Document:

<PAGE>   1
                                                                   Exhibit 10.13

                                                               January 1, 2000

Mr. George T. Haymaker, Jr.
President and Chief Executive Officer
Kaiser Aluminum Corporation
5847 San Felipe, Suite 2600
Houston, Texas 77057

         RE:      DIRECTOR AND NON-EXECUTIVE CHAIRMAN AGREEMENT

Dear George:

         Reference is hereby made to the oral agreement that in October, 1999
was entered into by and between the Boards of Directors (the "Boards") of Kaiser
Aluminum Corporation ("KAC"), Kaiser Aluminum & Chemical Corporation ("KACC")
and you regarding the terms and conditions upon which you are to serve as a
Director and non-executive Chairman of the Boards for the period commencing
immediately after your retirement from employment by KACC in December, 1999, and
ending on the date of the annual meeting of shareholders of KAC in May, 2001.
The purpose of this letter agreement is to set forth and memorialize the terms
and conditions of our oral agreement. The terms and conditions of our agreement
are set forth below.

         1.       The Boards hereby engage you and you hereby agree to perform
                  services as a Director and non-executive Chairman of the
                  Boards of KAC and KACC.

         2.       In addition to your duties as a Director of the Boards, you
                  shall devote up to forty (40) hours each calendar month to the
                  affairs of KAC and KACC as directed by the Chief Executive
                  Officer (or acting Chief Executive Officer) of KAC and KACC,
                  with particular focus on assisting with implementation of
                  strategic plans that have been developed (or will be
                  developed) for KAC and KACC.

         3.       The term of this letter agreement shall commence on the date
                  immediately after the date of your retirement from employment
                  by KACC in December, 1999, and will expire on the date of the
                  annual meeting of shareholders of KAC in May, 2001, unless
                  earlier terminated by (i) your death or disability (as defined
                  in KAC's Long Term Disability Plan that covers executives and
                  directors of KAC), (ii) for cause (as defined below) or (iii)
                  the mutual agreement of the parties hereto. For purposes of
                  this letter agreement, the term "cause" shall mean:

                  (i)      Your conviction for, or plea of nolo contendere to,
                           a felony; or

                  (ii)     Your commission of an act involving fraud or
                           intentional dishonesty, which act is intended to
                           result in substantial personal enrichment at the
                           expense of KAC or any of its subsidiaries; or

                  (iii)    Your material breach of any material provision of
                           this letter agreement which remains uncorrected for
                           30 days after written notice from the Boards or the
                           Chief Executive Officer and an opportunity to
                           correct; or

                  (iv)     Your knowing and willful misconduct in the
                           performance of your duties, which continues for 30
                           days after written notice from the Board or the Chief
                           Executive Officer and which results in material
                           injury to the reputation, business or operation of
                           KAC or any of its subsidiaries.

         The existence of "cause" shall be determined by an affirmative vote of
         not less than two-thirds of the members of each of the Boards. If the
         requisite affirmative vote by two-thirds of the members of each of the
         Boards is not obtained, this letter agreement may not be terminated for
         cause.

         4.       Your base compensation for services as a Director and
                  non-executive Chairman of both Boards shall be at a rate of
                  $250,000 for a full twelve consecutive month year, which
                  shall include an amount of $40,000 per year representing base
                  Director's fees, which may be deferred as described in
                  paragraph 5, and any amounts due for performance on any
                  Committees of the Boards, including the Executive Committee.
                  Absent any deferrals as described in paragraph 5, base
                  compensation shall be paid in cash in quarterly increments of
                  $62,500 during the first month following the completion of
                  the quarter in which fees were earned.  Notwithstanding the
                  immediately preceding sentence, but subject to the following
                  provisions of paragraph 5, with respect to the final quarter
                  of the term of this letter agreement in which this letter

<PAGE>   2

                  agreement shall expire or terminate, the parties hereby
                  expressly agree that you shall be entitled to a pro rata
                  portion of the $62,500 quarterly increment determined by
                  multiplying such amount by a fraction, the numerator of which
                  shall be the number of hours in which you performed services
                  hereunder and the denominator shall be 120 hours.  You shall
                  be solely liable and responsible for complying with all laws,
                  rules and regulations regarding timely payment of applicable
                  taxes including, without limitation, federal and state
                  income, self-employment and/or disability taxes that may
                  apply to such compensation.

