Document:

exv10w3

Exhibit 10.3

Performance Shares Award Agreement

Under the Amended and Restated 2006 

Equity and Performance
Incentive Plan

Kaiser Aluminum Corporation

 

 

Kaiser Aluminum Corporation

Amended and Restated 2006 Equity

and Performance Incentive Plan

Performance Shares Award Agreement

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

     Participant: __________________

     Date of Grant: ___________________

     Number of Performance Shares Granted: __________

     End of Performance Period: December 31, 20__

     Management Objectives: The Management Objectives which, if achieved, will result in payment
hereunder are set forth on Exhibit A hereto.

     Formula for Determining Performance Shares Earned: The specific number of Performance Shares
earned hereunder, if any, will be determined based on the level of achievement of the Management
Objectives in accordance with the formula set forth on Exhibit A hereto. Except as
otherwise provided in Section 5 or Section 6 of this Agreement, before the Performance Shares will
be earned and paid, the Committee must certify the level of achievement of the Management
Objectives, which the Committee shall do as soon as practicable after the date set forth under “End
of Performance Period” above and in no event later than December 31 of the calendar year following
the “End of Performance Period” above.

     Performance Vesting Date: The later of (1) the third anniversary of the Date of Grant and (2)
the date on which the Committee certifies the level of achievement of the Management Objectives
specified above (the “Certification Date”), on which the specific number of Performance Shares
earned hereunder, if any, shall become vested and earned.

     
 

     THIS PERFORMANCE SHARES AWARD AGREEMENT, effective as of the Date of Grant set forth above
(this “Agreement”), represents the grant of Performance Shares 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 Performance
Shares granted hereunder. 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.

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     1. Employment with the Company. Except as may otherwise be provided in Sections 5 or 6 of
this Agreement, the Performance Shares granted hereunder are granted on the condition that the
Participant remains an Employee of the Company from the Date of Grant set forth above through (and
including) the Performance Vesting Date.

     2. Account for Performance Shares; Restrictions on Transfer.

	 	(a)	 	The Performance Shares covered by this Agreement are granted to the
Participant effective on the Date of Grant set forth above and are subject to, and
granted upon, the terms, conditions and restrictions set forth in this Agreement and
in the Plan. The Performance Shares granted hereunder shall be earned as set forth
under “Formula for Determining Performance Shares Earned” above. The Performance
Shares granted hereunder shall be credited to a bookkeeping entry in the
Participant’s name established and maintained by the Company until payment or
forfeiture of such Performance Shares in accordance with this Agreement.
	 
	 	(b)	 	Except as may otherwise be provided herein and in the Plan, neither the
Performance Shares granted hereunder nor any right or interest under this Agreement
(including, without limitation, any interest in the Common Shares underlying such
Performance Shares) shall be transferable prior to payment in accordance with
Section 3 of this Agreement other than as contemplated by Section 8 of this
Agreement or by will or the laws of descent and distribution. If Performance Shares
granted hereunder or any right or interest under this Agreement (including, without
limitation, any interest in the Common Shares underlying Performance Shares) are
sold, transferred, pledged, assigned or otherwise alienated or hypothecated, whether
voluntarily or involuntarily, 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 Performance Shares granted hereunder or any right or interest under
this Agreement (including, without limitation, any interest in the Common Shares
underlying Performance Shares), all Performance Shares shall be immediately
forfeited by the Participant and all obligations of the Company under this Agreement
shall terminate.

     3. Payment of Performance Shares.

	 	(a)	 	Each Performance Share granted hereunder that becomes vested and earned
or deemed earned shall entitle the Participant to receive one (1) Common Share,
subject to adjustment in accordance with Section 13 of the Plan.
	 
