties consistent
with such position (including service as a director or officer of any affiliate
of the Company if elected) as may be assigned by the Board of Directors of the
Company (the “Board”); provided, however, that the Executive may serve on the
Board of Directors of one other business at any time during the Term that does
not compete with the Company and may participate in civic, charitable and
industry organizations to the extent that such participation does not materially
interfere with the performance of his duties hereunder. The Executive’s title
shall be President and Chief Executive Officer, or such other titles of at least
equivalent level consistent with the Executive’s duties from time to time as may
be assigned to the Executive by the Board, and the Executive shall have all
authorities as are customarily and ordinarily exercised by executives in similar
positions in similar businesses in the United States. The Executive shall report
solely to the Board. The Company agrees to use its best efforts to cause the
Executive to be elected to the Board and to have the Executive serve as a member
of the Board throughout his service during the Term.
     1.2.     Acceptance. The Executive hereby accepts such employment and
agrees to render the services described above. During the Term, and consistent
with the above, the Executive agrees to serve the Company faithfully and to the
best of the Executive’s ability, to devote the Executive’s entire business time,
energy and skill to such employment, and to use the Executive’s best efforts,
skill and ability to promote the Company’s interests.
     1.3.     Location. The duties to be performed by the Executive hereunder
shall be performed primarily at the Company’s offices in Foothill Ranch,
California or such other location as mutually agreed by the parties, subject to
reasonable travel requirements consistent with the nature of the Executive’s
duties from time to time on behalf of the Company. The Executive shall not be
required to change his principal residence in the event the Company relocates
its offices.

2.   Term of Employment.

     2.1.     Term. The term of the Executive’s employment under this Agreement
(the “Term”) shall commence on the effective date of the Company’s Plan of
Reorganization in the

 

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pending bankruptcy cases (the “Effective Date”), and shall continue until the
earlier of (i) the fifth anniversary of the Effective Date and (ii) such earlier
date on which the Term is terminated pursuant to Section 4. The Term shall
automatically be renewed and extended for successive periods of one (1) year
unless either party hereto shall have notified the other party hereto in writing
that such extension shall not take effect at least one (1) year prior to the end
of the initial Term or of any extension.

3.   Compensation; Benefits.

     3.1.     Salary. As compensation for the services to be rendered pursuant
to this Agreement, the Company agrees to pay to the Executive during the Term a
base salary, payable monthly in arrears, at the initial annual rate of $730,000
(the “Base Salary”). On each anniversary of the Effective Date or such other
appropriate date as may be agreed by the parties during the Term, the Company
shall review the Base Salary and determine if, and by how much, the Base Salary
should be increased. Once the Base Salary has been increased hereunder, it shall
not be decreased without the Executive’s consent. All payments of Base Salary or
other compensation hereunder shall be less such deductions or withholdings as
are required by applicable law and regulations.
     3.2.     Bonus. In addition to the amounts to be paid to the Executive
pursuant to Section 3.1, if the Company achieves 100% or more of the Company’s
target objectives for a fiscal year of the Company, such target objectives which
are recommended by the Executive and approved by the Compensation Committee of
the Board (the “Compensation Committee”) not later than March 31 of such year,
the Executive shall receive an annual bonus (an “Annual Bonus”) equal to the
product of (i) the Executive’s Base Salary at the rate in effect at the end of
such fiscal year and (ii) 68.5%. Should the Company achieve such target
objectives in a fiscal year which are significantly beyond expectations for the
Company’s performance for such year, the 68.5% multiplier set forth in clause
(ii) of the preceding sentence shall be increased up to a maximum of 300% of the
target bonus opportunity (or 205.5% of Base Salary). A formula will be
established to provide for recognition of threshold objectives below such target
objectives and for pro rata awards between the threshold award opportunity and
the maximum award opportunity. Any Annual Bonus earned hereunder shall be
payable not later than the 15th day of the third month following the end of the
fiscal year to which it relates.
     In the event that the Executive’s employment shall terminate other than on
a date which is the last day of a fiscal year of the Company, the Executive’s
target Annual Bonus with respect to the fiscal year in which employment
terminates shall be prorated for the actual number of days of the Executive’s
employment under this Agreement during the fiscal year in which occurs the
Executive’s termination of employment, and such Annual Bonus shall be payable to
the Executive within ten (10) business days following such termination of
employment. Notwithstanding the foregoing, the Executive shall be entitled to no
Annual Bonus in respect of or the fiscal year of the Company in which his
Employment terminates if such termination is pursuant to Section 4.4.
     3.3.     Emergence Grant. As of the Effective Date, the Executive is
awarded a one-time grant of 185,000 shares of restricted stock, subject to a
three-year cliff vesting schedule and other customary restrictions that shall
lapse on the third anniversary of the date of such award or

