Document:

Exhibit

Exhibit 10.1

Kaiser Aluminum 
2018 Short-Term Incentive Plan for Key Managers

This is a summary of the Kaiser Aluminum short-term incentive program (“STIP”) effective January 1, 2018. The STIP performance period is the 2018 calendar year. The 2018 STIP rewards participants for performance based on return on net assets targets derived from the adjusted pre-tax operating income of our core fabricated products business calculated as a percentage of adjusted net assets and expressed in adjusted earnings before interest, taxes, depreciation and amortization as reported to investors (“Adjusted EBITDA”) with modifiers for safety, quality, delivery and manufacturing cost efficiency, with the possibility of adjustments to individual awards based on actual performance, including individual, facility, and/or functional area.
Purpose of the 2018 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 performance as well as our success and ability to pay.

STIP Philosophy
Compensation should (i) reward management for value creation, the safe and efficient operation of our business and customer satisfaction, (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, operate safely and efficiently and provide customer satisfaction.
Primary Performance Measures
The performance goals will be based on Adjusted EBITDA, as reflected in the Company’s Reconciliations of Non-GAAP Measures - Consolidated, as reported in the Company’s earnings materials.    

		
	•
	Safety performance will be measured by Total Case Incident Rate (TCIR) and Lost-time Case Incident Rate (LCIR).

		
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	Quality performance will be measured by the no fault claim rate.

		
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	Delivery performance will be measured by the on-time delivery rate.

		
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	Manufacturing cost efficiency will be measured by the Company’s manufacturing cost (excluding benefit costs) compared to plan.

1

Target Incentive
		
	•
	A monetary target incentive amount for each participant is established for the STIP based on the competitive market, internal compensation balance and position responsibilities.

		
	•
	Participants’ monetary incentive targets are set at the beginning of the STIP performance period.

		
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	The participant’s monetary incentive target amount represents the incentive opportunity based on the Adjusted EBITDA, safety, quality, delivery and cost performance results.

How The Award Multiplier Is Determined
		
	•
	At the end of the year Adjusted EBITDA will be determined and used to calculate the Award Multiplier.

		
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	The Award Multiplier is adjusted within a range as follows:

		
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	Up to ±5% based upon TCIR

		
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	Up to ±5% based upon LCIR

		
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	Up to ±10% based upon no fault claim rate  

		
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	Up to ±10% based upon on-time delivery rate  

		
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	Up to ±20% based on manufacturing cost efficiency, excluding benefits costs 

		
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	Individual participant awards are modified to reflect any adjustments permitted by the STIP and subject to a maximum final Award Multiplier of 3.0 times target.

2

STIP Award
Each participant’s base award is determined as the monetary incentive target times the Award Multiplier modified to reflect any adjustments permitted by the STIP.

		
	•
	Individual payouts may be adjusted up or down 100% based on actual performance, including individual, facility, and/or functional area.

		
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	Adjustments to awards for executive officers, including our CEO and named executive officers, require approval by the Compensation Committee.  All other adjustments require the approval of our CEO.

Form and Timing of Payment
		
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	STIP awards are paid, at the Company’s election, in cash, non-restricted shares of the Company’s common stock or a combination of cash and non-restricted shares no later than March 15 following the end of the year.

		
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	Except as set forth in this STIP, Awards are conditioned on employment on date of payment. 

Detrimental Activity
		
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	If a participant, either during employment by the Company or any affiliate or within one year after termination of such employment (or, if termination of such employment results from retirement at or after age 65, within the period ending one year after the date the Company paid the STIP award to the participant), shall engage in any Detrimental Activity (as defined below), and the Compensation Committee shall so find, forthwith upon notice of such finding, the participant shall forfeit to the Company any payment received under this STIP.

		
	•
	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 time to time by the Company or any affiliate to the participant, whether as wages or vacation pay or in the form of any other benefit or for any other reason; provided, however, that, except to the extent permitted by Treasury Regulation Section 1.409A-3(j)(4), such offset shall not apply to amounts that are “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code.  

		
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	“Detrimental Activity” means any conduct or act determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any affiliate, including, without limitation, any one or more of the following types of activity: 

		
	◦
	Conduct resulting in an accounting restatement due to material noncompliance with any financial reporting requirement under the U.S. federal securities laws.