	 	(b)	 	Except as otherwise provided in Section 5(a) of this Agreement, the
Company shall issue or deliver Common Shares to the Participant to settle vested and
earned Performance Shares granted hereunder as soon as practicable following the
Performance Vesting Date (and in no event later than December 31 of the calendar
year in which the Performance Vesting Date occurs) or, if the Performance Shares are
vested and deemed earned prior thereto upon an event contemplated by Section 5(b),
5(c) or 6 of this Agreement, the date of such event (and in no event later than 2-1/2
months after the end of the calendar year in which such event occurs), with the
applicable vesting date being referred to herein as the “Vesting Date.”
Notwithstanding the foregoing, if the applicable Vesting Date is a date when trading

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	 	 	 	in the Common Shares is subject to a “blackout period” or any other restriction on
trading under the Company’s trading policy, the issuance or delivery to the
Participant of the Common Shares underlying the vested and earned Performance
Shares shall be deferred until the end of such “blackout period” or other
restriction on trading, provided that, in all cases, the Common Shares
underlying the vested and earned Performance Shares shall be issued or delivered to
the Participant no later than (i) if the Performance Shares become vested and
earned on the Performance Vesting Date, December 31 of the calendar year in which
the Performance Vesting Date occurs and (ii) if the Performance Shares become
vested and deemed earned prior to the Performance Vesting Date, 2-1/2 months after
the end of the calendar year in which the applicable Vesting Date occurs.
	 
	 	(c)	 	Except to the extent determined by the Committee and permitted by the
Plan, the Company may not issue or deliver Common Shares to the Participant in
respect of the Performance Shares granted hereunder at a time earlier than otherwise
expressly provided in this Agreement.
	 
	 	(d)	 	The Company’s obligations to the Participant with respect to this
Agreement and the Performance Shares vested and earned hereunder shall be satisfied
in full upon the issuance or delivery of Common Shares in respect of such
Performance Shares.

     4. No Rights as Stockholder; Dividend Equivalents.

	 	(a)	 	The Participant shall have no rights of ownership in the Performance
Shares granted hereunder and shall have no voting or other ownership rights in
respect of the Common Shares underlying the Performance Shares granted hereunder
until the date on which such Common Shares, if any, are issued or delivered to the
Participant pursuant to Section 3 of this Agreement.
	 
	 	(b)	 	So long as the Performance Shares granted hereunder remain outstanding,
if the Company declares a dividend or distribution on the Company’s Common Shares
payable other than in shares of the Company’s capital stock and the record date for
such dividend or distribution occurs prior to the date set forth under “End of
Performance Period” above, the Participant shall be paid, on or as promptly as
practicable after the payment date for such dividend or distribution (and, in any
event, within the same calendar quarter in which such dividend or distribution is
paid), the amount and type of dividend or distribution that the Participant would
have received if the number of Common Shares issuable or deliverable assuming the
Target Performance Shares (as defined in Section 5(a)) are vested and earned had
been issued and outstanding and held of record by the Participant on such record
date. So long as the Performance Shares granted hereunder remain outstanding, if
the Company declares a dividend or distribution on the Company’s Common Shares
payable other than in shares of the Company’s capital stock and the record date for
such dividend or distribution occurs on or after the date set forth under “End of
Performance Period” above but before Common Shares are issued or delivered to the
Participant in settlement of any Earned Performance Shares (as defined in Section
5(a)) pursuant to Section 3 of this Agreement, the Participant shall be paid, on or
as promptly as practicable after the later of the payment date for such dividend

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	 	 	 	or distribution and the date on which such Common Shares, if any, are so issued (and,
in any event, within the same calendar year in which such dividend or distribution
is paid), the amount and type of dividend or distribution that the Participant
would have received if such Common Shares had been issued and outstanding and held
of record by the Participant on such record date. For purposes of the time and
form of payment requirements of Section 409A of the Code, such dividend equivalents
shall be treated separately from the Performance Shares.
	 
	 	(c)	 	The obligations of the Company under this Agreement are unfunded and
unsecured, and the rights of the Participant hereunder will be no greater than those
of an unsecured general creditor. No assets of the Company will be held or set
aside as security for the obligations of the Company under this Agreement.
	 
