Document:

EX-10.2

VOLUNTARY RETIREMENT AGREEMENT

This VOLUNTARY RETIREMENT AGREEMENT (“Agreement”) is between FIVE STAR BANK (“FSB”), and
RONALD A. MILLER (“Executive”).

WHEREAS, Executive is employed by FSB as Chief Financial Officer;

WHEREAS, Executive has communicated his desire to retire voluntarily from FSB effective March
31, 2010;

WHEREAS, Executive and FSB wish to establish and clarify their respective rights and
obligations arising from the retirement of Executive;

NOW, THEREFORE, in consideration of the mutual promises, benefits and covenants herein
contained, Executive and FSB hereby agree as follows:

1. Executive shall resign and be separated as an employee of FSB effective March 31, 2010.
Executive and FSB agree to announce and describe Executive’s separation as a voluntary retirement.
Executive’s participation in all FSB fringe benefits shall cease effective March 31, 2010, with the
exception of previously vested benefits.

2. FSB shall make one hundred and twenty (120) equal monthly payments to Executive of
$5,500.00, less required deductions and withholding, beginning with the first regular pay period of
October 2010. In the event of Executive’s death, any payments still due Executive under this
paragraph shall be made to Executive’s estate.

3. Executive shall execute the Release of Claims attached hereto as Exhibit A within five days
following March 31, 2010. Payments under paragraph 2 shall not be made unless Executive executes
the release of claims within 5 days of March 31, 2010 and does not revoke the Release of Claims.

4. (a) Executive has had access to and participated in the development of or been acquainted
with confidential or proprietary information and trade secrets related to the business of FSB, its
subsidiaries, joint ventures, and affiliates (collectively, the “Companies”), including but not
limited to (i) trade secrets, business plans, software programs, operating plans, marketing plans,
financial reports, operating data, budgets, wage and salary rates, pricing strategies and
information, terms of agreements with suppliers or customers and others, customer lists, reports,
correspondence, tapes, disks, tangible property and specifications owned by or used in the
Companies’ businesses; (ii) operating strengths and weaknesses of the Companies’ officers,
directors, employees, agents, suppliers and customers, and/or (iii) information pertaining to
future developments such as, but not limited to, research and development, software development or
enhancement, future marketing plans or ideas, and plans or ideas for new services or products,
(iv) all information which was learned or developed by Executive in the course and performance of
his duties, including without limitation, reports, information and data relating to the FSB’s
acquisition strategies, and (v) other tangible and intangible property which is used in the
business and operations of the Companies but not made publicly available (i) through (v) are,
collectively, (the “Confidential Information”).

(b) Executive shall not, directly or indirectly, disclose, use or make known for his or
another’s benefit any Confidential Information of the Companies or use such Confidential
Information in any way except in the best interests of the Companies in the performance of
Executive’s duties. In addition, to the extent that FSB has entered into a confidentiality
agreement with any other person or entity Executive agrees to comply with the terms of such
confidentiality agreement and to be subject to the restrictions and limitations imposed by such
confidentiality agreements as if he was a party thereto.

(c) The obligations of Executive under this paragraph 5 shall survive the termination of
Executive’s employment and the expiration of this Agreement.

5. Executive shall make himself available at reasonable times and places to:

(a) fully cooperate and assist with any examination of FSB conducted by regulatory authorities
having jurisdiction over FSB, including attendance at meetings and production of notes and records
that may be in Executive’s possession; and

(b) fully cooperate and assist FSB in any internal investigations or audits, or in any
litigation to which FSB or any of the Companies is a party.

It is understood between the parties that paragraph 5(a) and 5(b) above will be limited to
matters that the Executive played a role in during his course of employment.

6. (a) Executive covenants, to the maximum extent permitted by law, that he shall not at any
time hereafter provide information, support or assistance, directly or indirectly, to any
individual or organization, in connection with any action, charge, complaint, suit or proceeding of
any kind against FSB or any of the Companies. The foregoing covenant shall not preclude Executive
from testifying in a proceeding before a court or agency under compulsion of law, provided that
Executive complies fully with paragraph 7(b) below.

(b) Executive agrees to give FSB notice of any and all attempts to compel disclosure of any
information he is prohibited from disclosing by this paragraph 7(a). Executive shall provide
written notice of an attempt to compel such disclosure as promptly as possible to FSB, and at least
five (5) days before compliance with any subpoena or order is requested or required.