		
	◦
	Engaging in any activity, as an employee, principal, agent, or consultant for another entity that competes with the Company in any actual, researched, or prospective product, service, system, or business activity for which the Participant has had any direct responsibility during the last two years of the participant’s employment with the Company or an affiliate, in any territory in which the Company or an affiliate manufactures, sells, markets, services, or installs such product, service, or system, or engages in such business activity.

3

		
	◦
	Soliciting any employee of the Company or an affiliate to terminate the employee’s employment with the Company or an affiliate.

		
	◦
	The disclosure to anyone outside the Company or an affiliate, or the use in other than the Company’s or an affiliate’s business, without prior written authorization from the Company, of any confidential, proprietary or trade secret information or material relating to the business of the Company and its subsidiaries acquired by the participant during the participant’s employment with the Company or its subsidiaries or while acting as a consultant for the Company or its subsidiaries.

		
	◦
	The failure or refusal to disclose promptly and to assign to the Company upon request all right, title and interest in any invention or idea, patentable or not, made or conceived by the participant during employment by the Company or any affiliate, relating in any manner to the actual or anticipated business, research or development work of the Company or any affiliate or the failure or refusal to do anything reasonably necessary to enable the Company or any affiliate to secure a patent where appropriate in the U.S. and in other countries.

		
	◦
	Activity that results in termination for Cause (as defined below).

		
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	“Cause” means (i) the participant’s engaging in fraud, embezzlement, gross misconduct or any act of gross dishonesty with respect to the Company or its affiliates, (ii) the participant’s habitual drug or alcohol use which impairs the ability of the participant to perform the participant’s duties with the Company or its affiliates, (iii) the participant’s indictment with respect to, conviction of, or plea of guilty or no contest 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 the participant’s duties with the Company and its affiliates, or (iv) 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 the participant’s 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.

Other Administrative Provisions
		
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	The STIP will be reviewed annually.

		
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	Annual 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.

		
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	All applicable federal, state, local and FICA taxes will be withheld from all incentive award payments.

4

		
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	Retirement or termination: If a participant dies, or retires at or after age 65, or becomes disabled, the participant’s award shall be determined based on the Company’s actual performance and prorated for the actual number of days of the participant’s employment during 2018.

		
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	Leave of absence participants earn a prorated award based on the number of months of active employment.

		
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	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.

		
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	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.

		
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	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.

		
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	The STIP constitutes no right to continued employment.

		
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	The Chairman and CEO, with oversight from the Compensation Committee, has the discretionary authority to interpret the terms of the plan and those decisions shall be final, binding and conclusive on all persons affected.

5Exhibit

Exhibit10.2

Kaiser Aluminum 2018-2020 Long-Term Incentive Plan
	
								
	Management Objective:
	The applicable measurable performance objective:

	 
	 
	 

	 
	Ÿ
	for 30% of the Performance Shares is the percentile ranking (“Relative TSR Ranking”) of the total shareholder return (“TSR”) of Kaiser Aluminum Corporation (the “Company”) over the period from January 1, 2018 through December 31, 2020 (the “Performance Period”) compared to the TSR of companies listed on Annex I hereto (each, a “Peer Company”), each of which is a member of the S&P 600 Small Cap Materials Sector index, over the Performance Period; 

	 
	 
	 

	 
	Ÿ
	for 40% of the Performance Shares is the cost performance (“Cost Performance”) of the Company, measured against the Company’s total controllable cost (“Total Controllable Cost”), over the Performance Period; and

	 
	 
	 

	 
	Ÿ
	for 30% of the Performance Shares is the economic value added performance (“EVA Performance”) of the Company, measured by the consolidated adjusted pre-tax operating income of the Company (“PTOI”) less a capital charge, over the Performance Period.

	 
	 
	 

	 
	TSR Performance Objective

	 
	 
	 

	 
	The Relative TSR Ranking will be based on the Company’s relative stock performance against the Peer Companies, with any dividends being treated as being reinvested on the applicable ex-dividend date.

	 
	 
	 

	 
	The beginning and ending share prices are determined using the 20 trading day averages preceding the beginning and the end of the applicable performance period, respectively.

	 
	 
	 

	 
	Any Peer Company that is acquired during the Performance Period shall be omitted from the peer group and will not be included in determining the Relative TSR Ranking.

	 
	 
	 

	 
	Any Peer Company that files for bankruptcy, or that has its shares delisted from its primary stock exchange because it fails to meet the exchange listing requirements (other than as a result of its acquisition), during the Performance Period shall remain in the peer group and will be ranked last for purposes of determining the Relative TSR Ranking.

