AK Steel Holding (AKS)

Compensation of Directors

During 2005, each director who was not an employee of the Company received an annual fee of $80,000 for service on the Board of Directors. One-half of the annual fee is paid in the form of restricted shares of common

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stock of the Company valued at the fair market price on the date of issuance and the balance is paid in cash or, at the director’s option, in the form of additional restricted shares of common stock. The restrictions on the shares of common stock paid to a director lapse on the date the director retires or otherwise completes his or her tenure on the Board. Each non-employee director who chairs a committee of the Board of Directors receives an additional annual fee of $5,000 for such service. Non-employee directors also are paid a fee of $2,000 for each Board meeting and each committee meeting they attend and are reimbursed for their expenses incurred in attending those meetings. As non-executive Chairman, Mr. Jenkins’ annual fee for service on the Board of Directors for 2005 was set at 2.5 times that of the other non-employee directors. Mr. Jenkins’ fee for each Board meeting and each committee meeting he attended in 2005 was $5,000. Effective January 1, 2006, Mr. Jenkins ended his service as non-executive Chairman and was elected to serve as Lead Director to the Board. Specifically for service in his capacity as Lead Director, Mr. Jenkins now receives an annual fee of $60,000 in addition to the above-described fees paid to all non-employee directors.

Each year directors may elect to defer any portion of their annual fee for services not paid in the form of restricted stock as well as any portion or all of the fees received for meeting attendance and serving as committee chair, pursuant to the Director Deferred Compensation Plan. One director deferred compensation under this plan during 2005. Upon first being elected to the Board, each non-employee director also is granted options under the Company’s Stock Incentive Plan to purchase a total of 10,000 shares of the Company’s common stock at its prevailing market price at the time of the grant. The options vest on the first anniversary of the date of grant and may be exercised at any time thereafter until the tenth anniversary of the grant date or three years after retirement from the Board, whichever is sooner. An employee of the Company who serves as a director receives no additional compensation for such service.

Compensation of Directors

In 2004, the Nominating and Governance Committee reviewed with the assistance of an independent compensation consultant the compensation paid to directors who are not employees of the Company. The

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consultant reported that the total compensation paid by the Company to its directors was well below that of similarly situated companies and recommended that an increase in compensation was needed to keep the Company competitive and enable it to continue to attract high quality candidates to serve on the Board of Directors. The consultant further recommended that the annual fee should be increased from $40,000 to $80,000. That recommendation was accepted by the Nominating and Governance Committee and approved by the Board of Directors, to be effective April 1, 2004. One-half of the annual fee is paid in the form of restricted shares of common stock of the Company valued at its market price on the date of issuance and the balance is paid in cash or, at the director’s option, in the form of additional restricted shares of common stock. Each non-employee director who chairs a committee of the Board of Directors receives an additional annual fee of $5,000 for such service. Non-employee directors also are paid a fee of $2,000 for each Board meeting and each committee meeting they attend and are reimbursed for their expenses incurred in attending those meetings. As non-executive Chairman, Mr. Jenkins’ annual fee for service on the Board of Directors is set at 2.5 times that of the other non-employee directors. With the increase in the annual fee payable to the other non-employee directors, therefore, his annual fee also increased on April 1, 2004, from $100,000 to $200,000. One-half of his retainer is also paid in the form of restricted shares of common stock of the Company valued at their market price on the date of issuance. Mr. Jenkins’ fee for each Board meeting and each committee meeting he attends is $5,000. Directors may elect each year to defer any portion of the annual fee for services not paid in the form of restricted stock as well as any portion or all of the fees received for meeting attendance and serving as committee chair, pursuant to the Director Deferred Compensation Plan. One director deferred compensation under this plan during 2004. Upon first being elected to the Board, each non-employee director also is granted options under the Company’s Stock Incentive Plan to purchase a total of 10,000 shares of the Company’s common stock at its prevailing market price at the time of the grant. The options vest on the first anniversary of the date of grant and may be exercised at any time thereafter until the tenth anniversary of the grant date or three years after retirement from the Board, whichever is sooner. An employee of the Company who serves as a director receives no additional compensation for such service.