	 	(d)	 	In the event (i) the Participant ceases to be an Employee of the Company
prior to the Performance Vesting Date and forfeits Performance Shares pursuant to
Section 5(e) of this Agreement or (ii) the Participant forfeits any Performance
Shares pursuant to Section 2(b) or 7 of this Agreement, the Company shall have the
right to demand that all or any portion of dividend or distribution equivalents
theretofore received by the Participant in respect of such forfeited Performance
Shares be repaid to the Company. Furthermore, the Company may, to the extent
permitted by law, set off the amounts payable to it as a result of any such demand
against any amounts that may be owing from time to time by the Company or any
Subsidiary 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 Code.

     5. Termination of Employment.

	 	(a)	 	By Death. In the event the Participant ceases to be an Employee of the
Company by reason of death prior to the date set forth under “End of Performance
Period” above, a number of Performance Shares granted hereunder that would become
vested and earned assuming achievement of the target level of Management Objectives
set forth above and assuming the Participant were an Employee of the Company from
the Date of Grant through (and including) the Performance Vesting Date (“Target
Performance Shares”) shall immediately become 100% vested and deemed earned and the
Company shall issue or deliver the Common Shares underlying the Target Performance
Shares as soon as practicable following the date of death (and in no event later
than 2-1/2 months after the end of the calendar year in which the Participant’s death
occurs) to the Person or Persons that have been named as the Participant’s
beneficiary or beneficiaries, as contemplated by Section 8 of this Agreement, or to
such Person or Persons that have acquired the Participant’s rights to such
Performance Shares by will or the laws of descent and distribution. In the event
the Participant ceases to be an Employee of the Company by reason of death on or
after the date set forth under “End of Performance Period” above but on or before
the Performance Vesting Date, a number of Performance Shares granted hereunder that
would become vested and earned on the Performance Vesting Date assuming the
Participant were an Employee of the Company from the Date of Grant

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	 	 	 	through (and including) the Performance Vesting Date (“Earned Performance Shares”)
shall become 100% vested and earned upon the Performance Vesting Date and the
Company shall issue or deliver the Common Shares underlying the Earned Performance
Shares as soon as practicable following the Performance Vesting Date (and in no
event later than December 31 of the calendar year in which the Performance Vesting
Date occurs) to the Person or Persons that have been named as the Participant’s
beneficiary or beneficiaries, as contemplated by Section 8 of this Agreement, or to
such Person or Persons that have acquired the Participant’s rights to such
Performance Shares by will or the laws of descent and distribution.
Notwithstanding the foregoing, if, in connection with the events contemplated by
the first sentence of this Section 5(a), the Participant’s death or, in connection
with the events contemplated by the second sentence of this Section 5(a), the
Performance Vesting Date occurs on a date when trading in the Common Shares is
subject to a “blackout period” or any other restriction on trading under the
Company’s trading policy, the issuance or delivery to such Person or Persons of the
Common Shares underlying the Performance Shares shall be deferred until the end of
such “blackout period” or other restriction on trading, provided that, in
all cases, the Common Shares underlying the Performance Shares shall be issued or
delivered to such Person or Persons no later than (i) in connection with the events
contemplated by the first sentence of this Section 5(a), 2-1/2 months after the end
of the calendar year in which the Participant’s death occurs or (ii) in connection
with the events contemplated by the second sentence of this Section 5(a), December
31 of the calendar year in which the Performance Vesting Date occurs.
	 
	 	(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)) prior to the
date set forth under “End of Performance Period” above, the Target Performance
Shares shall immediately become 100% vested and deemed earned, and the Company shall
issue or deliver the Common Shares underlying the Target Performance Shares to the
Participant in accordance with Section 3 of this Agreement. In the event the
Participant ceases to be an Employee of the Company by reason of Disability on or
after the date set forth under “End of Performance Period” above but on or before
the Performance Vesting Date, any Earned Performance Shares shall become 100% vested
and earned upon the Performance Vesting Date and the Company shall issue or deliver
the Common Shares underlying the Earned Performance Shares to the Participant in
accordance with Section 3 of this Agreement.
	 
