KAISER ALUMINUM & CHEMICAL CORP
RELEASE BETWEEN KERRY A. SHIBA AND KAISER ALUMINUM & CHEMICAL CORPORATION
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>h34232exv10w1.htm
<DESCRIPTION>RELEASE BETWEEN KERRY A. SHIBA AND KAISER ALUMINUM & CHEMICAL CORPORATION
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.1
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>RELEASE</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Release (&#147;Agreement&#148;) is made and entered into this
&#95;&#95;&#95;&nbsp;day of March, 2006, by and
between Kerry A. Shiba, his heirs, executors/administrators, successors, and assigns (collectively
&#147;Shiba&#148;) and the Kaiser Aluminum &#038; Chemical Corporation, its successors, assigns, officers,
directors, shareholders, members, employees, agents, and counsel (collectively &#147;Kaiser&#148;). The
effective date of this Agreement shall be seven (7)&nbsp;calendar days after March &#95;&#95;&#95;, 2006, provided
that Shiba has not exercised his right to revoke the Agreement pursuant to paragraph 13(d) below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, Shiba resigned his employment effective January&nbsp;23, 2006; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, It is the mutual desire of all concerned to settle and resolve any known and unknown
disputes, claims and/or differences under the terms and conditions hereinafter set forth;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE</B>, in consideration of the mutual promises contained in this Agreement, and other
good and valuable consideration, the parties agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Shiba, on behalf of Shiba, Shiba&#146;s successors, administrators, heirs and assigns, hereby
fully releases, waives and forever discharges Kaiser, all of Kaiser&#146;s affiliated companies and
subsidiaries, alter egos, their predecessors, successors, affiliates, assigns, shareholders,
directors, officers, agents, attorneys and employees, whether past, present or future (the
&#147;Released Parties&#148;), from all causes of action, suits, debts, claims, demands, damages, costs,
judgments or liabilities of any nature, including costs and attorneys&#146; fees, which he now has or
may have, whether known or unknown, against Kaiser or any of the Released Parties on account of his
employment with and/or separation of such employment with Kaiser. This release also includes, but
is not limited to, any claim for bonus, severance, change-in-control or other compensation or
benefits; claims under any severance or similar agreement between or among Shiba and Kaiser; any
claim of discrimination or harassment based upon any basis, including race, color, national origin,
religion, sex, age, or disability arising under any federal, state, or local statute, regulation,
ordinance, order, or law, including, without limitation, the Age Discrimination in Employment Act,
as amended; Title VII of the Civil Rights Act of 1964, as amended; the Equal Pay Act; the Americans
with Disabilities Act; the Family and Medical Leave Act; the Older Workers Benefit Protection Act;
the Employee Retirement Income Security Act; the National Labor Relations Act, as amended; the
Civil Rights Acts of 1866 and 1871 (42 U.S.C. &#167;&#167; 1981, 1983, 1985, <U>et. seq.</U>), as amended;
the Civil Rights Act of 1991; any and all claims under federal, state, or local law including,
without limitation, any claim of the existence or breach of an oral, implied, or written contract
of employment; negligent or intentional misrepresentations; wrongful discharge; interference with
contract; defamation; assault and battery; negligent or intentional infliction of emotional
distress; violation of public policy; whistle-blowing; promissory and/or equitable estoppel; and
any other federal, state, or local laws regarding rights or claims relating to employment. Shiba
acknowledges and agrees that this release and the release contained in paragraph 2 are essential
and material terms of this Agreement, and that without such release and covenant not to sue, no
agreement would have been reached by the parties. Shiba also understands and acknowledges the
significance and consequences of this release and this Agreement. Notwithstanding the foregoing
release, Kaiser&#146;s obligations (i)&nbsp;of performance under this Agreement shall continue in full force
and
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">effect in accordance with its terms and (ii)&nbsp;to indemnify Shiba pursuant to the terms of the
indemnity agreements between Kaiser and Shiba shall continue in full force and effect. In
addition, in the event that any legal action against Shiba is initiated by anyone covered by this
release who has otherwise released Shiba under the terms of any agreement between such person and
Kaiser, Shiba shall be free to assert any counterclaims against such person as though this release
did not exist.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;As a condition of Shiba&#146;s willingness to enter into this Agreement, and in consideration
for the agreements of Shiba contained in this Agreement, Kaiser and its past, present and future,
direct and indirect, affiliates, predecessors, successors and assigns, with the intention of
