TIME-BASED STOCK OPTION GRANT
                    PURSUANT TO THE KAISER
              1997 OMNIBUS STOCK INCENTIVE PLAN
                                
  
  1.    Grant of Stock Option.  Kaiser Aluminum Corporation ("KAC") 
       ----------------------
  and Kaiser Aluminum & Chemical Corporation ("KACC"), both
  Delaware corporations (collectively, the "Company"), hereby
  evidence that the Company has granted to GEORGE T. HAYMAKER JR.
  ("Optionee") the right, privilege and option as herein set forth
  (the "Stock Option") to purchase up to 283,000 shares of common
  stock, $.01 par value per share, of KAC (as more fully defined in
  Attachment A   "Definitions Applicable to Certain Terms", which 
  ------------
  is incorporated herein and made a part hereof, the "Option
  Shares") in accordance with the terms of this document (this
  "Stock Option Grant").  
  
  The Stock Option is granted pursuant to the Kaiser 1997 Omnibus
  Stock Incentive Plan (the "Plan") and is subject to the
  provisions of the Plan, a copy of which has been furnished to
  Optionee and which is hereby incorporated in and made a part of
  this Stock Option Grant, as well as to the provisions of this
  Stock Option Grant.  By acceptance of the Stock Option, Optionee
  agrees to be bound by all of the terms, provisions, conditions
  and limitations of the Plan and this Stock Option Grant.
  
  All capitalized terms used herein shall have the meanings
  provided in the Plan document unless otherwise specifically
  provided in this Stock Option Grant, including Attachment A.  The 
                                                -------------
  Stock Option is a Nonqualified Stock Option under the Plan and is
  not intended to qualify as an "incentive stock option" within the
  meaning of Section 422 of the Code.
  
  All Option Shares, when issued to Optionee upon the exercise of
  this Stock Option, shall be fully paid and nonassessable.
  
  2.    Option Term.  Subject to earlier termination as provided 
       -----------
  herein, or in the Plan, the Stock Option shall expire on December
  31, 2002.  The period during which the Stock Option is in effect
  shall be referred to as the "Option Period".
  
  3.    Option Exercise Price.  The exercise price per Option Share 
       ---------------------
  (including any Attributable Securities, as defined in Attachment 
                                                        ----------
  A) (the "Option Price") at which Optionee may purchase such
  Option Shares subject to the Stock Option shall be equal to the
  remainder of (i) $9.3594 per Option Share minus (ii) the amount
  per Option Share of Distributed Cash Value (as defined in
  Attachment A) determined as of the date of exercise.  Such Option 
  ------------
  Price shall also be subject to adjustment as provided in the Plan
  and this Stock Option Grant.  The Company shall notify Optionee
  within thirty (30) days of each change in the Option Price.
  
  4.    Vesting.  The Stock Option may be exercised during the 
       -------
  Option Period only to the extent it has become a "Vested Option". 
  Provided Optionee's Qualified Service Period (as defined in
  Attachment A) has not previously terminated, the Stock Option 
  ------------
  shall become a "Vested Option" as to one-third of the Option
  Shares as of 12:01 a.m. Houston time on December 31, 1998, as to
  an additional one-third of the Option Shares as of 12:01 a.m.
  Houston time on December 31, 1999 and as to the final one-third
  of the Option Shares as of 12:01 a.m. Houston time on December
  31, 2000.  Notwithstanding the preceding sentence, if a Company
  Sale Transaction (as defined in Attachment A) shall occur prior 
                                  -------------
  to January 1, 2001 and prior to the end of Optionee's Qualified
  Service Period, then the Stock Option shall become a Vested
  Option, exercisable as of the date of consummation of the Company
  Sale Transaction as to all Option Shares.
  
  5.    Method of Exercise.  To exercise the Stock Option, Optionee 
       ------------------
  shall deliver written notice to the Company stating the number of
  Option Shares with respect to which the Stock Option is being
  exercised together with payment for such Option Shares.  Payment
  shall be made (i) in cash or its equivalent, (ii) by tendering
  previously acquired Shares having an aggregate Fair Market Value
  (as defined in the Plan) at the time of exercise equal to the
  total Option Price (provided that the Shares which are tendered
  must have been held by Optionee for at least six months prior to
  their tender to satisfy the Option Price) or (iii) by a
  combination of (i) and (ii).
  
