April 20, 1999
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Kaiser Aluminum Corporation (the "Company"); Definitive
Proxy Materials
Ladies and Gentlemen:
On behalf of the Company and pursuant to Rule 14a-6(b)
promulgated under the Securities Exchange Act of 1934, as
amended, please find attached the Definitive Proxy Statement
with respect to the 1999 Annual Meeting of Stockholders,
including the Notice of 1999 Annual Meeting, and form of
Proxy. It is intended that these materials will be released
to the Company's stockholders commencing on or about April 21,
1999.
A hard copy of the actual performance graph has been
provided via Federal Express to Charles A. Sjoquist, Branch
Chief, under our cover dated April 20, 1999.
Please be advised that by copy of this letter, six (6)
copies of such materials are being delivered the New York
Stock Exchange.
Please contact the undersigned at (925) 847-5882 with any
questions or comments you may have.
Sincerely,
/s/ John M. Donnan
John M. Donnan
General Attorney
cc: w/ Enclosures
VIA FEDERAL EXPRESS
Mr. Hugh O'Brien
New York Stock Exchange
20 Broad Street, 18th Floor
New York, New York 10005
<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /x /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(As permitted by Rule 14(a)-6(e)(2))
/x / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
Kaiser Aluminum Corporation
- --------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Kaiser Aluminum Corporation
- --------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/x / No fee required
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee is calculated and
state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
Kaiser Aluminum Corporation
April 19, 1999
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of
Stockholders (the "Annual Meeting") of Kaiser Aluminum
Corporation (the "Company") to be held at 11:30 a.m. on
Wednesday, May 19, 1999, at Waterwood National Resort and
Country Club, 1 Waterwood Parkway, Huntsville, Texas.
At the Annual Meeting, the holders of the Company's
Common Stock, par value $.01 per share ("Common Stock"), on
March 23, 1999 (all such holders being collectively referred
to as the "Stockholders") will consider and vote, as a single
class, (i) in the election of directors, and (ii) upon such
other business as may properly be presented to the Annual
Meeting or any adjournments or postponements thereof.
Each Stockholder is entitled to receive notice of and to
vote at the Annual Meeting and is urged to attend. Holders of
shares of Common Stock have one vote for each share held of
record. Whether or not you intend to be present at the Annual
Meeting, we urge you to complete, date, sign and promptly
return the enclosed proxy card.
We look forward to seeing as many of you as possible at
the Annual Meeting.
/s/ George T. Haymaker, Jr. /s/ Raymond J. Milchovich
GEORGE T. HAYMAKER, JR. RAYMOND J. MILCHOVICH
Chairman of the Board and President and Chief
Chief Executive Officer Operating Officer
KAISER ALUMINUM CORPORATION
5847 San Felipe, Suite 2600
Houston, Texas 77057
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 19, 1999
The Annual Meeting of Stockholders (the "Annual Meeting")
of Kaiser Aluminum Corporation (the "Company") will be held at
Waterwood National Resort and Country Club, 1 Waterwood
Parkway, Huntsville, Texas, on Wednesday, May 19, 1999, at
11:30 a.m., Houston time, for the following purposes:
1. To elect six (6) directors to hold office until
the Company's 2000 Annual Meeting of
Stockholders or until their respective
successors are elected and qualified; and
2. To consider and transact such other business as
may properly be presented to the Annual Meeting
or any adjournments or postponements thereof.
Holders of record of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), as of the close of
business on March 23, 1999, are entitled to notice of and to
vote at the Annual Meeting (all such holders being
collectively referred to as the "Stockholders"). The
Stockholder list will be available commencing May 7, 1999, and
may be inspected for purposes germane to the Annual Meeting
during normal business hours prior to the Annual Meeting at
the offices of the Company, 5847 San Felipe, Suite 2600,
Houston, Texas.
By Order of the Board of Directors
/s/ John Wm. Niemand II
JOHN WM. NIEMAND II
Secretary
April 19, 1999
IMPORTANT
Please complete, date and sign the enclosed proxy card
and return it promptly in the enclosed envelope provided for
your convenience and which requires no postage if mailed in
the United States. Any Stockholder who attends the Annual
Meeting may vote personally on all matters brought before the
Annual Meeting by following the procedures described in the
attached Proxy Statement. In that event, your proxy will not
be used. <PAGE>
KAISER ALUMINUM CORPORATION
5847 San Felipe, Suite 2600
Houston, Texas 77057
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 19, 1999
This proxy statement (the "Proxy Statement") is furnished
to Stockholders (as defined below) in connection with the
solicitation of proxies on behalf of the Board of Directors of
Kaiser Aluminum Corporation (the "Company"), a Delaware
corporation, to be voted at the Company's Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Wednesday,
May 19, 1999, and any adjournments or postponements thereof,
at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. The
principal executive offices of the Company are located at 5847
San Felipe, Suite 2600, Houston, Texas 77057, telephone (713)
267-3777.
This Proxy Statement, the Notice of Annual Meeting of
Stockholders and the accompanying proxy card and Pre-
Registration Form are being mailed, commencing on or about
April 21, 1999, to the record holders as of the close of
business on March 23, 1999, of the Company's Common Stock, par
value $.01 per share (the "Common Stock") (all such holders
being collectively referred to as the "Stockholders").
Holders of shares of Common Stock have one vote for each
share held of record. As of March 23, 1999, there were
79,153,543 outstanding shares of Common Stock.
We cordially invite you to attend the Annual Meeting.
Whether or not you plan to attend, please complete, date, sign
and promptly return your proxy card in the enclosed envelope.
The persons authorized to act as proxies at the Annual
Meeting, individually or jointly, as listed on the proxy card
are George T. Haymaker, Jr., Charles E. Hurwitz, John T. La
Duc and E. Bruce Butler. You may revoke your proxy at any
time prior to its exercise at the Annual Meeting by giving
notice to the Company's Secretary, by filing a later-dated
proxy or, if you attend the Annual Meeting, by voting your
shares in person. Proxies for the Common Stock will be voted
in accordance with the directions specified thereon or, in the
absence of instructions, "FOR" the election of the directors
as set forth in this Proxy Statement.
All Stockholders, or their duly appointed proxies, may
attend the Annual Meeting. Seating, however, is limited.
Admission to the Annual Meeting will be on a first-come,
first-served basis. Registration is expected to begin at
10:00 a.m., and seating is expected to be available at 11:00
a.m. Cameras, recording equipment, communication devices or
other similar equipment will not be permitted in the meeting
room without the prior written consent of the Company. In
addition, posters, placards and other signs and materials may
not be displayed in the meeting room. The Annual Meeting will
be conducted in accordance with certain rules and procedures
established by the Company. These rules and procedures will
be announced or otherwise made available at the Annual
Meeting.
PLEASE NOTE THAT IF YOU HOLD YOUR SHARES IN "STREET NAME"
(THAT IS, THROUGH A BROKER, BANK OR OTHER NOMINEE), YOU WILL
NEED TO BRING A COPY OF A BROKERAGE OR SIMILAR STATEMENT
REFLECTING YOUR STOCK OWNERSHIP AS OF THE RECORD DATE. ALL
STOCKHOLDERS, OR THEIR DULY APPOINTED PROXIES, WILL BE
REQUIRED TO CHECK IN AT THE REGISTRATION DESK PRIOR TO THE
ANNUAL MEETING. IN ADDITION, ALL STOCKHOLDERS, REGARDLESS OF
THEIR FORM OF OWNERSHIP, AND ALL PROXIES WILL ALSO BE REQUIRED
TO VERIFY THEIR IDENTITY WITH A DRIVER'S LICENSE OR OTHER
APPROPRIATE IDENTIFICATION BEARING A PHOTOGRAPH.
In order to expedite your admission to the Annual
Meeting, we suggest that you pre-register by completing and
submitting the form being sent to you with this Proxy
Statement. Alternatively, you may pre-register by calling the
Company's Shareholder Services department at 1-800-256-1601.
Persons who pre-register will be required to verify their
identity with a driver's license or other appropriate
identification bearing a photograph.
The presence, in person or by proxy, of the holders of
shares of Common Stock entitled to cast a majority of the
votes entitled to be cast at the Annual Meeting is required to
constitute a quorum for the transaction of business at the
Annual Meeting. Under Delaware law, abstentions and broker
non-votes (i.e., shares held in street name as to which the
broker, bank or other nominee has no discretionary power to
vote on a particular matter, has received no instructions from
the persons entitled to vote such shares, and has
appropriately advised the Company that it lacks voting
authority) are counted for purposes of determining the
presence or absence of a quorum for the transaction of
business, but will not be treated as shares present and
entitled to vote at the Annual Meeting (and not counted in the
vote totals) with respect to such matters on which the broker
could not vote. A plurality of the votes present, in person
or by proxy, is necessary for the election of directors. With
regard to the election of directors, votes may be cast in
favor or withheld; votes that are withheld and broker non-
votes will be excluded entirely from the vote and will have no
effect on the outcome. Abstentions may not be specified in
the election of directors.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. IF YOUR
SHARES ARE REGISTERED IN THE NAME OF A BROKER, BANK OR OTHER
NOMINEE, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND INSTRUCT HIM OR HER TO VOTE THE PROXY CARD AS SOON
AS POSSIBLE. IF YOU PLAN TO ATTEND THE ANNUAL MEETING TO VOTE
IN PERSON AND YOUR SHARES ARE REGISTERED IN THE NAME OF A
BROKER, BANK OR OTHER NOMINEE, YOU MUST SECURE A PROXY FROM
SUCH NOMINEE ASSIGNING VOTING RIGHTS TO YOU FOR YOUR SHARES.
ELECTION OF DIRECTORS
At the Annual Meeting, six directors will be elected by
the Stockholders to serve until the 2000 Annual Meeting or
until their respective successors are duly elected and
qualified. The six nominees receiving the highest number of
votes will be elected.
The six persons nominated for election to the Board of
Directors at the Annual Meeting are Robert J. Cruikshank,
George T. Haymaker, Jr., Charles E. Hurwitz, Ezra G. Levin,
Raymond J. Milchovich and James D. Woods. Messrs. Cruikshank,
Haymaker, Hurwitz and Levin are currently members of the Board
of Directors. See, "Executive Officers and Directors" and
"Principal Stockholders" for information concerning each of
the nominees, including their business experience during the
past five years and the number of shares of Common Stock owned
beneficially by each of them as of April 9, 1999. Each of the
nominees has consented to serve as a member of the Board of
Directors if elected.
The persons named in the proxies will vote the shares
represented thereby for the election of the foregoing named
nominees except where authority has been withheld as to a
particular nominee or as to all such nominees. Should any
nominee decline or be unable to serve as a director of the
Company, which is not anticipated, the persons named in the
proxies will vote for the election of such other person as the
Board of Directors may recommend.
The Board of Directors recommends a vote "FOR" the
election of all such nominees.
OTHER BUSINESS
Neither the Board of Directors nor management intends to
bring before the Annual Meeting any business other than the
matter referred to in the Notice of Annual Meeting of
Stockholders and this Proxy Statement, nor is any stockholder
entitled under the Company's Amended and Restated By-laws to
bring any such other matter before the Annual Meeting.
Nonetheless, if any other business should properly come before
the Annual Meeting, or any adjournments or postponements
thereof, the persons named on the enclosed proxy card will
vote on such matters according to their best judgment.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company (sometimes referred
to herein as the "Board") held four meetings and acted by
written consent on one occasion during 1998. In addition,
management confers frequently with its directors on an
informal basis to discuss Company affairs. During 1998, no
director attended fewer than 75% of the aggregate of the
meetings of the Board and all committees of the Board on which
he served.
The Board currently has five standing committees. These
committees consist of the Executive, Audit, Compensation
Policy, Section 162(m) Compensation, and Strategic Planning
Committees.
The Executive Committee meets on call and has authority
to act on most matters during the intervals between meetings
of the entire Board. The current members are Messrs. Haymaker
and Hurwitz (Chairman). The Executive Committee, which did
not meet during 1998, acted by written consent four times.
The current members of the Audit Committee are Messrs.
Levin, Marcus (Chairman) and Petris. The Audit Committee
meets with appropriate Company financial and legal personnel,
internal auditors and independent public accountants and
reviews the internal controls of the Company and the
objectivity and appropriateness of its financial reporting.
