EX-10.1






Employment Agreement




This Employment Agreement (“Agreement”) is entered into between Alaska Communications Systems
Group, Inc., a Delaware corporation, its subsidiaries, affiliates and any business ventures in
which they may participate (collectively “ACS” or “the Company”) and Anand Vadapalli (“Executive”).
ACS and Executive are also referred to herein individually as a “Party” and collectively as the
“Parties.”



WITNESSETH:




WHEREAS, Executive has served successfully in key leadership positions with ACS since 2006;
and



WHEREAS, the Company has progressively expanded Executive’s role and responsibilities with the
Company over time; and



WHEREAS, the Company desires to continue to employ and to promote Executive to serve as the
President and Chief Executive Officer of the Company; and



WHEREAS, Executive agrees to provide such services to ACS upon the terms and conditions set
forth herein;



AGREEMENT




NOW, THEREFORE, for and in consideration of the promises and other good and valuable
consideration set forth in this Agreement, the sufficiency and receipt of which are hereby
acknowledged, ACS and Executive hereby agree as follows:




	1.	 	Effective Date and Effect of Prior Agreement. The effective date (“Effective Date”)
of this Agreement shall be August 5, 2015. Subject to the opportunity to vest previously
granted awards, this Agreement rescinds and supersedes any prior employment agreement between
the parties.






	2.	 	Position Title and Location. ACS hereby employs Executive and Executive accepts
employment by ACS as the President and Chief Executive Officer (“CEO”) of the Company.
Executive shall also be appointed to serve as a director on the Company’s Board of Directors
(“Board”) as of the Effective Date of this Agreement, and thereafter shall be nominated and
recommended annually by the Board for re-election as a director for so long as he continues to
serve as President and CEO of the Company. The primary work location1 of the
principal place of employment for the President and CEO position shall be selected by
Executive at either the Company’s headquarters offices in Anchorage, Alaska, or at Executive’s
principal residence, which Executive has or may establish at any time during this Agreement
anywhere in the lower 48 United States within reasonable flying distance to the Company’s
headquarters (“Outside Principal Residence”). If Executive’s primary work location is at his
Outside Principal Residence, Executive shall travel to and from work from the Company’s
headquarters periodically based on the needs of the business as determined by Executive in
consultation with the Board.






	3.	 	Responsibilities and Authority. Executive shall be fully responsible for the general
oversight and management of ACS, including overall business strategy, all operating units,
operating plans, and financial performance, and such business ventures as the Company may
acquire or participate in. In accordance with the Company’s Articles of Incorporation, Bylaws
and the ACS Corporate Governance Principles, Executive shall perform all duties incident to
his office, as assigned or modified from time to time by the Board.






	4.	 	Reporting. Executive shall report directly to the Board, to each committee of the
Board, as requested, and to the Chairman of the Board. All other members of executive
management of the Company shall report to Executive.






	5.	 	Term. Unless otherwise terminated as provided in this Agreement, Executive’s term of
employment (“Term”) shall commence on the Effective Date and shall continue until June 30,
2018; provided, that the Term shall be automatically extended for successive one-year periods
thereafter, unless written Notice is given by either Party to the other Party at least one
hundred eighty (180) days prior to the last day of the then-existing initial or extended Term,
of the Party’s intent to terminate the Agreement on the last day of that Term.






	6.	 	Loyalty and Effort. Executive agrees to abide by the ACS Articles of Incorporation,
Bylaws, Corporate Governance Principles, policies and procedures and decisions of the Board,
as those documents may be modified from time to time, and agrees to devote his full time,
attention, abilities and efforts to the business of the Company during the Term of this
Agreement, except for permitted vacation periods and reasonable periods of illness or
incapacity. Executive understands and accepts that he owes the Company the highest duty of
fidelity and loyalty. Executive will never make secret profits at ACS’ expense, will not
accept favors from customers or suppliers, except in accordance with law and ACS policy, and
will protect all of ACS’ property, tangible and intangible, as if it were Executive’s own.
While an employee of ACS, Executive will not perform employment duties or provide services for
remuneration for any other person or entity without the prior written consent of the Board.
Executive may serve as a member of the boards of directors of such other business, community
and charitable organizations as he may disclose to the ACS Board of Directors, subject to
approval by the Board, which approval may be withheld or rescinded in the best interests of
ACS’ business.






	7.	 	Compensation. During the Term of this agreement, ACS agrees to pay Executive, and
Executive agrees to accept in exchange for his services under this Agreement, the following
compensation:






	 	7.1.	 	Annual Base Salary. Executive shall be paid an annual base salary of not less
than four hundred fifty thousand dollars ($450,000.00) (the “Base Salary”), subject to
payroll taxes and withholding, to be paid in substantially equal installments at the same
intervals as other officers of ACS are paid. The annual Base Salary shall be prorated for
partial years of service based on the number of days Executive is employed in the position
compared to the total number of days in the year. The Board shall annually consider
Executive’s Base Salary and make such increases as it deems appropriate.






	 	7.2.	 	Annual Cash Incentive. In addition to the annual Base Salary, Executive is
eligible for a target annual Cash Incentive (“CI”) payment, which shall not be less than
the Base Salary, with the actual amount to be paid determined annually by the Compensation
and Personnel Committee of the Board (“Committee”) based on his achievement of the annual
performance objectives (“Objectives”) to be set by the Committee within ninety (90) days of
the beginning of each performance year. Except as otherwise specifically provided in this
Agreement, to be eligible to receive CI in respect to performance in any performance year,
Executive must be actively employed by ACS and in good standing on the day the annual CI
amounts are paid for the relevant performance year. Payment of CI to Executive shall be
made not later than the time such payments are made to any other Officers of ACS.






	 	7.3.	 	Long-Term Incentive and Retention Compensation.






	 	7.3.1.	 	During the Term of this Agreement, Executive shall be eligible to receive annual
long-term awards (“LTAs”) in the form of time-vested Restricted Share Units,
performance-based Performance Share Units or other equity or equity-based awards, or a
combination thereof (“Equity”) and/or performance-based cash awards other than annual
cash incentives. To align the interests of Executive with those of the Company
shareholders, annual LTAs should be guided by the principle that annual LTAs are not
less than twice the value of Executive’s annual base salary. The specific quantity
and type of LTAs (as well as the terms and conditions associated with and the grant
date schedule for each LTA), however, shall be determined annually by the Compensation
and Personnel Committee of the Board of Directors within ninety (90) days of the
beginning of each performance year. The annual LTAs shall vest only in the amounts
and on the terms and schedule approved by the Board, and based on accomplishment of
performance objectives set by the Board, shall be subject to the terms of an
individual grant award agreement which must be executed by Executive within a
reasonable amount of time following the grant as a condition of vesting the LTA and
shall vest post separation only in compliance with the provisions of this Agreement,
including those restrictive covenants set forth in Section 12 of this Agreement.






	 	7.3.2.	 	Executive agrees to abide by ACS’ minimum executive equity holding policies, as
those policies may be amended from time to time in the discretion of the Board.
Currently, the minimum equity holding requirement for Executive’s position is to
accumulate and hold a number of shares of ACS common stock, including both vested and
unvested Equity grants having a value of at least three (3) times Executive’s annual
Base Salary, within five (5) years of the date Executive started work with ACS.
Executive understands and accepts that the Board may modify these minimum holding
requirements in the future and agrees that any such future modifications of holding
requirements shall be binding on him.






	 	7.4.	 	Taxes and Withholding. All amounts paid to Executive or to Executive’s estate
or beneficiaries, whether in cash or equity compensation, shall be subject to applicable
payroll taxes and withholding as required by law, which shall be deducted from the cash
payment(s) or shares of stock or stock units, as the case may be, before payment to
Executive.