(c) Executive further covenants that he will not make to any person or entity any statement,
whether written or oral, that directly or indirectly impugns the integrity of, or reflects
negatively on any of the Companies or any of their respective agents or employees, or that
denigrates, disparages, or results in detriment to any of the Companies or any of their respective
agents or employees. The Companies agree that they will not make to any person or entity any
statement, whether written or oral, that directly or indirectly impugns the integrity of, or
reflects negatively on Executive, or that denigrates, disparages, or results in detriment to
Executive, except as any Company or their agents or employees may be obligated to comply with SEC
and other regulatory requirements.

7. Any breach by Executive of this Agreement shall be considered a material breach for which
FSB shall be entitled to cease immediately the payments described in paragraph 2 of this Agreement,
in addition to any other remedies to which FSB may be entitled by law or under the Agreement.

8. If any provision of this Agreement is held to be illegal, void or unenforceable, such
provisions shall have no effect upon, and shall not impair the legality or enforceability of, any
other provision of this Agreement.

9. This Agreement is binding upon, and shall inure to the benefit of, the parties and their
respective heirs, executors, representatives, successors and assigns.

10. The making of this Agreement is not intended, and shall not be construed, as any admission
that FSB or any of the Companies has violated any federal, state, or local law, or has committed
any wrong against Executive or any other person or entity.

11. Nothing herein is intended to alter Executive’s status as an at-will employee.

12. Executive acknowledges and warrants that:

(a) He has had the opportunity to consider, for up to twenty-one days, the terms and
provisions of this Agreement;

(b) He has been advised by FSB in this writing to consult, and has had adequate opportunity to
consult with, an attorney of his choosing prior to executing this Agreement;

(c) He has carefully read this Agreement in its entirety, has had an opportunity to have its
provisions explained to him by an attorney of his choosing, and fully understands the significance
of all of its terms and provisions; and

(d) He is signing this Agreement voluntarily and of his own free will and assents to all of
the terms and conditions contained herein.

13. This Agreement shall not become effective until the eighth day following its execution by
Executive (the “Effective Date”). Executive shall have the right to revoke this Agreement for a
period of seven (7) days following his execution of this Agreement by giving written notice by
personal delivery of such revocation to FSB. If Executive revokes this Agreement prior to the
Effective Date, the promises and obligations contained herein shall be null and void.

	 	 	 
	IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

	     

RONALD A. MILLER

	 	     

FIVE STAR BANK
	
 
	 	By:Peter G. Humphrey President & CEO
	
 
	 	 
	Date:9/24/08     

	 	Date:9/24/08     
	 

	 	 

1

EXHIBIT A

RELEASE OF CLAIMS

In consideration for the terms and conditions set forth in the attached Agreement, Ronald A.
Miller (“Executive”) hereby extinguishes and releases all of his claims against Five Star Bank
(“FSB”), and any of its past, present or future parent companies, subsidiaries, joint ventures, and
affiliates, and all their respective past, present and future employees, officers, directors,
trustees, shareholders, agents, and successors and assigns (collectively, “Releasees”).

Executive, for himself and for his heirs, executors, successors and assigns (collectively,
“Releasors”), hereby releases and discharges the Releasees from any and all claims, demands, causes
of action, and liabilities of any kind whatsoever, whether known or unknown, which the Releasors
ever had, now have or may hereafter have against the Releasees by reason of any actual or alleged
act, omission, transaction, practice, conduct, occurrence, or other matter, except for those rights
expressly reserved in this Release of Claims.

Without limiting the generality of the paragraph above or characterizing the nature of the
Releasors’ claims, this document releases the Releasees from (i) any and all claims arising out of
Executive’s employment with FSB; (ii) any and all claims (whether based on a federal, state or
local stature, or court decision) including, but not limited to claims under, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the American with
Disabilities Act, the Employee Retirement and Income Security Act, the Sarbanes-Oxley Act of 2002,
the New York Human Rights Law, the New York Labor Law, and/or any other federal, state or local
statute or court decision; (iii) any and all claims for breach of contract; (iv) any and all claims
for lost wages, bonuses, back pay, front pay, employee benefits, including severance pay, or for
damages or injury of any type whatsoever, including, but not limited to, defamation, injury to
reputation, intentional or negligent infliction of emotional distress, (whether arising by virtue
of statute or common law, and whether based upon negligent or willful actions or omissions); and
(v) any and all claims for compensatory or punitive damages, attorneys’ fees, costs and
disbursements, which the Releasors ever had, now have or hereafter can, shall or may have against
the Releasees for, upon or by reason of any actual or alleged act, omission, transaction, practice,
conduct, occurrence or other matter up to and including the date of the execution of this Release
of Claims by Executive. Executive expressly does not release or waive his rights to enforce the
Agreement.