         5.       Some or all of the following amounts attributable to your fees
                  as a Director may be deferred at your option into a "phantom
                  stock" and/or interest-bearing account to the same extent as
                  other Directors of KAC and KACC are permitted an election to
                  do so. Your deferral rights hereunder pertain to the $10,000
                  in quarterly payments of Director's fees as shall be due in
                  cash following the relevant calendar quarter for required
                  services rendered for an entire calendar quarter.
                  Notwithstanding the immediately preceding sentence, with
                  respect to the final quarter of the term of this
                  letter agreement in which this letter agreement shall expire
                  or terminate, the parties agree that you shall be entitled to
                  a pro rata portion of the $10,000 quarterly Director's fees
                  determined by the portion of the quarter in which you serve as
                  a Director.

         6.       You will be paid incentive compensation with a target amount
                  of $50,000 upon KAC's achievement of such benchmark or
                  benchmarks as shall be determined in the discretion of the
                  Board.  Any such incentive compensation for the year 2000
                  shall be paid in cash in the first calendar quarter of 2001.
                  Any such incentive compensation for 2001 shall be paid in
                  cash in the third quarter of 2001.  Notwithstanding the
                  immediately preceding sentence, the parties agree that any
                  such incentive compensation for a year in which this letter
                  agreement shall expire or terminate shall be determined by
                  multiplying the full amount of incentive compensation for the
                  year by a fraction, the numerator of which is the number of
                  hours in which you performed services hereunder and the
                  denominator of which shall be 480 hours.  You shall be solely
                  liable and responsible for complying with all laws, rules and
                  regulations regarding timely payment of applicable taxes
                  including, without limitation, federal and state income,
                  self-employment and/or disability taxes that may apply to any
                  such incentive compensation payment or payments.

         7.       In order to further assure that your interests are aligned
                  with those of KAC's and KACC's stockholders, and in order to
                  ensure that your right to exercise the options described below
                  is not adversely affected by your agreement to serve as
                  non-executive Chairman of the Board, the following stock
                  option agreements are hereby amended as set forth below.

                  a.       Each of the agreement evidencing an option grant
                           made as of May 18, 1993 and dated August 1993
                           pursuant to which you were granted an option to
                           purchase 100,000 shares of common stock of KAC under
                           the Kaiser 1993 Omnibus Stock Incentive Plan (the
                           "1993 Plan") and the agreement evidencing an option
                           grant made as of December 21, 1994 and dated April
                           1995 pursuant to which you were granted an option to
                           purchase 26,700 shares of common stock of KAC under
                           the 1993 Plan, is amended by providing at the end of
                           the fifth paragraph thereof the following sentence:

                                    Solely for purposes of this letter
                                    agreement, your employment shall not be
                                    deemed to have terminated during any period
                                    of time you serve as the salaried Chairman
                                    of the Board of Directors of the Company,
                                    whether or not you serve as an officer of
                                    the Company or hold any other position with
                                    the Company.

                  b.       Each of the agreement effective as of January 1, 1998
                           pursuant to which you were granted an option to
                           purchase 283,000 shares of KAC common stock under the
                           Kaiser 1997 Omnibus Stock Incentive Plan (the "1997
                           Plan") and the agreement effective as of January 1,
                           1998 pursuant to which you were granted an option to
                           purchase 386,000 shares of KAC common stock under the
                           1997 Plan, is amended by amending the introductory
                           sentence of Paragraph 6 thereof to read in its
                           entirety as follows:

                                            6. Termination of Optionee's
                                    Employment. Termination of Optionee's
                                    employment with KAC or any Subsidiary (as
                                    defined in Attachment A), and any branch,
                                    unit or division of KAC or any Subsidiary

<PAGE>   3

                                    (the "KAC Group") ("Employment") prior to
                                    March 1, 2001 shall affect Optionee's rights
                                    under the Stock Option as provided in this
                                    Section 6. Solely for purposes of this Stock
                                    Option Grant (including Section 4 hereof),
                                    Optionee's Employment shall be deemed to
                                    have been terminated on the later of the
                                    date: (i) Optionee no longer serves as a
                                    regular full-time salaried employee of any
                                    member of the KAC Group; and (ii) Optionee
                                    no longer serves as the salaried Chairman of
                                    the Board of Directors of the Company.

