8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): March 30, 2007

KAISER ALUMINUM CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	0-52105	94-3030279
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
27422 Portola Parkway, Suite 350
Foothill Ranch, California		92610-2831
(Address of Principal Executive Offices)		(Zip Code)

(949) 614-1740
(Registrant’s telephone number, including area code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 1.01. Entry into a Material Definitive Agreement.

2007 Base Compensation

     Effective March 30, 2007, the Compensation Committee of the Board of Directors of Kaiser Aluminum Corporation (the “Company”) approved the increases in annual base compensation of the Company’s executive officers and senior managers , with such increases to be effective April 1, 2007. The table below sets forth the annual base compensation of the executive officers of the Company identified below (the “Named Executive Officers”) for 2007 and 2006. Daniel Maddox, the Company’s former Vice President and Controller who resigned effective April 1, 2007, did not receive an increase in annual base salary in 2007 and was not eligible to participate in the Company’s incentive compensation programs for 2007.

Name and Position	Year		Base Compensation
Jack A. Hockema		2007	$	758,000
President, Chief Executive Officer and Director		2006	$	730,000
Joseph P. Bellino		2007	$	363,000
Executive Vice President and Chief Financial Officer		2006	$	350,000
John Barneson		2007	$	291,000
Senior Vice President and Chief Administrative Officer		2006	$	280,000
John M. Donnan		2007	$	270,000
Vice President, Secretary and General Counsel		2006	$	260,000

2007 Short-Term Incentive Compensation

     Effective March 30, 2007, the Compensation Committee approved a short-term incentive plan for 2007 (the “2007 STI Plan”). The 2007 STI Plan is designed to reward participants for economic value added (EVA) versus cost of capital of the Company’s core Fabricated Products business, including corporate expenses, with modifiers for safety performance (as measured by the total case incident rate), business unit performance and individual performance. Under the 2007 STI Plan, EVA will equal the Company’s pre-tax operating income (subject to certain adjustments) less a capital charge, calculated as a percentage of the Company’s net assets (subject to certain adjustments). The 2007 STI Plan provides for (1) a threshold performance level below which no payout is made, a target performance level at which the target award is available and a maximum performance level at or above which the maximum payout is available, and (2) minimum and maximum payout opportunities ranging from zero up to three times the target payout amount. The table below sets forth the estimated future payouts that can be earned by each of the Named Executive Officers under the 2007 STI Plan at the threshold, target and maximum performance levels.

Name	Threshold		Target		Maximum
Jack A. Hockema	$	259,615	$	519,230	$	1,557,690
Joseph P. Bellino	$	90,750	$	181,500	$	544,500
John Barneson,	$	65,475	$	130,950	$	392,850
John M. Donnan	$	60,750	$	121,500	$	364,500

     Under the 2007 STI Plan, a pro rata incentive award is earned based on actual eligibility during the performance period if prior to December 31, 2007 a participant (1) dies, (2) retires under “normal” retirement (age 62) or in connection with full early retirement (position elimination), (3) is involuntarily terminated due to position elimination, or (4) becomes disabled. Under the 2007 STI Plan, incentive awards are forfeited for voluntary terminations prior to December 31, 2007. A participant will be entitled to the full payment of his or her award if his or her employment terminates on or after December 31, 2007, unless such participant’s employment is voluntarily terminated by him or her without good reason or by us for cause, in which case he or she would forfeit the award.

     The preceding description of the 2007 STI Plan is a summary and is qualified in its entirety by the Summary of the Kaiser Aluminum Fabricated Products 2007 Short-Term Incentive Plan For Key Managers, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

2007 Long-Term Incentive Compensation

     Effective March 30, 2007, the Compensation Committee approved the following grants of restricted stock and option rights for the Named Executive Officers made on April 3, 2007:

	Number of Shares of		Number of shares of Common Stock for which
Name	Restricted Stock(1)		Option Rights are Exercisable(2)
Jack A. Hockema		13,239		8,037
Joseph P. Bellino		5,041		3,060
John Barneson,		3,844		2,334
John M. Donnan		3,431		2,083

(1)

The restrictions on 100% of the shares of restricted stock granted will lapse on April 3, 2010 or earlier if the Named Executive Officer’s employment terminates as a result of death or disability (or, in the case of Messrs. Hockema and Bellino, retirement), the Named Executive Officer’s employment is terminated by the Company without cause, the Named Executive Officer’s employment is voluntarily terminated by him for good reason or in the event of a change in control of the Company.