  6.    Termination of Optionee's Employment.  Termination of 
       ------------------------------------
  Optionee's employment as a regular full-time salaried employee of
  KAC, a Subsidiary (as defined in Attachment A), or any branch, 
                                   ------------
  unit or division of KAC or any Subsidiary ("Employment") shall
  affect Optionee's rights under the Stock Option as follows:
  
  (a)   Termination by the Company for Cause.  If Optionee's
  Employment is terminated by the Company at any time for Cause,
  then (i) the Option Period shall terminate and (ii) Optionee's
  right to exercise the Stock Option shall terminate, in each case
  immediately upon Optionee's becoming subject to termination of
  Employment for Cause.  Optionee shall be terminated for "Cause"
  if terminated as a result of Optionee's breach of Optionee's
  written employment or other engagement agreement, or if the Board
  of Directors determines that Optionee is being terminated as a
  result of misconduct, dishonesty, disloyalty, disobedience or
  action that might reasonably be expected to injure KAC or any
  Subsidiary or their business interests or reputation.
  
  (b)   Termination by the Company Other than for Cause.  If
  Optionee's Employment is terminated by the Company prior to
  January 1, 2001 other than for Cause, then (i) the Stock Option
  and the Option Period shall not terminate and (ii) the Stock
  Option shall thereafter be exercisable as to all Option Shares
  from and including the date of such termination through a period
  of 12 months from such date of termination.
  
  (c)   Employment Agreement Termination.  If Optionee terminates
  Optionee's Employment at the expiration of Optionee's Employment
  Agreement (December 5, 1999), or at any time within the month of
  expiration (December 1999), then (i) the Stock Option and the
  Option Period shall not terminate and (ii) the Stock Option shall
  thereafter be exercisable as to all Option Shares, but only
  during the period from and including the date of such termination
  through a period of 12 months from such date of termination.
  
  (d)   Other Termination.  If Optionee's Employment terminates
  prior to January 1, 2001 for any reason other than those set
  forth in Paragraph 6(a), Paragraph 6(b) and Paragraph 6(c), then
  (i) the Stock Option and the Option Period shall not terminate
  but (ii) the Stock Option shall thereafter be exercisable only to
  the extent it has become a Vested Option as of the date of
  Optionee's Employment and otherwise is exercisable in accordance
  with the provisions of this Stock Option Grant and the Plan.
  
  (e)   Death or Disability.  The Stock Option may be exercised by
  Optionee or, in the case of death, by the executor or
  administrator of Optionee's estate, or the person or persons to
  whom Optionee's rights under the Stock Option shall pass by will
  or by the applicable laws of descent and distribution, or in the
  case of Disability, by Optionee's personal representative.  
  
  7.    Reorganizations; Repurchase of Stock Option.  
       -------------------------------------------
  
  (a)   Freedom to Reorganize the Company and Subsidiaries.  The
  existence of the Stock Option shall not affect in any way the
  right or power of the Company and its Subsidiaries or the issuers
  of Attributable Securities or its or their stockholders to make
  or authorize any and all Distribution Events (as defined in
  Attachment A) and any and all other adjustments, 
  ------------
  recapitalizations, reorganizations or other changes in the
  capital structure or business of the Company or its Subsidiaries
  or the issuers of Attributable Securities, any and all issuances
  of bonds, debentures, common stock, preferred or prior preference
  stock, warrants, rights or other securities, whether or not
  affecting the Option Shares or the rights thereof, any
  dissolution or liquidation of the Company or any Subsidiary, any
  sale or other divestiture or transfer of all or any part of the
  assets or business of the Company or any Subsidiary or any issuer
  of Attributable Securities (including any Company Sale
  Transaction, as defined in Attachment A) and any and all other 
                             -------------
  corporate acts or proceedings, whether of a similar character or
  otherwise (collectively, including any Distribution Events and
  any Company Sale Transaction, collectively, "Reorganizations").
  