         8.       The relationship between the parties shall be that of
                  independent contracting parties and shall not constitute or be
                  deemed for any purpose to be that of employer and employee.
                  The Boards and KAC and KACC expressly acknowledge and agree
                  that neither shall have the right to direct you with respect
                  to the means or manner in which you fulfill your obligations
                  and responsibilities under this letter agreement. The Boards
                  and KAC and KACC are solely interested in the results obtained
                  by you in connection with your performance of services
                  required hereunder.

         9.       The parties hereby agree that the following provisions shall
                  generally govern this letter agreement.

                  a.       The compensation to which you may be entitled
                           hereunder shall not be subject to your debts or other
                           obligations and shall not be subject in any manner to
                           anticipation, alienation, sale, transfer, assignment,
                           pledge, encumbrance, attachment, garnishment, or
                           other legal or equitable process.

                  b.       This letter agreement shall not be construed to
                           confer upon you any right to receive any, or any
                           particular rate of, base or incentive compensation
                           for services rendered hereunder (other than the base
                           and incentive compensation payable under this letter
                           agreement).

                  c.       This letter agreement contains the entire
                           understanding and agreement between the parties with
                           respect to the subject matter hereof. Accordingly,
                           this letter agreement supersedes any and all other
                           agreements, contracts, plans or other arrangements
                           by, between, among or involving you and KAC and KACC
                           whereunder you are to serve as a Director and
                           non-executive Chairman of KAC and KACC.

                  d.       This letter agreement may not be amended, modified
                           or supplemented in any respect except by a
                           subsequent written agreement entered into by both
                           parties.

                  e.       This letter agreement may not be terminated prior
                           to expiration of the specified term except as
                           otherwise provided in Paragraph 3 hereof.

                  f.       This letter agreement shall be binding upon, and
                           shall inure to the benefit of, KAC and its successors
                           and assigns, KACC and its successors and assigns, and
                           you and your heirs, executors, administrators and
                           personal representatives.

                  g.       No term or condition of this letter agreement shall
                           be deemed to have been waived, nor shall there be an
                           estoppel against the enforcement of any provision of
                           this letter agreement, except by written instrument
                           of the party charged with such waiver or estoppel.
                           Any waiver by either party hereto of a breach of any
                           provision of this letter agreement by the other party
                           shall not operate or be construed as a waiver by such
                           party of any subsequent breach thereof.

                  h.       In the event that any provision of this letter
                           agreement is declared invalid and not binding on the
                           parties hereto in a final decree or order issued by a
                           court of competent jurisdiction, such declaration
                           shall not affect the validity of the other provisions
                           of this letter agreement to which such declaration of
                           invalidity does not relate and such other provisions
                           shall remain in full force and effect.

                  i.       Any notice required or permitted to be given under
                           this letter agreement shall be sufficient if in
                           writing and hand-delivered with appropriate proof of
                           same, or sent by registered or certified mail, return
                           receipt requested, to the affected party or other
                           person or entity at the address last furnished by
                           such party, person or entity. Such notice shall be
                           deemed given as of the date of delivery or, if

<PAGE>   4

                           delivery is made by mail, as of the date shown on the
                           postmark on the receipt for registration or
                           certification.

                  j.       This letter agreement shall be governed and
                           construed in accordance with the laws of the state
                           of Texas, without regard to principles of choice
                           of law.

         If the foregoing accurately sets forth your understanding of our
agreement on the matters set forth herein, please indicate acceptance of this
letter agreement by signing this letter agreement in the space indicated below.

                                          Very truly yours,

                                          KAISER ALUMINUM CORPORATION

                                          By:  /S/ RAYMOND J. MILCHOVICH
                                          Printed Name:  Raymond J. Milchovich
                                          Title:  President, CEO and COO

                                          KAISER ALUMINUM & CHEMICAL
                                          CORPORATION

                                          By:  /S/ RAYMOND J. MILCHOVICH
                                          Printed Name:  Raymond J. Milchovich
                                          Title:  President, CEO and COO

         Accepted and Agreed to as of the 22nd day of January, 2000.