	 	 	 	“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. In
the event the Participant ceases to be an Employee of the Company prior to the date
set forth under “End of Performance Period” above because either (i) the Company or
any of its Subsidiaries terminates such employment for any reason other than for
Cause or other Detrimental Activity or (ii) the Participant terminates his or her
employment for Good Reason, the Target Performance Shares shall immediately

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	 	 	 	become 100% vested and deemed earned and the Company shall issue or deliver the
Common Shares underlying the Target Performance Shares to the Participant in
accordance with Section 3 of this Agreement. In the event the Participant ceases
to be an Employee of the Company on or after the date set forth under “End of
Performance Period” above but on or before the Performance Vesting Date because
either (i) the Company or any of its Subsidiaries terminates such employment for
any reason other than for Cause or other Detrimental Activity or (ii) the
Participant terminates his or her employment for Good Reason, any Earned
Performance Shares shall become 100% vested and earned upon the Performance Vesting
Date and the Company shall issue or deliver the Common Shares underlying the Earned
Performance Shares to the Participant in accordance with Section 3 of this
Agreement.
	 
	 	(d)	 	Retirement. In the event the Participant ceases to be an Employee of the
Company as a result of retirement at or after age 65 and on or before the
Performance Vesting Date, the Performance Shares granted hereunder shall remain
outstanding subject to the forfeiture provisions contained in Sections 2 and 7 of
this Agreement and any Earned Performance Shares shall become 100% vested and earned
upon the Performance Vesting Date, and the Company shall issue or deliver the Common
Shares underlying the Earned Performance Shares to the Participant in accordance
with Section 3 of this Agreement.
	 
	 	(e)	 	For Other Reasons. In the event the Participant ceases to be an Employee
of the Company prior to the Performance Vesting Date for any reason other than the
reasons set forth in Sections 5(a), 5(b), 5(c) or 5(d) of this Agreement, all
Performance Shares granted hereunder and any rights to dividend equivalents related
thereto shall be forfeited by the Participant. The Company shall have the right, at
the sole discretion of the Committee, to determine that all or any portion of the
Performance Shares that would otherwise be forfeited has been vested and earned.

     6. Change in Control. Notwithstanding anything to the contrary in this Agreement, in the
event of a Change in Control of the Company prior to the date set forth under “End of Performance
Period” above and, unless the Participant has ceased to be an Employee of the Company as a result
of retirement at or after age 65 as contemplated by Section 5(d) of this Agreement, while the
Participant continues to be an Employee of the Company, the Target Performance Shares shall become
100% vested and deemed earned and the Company shall issue or deliver the Common Shares underlying
the Target Performance Shares to the Participant in accordance with Section 3 of this Agreement.
In the event of a Change in Control of the Company on or after the date set forth under “End of
Performance Period” above but on or before the Performance Vesting Date, any Earned Performance
Shares shall become 100% vested and earned upon the Performance Vesting Date and the Company shall
issue or deliver the Common Shares underlying the Earned Performance Shares to the Participant in
accordance with Section 3 of this Agreement.

     7. Detrimental Activity. If the Participant, either during employment by the Company or any
Subsidiary or within one (1) year after termination of such employment (or, if termination of such
employment results from retirement at or after age 65 as contemplated by Section 5(d) of this
Agreement, within the period ending one (1) year after the date set forth under “End of Performance

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Period” above), shall engage in any Detrimental Activity, and the Committee shall so find,
forthwith upon notice of such finding, the Participant shall:

	 	(a)	 	Forfeit any Performance Shares granted hereunder;
	 
	 	(b)	 	Return to the Company all Common Shares that the Participant has not
disposed of that were acquired pursuant to this Agreement 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 aggregate 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
time to time by the Company or any Subsidiary 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 Code. For purposes of this Section 7, Common Shares shall be deemed to be acquired pursuant to
this Agreement at such time as they are issued or delivered to the Participant to settle earned
Performance Shares.

     8. 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 shall 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 in accordance with the Participant’s will or the laws of descent and
distribution.

     9. 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 that the Company or any Subsidiary would otherwise
have to terminate the Participant’s employment or other service at any time.

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     10. Miscellaneous.