	 	7.5.	 	Notwithstanding anything to the contrary in this Agreement, in the event that a
majority of the shareholders of the Company votes to disapprove: (i) any proposed employee
stock incentive plan (“Plan”) or amendment to or extension of any such Plan which is
necessary in order to continue awarding Equity grants to the Officers, Directors or
employees of ACS; (ii) the authorization of additional shares of Company stock necessary to
continue to provide Equity grants to the Officers, Directors or employees of ACS pursuant
to any such Plan; or (iii) an advisory vote on Executive’s compensation package; the
Parties shall promptly initiate good faith negotiations to amend this Agreement to take
into account the results of any of the above shareholder votes. If the Parties are unable
to reach agreement on an amendment that is satisfactory to both Parties within a reasonable
period of time not to exceed ninety (90) days, either Party may terminate this Agreement
thereafter upon thirty (30) days written Notice to the other Party, provided however, in
the event that this Agreement is terminated under this section, the Parties shall promptly
initiate good faith negotiations to resolve the amount, if any, of any severance payments
due to Executive.






	8.	 	Additional Benefits.






	 	8.1	 	During the Term of this Agreement, and in accordance with their normal eligibility
requirements, Executive shall be entitled to participate in other Company benefit programs
generally available to all or substantially all of ACS’ employees (excluding participation
in Equity compensation and cash incentive programs other than as provided for in this
Agreement) on no less favorable terms than are applicable to other Company executives,
including health and welfare benefits, paid leave, retirement benefits and 401k plans, and
the ACS employee stock purchase plan, all subject to the Board’s authority, from time to
time, to add to, modify, replace or discontinue these generally applicable employee benefit
programs in accordance with law. In the event that Executive relocates to an Outside
Principal Residence and his primary work location is outside of Alaska as permitted
pursuant to Section 2 of this Agreement, Executive will not be enrolled in the Alaska
Electrical Pension Plan, but will instead be eligible for matching contributions to his
401(k) plan to the extent matching contributions are offered by the Company.






	 	8.2	 	In the event that Executive relocates to an Outside Principal Residence, Executive
shall be entitled to reimbursement for all reasonable travel costs between Executive’s
Outside Principal Residence and the Company’s headquarters (currently in Anchorage) or
other appropriate business locations, and living expenses while working away from
Executive’s Outside Principal Residence. All such expenses shall be reimbursed at actual
cost to Executive. Further, the Company shall lease appropriate living accommodations for
Executive’s use while working away from his Outside Principal Residence at the Company’s
headquarters with such living expenses not to exceed $2,500 per month. Executive shall
also be entitled to reimbursement of normal business expenses (including reasonable and
necessary travel expenses on behalf of the Company) in accordance with the Company’s
applicable expense reimbursement policies and procedures and shall be covered under ACS’
Directors and Officers insurance and corporate indemnification policies, as they may be
amended from time to time, and subject to the terms and conditions of those respective
plans and programs. Executive shall also receive an annual automobile allowance, which
shall be pro-rated in the first and last years of the Term. The Company agrees to
reimburse Executive for his reasonable legal and other professional fees actually incurred
with respect to the negotiation, and prior to the execution, of this Agreement, up to a
maximum of twenty thousand dollars ($20,000.00), upon submission of adequate documentation
of such payments by Executive. Reimbursement for legal expenses shall be made promptly,
and no event later than March 15 of the year after the year in which this Agreement is
executed by both Parties.






	 	8.3	 	Executive may receive a relocation payment of up to fifty thousand dollars ($50,000.00)
for reimbursement of customary relocation expenses and reimbursement of up to fifty
thousand dollars ($50,000.00) for realtor commissions associated with the sale of
Executive’s principal residence in Anchorage, as documented by receipts submitted by
Executive within twelve (12) months of Executive incurring such expenses (and expressly
excluding reimbursement of any loss on sale of Executive’s residence) in connection with a
relocation Executive makes at any time during the term of this Agreement to establish his
Outside Principal Residence as permitted pursuant to Section 2 of this Agreement.
Relocation payments are subject to vesting based on continued employment through the end of
the Term of this Agreement and will be forfeited on a pro-rata basis based upon the
remaining time period of the contract for which the CEO voluntarily elects not to serve.
However, the Company may at it sole discretion accelerate such vesting on a discretionary
basis.






	 	8.4	 	Executive understands and acknowledges that under current tax regulations, in the event
that Executive relocates his principal residence outside of Anchorage, but spends more than
50% of his working time in Anchorage, travel and living expenses provided by the Company
would be considered taxable compensation. Executive acknowledges that he fully understands
the tax consequences associated with the reimbursement of travel and living expenses as
provided in Section 8.2 and agrees that he shall be solely responsible for any taxes that
may be imposed upon such reimbursements and that the Company will not provide any tax
gross-up or tax make-whole payment in relation thereto. To the extent that any
reimbursements under this Agreement are subject to Section 409A, any such reimbursements
payable to Executive shall be paid to Executive no later than December 31 of the year
following the year in which the expense was incurred; provided, that Executive submits
Executive’s reimbursement request promptly following the date the expense is incurred, the
amount of expenses reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year, other than medical expenses referred to in Section
105(b) of the Code, and Executive’s right to reimbursement under this Agreement will not be
subject to liquidation or exchange for another benefit.






	9.	 	Insurance. At ACS’ request, Executive shall cooperate with ACS in obtaining, at ACS’
expense, key-man life insurance policies on Executive’s life, with ACS to be the beneficiary
of any such policies. ACS’ inability to obtain such insurance due to the lack of insurability
of Executive shall not be a breach of this Agreement.






	10.	 	Termination of Employment. Upon termination of his service as President and CEO for
any reason, Executive shall immediately tender his resignation as a director of the Company,
which the Board reserves the right to accept or reject. In the event Executive’s resignation
as a director is accepted, Executive shall promptly execute and tender any documents that may
be necessary to effectuate his resignation from the Board. Termination of Executive’s
employment with ACS may be by any of the following means:






	 	10.1.	 	By ACS. ACS may terminate the employment of Executive at any time during the
Term of this Agreement, with or without Cause (as defined in Section 11.11.1 of this
Agreement), upon the giving of written Notice to Executive of such termination in
accordance with this Agreement. In the event of termination for Cause, the Company must
specify the reasons for the termination in the written Notice provided to Executive.






	 	10.2.	 	By Executive. Executive may terminate his employment with ACS at any time
during the Term of this Agreement, whether for Good Reason or otherwise, upon the giving of
written Notice of his resignation in accordance with this Agreement.






	 	10.3.	 	Upon Retirement. Executive is eligible to terminate his employment by
Retirement upon the giving of written Notice as provided in this Agreement, at any time he
is eligible for Retirement as that term is defined in Section 11.11.5 of this Agreement.






	 	10.4.	 	Upon Death or Disability. This Agreement and Executive’s employment with ACS
shall terminate immediately upon the Board’s determination of Death or Disability of
Executive, as those terms are defined in this Agreement; provided, if Executive is disabled
and unable to perform the normal duties of his position for any period longer than sixty
(60) days, the Board, in its discretion, may require Executive’s title, duties and
responsibilities to be reassigned to and performed by another individual for any period of
time during which Executive remains disabled, and such reassignment shall not be considered
Good Reason for Executive to resign under this Agreement.






	 	10.5.	 	Notice of Termination. For a termination of employment for which the Notice
requirements are specifically set forth in this Agreement (e.g. subsection
11.11.1—Termination for Cause, or subsection 11.5.2—Resignation for Good Reason), the
Notice requirements of the applicable section shall govern. For all other terminations of
employment (other than termination for Death or Disability, which is provided for in
Section 10.4 hereof, written Notice of the termination of employment shall be provided by
ACS or the Executive, whichever initiates the termination. The Notice required by this
section 10.5 shall be given at least thirty (30) days in advance of the termination by the
Party initiating the termination, during which period Executive’s employment and provision
of services will continue; provided, however, that ACS may excuse Executive from any or all
of his duties during the Notice period, without changing the date on which the Executive’s
employment terminates or reducing the Executive’s compensation for the remainder of the
Notice period.