I ACKNOWLEDGE THAT I HAVE BEEN GIVEN AT LEAST 21 DAYS IN WHICH TO CONSIDER SIGNING THIS
RELEASE. I ACKNOWLEDGE THAT I MAY REVOKE THIS RELEASE OF CLAIMS WITHIN SEVEN (7) DAYS OF SIGNING
IT. I ACKNOWLEDGE THAT I HAVE BEEN ADVISED TO CONSULT AN ATTORNEY AND I HAVE HAD THE OPPORTUNITY
TO CONSULT WITH AN ATTORNEY OF MY CHOICE CONCERNING THIS RELEASE. I HAVE CAREFULLY READ AND FULLY
UNDERSTAND ALL THE PROVISIONS OF THIS RELEASE, AND I AM ENTERING INTO THIS RELEASE VOLUNTARILY. I
ACKNOWLEDGE THAT THE CONSIDERATION I AM RECEIVING IN EXCHANGE FOR EXECUTING THIS RELEASE IS GREATER
THAN THAT WHICH I WOULD BE ENTITLED TO IN THE ABSENCE OF THIS RELEASE.

WITNESS MY SIGNATURE THIS      DAY OF      , 2010.

     

RONALD A. MILLER

2EX-10.1

Alaska Communications Systems Group, Inc. (“ACS”)

Ms. Liane Pelletier (“Executive”)

Amended and Restated Executive Employment Agreement (“Agreement")

	 	1.	 	Effective Date: September 22, 2008.

	 	2.	 	Positions & Titles: Executive shall continue as Chairman of the ACS Board of Directors
(“Board"), President, and Chief Executive Officer of ACS.

	 	3.	 	Responsibilities: Executive shall be responsible for the general oversight and
management of ACS, including overall business strategy, all operating units, operating
plans and financial performance.

	 	4.	 	Reporting: As President and Chief Executive Officer, Executive shall report to the
Board and shall have all other members of executive management of ACS reporting to her.

	 	5.	 	Location: Anchorage, Alaska.

	 	6.	 	Term: Through April 1, 2011; provided, the Term shall be extended for successive
one-year periods thereafter unless 90 days prior to the last day of the then-existing
initial or extended Term either party gives the other party written notice that the Term
shall not be so extended.

	 	7.	 	Retention Bonus: 100,000 fully vested restricted stock units: On the Effective Date,
Executive shall be granted 100,000 restricted stock units (“RSUs”), in accordance with the
form of restricted stock unit previously presented to Executive.  The RSUs
shall be fully vested and nonforfeitable on the date of grant and shall be payable on July
31, 2009 with one share of common stock of ACS for each vested RSU; provided, if the
stockholders of ACS have not approved the issuance of common stock pursuant to the grant on
or prior to the date the RSUs are payable hereunder, the RSUs shall be paid to Executive in
a cash lump sum in an amount equal to 100,000 multiplied by the Fair Market Value (as
defined under the ACS 1999 Stock Incentive Plan (the “1999 Plan”)) of one share of ACS
common stock on July 30, 2009. For the avoidance of doubt, Executive acknowledges that the
RSUs shall not be issued under the 1999 Plan and shall not be settled in shares of the
Company’s common stock absent stockholder approval thereof.

Dividend-Equivalent Payments: In addition, on July 31, 2009,
Executive shall receive a cash lump sum payment of
dividend-equivalents in an amount equal to 100,000 multiplied by
the sum of all cash dividends declared on one share of ACS common
stock from September 12, 2008 through July 31, 2009 or, if
earlier, through the date of a Triggering Event (as defined
below).

Taxes: All amounts paid with respect to the RSUs and dividends
thereon shall be subject to applicable tax withholding to be
deducted from the shares of common stock or cash payment(s), as
the case may be.

Section 409A; Termination; Change of Control: For purposes
hereof, the RSUs and the dividend-equivalents thereon shall be
independent instruments and constitute separate payments for
purpose of Section 409A (“Section 409A”) of the Internal Revenue
Code of 1986, as amended. The foregoing payment timing to the
contrary notwithstanding, the RSUs and dividend-equivalents
thereon shall be immediately payable upon (i) a termination of
Executive’s employment for any reason (in shares of ACS common
stock or cash, as the case may be, as provided above), provided
that such termination constitutes a separation from service
within the meaning of Section 409A(2)(A)(i) or (ii) the
occurrence of a Change of Control (defined below) (in shares of
ACS common stock or cash, as the case may be, as provided above),
provided such Change of Control constitutes a change of ownership
or effective control of ACS or of a substantial portion of the
assets of ACS within the meaning of Section 409A(2)(A)(v) and the
Treasury Regulations thereunder (each such event under clauses
(i) and (ii) a “Triggering Event”).

