2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 68 AK STEEL HOLDING CORPORATION DirectorAverageAgeandAverageBoardTenureSnapshot The below charts provide the respective ages and tenures of service for each of our Director nominees,inadditiontotheaverageageandtenure. 0 10 20 30 40 50 60 70 80 AverageAge:63 Cuneo Edison Essig Gerber Kenny Michael Newport Thomson Wilson Wright Yocum 0 5 10 15 20 25 AverageBoardTenure:6.8 years Cuneo Edison Essig Gerber Kenny Michael Newport Thomson Wilson Wright Yocum iii 2018ProxyStatement AverageAge:63AverageBoardTenure:6.8years Total of 07 pages in section ❖ Executivecompensationclawbackpolicy ❖ RegularBoardandCommitteeself-evaluations ❖ RegularExecutiveSessionsofindependentDirectors ❖ Stockholderoutreachprogram ❖ Pay-for-performance-basedexecutivecompensationprogram ❖ StockretentionguidelinesforDirectorsandExecutiveOfficers ❖ MajorityofDirectorcompensationintheformofrestrictedstockunits ❖ Policyprohibitinginsidertrading,hedgingtransactionsandpledgingofsecurities ❖ Proxy access rights –our By-laws includeproxy access provisions permittingeligiblestockholders toincludeinourproxystatementnomineesforelectiontoourBoard. DirectorNomineeSnapshot Set forth below is a summary of relevant biographical information for each of our Director nominees. Name Age Director Since Independent PrimaryOccupation Committee Memberships(1) Other Public Boards DennisC.Cuneo 68 2008 Yes Partner,Fisher&Phillips, LLP;President,DC StrategicAdvisors,LLC Finance, MD&C,CS (Chair) 1 SheriH.Edison 61 2014 Yes SeniorVicePresident,Chief LegalOfficerandSecretary, BemisCompany,Inc. Audit,MD&C, N&G 0 MarkG.Essig 60 2013 Yes ChiefExecutiveOfficer,FKI SecurityGroup Audit,Finance (Chair),N&G 0 WilliamK.Gerber 64 2007 Yes ManagingDirector,Cabrillo PointCapitalLLC Audit(Chair), Finance,CS 1 GregoryB.Kenny 65 2016 Yes RetiredChiefExecutive Officer&Presidentof GeneralCableCorporation Finance, MD&C,N&G 2 RalphS.Michael,III 63 2007 Yes Chairman,FifthThirdBank, GreaterCincinnatiRegion Audit,Finance, MD&C(Chair) 1 RogerK.Newport 53 2016 No ChiefExecutiveOfficer,AK SteelHoldingCorporation None 0 JamesA.Thomson 73 1996 Yes Non-ExecutiveChairmanof theBoardofDirectors MD&C,N&G (Chair),CS 0 DwayneA.Wilson 59 2017 Yes RetiredSeniorVice President,Fluor Corporation Finance,N&G, CS 1 VicenteWright 65 2013 Yes RetiredPresidentandChief ExecutiveOfficer,California SteelIndustries Audit,N&G, CS 0 ArleneM.Yocum 60 2017 Yes RetiredExecutiveVice PresidentandManaging ExecutiveofClientService, PNCAssetManagement Audit,MD&C, CS 0 (1) MD&C=ManagementDevelopmentandCompensationCommittee;N&G=NominatingandGovernanceCommittee; CS=CorporateSustainabilityCommittee(formerlythePublicandEnvironmentalIssuesCommittee) ii 2018ProxyStatement PROXY SUMMARY This summary highlights information contained elsewhere in the Proxy Statement. This summary does not contain all of the information that you should consider and you should read the entire Proxy Statement before voting. For more complete information regarding our 2017 performance, please review the Annual Report on Form 10-K for the year ended December 31, 2017, a copy of whichis availableat the Investors sectionof our websiteat www.aksteel.com. Voting Matters andRecommendation OurBoard’s Recommendation PROPOSAL1. Electionof Directors (page 6) The Board and the members of the Nominating and Governance Committee believe that the eleven Director nominees possess the necessary and preferred qualifications to provide effective oversight of the business and quality guidance and counsel to our Management to maximize long-term value for our stockholders. FOR eachDirector Nominee PROPOSAL2. Ratificationof Ernst & YoungLLPas IndependentRegistered PublicAccountingFirm (page 102) The Audit Committee and the Board believe that the continued retention of Ernst & Young LLP to serve as the Independent Registered Public Accounting Firm for the year ending 2018 is in our and our stockholders’ best interests. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s selection of the independent registered public account firm. Ernst & Younghas served as our auditor since2013. FOR PROPOSAL3. Advisoryvote to approveNamedExecutiveOfficer Compensation(page 103) We seek a non-binding advisory vote from our stockholders to approve the compensation of our Named Executive Officers as described in the Compensation Discussion and Analysis (“CD&A”) section beginning on page 40. The Board values stockholders’ opinions and the Management Development and Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions, as it has done each yearsincetheinceptionofourannualadvisoryvote. FOR GovernanceHighlights We are committed to the highest standards of corporate governance, which we believe promote the long-term interests of our business and maximize returns for our stockholders, while strengthening Board and Management accountability. The following are some highlights of ou governanceframework: ❖ 10 of 11 Director nomineesare independent ❖ Independentleadershipof the Boardthrough our Non-ExecutiveChairman ❖ AllCommittees comprised entirelyof independentDirectors ❖ 4 of 11 Director nominees(36%) are diverseinterms of gender, race and/or ethnicity ❖ Annualelectionof Directors ❖ Majority votingfor Directors ❖ Mandatory retirement agefor Directors andExecutiveOfficers ❖ Robustrisk oversight by the Boardandits Committees i 2018Proxy Statement ALASKA AIR GROUP In 2017, we also continued to execute across five focus areas . . . Be Safe and On Time Focus on People Build a Deep, Emotional Connection with our Brand Defend and Grow Our Customer Base Win with Low Costs and Low Fares . . . and implement our proven growth model in West Coast markets. 1. Fly where guests want to go with affordable fares 2. Build loyalty by providing superior value, excellent service and generous benefits 3. With increased loyalty, add network depth and frequency 3 Total of 10 pages in section 85% of the integration milestones will be complete by June 2018 . . . 100% 80% 70% 90% 60% 50% 40% 30% 0% 10% 20% IntegrationCumulativeMilestoneCompletion (2016-2020) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2019 2020 More than50%ofmilestones completed in3quarters Q4 2017 June 2018 April2018 (PSS) Importantmilestones remainpost-2018 (e.g.,Airbus fleet retrofit) . . . and the passenger service system (PSS) transition, scheduled for April 25, will enable the Company to unlock most of the synergies we expect from the deal. Our transition approach minimizes customer impact and risk through: ‰ Sabre to Sabre migration ‰ Lessons learned from other airlines’ successes and challenges ‰ Engaging experts (external and internal) ‰ Minimizing data migration (“bleed down” approach to data transfer) ‰ Leveraging codeshare to bridge to new Alaska PSS transition will unlock the majority of the expected revenue synergies. AnnualrevenuesynergiesexpectedfromVirginAmericaintegration $36M $65M $195M $255M $300M 2017 2018 2019 2020 2021 2 PROXY STATEMENT SUMMARY 2017 was a great year for Alaska Air Group – we invested in our route network, our fleet, our product, and laid the foundation for our future. We made great progress in 2017 combining Alaska and Virgin America. ✓ Aligned revenue management across platforms; ✓ Co-located stations in 22 of 31 jointly served airports; ✓ Invested in culture ✓ Received Single Operating Certificate from the Federal Aviation Administration ✓ Achieved single Human Resources, Finance and Payroll Systems ✓ Finalized all aircraft livery and interior design decisions ✓ Merged customer loyalty platforms The overall integration timeline is tracking well against other recent airline mergers. Keymilestoneschedule (Numberofmonthsfrom dealtoclose) Delta/ Northwest United/ Continental Airlines Southwest/ AirTran American Airlin s/ USAirways Single passenger service system (PSS) 16 mos. Ranked #1 16 mos. 17 mos. 43 mos. 22 mos. Single website 16 mos. Ranked #1 16 mos. 17 mos. 42 mos. 22 mos. Full codeshare (AS partial) At close Ranked #1 2 mos. 11 mos. n/a 3 mos. Frequent flyer plan (FFP) integration 13 mos. Ranked #2 12 mos. 17 mos. 42 mos. 15 mos. Ability to transfer FFP miles 1 mo. Ranked #2 8 mos. Prior 5 mos. 42 mos. 15 mos. Single operating certificate 13 mos. Ranked #2 15 mos. 13 mos. 10 mos. 16 mos. Elite upgrade reciprocity* 16 mos. Ranked #3 At close At close 42 mos. 1 mo. Single operations control center (OCC) 15 mos. Ranked #3 6 mos. 12 mos. n/a n/a *StatusmatchforElevatemembersintoMileagePlanat1month;ASelitesrecognizedonVirginmetalat8months;fullelitebenefits reciprocityatPSS(~16months);allfigures+/-1monthduetorounding.