	 	10.6	 	Cooperation during and after transition. Upon Notice of the non-renewal or
other termination of Executive’s employment or this Agreement for any reason, Executive
shall provide transition assistance to the Company as is reasonably requested by the Board
for a period not to exceed six (6) months from the date of termination of his employment.
Executive further agrees that, notwithstanding the termination of his employment, he will
continue to reasonably cooperate with the Company in response to reasonable requests for
information, affidavits, depositions, testimony or other assistance concerning matters
involving the business, or in connection with any regulatory or other reviews or
investigations, or the defense or prosecution or any claims, including being available at
reasonable times and durations for interviews, depositions and testimony in regard to any
matters in which Executive has relevant information.  Except for any claim or action that
Executive may assert against the Company, Executive shall be reasonably compensated for his
time (at the rate of $500 per hour, not to exceed $4,000 per day) and receive reimbursement
for expenses, including without limitation lost compensation and reasonable out-of-pocket
travel, hotel and meal expenses incurred in connection with providing such transition
assistance and cooperation at the Company’s request. Executive agrees that such
cooperation shall be provided without the necessity of any subpoenas.






	11.	 	Severance Benefits.






	 	11.1.	 	Section 409A. For purposes of this Agreement, any installment payments or
equity grants in installments shall constitute separate payments for purposes of Section
409A of the Internal Revenue Code (“Section 409A”). To the extent possible, payments under
this Agreement are intended to qualify as short-term deferrals or as payments under a
separation pay plan, as described in Treasury Regulation Sections 1.409A-1(b)(4) and
-1(b)(9). To the extent Section 409A applies to any payment under this Agreement, this
Agreement is intended to comply with Section 409A. Notwithstanding any other provision of
this Agreement to the contrary, this Agreement shall be interpreted, applied, operated and
administered in a manner consistent with such intentions, so as to avoid subjecting
Executive to any additional tax or accelerated income recognition under Section 409A.
Except with respect to any amounts that may qualify as short-term deferrals, no Severance
Benefits that are payable under this Agreement on account of the Executive’s termination of
employment shall be paid unless such termination constitutes a “separation from service,”
as that term is defined in applicable Treasury regulations issued under Section 409A.
Notwithstanding anything to the contrary in this Agreement, if at the time of the
Executive’s termination of employment with the Company, Executive is a “Specified
Employee,” as determined by the Company in accordance with Section 409A of the Code, and
the deferral of the commencement of any payments or benefits otherwise payable hereunder as
a result of such termination of employment is necessary in order to prevent any accelerated
or additional tax under Section 409A of the Code, then the Company will defer the
commencement of the payment of any such payments or benefits hereunder (without any
reduction in the payments or benefits ultimately paid or provided to the Executive) until
the date that is at least six (6) months following the Executive’s termination of
employment with the Company (or the earliest date permitted under Section 409A of the
Code), whereupon the Company will pay the Executive a lump-sum amount equal to the
cumulative amounts that would have otherwise been previously paid to the Executive under
this Agreement during the period in which such payments or benefits were deferred (without
interest). Thereafter, any remaining payments will resume in accordance with this
Agreement.






	 	11.2.	 	General. The severance payments and benefits provided for under this Section
11 (“Severance Benefits”) shall be the only Severance Benefits to which Executive is
entitled under this Agreement. Executive understands and agrees that, except as set forth
in Section 11.3 below, no Severance Benefits shall be paid if his employment terminates in
accordance with Section 5 of this Agreement on June 30, 2018 or such later date to which
the Term of his employment may be extended under Section 5 hereof. Upon termination of
employment, Executive shall not be eligible for any Cash Incentive or other bonus
compensation which has not been paid or, in the case of equity awards, have not vested or
been exercised, as the case may be, prior to the date of termination of his employment,
except as specifically provided in this Section 11. Except to the extent that it would
cause a violation of Section 409A of the Code, ACS may offset against any Severance
Benefits which may be owing to Executive any amounts then owed by Executive to the Company.
Executive acknowledges and agrees that his entitlement to any Severance Benefits is
conditioned upon Executive’s execution, timely delivery and non-revocation of a general
release in favor of ACS in the form set forth in Exhibit A, attached hereto, which ACS
shall tender to Executive within ten (10) days after termination of his employment and
Executive shall sign and deliver to ACS not later than thirty (30) days after his receipt
of the general release from the Company or such other period as required by law. Severance
Benefits under this Agreement shall be paid on the last day of the sixty (60) day period
following Executive’s termination of employment. Executive’s failure to execute the
general release provided for herein within the thirty-day (30) day period provided in this
Agreement or his revocation of a previously executed release pursuant the terms of that
release, shall result in Executive’s forfeiture of all Severance Benefits to which he would
otherwise be entitled under this Agreement.






	 	11.3.	 	Termination in accordance with Section 5 of this Agreement. In the event
Executive’s employment terminates at the end of the Term, including any extension thereof,
ACS shall pay Executive all of the following: a Cash Incentive (“CI”) payment based on
achievement of annual performance Objectives set by the Committee, as determined by the
Committee, consisting of: (a) a CI payment for the prior full performance year of
Executive’s employment, if CI for such performance year is unpaid as of the date of
termination of his employment in the subsequent year; and (b) a CI payment for the final
partial year of Executive’s employment, which payment shall be pro-rated based on the
number of days in the final partial year that Executive was employed by ACS compared to the
total number of days in the year. The Company and any successor shall determine such CI
payments in accordance with the objective criteria the board has established to measure
Company achievement for the relevant performance year and this measure of Company
achievement shall be no less than the level of Company achievement as determined for other
Company executive management. Also, unless otherwise required by Section 11.1 hereof, shall
be made in the year following the performance year to which the Cash Incentive payments
relate at the time Cash Incentive payments are made to other officers of the Company for
the performance year(s) in question.






	 	11.3.1.	 	vesting of any outstanding LTAs on the following basis: (1) continued vesting of
time vested awards that are scheduled to vest during subsequent periods; and (2)
continued vesting during subsequent periods, subject to the satisfaction of the
applicable performance conditions established under the terms of the awards, of
performance-based awards that vest in subsequent periods; and






	 	11.3.2.	 	a relocation payment as set forth in subsection 11.5.1(v) of this Agreement
provided Executive has not established an Outside Principal Residence and claimed
relocation benefits as provided in Section 8.2.






	 	11.4	 	Termination for Cause and Resignation without Good Reason. Executive shall
not be entitled to receive any Severance Benefits under this Agreement in the event
Executive’s employment is terminated by the Company for “Cause” or Executive resigns from
his position without “Good Reason,” as those terms are defined in this Agreement. In such
event, Executive shall be paid his normal Base Salary prorated to the date of termination
of his employment, minus any applicable taxes or other withholding, and shall be entitled
only to any standard employee benefits under generally applicable employee benefits plans
for which he is eligible upon termination (but excluding any payments provided for upon
termination at the expiration of the Term or extended Term under Section 11.3 of this
Agreement). Executive shall not be entitled or deemed to have earned any Cash Incentive or
bonus compensation payment for work performed during the calendar year in which the
termination occurs. Executive shall not be entitled to and shall not receive any equity
awards that otherwise might vest after the date of his termination, and all unvested and
unexercised equity awards shall be forfeited immediately upon termination of his
employment.