binding itself, its assigns and legal representatives, hereby releases, waives and forever
discharges Shiba from, and hereby acknowledges full accord and satisfaction of, any and all claims,
demands, causes of action, and liabilities of any kind whatsoever (upon any legal or equitable
theory, whether contractual, common law or statutory, under federal, state or local law or
otherwise), whether known or unknown, asserted or unasserted, by reason of any act, omission,
transaction, agreement or occurrence that Kaiser ever had, now has or hereafter may have against
Shiba up to and including the date of the execution of this Agreement; provided, however, that the
release contained in this paragraph shall not release any acts or omissions by Shiba that were
fraudulent or criminal. Kaiser represents that it is unaware of Shiba having engaged in any such
fraudulent or criminal acts. In giving the release contemplated by this paragraph Shibarepresents
that he has not engaged in conduct outside the scope of his duties at Kaiser that could give rise
to any nonfrivolous and good faith claim(s) against Kaiser by a third party and that he is not
aware of any such pending or threatened claims,Kaiser represents that it is unaware of Shiba having
engaged in such conduct (described in the preceding sentence )and is unaware of any such pending
or threatened claims Notwithstanding the foregoing release, Shiba&#146;s obligations of performance
under this Agreement shall continue in full force and effect in accordance with its terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;It is understood and agreed that this is a full and final release applying not only to all
claims as defined in paragraphs 1 ,2 and 3 that are presently known, anticipated or disclosed to
the parties, but also to all claims as defined in paragraphs 1, 2 and 3 that are presently unknown,
unanticipated, and undisclosed to the parties. Shiba and Kaiser hereby each waive any and all
rights or benefits that either party may now have, or may in the future have, under the terms of
California Civil Code Section&nbsp;1542, which provides as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A general release does not extend to claims which the creditor does not know or suspect to
exist in his or her favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Kaiser will pay to Shiba the following amounts, less all authorized deductions and required
legal withholdings:
</DIV>

<DIV style="margin-top: 6pt">
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    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Earned 2005 STI in which Shiba has a vested interest without deduction or
modifiers, based on Kaiser&#146;s results for 2005, with such amount being paid to Shiba no
later than March&nbsp;31, 2006;</TD>
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</DIV>
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<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$141,796.00 representing earned LTI awards for 2002 and 2003, with such amount
being paid to Shiba within three (3)&nbsp;days of the effective date of this Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>An amount equal to Shiba&#146;s 2004 and 2005 earned LTI, without deduction or
modifiers, based on Kaiser results for 2004 and 2005, with such amount being paid to
Shiba no later than March&nbsp;31, 2006;</TD>
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<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$135,000.00 to be paid within three (3)&nbsp;days of the effective date of this
Agreement; and,</TD>
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<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$135,000.00 to be paid on July&nbsp;23, 2006, which payment is contingent on Shiba
fulfilling his obligations under paragraph 12 of this Agreement.</TD>
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</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Kaiser agrees and acknowledges that it has an obligation to pay Shiba for all accrued, but
unused vacation as of January&nbsp;23, 2006, meaning unused vacation for 2005 and vacation accrued in
2006 for 2007. Kaiser shall pay Shiba for 41&nbsp;days of vacation in fulfillment of its vacation
obligations and shall make such payment by February&nbsp;15, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Kaiser will pay Shiba&#146;s COBRA premiums for his medical and dental coverage currently in
effect through the earlier of (i)&nbsp;the date Shiba becomes eligible for comparable medical coverage
under another employer&#146;s health insurance plans or (ii)&nbsp;February&nbsp;28, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Kaiser will continue to pay or reimburse Shiba for the base monthly dues for the membership
at Coto de Caza Golf &#038; Racquet through March&nbsp;31, 2006, at which time Shiba will no longer have
access to such membership and will cooperate with Kaiser to transfer the membership back to Kaiser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Except as otherwise set forth above or as provided in the insurance or benefit plans,
Shiba&#146;s participation in or receipt of any other benefits made available by the Kaiser, including,
but not limited to all insurance programs or plans will terminate effective January&nbsp;23, 2006.