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earlier upon a Change of Control or the Executive’s retirement, death,
Disability, termination of employment under this Agreement other than for Cause
or termination by the Executive for Good Reason. For purposes of this
Section 3.3, the term “retirement” means the Executive’s termination of
employment for any reason at or after the earlier of (i) age 65, or (ii) the end
of the initial Term of this Agreement.
     3.4.     Incentive Compensation. For fiscal year 2007 and each fiscal year
thereafter, the Executive will be eligible to receive grants of long-term
incentive compensation, including, but not limited to equity awards (such as
restricted stock, stock options and performance shares) having a target economic
value of 165% of the Base Salary for the fiscal year, on similar terms as grants
made to senior executives; provided, however, that the grants shall provide for
full vesting at retirement (as defined in Section 3.3) and shall further provide
that in the event of a termination of the Executive’s employment, other than
pursuant to Section 4.4 or a non-renewal of the Term of this Agreement, the
Executive’s vested interest in each outstanding grant shall be not less
favorable than had such grant provided for vesting in proportion to the actual
number of days of the Executive’s employment during the applicable vesting
period over the total number of days in such vesting period.
     3.5.     Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred or paid by the Executive
during the Term in the performance of Executive’s services under this Agreement,
subject to and in accordance with applicable expense reimbursement and related
policies and procedures as in effect from time to time.
     3.6.     Vacation. During each year of the Term, the Executive shall be
entitled to a paid vacation period or periods of four (4) weeks taken in
accordance with applicable vacation policy as in effect from time to time.
     3.7.     Benefits; Perquisites. During the Term, the Executive shall be
entitled to participate in those retirement plans, deferred compensation plans,
group insurance, life, medical, dental, disability and other benefit plans of
the Company at the same level as those benefits are provided by the Company from
time to time to senior executives of the Company generally. Also, during the
Term, the Executive shall be entitled to fringe benefits and perquisites at the
same level as those benefits are provided by the Company from time to time to
senior executives of the Company generally. However, nothing herein shall
require the Company to establish and/or maintain any such plans.
     3.8.     Legal Expenses. The Company agrees to pay the legal fees and
expenses incurred by the Executive in connection with the negotiation and
consummation of this Agreement.
     3.9.     Termination of Severance Agreements. Prior to the Effective Date,
Executive is a participant in the Company’s Key Employee Retention Program,
approved by the Bankruptcy Court on September 3, 2005, consisting of the
Retention Plan, Severance Plan, Change in Control Severance Program and
Long-Term Incentive Plan. Executive shall continue his participation in the
Retention Plan and the Long-Term Incentive Plan following the Effective Date
with respect to awards granted prior to the Effective Date, subject to the terms
and

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conditions set forth in such plans. The parties intend that this Agreement will
replace and supersede the Severance Plan and the Change in Control Severance
Program.

