AK Steel Holding (AKS)

DIRECTOR COMPENSATION

During 2007, each director who was not an employee of the Company received an annual retainer of $90,000 for service on the Board of Directors. Each non-employee director who chairs a committee of the Board of Directors receives an additional annual retainer. The annual retainer for the chair of the Audit Committee is $15,000. The annual retainer for the chair of the Compensation Committee is $12,500. The annual retainer for each of the chairs of the Nominating and Governance Committee and the Public and Environmental Issues Committee is $5,000. In addition, the Company pays non-employee directors $2,000 for each Board meeting that they attend and for each meeting that they attend of a committee of which they are a member. The Company reimburses all directors for the expenses they incur in attending those meetings.

Each non-employee director receives at least one-half of his or her annual retainer for service in the form of restricted shares of common stock of the Company. The balance of his or her annual retainer for service is paid in cash or, at the director’s option, in the form of additional restricted shares of common stock. Director compensation is paid quarterly. The annual retainer portion of a director’s compensation is paid prospectively and the attendance fee portion is paid retrospectively. Restricted shares are issued quarterly at the time the cash compensation is paid and are valued at the fair market price on the date of issuance. The restrictions on the restricted shares of common stock lapse on the date the director completes his or her full tenure on the Board due to the director’s attainment of mandatory retirement age, the election by the shareholders of a replacement director, or the director’s death or disability.

In addition to the above-described annual retainer and meeting fees paid to all non-employee directors, Mr. Jenkins was also paid an annual fee for 2007 in the amount of $60,000 for his service as Lead Director of the Board of Directors.

Under the Director Deferred Compensation Plan, each year a director may elect to defer any portion of his or her annual retainer or other director fees which is not paid in the form of restricted stock.

Upon first being elected to the Board, each non-employee director is granted options under the Company’s Stock Incentive Plan to purchase a total of 10,000 shares of the Company’s common stock. The option price for each share is the fair market value of the share as defined in the Company’s Stock Incentive Plan. Under the terms of the Stock Incentive Plan, fair market value is calculated based on the average of the high and low market price for shares of the Company’s common stock traded on the grant date. On the fifth anniversary date of becoming a non-employee director, as provided under Section 6.1(b) of the Company’s Stock Incentive plan, each director may receive options in an amount similar to the initial 10,000 options granted when he or she was first elected to the Board. Restrictions on the right to exercise the options lapse on the first anniversary of the date of grant and such options 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.

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DIRECTOR COMPENSATION

During 2006, each director who was not an employee of the Company received an annual retainer for service on the Board of Directors. In May 2006, the Nominating and Governance Committee recommended, and the Board of Directors approved, an increase in the annual retainer for the Board of Directors effective July 1, 2006. At that time, the annual retainer for service on the Board of Directors increased from $80,000 to $90,000.

Each non-employee director who chairs a committee of the Board of Directors receives an additional annual retainer. In May 2006, the Nominating and Governance Committee recommended, and the Board of Directors approved, an increase in the annual retainer for the chairs of the Audit Committee and the Compensation Committee of the Board of Directors effective July 1, 2006. At that time, the annual retainer for the chair of the Audit Committee increased from $5,000 to $15,000 and the annual retainer for the chair of the Compensation Committee increased from $5,000 to $12,500. The annual retainer for the chairs of the Nominating and Governance Committee and the Public and Environmental Issues Committee did not change and remains $5,000.

In addition, the Company pays non-employee directors $2,000 for each meeting they attend of the Board and a committee of which they are a member. The Company reimburses all directors for the expenses they incur in attending those meetings.

Each non-employee director receives at least one-half of his or her annual retainer for service in the form of restricted shares of common stock of the Company. The balance of his or her annual retainer for service is paid in cash or, at the director’s option, in the form of additional restricted shares of common stock. Director compensation is paid quarterly. The annual retainer portion of a director’s compensation is paid prospectively and the attendance fee portion is paid retrospectively. Restricted shares are issued quarterly at the time the cash compensation is paid and are valued at the fair market price on the date of issuance. The restrictions on the restricted shares of common stock lapse on the date the director retires or otherwise completes his or her tenure on the Board.

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In addition to the above-described annual retainer and meeting fees paid to all non-employee directors, Mr. Jenkins was also paid an annual fee for 2006 in the amount of $60,000 for his service as Lead Director of the Board of Directors.

Under the Director Deferred Compensation Plan, each year a director may elect to defer any portion of his or her annual retainer or other director fees which is not paid in the form of restricted stock.

Upon first being elected to the Board, each non-employee director is granted options under the Company’s Stock Incentive Plan to purchase a total of 10,000 shares of the Company’s common stock. The option price for each share is the fair market value of the share as defined in the Company’s Stock Incentive Plan. Under the terms of the Stock Incentive Plan, fair market value is calculated based on the average of the high and low market price for shares of the Company’s common stock traded on the grant date. On December 8, 2006, the Board of Directors approved an amendment to Section 6.1(b) of the Company’s Stock Incentive Plan. Pursuant to this amendment, on the fifth anniversary date of becoming a non-employee director, each director may receive options in an amount similar to the initial 10,000 options granted when he or she was first elected to the Board. Upon adoption of the amendment, the Board then granted each director who had completed more than five years of service on the Board prior to the effective date of the amendment 10,000 options of the Company’s common stock. The option price for each share was the fair market value of the Company’s common stock at December 8, 2006, the grant date, calculated as noted above. Restrictions on the right to exercise the options will lapse 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.