EX-10.1






	 	 	 
	Alaska Communications 2014 Officer Severance Policy

	 	P/P 250.0
	Prepared by: Legal

	 	Effective Date:
	
 
	 	 
	Supersedes: 2010, 2008 & 2009 Officer Severance Policies & 2006 Officer Severance

Plan

	 	

June 9, 2014
	Approved by: Compensation & Personnel Committee of the Board of Directors

	 	

	 

	 	








	1.	 	Purpose





The Alaska Communications Systems Holdings, Inc. 2014 Officer Severance Policy (“the Policy”) is
established to provide severance income continuance to Eligible Officers under certain termination
and change in control circumstances as further defined in this Policy. In consideration for such
severance income and benefits, the Eligible Officer will release Alaska Communications Systems
Holdings, Inc. and its affiliates (the “Company”) from any and all actions, suits, proceedings,
claims, and demands related to the termination.




	2.	 	Administration





The Policy is administered by the Compensation and Personnel Committee (the “Committee”) designated
by the Board of Directors of the Company (“the Board”). The Committee, subject to action of the
Board, has complete discretion and authority with respect to the Policy and its application. The
Committee reserves the right to interpret the Policy, prescribe, amend and rescind rules relating
to it, determine the terms and provisions of the severance payments and make all other
determinations it deems necessary or advisable for the administration of the Policy. The
determination of the Committee on all matters regarding the Policy will be conclusive.



3. Eligibility



Eligible Officers are regular full-time individuals employed by the Company for a minimum of six
continuous months in the positions listed in this Section 3 below (“Eligible Officer(s)”).
Eligible Officers will be eligible to participate in the Policy; provided, however, that an
employee of the Company who is temporarily appointed to a particular eligible position in an acting
manner, is not eligible to participate as a result of that temporary position. Additionally, any
employee with an employment agreement that includes severance benefits will not be an Eligible
Officer under this Policy.



Vice President



Senior Vice President



Executive Vice President



President



4. Definitions




	 	 	 a. “Cause” means the occurrence, at the sole discretion of the Company, of any of the following:






(i) an act or acts of personal dishonesty or illegal or unethical acts knowingly performed
by the Eligible Officer, including but not limited to omissions;




(ii) a breach of a fiduciary duty owed to the Company, its Board, or stockholders (even if
the Company is required to indemnify the Eligible Officer),




(iii) a breach of an obligation or violation of a provision applicable under any corporate
compliance or ethics policy;




(iv) repeated failures or negligence by the Eligible Officer to perform faithfully and
efficiently the duties, obligations and responsibilities of the position or engaging in
conduct harmful to the Company or its employees, and which failures or conduct are not
remedied after receipt of written notice from the Company within a period set forth in the
notice, (where the Company has or may suffer immediate and grave harm from the Eligible
Officer’s continued employment, no advance warning may be provided); or




(v) a conviction or plea of guilty or “no contest” of the Eligible Officer for a felony or
any misdemeanor involving theft, dishonesty, fraud or moral turpitude.




	b.	 	“Change of Control” means the occurrence of any of the following events:






(i) Any Company transaction or series of related transactions that result in the Company’s
voting stockholders owning less than fifty percent of the voting power of the new company;




(ii) During any period of two years or less, the election of an insurgent slate of directors
comprising a new majority of the Board of Directors (an “insurgent slate” means director
candidates not nominated by the incumbent board);




(iii) Approval by the Company’s stockholders of a complete liquidation or dissolution of the
Company; or




(iv) The sale of all or substantially all of the Company’s assets.



c. “Death” means an Eligible Officer is dead or declared legally dead by a competent authority.



d. “Disability” or “Disabled” means a physical or mental impairment that renders an Eligible
Officer incapable of working for at least six consecutive months during any one year period, not
limited to a calendar year. In the event of a dispute regarding the presence of a Disability, the
Company will seek the opinion of an independent physician.



e. “Eligible Officer” is defined in Section 3.



f. “Executive Officer” means an Eligible Officer who has one of the titles listed in this Section
4.f. below, provided, however, that an employee of the Company who is temporarily appointed to the
position of Executive Officer as an acting Executive Officer, is not considered an Executive
Officer for purposes of the benefits provided under this Policy.