The Audit Committee also recommends to the Board the
appointment and retention of the independent public
accountants to serve as auditors in examining the corporate
accounts of the Company and has the authority to supervise and
direct the financial reporting, affairs, policies and
procedures of the Company, limited only by restrictions
imposed by applicable law, rule or regulation. The
independent public accountants periodically meet privately
with the Audit Committee and have access to the Audit
Committee at any time. The Audit Committee met two times
during 1998.
The Compensation Policy Committee (the "Policy
Committee") reviews and approves proposals concerning or
relating to the establishment or change of benefits plans,
material amendments to any existing benefit plan, salaries or
other compensation, except to the extent that (i) such
authority has been delegated by the Board to the Section
162(m) Compensation Committee (the "Section 162(m) Committee")
or designated officers, or (ii) such plans are governed by the
Board or a subsidiary's board of directors or covered by a
collective bargaining arrangement or other agreement.
Notwithstanding the foregoing, the Policy Committee also
supervises plan committees other than the Section 162(m)
Committee and may delegate the administration and investment
decisions concerning plans to committees established for those
purposes. Messrs. Cruikshank, Levin (Chairman) and Marcus
currently serve as members of the Policy Committee. The
Policy Committee, which met 30 times during 1998, did not act
by written consent during 1998.
The Section 162(m) Committee administers and approves
amendments to the Company's plans or programs which are
intended to comply with the provisions of Section 162(m) of
the Internal Revenue Code of 1986, as it may be amended from
time to time (the "Code"). The Section 162(m) Committee also
establishes the criteria to be used in determining awards to
be made pursuant to such plans and programs. Messrs.
Cruikshank and Marcus (Chairman) currently serve as members of
the Section 162(m) Committee. The Section 162(m) Committee,
which met 30 times during 1998, did not act by written consent
during 1998.
The Strategic Planning Committee serves in an advisory
capacity to the Company's management and the Board and
consults with management from time to time in connection with
management's review and analysis of alternative strategies to
create increased stockholder value. Messrs. Cruikshank
(Chairman), Levin and Marcus currently serve as members of the
Strategic Planning Committee. The Strategic Planning
Committee, which met four times during 1998, did not act by
written consent during 1998.
The Board does not have a standing nominating committee
nor does it have any committee performing a similar function.
Director Compensation
Each of the directors who was not an employee of the
Company, the Company's parent, MAXXAM Inc. ("MAXXAM"), or the
Company's principal subsidiary, Kaiser Aluminum & Chemical
Corporation ("KACC"), received a base fee of $40,000 for 1998,
$10,000 of which was paid in the form of an option to purchase
shares of Common Stock as more fully described below. Non-
employee directors of the Company who were also non-employee
directors of MAXXAM received director or committee fees for
serving as a director of the Company and/or KACC in addition
to the fees received from MAXXAM. In addition, the Chairman
of each of the committees was paid a fee of $3,000 per year
for services as Chairman. All committee members also received
a fee of $1,500 per day per committee meeting held in person
on a date other than a Board meeting date and $500 per formal
telephonic committee meeting. In respect of 1998, Messrs.
Cruikshank, Levin, Marcus and Petris received an aggregate of
$20,000, $20,500, $23,000 and $2,500, respectively, in such
committee fees from the Company and KACC in the form of cash
payments.
Non-employee directors are also eligible to participate
in the Kaiser 1997 Omnibus Stock Incentive Plan (the "1997
Omnibus Plan") and a program pursuant to which each non-
employee director of the Company is eligible to receive an
option to purchase Common Stock at the average of the high and
low market price of the Common Stock on the day of the grant.
In each instance the grant is intended to have a value of
$10,000, and the number of shares covered by the options is
determined using a modified Black-Scholes option pricing
method. The program provides for such options to be granted
annually at the Company's regularly scheduled meeting of the
Board in December. Each option becomes exercisable as to all
of the shares covered by the option one year from the date of
the grant. On December 8, 1998, Messrs. Cruikshank, Levin,
Marcus and Petris each received options under the program to
purchase 2,439 shares of Common Stock at an exercise price of
$6.125 per share.
The Company also has a program pursuant to which a one-
time grant of an option to purchase Common Stock is made to
each new non-employee director of the Company based on the
market price of such stock on the day of the grant. In each
instance the grant is to have a value of $10,000, and the
number of shares covered by the option is to be determined
using a modified Black-Scholes option pricing method. Each
option becomes exercisable as to all of the shares covered by
the option one year from the date of the grant. No options
were granted under this program in 1998.
KACC has adopted programs identical to the programs
described in the two preceding paragraphs, and each of the
Company and KACC has expressed its intention that the programs
not be deemed to duplicate benefits with respect to
individuals who serve as a director of both the Company and
KACC.
The Company and KACC also have a deferred compensation
program in which all non-employee directors are eligible to
participate. By executing a deferred fee agreement, a non-
employee director may defer all or part of the fees from the
Company and KACC for services in such capacity for any
calendar year. The deferred fees are credited to a book
account as of the date such fees would have been paid to the
director and are deemed "invested", in 25% increments, in two
investment choices: in phantom shares of Common Stock and/or
in an account bearing interest calculated using one-twelfth of
the sum of the prime rate plus 2% on the first day of each
month. If deferred, fees, including all earnings credited to
the book account, are paid in cash to the director or
beneficiary as soon as practicable following the date the
director ceases for any reason to be a member of the Board,
either in a lump sum or in a specified number of annual
installments not to exceed ten, at the director's election.
Subject to the approval of the Chairman of the Board,
directors may also be paid additional ad hoc fees for
extraordinary services in the amount of $750 per one-half day
or $1,500 per day. Directors are reimbursed for travel and
other disbursements relating to Board and committee meetings
and non-employee directors are provided travel accident
insurance in respect of Company-related business travel.
Fees to directors who are also employees of KACC or
MAXXAM are deemed to be included in their salary. Directors
of the Company were also directors of KACC and received the
foregoing compensation for acting in both capacities.
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information, as of
April 19, 1999, with respect to the executive officers,
directors and nominees for director of the Company and certain
executive officers of KACC. All officers and directors hold
office until their respective successors are elected and
qualified or until their earlier resignation or removal.
<TABLE>
<CAPTION>
Name Positions and Offices with the Company
- ---- --------------------------------------
<S> <C>
George T. Haymaker, Jr. Chairman of the Board, Chief Executive
Officer and Director
Raymond J. Milchovich President and Chief Operating Officer
John T. La Duc Executive Vice President and Chief
Financial Officer
Joseph A. Bonn Vice President, Planning and Development
E. Bruce Butler Vice President and General Counsel
Robert E. Cole* Vice President, Government Affairs
Wayne R. Hale* Vice President, and President of Kaiser
Primary Products
Jack A. Hockema Vice President, and President of Kaiser
Engineered Products
W. Scott Lamb Vice President, Investor Relations and
Corporate Communications
Daniel D. Maddox Vice President and Controller
Keith T. Milne Vice President, Corporate Development
Ronald L. Reman Vice President, Taxes
Geoffrey W. Smith Vice President, and President of Kaiser
Alumina
Karen A. Twitchell Vice President and Treasurer
Kris S. Vasan* Vice President, Financial Risk Management
John H. Walker* Vice President, and President of Kaiser
Flat-Rolled Products
John Wm. Niemand II Secretary
Charles E. Hurwitz Vice Chairman of the Board* and Director
Robert J. Cruikshank Director
Ezra G. Levin Director
Robert Marcus Director
Robert J. Petris Director
James D. Woods --
* KACC only
</TABLE>
George T. Haymaker, Jr. Mr. Haymaker, age 61, was
elected to the positions of Chairman of the Board and Chief
Executive Officer of the Company and KACC effective January
1, 1994 and served as President of the Company and KACC from
May 1996 and June 1996, respectively, through July 1997.
From May 1993 to December 1993, Mr. Haymaker served as
President and Chief Operating Officer of the Company and
KACC. Mr. Haymaker became a director of the Company in May
1993, and a director of KACC in June 1993. From 1987 to
April 1993, Mr. Haymaker was a partner in a partnership which
acquired, redirected and operated small to medium sized
companies in the metals industry. Since July 1987, Mr.
Haymaker has been a director, and from February 1992 through
March 1993 was President, of Midamerica Holdings (formerly
Metalmark Corporation), which is in the business of semi-
fabrication of aluminum extrusions. From May 1986 until
February 1993, he also served as President of West Coast
Sales Corp., which provides management and acquisition
services. Mr. Haymaker also served as Chief Executive
Officer and a director of Amarlite Architectural Products,
Inc., a producer of architectural curtain wall and entrance
products, from August 1990 to April 1992 and from April 1989
to February 1993, respectively. He was a director of
American Powdered Metals Company, which is engaged in the
manufacture of powdered metal components, from August 1988 to
March 1993, and Hayken Metals Asia Limited, which represents
manufacturers of aluminum and metal products, from January
1988 to April 1993. From 1984 to 1986, Mr. Haymaker served
as Executive Vice President-Aluminum Operations of Alumax
Inc., responsible for all primary aluminum and
semifabricating activities. Mr. Haymaker is also a director
of Flowserve Corporation, a provider of valves, pumps and
seals.
Raymond J. Milchovich. Mr. Milchovich, age 49, became
President and Chief Operating Officer of the Company and KACC
in July 1997. He became a Vice President of the Company in
May 1997 and served in such capacity through July 1997. He
served as Vice President, President of Kaiser Flat-Rolled
Products, of KACC from June 1995 through July 1997. From
July 1986 to June 1995, Mr. Milchovich served as Divisional
Vice President of KACC's flat-rolled products business unit
and Works Manager of KACC's Trentwood facility in Spokane,
Washington. Mr. Milchovich is a nominee for director of the
Company.
John T. La Duc. Mr. La Duc, age 56, was elected
Executive Vice President and Chief Financial Officer of the
Company effective September 1, 1998, and of KACC effective
July 31, 1998. Mr. La Duc served as Vice President and Chief
Financial Officer of the Company from June 1989 and May 1990,
respectively, and was Treasurer of the Company from August
1995 until February 1996 and from January 1993 until April
1993. He was also Treasurer of KACC from June 1995 until
February 1996, and served as Vice President and Chief
Financial Officer of KACC from June 1989 and January 1990,
respectively. Since September 1990, Mr. La Duc has served as
Senior Vice President of MAXXAM. Mr. La Duc also serves as a
Vice President and a director of MAXXAM Group Holdings Inc.,
a wholly owned subsidiary of MAXXAM and parent of MAXXAM's
forest products operations ("MGHI"), as a Vice President and
manager on the Board of Managers of Scotia Pacific Company
LLC ("Scopac LLC"), a wholly owned subsidiary of MAXXAM
engaged in forest product operations and successor by merger
in July 1998 to Scotia Pacific Holding Company, and as a
director and Vice President of The Pacific Lumber Company,
the parent of Scopac LLC ("Pacific Lumber"). He previously
served as Chief Financial Officer of MAXXAM from September
1990 until December 1994.
Joseph A. Bonn. Mr. Bonn, age 55, has been Vice
President of the Company since May 1997 and has been Vice
President, Planning and Development of KACC since March 1997.
He served as Vice President, Planning and Administration of
the Company and KACC from February 1992 and July 1989,
respectively, through May 1997 and July 1997, respectively.
Mr. Bonn has served as a Vice President of KACC since April
1987 and served as Senior Vice President-Administration of
MAXXAM from September 1991 through December 1992. He was
also KACC's Director of Strategic Planning from April 1987
until July 1989. From September 1982 to April 1987, Mr. Bonn
served as General Manager of various aluminum fabricating
divisions.
E. Bruce Butler. Mr. Butler, age 59, became Vice
President and General Counsel of the Company and KACC in
March 1997. Prior to becoming Vice President and General
Counsel of both companies, Mr. Butler served as Assistant
General Counsel - Kaiser International of KACC from August
1996. Immediately prior to joining the Company and KACC, Mr.
Butler practiced in the Los Angeles office of Arter & Hadden.
Prior to joining Arter & Hadden, Mr. Butler served as Vice
President and General Counsel of Allied Signal Aerospace
Company from 1988 to 1994 and International Counsel of Allied
Signal, Inc. from 1984 through 1987. From 1971 through 1984,
Mr. Butler practiced with Patton, Boggs & Blow, where he
became a partner in 1977 and served as the Resident Partner
in the firm's London office.
Robert E. Cole. Mr. Cole, age 52, has been a Vice
President of KACC since March 1981. Since September 1990,
Mr. Cole also has served as Vice President-Federal Government
Affairs of MAXXAM and as a Vice President of Pacific Lumber.