4.   Termination.

     4.1.     General. Following any termination of the Executive’s employment,
the Company shall pay or provide to the Executive, or his estate or beneficiary,
as the case may be, (i) Base Salary earned through the date of such termination;
(ii) except in the case of a termination described in Section 4.4, any earned,
but unpaid, annual cash incentive or other incentive awards, including the
Executive’s Annual Bonus earned pursuant to Section 3.2; (iii) a payment
representing the Executive’s accrued but unpaid vacation; (iv) any vested, but
not forfeited benefits on the date of such termination under the Company’s
employee benefit plans, as determined in accordance with the terms of such plans
but subject to the provisions of Section 3.3 and 3.4; and (v) benefit
continuation and conversion rights to which the Executive is entitled under the
Company’s employee benefit plans.
     4.2.     Death. If the Executive shall die during the Term, the Term shall
immediately terminate and the Executive shall be entitled to no further payments
or benefits hereunder, except for those payments and benefits described in
Section 4.1. All outstanding equity grants shall vest in the manner provided in
the applicable award (subject to the provisions of Section 3.3 and 3.4), and any
vested but unexercised grants shall become exercisable and shall remain so for
the period commencing on the date of such termination through the second
anniversary of such termination.
     4.3.     Disability. If during the Term the Executive shall become
physically or mentally disabled (a “Disability”), whether totally or partially,
such that the Executive is unable to perform the Executive’s principal services
hereunder for a period of not less than ninety (90) consecutive days, the
Company may at any time after the last day of such period (provided that such
disability is continuing), by written notice to the Executive, terminate the
Term. Upon termination under this Section 4.3, all outstanding equity grants
shall vest in the manner provided in the applicable award (subject to the
provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall
become exercisable and shall remain so for the period commencing on the date of
such termination through the second anniversary of such termination. In addition
to those payments and benefits described in Section 4.1, the Executive shall be
entitled to payments made to the Executive pursuant to a Company insurance plan.
     4.4.     For Cause; Without Good Reason. If the Company terminates the
Executive’s employment for Cause or the Executive terminates his employment
other than for Good Reason, the Term shall terminate immediately and (i) the
Executive shall be entitled to receive no further amounts or benefits hereunder,
except those payments and benefits described in Section 4.1 or as required by
law, (ii) all unvested equity grants pursuant to Section 3.3 and 3.4 shall be
immediately forfeited, and (iii) all vested but unexercised equity grants shall
be forfeited on the date which is ninety (90) days following such termination.
For purposes of this Agreement, “Cause” shall mean the Executive (A) being
convicted of, or pleading guilty or no contest to, a felony (except for motor
vehicle violations); (B) engaging in conduct that constitutes gross misconduct
or fraud in connection with the performance of his duties to the Company, or
(C) materially breaching this Agreement which the Executive does not cure within
thirty (30) days

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after the Company provides written notice of such breach to the Executive. The
Executive shall not terminate his employment without Good Reason prior to the
date which is thirty (30) days following the date on which the Executive
provides written notice of such termination to the Company; provided, however,
that the Company may waive such notice period in writing.
     4.5.     Without Cause; For Good Reason. If during the Term the Company
terminates the Executive’s employment without Cause or if the Executive
terminates his employment with Good Reason, the Term shall immediately terminate
and the Executive shall be entitled to no further payments or benefits hereunder
other than his Accrued Benefits, except: (i) the Company shall make a lump sum
payment to the Executive within ten (10 ) business days of such termination in
an amount equal to two hundred percent (200%) of the sum of the Base Salary plus
target Annual Bonus opportunity for the fiscal year in which occurs the
Executive’s termination of employment; (ii) continuing receipt of group
insurance, life, medical, dental, disability and other similar benefits
described in Section 3.7 (to the extent to which such are in place from time to
time, but excluding perquisites) during the twenty-four month period commencing
on the date of such termination; and (iii) all outstanding equity grants shall
vest in the manner provided in the applicable award (subject to the provisions
of Section 3.3 and 3.4), and any vested but unexercised grants shall become
exercisable and shall remain so for the period commencing on the date of such
termination through the second anniversary of such termination.
     For purposes of this Agreement, “Good Reason” shall mean, without the
Executive’s consent, the occurrence of any of the following during the Term:
(A) any reduction in the Executive’s Base Salary, target bonus opportunity or
benefits pursuant to Section 3 of this Agreement without the Executive’s prior
consent; (B) a material change in the Executive’s position causing it to be of
materially less stature or responsibility, or a change in the Executive’s
duties, authorities, responsibilities or reporting relationship, but in each
case only if the Company does not cure such change within thirty (30) days after
the Executive provides written notice of such change to the Company; (C) the
Company materially breaches this Agreement and does not cure such breach within
thirty (30) days after the Executive provides written notice of such breach to
the Company; or (D) the Executive is not nominated for election to the Board, or
the Executive is not timely renominated for election to the Board or is
involuntarily removed from the Board under circumstances that would not
constitute Cause or Disability hereunder. The Company shall not terminate the
Executive’s employment without Cause prior to the date which is thirty (30) days
following the date on which the Company provides written notice of such
termination to the Executive; provided, however, that the Executive may waive
such notice period in writing.
     Notwithstanding anything to the contrary in clause (i) immediately above,
if the Executive constitutes a “key employee” as defined in Section 416(i) of
the Internal Revenue Code and as applied under Section 409A of the Internal
Revenue Code at such termination, the payment under clause (i) immediately above
shall be paid on the first business day following the sixth month anniversary of
the Executive’s termination of employment if necessary to comply with
Section 409A of the Internal Revenue Code and regulations issued thereunder.

