Document:

exv10w1

 

Exhibit 10.1

Summary of the Kaiser Aluminum Fabricated Products

2007 Short-Term Incentive Plan For Key Managers

This is a summary of the Kaiser Aluminum Fabricated Products short-term incentive program (STIP)
effective January 1, 2007. The STIP performance period is annual. The 2007 program rewards
participants for economic value added (“EVA”) versus our cost of capital with modifiers for safety,
business unit, plan and individual performance objectives.

Purpose of the 2007 Kaiser Aluminum STIP

	1.	 	Focus attention on value creation within Fabricated Products, our core business segment, and
Corporate.
	 
	2.	 	Reward the achievement of aggressive performance goals.
	 
	3.	 	Provide incentive opportunities that are consistent with competitive market.
	 
	4.	 	Link incentive pay to individual performance as well as our success and ability to pay.

STIP Philosophy 

Compensation should (i) reward management for value creation and the safe operation of our
business, (ii) stand the test of time to provide continuity in compensation philosophy, (iii)
recognize the cyclical nature of our business, and (iv) provide a retention incentive. In order to
achieve success, participants must continue to seek out and find ways to create value and operate
safely.

Primary Performance Measures

	•	 	EVA will equal our pre-tax operating income (“PTOI”) less a
capital charge calculated as a percentage of our net assets
(“Net Assets”). Both PTOI and Net Assets will be based on
our financial statements and certain adjustments described
in more detail below.

	 	o	 	Net Assets will equal our Total Assets less Total Liabilities reflected
in the financial statements for our prior fiscal year subject to adjustments to:

	 	§	 	Remove Primary Products
	 
	 	§	 	Remove Discontinued Operations
	 
	 	§	 	Eliminate fresh start adjustments
	 
	 	§	 	Eliminate VEBA assets and liabilities
	 
	 	§	 	Exclude financing items
	 
	 	§	 	Exclude capex 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
	 
	 	§	 	Others as recommended by the CEO and approved our Compensation Committee
of the Board of Directors (the “Compensation Committee”)

	 	o	 	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
	 
	 	•	 	Asset impairment charges
	 
	 	•	 	Others as recommended by the CEO and approved our Compensation
Committee

	•	 	Safety performance will be measured by Total Case Incident Rate (TCIR).

Individual Performance Criteria — Kaiser Aluminum STIP

	•	 	Individual payouts from the 2007 STIP may be
adjusted based upon performance against
individual objectives and/or business unit
performance.
	 
	•	 	The business unit modifier allows for a plus
or minus 50% of target or award based on the
performance of the specific business unit that
applies to the individual.
	 
	•	 	There are up to four categories based on
individual objectives or targets set in the
first quarter of each year. Each category
allows for an individual modifier of plus or
minus 25% of target or award.

Target Incentive

	•	 	A monetary target incentive amount for each
participant is established for the STIP based
on competitive market, internal compensation
balance and position responsibilities.
	 
	•	 	Participants’ monetary incentive targets are
set at the beginning of each annual STIP
performance period.
	 
	•	 	The participant’s monetary incentive target
amount represents the incentive opportunity
when certain financial, safety, operational
and individual performance goals are met.

How Incentive Awards Are Determined

	•	 	At the end of the year EVA will be determined and used to calculate the Award Multiple.
	 
	•	 	Award Multiples calculations are audited by Grant Thornton or other auditor determined by the Compensation
Committee.
	 
	•	 	The Award Multiple is adjusted within a range of plus or minus 10% based upon TCIR.
	 
	•	 	The maximum Award Multiple is 3.0 times target.
	 
	•	 	A pool is established based upon the Award Multiple multiplied by the sum of individual monetary incentive
targets for the STIP participants.
	 
	•	 	Payouts are in cash.
	 
	•	 	The entire pool is paid to participants.

STIP Award

	•	 	Each participant’s base award is determined as the vested monetary incentive target times Award Multiple.
	 
	•	 	Based on EVA and TCIR performance as well as business unit and individual performance, the monetary award
can be modified in aggregate up to plus or minus 100% of incentive target or base award.

	 	o	 	If the award multiple is 1.0 or greater, then the earnings and
individual / safety performance modifier will be a percentage of the calculated
award.
	 
	 	o	 	If the award multiple is less than 1.0, then the earnings and
individual / safety performance modifier will be a percentage of incentive target.