	 	8.	 	Annual Cash and Stock Compensation: Base Salary of $550,000 per fiscal year (“Base
Salary”) beginning on the Effective Date, payable (i) $500,000 in cash in regular payroll
installments and (ii) $50,000 in restricted stock (based on the Fair Market Value of ACS
common stock on the first day of the applicable fiscal year), except that the first such
grant shall be in the amount of $37,500 for the fiscal year ending December 31, 2008 and
shall be awarded on the Effective Date (based on the Fair Market Value on the Effective
Date) pursuant to the 1999 Plan (or any successor plan) and vesting and becoming
unrestricted on the last day of the applicable fiscal year; provided, in the event of a
termination of Executive’s employment for any reason prior to the last day of the
applicable fiscal year, the restricted stock shall vest and all restrictions shall
immediately lapse pro rata based on the fraction the numerator of which is the number of
days employed during the applicable fiscal year and the denominator of which is 365 (except
that, for 2008, any such proration is measured from April 1, 2008). In addition, Executive
shall be entitled to an annual bonus in the target amount of $550,000 based on achieving
100% of targeted performance objectives. The actual bonus paid for any fiscal year (see
below) could range from 0% to 300% of Base Salary based on the achievement of performance
objectives determined by the Board or a designated committee of the Board in consultation
with Executive for each fiscal year and subject to the payment timing and other terms of
the applicable annual bonus plan. To be eligible for a bonus in respect of any Executive’s
performance in any fiscal year, Executive must be actively employed by ACS and in good
standing on the date ACS’s independent public accouting firm issues its final audit report
pertaining to such fiscal year’s financial statements.

	 	9.	 	Equity Package: 2008 Grant of 500,000 Stock Appreciation Rights: On Effective Date,
Executive shall be granted stock appreciation rights with respect to 500,000 shares of ACS
common stock under the 1999 Plan (“2008 SARs”), such 2008 SARs to be settled in shares of
ACS common stock (net of minimum withholding tax, as Executive may elect), to have a base
price equal to the Fair Market Value of ACS common stock on the Effective Date, to have a
term of five (5) years, and to vest and be exercisable as to 50% of the 2008 SARs on the
date of grant and as to the other 50% of the 2008 SARs on April 1, 2009 or to vest and be
exercisable in full immediately prior to a Change of Control, whichever is earlier. The
2008 SARs shall be subject to the terms of an award agreement to be provided to Executive.
The foregoing to the contrary notwithstanding, in the event of a termination of Executive’s
employment by ACS without Cause, by Executive for Good Reason or due to Executive’s
Disability or death (such capitalized terms as are defined below) the unvested 2008 SARs
shall vest and be exercisable pro rata based on the fraction the numerator of which is the
number of days employed since April 1, 2008 and the denominator of which is 365.

2009 Grant of 500,000 Stock Appreciation Rights: On January 2,
2009, Executive shall be granted stock appreciation rights with
respect to 500,000 shares of ACS common stock under the 1999 Plan
(“2009 SARs”), such 2009 SARs to be settled in shares of ACS
common stock (net of minimum withholding tax, as Executive may
elect), to have a base price equal to the Fair Market Value of
ACS common stock on the date of grant, to have a term of five (5)
years, and to vest as to 50% of the 2009 SARs on April 1, 2010
and as to the other 50% of the 2009 SARs on April 1, 2011 or, to
vest and be exercisable in full immediately prior to a Change of
Control, whichever is earlier. The 2009 SARs shall be subject to
the terms of an award agreement to be provided to Executive. The
foregoing to the contrary notwithstanding, in the event of a
termination of Executive’s employment by ACS without Cause, by
Executive for Good Reason or due to Executive’s Disability or
death (such capitalized terms as are defined below) the 2009 SARs
shall vest and be exercisable (including such 2009 SARs as had
become vested and exercisable previously) pro rata based on the
fraction the numerator of which is the number of days employed
since April 1, 2008 and the denominator of which is 1,095.

Termination; Change of Control Prior to Grant of 2009 SARs: Upon
the occurrence of a Triggering Event at any time prior to the
grant of the 2009 SARs, Executive shall receive an immediate cash
lump sum payment in an amount equal to the Vested Portion
multiplied by the Triggering Event Spread Value. The “Vested
Portion” is the number of 2009 SARs that would have vested upon
the occurrence of the Triggering Event had the 2009 SARs been
awarded on the Effective Date (and not on January 2, 2009) in
accordance with the provisions of the immediately preceding
paragraph. The “Triggering Event Spread Value” equals the
positive difference (if any) between the Fair Market Value of one
share of ACS common stock on the date of the Triggering Event
minus the Fair Market Value of one share of ACS common stock on
the Effective Date.