(2)

The option rights granted will become exercisable as to one-third of the total number of shares of common stock for which they are exercisable on each of April 3, 2008, April 3, 2009 and April 3, 2010 or earlier if the Named Executive Officer’s employment terminates as a result of death or disability (or, in the case of Messrs. Hockema and Bellino, retirement), the Named Executive Officer’s employment is terminated by the Company without cause, the Named Executive Officer’s employment is voluntarily terminated by him for good reason or in the event of a change in control of the Company. The purchase price payable upon exercise of each option right is $80.01, the closing sale price per share of the Company’s common stock, as reported by the Nasdaq Global Market, Inc. on April 3, 2007.

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     The restricted stock grants and the option rights grants were made pursuant to the Company’s 2006 Equity and Performance Incentive Plan. See Exhibit 99.1 to the Registration Statement on Form S-8 filed by the Company with the Securities and Exchange Commission (the “SEC”) on July 6, 2006 for a copy of the Company’s 2006 Equity and Performance Incentive Plan. The form of Restricted Stock Award Agreement used to evidence the grants made to the Company’s executive officers is attached hereto as Exhibit 10.2 and incorporated herein by reference. This form replaces the form previously adopted and filed as Exhibit 10.12 to the Company’s Current Report on Form 8-K dated June 30, 2006 and filed with the SEC on July 6, 2006. The form of Option Rights Award Agreement used to evidence the grants made to the Company’s executive officers is attached hereto as Exhibit 10.3 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits.

Exhibit
Number	Description
10.1	Summary of the Kaiser Aluminum Fabricated Products 2007 Short Term Incentive Plan for Key Managers.
10.2	Form of Executive Officer Restricted Stock Award Agreement.
10.3	Form of Executive Officer Option Rights Award Agreement.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KAISER ALUMINUM CORPORATION (Registrant)
By :	/s/ John M. Donnan
	John M. Donnan
	Vice President, Secretary and General Counsel

Date: April 5, 2007

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Exhibit Index

Exhibit
Number	Description
10.1	Summary of the Kaiser Aluminum Fabricated Products 2007 Short Term Incentive Plan for Key Managers.
10.2	Form of Executive Officer Restricted Stock Award Agreement.
10.3	Form of Executive Officer Option Rights Award Agreement.

EX-10.1

Exhibit 10.1

Summary of the Kaiser Aluminum Fabricated Products
2007 Short-Term Incentive Plan For Key Managers

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

Purpose of the 2007 Kaiser Aluminum STIP

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

STIP Philosophy

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

Primary Performance Measures

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

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

§	Remove Primary Products
§	Remove Discontinued Operations
§	Eliminate fresh start adjustments
§	Eliminate VEBA assets and liabilities
§	Exclude financing items
§	Exclude capex in progress
§	Add capitalized value of long-term leases
§	Add prorated value of capital projects and acquisitions larger than 1% of prior year Net Assets
§	Others as recommended by the CEO and approved our Compensation Committee of the Board of Directors (the “Compensation Committee”)

o PTOI will be adjusted to:

§	Exclude LIFO adjustments
§	Add back depreciation associated with step-down in property, plant and equipment resulting from the implementation of fresh start accounting
§	Amortize the following non-recurring activities over 36 months if the value exceeds one percent of Net Assets:

• Restructuring charges

• Gains or losses resulting from asset dispositions

• Labor stoppage costs

• Asset impairment charges

• Others as recommended by the CEO and approved our Compensation Committee

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

Individual Performance Criteria — Kaiser Aluminum STIP

• Individual payouts from the 2007 STIP may be adjusted based upon performance against individual objectives and/or business unit performance.

• The business unit modifier allows for a plus or minus 50% of target or award based on the performance of the specific business unit that applies to the individual.