Form and Timing of Payment

	•	 	Annual monetary incentive awards from the STIP are paid in cash no later than March 15 following the end of the
year.
	 
	•	 	Award is conditioned on employment on date of payment unless employment is terminated:

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	 	o	 	As a result of death, disability, normal retirement or full early
retirement (position elimination);
	 
	 	o	 	Involuntarily by the company without cause; or
	 
	 	o	 	Voluntarily by the employee with good reason

Other Administrative Provisions

	•	 	The STIP will be reviewed annually.
	 
	•	 	Annual monetary incentive awards paid from the STIP count
as additional compensation for purposes of the Company’s
Defined Contribution and Restoration Plans but not for
other Company benefits.
	 
	•	 	All applicable federal, state, local and FICA taxes will
be withheld from all incentive award payments.
	 
	•	 	Retirement or termination: If participant dies or retires
under “normal” (age 62), full early retirement (position
elimination), or is involuntarily terminated due to
position elimination, or becomes disabled, on a date
other than December 31 of any year, a pro-rata incentive
award is earned based on actual eligibility during the
performance period.
	 
	•	 	Leave of absence participants earn a prorated award based
on the number of months of active employment.
	 
	•	 	Incentive awards are forfeited for all voluntary
terminations by the employee without good reason prior to
the end of the performance period (December 31).
	 
	•	 	Beneficiary designation: In the event of death the
deceased participant’s designated beneficiary will
receive any payments due under the STIP. If there is no
designated beneficiary on file with Human Resources, any
amounts due will be paid to the surviving spouse or, if
no surviving spouse, to the participant’s estate.
	 
	•	 	Non transferability: No amounts earned under the STIP may
be sold, transferred, pledged or assigned, other than by
will or the laws of descent and distribution until the
termination of the applicable performance period. All
rights to benefits under the STIP are exercisable only by
the participant or, in the case of death, by the
participant’s beneficiary.
	 
	•	 	The STIP may be modified, amended or terminated by the
Compensation Committee at any time. If the plan is
terminated, modified or amended, then future payments
from the STIP are governed by such modifications or
amendments. If terminated, then a prorated award will be
determined based on number of months up to termination,
and paid before March 15 following the end of the year.
	 
	•	 	The STIP constitutes no right to continued employment.
	 
	•	 	The Chairman and CEO, with oversight from the
Compensation Committee, has the discretionary authority
to interpret the terms of the plan and his decisions
shall be final, binding and conclusive on all persons
affected.

3exv10w2

 

Exhibit 10.2

[Senior Executive and Manager Grants]

Restricted Stock Award Agreement

Under the 2006 Equity and Performance

 Incentive Plan

Kaiser Aluminum Corporation

 

 

Kaiser Aluminum Corporation

2006 Equity and Performance Incentive Plan

Restricted Stock Award Agreement

     You have been selected to receive a grant of Restricted Stock pursuant to the Kaiser
Aluminum Corporation 2006 Equity and Performance Incentive Plan (the “Plan”),
as specified below:

     Participant:
                                                               
                       

     Date
of Grant:                                                                 
                  

     Number
of Shares of Restricted Stock Granted:                            

     Purchase
Price: $              per share of Restricted Stock

     Lapse of Restriction Date: Restrictions placed on the shares of Restricted Stock shall lapse
on the date and in the amount listed below:

	 	 	 	 	 	 	 	 	 
	Date on Which	 	Number of Shares for	 	 	Cumulative Number of Shares	 
	Restrictions Lapse	 	Which Restrictions Lapse	 	 	for Which Restrictions Lapse	 
	 
	 
	 	 	 	 	 	 	 	 
	 

     THIS RESTRICTED STOCK AWARD AGREEMENT, effective as of the Date of Grant set forth
above (this “Agreement”), represents the grant of Restricted Stock by Kaiser Aluminum Corporation,
a Delaware corporation (the “Company”), to the Participant named above, pursuant to the provisions
of the Plan.

     The Plan provides a complete description of the terms and conditions governing the Restricted
Stock. If there is any inconsistency between the terms of this Agreement and the terms of the
Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this
Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless
specifically set forth otherwise herein. The parties hereto agree as follows:

     1. Employment with the Company. Except as may otherwise be provided in Sections 5 or 6 of
this Agreement, the shares of Restricted Stock granted hereunder are granted on the condition that
the Participant remains an Employee of the Company from the Date of Grant through (and including)
the “Date on which Restrictions Lapse” set forth in the table above opposite such number of shares
of Restricted Stock (such applicable periods each being referred to herein as a “Period of
Restriction”).

