AK Steel Holding (AKS)

Summary of the Long-Term Plan

Set forth below is a summary of certain important features of the Long-Term Plan, as so amended and restated, including, among other things, the performance measures, eligibility requirements and limitations on awards contained therein. The summary is qualified in its entirety by reference to the full text of the Long-Term Plan, a copy of which is appended to this Proxy Statement as Annex B. All capitalized terms not defined in the summary are defined in the text of the Long-Term Plan.

Performance Period. Each Performance Period under the Long-Term Plan generally consists of three consecutive calendar years. However, to effect the transition to the new metrics for measuring performance under the amended and restated plan, calendar year 2005 will constitute a one-year Performance Period, and calendar years 2005 and 2006 together will constitute a two-year Performance Period, with appropriate adjustments from the three-year performance goals.

Administration. The Long-Term Plan will continue to be administered by the Committee, all of the members of which must be (i) “non-employee directors” within the meaning of and to the extent required by Rule 166-3 of the Exchange Act, (ii) “independent directors” under the rules and regulations of the New York Stock Exchange” and (iii) “outside directors” within the meaning of Section 162(m). The Committee selects the Company executive officers who will participate in the Long-Term Plan, and the Company’s Executive Management Committee selects other management employees as Plan Members. The Committee establishes and administers the performance goals that must be achieved for Plan Members to receive Performance Awards, certifies in writing that the criteria to receive a Performance Award have been satisfied, determines the terms of the Performance Awards and may remove any Plan Member from further participation in the Long-Term Plan. The Committee and the Board have the authority to amend or terminate the Long-Term Plan at any time.

Eligibility. All executive officers and other key management employees of the Company are eligible to be selected for participation in the Long-Term Plan.

Performance Awards. The Committee assigns each Plan Member who is a Covered Employee a Target Percentage. The Executive Management Committee assigns each other Plan Member a Target Percentage. A Plan Member’s Target Percentage is multiplied by his or her base salary for the last month of the relevant performance

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period, annualized to arrive at the Plan Member’s Target Amount. The Plan Member will be entitled to a certain percentage of his Target Amount if certain performance goals are attained by the Company. The performance goals are objective and based on the Company’s EBITDA, determined cumulatively for the calendar years within the Performance Period and in accordance with generally accepted accounting principles. Prior to the March 2005 amendments, the Long-Term Plan’s performance goals were based on a comparison of the Company’s EBITDA per ton of steel shipped (excluding special, extraordinary and unusual items) to EBITDA per ton shipped (excluding special, extraordinary and unusual items) of the Company’s principal competitors. Upon approval of the amendment and restatement of the Long-Term Plan, an absolute cumulative EBITDA performance metric will be used.

For each Performance Period, the Committee assigns, in writing, a Threshold Performance Goal, a Target Performance Goal, and a Maximum Performance Goal with respect to cumulative EBITDA for the Performance Period. If the Threshold Performance Goal is not achieved, no Performance Awards will be made for that Performance Period. If the Threshold Performance Goal is achieved, then each Plan Member will receive a Performance Award equal to one half of his or her Target Amount. If the Target Performance Goal is achieved, then each Plan Member will receive a Performance Award equal to his or her Target Amount. If the Maximum Performance Goal is achieved, then each Plan Member will receive a Performance Award equal to two times his or her Target Amount. If the performance level achieved falls between the Threshold and Target Performance Goals, or between the Target and Maximum Performance Goals, applicable Performance Awards will be determined by straight-line interpolation.

At the conclusion of a particular Performance Period, the Committee determines the extent to which the performance goals have been met. The Committee then determines the applicable Performance Awards, if any, to be paid to Plan Members. However, no payout may be made under the Long-Term Plan to a Covered Employee except upon written certification by the Committee that the applicable performance goals have been satisfied. No Covered Employee may receive a Performance Award under the Long-Term Plan in excess of $5,000,000. Any Performance Awards will be paid to Plan Members in cash in a single lump sum within 120 days following the applicable Performance Period.

Termination of Employment. If during a calendar year a Plan Member dies, becomes disabled, retires, or is involuntarily terminated for reasons other than cause, the Plan Member (or his or her estate in the case of death) is entitled under the Long-Term Plan to an amount equal to twice the amount paid or to be paid to the Plan Member on the Performance Award Payment Date occurring within that calendar year, less any amount already paid to the Plan Member on such Performance Award Payment Date.

Events of Forfeiture. If a Plan Member is terminated for cause, or voluntarily terminates his or her employment with the Company prior to any Performance Award Payment Date, no Performance Award may be paid under the Long-Term Plan. If the Long-Term Plan is terminated, no Performance Awards shall be paid to any Plan Member on or after the date of such action, unless the Committee expressly provides otherwise.