AK Steel Holding (AKS)

Stock option and restricted stock award vesting

Historically, the restrictions on grants of common stock to the Company’s employees have lapsed over a five-year period, with 25% lapsing on the second anniversary of the grant date and an additional 25% lapsing on the third, fourth and fifth anniversaries of the grant date. All restricted stock grants to the NEOs in 2006 have such a vesting schedule. In July 2006, however, the Committee requested, as part of a routine review of compensation elements, that Mr. Johnston, the Committee’s executive compensation consultant, evaluate the vesting schedule for both options and restricted stock to determine if they were competitive and appropriate relative to the compensation programs of other similarly-situated companies. Mr. Johnston performed that evaluation and at the Committee’s October 2006 meeting provided comparative data of the vesting periods of other similarly-situated companies, including direct competitors of the Company. Based upon that comparative data, the Committee concluded that the vesting schedule for the Company’s option grants was competitive and appropriate and, therefore, should not be changed. With respect to the vesting schedule for the Company’s restricted stock grants, however, the Committee concluded that it would be more competitive and appropriate to shorten the vesting schedule. The Committee therefore recommended to the Board, and the Board approved at its

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October 19, 2006 meeting, that the vesting schedule for the Company’s restricted stock grants be changed starting with grants made in January 2007 to a three-year step period, vesting ratably on the first, second and third anniversaries of the grant. Therefore, pursuant to this action by the Board, the restricted stock grants made to the Company’s employees, including its NEOs, in January 2007 shall lapse with respect to one-third of the shares on the first anniversary of the date of the award, and with respect to an additional one-third of the shares on each of the second and third anniversaries of the date of the award. Absent further action by the Board, this vesting schedule also will be used in future years.