• There are up to four categories based on individual objectives or targets set in the first quarter of each year. Each category allows for an individual modifier of plus or minus 25% of target or award.

Target Incentive

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

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

• The participant’s monetary incentive target amount represents the incentive opportunity when certain financial, safety, operational and individual performance goals are met.

How Incentive Awards Are Determined

• At the end of the year EVA will be determined and used to calculate the Award Multiple.

• Award Multiples calculations are audited by Grant Thornton or other auditor determined by the Compensation Committee.

• The Award Multiple is adjusted within a range of plus or minus 10% based upon TCIR.

• The maximum Award Multiple is 3.0 times target.

• A pool is established based upon the Award Multiple multiplied by the sum of individual monetary incentive targets for the STIP participants.

• Payouts are in cash.

• The entire pool is paid to participants.

STIP Award

• Each participant’s base award is determined as the vested monetary incentive target times Award Multiple.

• Based on EVA and TCIR performance as well as business unit and individual performance, the monetary award can be modified in aggregate up to plus or minus 100% of incentive target or base award.

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

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

Form and Timing of Payment

• Annual monetary incentive awards from the STIP are paid in cash no later than March 15 following the end of the year.

• Award is conditioned on employment on date of payment unless employment is terminated:

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o As a result of death, disability, normal retirement or full early retirement (position elimination);

o Involuntarily by the company without cause; or

o Voluntarily by the employee with good reason

Other Administrative Provisions

• The STIP will be reviewed annually.

• Annual monetary incentive awards paid from the STIP count as additional compensation for purposes of the Company’s Defined Contribution and Restoration Plans but not for other Company benefits.

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

• Retirement or termination: If participant dies or retires under “normal” (age 62), full early retirement (position elimination), or is involuntarily terminated due to position elimination, or becomes disabled, on a date other than December 31 of any year, a pro-rata incentive award is earned based on actual eligibility during the performance period.

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

• Incentive awards are forfeited for all voluntary terminations by the employee without good reason prior to the end of the performance period (December 31).

• Beneficiary designation: In the event of death the deceased participant’s designated beneficiary will receive any payments due under the STIP. If there is no designated beneficiary on file with Human Resources, any amounts due will be paid to the surviving spouse or, if no surviving spouse, to the participant’s estate.

• Non transferability: No amounts earned under the STIP may be sold, transferred, pledged or assigned, other than by will or the laws of descent and distribution until the termination of the applicable performance period. All rights to benefits under the STIP are exercisable only by the participant or, in the case of death, by the participant’s beneficiary.

• The STIP may be modified, amended or terminated by the Compensation Committee at any time. If the plan is terminated, modified or amended, then future payments from the STIP are governed by such modifications or amendments. If terminated, then a prorated award will be determined based on number of months up to termination, and paid before March 15 following the end of the year.

• The STIP constitutes no right to continued employment.

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

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EX-10.2

Exhibit 10.2

[Senior Executive and Manager Grants]

Restricted Stock Award Agreement
Under the 2006 Equity and Performance
Incentive Plan

Kaiser Aluminum Corporation

Kaiser Aluminum Corporation
2006 Equity and Performance Incentive Plan
Restricted Stock Award Agreement

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

     Participant:                                                                                        

     Date of Grant:                                                                                    

     Number of Shares of Restricted Stock Granted:                            

     Purchase Price: $              per share of Restricted Stock

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

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

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

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

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

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

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

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

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

(a)

The Participant waives receipt from the Company of a certificate or certificates representing the shares of Restricted Stock granted hereunder, registered in the Participant’s name and bearing a legend evidencing the restrictions imposed on such shares of Restricted Stock by this Agreement. The Participant acknowledges and agrees that the Company shall retain custody of such certificate or certificates until the restrictions imposed by this Agreement on the shares of Restricted Stock granted hereunder lapse. The Participant acknowledges and agrees that, alternatively, the shares of Restricted Stock granted hereunder may be maintained in book-entry form with instructions from the Company to the Company’s transfer agent that such shares shall remain restricted until the restrictions imposed by this Agreement on such shares lapse. The Participant will provide the Company a duly signed stock power in such form as may be requested by the Company.