     This grant of Restricted Stock shall not confer any right to the Participant (or any other
Participant) to be granted Restricted Stock or other Awards in the future under the Plan.

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     2. Certificate Legend. Each certificate representing, or book entry account maintaining,
shares of Restricted Stock granted pursuant to the Plan shall bear the following legend:

“The sale or other transfer of the shares of common stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is subject
to certain restrictions on transfer as set forth in the Kaiser Aluminum
Corporation 2006 Equity and Performance Incentive Plan (the “Plan”), and in
the associated Restricted Stock Award Agreement. A copy of the Plan and such
Restricted Stock Award Agreement may be obtained from Kaiser Aluminum
Corporation.”

     3. Receipt and Delivery of Stock; Removal of Restrictions.

	 	(a)	 	The Participant waives receipt from the Company of a certificate or
certificates representing the shares of Restricted Stock granted hereunder,
registered in the Participant’s name and bearing a legend evidencing the
restrictions imposed on such shares of Restricted Stock by this Agreement. The
Participant acknowledges and agrees that the Company shall retain custody of such
certificate or certificates until the restrictions imposed by this Agreement on the shares of Restricted Stock granted hereunder lapse. The Participant acknowledges
and agrees that, alternatively, the shares of Restricted Stock granted hereunder may
be maintained in book-entry form with instructions from the Company to the Company’s
transfer agent that such shares shall remain restricted until the restrictions
imposed by this Agreement on such shares lapse. The Participant will provide the
Company a duly signed stock power in such form as may be requested by the Company.
	 
	 	(b)	 	Except as may otherwise be provided herein and in the Plan, the shares of
Restricted Stock granted pursuant to this Agreement shall become freely transferable
by the Participant on the date and in the amount set forth under the Lapse of
Restriction Dates above, subject to all restrictions on transfers imposed by the
Company’s certificate of incorporation, bylaws or insider trading policies as in
effect from time to time or by applicable federal or state securities laws. Once shares of Restricted Stock granted pursuant to this Agreement are no longer subject
to any restrictions on transfer under this Agreement or the Plan, the Participant
shall be entitled to have the legend required by Section 2 of this Agreement removed
from the applicable stock certificates or book-entry account.

     4. Voting Rights and Dividends. During a Period of Restriction, the Participant may exercise
full voting rights and shall receive all dividends and other distributions paid with respect to the
shares of Restricted Stock held by the Participant; provided, however, that if any such dividends
or distributions are paid in shares of the Company’s capital stock, such shares shall be subject to
the same restrictions on transferability as are the shares of Restricted Stock with respect to
which they were paid.

     5. Termination of Employment.

	 	(a)	 	By Death. In the event the Participant ceases to be an Employee of the
Company by reason of death during a Period of Restriction, all shares of Restricted
Stock held by

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	 	 	 	the Participant at the time of death shall no longer be subject to the Period of
Restriction and shall become freely transferable (subject, however, to all
restrictions on transfer imposed by the Company’s certificate of incorporation or
bylaws or by applicable federal or state securities laws) by such Person or Persons
as shall have been named as the Participant’s beneficiary, or by such Persons that
have acquired the Participant’s rights under the shares of Restricted Stock by will
or the laws of descent and distribution. Once the shares of Restricted Stock are
no longer subject to any restrictions on transfer under this Agreement or the Plan,
the Person holding such shares shall be entitled to have the legend required by
Section 2 of this Agreement removed from the applicable stock certificates or
book-entry account.

	 	(b)	 	By Disability. In the event the Participant ceases to be an Employee of
the Company by reason of Disability (as defined in this Section 5(b)) during a
Period of Restriction, all shares of Restricted Stock held by the Participant at the
time of employment termination shall no longer be subject to the Period of
Restriction and shall become freely transferable (subject, however, to all
restrictions on transfer imposed by the Company’s certificate of incorporation or
bylaws or by applicable federal or state securities laws) by the Participant. Once shares of Restricted Stock are no longer subject to any restrictions on transfer
under this Agreement or the Plan, the Person holding such shares shall be entitled
to have the legend required by Section 2 of this Agreement removed from the
applicable stock certificates or book-entry account.
	 