Mr. Cole is currently Chairman of the United States Auto
Parts Advisory Committee to the United States Congress.
Wayne R. Hale. Mr. Hale, age 43, became a Vice President
of KACC effective November 1997 and President of Kaiser
Primary Products effective December 1997. From January 1,
1997, until accepting his current position, Mr. Hale served
as the Managing Director of Anglesey Aluminium Limited, a
United Kingdom corporation 49% owned by KACC ("Anglesey"), on
behalf of Rio Tinto plc, the owner of the 51% interest in
Anglesey. Anglesey owns and operates an aluminum smelter and
port facility in Holyhead, Wales. Between August 1990 and
December 1996, Mr. Hale was employed by KACC and served as
Technical Manager and then Operations Manager of the Anglesey
smelter before becoming Managing Director of Anglesey in
August 1995.
Jack A. Hockema. Mr. Hockema, age 52, became a Vice
President of the Company in May 1997. Mr. Hockema became
Vice President of KACC and President of Kaiser Engineered
Products in March 1997. He served as President of Kaiser
Extruded Products and Engineered Components from September
1996 to March 1997. Mr. Hockema served as a consultant to
KACC and acting President of Kaiser Engineered Components
from September 1995 until September 1996. Mr. Hockema was an
employee of KACC from 1977 to 1982, working at KACC's
Trentwood facility, and serving as plant manager of its
former Union City, California, can plant and as operations
manager for Kaiser Extruded Products. Mr. Hockema left KACC
to become Vice President and General Manager of Bohn Extruded
Products, a division of Gulf+Western, and later served as
Group Vice President of American Brass Specialty Products
until June 1992. From June 1992 until September 1996, Mr.
Hockema provided consulting and investment advisory services
to individuals and companies in the metals industry.
W. Scott Lamb. Mr. Lamb, age 44, was elected Vice
President, Investor Relations and Corporate Communications of
the Company effective September 1, 1998, and of KACC
effective July 31, 1998. Mr. Lamb previously served as
Director of Investor Relations and Corporate Communications
of the Company and KACC from June 1997 through July 1998.
From July 1995 through June 1997, he served as Director of
Investor Relations of the Company and KACC and from January
1995 through July 1995, he served as Director of Public
Relations of the Company and KACC. From January 1992 through
January 1995, Mr. Lamb served as Director of Public Relations
of MAXXAM.
Daniel D. Maddox. Mr. Maddox, age 39, was elected to the
position of Vice President and Controller of the Company
effective September 1, 1998, and of KACC effective July 31,
1998. He served as Controller, Corporate Consolidation and
Reporting of the Company and KACC from October 1, 1997,
through September 1998 and July 1998, respectively. Mr.
Maddox previously served as Assistant Corporate Controller of
the Company from May 1997 to September 1997 and KACC from
June 1997 to September 1997 and Director-External Reporting
of KACC from June 1996 to May 1997. Mr. Maddox was with
Arthur Andersen LLP from 1982 until joining KACC in June
1996.
Keith T. Milne. Mr. Milne, age 44, was elected Vice
President, Corporate Development of the Company effective
September 1, 1998, and of KACC effective July 31, 1998. Mr.
Milne previously served as Vice President, Corporate
Development of KACC from September 1997. From September
1995, Mr. Milne served as Vice President, Kaiser Aluminum
International of KACC. He previously served as Business
Manager of KACC's Primary Aluminum Business Unit from June
1993 until September 1995, and as Assistant Treasurer of KACC
from August 1992 until June 1993.
Ronald L. Reman. Mr. Reman, age 41, was elected Vice
President, Taxes of KACC effective July 31, 1998 and of the
Company effective September 1, 1998. From September 1992
through September 1998, Mr. Reman served as Assistant
Treasurer of the Company and KACC. Mr. Reman has served as
Vice President-Taxes of MAXXAM since September 1992. From
July 1984 until October 1986, Mr. Reman was a Senior Manager
in the Tax Department of the New York office of Price
Waterhouse after having served seven years with the New York
office of Coopers & Lybrand. Mr. Reman also serves as Vice
President-Taxes of MGHI, Pacific Lumber and Scopac LLC.
Geoffrey W. Smith. Mr. Smith, age 52, has been a Vice
President of the Company since May 1997, President of Kaiser
Alumina of KACC since March 1999 and a Vice President of KACC
since January 1992. From June 1996 through March 1999, Mr.
Smith served as President of Kaiser Aluminum Commodities of
KACC. From June 1995 until June 1996, Mr. Smith served as
President of Kaiser Alumina of KACC, and from December 1994
until June 1995, Mr. Smith was General Manager of KACC's
alumina business unit. Mr. Smith previously served as Co-
General Manager of KACC's alumina business unit from
September 1991 through December 1994. From September 1990 to
January 1992, Mr. Smith was Divisional Vice President of
KACC's alumina business unit. From August 1988 to August
1990, Mr. Smith was Director of Business Development for the
alumina business unit, and from 1982 to August 1988, he was
Operations/Technical Manager for KACC's Gramercy, Louisiana
facility.
Karen A. Twitchell. Ms. Twitchell, age 43, was elected
to the position of Vice President and Treasurer of the
Company effective September 1, 1998, and KACC effective July
31, 1998. She has served as Treasurer of the Company and
KACC since February 1996. Prior to that time, Ms. Twitchell
was Vice President and Treasurer of Southdown, Inc., a
Houston-based company specializing in portland and masonry
cement, from April 1994 and Treasurer from 1989.
Kris S. Vasan. Mr. Vasan, age 49, has been Vice
President, Financial Risk Management, of KACC since June
1995. Mr. Vasan previously served as Treasurer of the
Company from April 1993 until August 1995 and as Treasurer of
KACC from April 1993 until June 1995. Prior to that, Mr.
Vasan served the Company and KACC as Corporate Director of
Financial Planning and Analysis from June 1990 until April
1993. From October 1987 until June 1990, he served as
Associate Director of Financial Planning and Analysis.
John H. Walker. Mr. Walker, age 41, has been a Vice
President of KACC since November 1997, and President of
Kaiser Flat-Rolled Products from December 1997. From
September 1996 through October 1997, Mr. Walker served as
Vice President, Operations of KACC's Flat-Rolled Products
business unit and Works Manager of KACC's Trentwood facility
in Spokane, Washington. Prior to joining KACC, Mr. Walker
spent eight years with Weirton Steel Company, a fully
integrated steel producer ("Weirton Steel"). From August
1995 to September 1996, Mr. Walker was the Vice President of
Operations for Weirton Steel. From March of 1994 to August
1995, he served as General Manager of Operations for Weirton
Steel and prior to that served as the Director of Operating
Planning from 1991 to 1994.
John Wm. Niemand II. Mr. Niemand, age 54, became
Secretary of the Company in May 1997 and Secretary of KACC in
June 1997. He previously served as an Assistant Secretary of
the Company and KACC since July 1988. Mr. Niemand served as
Senior Corporate Counsel of the Company and KACC from May
1992 through December 1995, and has served as Assistant
General Counsel of the Company and KACC since January 1996.
Charles E. Hurwitz. Mr. Hurwitz, age 58, was appointed
Vice Chairman of KACC in December 1994 and has served as a
director of the Company and KACC since October and November
1988, respectively. Mr. Hurwitz has also served as a member
of the Board of Directors and the Executive Committee of
MAXXAM since August 1978 and was elected Chairman of the
Board and Chief Executive Officer of MAXXAM in March 1980.
From January 1993 to January 1998, he also served MAXXAM as
President. Mr. Hurwitz has also been, since its formation in
November 1996, Chairman of the Board, President and Chief
Executive Officer of MGHI. He has been, since January 1974,
Chairman of the Board and Chief Executive Officer of
Federated Development Company ("Federated"), a New York
business trust primarily engaged in the management of real
estate investments and principal stockholder of MAXXAM. Mr.
Hurwitz has also served, since May 1993 and October 1995,
respectively, as a director and Chairman of the Board of
SHRP General Partner, Inc. ("SHRP"), the managing general
partner of Sam Houston Race Park, Ltd., a Texas limited
partnership which operates a horse racing facility in Texas
and in which MAXXAM holds a controlling interest ("SHRP,
Ltd.").
Robert J. Cruikshank. Mr. Cruikshank, age 68, has served
as a director of the Company and KACC since January 1994. In
addition, he has been a director of MAXXAM since May 1993.
Mr. Cruikshank was a Senior Partner in the international
public accounting firm of Deloitte & Touche from December
1989 until his retirement in March 1993. Mr. Cruikshank
served on the board of directors of Deloitte Haskins & Sells
from 1981 to 1985 and as Managing Partner from June 1974
until its merger with Touche Ross & Co. in December 1989.
Mr. Cruikshank also serves as a director and on the
Compensation Committee of Reliant Energy Incorporated
(formerly Houston Industries Incorporated), a public utility
holding company with interests in electric and natural gas
utilities, coal and transportation businesses; a director of
Texas Biotechnology Incorporated; a trust manager of
Weingarten Realty Investors; a director of American
Residential Services, Inc.; and as advisory director of
Compass Bank-Houston.
Ezra G. Levin. Mr. Levin, age 65, has been a director of
the Company since July 1991. He has been a director of KACC
since November 1988, and a director of MAXXAM since May 1978.
Mr. Levin also served as a director of the Company from April
1988 to May 1990. Mr. Levin has served as a director of
Pacific Lumber since February 1997, and as a manager on the
Board of Managers of Scopac LLC since June 1998. From
January 1974 through December 1995, he served as a trustee of
Federated. Mr. Levin is a partner in the law firm of Kramer
Levin Naftalis & Frankel LLP.
James D. Woods. Mr. Woods, age 67, is a nominee for
director of the Company. Mr. Woods has served as Chairman
Emeritus and Consultant for Baker Hughes Incorporated from
1997 to the present, and he was Chairman of the Board and
Chief Executive Officer of Baker Hughes Incorporated from
1987 to 1996. Mr. Woods is a director of The Kroger Co.;
Varco International, Inc.; Howmet International, Inc.; Wynn's
International, Inc.; and OMI Corporation. Mr. Woods is a
nominee for director of the Company.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of April 9, 1999,
unless otherwise indicated, the undiluted beneficial
ownership of the Company's equity securities by (i) those
persons known by the Company to own beneficially more than 5%
of the shares of any class then outstanding, (ii) each of the
directors and nominees for director of the Company, (iii)
each of the named executive officers listed in the Summary
Compensation Table, and (iv) all directors, nominees for
director and executive officers of the Company and KACC as a
group.
<TABLE>
<CAPTION>
Name of
Beneficial Owner Title of Class # of Shares(1) % of Class
---------------- -------------- -------------- ----------
<S> <C> <C> <C>
MAXXAM Inc. Common Stock 50,000,000(2) 63.2
Vanguard Windsor Funds-Windsor Fund Common Stock 5,929,334(3) 7.5
Robert J. Cruikshank Common Stock 5,773(4) *
George T. Haymaker, Jr. Common Stock 237,428(5) *
Charles E. Hurwitz Common Stock 250,000(6)(7) *
John T. La Duc Common Stock 230,121(5) *
Ezra G. Levin Common Stock 3,773(6) *
Robert Marcus Common Stock 3,773(6) *
Raymond J. Milchovich Common Stock 189,840(5) *
Robert J. Petris Common Stock 3,773(6) *
Geoffrey W. Smith Common Stock 63,600(5) *
John H. Walker Common Stock 2,754 *
James D. Woods Common Stock -0- *
All directors, nominees for Common Stock 1,287,889(8) 1.6
director and executive officers of
the Company and KACC as a group (23
persons)
</TABLE>
- ------------
* Less than 1%.
(1) Unless otherwise indicated, the beneficial owners have
sole voting and investment power with respect to the
shares listed in the table. Also includes options
exercisable within 60 days of April 9, 1999, to acquire
such shares.
(2) Includes 27,938,250 shares beneficially owned by MGHI.
As of April 9, 1999, such shares were pledged as
security for $130.0 million principal amount of 12%
Senior Secured Notes due 2003. An additional 7,915,000
shares of the Company's Common Stock were pledged by
MAXXAM under a separate agreement under which $16.0
million had been borrowed by MAXXAM as of December 31,
1998. In addition to the foregoing, MAXXAM has agreed
to secure each $1.0 million of borrowings with 400,000
shares of the Company's Common Stock under the terms of
another $25 million credit facility ($2.5 million
outstanding at December 31, 1998). The address of
MAXXAM is 5847 San Felipe, Suite 2600, Houston, Texas
77057.