	 	11.5	 	Resignation for Good Reason.






	 	11.5.1	 	Executive shall be entitled to the following Severance Benefits upon his
resignation for Good Reason:






	 	(i)	 	one times (1x) Executive’s annual Base Salary, and one
times (1x) Executive’s target annual Cash Incentive in effect at the time of
the termination of his employment; provided, such payment shall be made
promptly by ACS in accordance with this Agreement, and in no event later
than the earlier of (a) ninety (90) days after the effective date of such
termination, or (b) March 15 of the year following the year of termination
of Executive’s employment;






	 	(ii)	 	a Cash Incentive payment based on achievement of annual
performance Objectives set by the Committee, as determined by the Committee,
consisting of: (a) a CI payment for the prior full performance year of
Executive’s employment, if CI for such performance year is unpaid as of the
date of termination of his employment in the subsequent year; and (b) a CI
payment for the final partial year of Executive’s employment, which payment
shall be pro-rated based on the number of days in the final partial year
that Executive was employed by ACS compared to the total number of days in
the year. The Company and any successor shall determine such CI payments in
accordance with the objective criteria the board has established to measure
Company achievement for the relevant performance year and this measure of
Company achievement shall be no less than the level of Company achievement
as determined for other Company executive management. Also, unless otherwise
required by Section 11.1 hereof, shall be made in the year following the
performance year to which the Cash Incentive payments relate at the time
Cash Incentive payments are made to other officers of the Company for the
performance year(s) in question.






	 	(iii)	 	vesting of any outstanding LTAs on the following basis:
For any LTAs granted in 2013 or after, (a) continued vesting of time vested
awards that are scheduled to vest during subsequent periods, and (b)
continued vesting during subsequent periods, subject to the satisfaction of
the applicable performance conditions established under the terms of the
awards, of performance-based awards that are scheduled to vest in subsequent
periods;






	 	(iv)	 	as additional taxable severance pay, monthly payments for
up to one (1) year equal to monthly federal medical COBRA premiums actually
paid by Executive for continuing medical insurance coverage for him and his
family after termination of employment (less the standard employee
contribution amount and required tax withholding); provided, to receive each
monthly payment, Executive must promptly provide adequate documentation of
COBRA payments actually paid (unless ACS waives this requirement). Payments
are to be made promptly by ACS in accordance with this Agreement, and in no
event later than March 15 of the year after the year in which the expense
was incurred, except that in the event Executive is eligible for comparable
medical benefits coverage within the one (1) year period, he must promptly
notify the Company of the start date of the replacement coverage, and
payments under this subsection 11.5.1(iv) shall cease as of the date
replacement coverage is secured;






	 	(v)	 	a relocation payment of up to fifty thousand dollars
($50,000.00) for reimbursement of customary relocation expenses and
reimbursement of up to fifty thousand dollars ($50,000) for realtor
commissions associated with the sale of the Executive’s principal residence,
as documented by receipts submitted by Executive within twelve (12) months
of the termination of Executive’s employment (and expressly excluding
reimbursement on any loss on sale of Executive’s residence); provided, this
relocation benefit shall not apply: (a) if Executive accepts employment with
another company during the Term of this Agreement or within ninety (90) days
following the termination of his employment with ACS; or (b) Executive’s new
principal place of employment is not more than sixty (60) miles from the
Company’s principal headquarters offices in Anchorage, Alaska or Executive’s
Outside Principal Residence. Payments under this Section 11.5.1(v) are to be
made promptly by ACS, and in no event later than March 15 of the year after
the year in which the expense was incurred.






	 	11.5.2	 	For an event to be deemed Good Reason for Executive’s resignation, it must have
occurred within the last sixty (60) days prior to Executive giving of the written
Notice required under this subsection 11.5.2; otherwise it will no longer be
considered to be Good Reason under this Agreement. Executive must give the Company
at least thirty (30) days written Notice of resignation for Good Reason under this
Agreement. The Notice must describe the Good Reason{s) with adequate specificity,
and the Company, in its discretion, may cure the reason(s) within the thirty (30)
day Notice period, in which case Executive no longer has Good Reason to resign. Upon
receipt of Executive’s Notice of resignation, the Company, in its discretion, may
waive the thirty (30) day Notice period, and terminate Executive’s employment
effective immediately, preserving for subsequent resolution whether Good Reason for
the resignation has been shown, provided, however, that if all or part of the notice
period is waived by the Company, the Company shall pay Executive a lump sum amount
equal to his regular Base Salary for the remainder of the thirty (30) days Notice
period.






	 	11.6	 	Termination without Cause. In the event of the involuntary termination of
Executive by the Company without Cause (as “Cause” is defined in Section 11.11.1 of this
Agreement), Executive shall be entitled to the same Severance Benefits as set forth in
Section 11.5 of this Agreement, above, in respect to his resignation with Good Reason.






	 	11.7	 	Change in Control Termination. Executive is entitled to Change in Control
Severance Benefits only if ACS or a successor entity terminates Executive’s employment on
an involuntary basis without Cause (other than a termination for Death or Disability or a
non-renewal of the Agreement by ACS under Section 5 of this Agreement), or Executive
terminates his employment for Good Reason, either of which occurs within four (4) months
before or two (2) years after a Change in Control event, as that term is defined in this
Agreement. In such event, the Company and any successors shall pay Change in Control
Severance Benefits shall be paid to Executive in the following amounts (and in lieu of the
amounts described in Section 11.5 and 11.6):






	 	11.7.1	 	two times (2x) the amount described in Section 11.5(i); provided, (a) one-half
of such payment shall be made promptly by ACS in accordance with this Agreement, and
in no event later than the earlier of (i) ninety (90) days after the effective date
of such termination or (ii) March 15 of the year following the year of termination of
Executive’s employment, and (b) one-half of such payment shall be made promptly by
ACS in accordance with this Agreement, and in no event later than the later of (x)
the date described in subclause A of this Section 11.7.1 or (y) thirty (30) days
after the effective date of the Change in Control;






	 	11.7.2	 	a Cash Incentive payment based on achievement of annual performance Objectives
set by the Committee, as determined by the Committee, consisting of: (a) a CI payment
for the prior full performance year of Executive’s employment, if CI for such
performance year is unpaid as of the date of termination of his employment in the
subsequent year; and (b) a CI payment for the final partial year of Executive’s
employment, which payment shall be pro-rated based on the number of days in the final
partial year that Executive was employed by ACS compared to the total number of days
in the year. The Company and any successor shall determine such CI payments in
accordance with the objective criteria the board has established to measure Company
achievement for the relevant performance year and this measure of Company achievement
shall be no less than the level of Company achievement as determined for other
Company executive management. Also, unless otherwise required by Section 11.1 hereof,
shall be made in the year following the performance year to which the Cash Incentive
payments relate at the time Cash Incentive payments are made to other officers of the
Company for the performance year(s) in question






	 	11.7.3	 	accelerated full vesting of LTAs made to Executive in 2011 or after which are
unvested as of the date of termination of Executive’s employment, in accordance with
the terms of the equity award agreements that have been executed by Executive in
regard to each grant;






	 	11.7.4	 	as additional taxable severance pay, monthly payments for up to eighteen (18)
months equal to federal medical COBRA premiums actually paid by Executive for
continuing medical insurance coverage for him and his family (less the standard
employee contribution amount and required tax withholding); provided, to receive each
monthly payment, Executive must promptly provide adequate documentation of COBRA
payments actually made (unless ACS waives this requirement). If Executive is not yet
eligible for comparable medical benefits at the end of the eighteen (18) month
period, monthly payments shall continue for an additional six (6) months at the
average monthly rate paid during the preceding eighteen (18) months (for a total of
twenty-four (24) months’ payments). Payments under this Section 11.7.4 are to be made
promptly by ACS, and in no event later than March 15 of the year after the year in
which the expense was incurred, except that in the event Executive is eligible for
comparable medical benefits coverage within the twenty-four (24) month period, he
must promptly notify the Company of the beginning date of the replacement coverage,
and payments under this subsection 11.7.4 shall cease as of the date replacement
coverage was secured;






	 	11.7.5	 	a relocation payment of up to fifty thousand dollars ($50,000.00) for
reimbursement of customary relocation expenses and reimbursement of up to fifty
thousand dollars ($50,000) for realtor commissions associated with the sale of the
Executive’s principal residence, as documented by receipts submitted by Executive to
ACS within twelve (12) months of the termination of Executive’s employment (and
expressly excluding reimbursement on any loss on the sale of Executive’s residence);
provided, that this relocation benefit shall not apply: (i) if Executive accepts
employment with another company during the term of this Agreement or within ninety
(90) days following termination of his employment with ACS; or (ii) Executive’s new
principal place of employment is not more than sixty (60) miles from Company’s
principal headquarters offices in Anchorage, Alaska or Executive’s Principal Outside
Residence. Payments under this Section 11.7.5 are to be made promptly by ACS, and in
no event later than March 15 of the year after the year in which the expense was
incurred.