Contingent 2009 Make-Whole Restricted Stock Award: On January 2,
2009, Executive shall be granted such positive number of shares
of ACS restricted stock pursuant to the 1999 Plan as equals (i)
the Contingent Spread Value multiplied by (ii) the quotient of
(x) 500,000 and (y) the Fair Market Value of one share of ACS
common stock on January 2, 2009 (“2009 Restricted Stock”). The
“Contingent Spread Value” equals the positive difference (if any)
between the Fair Market Value of one share of ACS common stock on
January 2, 2009 minus the Fair Market Value of one share of ACS
common stock the Effective Date. If so granted, the 2009
Restricted Stock will vest and become unrestricted as to 50% of
the shares on April 1, 2010 and as to the other 50% of the shares
on the April 1, 2011 and upon vesting shall be subject to minimum
withholding tax as Executive may elect. Executive shall receive
all ordinary and extraordinary dividends on the 2009 Restricted
Stock from and after the date of grant as and when such dividends
are paid to stockholders. The shares comprising the 2009
Restricted Stock shall not have voting rights until restrictions
lapse on such shares. The 2009 Restricted Stock shall be subject
to the terms of an award agreement to be provided to Executive.
The foregoing to the contrary notwithstanding, in the event of a
termination of Executive’s employment by ACS without Cause, by
Executive for Good Reason or due to Executive’s Disability or
death the 2009 Restricted Stock shall vest and become
unrestricted (including such number of shares as had become
vested previously) pro rata based on the fraction the numerator
of which is the number of days employed since April 1, 2008 and
the denominator of which is 1,095.

Executive shall be eligible to participate in the ACS Lead Team
Equity Program (the “ACS LTE Program”) with a target grant of
$1,100,000, to be paid 50% in the form of a restricted stock
grant and 50% in the form of LTIP restricted stock, subject to
the same terms and provisions of the ACS LTE Program as apply to
other senior leadership team members receiving such awards;
provided, unless more favorable terms are provided to the senior
leadership team, (x) the restricted stock shall vest on the fifth
anniversary of the grant date, subject to accelerated vesting of
one-third of the grant in respect of performance during each of
the first three years ending during the vesting period based on
the achievement of performance goals, established by the Board,
for such year and (y) the LTIP restricted stock shall vest on the
fifth anniversary of the grant date subject to accelerated
vesting of the entire grant based on the achievement of
cumulative performance goals, established by the Board in respect
of performance during the first three fiscal years ending during
the vesting period.

2008 Grant of $1,650,000 of Performance Share Units: On the
Effective Date, pursuant to the Project Blue long-term
performance program for executives, Executive shall be granted
such number of performance share units (“PSUs”) under the 1999
Plan, as amended, as equals (i) $1,650,000 divided by (ii) the
Fair Market Value on August 1, 2008, which PSUs shall be earned
and vested upon the attainment of performance goals established
by the Board and set forth in the award agreement. If such
performance goals are not attained, the Compensation and
Personnel Committee, in its discretion, may deem a lesser number
of such performance share units (which may be zero) to have been
earned and vested at the completion of the performance period.
The performance period shall commence on August 1, 2008 and end
on December 31, 2009. The performance shares shall be subject to
the terms of an award agreement to be provided to Executive. The
performance shares shall vest on the last day of the performance
period provided Executive is continuously employed through the
date of vesting; provided, in the event of a termination of
Executive’s employment by ACS without Cause, by Executive for
Good Reason or due to Executive’s Disability or death the
performance shares shall continue to vest and be payable, to the
extent of attainment of the performance goals, as if Executive’s
employment had not terminated. In the event of a Change of
Control prior to the last day of the performance period, the
performance shares shall be deemed earned and vested to the
extent of the attainment of performance as determined by the
Compensation and Personnel Committee prior to consummation of
such Change of Control (with equitable adjustment of the
performance goals due to the truncation of the performance period
occurring upon such Change of Control).

	 	10.	 	Additional Benefits: Executive shall participate in ACS’s health and other benefit
plans and programs for senior executives and be covered under ACS’s D&O insurance and
corporate indemnification policies, subject to the terms and conditions of those respective
plans and programs. Executive shall be entitled to four (4) weeks of paid vacation each
calendar year (prorated for any partial calendar years). ACS shall reimburse Executive for
her reasonable legal and other professional fees incurred in connection with the
negotiation and documentation of this Agreement, up to a maximum of $20,000.