Pursuant to any applicable plan documents, Shiba&#146;s participation in Kaiser&#146;s retirement and/or
401(k) plans terminated effective January&nbsp;23, 2006. Shiba will be entitled to those amounts in
which he is vested, if any, under the terms of the retirement and/or 401(k) plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Kaiser will provide Shiba with favorable performance references that highlight the
accomplishments and successes Shiba achieved that are noted on Exhibit&nbsp;A hereto. Kaiser will
provide Shiba with out-placement services consistent with Kaiser&#146;s existing policies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;The parties agree that they will not disparage, debase or demean each other.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;Shiba represents and warrants that he has returned to Kaiser all Kaiser&#146;s property, books,
lists, records, other documents, and equipment, except for a HP 6L printer and damaged Compaq
laptop computer both of which Kaiser has authorized Shiba to retain. Shiba covenants that should
Shiba at any time discover in his possession any additional items of Kaiser&#146;s property, books,
notes, records, documents or equipment, Shiba will promptly return such property to Kaiser.
</DIV>

<P align="center" style="font-size: 10pt">3
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Shiba agrees to assist and cooperate with Kaiser in the transition of Employee&#146;s projects
and assignments through July&nbsp;23, 2006, and that Kaiser shall fully pay for or reimburse any
reasonable out-of-pocket costs and expenses incurred in these efforts provided that such costs and
expenses are approved in advance by Kaiser. In connection with the foregoing, Kaiser understands
and acknowledges that while Shiba shall endeavor to use his reasonable best efforts to assist and
cooperate in the transition and provide information which he believes to be reliable and relevant,
Shiba shall not have authority to act on behalf of Kaiser nor any liability to Kaiser resulting
from the advice provided by Shiba or use of such information by Kaiser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;Shiba and Kaiser acknowledge that it is their mutual intent that this Agreement complies
with the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection
Act. Accordingly, this Agreement requires, and Shiba acknowledges and agrees that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">(a)&nbsp;By signing this Agreement, Shiba is knowingly and voluntarily waiving his rights
under the Age Discrimination in Employment Act, as amended;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">(b)&nbsp;Kaiser has advised Shiba to consult with an attorney of his choosing regarding
the terms of this Agreement including the waiver of rights, and Shiba has done so;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">(c)&nbsp;Kaiser has given Shiba twenty-one (21)&nbsp;calendar days to consider this Agreement,
and Shiba hereby voluntarily waives the 21-day consideration period;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 5%">(d) (d)&nbsp;Shiba has the right to revoke this Agreement within seven (7)&nbsp;calendar days
of its execution; and Shiba has read and fully understands the terms of this
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;Shiba represents and warrants that he has not filed or instituted any claim, complaint,
charge, or proceeding before any court, administrative agency, or any other tribunal regarding his
employment with Kaiser, the terms and conditions of such employment, the termination of such
employment, or any alleged violation of state, federal, or local law or regulations by Kaiser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;Kaiser represents and warrants that it has not filed or instituted any claim, complaint,
charge, or proceeding before any court, administrative agency, or any other tribunal regarding
Shiba.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;For the one year period following the termination of employment with Kaiser, Shiba agrees
that he will not, without the prior written consent of Kaiser, which shall not unreasonably be
withheld, directly or indirectly, whether as a principal, agent, employee, consultant, contractor,
advisor, representative, stockholder (other than as a holder of an interest of five percent (5%) or