	 	11.8	 	Limitation on Payments. If it is determined that any payment or benefit
provided to or for the benefit of Executive (a “Payment”), whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise, would be
subject to the excise tax imposed by Code section 4999, or any interest or penalties with
respect to such excise tax (such excise tax together with any such interest and penalties,
shall be referred to as the “Excise Tax”), then the following provisions (Section 11.8.1
through 11.8.6, below) shall apply.






	 	11.8.1	 	The Company shall calculate the following:






	 	(i)	 	Executive’s Net After-Tax Benefit (as defined in 11.8.2
below) assuming that Payments to the Executive are reduced to the extent
necessary so that no portion thereof shall be subject to the Excise Tax (the
“4999 Limit”).






	 	(ii)	 	Executive’s Net After-Tax Benefit without application of
the 4999 Limit.






	 	11.8.2	 	“Net After-Tax Benefit” shall mean the sum of (i) all payments that Executive
receives or is entitled to receive that are contingent on a change in the ownership
or effective control of the Company or in the ownership of a substantial portion of
the assets of the Company within the meaning of Code section 280G(b)(2), less
(ii) the amount of federal, state, local, employment, and Excise Tax (if any) imposed
with respect to such Payments.






	 	11.8.3	 	In the event the amount in 11.8.1(i) is greater than the amount in 11.8.1(ii),
Executive shall receive Payments only up to the 4999 Limit. Reductions in Payments
shall be made in the following order:






	 	(i)	 	lump sum Payments under 11.5.1(i) or 11.7.1;






	 	(ii)	 	COBRA Payments under 11.5.1(iv) or 11.7.4, with the
reduction made in the order such Payments are paid, starting with the first
paid;






	 	(iii)	 	cash incentive payments under 11.5.1(ii) or 11.7.2, with
the reduction made in the order that such payments are due, starting with
the first to be paid; and






	 	(iv)	 	relocation payments under 11.5.1(v) or 11.7.5.






	 	11.8.4	 	In the event the amount in 11.8.1(ii) is greater than the amount in 11.8.1(i),
then Executive shall be entitled to receive all such Payments, and shall be solely
liable for any and all Excise Tax with respect to such Payments.






	 	11.8.5	 	The determinations required to be made under this Section 11.8 shall be made by
the public accounting firm that is retained by the Company as of the date immediately
prior to the Change in Control (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and Executive within fifteen (15)
business days of the receipt of notice from the Company or Executive that Payments
are due under this Agreement, or such earlier time as is requested by the Company.
Notwithstanding the foregoing, in the event (i) the Board shall determine prior to
the Change in Control that the Accounting Firm is precluded from performing such
services under applicable auditor independence rules or (ii) the Audit Committee of
the Board determines that it does not want the Accounting Firm to perform such
services because of auditor independence concerns or (iii) the Accounting Firm is
serving as accountant or auditor for the person(s) effecting the Change in Control,
the Board shall appoint another nationally certified public accounting firm to make
the determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees, costs and expenses (including, but
not limited to, the costs of retaining experts) of the Accounting Firm shall be borne
by the Company. The determination by the Accounting Firm shall be binding upon the
Company and Executive (except as provided in Section 11.8.6 below). If payments are
reduced to the 4999 Limit or the Accounting Firm determines that no Excise Tax is
payable by Executive without a reduction in Payments, the Company shall fulfill its
withholding and reporting obligations in a manner consistent with a determination
that the Executive is not required to report any Excise Tax on the Executive’s
federal income tax return.  






	 	11.8.6	 	If it is established pursuant to a final determination of a court or an
Internal Revenue Service (the “IRS”) proceeding which has been finally and
conclusively resolved, that Payments have been made to, or provided for the benefit
of, Executive by the Company, which are in excess of the limitations provided in this
Section 11.8 (referred to hereinafter as an “Excess Payment”), Executive shall repay
the Excess Payment to the Company on demand, together with interest on the Excess
Payment at the applicable federal rate (as defined in Section 1274(d) of the Code)
from the date of Executive’s receipt of such Excess Payment until the date of such
repayment. As a result of the uncertainty in the application of Section 4999 of the
Code at the time of the determination, it is possible that Payments which will not
have been made by the Company should have been made (an “Underpayment”), consistent
with the calculations required to be made under this Section. In the event that it
is determined (i) by the Accounting Firm, the Company (which shall include the
position taken by the Company, or together with its consolidated group, on its
federal income tax return) or the IRS or (ii) pursuant to a determination by a court,
that an Underpayment has occurred, the Company shall pay an amount equal to such
Underpayment to Executive within ten (10) days of such determination together with
interest on such amount at the applicable federal rate from the date such amount
would have been paid to Executive until the date of Payment, provided that any such
Underpayment shall constitute a payment (within the meaning of Treasury Regulation
Section 1.409A-2(b)(2)) separate and apart from the Payments; and provided, further,
that any such Underpayment shall be deemed a disputed payment (within the meaning of
Treasury Regulation Section 1.409A-3(g)). Executive shall cooperate, to the extent
the Executive’s expenses are reimbursed by the Company, with any reasonable requests
by the Company in connection with any contests or disputes with the IRS in connection
with the Excise Tax or the determination of the Excess Payment. Notwithstanding the
foregoing, in the event that amounts payable under this Agreement were reduced
pursuant to this Section 11.8 and the value of the Payments is subsequently
re-determined by the Accounting Firm within the context of Treasury Regulation
§1.280G-1 Q/A 33 that reduces the value attributable to such Payments, the Company
shall promptly pay to Executive any amounts Payable under this Agreement that were
not previously paid solely as a result of this Section 11.8, subject to the 4999
Limit.






	 	11.9	 	Retirement. Executive is not entitled to any Severance Benefits upon
termination of his employment due to his “Retirement,” as that term is defined in this
Agreement. Upon his Retirement, Executive shall be entitled to retirement benefits as
provided in any applicable Company retirement benefits plan, as such plan may be amended
from time to time or replaced. Executive shall not be entitled to any Cash Incentive or
other bonus compensation which is unpaid as of the date of his termination of employment
due to Retirement, nor to the vesting (or exercise, in the case of stock options or
appreciation rights) of any LTAs, except as provided in the terms of the award agreements
executed by Executive in regard to each LTA grant, or as otherwise expressly provided in
this Agreement. If after retirement Executive accepts employment with or becomes “related
to or connected with” a Competitor, as set forth in Section 12.1 hereof, any unvested or
unexercised equity awards to which he would otherwise be entitled shall be forfeited as of
the date of Executive’s acceptance of such employment or other relationship or connection
to any such Competitor. Executive shall promptly notify ACS in writing of his acceptance
of employment or other engagement by a Competitor which affects unvested or unexercised
equity awards under this Section 11.9.