                                               /S/ GEORGE T. HAYMAKER, JR.
                                          Printed Name:  George T. Haymaker, Jr.
                                          Title:  Chairman of the Board<PAGE>   1
                                                                   Exhibit 10.26

April 15, 1999

Mr. Jack Hockema
30041 Saddleridge Drive
San Juan Capistrano, CA 92675

Dear Jack:

This letter will extend your current Employment Agreement for two years beyond
the current expiration date of December 31, 1998 to December 31, 2000. Also,
your Employment Agreement will be modified as outlined below:

-        Your annual base salary will be raised to two hundred sixty-five
         thousand dollars ($265,000) effective January 1, 1999.

-        You will participate in the Engineered Products Business Unit 1999 and
         2000 annual incentive plans with an annual target incentive opportunity
         of one hundred thirty-five thousand dollars ($135,000) and will not
         participate in the EVA incentive compensation arrangement set forth in
         your Employment Agreement.

-        You will participate in the Engineered Products 1997-1999 and 1998-2000
         Long-Term incentive plans, with an incentive target opportunity of two
         hundred thousand dollars ($200,000) and will not participate in the EVA
         incentive compensation arrangement set forth in your Employment
         Agreement.

-        For both the annual and long-term incentive plans the Engineered
         Products plan multiplier will be used to calculate your award, however
         your target will not affect the award pool as it applies to other
         participants.

-        Your automobile allowance will be increased to nine hundred dollars
         ($900) per month, effective January 1, 1999.

-        The "Growing the Business Bonus" will be modified per Attachment I to
         provide a method for calculating a lump sum payment in the event of a
         transfer or sale of all or substantially all of the assets of the
         Engineered Products to a party not controlled by MAXXAM, Kaiser
         Aluminum Corporation or Kaiser Aluminum & Chemical Corporation. In
         cases other than a sale or transfer, the "Growing the Business Bonus"
         will be applied as set forth in your Employment Agreement.

-        For clarification purposes in calculating the "Growing the Business
         Bonus" as it pertains to Attachment I and your Employment Agreement,
         Engineered Products Ebit and net assets will be the reported Ebit and
         net assets adjusted as follows:

                  (a)      Certain 1997 AKW and restructuring adjustments
                  (b)      Amortization of Newark strike costs from 8/15/98
                           through 8/15/2001

-        You will participate in the "Enhanced Severance Protection and Change
         of Control Benefits Program" as described in the letter set forth in
         Attachment II.

Except for the above modifications, all other conditions of your Employment
Agreement remain unchanged.

Sincerely,                               Agreed To and Accepted By:

/S/ Raymond J. Milchovich                /S/ Jack A. Hockema
Raymond J. Milchovich                    Printed Name  Jack A. Hockema
President and Chief Operating Officer    Title Vice President, President EP
                                         Date 4-18-99

                                  ATTACHMENT I

If during the period January 1, 1999 through December 31, 2000 all or
substantially all of the assets of the Engineered Products Business Unit are
sold to a party not controlled by MAXXAM, Kaiser Aluminum Corporation or Kaiser
Aluminum & Chemical Corporation, the "Growing the Business Bonus" will be
calculated as follows:

-        The performance through the date of the sale or transfer shall be
         determined as follows. Note that the "plan" amounts are the specific
         threshold, target and maximum amounts or percentages, for both
         Engineered Products and KAC, as agreed to in the original 1996
         agreement. Refer to Example I.

-        If the sale or transfer is in the year 1999, performance will be
         determined based on the ratio of actual year to date 1999 performance
         to plan for Engineered Products (EP) EBIT, EP EBIT RONA and KAC EBIT
         RONA, and applied to the remainder of the 1999 and 2000 year periods.
         The average multiple is determined after applying such ratio to the
         plan for each of the components, for each of the years.

-        If the sale or transfer is in the year 2000, performance will be
         determined as: (a) for the year 1999, the actual performance against

<PAGE>   2

         plan for EP EBIT, EP EBIT RONA and KAC EBIT RONA; (b) for the year 2000
         the ratio of actual year to date EP EBIT, EP EBIT RONA and KAC EBIT
         RONA, is applied to the remainder of the 2000 year. The average
         multiple is determined based on the actual performance against the plan
         for the year 1999 and the applied performance against the plan for the
         year 2000.