(b)

Except as may otherwise be provided herein and in the Plan, the shares of Restricted Stock granted pursuant to this Agreement shall become freely transferable by the Participant on the date and in the amount set forth under the Lapse of Restriction Dates above, subject to all restrictions on transfers imposed by the Company’s certificate of incorporation, bylaws or insider trading policies as in effect from time to time or by applicable federal or state securities laws. Once shares of Restricted Stock granted pursuant to this Agreement are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Participant shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account.

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

     5. Termination of Employment.

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

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

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

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

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

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

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

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

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

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

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

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

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

     11. Miscellaneous.

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

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

12. Definitions.

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

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

(e)

“Change in Control” means the occurrence on or after the date of this Agreement of any of the following events:

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

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

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

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

(ii)

a majority of the Directors are not Incumbent Directors; or

(iii)

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

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

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

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

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

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

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

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

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     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.

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STOCK POWER

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

Date:
	Participant

EX-10.3

Exhibit 10.3

[Senior Executive and Manager Grants]

Nonqualified Stock Option Award Agreement

Under the 2006 Equity and Performance

Incentive Plan

Kaiser Aluminum Corporation

Kaiser Aluminum Corporation
2006 Equity and Performance Incentive Plan
Nonqualified Stock Option Award Agreement

     You have been selected to receive an option to purchase shares (the “Common Shares”) of common stock, par value $0.01 per share (“Common Stock”), of Kaiser Aluminum Corporation, a Delaware corporation (the “Company”), pursuant to the Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan (the “Plan”), as specified below:

Optionee:

Date of Grant:

Number of Common Shares for which Option is Exercisable:

Option Price: $______ per share

     Vesting of Option: Except as hereinafter provided, the Option shall vest and become exercisable as follows:

		Cumulative Number of Shares for
	Number of Shares for Which	Which Option is Exercisable
Date	Option Becomes Exercisable	(assuming no prior exercise)

     THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT, effective as of the Date of Grant set forth above (this “Agreement”), represents the grant of an option to purchase Common Shares by the Company to the Optionee named above, pursuant to the provisions of the Plan (the “Option”).

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

     1. Employment with the Company. Except as may otherwise be provided in Sections 5 or 6 of this Agreement, the Option granted hereunder is granted on the condition that the Optionee remains an Employee of the Company from the Date of Grant through (and including) the date or dates on which the Option vests as set forth in the table above.

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     This grant of the Option shall not confer any right to the Optionee (or any other Optionee) to be granted Option Rights or other Awards in the future under the Plan.

     2. Type of Option. The Option is intended to be a nonqualified stock option and shall not be treated as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

     3. Exercise and Payment of Option.

(a)

To the extent exercisable, the Option may be exercised in whole or in part from time to time. The Option Price shall be payable (i) in cash or by check acceptable to the Company or by wire transfer of immediately available funds, (ii) in Common Shares (excluding shares of Restricted Stock) owned by the Optionee for at least 6 months (which Common Shares shall be valued for such purpose based on the Market Value per Share on the date of exercise), or (iii) by a combination of such methods of payment; provided, however, that the payment method in Common Shares will not be available at any time that the Company is prohibited from purchasing or otherwise acquiring Common Shares.

(b)

To the extent permitted by law, the payment of the Option Price may be deferred and payable by the Optionee from the proceeds of a sale through a bank or broker on a date satisfactory to the Company of some or all of the Common Shares to which such exercise relates.

     4. Termination of Option. Notwithstanding any other provision of this Agreement, the Option shall terminate ten years from the Date of Grant (the “Termination Date”) unless terminated earlier pursuant to Section 5.