Executive Vice President



Senior Vice President



President



g. “Good Reason” means the occurrence of any of the following events without the Eligible Officer’s
written consent, provided, however within 60 days following the occurrence of the event, the
Eligible Officer must provide at least 30 days written notice of intent to resign specifying the
specific Good Reason for resignation and during which time the Company has not provided a cure
sufficient to remove the Good Reason:




(i) a reduction in Target Annual Compensation of greater than 10% in any three year period,
unless substantially all Eligible Officers’ compensation is similarly reduced;




(ii) a significant reduction in other benefits (unless reduction applies to substantially
all other Eligible Officers or substantially all full-time employees of the Company);




(iii) a significant reduction in job title, responsibilities, number of employees under
supervision, duties or a significant demotion, recognizing that the Company may, from time
to time, have a business need to modify assigned responsibilities or reassign employees
between Eligible Officers, which changes, in and of themselves, will not constitute Good
Reason




(iv) required relocation of the principal work location that is more than 60 miles from the
prior work location; or




	 	(v)	 	the Company’s material breach of a material obligation owed under an employment
agreement.





h. “Severance Benefit” means the COBRA reimbursement benefit described in Section 5 for each
category of Eligible Officer.



i. “Severance Pay” means the pay described in Section 5 for each category of Eligible Officer.



j. “Target Annual Compensation” means base salary, and target annual incentive compensation.



5. Severance Pay and Benefits



a. Any Eligible Officer whose employment with the Company is terminated under either of the
circumstances described below in this Section 5.a., and who signs a form of waiver attached as
Exhibit A within 21 days of termination of employment, or 45 days as may be required under
applicable law, and does not revoke the signed waiver within the revocation period as required
under applicable law, will be eligible for Severance Pay and Severance Benefits as described in
this Section 5.




	 	i.	 	An Eligible Officer is terminated by the Company or an affiliate without Cause,
or






	 	ii.	 	An Eligible Officer resigns for Good Reason after giving at least 30 days
written notice of intent to resign specifying the specific Good Reason for the
resignation and during which time the Company has not provided a cure sufficient to
remove the Good Reason.





b. The amount of Severance Pay and Benefits to which an Eligible Officer may be entitled under this
Policy will be determined in accordance with the Eligible Officer’s position.



Executive Officer Severance Pay 



One times the annual base salary in effect on the termination date, unless resigning for Good
Reason based on Section 4g(i) reduction in compensation, then annual base salary prior to
reduction; and



Annual cash incentive payment based on achievement of annual performance goals for the prior full
performance year of Executive Officer’s employment, if unpaid as of the date of termination; and



Prorated annual cash incentive based on actual performance against established goals for the year
of termination, payable at such time as annual cash incentive award payments, if any, are made to
other Executive Officers.



Executive Officer Severance Benefit



Subject to Section 5c below, for up to one year after termination, reimbursement of any monthly
federal medical COBRA premiums actually paid by the Executive Officer for continuing medical
insurance coverage for the Executive Officer and family, less the standard employee contribution
amount. Reimbursement will be provided no later than March 15 of the year after the year in which
the expense was incurred.



Other Eligible Officers Severance Pay



One times the annual base salary in effect on the termination date, unless resigning for Good
Reason based on Section 4g(i) reduction in compensation, then annual base salary prior to
reduction; and



Annual cash incentive payment based on achievement of annual performance goals for the prior full
performance year of employment, if unpaid as of the date of termination.