(3) Information is based solely on the Schedule 13G filed
with the SEC on February 10, 1999, by Vanguard Windsor
Funds-Windsor Fund ("Vanguard") as a result of its
ownership interest in the Company at December 31, 1998
(the "Vanguard 13G"). The Vanguard 13G indicates that
these shares are held of record by Vanguard and that
Vanguard has sole voting power and shared dispositive
power with respect to these shares. Vanguard's address
is P.O. Box 2600, Valley Forge, Pennsylvania 19482. In
addition, Wellington Management Company, LLP, a
registered investment advisor ("Wellington"), filed a
Schedule 13G with the SEC on February 10, 1999, as a
result of its ownership interest in these shares at
December 31, 1998 (the "Wellington 13G"). The
Wellington 13G indicates that Wellington does not have
sole or shared voting power with respect to any of such
shares and that Wellington has shared dispositive power
with respect to all of such shares. Wellington's
address is 75 State Street, Boston, Massachusetts
02109.
(4) Includes options exercisable within 60 days of April 9,
1999, to acquire 3,773 shares of Common Stock.
(5) Includes 181,033, 134,200, 102,950 and 20,240 options
exercisable within 60 days of April 9, 1999, to acquire
shares of Common Stock, by Messrs. Haymaker,
Milchovich, La Duc and Smith, respectively.
(6) Represents only options exercisable within 60 days of
April 9, 1999, to acquire such shares.
(7) Excludes shares owned by MAXXAM. Mr. Hurwitz may be
deemed to hold beneficial ownership in the Company as a
result of his beneficial ownership in MAXXAM.
(8) Includes options exercisable within 60 days of April 9,
1999, to acquire 843,966 shares of Common Stock.
Ownership of Parent of the Company
As of April 9, 1999, MAXXAM owned, directly and
indirectly, approximately 63.2% of the issued and outstanding
Common Stock of the Company. The following table sets forth,
as of April 9, 1999, the beneficial ownership of the common
stock and Class A $.05 Non-Cumulative Participating
Convertible Preferred Stock ("Preferred Stock") of MAXXAM by
the directors of the Company, and by the directors and
nominees for director of the Company and the executive
officers of the Company and KACC as a group:
<TABLE>
<CAPTION>
% of
Combined
Name of Voting
Beneficial Owner Title of Class # of Shares (1) % of Class Power(2)
- ---------------- -------------- --------------- ---------- --------
<S> <C> <C> <C> <C>
Charles E. Hurwitz Common Stock 2,644,896(3)(4)(5) 37.6
68.9
Preferred Stock 720,941(6)(7) 99.2
Ezra G. Levin Common Stock 2,400(4)(5)(8) * *
Robert J. Cruikshank Common Stock 2,400(8) * *
All directors, Common Stock 2,650,611(4)(5)(9) 37.6
nominees for director 68.9
and executive officers Preferred Stock 720,941(6)(7) 99.2
as a group (23
persons)
</TABLE>
- ------------
* Less than 1%.
(1) Unless otherwise indicated, beneficial owners have sole
voting and investment power with respect to the shares
listed in the table. Includes the number of shares
such persons would have received on April 9, 1999, if
any, for their exercisable stock appreciation rights
("SARs") (excluding SARs payable in cash only)
exercisable within 60 days of such date if such rights
had been paid solely in shares of MAXXAM common stock.
(2) MAXXAM Preferred Stock is generally entitled to ten
votes per share on matters presented to a vote of
MAXXAM's stockholders.
(3) Includes 1,669,451 shares of MAXXAM common stock owned
by Federated Development Inc., a wholly owned
subsidiary of Federated ("FDI"), as to which
Mr. Hurwitz indirectly possesses voting and investment
power. Mr. Hurwitz serves as a trustee of Federated,
and together with members of his immediate family and
trusts for the benefit thereof, owns all of the voting
shares of Federated. Also includes (a) 34,845 shares
of MAXXAM common stock separately owned by Mr.
Hurwitz's spouse and as to which Mr. Hurwitz disclaims
beneficial ownership, (b) 46,500 shares of MAXXAM
common stock owned by the Hurwitz Investment
Partnership L.P., a limited partnership controlled by
Mr. Hurwitz and his spouse, 23,250 of which shares were
separately owned by Mr. Hurwitz's spouse prior to their
transfer to such limited partnership and as to which
Mr. Hurwitz disclaims beneficial ownership, (c) 91,926
shares of MAXXAM common stock owned by the 1992 Hurwitz
Investment Partnership L.P., of which 45,963 shares are
owned by Mr. Hurwitz's spouse as separate property and
as to which Mr. Hurwitz disclaims beneficial ownership,
(d) 704,645 shares of MAXXAM common stock held directly
by Mr. Hurwitz, (e) 60,000 shares of MAXXAM common
stock owned by Federated Development Investments, LLC,
which is owned 79% by FDI and 21% by Mr. Hurwitz, and
of which FDI is the managing member ("FDILLC"), (f)
options to purchase 21,029 shares of MAXXAM common
stock held by FDI, and (g) options held by Mr. Hurwitz
to purchase 16,500 shares of MAXXAM common stock within
60 days of April 9, 1999.
(4) FDI, Federated, FDILLC, the Hurwitz Investment
Partnership L.P., the 1992 Hurwitz Investment
Partnership L.P., Messrs. Hurwitz and Levin, and Mr.
James H. Paulin, Jr., may be deemed a "group" (the
"Stockholder Group") within the meaning of Section
13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). As of April 9, 1999, in
the aggregate, the members of the Stockholder Group who
are also officers or directors of the Company or KACC
beneficially owned 2,647,296 shares of MAXXAM common
stock and 721,074 shares of Preferred Stock,
aggregating approximately 68.9% of the total voting
power of MAXXAM. By reason of the foregoing and their
relationship with the members of the Stockholder Group,
Messrs. Hurwitz and Levin may be deemed to possess
shared voting and investment power with respect to the
shares held by the Stockholder Group.
(5) Does not include shares owned by other members of the
Stockholder Group.
(6) Includes 661,377 shares owned by FDI as to which Mr.
Hurwitz possesses voting and investment power and 1,064
shares held directly.
(7) Includes options exercisable within 60 days of April 9,
1999, to acquire 58,500 shares of Preferred Stock.
(8) Includes options exercisable within 60 days of April 9,
1999, to acquire 1,400 shares of MAXXAM common stock.
(9) Includes (i) options exercisable within 60 days of
April 9, 1999, to acquire 1,400 shares of MAXXAM common
stock, and (ii) 665 shares of MAXXAM common stock which
would have been received on April 9, 1999 for 4,000
SARs exercisable within 60 days of such date, if such
SARs had been paid solely in shares of MAXXAM common
stock.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
Although certain plans or programs in which executive
officers of the Company participate are jointly sponsored by
the Company and KACC, executive officers of the Company are
directly employed and compensated by KACC. The following
table sets forth compensation information, cash and non-cash,
for each of the Company's last three completed fiscal years
with respect to the Chief Executive Officer and the four most
highly compensated executive officers of the Company
(collectively referred to as the "named executive officers")
for the fiscal year ended December 31, 1998:
<TABLE>
<CAPTION>
<PAGE>
Long-Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted
Annual Stock Options/ LTIP All Other
Name and Salary Bonus Compensation Award(s) SARs Payouts Compensation
Principal Position Year ($) ($) ($)(1) ($) (#) ($)(2) ($)
- ------------------ ---- ------ ----- ------------ ---------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George T. Haymaker, Jr. 1998 563,583 290,000 -0- -0- 669,000 294,328 28,179(3)
Chairman and Chief 1997 494,083 311,000 -0- -0- -0- 121,122 24,704(3)
Executive Officer 1996 487,000 71,638 -0- -0- -0- -0- 9,740(3)
Raymond J. Milchovich 1998 419,583 250,000 -0- -0- 635,000 102,211 20,979(3)
President and Chief 1997 272,083 211,000 -0- -0- -0- 71,212 17,796(3)(4)
Operating Officer 1996 223,750 42,700 -0- -0- -0- -0- 77,158(3)(4)
John T. La Duc 1998 320,000 220,000(5) -0- -0- 468,750 124,356 16,000(3)
Executive Vice 1997 260,000 184,000(5) -0- -0- -0- 44,236 13,000(3)
President and Chief 1996 260,000 83,200(5) -0- -0- -0- -0- 5,200(3)
Financial Officer
John H. Walker 1998 216,250 300,000 20,000(6) -0- -0- 25,877 9,839(3)
Vice President, and 1997 192,500 155,715(7) -0- -0- -0- 1,652 9,943(3)(4)
President of Kaiser 1996 45,714 83,979(7) -0- -0- -0- -0- 9,292(4)
Flat-Rolled Products
Geoffrey W. Smith 1998 255,000 155,325 -0- -0- -0- 139,300 85,083(3)(4)
Vice President, and 1997 255,000 116,635 -0- -0- -0- 68,250 55,743(3)(4)
President of Kaiser 1996 246,250 38,000 -0- -0- -0- -0- 33,550(3)(4)
Alumina
</TABLE>
- ------------
(1) Excludes perquisites and other personal benefits
because the aggregate amount of such compensation does
not exceed the lesser of $50,000 or 10% of the total of
annual salary and bonus reported. Tax preparation fees
for each of the named executive officers, other than
Mr. Walker, and the value of the personal use of
company cars with respect to each named executive
officer exceed 25% of the total perquisites and other
personal benefits received by each such named executive
officer.
(2) The long-term component of the Company's incentive
compensation program in effect for the periods covered
above provides incentive compensation based on
performance against goals over rolling three-year
periods. Payments are generally made 57% in shares of
the Company's Common Stock and 43% in cash and are paid
in two equal installments; the first during the year
following the end of the three-year period and the
second during the following year. The amounts
indicated reflect the value of the actual payment
received under the program during the year indicated
with the stock portion of each amount being based on
the market value on the date of distribution. No
payments were made under the program in 1996. Total
awards for the 1994-1996, 1995-1997 and 1996-1998
periods were $230,000, $362,100 and $250,000 for Mr.
Haymaker; $40,280, $161,500 and $150,000 for Mr.
Milchovich; $84,000, $164,900 and $120,000 for Mr.
La Duc; $1,456, $21,900 and $27,500 for Mr. Walker; and
$129,600, $152,700 and $128,395 for Mr. Smith,
respectively. Additional information with respect to
the long-term component of the Company's incentive
compensation program is set forth below in the Long-
Term Incentive Plan Awards Table and in the Report of
the Compensation Committees on Executive Compensation.
(3) Includes accruals by KACC of $28,179, $24,704 and
$9,740 for Mr. Haymaker; $20,979, $13,604 and $4,475
for Mr. Milchovich; $16,000, $13,000 and $5,200 for Mr.
La Duc; $9,839, $800 and $0 for Mr. Walker; and
$12,750, $12,750 and $4,925 for Mr. Smith under the
Kaiser Savings Plan and Kaiser Supplemental Benefits
Plan (each as defined below) for 1998, 1997 and 1996,
respectively.
(4) Includes moving-related items of $4,192 and $72,683 for
Mr. Milchovich for 1997 and 1996; $9,143 and $9,292 for
Mr. Walker for 1997 and 1996; and $72,333, $42,993 and
$28,625 for Mr. Smith for 1998, 1997 and 1996.
(5) Includes $50,000 (to be paid over a two-year period)
for each of 1998, 1997 and 1996, respectively, which
will be reimbursed by MAXXAM.
(6) Additional compensation pursuant to program established
to compensate salaried employees at pre-determined
hourly rates for additional services performed in
connection with the strike by the United Steelworkers
of America.
(7) Includes payments of $50,000 and $75,000 made in 1997
and 1996, respectively, in connection with Mr. Walker's
signing bonus.