     5. Termination of Employment.

(a)	By Death. In the event the Optionee ceases to be an Employee of the Company by reason of death prior to the Termination Date, the unexercised portion of the Option held by the Optionee at the time of death shall become fully vested and immediately exercisable by such Person or Persons as shall have been named as the Optionee’s beneficiary, or by such Persons that have acquired the Optionee’s rights under the Option by will or the laws of descent and distribution. The Option shall terminate on the earlier of (i) the second anniversary of the death of the Optionee and (ii) the Termination Date.
(b)	By Disability. In the event the Optionee ceases to be an Employee of the Company by reason of Disability (as defined in this Section 5(b)) prior to the Termination Date, the unexercised portion of the Option held by the Optionee at the time of disability of the Optionee shall become fully vested and immediately exercisable. The Option shall terminate on the earlier of (i) the second anniversary of the Optionee ceases to be an Employee of the Company by reason of Disability and (ii) the Termination Date.
	“Disability” shall be defined as a total and permanent disability as a result of bodily

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	injury, disease or mental disorder which results in the Optionee’s entitlement to long-term disability benefits under the Kaiser Aluminum Self-Insured Welfare Plan or the Kaiser Aluminum Salaried Employees Retirement Plan.
(c)	Involuntary Termination Other Than for Cause or Detrimental Activity; Termination for Good Reason. In the event the Optionee ceases to be an Employee of the Company prior to the Termination Date because either (i) the Company or any of its Subsidiaries terminates such employment for any reason other than a termination for Cause or other Detrimental Activity or (ii) the Optionee terminates his or her employment for Good Reason, any unexercised portion of the Option shall become fully vested and immediately exercisable. The Option shall terminate on the earlier of (i) the second anniversary of the date on which the Optionee ceases to be an Employee of the Company for any reason set forth in this Section 5(c) and (ii) the Termination Date.
(d)	For Other Reasons. In the event the Optionee ceases to be an Employee of the Company prior to the Termination Date for any reason other than the reasons set forth in Section 5(a), 5(b) or 5(c) of this Agreement prior to the Termination Date, any unvested portion of the Option held by the Optionee at the time of employment termination shall be forfeited by the Optionee. Any portion of the Option that is vested but unexercised prior to the termination of employment pursuant to this Section 5(d), shall terminate on the earlier of (i) the date that is ninety (90) days after the Optionee ceases to be an employee and (ii) the Termination Date.

     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 Termination Date while the Optionee is an Employee of the Company, any unexercised portion of the Option shall become fully vested and immediately exercisable by the Optionee.

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

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

(a)	Forfeit any unexercised portion of the Option;
(b)	Return to the Company, in exchange for payment by the Company of any cash amount actually paid in exercise of any portion of the Option by the Optionee (unless such payment is prohibited by law), all Common Shares that the Optionee has not disposed of that were acquired by the Optionee following exercise of the

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	Option 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 upon exercise of the Option that the Optionee has disposed of, pay to the Company in cash the difference between:

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

To the extent that such amounts are not paid to the Company, the Company may, to the extent permitted by law, set off the amounts so payable to it against any amounts that may be owing from time to time by the Company or a Subsidiary to the Optionee, whether as wages, deferred compensation or vacation pay or in the form of any other benefit or for any other reason.

     9. Beneficiary Designation. The Optionee 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 Optionee’s death before the Optionee receives all of such benefit. Each such designation shall revoke all prior designations by the Optionee, shall be in a form prescribed by the Company, and will be effective only when filed by the Optionee in writing with the Vice President Human Resources of the Company during the Optionee’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Optionee’s death shall be paid to the Optionee’s estate.

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

     11. Adjustments. The Committee may make or provide for such adjustments in the numbers of Common Shares covered by this Agreement, and in the kind of shares covered hereby, as the Committee, in its sole discretion, exercised in good faith, may determine is equitably required to prevent dilution or enlargement of the rights of the Optionee that otherwise would result from (i) any stock dividend, stock split, combination of shares, extraordinary cash dividend, recapitalization or other change in the capital structure of the Company, (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (iii) any other corporate transaction or event having an effect similar to any of the foregoing (collectively, an “Event”). Moreover, in the case of such an Event, the Committee, in its discretion and without the consent of the Optionee, may provide in substitution for the Option such alternative consideration (including cash) or take such other action as it, in good faith, may determine to be equitable in the circumstances.

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12. Miscellaneous.