Other Eligible Officers Severance Benefit



Subject to Section 5c below, for up to six months after termination, reimbursement of any monthly
federal medical COBRA premiums actually paid by the employee for continuing medical insurance
coverage for the employee and family, less the standard employee contribution amount.
Reimbursement will be provided no later than March 15 of the year after the year in which the
expense was incurred



c. Severance Pay provided for under this Section 5 shall be paid in a lump sum on the last day of
the 60 day period following Eligible Officer’s termination of employment.



d. Replacement Medical Benefits. To the extent an Eligible Officer is eligible for medical
benefits coverage under a subsequent employer’s medical plan and before the applicable time period
has elapsed, such Eligible Officer will no longer be eligible for a Severance Benefit. An Eligible
Officer must notify the Company of the start date of the replacement coverage. Any payments for
COBRA coverage or other benefits to which an Eligible Officer was not entitled must be reimbursed
to the Company. Adequate documentation of payment of COBRA premiums is required in order to
qualify for reimbursement.



e. Unvested Equity Compensation. Unless otherwise provided herein, Eligible Officers will not be
eligible for any unvested equity compensation including, but not limited to, stock options,
restricted stock, and performance stock.



f. Other Incentive Compensation. Unless otherwise provided herein, non-executive Eligible Officers
will not be entitled to or deemed to have earned any cash or other bonus or incentive compensation
payments for the final year or partial year of employment.



6. Clawback Requirement. Notwithstanding any other provisions of this Policy to the
contrary, any compensation paid to an Eligible Officer pursuant to this Policy or any other
agreement or arrangement with the Company which is subject to recovery under any law, government
regulation or stock exchange listing requirement, will be subject to such deductions and clawback
as may be required to be made pursuant to such law, government regulation or stock exchange listing
requirement



7. Change of Control Severance Pay and Benefits



Any Eligible Officer whose employment with the Company is terminated without Cause or who resigns
for Good Reason within two and one half months before or one year after a Change of Control will be
eligible for two times base salary, annual cash incentive payment based on achievement of annual
performance goals for the prior full performance year of Executive Officer’s employment, if unpaid
as of the date of termination and the Severance Benefit described in Part 5 above. In addition, all
long term incentive compensation, whether equity or cash, will vest and be released or paid, as
appropriate. Any eligible severance pay and benefits based on a termination prior to Change in
Control is contingent upon and payable subsequent to Eligible Officers termination of employment
without Cause or resignation for Good Reason and the consummation of the Change in Control.



Change of control, in and of itself, will not be deemed Good Reason for a resignation.



8. Disability or Death



In the event of the Death or Disability of an Eligible Officer while employed by the Company, no
severance pay or benefits under this Policy will be payable, however, an Eligible Officer or his or
her estate will be eligible for a prorated annual cash incentive payment based on the time of
active work in the last performance year. Eligibility for this partial cash incentive award is in
accordance with the Company’s incentive compensation policy, including adjustments for Company and
individual performance, and giving credit for active work time in the last performance year.



Unless otherwise provided for in a particular incentive award agreement, no other incentive
compensation, unvested equity compensation or bonus will be deemed to have been earned or be paid
for the final year or partial year of employment following a death or Disability.



9. Non-Compete, Non-Disparagement and Non-Solicitation



Attached as Exhibit A to this Policy, and incorporated herein by reference, is a Form of Officer’s
Release (“Release”) that provides, among other things, restrictions for competition, disparagement
and solicitation of other Company employees. An Eligible Officer must acknowledge, agree to, and
sign the Release prior to receiving any severance pay or benefits under this Policy. If, during
the term that an Eligible Officer is receiving any severance pay or benefits described in this
Policy, the Eligible Officer violates the terms of this Agreement, the Release, or any other
noncompetition or nondisclosure agreement with the Company, the Company’s obligations to the
Eligible Officer under this Policy will automatically terminate.



10. Tax Withholding; Section 280G



The Company may withhold from any cash amounts payable to an Eligible Officer under this Policy to
satisfy all applicable federal, state, local or other income (including excise) and employment
withholding taxes. In the event the Company fails to withhold such sums for any reason, or
withholding is required for any noncash payments provided in connection with the Eligible Officer’s
termination of employment, the Company may require the Eligible Officer to promptly remit to the
Company sufficient cash to satisfy all applicable income and employment withholding taxes. The
Company will not make any “gross-up” payment to cover any personal tax liability of an Eligible
Officer.