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     4.6.     Change of Control.
          4.6.1     In the event of a Change of Control, the Executive shall
become fully vested in all outstanding equity grants as of the date of the
Change of Control. In addition to those payments and benefits described in
Section 4.1, if during the Term the Company terminates the Executive’s
employment without Cause or the Executive terminates his employment with Good
Reason, in each case within two (2) years following a Change of Control or the
Effective Date, whichever is later, the Term shall immediately terminate and the
Executive shall be entitled to no further payments or benefits hereunder other
than his Accrued Benefits, except: (i) the Company shall make a lump sum payment
to the Executive within ten (10 ) business days of such termination in an amount
equal to three hundred percent (300%) of the sum of the Base Salary plus target
Annual Bonus opportunity for the fiscal year in which occurs the Executive’s
termination of employment; (ii) continuing receipt of group insurance, life,
medical, dental, disability and other similar benefits described in Section 3.7
(to the extent to which such are in place from time to time, but excluding
perquisites) during the thirty-six month period commencing on the date of each
termination; (iii) any previously unvested grants shall become exercisable and
all outstanding grants shall remain exercisable for the period commencing on the
date of such termination through the earlier the second anniversary of such
termination; and (iv) the payment required, if any, pursuant to Section 4.6.3.
If the Executive constitutes a “key employee” as defined in Section 416(i) of
the Internal Revenue Code and as applied under Section 409A of the Internal
Revenue Code at such termination of employment, the payment due under clause
(i) immediately above shall be paid on the first business day following the
sixth month anniversary of Executive’s termination of employment if necessary to
comply with Section 409A of the Internal Revenue Code and regulations issued
thereunder.
          4.6.2     For purposes of this Agreement, a “Change of Control” shall
be deemed to occur upon: (i) the sale, lease, conveyance or other disposition of
all or substantially all of the Company’s assets as an entirety or substantially
as an entirety to any person, entity or group of persons acting in concert other
than in the ordinary course of business; (ii) any transaction or series of
related transactions (as a result of a tender offer, merger, consolidation,
issuance of securities pursuant to the Plan of Reorganization, purchase or
otherwise) that results in any Person (as defined in Section 13(h)(8)(E) under
the Securities Exchange Act of 1934) other than the Union VEBA Trust becoming
the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of 20% or more of the aggregate voting power
of all classes of common equity of the Company, except if such Person is (w) a
subsidiary of the Company, (x) an employee benefit plan for employees of the
Company or (y) a company formed to hold the Company’s common equity securities
and whose shareholders constituted, at the time such company became such holding
company, substantially all the shareholders of the Company; or (iii) a change in
the composition of the Board over a period of twenty-four (24) consecutive
months or less such that a majority of the then current Board members ceases to
be comprised of individuals who either (a) have been Board members continuously
since the beginning of such period, or (b) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (a) who were still in office at the time such
election or nomination was approved by the Board. The parties recognize that a
Change of Control may occur contemporaneous with or prior to the Company’s
emergence from bankruptcy or the Effective Date.