	 	11.10	 	Death or Disability Benefits. Executive (or his estate) is not entitled to
any Severance Benefits upon termination of his employment due to his “Death or Disability,”
as those terms are defined in this Agreement, but rather is entitled to the benefits set
forth in this Section. Death or Disability shall not be considered Good Reason to resign
under this Agreement. Executive’s employment shall be terminated by the Company
immediately in the event of Executive’s Death or Disability. However, ACS shall be
obligated to pay Executive (or his estate): (1) his Base Salary prorated to the date of
Death or cessation of active work due to Disability: (2) a Cash Incentive payment for the
last full performance year prior to the year in which the Death or Disability occurs only
if such CI is unpaid as of the date of termination of employment; provided, the amount to
be paid shall be based on the Committee’s determination of achievement of performance
objectives set by the Committee for that performance year; and (3) a partial Cash Incentive
payment based on the Committee’s determination of the achievement of performance objectives
in the last partial year of active employment, and pro-rated based on the amount of active
work time contributed by Executive during the final partial performance year, compared to
the total number of days in the year. Subject to Section 11.1 hereof, any such payment is
to be made at the time Cash Incentive payments are made to other officers of the Company
for the performance year(s) in question. Executive (or his estate) shall also be entitled
to vesting of any outstanding LTAs on the following basis:






	 	11.10.1	 	For any LTAs granted in 2013 or after, (a) immediate vesting of time vested awards
that are scheduled to vest during subsequent periods, and (a) continued vesting
during subsequent periods, subject to the satisfaction of the applicable performance
conditions established under the terms of the awards, of performance-based awards
that are scheduled to vest in subsequent periods.






	 	11.11	 	Definitions. In this Agreement, the terms listed below shall have the
following meanings:






	 	11.11.1	 	“Cause” means:






	 	(i)	 	Executive willfully or intentionally fails to perform his
assigned duties or comply with lawful directions from the Board, or knowingly
makes a material misrepresentation to the Board; or






	 	(ii)	 	Executive commits fraud, misappropriation or embezzlement
against ACS;






	 	(iii)	 	Executive engages in willful misconduct adverse to ACS or
any of its Officers, employees, agents, customers or vendors; provided, that
no act or omission shall be considered willful misconduct if it was undertaken
in good faith and based on an objectively reasonable interpretation of the
Company’s policies or procedures; or






	 	(iv)	 	Executive knowingly does something illegal, unethical, or
dishonest in his work, which includes improprieties arising out of omissions
(for example, a failure to report material information), unless such act or
omission is demonstrably due an inadvertent error which has only nominal
consequences for the Company; or






	 	(v)	 	Executive is found guilty or pleads guilty or “no-contest”
to any felony or a misdemeanor involving theft, dishonesty, fraud or moral
turpitude;






	 	(vi)	 	Executive commits gross misfeasance or gross nonfeasance in
the performance of the responsibilities of his position and such conduct
materially harms the Company; or






	 	(vii)	 	Executive breaches a material term of this Agreement or a
fiduciary duty owed to the Company, the Board of Directors, or the
stockholders.






The Committee shall provide Executive with written Notice of the existence of Cause and,
if susceptible of correction, an opportunity to correct the deficiency within thirty (30)
days; provided, however, that only one such correction opportunity shall be provided to
Executive in any six-month period for the same kind of deficiency; and provided further,
that where ACS has suffered or may suffer immediate and grave harm from Executive’s
continuation in his position, he may be removed from his position for Cause on less than
thirty (30) days Notice and without advance warning.




	 	11.11.2	 	“Change in Control” means:






	 	(i)	 	The Company consummates any corporate transaction or
series of related transactions, of a reorganization, merger or consolidation
(“Business Combination”), unless following the Business Combination the
“Persons” who were the “beneficial owners” (as these terms are defined in
this Section 11.11.2) of outstanding voting securities of the Company
immediately prior to such Business Combination continue to beneficially own
over 50% of the combined voting power of the voting securities of the Company
or such successor entity outstanding immediately after such Business
Combination in substantially the same proportions as their beneficial
ownership of the outstanding voting securities of the Company immediately
prior to such Business Combination;






	 	(ii)	 	The acquisition by any individual, entity, or group (within
the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) (a “Person”) of “beneficial
ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of more than 30% of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of
directors, other than any acquisition (a) directly from, or by, the Company,
including but not limited to a repurchase of common stock by the Company,
except for a repurchase in conjunction with a stockholder’s acquisition of
additional shares; (b) by a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries;






	 	(iii)	 	During any period of two (2) years or less, the
individual directors of the Board as of the Effective Date of this Agreement
(the “Incumbent Directors”) cease to constitute at least two-thirds of the
Board; provided, however, that for purposes of this Section 11.11.2, any new
director (other than a new director elected or appointed as a result of a
threatened or actual proxy contest, who shall not be considered an Incumbent
Director) whose election by the Board or nomination for election by the
Company’s stockholders was approved by at least two-thirds of the Incumbent
Directors then still in office or who were directors at the beginning of such
two (2) year period shall be considered an Incumbent Director; or






	 	(iv)	 	Approval by the stockholders of a complete liquidation or
dissolution of the Company; provided, however, that notwithstanding anything
to the contrary in this Agreement, in the event of termination of Executive’s
employment by the Company in connection with a Change in Control described in
this subsection 11.11.2(iv), Executive shall be entitled to receive only
those Severance Benefits provided for in Section 11.6 of this Agreement for
“Termination without Cause;” or






	 	(v)	 	The sale of all or substantially all of the assets of
ACS (including those of the Company’s subsidiaries).






In no event shall the sale of the Company’s stock to the public by the Company pursuant to
a registration statement filed with the Securities and Exchange Commission constitute a
Change in Control for purposes of this Agreement.




	 	11.11.3	 	“Death or Disability” means:






	 	(i)	 	Executive is dead, declared dead, or is missing and his
whereabouts unknown for three (3) consecutive months; or






	 	(ii)	 	Executive becomes physically or mentally incapacitated
and is unable to perform the normal duties of his position for at least six
(6) consecutive months during any one (1) year period, not limited to a
calendar year. If the Parties disagree about whether Executive is disabled,
ACS shall obtain an independent physician’s opinion. Executive’s refusal or
failure to submit to an examination by a physician selected by the Company
and reasonably acceptable to Executive shall be conclusive evidence of
Executive’s Disability.






	 	11.11.4	 	“Good Reason” means the Company:






	 	(i)	 	reduces Executive’s Base Salary or target annual Cash
Incentive payment without Executive’s consent;






	 	(ii)	 	significantly reduces Executive’s other benefits (unless
the reduction applies to substantially all other executive officers or
substantially all full-time employees of the Company);






	 	(iii)	 	removes Executive as President and CEO without Cause or
significantly reduces Executive’s authority, duties or responsibilities in
the Company;






	 	(iv)	 	requires Executive to work primarily out of an office
more than sixty (60) miles from Executive’s principal location of employment
or relocates Executive’s principal location of employment more than sixty
(60) miles, in each case without Executive’s consent, (this provision is not
triggered in the event Executive elects to voluntarily relocate to an Outside
Principal Residence); or






	 	(v)	 	breaches a material obligation ACS owes to Executive
under this Agreement.






	 	11.11.5	 	Eligibility for “Retirement” means Executive is either (i) 65 years old; or (ii)
is 58 and has been employed continuously by ACS for more than fifteen (15) years.






	 	11.	 	12 Officer Severance Policy. For clarity, the Parties acknowledge and agree
that, notwithstanding any provision to the contrary in any ACS Officer Severance Policy,
such Officer Severance Policy does not apply to Executive and has no applicability to or
effect upon this Agreement.






	12.	 	Restrictive Covenants.






	 	12.1.	 	Non-Competition. Executive agrees that he will not, directly or indirectly,
during his employment with ACS, and for a period of two (2) years after termination of his
employment with ACS for any reason or for so long as Executive has outstanding unvested
LTAs, whichever is longer, be an officer or director of, or be employed by, contract or
consult with, or otherwise perform services for, own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be related to or
connected with (as defined below), in any manner (collectively “engaged by”), any
Competitor of ACS, as that term is defined herein. A “Competitor” shall include any person
or entity which, directly or via partnership, affiliation, or similar business arrangement,
competes with ACS or produces, markets, distributes or otherwise derives benefits from the
production, marketing or distribution of products or services which compete with the
products or services being marketed by ACS at the time of Executive’s termination of
employment, or for new products or services that are marketed after Executive’s separation
from the Company but which Executive was involved in preparing for the market, within the
significant markets served by ACS at the time of termination of Executive’s employment.
Executive shall be deemed to be “related to or connected with” a Competitor if such
Competitor is (a) a partnership in which he is a general or limited partner or employee;
(b) a corporation or association of which he is a member, employee, consultant or agent;
provided, however, that nothing herein shall prevent Executive from the purchase or
ownership of shares which constitute less than five percent of the outstanding equity of a
publicly held corporation, if Executive has no other relationship with such corporation.