  (b)   Spin-Offs.  If the Board of Directors authorizes any
  Distribution Event or other Reorganization as a result of which
  holders of Shares (as defined in Attachment A) become entitled, 
                                   -------------
  in their capacities as holders, to receive Marketable Securities,
  the Board of Directors shall, to the extent reasonably
  practicable, cause the Company to provide for or require:
  (i) that the issuer(s) of such Marketable Securities shall
  undertake to issue and deliver to Optionee, upon any subsequent
  exercise of the Stock Option, such Marketable Securities as
  Optionee would have received if Optionee had so exercised the
  Stock Option prior to such Distribution Event or other
  Reorganization and had participated therein (and in any and all
  subsequent Distribution Events or other Reorganizations) to the
  maximum extent allowed to holders of Shares (including any
  Attributable Securities) outstanding at the time of such
  Distribution Event or other Reorganization; (ii) that such
  Marketable Securities shall be so issued and delivered to
  Optionee pursuant to an effective registration statement under
  the Securities Act of 1933, as amended, or otherwise free of any
  restriction on resale thereof by Optionee, other than any
  restriction on resale arising from Optionee's being an Affiliate
  or Insider (as such terms are defined in the Plan) of such
  issuer; (iii) that such Marketable Securities shall be so issued
  and delivered without any agreement, condition, payment or other
  consideration being required of Optionee or the Company;
  (iv) that such issuer(s) shall at all times reserve for issuance
  a sufficient amount of such Marketable Securities to fulfill all
  obligations contemplated hereunder; and (v) that upon each such
  issuance, such Marketable Securities shall be duly authorized,
  validly issued, fully paid and nonassessable.  The Company shall
  also provide for or require that: (x) in the event any such
  issuer shall fail or be unable to issue and deliver to Optionee
  any Marketable Securities as provided in the preceding sentence,
  such issuer shall be obligated, in lieu of issuing and delivering
  such Marketable Securities, to pay to Optionee in cash,
  immediately upon exercise of the Stock Option, the Market Value
  of such Marketable Securities determined as of the date of
  exercise of the Stock Option; and (y) in the event the Company is
  obligated to make a cash payment to Optionee pursuant to
  Paragraph 8(b), such issuer shall be obligated to reimburse the
  Company for a part of such payment proportionate to the
  Distributed Cash Value attributable to Attributable Securities of
  such issuer compared to the total amount of Distributed Cash
  Value.
  
  (c)   Right to Repurchase Stock Option.  Upon receipt of a notice
  of exercise, the Company shall have the right but not the
  obligation to repurchase, and thereby to satisfy all of the
  Company's obligations under, the Stock Option as to the number of
  Option Shares as to which the Stock Option is exercised by paying
  Optionee in cash an amount, net of any taxes required to be
  withheld, equal to the sum of (A) the product of (i) the number
  of Option Shares as to which the Stock Option is exercised
  multiplied by (ii) the amount, determined as of such date of
  exercise, equal to the remainder of (x) the Market Value of one
  Option Share minus (y) the Option Price plus (B) the amount of
  cash, if any, payable to Optionee pursuant to Paragraph 8(b).
  
  8.    Adjustments. 
       -----------
  
  (a)   In the event of any one or more Distribution Events or other
  Reorganizations affecting the Stock Option and not already
  adjusted for under Paragraph 7, the Option Price and the number
  of Option Shares subject to the Stock Option shall be
  appropriately adjusted by the Board of Directors.  In addition,
  the Board of Directors shall, as permitted by Section 3.2,
  Section 16.2 and other provisions of the Plan, construe and
  interpret the Plan and this Stock Option Grant and make all
  appropriate adjustments in order to prevent dilution or
  enlargement of the benefits or potential benefits intended to be
  made available to Optionee under this Stock Option Grant and the
  Plan.
  
  (b)   Without limitation to the foregoing, in the event that the
  amount of Distributed Cash Value as of any date of exercise of
  the Stock Option is equal to or greater than $9.3594 per Option
  Share, the Option Price shall be deemed to be $.01 per Option
  Share and the Company, in addition to issuing Option Shares to
  Optionee, shall pay to Optionee in respect of each Option Share
  as to which the Stock Option is exercised an amount of cash equal
  to the remainder of (i) such amount of Distributed Cash Value per
  Option Share minus (ii) $9.3594.
  
  9.    No Rights in Option Shares.  Optionee shall have no rights 
       --------------------------
  as a stockholder in respect of Option Shares until such Optionee
  becomes the holder of record of such Option Shares.
  
  10.   Option Shares Reserved.  The Company shall at all times 
       ----------------------
  during the Option Period reserve and keep available such number
  of Shares as will be sufficient to satisfy the requirements of
  this Stock Option.
  
  11.   Nontransferability of Stock Option.  The Stock Option 
       ----------------------------------
  granted pursuant to this Stock Option Grant is not transferable
  other than by will, the laws of descent and distribution or by
  qualified domestic relations order.  The Stock Option will be
  exercisable during Optionee's lifetime only by Optionee or by
  Optionee's guardian or legal representative.  No right or benefit
  hereunder shall in any manner be liable for or subject to any
  debts, contracts, liabilities, or torts of Optionee.
  