	 	 	 	“Disability” shall be defined as a total and permanent disability as a result of
bodily injury, disease or mental disorder which results in the Participant’s
entitlement to long-term disability benefits under the Kaiser Aluminum Self-Insured
Welfare Plan or the Kaiser Aluminum Salaried Employees Retirement Plan.
	 
	 	(c)	 	Involuntary Termination Other Than For Cause or Detrimental Activity;
Termination For Good Reason. In the event the Participant ceases to be an Employee
of the Company because either (i) the Company or any of its Subsidiaries terminates
such employment for any reason other than in a termination for Cause or other
Detrimental Activity or (ii) the Participant terminates his or her employment for
Good Reason, all shares of Restricted Stock held by the Participant at the time of
employment termination shall no longer be subject to the Period of Restriction and
shall become freely transferable (subject, however, to all restrictions on transfer
imposed by the Company’s certificate of incorporation or bylaws or by applicable
federal or state securities laws) by the Participant. Once shares of Restricted
Stock are no longer subject to any restrictions on transfer under this Agreement or
the Plan, the Person holding such shares shall be entitled to have the legend
required by Section 2 of this Agreement removed from the applicable stock
certificates or book-entry account.
	 
	 	(d)	 	For Other Reasons. In the event the Participant ceases to be an Employee
of the Company for any reason other than the reasons set forth in Section 5(a), 5(b)
or 5(c) of this Agreement during a Period of Restriction, all shares of Restricted
Stock held by the Participant at the time of employment termination and still
subject to the

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	 	 	 	restrictions on transfer pursuant to Section 7 of this Agreement shall be forfeited
by the Participant to the Company. Upon forfeiture of the Restricted Stock, the
Company shall have the right, at the sole discretion of the Committee, to vest all
or any portion of the Restricted Stock grant held by the Participant.

     6. Change in Control. Notwithstanding anything to the contrary in this Agreement, in the
event of a Change in Control of the Company during a Period of Restriction and prior to the
Participant ceasing to be an Employee of the Company, the Period of Restriction shall immediately
lapse, with all such shares of Restricted Stock vesting and becoming freely transferable by the
Participant, subject to restrictions on transfers imposed by the Company’s certificate of
incorporation, bylaws or insider trading policies as in effect from time to time or by applicable
federal or state securities laws.

     7. Restrictions on Transfer. Unless otherwise determined by the Committee in accordance with
the Plan, during the applicable Period of Restriction, shares of Restricted Stock granted pursuant
to this Agreement may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated (a “Transfer”), other than by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order. If, during a Period of Restriction, any Transfer, whether
voluntary or involuntary, of shares of Restricted Stock is made other than in accordance with this
Agreement or the Plan, or if any attachment, execution, garnishment or lien shall be issued against
or placed upon the shares of Restricted Stock, the Participant’s right to such shares of Restricted
Stock shall be immediately forfeited by the Participant to the Company, and all obligations of the
Company under this Agreement shall terminate.

     8. Detrimental Activity. If the Participant, either during employment by the Company or a
Subsidiary or within one (1) year after termination of such employment, shall engage in any
Detrimental Activity, and the Committee shall so find, forthwith upon notice of such finding, the
Participant shall:

	 	(a)	 	Forfeit any shares of Restricted Stock then held by the Participant;
	 
	 	(b)	 	Return to the Company, in exchange for payment by the Company of any cash
amount actually paid therefor by the Participant (unless such payment is prohibited
by law), all Common Shares that the Participant has not disposed of that were
offered pursuant to the Plan within one (1) year prior to the date of the
commencement of such Detrimental Activity; and
	 
	 	(c)	 	With respect to any Common Shares so acquired that the Participant has
disposed of, pay to the Company in cash the difference between:

	 	(i)	 	any cash amount actually paid therefor by the Participant
pursuant to the Plan, and
	 
	 	(ii)	 	the Market Value per Share of the Common Shares on the date
of such acquisition.

To the extent that such amounts are not paid to the Company, the Company may, to the extent
permitted by law, set off the amounts so payable to it against any amounts that may be owing from

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time to time by the Company or a Subsidiary to the Participant, whether as wages, deferred
compensation or vacation pay or in the form of any other benefit or for any other reason.

     9. Beneficiary Designation. The Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any benefit under this
Agreement is to be paid in case of the Participant’s death before the Participant receives all of
such benefit. Each such designation shall revoke all prior designations by the Participant, shall
be in a form prescribed by the Company, and will be effective only when filed by the Participant in
writing with the Vice President Human Resources of the Company during the Participant’s lifetime.
In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall
be paid to the Participant’s estate.

