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Alaska Communications Systems Group, Inc. (
"ACS" )
Ms. Liane Pelletier ( "Executive" )
Amended and Restated Executive Employment Agreement (
"Agreement" )
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1.
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Effective Date: September 22, 2008.
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2.
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Positions & Titles: Executive shall continue as
Chairman of the ACS Board of Directors ( "Board" ),
President, and Chief Executive Officer of ACS.
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3.
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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.
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4.
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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.
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5.
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Location: Anchorage, Alaska.
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6.
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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.
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7.
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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.
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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" ).
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8.
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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.
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9.
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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.
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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 pe
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