	 
	 
	 

	
								
	 
	The Relative TSR Ranking target is the 50th percentile (the “Target TSR Ranking”). The payout for TSR performance at the target level (a multiplier of 1.00x) is 50% of the applicable Performance Shares. The threshold performance required to potentially earn Performance Shares is a Relative TSR Ranking at the 25th percentile. The payout for TSR performance at the threshold level (a multiplier of 0.50x) is 25% of the applicable Performance Shares. If the Relative TSR Ranking is below the 25th percentile, no Performance Shares will be earned. If the Relative TSR Ranking is greater than the 90th percentile, Performance Shares will be earned at the maximum level.  The payout for performance at the maximum level (a multiplier of 2.00x) is 100% of the applicable Performance Shares.

	 
	 
	 

	 
	The multiplier for Performance Shares based on TSR Percentile Ranking will be determined by straight line interpolation between the measuring points based on the Relative TSR Ranking as follows:

	 
	 
	 
	 
	 

	 
	 
	 
	TSR Percentile Ranking
<25th percentile
  25th percentile
  50th percentile
  75th percentile
≥90th percentile
	Multiplier
   0.00x
   0.50x
   1.00x
   1.50x
   2.00x

	 
	 
	 

	 
	If the TSR of the Company over the Performance Period is negative, then the multiplier shall be capped at 1.00x.

	 
	 
	 

	 
	Cost Performance Objective

	 
	 
	 

	 
	The Company’s Cost Performance is measured as a percentage of the average annual increase or decrease in Total Controllable Cost over the Performance Period as compared with the Total Controllable Cost for 2017.  The baseline reflects 2017 costs/performance flexed for volume and mix.

	 
	 
	 
	 
	 
	 
	 
	 

	 
	Total Controllable Cost shall equal the sum of the Company’s (1) controllable variable conversion cost (“Variable Cost”) and (2) controllable plant overhead and selling, general and administrative expenses (“Overhead Cost”) as more fully described to the Company’s compensation committee (the “Committee”).

	 
	 
	 

	 
	The Cost Performance target is a 0% annualized cost increase requiring the offset of underlying inflation (the “Target Cost Performance”). The payout for Cost Performance at the target level (a multiplier of 1.00x) is 50% of the applicable Performance Shares. If the Cost Performance is equal to or greater than a 3% annualized cost increase, no Performance Shares will be earned. If the Cost Performance equals or exceeds a 3% annualized cost reduction, Performance Shares will be earned at the maximum level.  The payout for performance at the maximum level (a multiplier of 2.00x) is 100% of the applicable Performance Shares.

	 
	 
	 
	 
	 
	 
	 
	 

	
								
	 
	The multiplier for Performance Shares based on Cost Performance will be determined by a straight line interpolation based on Cost Performance as follows:

	 
	 
	 
	 
	 

	 
	 
	 
	Cost Performance

 ≥3% annualized cost increase
   0% annualized cost increase
 ≥3% annualized cost reduction
	Multiplier

   0.00x
   1.00x
   2.00x

	 
	 
	 
	 
	 
	 
	 
	 

	 
	EVA Performance Objective

	 
	 
	 

	 
	For each year of the Performance Period, EVA will equal (1) PTOI less (2) 15% of adjusted net assets as of the end of the immediately preceding year (“Net Assets”).

	 
	 
	 
	 
	 
	 
	 
	 

	 
	In determining EVA for a particular year:

	 
	 
	 

	 
	Net Assets will equal total assets less total liabilities of our Consolidated financial statements, subject to adjustments to:

	 
	 
	 

	 
	Ÿ
	remove discontinued operations and legacy environmental accruals;

	 
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	remove VEBA related assets and liabilities;

	 
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	exclude financing items;

	 
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	exclude capital expenditures in progress at prior year end;

	 
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	add prorated value of current year capital projects or acquisitions larger than 1% of prior year Net Assets except to the extent necessary to avoid over-stating Net Assets;

	 
	Ÿ
	exclude income tax related assets and liabilities; 

	 
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	exclude mark-to-market assets and liabilities relating to hedging activities except for those relating to option premiums; 

	 
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	exclude cash, cash equivalents and short-term investments; and

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

	 
	 
	 

	
								
	 
	PTOI will be adjusted to:

	 
	 
	 

	 
	Ÿ
	exclude non-cash LIFO inventory charges (benefits);