     10. Continuation of Employment. This Agreement shall not confer upon the Participant any
right with respect to continuance of employment with the Company or any Subsidiary, nor shall this
Agreement interfere in any way with any right the Company or any Subsidiary would otherwise have to
terminate the Participant’s employment or other service at any time.

     11. Miscellaneous.

	 	(a)	 	This Agreement and the rights of the Participant hereunder are subject to
all the terms and conditions of the Plan, as the same may be amended from time to
time, as well as to such rules and regulations as the Committee may adopt for
administration of the Plan. It is expressly understood that the Committee is
authorized to administer, construe and make all determinations necessary or
appropriate to the administration of the Plan and this Agreement, all of which shall
be binding upon the Participant.
	 
	 	(b)	 	In accordance with Section 19 of the Plan, the Board may terminate, amend
or modify the Plan.
	 
	 	(c)	 	The Participant shall, not later than the date or dates on which the
restrictions imposed by this Agreement on any shares of Restricted Stock granted
hereunder lapse, pay to the Company or make arrangements satisfactory to the
Committee for payment of any federal, state and local taxes (including the
Participant’s FICA obligation), whether domestic or foreign, required by law to be
withheld on account of such event.
	 
	 	 	 	The Participant acknowledges and agrees that the Company shall have the power and
the right to deduct or withhold an amount sufficient to satisfy federal, state and
local taxes (including the Participant’s FICA obligation), whether domestic or
foreign, required by law to be withheld with respect to any event under this
Agreement should Participant fail to make timely payment of all taxes due.
	 
	 	 	 	The Participant may elect, subject to the Plan and any procedural rules adopted by
the Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold shares having an aggregate Fair Market Value on the
date the tax is to be determined, equal to the amount required to be withheld.

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	 	(d)	 	The Participant agrees to take all steps necessary to comply with all
applicable provisions with respect transfers of the Company’s securities imposed by
the Company’s certificate of incorporation, bylaws and insider trading policies as
in effect from time to time and federal and state securities laws in exercising his
or her rights under this Agreement.
	 
	 	(e)	 	All obligations of the Company under the Plan and this Agreement, with
respect to the Restricted Stock, shall be binding on any successor (whether direct
or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all
or substantially all of the business or assets of the Company.
	 
	 	(f)	 	This Agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware.
	 
	 	(g)	 	Notice hereunder shall be given to the Company at its principal place of
business, and shall be given to the Participant at the address set forth below, or
in either case at such address as one party may subsequently furnish to the other
party in writing.
	 
	 	(h)	 	If there is any inconsistency between the terms of this Agreement and the
terms of a written employment agreement between the Participant and the Company or a
Subsidiary of the Company (the “Employment Agreement”) relating to the lapse of
restrictions imposed by this Agreement on the shares of Restricted Stock granted
hereunder, the terms of the Employment Agreement shall completely supersede and
replace the conflicting terms of this Agreement, provided that such terms of the
Employment Agreement are not inconsistent with the terms of the Plan.
	 
	 	(i)	 	Neither this Agreement nor the grant of Restricted Stock contemplated
hereby shall become effective unless and until the Company receives a copy of this
Agreement and a stock power in the form requested by the Company executed by the
Participant.

12. Definitions.

	 	(a)	 	“Beneficial Owner” or “Beneficial Ownership” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act.
	 
	 	(b)	 	“Board” or “Board of Directors” means the Board of Directors of the
Company.
	 
	 	(c)	 	“Business Combination” means a reorganization, merger or consolidation,
or sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation or entity, or other
transaction.
	 
	 	(d)	 	“Cause” means (1) the Participant’s engaging in fraud, embezzlement,
gross misconduct or any act of gross dishonesty with respect to the Company or its
affiliates, (2) the Participant’s habitual drug or alcohol use which impairs the
ability of the Participant to perform his duties with the Company or its affiliates,
(3) the Participant’s indictment with respect to, conviction of, or plea of guilty
or no contest

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	 	 	 	to, any felony, or other comparable crime under applicable local law (except, in
any event, for motor vehicle violations not involving personal injuries to third
parties or driving while intoxicated), or the Participant’s incarceration with
respect to any of the foregoing that, in each case, impairs the Participant’s
ability to continue to perform his duties with the Company and its affiliates, or
(4) the Participant’s material breach of any written employment agreement or other
agreement between the Company and the Participant, or of the Company’s Code of
Business Conduct, or failure by the Participant to substantially perform his or her
duties for the Company which remains uncorrected or reoccurs after written notice
has been delivered to the Participant demanding substantial performance and the
Participant has had a reasonable opportunity to correct such breach or failure to
perform.
	 