Certain employees under Section 409A of the Internal Revenue Code may be required to delay payments
that would otherwise be payable during the six month period immediately following separation from
service.



In the event that the severance pay or benefits provided under this Policy are subject to an excise
tax under Section 280G of the Internal Revenue Code, then pay and benefits under this Policy will
be either (i) delivered in full or (ii) reduced so that any payment is limited to 2.99 times “base
amount,” within the meaning of Section 280G(b)(3) of the Internal Revenue Code, whichever of the
foregoing amounts results in the Eligible Officer’s receipt of the greatest amount of benefits
after tax. Eligible Officers must cooperate in good faith with the Company in any valuation of
benefits that may be required under Section 280G of the Internal Revenue Code.



Any determinations required to be made related to Section 280G will be made in writing by an
accounting or consulting firm selected by the Company, and will be conclusive and binding upon the
Eligible Officer and the Company. The Company will bear all costs reasonably incurred in
connection with any such calculations. In the event it is later determined that a greater
reduction in payments should have been made to implement the objective and intent of this Section
9, the excess amount shall be returned immediately by the Eligible Officer to the Company, plus
interest at a rate equal to 120% of the semi-annual applicable federal rate as in effect at the
time of the Change in Control.



10. Dispute Resolution and Governing Law



The Committee will interpret the Policy with respect to any dispute that arises between an Eligible
Officer and the Company. The decision of the Committee on all disputes regarding the Policy are
conclusive.



This Policy will be governed by and construed in accordance with the laws of the state of Alaska,
including all matters of construction, validity and performance, without regard to the principles
of conflicts of law thereof, to the extent not superseded by applicable federal law. Each party
will be responsible its own for legal fees and costs incurred in any dispute related to this Policy
or the Release.



11.  Section 409A



The intent of the Company is that the payments and benefits under this Policy comply with or be
exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and
guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum
extent permitted, this Policy shall be interpreted to be in compliance therewith.



Notwithstanding anything in this Policy to the contrary, any compensation or benefits payable under
this Policy that is considered nonqualified deferred compensation under Section 409A and is
designated under this Policy as payable upon termination of employment shall be payable only upon a
“separation from service” with the Company within the meaning of Section 409A (a “Separation from
Service”).



Notwithstanding anything in this Policy to the contrary, if an Eligible Officer is deemed by the
Company at the time of Separation from Service to be a “specified employee” for purposes of Section
409A, to the extent delayed commencement of any portion of the benefits to which he or she is
entitled under this Agreement is required in order to avoid a prohibited distribution under Section
409A, such portion of the benefits shall not be provided to the Eligible Officer prior to the
earlier of (i) the expiration of the six-month period measured from the date of Separation from
Service with the Company or (ii) the date of the Eligible Officer’s death. Upon the first business
day following the expiration of the applicable Section 409A period, all payments deferred pursuant
to the preceding sentence shall be paid in a lump sum, and any remaining payments due under this
Policy shall be paid as otherwise provided herein.



Miscellaneous



a. This Policy will not be deemed to create a contract of employment between the Company and the
Eligible Officer and will create no right in the Eligible Officer to continue in the Company’s
employment for any specific period of time, or to create any other rights on the part of the
Eligible Officer or obligations on the part of the Company, except as set forth herein. This
Policy does not restrict the right of the Company to terminate the Eligible Officer, or restrict
the right of the Eligible Officer to terminate employment.



b. Nonalienation of Benefits. Except in so far as this provision may be contrary to applicable
law, no sale, transfer, alienation, assignment, pledge, collateralization or attachment of any
benefits under this Policy will be valid or recognized by the Company.



c. Eligible Officers will retain applicable rights to indemnification under the Company’s
certificate of incorporation, or otherwise provided at law or pursuant to By-laws. Eligible
Officers will continue to be covered by applicable Company insurance, including directors’ and
officers’ liability or employment practices insurance coverage for work performed while employed by
the Company.



d. This Policy is an unfunded compensation arrangement for a member of a select group of the
Company’s management and any exemptions under ERISA, as applicable to such an arrangement, will be
applicable to this Policy.



e. All notices, requests, demands, and other communication with are required or may be given under
this Policy will be in writing and will be deemed to have been duly given when delivered by hand or
overnight courier service or three days after it has been mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to these respective addresses (or to such
other addresses as the parties may notify each other of in the meantime using the same methods
herein). Notice of change of address, however, is only effective only upon actual receipt.