less in the equity of any corporation whose stock is traded on a public stock exchange), or in any
other capacity (i)&nbsp;provide services, advice or assistance to any business, person or entity which
competes with Kaiser directly, as a primary focus of its business, in the United States or in any
other location in which Kaiser operates, in the manufacture, sale or delivery of any materials,
products or services which constitute more than twenty percent (20%) of Kaiser&#146;s revenues in the
prior twelve month period; or (ii)&nbsp;intentionally
</DIV>


<P align="center" style="font-size: 10pt">4
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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">entice, induce or solicit, or attempt to entice, induce or solicit, any individual or entity
having a business relationship with Kaiser, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;Shiba shall keep secret and confidential and shall not disclose to any third party, in any
fashion or for any purpose whatsoever, any information regarding Kaiser which is (i)&nbsp;not available
to the general public, and/or (ii)&nbsp;not generally known outside Kaiser, to which Shiba has or will
have had access at any time during the course of his or her employment by Kaiser, including,
without limitation, any information relating to: Kaiser&#146;s business or operations; its plans,
strategies, prospects or objectives; its products, technology, intellectual property, processes or
specifications; its research and development operations or plans; its customers and customer lists;
its manufacturing, distribution, sales, service, support and marketing practices and operations;
its financial condition and results of operations; its operational strengths and weaknesses; and,
its personnel and compensation policies and procedures. For the avoidance of doubt, the foregoing
obligations do not apply to information that (a)&nbsp;is currently, or becomes, generally available to
the public other than as a result of a disclosure by Shiba in breach of this Agreement, or (b)
Shiba establishes otherwise became available to Shiba from a third party who is not known by Shiba
to have a confidentiality obligation to Kaiser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;In the event Shiba is requested or required, by law, rule, or regulation, or by oral
questions, interrogatories, requests for information or documents, subpoenas, civil investigative
demand or similar process, to disclose any confidential information, Shiba will (unless prohibited
by law) provide Kaiser with prompt notice thereof and provide sufficient information to enable
Kaiser to seek an appropriate protective order or, if Kaiser wishes to do so, waive Shiba
compliance with the pertinent provisions of this Agreement. If, in the absence of a protective
order or the receipt of a waiver hereunder, Shiba is nonetheless, in the reasonable advice of his
counsel, required to disclose any such information, Shiba may disclose such information to the
extent so required. If any phrase, clause, term, item or provision of this Agreement is declared
invalid or unenforceable by a court, administrative agency, or arbitrator of competent
jurisdiction; such phrase, clause, term, item or provision shall be deemed severed from this
Agreement, as applicable, but will not affect any other provisions of this Agreement which shall
otherwise remain in full force and effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;To the maximum extent permitted by law, the parties covenant not to sue or to institute or
cause to be instituted any action in any federal, state or local agency or court against each other
or any of the Released Parties, including, but not limited to, any of the claims released in
paragraphs 1 and 2 of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;Shiba and Kaiser agree that neither Shiba nor the Released Parties admit liability for, or
violation of, any contract, any federal, state or local statute or regulation, or any right
protected under the common law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.&nbsp;Shiba acknowledges that Shiba fully understands his right to discuss this Agreement with
his private attorney, that Shiba has availed himself of this right, that Shiba has carefully read
and fully understands this entire Agreement, and that Shiba is voluntarily entering into this
Agreement.