	 	(a)	 	To the extent applicable, this Agreement and the Plan are intended to
comply with Section 409A of the Code and all provisions of this Agreement and the
Plan shall be administered, construed and interpreted in a manner consistent with
the requirements for avoiding taxes or penalties under Section 409A of the Code. To
the extent that the Performance Shares, or the issuance or delivery of the Common
Shares in respect of the Performance Shares, are subject to Section 409A of the
Code, the Performance Shares shall be awarded, and any Common Shares in respect
thereof shall be issued or delivered, in a manner that will comply with Section 409A
of the Code, including proposed, temporary or final regulations or any other
guidance issued by the Secretary of the Treasury and the Internal Revenue Service
with respect thereto. Notwithstanding any provision of this Agreement to the
contrary, in light of the uncertainty with respect to the proper application of
Section 409A of the Code, the Company reserves the right to make amendments to this
Agreement as the Company deems necessary or desirable to avoid the imposition of
taxes or penalties under Section 409A of the Code. In any case, the Participant
shall be solely responsible and liable for the satisfaction of all taxes and
penalties that may be imposed in connection with this Agreement (including any taxes
and penalties under Section 409 of the Code), and neither the Company nor any
Subsidiary shall have any obligation to indemnify or otherwise hold the Participant
harmless from any or all of such taxes or penalties.
	 
	 	(b)	 	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.
	 
	 	(c)	 	In accordance with Section 19 of the Plan, the Board may terminate, amend
or modify the Plan.
	 
	 	(d)	 	The Participant shall 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 any event under this Agreement.
	 
	 	 	 	The Participant acknowledges that the Company shall have the power and the right to
deduct or withhold from the Participant’s compensation 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 the Participant fail to make
timely payment of all taxes due.
	 
	 	 	 	The Participant may elect, subject to the Plan, the approval of the Committee and
any procedural rules adopted by the Committee, to satisfy the withholding

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	 	 	 	requirement, in whole or in part, by having the Company withhold Common Shares
issuable or deliverable hereunder having an aggregate Market Value per Share on the
date the tax is to be determined equal to the amount required to be withheld.
	 
	 	(e)	 	The Participant shall take all steps necessary to comply with all
applicable provisions with respect to transfers of the Company’s securities imposed
by the Company’s certificate of incorporation, bylaws and insider trading policies
and federal and state securities laws, each as in effect from time to time, in
exercising his or her rights under this Agreement.
	 
	 	(f)	 	All obligations of the Company under the Plan and this Agreement 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.
	 
	 	(g)	 	This Agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware.
	 
	 	(h)	 	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.
	 
	 	(i)	 	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
any Subsidiary relating to the earning or payment of the Performance Shares granted
hereunder, the terms of this Agreement shall control.
	 
	 	(j)	 	Notwithstanding any other provisions of this Agreement, the Company shall
not be required to issue or deliver any Common Shares pursuant to this Agreement on
a date on which such issuance or delivery would violate the Securities Act of 1933,
as amended, or any other applicable federal or state securities laws.
	 
	 	(k)	 	By accepting the grant of Performance Shares contemplated hereby, the
Participant is deemed to be bound by the terms and conditions set forth in the Plan
and this Agreement regardless of whether the Participant executes and delivers to
the Company a copy hereof.
	 
	 	(l)	 	For the avoidance of doubt, Performance Shares which are not vested and
earned hereunder either (i) on the Certification Date based on the level of
achievement of the Management Objectives set forth above or (ii) upon an event
contemplated by Section 5 or 6 of this Agreement, shall be forfeited by the
Participant on the Certification Date or the date of such event, as applicable
(except as otherwise expressly provided). However, the Company shall have the
right, at the sole discretion of the Committee, to determine that all or any portion
of the Performance Shares that would otherwise be forfeited has been vested and
earned.

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     11. 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
similar transaction.
	 
	 	(d)	 	“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 his 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 his 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 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 11(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 11(e)(iii) below;

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	 	(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 11(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 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

11

 

	 	 	 	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 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 11(e)(iii).

	 	(f)	 	“Director” shall mean a member of the Board of Directors of the Company.
	 