Option Grants
The following table sets forth certain information
concerning stock options granted in fiscal year 1998 to each
of the Company's named executive officers who were granted
stock options during that period:
<TABLE>
<CAPTION>
Individual Grants
(a) (b) (c) (d) (e) (f)
# of % of Total
Securities Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration Grant Date
Name Grants 1998 ($/Share) Date Present Value ($)
---- ---------- ------------ ----------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
George T. Haymaker, Jr. 386,000 17.1 12.0000 01/01/07 1,604,404(1)
283,000 12.5 9.3594 12/31/02 999,076(2)
Raymond J. Milchovich 635,000 28.2 9.4063 07/02/03 3,150,000(3)
John T. La Duc 468,750 20.8 9.3125 07/10/03 2,325,000(3)
</TABLE>
- ------------
(1) Valuation utilizing modified Black-Scholes Option Price
Model with the following assumptions: 3-year monthly
volatility for Common Stock, 5.84% risk-free rate
(based on U.S. Treasury strip rate on the date of grant
with a term equal to that of the option), no dividend
yield and 9-year exercise date. No adjustments were
made for non-transferability or risk of forfeiture.
Additional information with respect to the terms of
this grant are set forth below under the caption
"Employment Contracts and Termination of Employment and
Change-in-Control Arrangements".
(2) Valuation utilizing modified Black-Scholes Option Price
Model with the following assumptions: 3-year monthly
volatility for Common Stock, 5.66% risk-free rate
(based on U.S. Treasury strip rate on the date of grant
with a term equal to that of the option), no dividend
yield and 5-year exercise date. No adjustments were
made for non-transferability or risk of forfeiture.
One-third of these stock options vested on December 31,
1998. An additional one-third vests on each December
31, thereafter until fully vested.
(3) Valuation utilizing Black-Scholes Option Price Model
with the following assumptions: 3-year monthly
volatility for Common Stock, 5.8% risk-free rate (based
on estimated 5-year T-Bond rate as of the grant date),
no dividend yield and 5-year exercise date. No
adjustments were made for non-transferability or risk
of forfeiture. One-fifth of these stock options vested
on December 31, 1998. An additional one-fifth vests on
each December 31, thereafter until fully vested.
The stock options set forth in the above table were
granted under the 1997 Omnibus Plan. Each of the foregoing
options is exercisable for cash, Common Stock or a combination
thereof. Additional information with respect to the terms of
each grant are set forth below under the caption "Employment
Contracts and Termination of Employment and Change-in-Control
Arrangements".
Option/SAR Exercises and Fiscal Year End Value Table
The table below provides information on an aggregated
basis concerning each exercise of stock options and SARs
during the fiscal year ended December 31, 1998, by each of the
Company's named executive officers, and the 1998 fiscal year-
end value of unexercised options and SARs.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Unexercised Value of Unexercised
Options/SARs in-the-Money Options/SARs
at Year End (#) at Fiscal Year-End ($)
--------------------- ------------------------
Shares
Acquired on
Exercise Value
Name (#)(1) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George T. Haymaker, Jr. -0- -0- 181,033 574,667 -(2) -(2)
Raymond J. Milchovich -0- -0- 134,200 508,000 -(2) -(2)
John T. La Duc -0- -0- 102,950 375,000 -(2) -(2)
-0- 134,250 4,000(3) -0- 117,500(3) -
John H. Walker -0- -0- -0- -0- - -
Geoffrey W. Smith -0- -0- 20,240 -0- -(2) -
</TABLE>
- -------------
(1) If no shares received, the number reflected, if any,
represents the number of securities with respect to
which options/SARs were exercised.
(2) Valued at $4.875, the closing price of the Company's
Common Stock on December 31, 1998, less exercise
price. No value is shown because the exercise price
is higher than the closing price.
(3) Represents SARs relating to MAXXAM common stock.
Valued at $57.375 per share, the closing price of
MAXXAM common stock on December 31, 1998, less
exercise price. The SARs relating to MAXXAM common
stock set forth in the above table for Mr. La Duc were
granted under MAXXAM's 1984 Phantom Share Plan (the
"MAXXAM Phantom Plan"). All of Mr. La Duc's SARs
under the MAXXAM Phantom Plan are exercisable for cash
only.
Long-Term Incentive Plan Awards Table
Each of the Company's named executive officers received
awards in 1998 under the long-term component of the Company's
incentive compensation program for the 1994-1996 and 1995-
1997 three-year, long-term performance periods. The
following table and accompanying footnotes describe the
awards received by each of the Company's named executive
officers in 1998.
<TABLE>
<CAPTION>
Estimated Future Payouts
under Non-Stock Price Based Plans(4)
------------------------------------
(a) (b) (c) (d) (e) (f)
Performance or
Other Periods
Number of Until Maturation
Name Shares or Payout Threshold Target Maximum
---- ---------- ---------------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
George T. Haymaker, Jr. 5,762(1) - - - -
10,887(2) -(3) - - -
Raymond J. Milchovich 1,009(1) - - - -
4,855(2) -(3) - - -
John T. La Duc 2,104(1) - - - -
4,957(2) -(3) - - -
John H. Walker -0-(1) - - - -
657(2) -(3) - - -
Geoffrey N. Smith 3,247(1) - - - -
4,589(2) -(3) - - -
</TABLE>
- ------------
(1) Represents the stock portion of the second installment
of long-term incentive award distributed in March 1998
in connection with the 1994-1996 three-year, long-term
performance period. The average closing price of the
Company's Common Stock during December 1996 was $11.375
per share. The total awards for the 1994-1996 long-
term performance period for Messrs. Haymaker,
Milchovich, La Duc, Walker and Smith were $230,000,
$90,480, $84,000, $1,456 and $129,600, respectively.
(2) Represents the stock portion of the first installment
of long-term incentive award distributed in March 1998
in connection with the 1995-1997 three-year, long-term
performance period. The average closing price of the
Company's Common Stock during December 1997 was $9.48
per share. The total awards for the 1995-1997 long-
term performance period for Messrs. Haymaker,
Milchovich, La Duc, Walker and Smith were $362,100,
$161,500, $164,900, $21,900 and $152,700, respectively.
(3) As more fully described below, payment of the second
installment for the 1995-1997 long-term performance
period was conditioned on continued employment through
December 31, 1998. Each of the Company's named
executive officers were employed by KACC on January 1,
1999, and the second installment was distributed in
April 1999.
(4) All payments in connection with the 1994-1996 and 1995-
1997 three-year, long-term performance periods have
been made. As more fully described below, the total
award for the 1996-1998 three-year, long-term
performance period has been determined. The first
installment was distributed in April 1999 and the
second installment will, subject to certain conditions,
be distributed in 2000.
Threshold, target and maximum dollar amounts for the
long-term portion of executive compensation are based upon
Company performance. Minimum performance criteria must be met
before the threshold amount is earned. Payments under the
long-term portion of the program are generally made 57% in
shares of the Company's Common Stock and 43% in cash. The
aggregate number of shares distributed is based on the average
closing price of the Company's Common Stock during the last
December of the performance period.
Awards are paid in two equal installments: the first
during the year following the end of the three-year period and
the second during the following year. Payment of the second
installment is generally conditioned on continued employment
through the end of the fiscal year following the end of the
performance period. If a participant voluntarily terminates
his or her employment for any reason other than death,
disability or retirement prior to the beginning of the fiscal
year the payment is to be made, any unmade payments are
forfeited.
During the 1994-1996 and 1995-1997 performance periods
target incentives were based on the return on assets employed
in the business. When incentive awards are determined at the
end of each performance period, up to an additional 30% of
each individuals incentive target based on the achievement of
goals or other accomplishments not reflected in the return on
assets, may be added to the incentive payment amount.
Although the Section 162(m) Committee cannot increase the
incentive payment, it may decrease the payment by up to 60% of
the target incentive. Additional information with respect to
long-term incentive compensation awarded to the Company's
named executive officers, including information with respect
to the 1996-1998 performance period, is set forth above in the
Summary Compensation Table and below in the Report of the
Compensation Committees on Executive Compensation.
<PAGE>
Defined Benefit Plans
Kaiser Retirement Plan
KACC maintains a qualified, defined-benefit retirement
plan (the "Kaiser Retirement Plan") for salaried employees of
KACC and co-sponsoring subsidiaries who meet certain
eligibility requirements. The table below shows estimated
annual retirement benefits payable under the terms of the
Kaiser Retirement Plan to participants with the indicated
years of credited service. These benefits are reflected
without reduction for the limitations imposed by the Code on
qualified plans and before adjustment for the Social Security
offset, thereby reflecting aggregate benefits to be received,
subject to Social Security offsets, under the Kaiser
Retirement Plan and the Kaiser Supplemental Benefits Plan (as
defined below).
<TABLE>
<CAPTION>
Years of Service
Average Annual ----------------
Remuneration 15 20 25 30 35
-------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 250,000 56,250 75,000 93,750 112,500 131,250
350,000 78,750 105,000 131,250 157,500 183,750
450,000 101,250 135,000 168,750 202,500 236,250
550,000 123,750 165,000 206,250 247,500 288,750
650,000 146,250 195,000 243,750 292,500 341,250
750,000 168,750 225,000 281,250 337,500 393,750
850,000 191,250 255,000 318,750 382,500 446,250
950,000 213,750 285,000 356,250 427,500 498,750
1,050,000 236,250 315,000 393,750 472,500 551,250
</TABLE>
The estimated annual retirement benefits shown are based upon
the assumptions that current Kaiser Retirement Plan and Kaiser
Supplemental Benefits Plan provisions remain in effect, that
the participant retires at age 65, and that the retiree
receives payments based on a straight-life annuity for his
lifetime. Messrs. Haymaker, Milchovich, La Duc, Walker and
Smith had 5.7, 18.6, 29.3, 2.25 and 24.5 years of credited
service, respectively, on December 31, 1998. Monthly
retirement benefits, except for certain minimum benefits, are
determined by multiplying years of credited service (not in
excess of 40) by the difference between 1.50% of average
monthly compensation for the highest base period (of 36, 48 or
60 consecutive months, depending upon compensation level) in
the last 10 years of employment and 1.25% of monthly primary
Social Security benefits. Pension compensation covered by the
Kaiser Retirement Plan and the Kaiser Supplemental Benefits
Plan consists of salary and bonus amounts set forth in the
Summary Compensation Table (column (c) plus column (d)
thereof). As more fully described below under the caption
"Employment Contracts and Termination of Employment and
Change-in-Control Arrangements", Messrs. Haymaker and Smith
have agreements which provide additional years of credited
service.
Participants are entitled to retire and receive pension
benefits, unreduced for age, upon reaching age 62 or after 30
years of credited service. Full early pension benefits
(without adjustment for Social Security offset prior to age
62) are payable to participants who are at least 55 years of
age and have completed 10 or more years of pension service (or
whose age and years of pension service total 70) and who have
been terminated by KACC or an affiliate for reasons of job
elimination or partial disability. Participants electing to
retire prior to age 62 who are at least 55 years of age and
who have completed 10 or more years of pension service (or
whose age and years of pension service total at least 70) may
receive pension benefits, unreduced for age, payable at age 62
or reduced benefits payable earlier. Participants who
terminate their employment after five years or more of pension
service, or after age 55 but prior to age 62, are entitled to
pension benefits, unreduced for age, commencing at age 62 or,
if they have completed 10 or more years of pension service,
actuarially reduced benefits payable earlier. For
participants with five or more years of pension service or who
have reached age 55 and who die, the Kaiser Retirement Plan
provides a pension to their eligible surviving spouses. Upon
retirement, participants may elect among several payment
alternatives including, for most types of retirement, a
lump-sum payment.
Kaiser Supplemental Benefits Plan
KACC maintains an unfunded, non-qualified Supplemental
Benefits Plan (the "Kaiser Supplemental Benefits Plan"), the
purpose of which is to restore benefits which would otherwise
be paid from the Kaiser Retirement Plan or the Supplemental
Savings and Retirement Plan, a qualified Section 401(k) plan
(the "Kaiser Savings Plan"), were it not for the Section
401(a)(17) and Section 415 limitations imposed by the Code.
Participation in the Kaiser Supplemental Benefits Plan
includes all employees of KACC and its subsidiaries whose
benefits under the Kaiser Retirement Plan and Kaiser Savings
Plan are likely to be affected by such limitations imposed by
the Code. Eligible participants are entitled to receive the
equivalent of the Kaiser Retirement Plan and Kaiser Savings
Plan benefits which they may be prevented from receiving under
those plans because of such Code limitations.
Kaiser Termination Payment Policy
Most full-time salaried employees of KACC are eligible
for benefits under an unfunded termination policy if their
employment is involuntarily terminated, subject to a number of
exclusions. The policy provides for lump-sum payments after
termination ranging from one-half month's salary for less than
one year of service graduating to eight months' salary for 30
or more years of service. The amounts payable to Messrs.