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          4.6.3.     If it shall be determined that any payment or distribution
of any type to or in respect of the Executive made directly or indirectly by the
Company, whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (the “Total Payments”), is or will be
subject to the excise tax imposed by Section 4999 of the Internal Code of 1986,
as amended (the “Code”), or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
collectively referred to as the “Excise Tax”), then the Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes) imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Total Payments.
          4.6.4     All computations and determinations relevant to
Section 4.6.3 and this 4.6.4 shall be made by an independent accounting firm
selected and reimbursed by the Company (The “Accounting Firm”), subject to the
Executive’s consent (not to be unreasonably withheld), which firm may be the
Company’s accountants. Such determination shall include whether any of the Total
Payments are “parachute payments” (within the meaning of Section 280G of the
Code). In making the initial determination hereunder as to whether a Gross-Up
Payment is required, the Accounting Firm shall determine that no Gross-Up
Payment is required if the Accounting Firm is able to conclude that no “Change
of Control” has occurred (within the meaning of Section 280G of the Code). If
the Accounting Firm determines that a Gross-Up Payment is required, the
Accounting Firm shall provide its determination (the “Determination”), together
with detailed supporting calculations regarding the amount of any Gross-Up
Payment and any other relevant matter both to the Company and the Executive by
no later than ten (10) days following its Determination, if applicable, or such
earlier time as is requested by the Company or the Executive (if the Executive
reasonably believes that any of the Total Payments may be subject to the Excise
Tax). If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive and the Company with a written
statement that such Accounting Firm has concluded that no Excise Tax is payable
(including the reasons therefor) and that the Executive has substantial
authority not to report any Excise Tax on his federal income tax return.
          4.6.5     If a Gross-Up Payment is determined to be payable, it shall
be paid to the Executive within twenty (20) days after the Determination (and
all accompanying calculations and other material supporting the Determination)
is delivered to the Company by the Accounting Firm. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive, absent
manifest error.
          4.6.6     As a result of uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the
Company should have been made (“Underpayment”) or that Gross-Up Payments will
have been made by the Company which should not have been made (“Overpayments”).
In either such event, the Accounting Firm shall determine the amount of the
Underpayment or Overpayment that has occurred. In the case of an Underpayment,
the amount of such Underpayment (together with any interest and penalties
payable by the Executive as a result of such Underpayment) shall be promptly
paid by the Company to or for the benefit of the Executive.