  12.   Amendment and Termination.  No amendment or termination of 
       -------------------------
  the Stock Option shall be made by the Board of Directors or the
  Committee (as defined in the Plan) at any time without the
  written consent of Optionee.  No amendment of the Plan will
  adversely affect the rights, privileges and options of Optionee
  under the Stock Option without the written consent of Optionee.
  
  13.   No Guarantee of Employment.  The Stock Option shall not 
       --------------------------
  confer upon Optionee any right with respect to continuance of
  Employment or other service with the Company or any Subsidiary or
  Affiliate, nor shall it interfere in any way with any right the
  Company or any Subsidiary or Affiliate would otherwise have to
  terminate such Optionee's Employment or other service at any
  time.
  
  14.   Withholding of Taxes.  The Company shall have the right to 
       --------------------
  deduct or withhold, or require Optionee to remit to the Company,
  an amount sufficient to satisfy all federal, state and local
  taxes, domestic or foreign, required by law or regulation to be
  withheld with respect to any taxable event arising under this
  Stock Option Grant or any exercise or other action or event
  hereunder.
  
  15.   No Guarantee of Tax Consequences.  Neither the Company nor 
       --------------------------------
  any Subsidiary or Affiliate, nor the Board of Directors or any
  Committee, makes any commitment or guarantee that any federal or
  state tax treatment will apply or be available to any person
  eligible for benefits under the Stock Option.
  
  16.   Severability.  In the event that any provision of the Stock 
       ------------
  Option shall be held illegal, invalid, or unenforceable for any
  reason, such provision shall be fully severable, but shall not
  affect the remaining provisions of the Stock Option, and the
  Stock Option shall be construed and enforced as if the illegal,
  invalid, or unenforceable provision had never been included
  herein.
  
  17.   Governing Law.  The Stock Option shall be construed in 
       -------------
  accordance with the laws of the State of Texas to the extent
  federal law does not supersede and preempt Texas law.
  
  Executed December 23, 1998, and effective as of the 1st day of
  January, 1998.
  
                       "COMPANY"
  
                       KAISER ALUMINUM CORPORATION
  
  
                       By:/s/E Bruce Butler
                       Printed Name:  E. Bruce Butler
                       Title: Vice President 
                            and General Counsel
  
  
                          KAISER ALUMINUM & CHEMICAL CORPORATION
  
  
                       By:/s/E. Bruce Butler
                       Printed Name:  E. Bruce Butler
                       Title: Vice President 
                            and General Counsel
  
  
   Accepted December 24, 1998, and effective as of the 1st day
  of January, 1998.
  
                       "OPTIONEE"
  
                       /s/ George T. Haymaker, Jr.
                       Printed Name:  George T. Haymaker Jr
                       Title: Chief Executive Officer
  
  
    <PAGE>
ATTACHMENT A
  ------------
  
  Time-Based Stock Option Grant
  
  Definitions Applicable to Certain Terms
  
  "Affiliate" - see Section 2.1 of the Plan.
  
  "Attributable Securities" - see the definition of "Option Share".
  
  "Cause" - see Paragraph 6(a) of this Stock Option Grant.
  
  "Change in Control" means a change in control of KAC that would
  be required to be reported in response to item 6(e) of Schedule
  14A of Regulation 14A under the Securities Exchange Act of 1934,
  as amended, assuming such Schedule, Regulation and Act were
  applicable to KAC as in effect on April 15, 1998.
  
  "Company Sale Transaction" means (a) a transaction in which KAC
  or KACC (if KACC is a Subsidiary of KAC immediately prior to such
  transaction) (i) sells or otherwise disposes of all or
  substantially all of its operating or business assets (other than
  to one or more Subsidiaries) or (ii) merges or consolidates with
  another entity and as a result of consummation of such merger or
  consolidation a Change in Control occurs, (b) a tender offer,
  exchange offer or other transaction in which all holders of
  Shares have the right to receive cash, securities or other
  property in respect of their Shares and as a result of
  consummation of such transaction a Change in Control occurs or
  (c) a transaction determined by the Board of Directors to be
  similar or substantially equivalent to a transaction contemplated
  by clause (a) or clause (b) of this sentence.
  
  "Disability" - See Section 2.12 of the Plan.
  