Haymaker, Milchovich, La Duc, Walker and Smith under the
policy if they had been involuntarily terminated on December
31, 1998 would have been $94,833, $197,917, $204,167, $18,750
and $170,000, respectively.
Employment Contracts and Termination of Employment and Change-
in-Control Arrangements
George T. Haymaker, Jr.
On April 1, 1993, the Company and KACC entered into a
five-year employment agreement with Mr. Haymaker, pursuant to
which he currently serves as Chairman and Chief Executive
Officer of the Company and KACC. Mr. Haymaker's employment
agreement, as amended, terminates December 5, 1999, and
provides for an annual base salary of not less than $569,000,
and a cumulative bonus target in 1999 of $1,245,000 under the
Company's executive compensation programs as more fully
described below in the Report of the Compensation Committees
on Executive Compensation. Of this amount, $395,000 is
attributable to Mr. Haymaker's short-term incentive target and
$850,000 is attributable to his long-term incentive target for
the three-year period ending December 31, 1999.
Pursuant to his employment agreement, Mr. Haymaker
received an initial award under the Kaiser 1993 Omnibus Stock
Incentive Plan (the "1993 Omnibus Plan") of options to
purchase up to 100,000 shares of the Company's Common Stock at
its fair market value on the date of the award. Such options
vested at the rate of 20% per year and are now fully vested.
In the event of a change of control of the Company or
KACC which within one year thereafter adversely affects Mr.
Haymaker's title, position, duties, responsibilities or
compensation, Mr. Haymaker's employment agreement provides
that he may elect to be deemed terminated without cause, and
therefore, entitled to a severance payment in an amount equal
to two times his base annual salary reduced by any payment
made as discussed under "Kaiser Termination Payment Policy"
above.
Under the terms of his employment agreement, Mr. Haymaker
vested 20% per year in an unfunded non-qualified supplemental
benefit, payable at retirement after age 62, equal to a
benefit determined as if his Kaiser Retirement Plan pension
were based on his aggregate service with KACC and a prior
employer (25 years), less his pension from that prior employer
and any retirement benefits from KACC. Mr. Haymaker is now
fully vested under this provision.
In 1998, Mr. Haymaker also received two stock option
grants. The first grant, made under the 1997 Omnibus Plan,
consisted of options to purchase 386,000 shares of the
Company's Common Stock at an exercise price of $12.00 per
share, subject to adjustment under certain circumstances. The
options covered by this grant become effective (i) if prior to
January 1, 2001, the value of the Company's Common Stock
equals or exceeds $18 per share (less certain distributions)
as determined under the terms of the grant (the "Performance
Hurdle"), (ii) if the Performance Hurdle is not achieved, then
on January 1, 2007, provided that Mr. Haymaker's employment
has not terminated as of such date, or (iii) if a significant
transaction such as the sale of all or substantially all of
the assets of the Company or KACC or a change of control
arising from a fundamental corporate transaction occurs prior
to December 31, 2000, then on the date the transaction is
consummated. Notwithstanding the foregoing, upon becoming
effective, not more than one-half of the options covered by
this grant may be exercised prior to the earlier of March 1,
2001 or the occurrence of a fundamental corporate transaction.
In the event of Mr. Haymaker's termination of employment by
KACC (other than for cause) prior to March 1, 2001, all of the
stock options covered by this grant become exercisable in full
subject to the terms of the grant and provided that they have
otherwise become effective.
The second grant, also under the 1997 Omnibus Plan,
consisted of options to purchase 283,000 shares of the
Company's Common Stock at an exercise price of $9.3594 per
share, subject to adjustment under certain circumstances. The
options covered by the second grant generally vest at the rate
of one-third per year, beginning on December 31, 1998, with an
additional one-third vesting each December 31, thereafter
until fully vested. In the event of Mr. Haymaker's
termination of employment by KACC (other than for cause), all
of the unvested stock options covered by this grant
immediately vest and become exercisable in full.
Raymond J. Milchovich
Mr. Milchovich and KACC entered into a five-year
employment agreement effective January 1, 1998. Pursuant to
the terms of the agreement, Mr. Milchovich is currently
entitled to a base salary of $475,000 per year. This amount
is reviewed annually by the Policy Committee to evaluate Mr.
Milchovich's performance, and in any event adjusted for
inflation consistent with the general program of increases for
other executives and management employees. Mr. Milchovich's
agreement also establishes an annual target bonus of $270,000
(subject to adjustment for inflation) payable upon KACC
achieving short-term objectives under the executive bonus plan
which are to be agreed upon annually and otherwise consistent
with KACC's business plan.
Pursuant to the terms of the agreement, Mr. Milchovich
received a grant under the 1997 Omnibus Plan of options to
purchase 635,000 shares of the Company's Common Stock at an
exercise price of $9.4063 per share. This grant was intended
to have a value at the date of grant equivalent to a value of
five times Mr. Milchovich's annual long-term incentive target
of $630,000 and to be in lieu of any payment of long-term
incentive compensation under KACC's executive bonus plan for
the five-year period beginning January 1, 1998, although Mr.
Milchovich remains eligible for additional option grants. The
options granted pursuant to the terms of Mr. Milchovich's
agreement generally vest at the rate of 20% per year,
beginning on December 31, 1998, with an additional 20% vesting
each December 31, thereafter until fully vested.
Mr. Milchovich's agreement provides that upon the
termination of his employment (other than for cause, by reason
of his acceptance of an offer of employment with an affiliate
or because of voluntary termination for other than good
reason), Mr. Milchovich is entitled to a lump sum payment
equal to the sum of (i) the benefit he would have received
under the Kaiser Retirement Plan and Kaiser Supplemental
Benefits Plan as if he had qualified for a fully early pension
less benefits payable from such plans, (ii) an amount equal to
his base salary as of the date of termination for a period
equal to the greater of (a) the number of months remaining in
the term of his agreement or (b) two years, and (iii) his
annual target bonus for the year of termination (but not less
than the initial target established by the agreement). In
addition, in the event of Mr. Milchovich's termination under
the circumstances described above, all of the unvested stock
options held by Mr. Milchovich on the date of termination that
would have vested during the term of his agreement immediately
vest and become exercisable in full. In the event of a change
of control, the benefits described above are also payable upon
either the subsequent termination of Mr. Milchovich's
employment by KACC other than for cause or the subsequent
termination of employment by Mr. Milchovich for any reason
within twelve months following a change of control.
John T. La Duc
Mr. La Duc and KACC entered into a five-year employment
agreement effective January 1, 1998. The terms of Mr. La
Duc's employment agreement are substantially similar to the
terms of Mr. Milchovich's agreement as described above, the
primary differences being that under the terms of his
agreement, Mr. La Duc (i) is currently entitled to a base
salary of $350,000 per year, (ii) has an annual target bonus
of $200,000, and (iii) received a grant under the 1997 Omnibus
Plan of options to purchase 468,750 shares of the Company's
Common Stock at an exercise price of $9.3125 per share, which
amount was based on Mr. La Duc's annual long-term incentive
target of $465,000.
John H. Walker
Mr. Walker and KACC entered into a letter agreement dated
July 27, 1998, pursuant to which Mr. Walker is entitled to the
severance benefits described below under the caption "Kaiser
Severance Protection and Change of Control Benefits Program".
Pursuant to the terms of the letter agreement Mr. Walker is
entitled to the maximum level of severance benefits available
under the Program (as defined below).
Geoffrey W. Smith
KACC has agreed to provide Mr. Smith with an unfunded
nonqualified supplemental benefit after retirement equal to
the additional Kaiser Retirement Plan pension he would be
entitled to receive if his prior employment (6.3) years with
an affiliate of KACC were counted as credited service under
such plan. This additional credited service is also counted
in determining his benefits as described above under the
caption "Kaiser Termination Payment Policy" and for purposes
of determining his employee contributions under KACC's retiree
medical program.
Kaiser Severance Protection and Change of Control
Benefits Program
In 1998, the Company and KACC implemented the Kaiser
Severance Protection and Change of Control Benefits Program
(the "Program") in order to provide certain selected executive
officers of the Company and KACC and key employees of KACC
(collectively, "Participants") with (i) incentives intended to
increase the likelihood of retaining the services of the
Participants and/or (ii) appropriate protection in the event
of a job loss or change of control. The Program will
generally remain in effect through December 31, 2000.
The three components of the Program, each of which is
described more fully below, consist of (i) severance payments
and benefits in the event of termination, (ii) retention
payments conditioned upon continued employment through
specified dates, and (iii) options relating to the Company's
Common Stock. Under the Program, the Company and KACC have
the sole discretion to determine which persons will
participate in the Program and the level of participation.
Not all components of the Program were made available to all
Participants.
Selected Participants are eligible for severance benefits
under the Program upon termination of employment for any
reason other than (i) the voluntary resignation or retirement
of the Participant, (ii) the discharge of the Participant for
serious cause or other reason prejudicial to the Company or
KACC, (iii) the Participant becoming eligible for sick leave,
long-term disability or full early disability benefits under
the Kaiser Retirement Plan, (iv) the Participant's refusal to
accept another suitable position with the Company or KACC, or
(v) the Participant's death. The benefits payable generally
consist of a lump sum cash payment ranging from six months to
one year of base salary (including, in some instances,
prorated incentive awards based upon designated incentive
targets) less whatever severance benefits the Participant
would otherwise be eligible to receive under the Kaiser
Termination Payment Policy. Participants may also be entitled
under the Program to continued medical, dental, life and
accidental death and disability coverage for designated
periods after termination.
In lieu of the severance benefits described above,
selected Participants are also eligible for severance benefits
in the event the Participant's employment terminates or
constructively terminates due to a change of control or
significant restructuring (collectively, a "Fundamental
Change") during a period which commences ninety (90) days
prior to a Fundamental Change and ends on the first
anniversary of the Fundamental Change. These benefits are not
available if (i) the purchaser, new controlling entity, the
Company or KACC offer the Participant suitable employment in a
substantially similar capacity at the Participant's current
level of compensation (regardless of whether the Participant
accepts or rejects the suitable position), (ii) the
Participant voluntarily resigns or is terminated, (iii) the
Participant is discharged for serious cause or other reason
prejudicial to the Company or KACC, (iv) the Participant
becomes eligible within ninety (90) days prior to the
Fundamental Change for sick leave, long-term disability or
full early disability benefits under the Kaiser Retirement
Plan, or (v) the Participant dies. If a Participant fails to
qualify for severance benefits under the Program as a result
of a termination of the Participant's employment due to a
Fundamental Change, the Participant will also fail to qualify
for the severance benefits described above in the preceding
paragraph.
The benefits payable under the Program as a result of a
termination of employment due to a Fundamental Change
generally consist of a lump sum cash payment in an amount
ranging from nine months to two years of base salary
(including, in some instances, prorated incentive awards based
upon designated incentive targets) less whatever severance
benefits the Participant would otherwise be eligible to
receive under the Kaiser Termination Payment Policy.
Participants may also be entitled under the Program to
continued medical, dental, life and accidental death and
disability coverage for designated periods after termination
due to a Fundamental Change.
Under the Program, selected Participants are also
eligible to receive retention payments conditioned upon
continued employment as of a designated date. In each
instance, the retention payment is also generally payable in
the event a Participant's employment is terminated prior to
the designated date unless the termination is for any of the
reasons described above which preclude severance payments
under the Program. Retention payments under the Program
generally consist of a lump sum cash payment and are generally
based upon six months of salary (including, in some instances,
prorated incentive awards based upon designated incentive
targets).
Selected Participants are also eligible under the Program
to receive options to purchase shares of the Company's Common
Stock. The number of shares of Common Stock subject to such
options and the specific terms of such options vary depending
upon the level of responsibility and seniority of the
Participant. Notwithstanding the foregoing, such options
generally (i) replace the long-term incentive compensation
otherwise applicable to the Participant receiving the options
for designated long-term incentive periods beginning on or
after January 1, 1998, (ii) expire five years after the date
of grant, (iii) are based upon the market price of the Common
Stock on the date of grant, (iv) vest over a period of three
or five years, and (v) terminate upon the termination of
employment for cause.