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          4.6.7     In the case of an Overpayment, the Executive shall, at the
direction and expense of the Company, take such steps as are reasonably
necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Company, and
otherwise reasonably cooperate with the Company to correct such Overpayment,
provided, however, that (i) the Executive shall not in any event be obligated to
return to the Company an amount greater than the net after-tax portion of the
Overpayment that he has retained or has recovered as a refund from the
applicable taxing authorities and (ii) this provision shall be interpreted in a
manner consistent with the intent of this Section 4.6, which is to make the
Executive whole, on an after-tax basis, from the application of the Excise
Taxes, it being acknowledged and understood that the correction of an
Overpayment may result in the Executive repaying to the Company an amount which
is less than the Overpayment.
          4.6.8     The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service relating to the possible application of
the Excise Tax under Section 4999 of the Code to any of the payments and amounts
referred to herein and shall afford the Company, at its expense, the opportunity
to control the defense of such claim (for the sake of clarity, if the Internal
Revenue Service is successful in any such claim or the Executive reaches a final
settlement with the Internal Revenue Service with respect to such claim (after
having afforded the Company, at its expense, the opportunity to control the
defense of such claim), the amount of the Excise Tax resulting from such
successful claim or settlement shall be determinative as to whether or not there
has been an Underpayment or an Overpayment for purposes of Section 4.6.6).
          4.6.9     Without limiting the intent of this Section 4.6.9 to make
the Executive whole, on an after-tax basis, from the application of the Excise
Taxes, all determinations by the Accounting Firm shall be made with a view to
minimizing the application of Sections 280G and 4999 of the Code of any of the
Total Payments, subject, however, to the following: the Accounting Firm shall
make its determination on the basis of substantial authority and shall provide
opinions to that effect to both the Company and the Executive upon the request
of either of them.
     4.7.     End of Term. If the Company notifies the Executive that the Term
will not be extended in accordance with the provisions of Section 2.1, the
Executive shall be entitled to no further payments or benefits, except for those
payments and benefits described in Section 4.1. All outstanding equity grants
shall vest in the manner provided in the applicable award (subject to the
provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall
become exercisable and shall remain so for the period commencing on the
expiration of the Term and continuing through the second anniversary of the end
of the Term.
     4.8.     No Mitigation. Upon termination of the Executive’s employment with
the Company, the Executive shall be under no obligation to seek other employment
or otherwise to mitigate the obligations of the Company under this Agreement.

5.   Protection of Confidential Information; Non-Competition.

     5.1.     The Executive acknowledges that the Executive’s services will be
unique, that they will involve the development of Company-subsidized
relationships with key customers,

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suppliers, and service providers as well as with key Company employees and that
the Executive’s work for the Company will give the Executive access to highly
confidential information not available to the public or competitors, including
trade secrets and confidential marketing, sales, product development and other
data and information which it would be impracticable for the Company to
effectively protect and preserve in the absence of this Section 5 and the
disclosure or misappropriation of which could materially adversely affect the
Company. Accordingly, the Executive agrees:
          5.1.1     Except in the course of performing the Executive’s duties
provided for in Section 1.1, not at any time, whether before, during or after
the Executive’s employment with the Company, to divulge to any other entity or
person any confidential information acquired by the Executive concerning the
Company’s or its affiliates’ financial affairs or business processes or methods
or their research, development or marketing programs or plans, or any other of
its or their trade secrets. In the event that the Executive is requested or
required to make disclosure of information subject to this Section 5.1.1 under
any court order, subpoena or other judicial process, then, except as prohibited
by law, the Executive will promptly notify the Company, take all reasonable
steps requested by the Company to defend against the compulsory disclosure and
permit the Company to control with counsel of its choice any proceeding relating
to the compulsory disclosure. The Executive acknowledges that all information,
the disclosure of which is prohibited by this section, is of a confidential and
proprietary character and of great value to the Company.
          5.1.2     to deliver promptly to the Company on termination of the
Executive’s employment with the Company, or at any time that the Company may so
request, all confidential memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof) relating to the
Company’s business and all property associated therewith, which the Executive
may then possess or have under the Executive’s control.
     5.2.     In consideration of the Company’s entering into this Agreement,
the Executive agrees that at all times during the Term and thereafter, until the
first anniversary of the date of the termination of the Term for any reason, the
Executive shall not, directly or indirectly, for himself or on behalf of or in
conjunction with, any other person, company, partnership, corporation, business,
group, or other entity (each, a “Person”):
          5.2.1     provide services to a “Competitor” (as defined below), as an
officer, director, shareholder, owner, partner, joint venturer, or in any other
capacity, whether as an executive, independent contractor, consultant, advisor,
or sales representative; or
          5.2.2     call upon any Person who is or that is, at such date of
termination, engaged in activity on behalf of the Company or any affiliate of
the Company for the purpose or with the intent of enticing such Person to cease
such activity on behalf of the Company or such affiliate.
     For purposes of this Agreement, “Competitor” means, on any date, a person
or entity that is primarily engaged in a material line of business conducted by
the Company.
     5.3.     If the Executive commits a breach of any of the provisions of
Section 5.1 or 5.2 hereof, the Company shall have the right and remedy to have
the provisions of this Agreement