                                    EXAMPLE I
J. Hockema - 1999 Agreement - "Growing the Business Bonus" Example For
Illustration Only

<TABLE>
<CAPTION>

                                       EP         EP EBIT       KAC EBIT
                                      EBIT         RONA           RONA        Totals
<S>                               <C>           <C>           <C>           <C>
Plan - 1999                       $    65.0          20.0%           8.0%
Plan - 2000                       $    85.0          20.0%          11.0%
Net Assets                                      $   240.0     $  1,600.0

SCENARIO 1 - SELL 6/30/99
Estimated Actual to 6/30/99       $    25.0          10.4%           3.0%
Plan at 6/30/99                   $    32.5          10.0%           4.0%
Ratio Actual to Plan                   76.9%        104.0%          75.0%

"Applied" Performance 1999        $    50.0          20.8%           6.0%     ratio x plan
"Applied" Performance 2000        $    65.4          20.8%           8.3%     ratio x plan
Award multiple 1999                   0.750         1.080          0.461         (1)
Award multiple 2000                   0.778         1.080          0.666         (1)

Average multiple 1999 - 2000          0.764          1.08          0.564
Weighting                                25%           25%            50%
Total weighted multiple               0.191          0.27          0.282            0.743
Target                                                                      $       600.0
Total Award                                                                 $       445.8

SCENARIO 2 - SELL 6/30/00
Estimated Actual 1999             $    50.0          20.8%           6.0%    assume same as above
Award multiple 1999                   0.833         1.080          0.461         (1)

Estimated Actual to 6/30/00       $    34.0          14.2%           4.0%
Plan at 6/30/00                   $    42.5          10.0%           5.5%
Ratio Actual to Plan                   80.0%        142.0%          72.7%
"Applied" Performance 2000        $    68.0          28.4%           8.0%     ratio x plan
Award multiple 2000                   0.811         1.925          0.666         (1)

Average multiple 1999 - 2000          0.822         1.503          0.564
Weighting                                25%           25%            50%
Total weighted multiple               0.206         0.376          0.282            0.864
Target                                                                      $       600.0
Total Award                                                                 $       518.4
</TABLE>

(1)      As per original agreement - plan EP EBIT RONA 1999 is $65 million, and
         2000 is $85 million. EP EBIT RONA plan target is 20%. KAC EBIT RONA
         scale based on award matrix C from original Corporate Lti programs
         (with 15% as plan target), and multiple based on actual performance
         against that year's plan performance.

                                  ATTACHMENT II

                                  April 15,1999

Mr. Jack Hockema
30041 Saddleridge Drive
San Juan Capistrano, CA 92675

Dear Jack:

I am pleased to inform you that you have been selected for coverage under the
Enhanced Severance Protection and Change of Control Benefits Program ("Plan")
for selected corporate officers.

As you know, Kaiser Aluminum is pursuing a strategy that could lead to various
forms of corporate restructuring. In that connection, the Plan was developed and
is being made available to selected key officers. The purposes of the Plan
include all of the following:

        -         Retention of top-performers and those with critical skills
                  both pre and post restructuring;

        -         Provision of appropriate protection to business unit
                  management in the event of job loss and/or a change of
                  control,1 and

        -         Maintenance of focus by management on key goals and
                  maintenance of overall energy level through a potentially
                  distracting period.

<PAGE>   3

This letter sets forth the basic provisions of the Plan which, subject to the
limits explained below, is being offered to you in conjunction with other
benefits that otherwise may be payable to you under the Kaiser Aluminum
Termination Payment and Benefits Plan Continuation Policy ("Policy"). For
example, if you become eligible for 6 months under the enhanced severance part
of the Plan and you already have earned 3 months severance under the Policy, you
would receive 3 months severance from the Policy and 3 months severance from the
Plan.

The Plan will be in effect through the end of the 2000 calendar year, unless
earlier amended or terminated by the Compensation Committees or Boards of
Directors of Kaiser Aluminum Corporation and Kaiser Aluminum & Chemical
Corporation. No amendment or termination of the

Plan will adversely affect your right to receive benefits provided under the
Plan without your written consent. After the year 2000, management will
determine the need for any other protection or enhanced severance programs.

