KAISER SEVERANCE PROTECTION AND CHANGE OF CONTROL BENEFITS
               PROGRAM

          In 1998, Kaiser Aluminum Corporation ("KAC") and Kaiser Aluminum
          & Chemical Corporation ("KACC") implemented the Kaiser Severance
          Protection and Change of Control Benefits Program (the "Program")
          in order to provide certain selected executive officers and key
          employees of KACC (collectively, "Participants") with (i)
          incentives intended to increase the likelihood of retaining the
          services of the Participants and/or (ii) appropriate protection
          in the event of a job loss or change of control.  The Program
          will generally remain in effect through December 31, 2000.

          The three components of the Program, each of which is described
          more fully below, consist of (i) severance payments and benefits
          in the event of termination, (ii) retention payments condition
          upon continued employment through specified dates, and (iii)
          options relating to KAC Common Stock.  Under the Program, KAC and
          KACC have the sole discretion to determine which executive
          officers and key employees participate in the Program and the
          level of participation.  Not all components of the Program were
          offered or otherwise made available to all Participants.

          Severance Benefits
          Selected Participants are eligible for severance benefits under
          the Program upon termination of employment for any reason other
          than (i) the voluntary resignation or retirement of the
          Participant, (ii) the discharge of the Participant for serious
          cause or other reason prejudicial to KAC or KACC, (iii) the
          Participant becoming eligible for sick leave, long term
          disability or full early disability benefits under the Kaiser
          Aluminum Salaried Employees Retirement Plan, (iv) the
          Participant's refusal to accept another suitable position with
          KAC or KACC, or (v) the Participant's death.  The benefits
          payable generally consist of a lump sum cash payment ranging from
          six months to one year of base salary (including, in some
          instances, prorated incentive awards based upon designated
          incentive targets) less whatever severance benefits the
          Participant would otherwise be eligible to receive under the
          Kaiser Aluminum Termination Payment and Benefits Plan
          Continuation Policy generally available to all regular salaried
          employees.  Participants may also be entitled under the Program
          to continued medical, dental, life and accidental death and
          disability coverage for designated periods after termination.

          In lieu of the severance benefits described above, selected
          Participants are also eligible for severance benefits in the
          event the Participant's employment terminates or constructively
          terminates due to a change of control(1) or significant
          restructuring(2) (collectively, a "Fundamental Change") during a
          period which commences ninety (90) days prior to a Fundamental
          Change and ends on the first anniversary of the Fundamental
          Change.  These benefits are not available if (i) the purchaser,
          new controlling entity, KAC or KACC offer the Participant
          suitable employment in a substantially similar capacity at the
          Participant's current level of compensation (regardless of
          whether the Participant accepts or rejects the suitable
          position), (ii) the Participant voluntarily resigns or is
          terminated, (iii) the Participant is discharged for serious cause
          or other reason prejudicial to KAC or KACC, (iv) the Participant
          becomes eligible within ninety (90) days prior to the Fundamental
          Change for sick leave, long term disability or full early
          disability benefits under the Kaiser Aluminum Salaried Employees 

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          (1)  For purposes of the Program, a "change of control" is
          generally defined as the transfer of all or substantially all of
          the assets of, or the merger, consolidation or reorganization of,
          KAC or KACC to or with another organization or the transfer of
          the stock of KAC or KACC to another organization in a manner such
          than neither KAC or MAXXAM Inc. controls KACC.

          (2)  For purposes of the Program, a "significant restructuring"
          is generally defined as the sale or other disposition of a
          designated portion of KACC's business.


          Retirement Plan, or (v) the Participant dies.  If a Participant
          fails to qualify for severance benefits under the Program as a
          result of a termination of the Participant's employment due to a
          Fundamental Change because of any of the above exclusions, the
          Participant will also fail to qualify for the severance benefits
          described above in the preceding paragraph.

          The benefits payable under the Program as a result of a
          termination of employment due to a Fundamental Change generally
          consist of a lump sum cash payment ranging from nine months to
          two years of base salary (including, in some instances, prorated
          incentive awards based upon designated incentive targets) less
          whatever severance benefits the Participant would otherwise be
          eligible to receive under the Kaiser Aluminum Termination Payment
          and Benefits Plan Continuation Policy generally available to all
          regular salaried employees.  Participants may also be entitled
          under the Program to continued medical, dental, life and
          accidental death and disability coverage for designated periods
          after termination due to a Fundamental Change.

          Retention Payments
          Under the Program, selected Participants are also eligible to
          receive retention payments conditioned upon continued employment
          as of a designated date.  In each instance, the retention payment
          is also generally payable in the event a Participant's employment
          is terminated prior to the designated date unless the termination
          is for any reason described above which would preclude severance
          payments under the program.  Retention payments under the Program
          generally consist of a lump sum cash payment and are generally
          based upon six months of salary (including, in some instances,
          prorated incentive awards based upon designated incentive
          targets).

          KAC Common Stock Options
          Under the Program, selected Participants are also eligible to
          receive options to purchase shares of KAC Common Stock.  The
          number of shares of KAC Common Stock subject to such options and
          the specific terms of such options vary depending upon the level
          of responsibility and seniority of the Participant. 

          Notwithstanding the foregoing, such options generally (i) replace
          the long term incentive compensation targets otherwise applicable
          to the Participant receiving the options for designated long term
          incentive periods beginning on or after January 1, 1998, (ii)
          expire three to five years after the date of grant, (iii) are
          based upon market prices of KAC Common Stock on the date of
          grant, (iv) vest over a period of three or five years, and (v)
          terminate upon the termination for cause of the Participant.