	 	(e)	 	“Change in Control” means the occurrence on or after the date of this
Agreement of any of the following events:

	 	(i)	 	the acquisition by any Person of Beneficial Ownership of 35%
or more of the combined voting power of the then-outstanding Voting Stock of
the Company; provided, however, that:

	 	(A)	 	for purposes of this Section 12(e)(i), the
following acquisitions shall not constitute a Change in Control: (1)
any acquisition of Voting Stock of the Company directly from the
Company (x) pursuant to the POR or (y) that is approved by a majority
of the Incumbent Directors, (2) any acquisition of Voting Stock of the
Company by the Company or any Subsidiary, (3) any acquisition of Voting
Stock of the Company by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary (other than
any voluntary employee beneficiary association established in
connection with the POR), and (4) any acquisition of Voting Stock of
the Company by any Person pursuant to a Business Combination that
complies with clauses (A), (B) and (C) of Section 12(e)(iii) below;
	 
	 	(B)	 	if any Person acquires Beneficial Ownership of
35% or more of combined voting power of the then-outstanding Voting
Stock of the Company as a result of a transaction described in clause
(A)(1) of Section 12(e)(i) and such Person thereafter becomes the
beneficial owner of any additional shares of Voting Stock of the
Company representing 1% or more of the then-outstanding Voting Stock of
the Company, other than in an acquisition directly from the Company
pursuant to the POR, in an acquisition directly from the Company in a
transaction that is approved by a majority of the Incumbent Directors
or other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Voting
Stock are treated equally, such subsequent acquisition shall be deemed
to constitute a Change in Control;
	 
	 	(C)	 	a Change in Control will not be deemed to have
occurred if a Person acquires beneficial ownership of 35% or more of
the Voting Stock of

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	 	 	 	the Company as a result of a reduction in the number of shares of
Voting Stock of the Company outstanding unless and until such Person
thereafter becomes the beneficial owner of any additional shares of
Voting Stock of the Company representing 1% or more of the
then-outstanding Voting Stock of the Company, other than in an
acquisition directly from the Company pursuant to the POR, in an
acquisition directly from the Company in a transaction that is
approved by a majority of the Incumbent Directors or other than as a
result of a stock dividend, stock split or similar transaction
effected by the Company in which all holders of Voting Stock are
treated equally; and

	 	(D)	 	if at least a majority of the Incumbent
Directors determine in good faith that a Person has acquired beneficial
ownership of 35% or more of the Voting Stock of the Company
inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares so that such Person beneficially owns less
than 35% of the Voting Stock of the Company, then no Change in Control
shall have occurred as a result of such Person’s acquisition; or

	 	(ii)	 	a majority of the Directors are not Incumbent Directors; or
	 
	 	(iii)	 	the consummation of a Business Combination, unless, in each
case, immediately following such Business Combination (A) all or substantially
all of the individuals and entities who were the beneficial owners of Voting
Stock of the Company immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of the combined voting
power of the then outstanding shares of Voting Stock of the entity resulting
from such Business Combination (including without limitation an entity which
as a result of such transaction owns the Company or all or substantially all
of the Company’s assets either directly or through one or more subsidiaries),
(B) no Person (other than the Company, such entity resulting from such
Business Combination, any employee benefit plan (or related trust) sponsored
or maintained by the Company, any Subsidiary or such entity resulting from
such Business Combination (other than any voluntary employee beneficiary
association established in connection with the POR) or any Person that
immediately prior to such Business Combination owns, directly or indirectly,
35% or more of the Voting Stock of the Company so long as such Person does not
at such time own, directly or indirectly, more than 1% of the securities of
the other corporation or other entity involved in such Business Combination to
be converted into or exchanged for shares of Voting Stock of the entity
resulting from such Business Combination pursuant to such Business
Combination)) beneficially owns, directly or indirectly, 35% or more of the
combined voting power of the then outstanding shares of Voting Stock of the
entity resulting from such Business Combination, and (C) at least a majority
of the members of the Board of Directors of the entity resulting from such
Business Combination were Incumbent Directors at the time of the execution

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	 	 	 	of the initial agreement or of the action of the Board providing for such
Business Combination; or

	 	(iv)	 	approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, except pursuant to a Business
Combination that complies with clauses (A), (B) and (C) of Section 12(e)(iii).