If to the Company addressed to:



Alaska Communications Systems Holdings, Inc.



600 Telephone Avenue MS65



Anchorage, Alaska 99503



If to the Eligible Officer, addressed to the most recent address in the Company’s personnel
records.



f. This Policy supersedes all prior understandings (including oral agreements) between Eligible
Officers and the Company concerning severance matters. Nevertheless; this Policy may be amended,
modified, changed, or terminated by the Company without prior notification or negotiation, and any
such future changes will be applicable to all Eligible Officers.



1



EXHIBIT A

Alaska Communications 2014 Officer Severance Policy

OFFICER’S RELEASE

(Non-Compete, non-disparagement & non-solicitation)




In exchange for a portion of the benefits described in the attached Alaska Communications
Systems 2014 Officer Severance Policy (the “Policy”), to which I agree I am not otherwise entitled,
I hereby release Alaska Communications Systems Group, Inc. (the “Company”), its respective
affiliates, subsidiaries, predecessors, successors, assigns, officers, directors, employees,
agents, stockholders, attorneys, and insurers, past, present and future (the “Released Parties”)
from any and all claims of any kind which I may have had, now have or may have against the Released
Parties, whether known or unknown to me, by reason of facts which have occurred on or prior to the
date that I have signed this Release in connection with, or in any way related to or arising out
of, my employment or termination of employment with the Company; provided that such released claims
will not include any claims to enforce my rights (i) under, or with respect to, the Policy, (ii) to
indemnification provided at law or pursuant to the Company or it’s affiliates’ By-Laws or insurance
or to directors and officers’ liability or employment practices insurance coverage, (iii) under
COBRA or my vested rights under benefit or incentive plans; or (iv) as a stockholder.
Notwithstanding the generality of the preceding sentence, such released claims include, without
limitation, any and all claims under federal, state or local laws pertaining to employment,
including the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000e et seq., the Fair Labor Standards Act, as amended, 29 U.S.C.
Section 201 et seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101 et
seq., the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981 et seq., the
Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 et seq., the Family and Medical Leave
Act of 1992, 29 U.S.C. Section 2601 et seq., and any and all state or local laws regarding
employment discrimination and/or federal, state or local laws of any type or description regarding
employment, including, but not limited to, any claims arising from or derivative of my employment
with the Company, as well as any and all claims under contract or tort law or otherwise.



I hereby represent that I have not filed, nor will I in the future file, any action,
complaint, charge, grievance or arbitration against the Company or the Released Parties arising out
of or in any way related to or connected with my employment with the Company, except to the extent
the law otherwise provides.




	 	•	 	I understand and agree that I must forever continue to keep confidential all proprietary
or confidential information which I learned while employed by the Company, whether oral or
written and as defined in the Corporate Compliance Program Manual (“Proprietary Information”)
and will not make use of any such Proprietary Information on my own behalf or on behalf of
any other person or entity, except as specifically authorized by the Policy.






	 	•	 	I understand and agree that as an employee of the Company, I have knowledge of
confidential and highly-sensitive competitive and proprietary information concerning the
Company’s business, including but not limited to customers, products and services, finances,
business strategies, intellectual property and future plans. I agree that, for period of
twelve months after termination of my employment, I will not become an officer, director,
employee, contractor, consultant, partner, joint-venture, or otherwise enter a business
relationship or service with any competitor of the Company in the Alaska markets it serves.






	 	•	 	I agree that for a period of twelve months after termination of my employment I will not
offer, encourage or solicit any other officer or employee of Alaska Communications to leave
the company or enter into an employment or business relationship with me or a subsequent
employer.