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specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach will cause irreparable injury to
the Company and that money damages will not provide an adequate remedy to the
Company, and, if the Executive attempts or threatens to commit a breach of any
of the provisions of Section 5.1 or 5.2, the right and remedy to be granted a
preliminary and permanent injunction in any court having equity jurisdiction
against the Executive with respect to the attempted or threatened breach, it
being agreed that each of such rights and remedies shall be independent of the
others and shall be severally enforceable, and that all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.
     5.4.     If any of the covenants contained in Section 5.1, 5.2 or 5.3, or
any part thereof, hereafter are construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, which shall be
given full effect, without regard to the invalid portions.
     5.5.     The period during which the prohibitions of Section 5.2 are in
effect shall be extended by any period or periods during which the Executive is
in violation of Section 5.2.
     5.6.     If any of the covenants contained in Section 5.1 or 5.2, or any
part thereof are held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision so as to be enforceable to the maximum extent permitted by
applicable law and, in its reduced form, said provision shall then be
enforceable.
     5.7.     The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Sections 5.1, 5.2 and 5.3 upon the courts of
any state within the geographical scope of such covenants. In the event that the
courts of any one or more of such states shall hold such covenants wholly
unenforceable by reason of the breadth of such covenants or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the Company’s right to the relief provided above in the courts of any
other states within the geographical scope of such covenants as to breaches of
such covenants in such other respective jurisdictions, the above covenants as
they relate to each state being for this purpose severable into diverse and
independent covenants.

6.   Inventions and Patents.

     The Executive agrees that all processes, technologies and inventions
(collectively, “Inventions”), including new contributions, improvements, ideas
and discoveries, whether patentable or not, conceived, developed, invented or
made by him during the Term shall belong to the Company, provided that such
Inventions grew out of the Executive’s work with the Company or any of its
subsidiaries or affiliates, are related in any manner to the business
(commercial or experimental) of the Company or any of its subsidiaries or
affiliates or are conceived or made on the Company’s time or with the use of the
Company’s facilities or materials. The Executive shall further (a) promptly
disclose such Inventions to the Company; (b) assign to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony in support of the Executive’s
inventorship.

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7.   Intellectual Property.

     Notwithstanding and without limiting the provisions of Section 6, the
Company shall be the sole owner of all the products and proceeds of the
Executive’s services hereunder, including, but not limited to, all materials,
ideas, concepts, formats, suggestions, developments, arrangements, packages,
programs and other intellectual properties that the Executive may acquire,
obtain, develop or create in connection with or during the Term, free and clear
of any claims by the Executive (or anyone claiming under the Executive) of any
kind or character whatsoever (other than the Executive’s right to receive
payments hereunder), the Executive shall, at the request of the Company, execute
such assignments, certificates or other instruments as the Company may from time
to time deem necessary or desirable to evidence, establish, maintain, perfect,
protect, enforce or defend its right, title or interest in or to any such
properties.

8.   Indemnification.

     In addition to any rights to indemnification to which the Executive is
entitled under the Company’s charter and by-laws, to the extent permitted by
applicable law, the Company will indemnify, from the assets of the Company
supplemented by insurance in an amount customary for corporations similar in
size and value to the Company and engaged in business activities similar to the
business activities of the Company, the Executive at all times, during and after
the Term, and, to the maximum extent permitted by applicable law, shall pay the
Executive’s expenses (including reasonable attorneys’ fees and expenses, which
shall be paid in advance by the Company as incurred, subject to recoupment in
accordance with applicable law) in connection with any threatened or actual
action, suit or proceeding to which the Executive may be made a party, brought
by any shareholder of the Company directly or derivatively or by any third party
by reason of any act or omission or alleged act or omission in relation to any
affairs of the Company or any subsidiary or affiliate of the Company of the
Executive as an officer, director or employee of the Company or of any
subsidiary or affiliate of the Company. The Company shall maintain during the
Term and thereafter insurance coverage sufficient to satisfy any indemnification
obligation of the Company arising under this Section 8.