	 
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	exclude non-cash mark to market and lower of cost or market adjustments;

	 
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	amortize the following non-recurring activities over three calendar years with the first year being the year of the initial charge if the value exceeds one percent of prior year Net Assets:

	 
	 
	- Restructuring charges;

	 
	 
	- Gains or losses resulting from asset dispositions;

	 
	 
	- Labor stoppage costs; and

	 
	 
	- Asset impairment charges;

	 
	Ÿ
	exclude discontinued operations and legacy environmental income and expenses;

	 
	Ÿ
	exclude unrealized mark-to-market gains (losses) related to hedging activities;

	 
	Ÿ
	exclude VEBA related income and expense;

	 
	Ÿ
	exclude workers compensation gains (expenses) caused by changes in the discount rate; and

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

	 
	 
	 

	 
	The EVA Performance target is is an amount specified by the Committee
(the “Target EVA Performance”). The payout for EVA Performance at the target level (a multiplier of 1.00x) is 50% of the applicable Performance Shares. If the EVA Performance is equal to or less than the threshold amount specified by the Committee, no Performance Shares will be earned. If the EVA Performance is greater than or equal to the maximum EVA performance specified by the Committee, Performance Shares will be earned at the maximum level.  The payout for performance at the maximum level (a multiplier of 2.00x) is 100% of the applicable Performance Shares.

	 
	 
	 
	 
	 
	 
	 
	 

	 
	The multiplier for Performance Shares based on EVA Performance will be determined by a straight line interpolation based on EVA Performance as follows:

	 
	 
	 
	 
	 

	 
	 
	 
	EVA Performance

 ≤ [Threshold EVA Performance] 
    [Target EVA Performance]
 ≥ [Maximum EVA Performance]
	Multiplier

   0.00x
   1.00x
   2.00x

	 
	 
	 
	 
	 
	 
	 
	 

	
								
	Determination of Number of Performance Shares Potentially Earned:
	The number of Performance Shares earned, if any, will be determined as follows:

	 
	 
	 

	 
	Ÿ
	Following December 31, 2020, the Committee will approve a multiplier (“LTI Multiplier”) for each of the performance metrics described above based on the Company’s performance.  

	 
	 
	 

	 
	Ÿ
	The number of Performance Shares earned, if any, will equal the sum of the product (rounded down to the nearest whole number) of (1) the number of Performance Shares granted under each performance metric and (2) one-half of the LTI Multiplier determined based on each of the applicable Company performance metrics (rounded to the nearest whole percentage point); provided, however, such number will not exceed the number of Performance Shares granted hereunder.

	 
	 
	 

	 
	The Committee will approve the LTI Multiplier not later than March 15, 2021.

	 
	 
	 

	Administrative Provisions:
	Additional administrative provisions are reflected in the terms of the applicable grant documents.

Annex I

Peer Company List

	
				
	AKS
	AK Steel Holding Corporation
	KRA
	Kraton Corporation

	ASIX
	AdvanSix Inc.
	KS
	Kapstone Paper and Packaging Corporation

	AVD
	American Vanguard Corporation
	KWR
	Quaker Chemical Corporation

	BCC
	Boise Cascade Company
	LXU
	LSB Industries, Inc.

	BCPC
	Balchem Corporation
	MTRN
	Materion Corporation

	CCC
	Calgon Carbon Corporation
	MYE
	Myers Industries, Inc.

	CENX
	Century Aluminum Company
	NGVT
	Ingevity Corporation 

	CLW
	Clearwater Paper Corporation
	NP
	Neehah, Inc.

	DEL
	Deltic Timber Corporation
	RYAM
	Rayonier Advanced Materials Inc.

	FF
	FutureFuel Corporation
	SCL
	Stepan Company

	FTK
	Flotek Industries, Inc.
	SHLM
	A. Schulman, Inc.

	FUL
	H.B. Fuller Company
	SWM
	Schweitzer-Mauduit International, Inc.

	GLT
	P. H. Glatfelter Company
	SXC
	SunCoke Energy, Inc.

	HAYN
	Haynes International, Inc.
	TG
	Tredegar Corporation

	HWKN
	Hawkins, Inc.
	TMST
	TimkenSteel Corporation

	IOSP
	Innospec Inc.
	USCR
	U.S. Concrete, Inc.

	IPHS
	Innophos Holdings, Inc.
	ZEUS
	Olympic Steel, Inc.

	KOP
	Koppers Holdings Inc.

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