	 	(f)	 	“Director” shall mean a member of the Board of Directors of the Company.
	 
	 	(g)	 	“Employee of the Company” means an officer or employee of the Company or
one or more of its Subsidiaries.
	 
	 	(h)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
	 
	 	(i)	 	“Good Reason” means, without a Participant’s consent, the occurrence of
any of the following events which is not cured by the Company within ten (10)
business days following the Participant’s written notice to the Company of the event
constituting Good Reason; provided, however, that any such written notice received
by the Company following the thirty (30) day period after the date on which the
Participant first had knowledge of the occurrence of such event giving rise to Good
Reason (or, in the case of multiple events, the latest to occur of such events)
shall not be effective and the Participant shall be deemed to have waived his/her
right to terminate employment for Good Reason with respect to such event:

	 	(i)	 	Demotion, reduction in title, reduction in position or
responsibilities, or change in reporting responsibilities or reporting level
that is materially and adversely inconsistent with the Participant’s then
position or the assignment of duties and/or responsibilities materially and
adversely inconsistent with such position; or
	 
	 	(ii)	 	Relocation of the Participant’s primary office location more
than fifty (50) miles from the Participant’s then current office location; or
	 
	 	(iii)	 	Reduction of greater than 10% in the Participant’s then base
salary or reduction of greater than 10% in the Participant’s then long term or
short term incentive compensation opportunity or a reduction in the
Participant’s eligibility for participation in the Company’s benefit plans
that is not commensurate with a similar reduction among similarly situated
employees.

	 	(j)	 	“Incumbent Directors” means the individuals who, as of the date hereof,
are Directors of the Company and any individual becoming a Director subsequent to
the date hereof whose election, nomination for election by the Company’s
stockholders, or appointment was approved by a vote of at least two-thirds of the
then Incumbent Directors (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for director
without objection to such nomination); provided, however, that an individual shall
not be an Incumbent Director if such individual’s election or appointment to the
Board occurs as a result

9

 

	 	 	 	of an actual or threatened election contest (as described in Rule 14a-12(c) of the
Exchange Act) with respect to the election or removal of Directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board.

	 	(k)	 	“Person” shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d).
	 
	 	(l)	 	“POR” means the Second Amended Joint Plan of Reorganization of Kaiser
Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their
Debtor Affiliates, as modified, filed pursuant to section 1121(a) of title 11 of the
United States Code and confirmed by an order of the United States Bankruptcy Court
for the District of Delaware entered on February 6, 2006, which confirmation was
affirmed by an order of the United States District Court for the District of
Delaware entered on May 11, 2006.
	 
	 	(m)	 	“Voting Stock” means securities entitled to vote generally in the
election of directors (or similar governing bodies).

10

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed effective as of the
Date of Grant.

	 	 	 	 	 
	 	Kaiser Aluminum Corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

The foregoing Agreement is hereby accepted and the terms and conditions thereof are hereby agreed
to by the Participant.

	 	 	 	 	 
	 

	 	 

Participant
	 	 
	 
	 	 	 	 
	 

	 	Participant’s name and address:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

DESIGNATION OF BENEFICIARY:

I hereby
designate
                                                           as my primary beneficiary,
and                                                                

 as my contingent beneficiary, hereunder in
the event of my death.

11

 

STOCK POWER

     For value received, the undersigned does hereby sell, assign and transfer unto Kaiser Aluminum
Corporation (the “Company”) that number of shares of the Company’s common stock awarded to the
undersigned pursuant to the Restricted Stock Award Agreement with a Grant Date of                     
(the “Agreement”) that is the subject of forfeiture under the terms of the Kaiser Aluminum
Corporation 2006 Equity and Performance Incentive Plan (the “Plan”) or that is transferred to the
Company in satisfaction of the withholding obligations of the undersigned as provided in the Plan
and the Agreement, and the undersigned does hereby irrevocably constitute and appoint the Secretary
or Treasurer of the Company to transfer said stock on the books of the Company, with full power of
substitution in the premises.

	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	  

	 	 

	 	 

Participant

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