	 	11.	 	Severance: Except as provided under a Change of Control below, if ACS terminates
Executive’s employment for Cause, Executive shall not be entitled to any severance payments
or benefits, except such compensation and benefits that have accrued before the date of
termination. In the event ACS terminates Executive’s employment on an involuntary basis
for reasons other than a Board determination of Cause or other than a termination for death
or Disability, or Executive terminates her employment for Good Reason (as defined),
Executive shall be entitled to receive the following from ACS (i) $1,100,000, payable in a
lump sum within 60 days of her termination date; unless required to later paid in
accordance with Section 16 hereof as a result of Section 409A of the Code (the “Severance
Amount”).(ii) any unpaid bonus from the previously completed fiscal year, payable when
bonuses are paid to other senior executives of ACS for such fiscal year; (iii) receive a
pro rata bonus (of the amount actually earned) for the year of termination, payable solely
when, as and if bonuses are paid to other senior executives of ACS for such year; (iv)
become vested in such number of the unvested 2008 SARs and the 2009 SARs as is respectively
provided in Paragraph 9, above, (v) receive the payment of all premiums for COBRA health
insurance coverage for herself and her eligible dependents for up to the eighteen- (18)
month period following such termination, provided she properly elects such coverage and
subject to all other terms and conditions of such coverage; and (vi) be entitled to $50,000
for relocation expenses (plus any income tax gross-up); payable in a lump-sum within 60
days of her termination date (unless required to later paid in accordance with Section 16
hereof as a result of Section 409A of the Code); provided, hoewever, this relocation
benefit shall not apply if Executive accepts employment with another company during the
term of this Agreement (collectively with the Severance Amount, “Severance Benefits”).
Executive understands that her entitlement to the Severance Benefits provided above is
conditioned upon Executive’s execution, timely delivery and non-revocation of a general
release in favor of ACS (which ACS shall tender to Executive within 15 days after such
termination and Executive shall sign and deliver to ACS within 45 days after such
termination) and its affiliates. Executive shall also provide transition assistance as
reasonably requested by the Board. The severance benefits provided under this Agreement
shall be the only severance benefits to which the Executive is entitled. ACS may offset
against the Severance Payment any amounts then owed by Executive. Executive understands
that no Severance Benefits (other than the relocation benefits described in clause (v)
above) are payable if her employment terminates in accordance with Section 6 at the close
of business on April 1, 2011 (or such later date as the Term of employment may be extended
as provided above).

	 	12.	 	Change of Control: In the event of a termination of Executive’s employment by ACS
without Cause or by Executive for Good Reason (i) prior to and in connection with a Change
of Control or (ii) within 24 months after a Change of Control, Executive shall be entitled
to Severance Benefits pursuant to the applicable terms and conditions set forth in
Paragraph 11 above (including but not limited to the timely delivery and non-revocation of
a general release in favor of ACS and its affiliates), except that the “Severance Amount”
shall be equal to four times (4x) Executive’s Base Salary, payable in a lump sum within 60
days of her termination date.

Additionally, in the event of a qualifying termination pursuant
to this Paragraph 12 above, Executive shall be entitled to the
benefits set forth on Attachment A hereto.

	 	13.	 	No Conflicts: Executive represents and warrants that she is not a party to any
agreement or arrangement that would limit in any manner her ability to perform her duties
for ACS.

	 	14.	 	Taxes Except as expressly set forth in this Agreement to the contrary, the Company may
withhold applicable taxes from all payments and benefits hereunder. Subject to the terms
of Attachment A and Section 11 of this Agreement, Executive acknowledges and agrees that
she shall be responsible for any and all taxes arising from any payments or benefits
provided under this Agreement.