--------
(1)  See page 3 for definition of "change of control".

ENHANCED SEVERANCE PROTECTION
Under the enhanced severance protection features of the Plan, you will qualify
for such severance benefits if you are terminated for any reason except for the
following exclusions:

         1.       You voluntarily resign or retire.

         2.       You are discharged for serious cause or other reason
                  prejudicial to Kaiser Aluminum.

         3.       You are eligible for sick leave, LTD or KRP full early
                  disability benefits. Or, you were eligible for sick leave or
                  LTD benefits and (i) you did not report back to work
                  immediately after your eligibility for such benefits ceased,
                  or (ii) you were not medically released to work at the time
                  such benefits ceased.

         4.       You refuse to accept another suitable position with Kaiser
                  Aluminum. Suitability is determined in accordance with
                  guidelines established from time to time by the personnel
                  policy committee.

         5.       You terminate employment on account of death.

In the event that your employment terminates and you qualify for enhanced
severance protection under the Plan, such benefits will be as follows:

         -        12 months base salary,

         -        Prorated incentive awards (prorated incentive target for all
                  short and long term incentive programs in progress at
                  termination).

         -        Continuation of your coverage under medical, dental, life and
                  AD&D coverage by Kaiser Aluminum(2) as if your employment had
                  continued uninterrupted for up to 12 months. You must continue
                  to pay your monthly medical and life insurance contributions
                  (if any) for this coverage to remain in effect.

         -        Payment of your automobile allowance for the number of the
                  severance months.

CHANGE OF CONTROL

In the event that your employment terminates or constructively terminates
(described below), due to a change of control or significant restructuring,
during a period which commences ninety (90) days prior to a change of control or
significant restructuring and ends on the first anniversary of such change of
control or significant restructuring, in lieu of the enhanced severance
protection benefits described above, you will qualify for change of control
benefits.

--------
(2) As you will not actually be an active employee, your coverage under the
cafeteria plan, spending accounts for medical and dependent care expense
reimbursement and the LTD Plan will cease. Your eligibility for COBRA coverage
will commence after the medical continuation benefits cease, and the medical
continuation period is subtracted from your COBRA eligibility period.

Change of control or significant restructuring is defined as: The transfer of
all or part of the assets of, or the merger, consolidation or reorganization of,
Kaiser Aluminum to or with another organization or the transfer of all or part
of the stock of Kaiser Aluminum to another organization.

These benefits are payable as described below, if you are terminated or
constructively terminated due to a change of control or significant
restructuring, except for the following exclusions:

<PAGE>   4

         1.       The purchaser or new controlling entity or Kaiser Aluminum
                  offers you suitable employment in substantially the same
                  capacity and at your current level of compensation. This
                  exception will apply regardless of whether you accept or
                  reject the suitable position.

         2.       You voluntarily resign or retire.

         3.       You are discharged for serious cause or other reason
                  prejudicial to Kaiser Aluminum.

         4.       You are eligible, within the 90 days prior to a change of
                  control, for sick leave, LTD or KRP full early disability
                  benefits. Or, you were eligible for sick leave or LTD benefits
                  and (i) you did not report back to work immediately after your
                  eligibility for such benefits ceased, or (ii) you were not
                  medically released to work at the time such benefits ceased.

         5.       You terminate employment on account of death.

The change of control benefits under the Plan will be as follows:

         -        24 months base salary,

         -        Prorated incentive awards (prorated incentive target for all
                  short and long term incentive programs in progress at
                  termination).

         -        Continuation of your coverage under medical, dental, life and
                  AD&D coverage by Kaiser Aluminum(3) as if your employment had
                  continued uninterrupted for up to 24 months. You must
                  continue to pay your monthly medical and life insurance
                  contributions (if any) for this coverage to remain in effect.

         -        Payment of your automobile allowance for the number of the
                  severance months.

--------
(3) As you will not actually be an active employee, your coverage under the
cafeteria plan, spending accounts for medical and dependent care expense
reimbursement and the LTD Plan will cease. Your eligibility for COBRA coverage
will commence after the medical continuation benefits cease, and the medical
continuation period is subtracted from your COBRA eligibility period.