	 	•	 	I agree that I will not make, publish, or communicate; or aid, assist, or encourage others
to make, publish or communicate, any negative, defamatory or disparaging remarks, comments or
statements concerning the Company or its businesses or any of its officers, directors,
employees, existing or prospective customers, suppliers, investors or other associated third
parties to any person or entity, or in any public forum, except as required by law, and
except that such statements may be made to members of the Board of Directors of the Company.






	 	•	 	I expressly understand and agree that the Released Parties’ obligations under this Release
and the Policy are in lieu of any and all other amounts to which I might be, am now or may
become entitled to receive from any of the Released Parties upon any claim whatsoever.






	 	•	 	I understand that I must not disclose the terms of this Release and the Policy to anyone
other than my immediate family, financial advisors and legal counsel and that I must
immediately inform my immediate family, financial advisors and legal counsel that they are
prohibited from disclosing the terms of this Release and the Policy.






	 	•	 	It is understood that I will not be in breach of the nondisclosure provisions of this
Release if I am required to disclose information pursuant to a valid subpoena or court order,
provided that I notify the Company (to the attention of the General Counsel of the Company)
as soon as practicable, but prior to the time in which I am required to disclose information,
that I have received the subpoena or court order which may require me to disclose information
protected by this Release. Notwithstanding the foregoing, I also may disclose the terms of
this Release to government taxing authorities or the SEC, if required to do so.






	 	•	 	I agree that any violation or breach by me of my nondisclosure obligations, without
limiting the Company’s remedies, will give rise on the part of the Company to a claim for
relief to recover from me, before a court of competent jurisdiction, any and all amounts
previously paid to or on behalf of me by the Company pursuant to this Policy, plus interest,
but will not release me from the performance of my obligations under this Release.






	 	•	 	I acknowledge that I may be subject to the Company’s Insider Trading Policy for a period
of time after my termination, and I agree to comply with the Insider Trading Policy until I
am not longer subject to it.






	 	•	 	I will not apply for or otherwise seek employment with the Released Parties without their
written consent.






	 	•	 	I agree to make myself reasonably available to the Company to respond to requests by the
Company for information concerning matters involving facts or events relating to the Company
that may be within my knowledge, and to assist the Company as reasonably requested with
respect to pending and future litigation, arbitrations, or other dispute resolutions.






	 	•	 	Further, I understand and agree that if I breach certain of my obligations under this
Policy; it would be difficult or impossible to measure the Released Parties’ damages in
dollars. Therefore, to enforce this Policy, I agree that the Released Parties have the right
to, without posting any bond, cease making any payments or providing any benefits required by
this Policy and obtain equitable relief in court including a temporary restraining order
against me, or obtain temporary or permanent injunction, or any other equitable remedy that
is available to the Released Parties.






	 	•	 	I have read this Release carefully, and I acknowledge that I have been given at least
[21/45] days to consider all of its terms, and have been advised to consult with an attorney
and any other advisors of my choice prior to executing this Release, and I have had the
opportunity to do so. I fully understand that by signing below I am forever voluntarily
giving up any right which I may have to sue or bring any other claims against the Released
Parties, including any rights and claims under the Age Discrimination in Employment Act and
any other discrimination laws, whether federal or state. I also understand that I have a
period of seven days after signing this Release within which to revoke my Release, and that
neither the Company nor any other person is obligated to provide any severance pay or
benefits to me pursuant to the Policy until eight days have passed since my signing of this
Release without my signature having been revoked. I understand that any revocation of this
Release must actually be received by the General Counsel of the Company within the seven-day
revocation period.






	 	•	 	I represent and acknowledge that I have decided to enter into this Release voluntarily,
knowlingly and without coercion of any kind.






	 	•	 	I represent and acknowledge that no representation, statement, promise, inducement, threat
or suggestion has been made by any of the Released Parties or by any other individual to
influence me to sign this Release, except such statements as are expressly set forth herein
or in the Policy.





This Release is final and binding and may not be changed or modified except by a written agreement
signed by an authorized Officer of the company.



       Date:      


Eligible Officer




2