	 	15.	 	Certain Definitions: For purposes of this Agreement, the following definitions shall
apply:

	 	(a)	 	“Cause” shall mean that the
Executive: (i) willfully fails to comply with lawful directions
of the Board after written notice from the Board; (ii) willfully
makes a material misrepresentation to the Board; (iii) commits
fraud, misappropriation or embezzlement against ACS or engages
in willful misconduct materially adverse to ACS; (iv) is charged
with or convicted of (or pleads guilty or no contest to) a
felony or other crime involving moral turpitude; provided that
if the Executive has been terminated ostensibly for Cause
because she has been charged with a crime described above, and
she is not convicted of, or does not plead guilty or no contest
to, such crime or a lesser offense (based on the same operative
facts), such termination shall be then recharacterized as a
termination without Cause (and Executive’s rights related
therero shall attach), (v) commits material acts of dishonesty
or unethical conduct related to the business of the company or
its relationships with employees, suppliers, contractors,
customers, or others with whom the company does business; (vi)
commits any other act, course of conduct, or omission that has
or is reasonably likely to have a material adverse effect on the
company, its business or financial position, or its goodwill or
reputation; or (vii) commits a material breach of this Agreement
(other than due to physical or mental illness) that is not
cured, to the extent deemed capable of cure by the Board in its
reasonable discretion, within thirty (30) days after receiving
written notice from the Board (for purposes of this clause (a)
and Paragraph 11 (“Severance”); “Board” shall include the
Executive Committee of the Board or such other committee or
Board members designated by the Board); and for such purpose,
such lawful directions include Executive’s obligation, in
carrying out her duties as President and Chief Executive Officer
of the Company, to adhere to the Company’s Corporate Governance
Principles, as approved by the Board, as such principles pertain
to the division of responsibility of the Board and management,
the Company’s Certificate of Incorporation and Bylaws, the
lawful resolutions of the Board of Directors, and the Delaware
General Corporation Law, in each case, as may be amended from
time to time (“Corporate Governance Principles”).

	 	(b)	 	“Good Reason” shall mean:
(i) the material diminution of, Executive’s position, including
authorities, duties, title, offices, or responsibilities
(including reporting responsibilities) (except as required by
applicable law or regulation); (ii) the failure to retain
Executive in the position of Chairman of the Board; or (iii) the
transfer, without the Executive’s concurrence, of her principal
place of employment to a geographic location more than 100 miles
from her principal place of employment, provided that Executive
gives written notice to ACS within 30 calendar days of the
initial existence of any of the foregoing conditions and that
ACS does not remedy such condition within 30 calendar days after
receipt of such notice.

	 	(c)	 	“Change of Control” shall mean
(i) the acquisition by any person or group of a majority or more
of ACS’ outstanding voting securities or (ii) any sale, lease,
exchange or other transfer in one transaction or a series of
related transactions comprising all or substantially all of the
assets of ACS and its operating subsidiaries, or any plan for
the liquidation or dissolution of ACS.

	 	(d)	 	“Disability” shall mean that for
180 days in any 365-day period Executive is incapable of
substantially fulfilling the duties of her position because of
physical, mental or emotional incapacity resulting from injury,
sickness, or disease.

	 	(e)	 	“Powers Reserved to the Board”
shall mean actions that require Board approval for management to
undertake as delineated in the Corporate Governance Principles,
above.

	 	16.	 	Section 409A: Except respecting the RSUs and dividend-equivalents thereon, this
Agreement and the payments hereunder are intended to qualify for the short-term deferral or
involuntary separation from service exception, including the safe harbor thereunder, to
Section 409A, as described in Treasury Regulation Sections 1.409A-1(b)(4) and -1(b)(9). To
the extent the requirements of Sections 409A(a)(2), (3) and (4) are applicable to 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,
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. Without limiting the generality of the foregoing, to the minimum extent
required in order to comply with Section 409A, amounts that would otherwise be payable
under this Agreement during the six-month period immediately following Executive’s
“separation from service” (as defined by Section 409A) shall instead be paid on the first
business day after the six-month period following such date, together with interest at the
Prime Rate (under The Wall Street Journal, electronic edition) as then in effect. If any
of the Severance Benefits, including Change of Control payments, are subject to Section
409A of the Code, Executive shall be entitled to any such Severance Benefits only if the
general release described in Paragraphs 11 and 12 above has been executed, is effective and
the applicable revocation period has expired no later than the date as of which such
Severance Benefits are to be paid or provided pursuant to this Agreement and if such
requirements are not satisfied, Executive shall not be entitled to any such Severance
Benefits.

