exv10w5






Exhibit 10.5




AMENDMENT TO ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.

1999 STOCK INCENTIVE PLAN



          This AMENDMENT, dated as of the date set forth by the Secretary below (“Amendment Effective
Date”) of the Alaska Communications Systems Group, Inc. (the “Company”) 1999 Stock Incentive Plan,
as amended (the “Plan”), hereby amends the Plan as of the Amendment Effective Date.




RECITALS




     WHEREAS, the Company has previously adopted the Plan to attract, retain, and motivate
officers, employees and/or consultants and to provide the Company and its Subsidiaries and
Affiliates with a stock plan providing incentives directly linked to the profitability of the
Company’s businesses and increases in the Company’s shareholder value; and



     WHEREAS, Article XII of the Plan provides that the Plan shall terminate on the tenth
anniversary of the Effective Date of the Plan (which will be November 17, 1999); and



     WHEREAS, the Board of Directors has determined it to be in the best interests of the
Company and its stockholders to, among other matters, extend the term of the Plan and allocate a
specified number of shares that shall continue to be reserved for issuance under the Plan.



     In respect of the foregoing premises, among other matters, the Plan is amended hereby as set
forth in the following articles of amendment.



AMENDMENT




     Section I. Capitalized terms used without definition in this amendment to the Plan
shall have the meanings set forth in the Plan.



     Section II. The following sentence shall be appended to Article II, Subsection (40),
“Restricted Stock.” “Any reference to an interest in Restricted Stock subject to this Plan may,
instead, be referred to where appropriate as a “Restricted Stock Unit,” wherever such term may more
accurately reflect the specific character of the Award.”



     Section III. A new subsection (39.5) shall be inserted into Article II, “Definitions”
of the Plan after subsection (39) and before subsection (40) thereof, as follows: “‘Section 409A
Excise Tax’ means the excise tax imposed on certain non-qualified deferred compensation under
Section 409A of the Code.”



     Section IV. Article III, “Administration,” shall be replaced in its entirety with the
following:



     The Plan shall be administered by the Compensation Committee of the Board or such other
committee of the Board as the Board may from time to time designate (the “Committee”), which shall
be composed of not less than two independent directors, and shall be appointed by and serve at the
pleasure of the Board.



     The Committee shall have plenary authority to grant Awards pursuant to the terms of the Plan
to Eligible Individuals.



     Among other things, the Committee shall have the authority, subject to the terms of the Plan:



               (a) To select the Eligible Individuals to whom Awards may from time to time be granted;



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               (b) To determine whether and to what extent Incentive Stock Options, Nonqualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units and
other stock-based awards or any combination thereof are to be granted hereunder;



               (c) To determine the number of shares of Common Stock to be covered by each Award granted
hereunder;



               (d) To determine the terms and conditions of any Award granted hereunder (including, but not
limited to, the option price (subject to Article VI (1))), any vesting condition, restriction or
limitation (which may be related to the performance of the participant, the Company or any
Subsidiary or Affiliate) and any vesting acceleration or forfeiture waiver regarding any Award and
the shares of Common Stock relating thereto, based on such factors as the Committee shall
determine; provided, however, in no event may the Committee grant any Incentive
Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, or like award, that has an
exercise price less than the Fair Market Value of the Common Stock on the grant date of the Award.



               (e) To modify, amend or adjust the terms and conditions of any Award, at any time or from time
to time, including but not limited to Performance Goals; provided, however, that
the Committee may not (i) subject to the last paragraph of Section 3, reduce the exercise price or
cancel and regrant a Stock Option theretofore granted or (ii) adjust upwards the amount payable
with respect to a Qualified Performance-Based Award or waive or alter the Performance Goals
associated therewith;



               (f) To determine to what extent and under what circumstances Common Stock and other amounts
payable with respect to an Award shall be deferred; and



               (g) To determine under what circumstances an Award may be settled in cash or Common Stock
under Articles VI(9), VI(10), Articles VII(2), VII(3) and Article VIII(2)(d).



     The Committee shall have the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to time deem advisable, to
interpret the terms and provisions of the Plan and any Award issued under the Plan (and any
agreement relating thereto) and to otherwise supervise the administration of the Plan.



     The Committee may act only by a majority of its members then in office, except that the
Committee may, except to the extent prohibited by applicable law or the applicable rules of a stock
exchange or automated quotation system, allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of its responsibilities
and powers to any person or persons selected by it; provided, however, that no such delegation may
be made that would cause Awards or other transactions under the Plan to cease to be exempt from
Section 16(b) of the Exchange Act or cause an Award designated as a Qualified Performance-Based
Award not to qualify for, to cease to qualify for, the Section 162(m) Exemption, or incur or become
subject to the imposition of Section 409A Excise Tax. Any such allocation or delegation may be
revoked by the Committee at any time.



