AK Steel Holding (AKS)

2005 Compensation of Chief Executive Officer

In developing a 2005 compensation package for Mr. Wainscott, the Committee considered the analysis and competitive compensation data supplied by an independent executive compensation consultant, the Company’s performance against annual and long-term incentive award objectives, the Board’s evaluation of Mr. Wainscott’s individual contribution to the Company’s achievements, the highly competitive nature of the steel industry, the disadvantages the Company has in competing against steel companies which either have shed or never had significant retiree pension and healthcare obligations, and the need to retain and motivate Mr. Wainscott to lead the Company’s continued financial turnaround. The Committee also considered Mr. Wainscott’s individual performance as CEO against specific goals and objectives which the Committee had approved for 2005 and which it used, in part, as a basis for an annual evaluation of Mr. Wainscott’s performance by all of the Board’s independent directors.

After giving appropriate consideration to all of these factors, in January 2005 the Committee concluded that both Mr. Wainscott’s individual performance as CEO and the Company’s performance in 2004 had been strong. The Committee further concluded that 2004 represented another year of substantial progress for the Company under Mr. Wainscott’s leadership. Consistent with the Committee’s view stated above that strong individual performance and strong Company performance should generally result in above-market increases in base salary, and taking into account Mr. Wainscott’s tenure as the Company’s CEO and peer group competitive competition practices, Mr. Wainscott’s base salary was set at $800,000 for 2005, which was an increase of $150,000 over his base salary for 2004. At the same time, Mr. Wainscott also was awarded grants under the Company’s SIP as follows: 60,000 performance shares, 40,000 restricted shares and 40,000 stock options. In January 2006, Mr. Wainscott also received an MIP incentive award in the amount of $320,000 with respect to 2005 at the time the Committee approved, and the Board ratified, payment of an incentive award under the MIP for achievement by the Company in 2005 of its performance goals at the target level with respect to safety and quality. Mr. Wainscott did not receive an LTPP incentive award with respect to 2005 because no awards were earned under that Plan for that performance period.

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2004 Compensation of Chief Executive Officer

During 2004, Mr. Wainscott’s base salary was $650,000. The Board also approved payment to Mr. Wainscott of a special bonus in 2004 in the amount of $54,167 and an MIP incentive award of $975,000 for 2004 based solely upon the Company’s performance for the 2004 calendar year. Mr. Wainscott also received a grant on January 20, 2005 of 43,796 restricted shares having an aggregate value as of the grant date of $600,005 as part of the 2004 special restricted stock award program described above. Mr. Wainscott did not receive an LTPP incentive award for 2004 because no awards were earned under that Plan for 2004. As noted above, Mr.

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Wainscott also did not receive a grant of options or restricted stock in January 2004 when such grants were made to other executive officers because the Board already had granted him options and restricted stock which anticipated his service as Chief Executive Officer and President of the Company for calendar year 2004 at the time the Board acted on October 16, 2003 to appoint Mr. Wainscott to those positions.

In developing a 2004 compensation package for Mr. Wainscott consisting of these various components, the Committee considered the analysis and recommendations of an independent executive compensation consultant, the Company’s performance against annual and long-term incentive award objectives, the Board’s evaluation of Mr. Wainscott’s individual contribution to the Company’s achievements, his and the Company’s performance against specific goals and objectives, the extremely difficult circumstances facing the Company and under which Mr. Wainscott assumed the executive leadership of the Company as its Chief Executive Officer and President, and the need to retain and motivate Mr. Wainscott to lead the Company’s continued financial turnaround.