</DIV>


<P align="center" style="font-size: 10pt">5
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.&nbsp;Shiba agrees that (except in connection with tax reporting, or pursuant to legal process
in any legal action to enforce the terms of this Agreement) Shiba, Shiba&#146;s agents, and Shiba&#146;s
family members shall keep confidential the terms of this Agreement and the allegations asserted by
Shiba. Shiba agrees that if Shiba discloses the terms of this Agreement or the allegations to any
other person, such disclosure will constitute a breach of this Agreement, except, notwithstanding
any provision to the contrary, nothing in this Agreement shall limit Shiba&#146;s obligation to respond
to properly issued subpoenas or requests by government agencies for information or documents, in
which case Shiba shall provide Kaiser with prompt notice to permit Kaiser to seek to quash or
otherwise limit the requests, and with Shiba then responding as required.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.&nbsp;Kaiser agrees that (except in connection with tax reporting, required disclosures under
federal securities laws or pursuant to legal process in any legal action to enforce the terms of
this Agreement) Kaiser and its agents shall keep confidential the terms of this Agreement. Except
as set forth above, Kaiser agrees that if Kaiser discloses the terms of this Agreement to any other
person, such disclosure will constitute a breach of this Agreement, except, notwithstanding any
provision to the contrary, nothing in this Agreement shall limit Kaiser&#146;s obligation to respond to
properly issued subpoenas or requests by government agencies for information or documents, in which
case Kaiser shall provide Shiba with prompt notice to permit Shiba to seek to quash or otherwise
limit the requests, and with Kaiser then responding as required.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.&nbsp;Any notice or communication required or permitted under this Agreement must be in writing
to Shiba at 27550 Glenwood Drive, Mission Viejo, CA 92692and to Kaiser at 27422 Portola Parkway,
Suite&nbsp;350, Foothill Ranch, CA 92610.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.&nbsp;Shiba agrees that this Agreement constitutes the entire understanding between the parties
with reference to the subject matter of this Agreement and all prior negotiations and
understandings, verbal or written, between Shiba and Kaiser, relating to the items and things
referred to in this Agreement have been merged herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.&nbsp;The parties hereto agree that if any covenant, paragraph or clause contained in this
Agreement, other than paragraphs 1 and 2, is declared illegal, null or void, or against public
policy, for any reason, the remaining covenants, paragraphs or clauses contained in this Agreement
shall not be affected thereby. If Shiba brings legal action against Kaiser, and if paragraphs 1
and 2, or any of them, are declared illegal, null or void, or against public policy, Shiba will
return to Kaiser all monies received by Shiba under this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27.&nbsp;Any and all disputes arising out of or in any way related to Shiba&#146;s employment with, or
separation from, Kaiser, as well as any and all disputes or claims arising out of or in any way
related to this Agreement, including, without limitation, fraud in the inducement of this
Agreement, or relating to the general validity or enforceability of this Agreement, shall be
submitted to final and binding arbitration before an arbitrator of the American Arbitration
Association in the County of Orange, State of California, in accordance with the rules of that body
governing employment disputes, and the prevailing party shall be entitled to reasonable costs and
attorneys&#146; fees. Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREFORE</B>, the parties hereto have executed this Agreement in counterpart originals or
otherwise, as of the dates set forth below.
</DIV>
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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>KERRY A. SHIBA</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD colspan="3" valign="top" align="left"><B>KAISER ALUMINUM &#038; CHEMICAL CORPORATION</B></TD>
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    <TD colspan="3" valign="top" align="left">Name: John M. Donnan</TD>
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<P align="center" style="font-size: 10pt">7
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;A<BR>
Kerry Shiba &#151; Items to Note for Performance References</B>
</DIV>


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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upgraded key lending relationships while still undergoing Chapter&nbsp;11 reorganization</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Negotiated and secured $325&nbsp;million exit financing commitments at favorable terms</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Negotiated and secured $200&nbsp;million replacement debtor-in-possession credit facility</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Negotiated and secured 8 key amendments to original debtor-in-possession credit facility</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Key member of core executive team leading successful and highly complex Chapter&nbsp;11 restructuring</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Established and retained key supplier and hedge counterparty unsecured credit support during Chapter&nbsp;11
reorganization</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Key spokesperson in retaining support from existing and new key customers during reorganization; realigned
customer credit strategy resulting in approximately $20&nbsp;million additional revenue</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Led relocation and restructuring of corporate headquarters operations, including outsourcing of tax, risk
management and investor / public relations functions</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Implemented investor and public relations outsourcing</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Key member of 3-person team attracting highly qualified candidates for new board of directors</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Led Sarbanes-Oxley 404 compliance efforts</TD>
</TR>

<TR>
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</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Eliminated company&#146;s poor reputation in key insurance markets resulting in $5&#043; million premium reduction</TD>
</TR>

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<P align="center" style="font-size: 10pt">8
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