Except as otherwise noted above, there are no employment
contracts between the Company or any of its subsidiaries and
any of the Company's named executive officers. Similarly,
except as otherwise noted above, there are not any
compensatory plans or arrangements which include payments from
the Company or any of its subsidiaries to any of the Company's
named executive officers in the event of any such officer's
resignation, retirement or any other termination of employment
with the Company and its subsidiaries or from a change in
control of the Company or a change in the named executive
officer's responsibilities following a change in control.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEES
ON
EXECUTIVE COMPENSATION
Two compensation committees administer the Company's
compensation plans, the Policy Committee and the Section
162(m) Committee. The Policy Committee administers and
establishes the Company's overall compensation policies,
except to the extent that this authority has been delegated by
the Board to the Section 162(m) Committee. The Section 162(m)
Committee administers and approves amendments to the Company's
plans or programs which are intended to comply with the
provisions of Section 162(m), and also establishes the
criteria to be used in determining awards to be made pursuant
to those plans or programs. Each committee reports to the
full Board and together they have furnished the following
report on executive compensation for fiscal year 1998.
Although certain plans or programs in which executive
officers of the Company participate are jointly sponsored by
the Company and KACC, executive officers of the Company are
directly employed and compensated by KACC. During 1998, the
members serving on the Policy Committee and Section 162(m)
Committee also served on KACC's Compensation Policy Committee
and Section 162(m) Compensation Committee, respectively (these
committees are hereinafter collectively referred to in this
report as the "Committees"). References to the "Company" made
in the remainder of this report are deemed to include KACC as
well as the Company.
Compensation Philosophy, Structure and Methodology
Philosophy. The Company's philosophy continues to be
that compensation of its executives officers should be related
as closely as possible to the ability of the Company as a
whole, and the area of direct responsibility of each
executive, to create economic value. To attract and retain
talented individuals, the Company provides the opportunity to
earn total compensation that is not only competitive with,
but, if Company goals are met, potentially superior to, that
available from employers with whom the Company and its
businesses compete.
Structure. Executive compensation for 1998 consisted of
a combination of base salary, short-term incentives based on
performance during 1998, long-term incentives based on
performance over the 1996-1998 three-year performance period,
employee benefits and executive perquisites. Base salaries,
together with short and long-term incentive targets, were
designed to fall near the 50th percentile (mid-point) of the
market. As a result, the combination of base pay and
incentive compensation allowed executive officers to
potentially earn less, the same as or more than the total
compensation opportunity offered by competing employers
depending on Company performance.
For 1998, the portion of executive compensation allocated
to base compensation ranged from approximately 30% to 49% for
certain senior executive officers, including the named
executive officers, and 43% to 70% for the remaining executive
officers, with the portion allocated to incentive compensation
in each case generally increasing with position
responsibility. For certain senior executives, including
Messrs. Haymaker, Milchovich, La Duc and Smith, the incentive
targets for 1998 were allocated 30% to short-term targets and
70% to long-term targets. For the remaining executive
officers the allocation was generally split evenly between
short and long-term targets. This structure reflected the
Company's compensation philosophy by structuring a major
portion of each executive's total compensation to be at-risk
and performance-based. The Company's compensation for
executive officers also included other benefits and
perquisites which generally fell within the 50th percentile of
its comparative market.
Methodology. Target compensation and incentives were
based on a combination of market survey data, internal force-
ranking and assessment of position responsibilities. Major
national surveys, as well as market data from a group of
companies engaged in metals, mining, chemicals and similar
industries, with whom the Company is likely to compete for
managerial talent, were used to establish the market. In
performing its assessment of position responsibilities,
descriptions of various key positions, the duties and major
responsibilities of each position, as well as the required
qualifications, were developed and then matched to database
descriptions to ensure an accurate match to reasonably
comparable positions at comparative companies.
Company performance awards and goals were established at
the beginning of 1998 with respect to the annual performance
period and at the beginning of 1996 with respect to the 1996-
1998 three-year, long-term performance period. Long-term
performance awards were structured to reward aggressive and
accurate planning during the period, while short-term
performance awards and goals emphasized (i) return on net
assets employed by the Company and, for business unit
presidents, including Messrs. Walker and Smith, business unit
earnings before interest and taxes ("EBIT"), and (ii) safety
or group and individual goals and objectives. Minimum or
threshold performance levels, which must be met for there to
be any incentive payout, as well as target performance levels
and target and maximum incentive payouts were also established
for the short and long-term performance periods. With respect
to the short-term performance period, performance goals for
executive officers other than business unit presidents were
generally based on "normalized" metal prices to allow for
measurement of the progress toward the $120 million profit
improvement program without fluctuations due to changing metal
prices and to adjust the effect of certain other factors
beyond the reasonable control of the Company's management. In
addition, incentive compensation payable to certain senior
executives, including Messrs. Haymaker, Milchovich, La Duc and
Smith, for the 1998 short-term performance period was capped
at their respective targets if the average price of the
Company's Common Stock during December 1998 was lower than the
average price during December 1997.
Components of Executive Officer Compensation for 1998
Base Salaries. Adjustments to the base salary of
certain executive officers were made during 1998 as necessary
to (i) reflect market related adjustments and increasing
responsibilities assumed either as the result of promotions or
additional assignments during the year and (ii) increase the
likelihood of retaining such executive officers as the Company
pursues its strategy for creating stockholder value.
Short-Term Incentive. As described above, short-term
incentive awards for 1998, as well as threshold performance
requirements, were generally based on the "normalized" return
on net assets for executive officers other than business unit
presidents whose awards and thresholds were based on business
unit EBIT. During 1998 Company and business unit results
exceeded threshold performance goals. However, Company
results generally fell below target performance levels, while
certain business unit results exceeded target performance
levels. As a result, short-term awards paid to the corporate
executive officers, including Messrs. Haymaker, Milchovich and
La Duc, were approximately 83% of the target amounts, while
short-term awards paid to business unit presidents, including
Messrs. Smith and Walker, ranged from 79% of target amounts to
the maximum payout of three times the target amounts. Short-
term awards for 1998 were paid in cash shortly after the first
quarter of 1999. The short-term awards earned by the named
executive officers are set forth above in column (c) of the
Summary Compensation Table.
Long-Term Incentive. Long-term incentive compensation
for the 1996-1998 long-term performance period was based on
the average return on net assets during each of the three
years included within the performance period. During the
1996-1998 long-term performance period Company and business
unit results generally exceeded threshold performance goals,
but generally did not reach target performance levels. As a
result, long-term awards for the 1996-1998 performance period
for the named executive officers were on average approximately
36% of the target amounts. Additional information with
respect to the long-term component of executive compensation
is set forth above in the Summary Compensation Table and
Long-Term Incentive Plan Awards Table.
1993 and 1997 Omnibus Plans
All long-term performance awards distributed in
connection with long-term performance periods beginning before
January 1, 1997 are made under the 1993 Omnibus Plan. All
long-term performance awards distributed in connection with
long-term performance periods beginning on or after January 1,
1997, will be made under the 1997 Omnibus Plan. In addition,
the 1997 Omnibus Plan may be utilized as otherwise necessary
to provide those persons who have substantial responsibility
for management and growth of the Company with an opportunity
to increase their ownership of Common Stock, stock options or
related types of benefits.
During 1998, no grants were made under the 1993 Omnibus
Plan, except in connection with the distribution of the second
installment of shares of Common Stock awarded for the 1994-
1996 long-term incentive compensation performance period and
the first installment of shares of Common Stock awarded for
the 1995-1997 long-term incentive compensation performance
period.
In addition, as more fully described above under the
caption "Employment Contracts and Termination and Change-in-
Control Arrangements" the Company implemented the Kaiser
Severance Protection and Change of Control Program (the
"Program"), in order to provide Participants with (i)
incentives intended to increase the likelihood of retaining
the services of the Participants, (ii) appropriate protection
in the event of a job loss or change of control and (iii) a
long-term incentive program for periods beginning on or after
January 1, 1998 and extending for three to five years. In
furtherance of these objectives as well to further increase
the alignment of the interests of the Participants and
stockholders of the Company, certain Participants received
options under the 1997 Omnibus Program to purchase shares of
the Common Stock. The Section 162(m) Committee approved the
grant of options to Messrs. Haymaker, Milchovich and La Duc
under the 1997 Omnibus Plan for the same reasons. In total,
options to purchase 2,090,714 shares of Common Stock were
granted to executive officers of the Company under the 1997
Omnibus Plan during 1998.
Employment Agreements
From time to time and for various reasons, management and
the Board has deemed it appropriate to enter into specific
employment agreements with certain executive officers. Such
agreements may relate, for example, to the further retention
of the officer or a commitment by the officer to relocate to
another location. Where such agreements are made, they are
negotiated by the Company's General Counsel, or his designee
under the supervision of the Policy Committee and reviewed and
approved by the Board or the Policy Committee and, if
appropriate, the Section 162(m) Committee. In making its
compensation decisions, and in supervising the negotiations
and approving such employment agreements, the Policy Committee
is mindful of the Company's overall corporate objectives and
the compensation objectives described above as well as the
circumstances making the employment agreement an appropriate
compensation mechanism. Such employment agreements generally
range in term from one to five years. During 1998, Mr.
Haymaker continued to be employed under the employment
agreement discussed above under the caption "Employment
Contracts and Termination of Employment and Change-in-Control
Arrangements". In addition, as discussed above under the same
caption, during 1998 the Company entered into employment
agreements with Messrs. Milchovich and La Duc and implemented
the Program.
Compensation of the CEO for the Last Completed Fiscal Year
Mr. Haymaker served as the Chairman of the Board and
Chief Executive Officer of the Company for all of 1998. Mr.
Haymaker is employed pursuant to a written employment
agreement which is described above under the caption
"Employment Contracts and Termination of Employment and
Change-in-Control Arrangements". Mr. Haymaker's employment
agreement provides that his annual base salary will be
reviewed and possibly changed on an annual basis. Effective
February 1, 1998, Mr. Haymaker's base salary was increased
from $504,000 to $569,000 to complete a two-step increase
intended to bring Mr. Haymaker's salary more in line with
market data obtained by the Company and the Company's overall
compensation structure for its executive officers. Mr.
Haymaker's employment agreement also contains target
incentives which are consistent with the goals and objectives
of the Company's incentive compensation programs as described
above. As previously noted, during 1998, Mr. Haymaker
received options under the 1997 Omnibus Plan as part of his
long-term incentives.
During 1998 the Company's performance fell below 1998
performance goals. As a result, the short-term incentive
award earned by Mr. Haymaker in 1998 was limited to $290,000,
or approximately 74.8% of his targeted amount of $387,900.
Similarly, the Company's performance during the 1996-1998
long-term incentive compensation performance period fell below
performance goals. As a result, the long-term award earned by
Mr. Haymaker for the 1996-1998 three-year long-term
performance period was $250,000, or approximately 30.5% of his
targeted amount of $818,500.
Compensation by MAXXAM
Mr. La Duc received a portion of his compensation during
1998 from MAXXAM, the Company's parent corporation. Where an
executive officer of both the Company and MAXXAM is
compensated by the Company, or where an executive officer of
both the Company and MAXXAM is compensated by MAXXAM, the
respective corporations make intercompany allocations of the
costs of employment of the executive officer based on the
allocation of that executive officer's time as expended among
the Company, MAXXAM or their respective subsidiaries. Such
allocations are described under "Certain Transactions" below.
Compliance with Section 162(m)
Section 162(m) generally disallows a tax deduction to
public companies for compensation over $1 million paid to the
CEO and four other most highly compensated executive officers
of public companies. Qualifying performance-based
compensation will not be subject to the deduction limit if
certain requirements are met. Compensation earned by or
awarded to certain senior executives whose compensation is
potentially subject to the limitations imposed by Section
162(m) of the Code is covered by a separate program intended
to comply with the provisions of Section 162(m) of the Code
(the "Senior Executive Program"). The Senior Executive
Program, the 1993 Omnibus Plan and the 1997 Omnibus Plan, each
of which has been approved by the stockholders of the Company,
are performance based and designed to enable compliance with
Section 162(m) and the regulations thereunder. In addition,
the Senior Executive Program and awards under the 1993 and
1997 Omnibus Plans that are intended to comply with Section
162(m) are administered by the Section 162(m) Committee.
Messrs. Marcus (Chairman) and Cruikshank currently serve as
members of the Section 162(m) Committee and for purposes of
Section 162(m) are qualifying directors. The senior
executives covered by the Senior Executive Program are the
only executive officers of the Company to which the limitation
imposed by Section 162(m) of the Code is likely to apply and
the Section 162(m) Committee believes that awards to these
senior executives should be tax deductible under Section
162(m).