	 	12.2.	 	Non-Solicitation. Executive agrees that during his employment by ACS and for
a period of one (1) year after the date upon which his employment with ACS terminates for
any reason or for so long as Executive has outstanding unvested LTAs, whichever is longer,
he shall not, directly or indirectly, (i) solicit, influence or entice, or attempt to
solicit, influence or entice, any officer, employee, agent, contractor, consultant,
partner, joint venture, supplier or customer of ACS to terminate his or her employment with
ACS or to cease its business relationship with ACS; or (ii) solicit, influence, entice or
in any way divert any officer, employee, agent, contractor, customer, potential customer,
distributor, partner, joint venture or supplier of ACS to do business or in any way become
associated with any Competitor of ACS.






	 	12.3.	 	Non-Disparagement. Each party agrees that during Executive’s employment by
ACS and at all times thereafter, unless otherwise required by law, neither will make any
statement, whether oral, written, or electronic, regarding the other or any aspect of ACS’s
business, including but not limited to, its finances, business strategy or plans, customers
or potential customers, directors, officers or employees (including Executive), that is
unfavorable to or which disparages Executive or ACS or which adversely affects Executive’s
or Company’s standing or reputation with the public or in the telecommunications industry.






	 	12.4.	 	Confidentiality and Non-Disclosure. Executive acknowledges that, in the
course of employment with the Company, he has had and will continue to have access to and
learn confidential information. Confidential information includes, but is not limited to
information about the Company’s customers and potential customers, customer data, pricing
and other terms and conditions under which the Company deals with customers or other
companies, pricing and other information related to the purchase or sale of company stock,
assets or products, financing and securitization arrangements, research materials, manuals,
computer programs, systems, formulas, data, techniques, network maps, technical
information, trade secrets, product development information, marketing plans and tactics,
lists of suppliers and suppliers’ terms and pricing, the processes and practices of the
Company and any competitor companies, financial information, information prepared for or
generated by the ACS Board of Directors, wages and salary information, labor agreements,
personnel information, and any other information designated by the Company as confidential
or that Executive knows or should know is confidential information, including the
confidential information of third parties, information subject to non-disclosure or
confidentiality agreements, and all other proprietary information of the Company
(collectively “Confidential Information”). Executive acknowledges and agrees that all
Confidential Information is and shall continue to be the exclusive property of the Company,
whether or not prepared in whole or in part by the Executive and whether or not disclosed
to or entrusted to the Executive in connection with his employment with the Company, and it
shall be returned to the Company upon termination of Executive’s employment for any reason.
Executive agrees that during his employment with ACS and at all times thereafter, he shall
keep secret all Confidential Information and shall not disclose Confidential Information,
directly or indirectly, under any circumstances or by any means, to any third persons
without the prior written consent of the Company. Executive agrees that he will not copy,
transmit, reproduce, summarize, quote or make any commercial or other use whatsoever of
Confidential Information, except as may be necessary to perform work done by Executive for
the Company. Executive agrees to exercise the highest duty of care in safeguarding
Confidential Information against loss, theft or other inadvertent disclosure and agrees
generally to take all steps necessary or requested by the Company to ensure protection of
the confidentiality of the Confidential Information. Executive further agrees, in addition
to the specific covenants contained herein, to comply with all of the Company’s policies
and procedures, as well as all applicable laws, for the protection of Confidential
Information.






	 	12.5.	 	Clawback Requirement. Upon written Notice by the Board of Directors or any
Committee of the Board to Executive describing a repayment obligation and amount owed under
this Section 12.5, Executive shall be required to return to or reimburse the Company for
any amount of Cash Incentive or bonus payment, any equity award made (or the value
thereof), the profits realized from the sale of securities of the Corporation, or any
Severance Benefit or payment, as the case may be, that was provided to Executive on the
basis financial results later found to require an accounting restatement as set forth in
Section 304 of the Sarbanes-Oxley Act of 2002, as amended (15 U.S.C. 7243) or Section 954
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (15 U.S.C. 78j-4)
or their implementing regulations (as the same may be adopted or amended in the future);
provided, the reimbursement required by this Section 12.5 shall be for the time periods as
set forth in each relevant statute, above, and, provided further, that any clawback policy
adopted by the Company may be modified subsequently by the Company to the extent necessary
to comply with any applicable law, regulation or exchange listing standard, without the
necessity that this Agreement be amended or that Executive consent to the application of
such policy. In addition, Executive shall be required to return to or reimburse the
Company for any Severance Benefits received under this Agreement if the Company
subsequently discovers any actions or omissions by Executive prior to termination of his
employment which would have warranted his termination for Cause under this Agreement, or
any action by Executive subsequent to the termination of his employment which constitutes a
breach of the restrictive covenants in this Section 12. Executive agrees to promptly
(within thirty (30) days of written Notice from the Company) make any such repayment owed
to ACS. This clawback requirement shall apply during Executive’s Term of employment and
shall survive the termination of his employment and this Agreement, regardless of
Executive’s employment status at the time the error is discovered.






	 	12.6.	 	Corporate Governance and Compliance. At all times during his employment with
ACS, Executive agrees to abide and be bound by the provisions of the ACS Articles of
Incorporation, its Bylaws, all resolutions and other decisions of the Board of Directors,
its Chairman, and Committees of the Board, within the lawful scope of their authority,
governing statutes, regulations, Corporate Governance Principles, as approved by the Board,
and the ACS Corporate Compliance Program Manual (including its appendices). Executive
acknowledges and accepts that these documents may be amended from time to time in the
future, and that such documents and any such future amendments, shall be deemed to be
specifically incorporated into this Agreement and shall be applicable to and binding on
Executive at all times under this Agreement.






	13.	 	Equitable Relief. Executive acknowledges and agrees that the provisions of Section
12 of this Agreement are essential to ACS, that ACS would not enter into this Agreement if it
did not include said Section 12, that a violation of Section 12 would constitute a material
breach of this Agreement, and that the damages sustained by ACS as a result of Executive’s
breach of Section 12 of this Agreement cannot be adequately remedied solely by an award of
money damages. Therefore, Executive agrees that, in addition to any other remedy the Company
may have under this Agreement or at law, ACS shall be entitled to injunctive and other
equitable relief to prevent or halt any breach or threatened breach of Section 12 of the
Agreement by Executive.






	14.	 	Effect of Violation. Executive and ACS acknowledge and agree that additional good
and sufficient compensation has been provided to Executive in exchange for his agreement to
the provisions of Sections 12 of this Agreement. Therefore, in addition the Company’s
remedies in equity and at law, Executive’s material violation of Section 12 of this Agreement
shall relieve ACS of any obligation it may have to pay any Cash Incentive compensation,
bonuses or Severance Benefits that may otherwise be owing but unpaid to Executive, and ACS may
cancel any unvested rights to shares of Company stock, but these actions by ACS shall not
relieve Executive of his obligations under this Agreement.






	15.	 	Intellectual Property. Any and all inventions, discoveries, ideas, improvements,
creations, works of authorship, or other intellectual property, whether or not patentable or
copyrightable (“Intellectual Property”), made or conceived by Executive during his employment
with the Company, shall be and at all times remain exclusively the property of ACS. Executive
hereby assigns to the Company all of his rights to any such Intellectual Property and agrees
to promptly disclose any such Intellectual Property in writing to the Company. Executive
further agrees to execute and assign any and all proper applications, assignments and other
documents and to render all assistance reasonably necessary to obtain patent, copyright or
trademark protection for any such Intellectual Property in ACS’ name.