For purposes of the Plan, you will be deemed to be constructively terminated if:

         -        You are demoted, suffer a substantial reduction of position
                  responsibilities or a substantial change in reporting
                  responsibilities or reporting level;

         -        You are relocated more than fifty (50) miles from your present
                  office location, except for a promotion and / or mutually
                  agreed transfer; or

         -        You suffer a reduction of your base salary and / or total
                  incentive opportunity.

Payments of base salary and prorated incentive awards under the Plan shall be
made (net of withholding for federal, state and local taxes) in a single sum in
cash within thirty (30) days following your termination or constructive
termination of employment. You will be responsible for timely payment of any
additional taxes that may be due on the benefits received under the Plan. Should
you feel that you have reason to contest any settlement under the Plan, you may
do so by following the same procedures as apply to the Company's other severance
pay plans, as such claims procedures are incorporated in the Plan by this
reference.

Kaiser Aluminum shall have the sole discretion to determine which employees
shall participate in the Plan and their level of participation. Kaiser Aluminum
also has the authority to construe, interpret and implement the Plan (including
the right to make factual determinations) and to make rules and otherwise
administer the Plan, and its determination on any matter relating to the Plan
shall be conclusive and binding on all interested persons. To the extent not
preempted by federal law, the Plan shall be construed in accordance with and
governed by the laws of the State of Texas.

As part of your enhanced severance and benefit eligibility under the Plan for
the one year period following the termination of your employment, you shall not,
without prior written consent of Kaiser Aluminum, directly or indirectly engage
in the business of developing products competitive with Kaiser Aluminum within
the United States of America or any other geographical area served by Kaiser
Aluminum. Nor will you engage, within this geographical area, in the design,
development, distribution, manufacture, assembly or sale of a product or service
in competition with any product or service currently marketed or planned by
Kaiser Aluminum to the extent such activity would reveal the plans, designs or
specifications disclosed to you by Kaiser Aluminum. This paragraph does not
restrict your ownership of securities in any enterprise or participation in the
management of any non-Kaiser competitive aspect of any enterprise. By signing

<PAGE>   5

this letter in the space provided, you acknowledge that these prohibitions are
both reasonable as to time, geographical area and scope of activity and do not
impose a restriction greater than is necessary to protect Kaiser Aluminum's good
will, proprietary information and business interests. Additionally, your
signature below acknowledges your continued commitment to abide by the terms of
paragraphs 2, 3, 4, 5, 6 and 7 of your Employment Agreement as well as the
Corporate Code of Business conduct and Accompanying Compliance Manuals. If you
have any questions concerning your obligations under either of these documents,
please let me know.

Participation in the Plan will not give rise to any right to continued
employment, shall not in any way prohibit changes in the terms of your
employment and shall not in any way limit the right of Kaiser Aluminum to
terminate your employment at any time for any reason with or without stating
a reason.

Kaiser Aluminum may assign its rights and obligations hereunder. In such event,
such rights and obligations shall inure to the benefit of and shall be binding
upon the successors and assigns of Kaiser Aluminum. Your rights and obligations
hereunder are personal, and such rights and obligations shall not be subject to
voluntary or involuntary assignment or other transfer by you and any attempted
alienation, assignment or other transfer of your rights or obligations hereunder
shall be void and without effect.

I congratulate you on your selection to participate in the Plan. It indicates
your importance to the performance of Kaiser Aluminum. I would also like to
thank you for your dedicated service and contribution to the past success of
Kaiser Aluminum, and look forward to your continued contribution.

If you have any questions regarding the Plan, please feel free to discuss them
with me, or call Bill Edgley, Director, Corporate Human Resources. If the
foregoing is acceptable, please indicate your acceptance by signing the
duplicate copy of this letter and returning the signed copy to the attention of
Bill Edgley at Kaiser Aluminum, 6177 Sunol Blvd., Pleasanton, CA 94566.

Sincerely,

/S/ Raymond J. Milchovich
Raymond J. Milchovich
President and Chief Operating Officer

AGREED TO AND ACCEPTED BY:

/S/ Jack A. Hockema
Printed Name:  Jack A. Hockema
Title:  Vice President, President EP
Dated:  4-18-99

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