(a)	This Agreement and the rights of the Optionee 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 Optionee.
(b)	In accordance with Section 19 of the Plan, the Board may terminate, amend or modify the Plan.
(c)	The Optionee shall, not later than the date on which the Option is exercised, pay to the Company or make arrangements satisfactory to the Committee for payment of any federal, state and local taxes (including the Optionee’s FICA obligation), whether domestic or foreign, required by law to be withheld on account of such event. The Optionee acknowledges and agrees that the Company shall have the power and the right to deduct or withhold from Optionee’s compensation an amount sufficient to satisfy federal, state and local taxes (including the Optionee’s FICA obligation), whether domestic or foreign, required by law to be withheld with respect to any event under this Agreement should the Optionee fail to make timely payment of all taxes due. The Optionee may elect, subject to the Plan and any procedural rules adopted by the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold shares purchased upon exercise of the Option having an aggregate Market Value per Share on the date the tax is to be determined, equal to the amount required to be withheld.
(d)	The Optionee agrees to 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 as in effect from time to time and federal and state securities laws in exercising his or her rights under this Agreement.
(e)	All obligations of the Company under the Plan and this Agreement, with respect to the Option, shall be binding on any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company.
(f)	This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware.
(g)	Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Optionee at the address set forth below, or in either case at such address as one party may subsequently furnish to the other party in writing.
(h)	If there is any inconsistency between the terms of this Agreement and the terms of a written employment agreement between the Optionee and the Company or a Subsidiary of the Company (the “Employment Agreement”), the terms of the

5

	Employment Agreement shall completely supersede and replace the conflicting terms of this Agreement; provided that such terms of the Employment Agreement are not inconsistent with the terms of the Plan.
(i)	Neither this Agreement nor the grant of the Option Rights contemplated hereby shall become effective unless and until the Company receives a copy of this Agreement executed by the Participant.

13. Definitions.

(a)	“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(b)	“Board” or “Board of Directors” means the Board of Directors of the Company.
(c)	“Business Combination” means a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation or entity, or other transaction.
(d)	“Cause” means (1) the Optionee’s engaging in fraud, embezzlement, gross misconduct or any act of gross dishonesty with respect to the Company or its affiliates, (2) the Optionee’s habitual drug or alcohol use which impairs the ability of the Optionee to perform his duties with the Company or its affiliates, (3) the Optionee’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 Optionee’s incarceration with respect to any of the foregoing that, in each case, impairs the Optionee’s ability to continue to perform his duties with the Company and its affiliates, or (4) the Optionee’s material breach of any written employment agreement or other agreement between the Company and the Optionee, or of the Company’s Code of Business Conduct, or failure by the Optionee to substantially perform his or her duties for the Company which remains uncorrected or reoccurs after written notice has been delivered to the Optionee demanding substantial performance and the Optionee 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 13(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,

6

	(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 13(e)(iii) below;
(B)	if any Person acquires Beneficial Ownership of 35% or more of combined voting power of the then-outstanding Voting Stock of the Company as a result of a transaction described in clause (A)(1) of Section 13(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

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(iii)

the consummation of a Business Combination, unless, in each case, immediately following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination (other than any voluntary employee beneficiary association established in connection with the POR) or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35% or more of the Voting Stock of the Company so long as such Person does not at such time own, directly or indirectly, more than 1% of the securities of the other corporation or other entity involved in such Business Combination to be converted into or exchanged for shares of Voting Stock of the entity resulting from such Business Combination pursuant to such Business Combination)) beneficially owns, directly or indirectly, 35% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution 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 13(e)(iii).

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

8

effective and the Optionee 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 Optionee’s then position or the assignment of duties and/or responsibilities materially and adversely inconsistent with such position; or
(ii)	Relocation of the Optionee’s primary office location more than fifty (50) miles from the Optionee’s then current office location; or
(iii)	Reduction of greater than 10% in the Optionee’s then base salary or reduction of greater than 10% in the Optionee’s then long term or short term incentive compensation opportunity or a reduction in the Optionee’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).
(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).

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     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 Optionee.

Optionee

Optionee’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.

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