Section 162(m) Compensation Compensation Policy Committee
Committee of the of the Board of Directors
Board of Directors
Robert J. Cruikshank Robert J. Cruikshank
Robert Marcus, Chairman Ezra G. Levin, Chairman
Robert Marcus
Compensation Committee Interlocks and Insider Participation
No member of the Policy Committee or the Section 162(m)
Committee was, during the 1998 fiscal year, an officer or
employee of the Company or any of its subsidiaries, or was
formerly an officer of the Company or any of its subsidiaries
or, other than Mr. Levin, had any relationships requiring
disclosure by the Company under Item 404 of Regulation S-K.
Mr. Levin served on the Company's Policy Committee and Board
of Directors during 1998 and is also a partner in the law firm
of Kramer Levin Naftalis & Frankel LLP, which provided legal
services to the Company and its subsidiaries during 1998.
During the Company's 1998 fiscal year, no executive
officer of the Company served as (i) a member of the
compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose
executive officers served on the Policy Committee or Section
162(m) Committee of the Company, (ii) a director of another
entity, one of whose executive officers served on any of such
committees, or (iii) a member of the compensation committee
(or other board committee performing equivalent functions) of
another entity, one of whose executive officers served as a
director of the Company.
PERFORMANCE GRAPH
The following performance graph compares the cumulative
total stockholder return on the Company's Common Stock with
the cumulative total returns of the S&P 500 Stock Index and a
peer group which consists of companies included by S&P in its
published index for the Aluminum Industry. The graph assumes
that the value of the investment in the Company's Common Stock
and each index was $100 at December 31, 1993, and that all
dividends were reinvested. The data points are calculated as
of the last trading day for the year indicated.
<TABLE>
<CAPTION>
INDEXED RETURNS
Years Ending
Base
Period
Company/Index Dec93 Dec94 Dec95 Dec96 Dec97 Dec98
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
KAISER ALUMINUM CORPORATION 100 120.83 145.83 129.17 98.61 54.17
S&P ALUMINUM INDUSTRY INDEX 100 122.62 151.12 173.56 176.40 180.97
S&P 500 INDEX 100 101.32 139.40 171.40 228.59 293.91
</TABLE>
CERTAIN TRANSACTIONS
During the period from October 28, 1988, through June 30,
1993, the Company and its domestic subsidiaries were included
in the consolidated federal income tax returns of MAXXAM.
Payments or refunds for periods prior to July 1, 1993, related
to foreign jurisdictions could still be required pursuant to
the Company's and KACC's respective tax allocation agreements
with MAXXAM. In accordance with the credit agreement entered
into by the Company and KACC, any such payments to MAXXAM by
KACC would require lender approval, except in certain
circumstances. The tax allocation agreements of the Company
and KACC with MAXXAM terminated pursuant to their terms,
effective for taxable periods beginning after June 30, 1993.
While the Company and KACC are severally liable for the MAXXAM
tax group's federal income tax liability for all of 1993 and
applicable prior periods, pursuant to the relevant tax
allocation agreements, MAXXAM indemnifies the Company and KACC
to the extent the tax liability exceeds amounts payable by
them under such agreements.
KACC and MAXXAM have an arrangement pursuant to which
they reimburse each other for certain allocable costs
associated with the performance of services by their
respective employees. KACC paid a total of approximately $2.3
million to MAXXAM pursuant to such arrangements and MAXXAM
paid approximately $3.0 million to KACC pursuant to such
arrangements in respect of 1998. Generally, KACC and MAXXAM
endeavor to minimize the need for reimbursement by ensuring
that employees are employed by the entity to which the
majority of their services are rendered.
Mr. Levin, a director of the Company and KACC, is a
partner in the law firm of Kramer Levin Naftalis & Frankel
LLP, which provides legal services to the Company and its
subsidiaries.
On April 17, 1995, SHRP, Ltd. and two affiliated
entities, SHRP Acquisition, Inc. and SHRP Capital Corp., filed
voluntary corporate petitions under Chapter 11 of the United
States Bankruptcy Code. Their bankruptcy plan has since been
confirmed and the transactions contemplated by the bankruptcy
reorganization plan were consummated on October 6, 1995. Mr.
Hurwitz has served as a director and Chairman of the Board of
SHRP, Inc., SHRP, Ltd.'s sole general partner prior to SHRP
Ltd.'s bankruptcy reorganization, and as a director, Chairman
of the Board and President of SHRP Capital Corp., a subsidiary
of SHRP, Ltd. which was dissolved effective December 31, 1997.
Mr. Haymaker's son, George T. Haymaker III, is an
executive officer of Coast Aluminum and Architectural
("Coast"), a distributor of aluminum products, including
products manufactured by KACC. During 1998 Coast purchased
approximately $14 million of products from KACC.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Based solely upon a review of the copies of the Forms 3,
4 and 5 and amendments thereto furnished to the Company with
respect to its most recent fiscal year, and written
representations from reporting persons that no other Form 5s
were required, the Company believes that all filing
requirements were complied with which were applicable to its
officers, directors and greater than 10% beneficial owners.
<PAGE>
OTHER MATTERS
Independent Public Accountants
Arthur Andersen LLP, the Company's independent public
accountants, has completed its audit with respect to the
Company's 1998 fiscal year. Representatives of Arthur
Andersen LLP plan to attend the Annual Meeting and will be
available to answer appropriate questions. Such
representatives will also have an opportunity to make a
statement at the Annual Meeting, if they so desire.
Stockholder Proposals for the 2000 Annual Meeting of
Stockholders
The Company's Amended and Restated By-laws require that
the Company receive written notice of any proposals which
stockholders intend to present at the 2000 Annual Meeting
(other than those submitted for inclusion in the Company's
proxy material pursuant to Rule 14a-8 of the Exchange Act),
and any nominations by stockholders of persons for election or
reelection as directors of the Company, by no earlier than
February 19, 2000, and no later than March 20, 2000. The
foregoing notice is required to set forth (i) as to each
person whom the stockholder proposes to nominate for election
or reelection as a director, all information relating to such
person that is required to be disclosed in solicitation of
proxies for election of directors, or is otherwise required,
in each case, pursuant to Regulation 14A under the Exchange
Act (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director
if elected); and (ii) as to any other business that the
stockholder proposes to bring before the meeting, a brief
description of such business, the reasons for conducting such
business at the meeting, and any material interest in such
business of the stockholder submitting the notice and the
beneficial owner, if any, on whose behalf the nomination or
proposal is being made, as well as (a) the name and address of
such stockholder, as they appear on the Company's books, and
of such beneficial owner, if applicable, and (b) the class and
number of shares of the Company which are owned beneficially
and of record by such stockholder and such beneficial owner,
if applicable. A copy of the provision referred to above may
be obtained, without charge, upon written request to the
Company's Secretary. Proposals intended to be presented at
the 2000 Annual Meeting of Stockholders pursuant to Rule 14a-8
of the Exchange Act must be received by December 21, 1999, in
order to be included in the Company's proxy statement and form
of proxy relating to that meeting. Any stockholder proposals
or nominations must be sent to the Company's Secretary at the
Company's executive offices at 5847 San Felipe, Suite 2600,
Houston, Texas 77057.
Other Matters
The cost of mailing and soliciting proxies in connection
with the Annual Meeting will be borne by the Company. The
Company will, if requested, reimburse banks, brokerage houses
and other custodians, nominees and certain fiduciaries for
their reasonable expenses incurred in mailing proxy material
to their principals. Proxies may be solicited by directors,
officers and employees of the Company without special
remuneration. The Company has retained Corporate Investor
Communications, Inc. to assist in the distribution and
solicitation of proxies at an estimated cost of approximately
$5,000, plus reasonable out-of-pocket expenses. In addition
to the use of mails, proxies may be solicited by personal
interviews, facsimile or telephone.
By Order of the Board of Directors
/S/ John Wm. Niemand II
JOHN WM. NIEMAND II
Secretary
April 19, 1999
Houston, Texas
- -------------------------------------------------------------
Table of Contents
Notice of Annual Meeting of Stockholders
Proxy Statement
Election of Directors. . . . . . . . . . . .3
Other Business . . . . . . . . . . . . . . .3
The Board of Directors and its
Committees . . . . . . . . . . . . . . . . 3
Executive Officers and Directors. . . . . . 6
Principal Stockholders. . . . . . . . . . .11
Executive Compensation. . . . . . . . . . .13
Report of the Compensation
Committees on Executive
Compensation . . . . . . . . . . . . . . .22
Performance Graph . . . . . . . . . . . . .26
Certain Transactions. . . . . . . . . . . .27
Compliance with Section 16(a)
of the Exchange Act. . . . . . . . . . . .27
Other Matters . . . . . . . . . . . . . . .28
- -------------------------------------------------------------<PAGE>
KAISER ALUMINUM CORPORATION
- ------------------------------------------------------------
Notice of 1999 Annual Meeting
and
Proxy Statement
- ------------------------------------------------------------
Important
Please sign and date your proxy card
and promptly return it in the enclosed envelope.
SKU KAC-PROXY-1999P
Printed on recycled paper.
<PAGE>
Appendix A
PROXY
KAISER ALUMINUM CORPORATION
Solicited on behalf of the Board of Directors
for the Annual Meeting of Stockholders to be
held May 19, 1999
The undersigned hereby appoints GEORGE T.
HAYMAKER, JR.,
CHARLES E. HURWITZ, JOHN T. LA DUC and E. Bruce
Butler
as proxies (each with
power to act alone, or jointly, and with power of
substitution) to vote, as designated
on the reverse side, all shares of Common Stock
the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held on
May 19, 1999, and
at any and all adjournments or postponements
thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
/SEE REVERSE SIDE/
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
/SEE REVERSE SIDE/
/X/ Please mark
votes as in
this example.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS
DESIGNATED BY THE UNDERSIGNED. IF NO CHOICE IS SPECIFIED,
THE PROXY WILL BE VOTED "FOR" THE ELECTION OF NOMINEES TO
THE BOARD OF DIRECTORS.
1. Election of Directors
Nominees: Robert J. Cruikshank, George T. Haymaker, Jr.,
Charles E. Hurwitz, Ezra G. Levin, Raymond J. Milchovich
and James D. Woods.
FOR ALL WITHHOLD
NOMINEES / / / / FROM ALL
(except as marked NOMINEES
to the contrary)
/ /
---------------------------------------------
To withhold authority to vote for any individual nominee(s)
while voting for the remainder mark the box and write the
name of the nominee(s) for which authority is withheld
in the space above.
2. In their discretion, the proxies are authorized to
vote upon such other matters as may properly come before
the meeting or any adjournments or postponements
thereof, hereby revoking any instruction(s) heretofore
given by the undersigned.
MARK HERE FOR ADDRESS CHANGE AND
NOTE AT LEFT / /
Please sign name(s) exactly as printed hereon. If stock is
held in the name of more than one person, EACH person should
sign. Executors, administrators, trustees, etc., should give
full title as such. If a corporation, please sign full
corporate name by duly authorized officer. If a
partnership, please sign in partnership name by authorized
person.
Signature(s): Title(s): Date:
----------- ----------- ---------
<PAGE>
Appendix B
Pre-Registration Form
If you plan to attend the Annual Meeting of
Stockholders at 11:30 a.m., local time, on Wednesday, May 19,
1999, at Waterwood National Resort and Country Club, 1
Waterwood Parkway, Huntsville, Texas, you may use this form to
pre-register and expedite your admission to the meeting. If
you choose to pre-register, you will only be required to
verify your identity at the registration table with a driver's
license or other appropriate identification bearing a
photograph to enter the meeting. If you are a Stockholder of
record, please complete this form and send it to the address
set forth below, or call the toll-free number listed below and
provide your information. If you hold your shares through
your broker, bank or other nominee, please complete and return
this form accompanied by your brokerage or similar statement
demonstrating that you owned shares of Common Stock as of the
close of business on March 23, 1999, in order to pre-register.
Please return this Pre-Registration Form, together
with proof of ownership of Common Stock as of March 23, 1999,
if necessary, to: Kaiser Aluminum Corporation, 5847 San
Felipe, Suite 2600, Houston, Texas 77057, attention:
Stockholder Meeting Pre-Registration. For further
information, you may call toll-free 1-800-256-1601.
I plan to attend the Company's Annual Meeting of Stockholders
on May 19, 1999.
Name:
-----------------
Street:
---------------
City:
-----------------
State: ZIP CODE:
--------------- ------
Daytime Telephone Number (including area code):
-------------