	 	(g)	 	“Employee of the Company” means an officer 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, if such written
notice is not 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), any such written notice 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

12

 

	 	(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 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) thereof.
	 
	 	(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).

13

 

     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.

14

 

Exhibit A

Management Objectives

[Specify Management Objectives and set forth the formula and procedures for determining the
number of Performance Shares which will be vested and earned if performance is at or above the
minimum level but falls short of full achievement of the specified Management Objectives.]exv10w4

Exhibit 10.4

2011 Long-Term Incentive

Management Objectives and Formula

	 	 	 

	Management Objective:

	 	The applicable Management Objective is average economic value added
(“EVA”) for 2011, 2012 and 2013 (“Average 2011-2013 EVA”). For each
such year, EVA will equal (1) pre-tax operating income of our core
Fabricated Products business, including corporate expenses for such
year (“PTOI”) less (2) 10% of net assets as of the end of the
immediately preceding year (“Net Assets”). 

In determining EVA for a particular year:

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

	 	•	 	Remove the secondary aluminum and hedging business units
(formerly Primary Products);
	 
	 	•	 	Remove discontinued operations and legacy environmental
accruals;
	 
	 	•	 	Eliminate fresh start adjustments for PP&E value and
intangible assets, including the write-up of pre-emergence goodwill;
	 
	 	•	 	Remove VEBA related assets and liabilities;
	 
	 	•	 	Exclude financing items;
	 
	 	•	 	Exclude capital expenditures in progress;

	 
	 	•	 	Add prorated value of capital projects and acquisitions larger than 1% of prior year Net Assets except to the extent
necessary to avoid over-stating Net Assets;
	 
	 	•	 	Exclude income tax related assets and liabilities;
	 
	 	•	 	Exclude derivative assets or liabilities associated with
Fabricated Products; and
	 
	 	•	 	Address other items as recommended by the Company’s Chief
Executive Officer and approved by our Committee; and

	 	(2)	 	PTOI will be adjusted to:

	 	•	 	Exclude non-cash LIFO inventory charges (benefits) and
respective non-cash metal gains (losses);
	 
	 	•	 	Exclude non-cash mark to market and lower of cost
or market 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 three
calendar years with the first year being the year of the initial
charge if the value exceeds one percent of Net Assets:

	 	•	 	Restructuring charges;
	 
	 	•	 	Gains or losses resulting from asset dispositions;
	 
	 	•	 	Labor stoppage costs; and
	 
	 	•	 	Asset impairment charges,

	 	•	 	Exclude discontinued operations and legacy environmental
income and expenses
	 
	 	•	 	Exclude VEBA income and expense

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

	 	 	 

	 

	 	The 2011 — 2013 average annual EVA target is an amount specified by
the Committee. The payout factor is calculated by dividing the
average annual EVA of each year of the three year performance period
by the average annual target
	 
	 	 
	 

	 	The threshold for vesting performance shares is an annual average
EVA of zero. Payout at the target level (a payout factor of 1) is
50% of the performance shares, 100% of the performance shares are
earned at 2X the average annual EVA target.
	 
	 	 
	Determination of
Number of Performance Shares 

Which Are Earned:

	 	The number of Performance Shares which are earned will be determined
as follows:

	 	•	 	Following the end of each of 2011, 2012 and 2013, the
Committee will certify EVA for such year based on the Company’s
financial statements.
	 
	 	•	 	Following the end of 2013, the Committee will also certify
(1) the Average 2011-2013 EVA and (2) Average 2011-2013 EVA as a
percentage of Target Average 2011-2013 EVA (the “Payout
Multiplier”).
	 
	 	•	 	The number of Performance Shares which are earned will equal
the product (rounded down to the nearest whole number) of (1)
one-half of the number of Performance Shares granted hereunder (the
“Target Performance Shares”) and (2) the Payout Multiplier;
provided, however, such number will not exceed the number of
Performance Shares granted hereunder.

	 	 	 

	 

	 	The Committee will certify the Average 2011-2013 EVA and the Payout
Multiplier not later than March 15, 2014.
	 
	 	 
	Administrative
Provisions:

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

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