	16.	 	Representations and Warranties. Executive represents and warrants that he is not a
party to nor bound by any other agreement or arrangement that would in any manner conflict
with or impede his execution or performance of this Agreement, or his performance of any
duties imposed upon Executive by ACS’ Articles of Incorporation, its Bylaws, Corporate
Governance Principles, Corporate Compliance Program, or any corporate or other statutory or
common law.






	17.	 	Insurance and Indemnity. The Company shall, to the extent permitted by law, include
Executive during the Term of this Agreement under any directors and officers’ liability
insurance policies maintained for its directors and officers, with coverage at least as
favorable to the Executive in amount and other material respects as the coverage provided
other directors and officers covered thereby, as such insurance policies may be amended from
time to time. The Company’s obligation to provide insurance and indemnify the Executive under
the terms of such policies shall survive expiration or termination of this Agreement with
respect to proceedings or threatened proceedings based on acts or omissions of the Executive
occurring during the Executive’s employment with ACS.






	18.	 	Notice. Whenever Notice, demands and other communications to a Party are provided
for in this Agreement, such Notice shall be given in writing, addressed to Executive or the
Board of Directors of ACS, as the case may be, with a copy of each such Notice provided to the
General Counsel of ACS. Notice under this Agreement shall be considered effective when
actually delivered by hand, overnight courier service or first class mail, return receipt
requested to the addresses provided herein, or to such other address as any Party shall have
furnished in writing to the other Party in the same manner as required by this Section 18.






Notice to the Board of Directors of ACS shall be provided to:




	 	 	 	Board of Directors






	 	 	 	Alaska Communications Systems Group, Inc.






	 	600	 	Telephone Avenue, MS 65






	 	 	 	Anchorage, Alaska 9950






	 	 	 	with a copy to the ACS General Counsel at the same address.






Notice to Executive shall be provided to the following address:




Anand Vadapalli




16044 Essex Point Circle




Anchorage AK 99516




Except as to notice for matters relating to termination of Executive’s employment, non-renewal
of this Agreement, and claims for Severance Benefits under this Agreement, the timing of which
Notice is governed by the relevant Sections of this Agreement pertaining to each of them, as to
all other matters, Notice describing a breach of this Agreement by either Party shall be
provided to the other Party in writing, as provided in this Section 18, and shall provide a
minimum of thirty (30) days for the Party alleged to be in breach to correct the breach before
taking further action in response to the breach. This thirty (30) day notice period may be
waived by the Board of Directors in the event of a material breach by Executive that causes or
threatens to cause significant adverse effects on the Company or its shareholders.




	19.	 	Assignment. This Agreement is personal to Executive and shall not be assignable by
Executive. No right or interest in any payments to Executive (including rights to stock
awards) shall be assignable by Executive. ACS may assign its rights and obligations under
this Agreement to (i) any entity resulting from any merger, consolidation or other
reorganization or Business Consolidation to which ACS is a party; or (ii) any corporation,
partnership, association or other person or entity to which ACS may transfer all or
substantially all of the assets and business of the Company existing as the time of the
assignment. In the event of a permitted assignment, all of the terms and conditions of this
Agreement shall continue to be binding upon and shall inure to the benefit of and be
enforceable by the Parties to this Agreement and their respective successors and permitted
assigns. Assignments not permitted by this Agreement shall be deemed void.






	20.	 	No third party beneficiaries. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person (other than the Parties
hereto and, in the case of Executive, his estate, heirs or personal representatives), any
rights or remedies under or by reason of this Agreement.






	21.	 	Waiver. No failure or delay by either party to this Agreement in exercising,
protecting or enforcing any of it rights, interests or remedies hereunder, and no course of
dealing or performance with respect thereto, shall constitute a waiver of any provision of
this Agreement or the Agreement as a whole, either in one instance or any other instance or
circumstance. All rights and remedies of the parties under this Agreement shall be cumulative
and not exclusive any other rights or remedies.






	22.	 	Amendments. No amendment, modification, waiver, departure from or discharge of any
provision of this Agreement shall be effective unless it is made in writing, specifically
identifying the Agreement and the provision(s) to be amended, and signed by both ACS and
Executive. No provision of this Agreement shall be varied, contradicted or explained by any
oral agreement, course of dealing or performance or any other means not set forth in a written
amendment in accordance with this Section 22 and signed by ACS and Executive.






	23.	 	Rules of Construction. This Agreement has been jointly drafted and freely and fully
negotiated by the Parties, each of which has had ample opportunity to consult with its
attorneys, and, consequently, the terms and conditions hereof shall not be subject to any
rules of construction or presumptions in favor of or against either Party. When the context
requires, the plural shall be deemed to include the singular, and the singular shall include
the plural in this Agreement. Except as to words specifically defined in this Agreement,
which definitions shall control, words in this Agreement shall be given their ordinary
meanings. In the event of any inconsistency between this Agreement and any other plan,
program, practice or agreement otherwise applicable to Executive or the Company, this
Agreement shall control.






	24.	 	Applicable Law; Venue. This Agreement shall in all respects, including all matters
of construction, validity, performance and enforcement, be governed by, and construed and
enforced in accordance with the laws of the State of Alaska, without regard to any conflicts
of laws rules. The Parties both agree to irrevocably consent to the exclusive jurisdiction
and venue of the state courts located in Anchorage, Alaska, in connection with any dispute
arising from or relating to this Agreement. ACS and Executive further agree to irrevocably
waive any rights they might otherwise have to a jury trial in any such proceeding.






	25.	 	Attorneys Fees. Each Party shall bear its own attorney’s fees and costs incurred in
any action or dispute arising out of this agreement.






	26.	 	Severability. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable in any jurisdiction, for any reason, including, without limitation,
the duration of such provision, its geographical scope or the extent of the activities
prohibited or required by it, to the full extent permitted by law: (a) all other provisions of
this Agreement shall remain in full force and effect and shall be liberally construed in order
to carry out the intent of the Parties hereto as nearly as may be possible; (b) such
invalidity, illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Agreement; and (c) any court having jurisdiction
shall have the power to reform such provision to the extent necessary for such provision to be
enforceable under applicable law.






	27.	 	Survival. Termination of Executive’s employment with the Company or termination or
expiration of this Agreement shall not affect the continued effectiveness of provisions of
this Agreement that, by their content, context, implication or effect, should survive in order
to effectuate the intent of the Agreement.






	28.	 	Headings. All headings used in this Agreement are for convenience only and shall not
in any way affect the construction of, or be taken into consideration in interpreting, this
Agreement.






	29.	 	Counterparts. This Agreement, and any Amendment entered into pursuant to Section 22
of this Agreement, may be executed in counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which counterparts, taken
together, shall constitute one and the same instrument.






	30.	 	Entire Agreement. This Agreement constitutes the entire agreement between ACS and
Executive with respect to the subject matter hereof, and all prior or contemporaneous oral or
written communications, representations, promises, understandings or agreements between ACS
and Executive with respect to the employment relationship are hereby superseded and nullified
in their entireties, and this Agreement shall control. No agreements or representations, oral
or otherwise, with respect to the subject matter of this Agreement have been made by either
Party which are not set forth in this Agreement.





1 “Primary work location” means the location
where Executive spends more than 50% of his working time.



1



IN WITNESS WHEREOF, ACS and Executive have executed and entered into this Agreement on the
date set forth below.



EXECUTIVE:



By: /s/ Anand Vadapalli


(Signature)



Name: Anand Vadapalli



Date:  August 5, 2015



ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.



By: /s/ Leonard Steinberg



(Signature)



Name: Leonard Steinberg



Its: Corporate Secretary



Date: August 5, 2015




2