	 	17.	 	Miscellaneous: Executive’s employment by ACS is “at will” and nothing in this Agreement
(including Attachment A attached hereto shall be interpreted to imply otherwise. This
Agreement is to be governed by and construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of laws. All disputes between ACS and
Executive (whether contractual or otherwise, including, without limitation, disputes
relating to or arising under or by reason of this Agreement or the other agreements
referred to herein) must be resolved by binding confidential arbitration held in a major
metropolitan location (selected by the Board) in proximity to ACS’s then headquarters. The
Company shall pay all of the costs of such arbitration. Each party shall pay her or its
own attorneys fees and costs. Such arbitration shall be conducted in accordance with the
rules of the Commercial Panel of the American Arbitration Association (the “AAA”) and not
in accordance with the Employment Dispute Resolution Rules of the AAA, and judgment on the
award rendered in such arbitration may be entered in any court having jurisdiction. The
arbitrator shall have no authority to award punitive or exemplary damages and the parties
waive, to the full extent permitted by law, any right to recover such damages in such
arbitration. Nothing in this Agreement shall restrict the right of ACS or its affiliates to
seek injunctive relief arising out of any violation by the Executive of the Agreement on
Confidentiality, Trade Secrets and Restrictive Covenants. This Agreement is intended by ACS
and Executive to be a binding and completely integrated agreement superseding all prior and
contemporaneous promises, representations, offers, contracts, and agreements among ACS and
Executive with respect to the subject matter addressed herein. This Agreement may not be
amended except in a writing executed by Executive and a duly authorized officer of ACS.
This Agreement shall only be binding on ACS and Executive if and when both ACS and
Executive execute the Agreement by signing below, or when both parties have executed the
Agreement in counterparts. For purposes of this Paragraph 16 (“Miscellaneous”) and the
general release referred to in Paragraph 11 (“Severance”) above, the term “ACS” includes
Alaska Communications Systems Group, Inc., its subsidiaries, affiliates and related
entities, (collectively, the “Related Entities”), and all partners, members, directors,
employees, shareholders, affiliates and agents of ACS, or any other Related Entities.
Absent any such other agreements that shall be entered into, this Agreement shall be
binding. In the event of any inconsistency between this Agreement and any other plan,
program, practice or agreement in which Executive and the Company are parties, this
Agreement shall control.

	 	18.	 	Indemnification: The Company shall at all times continue to indemnify Executive for her
acts and omissions as an officer, employee and member of the Board to the maximum extent
provided under the Company’s charter, by-laws and applicable law. The Company shall
continue to insure Executive, at all times for which she may be subject to liability for
all such acts and omissions, under any contract of directors and officers liability
insurance coverage in force at any time for members of the Board.

1

IN WITNESS WHEREOF, each of ACS and the Executive have executed this Agreement on
September 22, 2008, the Effective Date.

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.

	 	 	 
	/s/ Liane Pelletier     

	 	By:_/s/ Gary R. Donahee     
	 

	 	 
	Liane Pelletier

	 	Gary R. Donahee

Chairman, Compensation & Personnel Committee of the

Board of Directors

Accepted and agreed, as duly authorized:

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.

By:_/s/ Timothy R. Watts          

Timothy R. Watts

Corporate Secretary

2

ATTACHMENT A

Excise Tax

1. If it is determined that any amount, right or benefit paid or payable (or otherwise
provided or to be provided) to Executive by the Company or any of its affiliates under this
Agreement or any other plan, program or arrangement under which Executive participates or is a
party, other than amounts payable under this Attachment A, (collectively, the “Payments”), would
constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue
Code (“Code”), subject to the excise tax imposed by Section 4999 of the Code, as amended from time
to time (the “Excise Tax”), Executive shall be entitled to receive an additional payment from the
Company (a “Gross-Up Payment”) in an amount such that, after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes) imposed on the Gross-Up
Payment, including, without limitation, any income and employment taxes and Excise Tax thereon,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.

2. All determinations required to be made under this Attachment A, including the amount of any
such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall
be made by an independent, nationally recognized accounting firm mutually acceptable to the Company
and Executive (the “Auditor”). The Auditor shall promptly provide detailed supporting calculations
to both the Company and Executive following any determination that a Gross-Up Payment is necessary.
All fees and expenses of the Auditor shall be paid by the Company. Any Gross-Up Payment, as
determined pursuant to this Attachment A, shall be paid by the Company to Executive within five (5)
days after the later of the receipt of the Auditor’s determination and the date when the Excise Tax
is deducted and withheld pursuant to Section 4999 of the Code. All determinations made by the
Auditor shall be binding upon the Company and Executive; provided that if, notwithstanding the
Auditor’s initial determination, there is a final, adverse determination by the Internal Revenue
Service (or other applicable taxing authority) that an additional Excise Tax is due with respect to
the Payments, then the Auditor shall recalculate the amount of the Gross-Up Payment Amount, if
applicable, based upon such adverse determination made by the Internal Revenue Service (or other
applicable taxing authority) after taking into account any additional interest and penalties (the
“Recalculated Amount”) and the Company shall pay to Executive the excess of the Recalculated Amount
over the Gross-Up Payment initially paid to Executive within five (5) days of the receipt of the
Auditor’s recalculation the Gross-Up Payment.

3. Without limiting any earlier payment provided under this Attachment A, the Gross-Up Payment
(or Gross-Up Payments, if applicable) payable to Executive under this Attachment A shall be paid to
her not later than the last day of Executive’s taxable year following the taxable year in which
Executive remits the taxes owed by her that result in the obligation of the Company to pay her such
Gross-Up Payment.

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]