9.   Notices.

     All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, one day after sent by overnight courier
or three days after mailed first class, postage prepaid, by registered or
certified mail as follows (or to such other address as either party shall
designate by notice in writing to the other in accordance herewith):
     If to the Company, to:
Kaiser Aluminum Corporation
27422 Portola Parkway, Suite 350
Foothill Ranch, California 92610

Attn: General Counsel

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     If to the Executive, to the Executive’s principal residence as reflected in
the records of the Company.

10.   General.

     10.1.     This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to agreements made
between residents thereof and to be performed entirely in Delaware.
     10.2.     The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
     10.3.     This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
     10.4.     This Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive, nor may the Executive pledge,
encumber or anticipate any payments or benefits due hereunder, by operation of
law or otherwise. The Company may assign its rights, together with its
obligations, hereunder (i) to any affiliate or (ii) to a third party in
connection with any sale, transfer or other disposition of all or substantially
all of any business to which the Executive’s services are then principally
devoted, provided that no assignment pursuant to clause (ii) shall relieve the
Company from its obligations hereunder to the extent the same are not timely
discharged by such assignee. In this regard, the parties acknowledge that
Executive shall be employed by the Company’s subsidiary, Kaiser Aluminum
Fabricated Products, LLC, a Delaware limited liability company (“KAFP”), and
that while Executive is employed by KAFP, KAFP shall assume the payment
obligations of the Company under this Agreement subject to the proviso set forth
above in the preceding sentence which states that the Company shall not be
relieved of its obligations hereunder to the extent that the obligations assumed
by KAFP are not timely discharged by KAFP.
     10.5.     The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement or the Term to the extent
necessary to the intended preservation of such rights and obligations.
     10.6.     This Agreement may be amended, modified, superseded, canceled,
renewed or extended and the terms or covenants hereof may be waived, only by a
written instrument executed by both of the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breath, or a waiver of
the breach of any other term or covenant contained in this Agreement.

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     10.7.     This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

11.   Dispute Resolution.

     Subject to the rights of the Company pursuant to Section 5.3 above, any
controversy, claim or dispute arising out of or relating to this Agreement, the
breach thereof, or the Executive’s employment by the Company shall be settled by
arbitration with one arbitrator. The arbitration will be administered by the
American Arbitration Association in accordance with its National Rules for
Resolution of Employment Disputes. The arbitration proceeding shall be
confidential, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction. Any such arbitration shall take place
in the Orange County, California, or in any other mutually agreeable location.
In the event any judicial action is necessary to enforce the arbitration
provisions of this Agreement, sole jurisdiction shall be in the federal and
state courts, as applicable, located in California. Any request for interim
injunctive relief or other provisional remedies or opposition thereto shall not
be deemed to be a waiver of the right or obligation to arbitrate hereunder. The
Company shall pay or promptly reimburse the Executive for all reasonable costs,
fees and expenses relating to such dispute, including reasonable legal fees.

12.   Subsidiaries; Affiliates; and Benefits.

     As used herein, the term “subsidiary” shall mean any corporation or other
business entity controlled directly or indirectly by the corporation or other
business entity in question; the term “affiliate” shall mean and include any
corporation or other business entity directly or indirectly controlling,
controlled by or under common control with the corporation or other business
entity in question; and references to “benefits” and “benefit plans” shall
include the benefits provided by the Company and the Company’s subsidiaries from
time to time to senior executives of the Company generally and the underlying
plans.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

            KAISER ALUMINUM CORPORATION
      By:   /s/ John M. Donnan         Name:   John M. Donnan        Title:  
Vice President, Secretary & General Counsel     

                    /s/ Jack A. Hockema         Jack A. Hockema             

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