exv10w4



 





Exhibit 10.4




Kaiser Aluminum Corporation

2008 -2010 Long-Term Incentive Program




Summary of Management Objectives and

Formula for Determining Performance Shares Earned




	 	 	 	 	 
	Management Objective:	 	The applicable Management Objective (as defined in the Company’s Amended
and Restated 2006 Equity and Performance Incentive Plan (the “Plan”)) is
average economic value added (“EVA”) for 2008, 2009 and 2010 (“Average
2008-2010 EVA”). For each such year, EVA will equal (1) pre-tax
operating income for such year (“PTOI”) less (2) a percentage of net
assets as of the end of the immediately preceding year as specified by
the Committee (as defined in the Plan) (“Net Assets”).

	 
	 	 	 	 
	 
	 	In determining EVA for a particular year:
	 
	 	 	 	 
	 	 	(1) Net Assets will equal total assets less total liabilities, subject to
adjustments to:
	 
	 	 	 	 
	 

	 	•
	 	Remove the Company’s primary aluminum segment;
	 
	 	 	 	 
	 

	 	•
	 	Remove discontinued operations;
	 
	 	 	 	 
	 

	 	•
	 	Eliminate fresh start adjustments;
	 
	 	 	 	 
	 

	 	•
	 	Eliminate assets and liabilities of voluntary employee
beneficiary associations;
	 
	 	 	 	 
	 

	 	•
	 	Exclude financing items;
	 
	 	 	 	 
	 

	 	•
	 	Exclude capital expenditures in progress;
	 
	 	 	 	 
	 

	 	•
	 	Add capitalized value of long-term leases;
	 
	 	 	 	 
	 

	 	•
	 	Add prorated value of capital projects and acquisitions larger
than 1% of prior year Net Assets; and
	 
	 	 	 	 
	 

	 	•
	 	Address other items as recommended by the Company’s Chief
Executive Officer and approved by the Committee; and
	 
	 	 	 	 
	 	 	(2) PTOI will be adjusted to:
















 






	 	 	 	 	 
	 

	 	•
	 	Exclude LIFO adjustments;
	 
	 	 	 	 
	 

	 	•
	 	Add back depreciation associated with step-down in property,
plant and equipment resulting from the implementation of fresh start
accounting;
	 
	 	 	 	 
	 

	 	•
	 	Amortize the following non-recurring activities over 36 months if
the value exceeds one percent of Net Assets:
	 
	 	 	 	 







	 	 	 	 	 
	 

	 	•
	 	Restructuring charges;
	 
	 	 	 	 
	 

	 	•
	 	Gains or losses resulting from asset dispositions;
	 
	 	 	 	 
	 

	 	•
	 	Labor stoppage costs; and
	 
	 	 	 	 











	 	 	 	 
	 

	•
	 	Asset impairment charges; and
	 
	 	 	 
	 

	•
	 	Address other items as recommended by the Company’s Chief
Executive Officer and approved by the Committee. 
	 
	 

	
The threshold Average 2008-2010 EVA (at which no Performance Shares (as
defined in the Plan) granted would be earned) is zero, the target Average
2008-2010 EVA (at which one-half of the Performance Shares granted would
be earned) is an amount specified by the Committee (“Target Average
2008-2010 EVA”), and the maximum Average 2008-2010 EVA (at or above which
all Performance Shares granted would be earned) is twice the Target
Average 2008-2010 EVA.
	 
	 	 	 
	Determination of
Number 
	The number of Performance Shares which are earned will be determined as
follows:
	of
Performance Shares 

	 	 	 
	Which Are Earned:

	•
	 	Following the end of each of 2008, 2009 and 2010, the Committee will certify EVA for such year
based on the company’s audited historical financial statements.
	 
	 	 	 
	 

	•
	 	Following the end of 2010, the Committee will also certify (1)
the Average 2008-2010 EVA and (2) Average 2008-2010 EVA as a percentage
of Target Average 2008-2010 EVA (the “Payout Multiplier”).
	 
	 	 	 
	 

	•
	 	The number of Performance Shares which are earned will equal the
product (rounded up to the nearest whole number) of (1) one-half of the
number of Performance Shares granted (the “Target Performance Shares”)
and (2) the Payout Multiplier; provided, however, such number will not
exceed the number of Performance Shares granted.
	 
	 	 	 
	 	The Committee will certify the Average 2008-2010 EVA and the Payout
Multiplier not later than March 15, 2011.







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