  "Distributed Cash Value" means, as of any determination date, the
  aggregate amount of cash (other than regular quarterly cash
  dividends, if any) plus the aggregate value, as determined by the
  Board of Directors as of the date of distribution, of all
  property (other than cash and Attributable Securities)
  distributed or set aside for distribution to the holder of one
  Original Share and all Attributable Securities, if any, during
  the period commencing January 1, 1998 and ending on the
  determination date.
  
  "Distribution Events" means any and all distributions, dividends,
  recapitalizations, forward or reverse splits, reorganizations,
  mergers, consolidations, spin-offs, combinations, repurchases,
  share exchanges, or other similar or substantially equivalent
  corporate transactions or events in which the holder of a
  security becomes, as such, entitled to receive cash, securities
  or other property in addition to or in exchange for or upon
  conversion of such security.
  
  "Employment" - see Paragraph 6 of this Stock Option Grant.
  
  "Insider" - see Section 2.19 of the Plan.
  
  "KAC" - see Paragraph 1 of this Stock Option Grant.
  
  "KACC" - see Paragraph 1 of this Stock Option Grant.
  
  "Market Value" means, as of any Trading Day, the average of the
  highest and lowest sales prices as reported by the consolidated
  tape (or, if such prices are not quoted, the average of the
  quoted closing bid and asked prices) on such Trading Day for one
  Option Share (including, as applicable, the Market Values of any
  Attributable Securities).  In the event that sales prices or
  closing bid and asked prices are not quoted on a particular
  Trading Day, the Market Value for that Trading Day shall be
  deemed to be the Market Value for the immediately preceding
  Trading Day.  In the event that any Attributable Security shall
  cease to be a Marketable Security, it shall thereupon be deemed
  to have no further Market Value and shall be deemed instead to
  have, as of the date it ceases to be a Marketable Security, such
  Distributed Cash Value as shall be determined by the Board of
  Directors.
  
  "Marketable Securities" means securities (a) of a class that is
  registered under the Securities Exchange Act of 1934, as amended,
  (b) for which sales prices or bid and asked prices are regularly
  quoted and (c) that, if issued and delivered to Optionee upon
  exercise of the Stock Option, would not be subject to any
  restriction on resale, other than any restriction arising from
  Optionee's being an Affiliate or Insider (as such terms are
  defined in the Plan) of the issuer of such Marketable Securities.
  
  "Option Period" - see Paragraph 2 of this Stock Option Grant.
  
  "Option Price" - see Paragraph 3 of this Stock Option Grant.
  
  "Option Share" means (a) one Share as constituted on January 1,
  1998 (an "Original Share") and (b) in the event of any one or
  more successive Distribution Events, all Marketable Securities
  ("Attributable Securities") into which or for which an Original
  Share or any Attributable Securities may be converted or
  exchanged or that a Stockholder may have the right to receive in
  respect of such Original Share or Attributable Securities.
  
  "Optionee" - see Paragraph 1 of this Stock Option Grant.
  
  "Original Share" - see the definition of "Option Share".
  
  "Plan" - see Paragraph 1 of this Stock Option Grant.
  
  "Qualified Service Period" means the period from and including
  January 1, 1998 through and including the earlier of (a) December
  31, 2000 or (b) the date immediately preceding the date of
  termination of Optionee's Employment; provided, however, that if
  Optionee's Employment has not terminated prior to the date that a
  proposed Company Sale Transaction is announced by KAC and such
  Company Sale Transaction is subsequently consummated, then
  Optionee's Qualified Service Period shall be deemed to continue
  through, and end on, the date of consummation of such Company
  Sale Transaction unless, prior to the date of consummation of
  such Company Sale Transaction, Optionee's Employment is
  terminated by the Company for Cause or is terminated by Optionee
  other than pursuant to Paragraph 6(c) of this Stock Option Grant.
  
  "Reorganization" - see Section 7(a) of this Stock Option Grant.
  
  "Share" means one share of common stock, par value $.01 per
  share, of KAC.
  
  "Stock Option" - see Paragraph 1 of this Stock Option Grant.
  
  "Subsidiary" - see Section 2.32 of the Plan.  For avoidance of
  doubt, KACC shall be considered a Subsidiary of KAC so long as
  KAC has a majority voting interest in KACC, and KAC shall be
  considered to have a majority voting interest whether it holds
  such interest directly or indirectly through one or more
  Subsidiaries.
  
  "Trading Day" means as to an Option Share (including any
  Attributable Securities) a day when the New York Stock Exchange
  (or other principal securities exchange, including Nasdaq, on
  which such securities are traded) is open.