     Any determination made by the Committee or pursuant to delegated authority pursuant to the
provisions of the Plan with respect to any Award shall be made in the sole discretion of the
Committee or such delegate at the time of the grant of the Award or, unless in contravention of any
express term of the Plan, at any time thereafter. All decisions made by the Committee or any
appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company and Plan participants.



     Section V. The first two paragraphs of Article IV, “Common Stock Subject to the Plan”
shall be replaced with the following:



     The maximum number of shares of Common Stock that may be delivered to participants and their
beneficiaries under the Plan shall be 6,774,232 (the “Reserve”). No participant may be granted
Stock Options and Freestanding Stock Appreciation Rights covering in excess of 500,000 shares
allocated under the Reserve in any
calendar year. In no event may any participant may be granted more than 500,000 shares of
Restricted Stock,



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Restricted Stock Units, or Performance Units covering in excess of 500,000 shares
of Common Stock subject to the Reserve (as most recently approved by the Company’s stockholders).
Shares subject to an Award under the Plan may be authorized and unissued shares or may be treasury
shares.



     Any Common Stock subject to an Award under this Plan, the Pre-Merger Plan or the ALEC Plan
that is terminated unexercised, forfeited or surrendered or that expires for any reason (including,
but not limited to, Common Stock tendered to exercise outstanding Stock Options or shares tendered
or withheld for taxes under any Award under this Plan) shall again be available for issuance under
this Plan; provided, however, that the Common Stock related to any such terminated,
unexercised, forfeited, surrendered or expired Award may only be used in respect of Awards of the
same type (i.e., shares related to forfeited Stock Options may be used to grant new Stock Options,
forfeited Restricted Stock or Restricted Stock Units may be used to grant new Restricted Stock or
Restricted Stock Units, as the case may be; provided, however, any shares of Common
Stock tendered to exercise outstanding Stock Options or shares tendered or withheld for taxes under
any Award under this Plan shall be deemed to have value equal to the Fair Market Value of the
Common Stock on the date of surrender that would have otherwise remained outstanding but for the
Company’s acceptance or withholding of such tendered or withheld securities, respectively.



     Section VI. Article XI, Subsection (2), “Definition of Change in Control,” shall be
replaced in its entirety with the following:



     For purposes of the Plan, a “Change in Control” shall mean:



     (a) the consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless, following such Business Combination, all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Power immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries); or



     (b) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company.



     Section VII. Article XII, “Term, Amendment and Termination,” shall be replaced in its
entirety with the following:



     The Plan will terminate on December 31, 2012. Awards outstanding under the Plan as of such
date shall not be affected or impaired by the termination of the Plan.



     The Board may amend, alter, or discontinue the Plan, but no amendment, alteration or
discontinuation shall be made which would impair the rights of an optionee under a Stock Option or
a recipient of a Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award,
Performance Unit Award or other stock-based Award theretofore granted without the optionee’s or
recipient’s consent, except such an amendment made to comply with applicable law, stock exchange
rules or accounting rules. In addition, no such amendment shall be made without the approval of
the Company’s stockholders to the extent such approval is required by applicable law or stock
exchange rules; provided, however, that stockholder approval shall be required for any amendment
which (i) increases the maximum number of shares for which Stock Options may be granted under the
Plan (subject, however, to the provisions of Section 3 hereof), (ii) reduces the exercise price at
which Awards may be granted (subject, however, to the provisions of Section 3 hereof), (iii)
extends the period during which Stock Options may be granted or exercised beyond the times
originally prescribed, (iv) changes the persons eligible to participate in the Plan, or (v)
materially increases the benefits accruing to participants under the Plan.



     Subject to the re-pricing restrictions in Article III(5)(a), the Committee may amend the terms
of any Stock Option or other Award theretofore granted, prospectively or retroactively, but no such
amendment shall be



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permitted that would cause an Award that is, or is intended to be, a Qualified
Performance-Based Award to fail or cease to qualify for the Section 162(m) Exemption or cause the
Award to incur Section 409A Excise Tax, nor shall any such amendment impair the rights of any
holder without the holder’s consent except such an amendment made to cause the Plan or Award to
comply with applicable law, stock exchange or automated quotation system rules or accounting rules.



     Subject to the above provisions, the Board shall have the authority to amend the Plan to take
into account changes in law and in tax and accounting rules as well as other developments, and to
grant Awards which qualify for beneficial treatment under such rules without stockholder approval.



     Section VIII. Except as amended hereby, the Plan, as previously amended prior to the
Amendment Effective Date, remains in full force and effect.



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