Stock Incentive Plans

9 Months Ended

Sep. 30, 2012

Stock Incentive Plans [Abstract]

STOCK INCENTIVE PLANS

5. STOCK INCENTIVE PLANS

Under the Company’s stock incentive plan, stock options, restricted stock, stock-settled stock appreciation rights (“SSARs”), performance share units and other awards may be granted to officers, employees, consultants, and non-employee directors.

The following table summarizes the activity for SSARs and stock options for the nine months ended September 30, 2012:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value
Outstanding at December 31, 2011		317		$	8.64
Granted		—			—
Exercised		—			—
Canceled or expired		(6	)		8.00
Outstanding at September 30, 2012		311			8.66		1.29	$	—
Exercisable at September 30, 2012		311		$	8.66		1.29	$	—

The following table summarizes the activity for restricted stock units, long-term incentive awards and non-employee director stock compensation for the nine months ended September 30, 2012:

	Number of Shares			Weighted Average Fair Value
Nonvested at December 31, 2011		1,072		$	7.35
Granted		610			2.66
Vested		(251	)		6.80
Canceled or expired		(103	)		5.63
Nonvested at September 30, 2012		1,328		$	5.43

The following table summarizes the activity for performance share units for the nine months ended September 30, 2012:

	Number of Shares			Weighted Average Fair Value
Nonvested at December 31, 2011		290		$	7.66
Granted		639			2.69
Vested		(96	)		6.51
Canceled or expired		(67	)		2.79
Nonvested at September 30, 2012		766		$	4.08

The following table summarizes the assumptions used for valuation of equity instruments granted during the nine months ended September 30, 2012 and 2011:

	Nine Months Ended September 30,
	2012	2011
Restricted stock:
Risk free rate	0.18% - 0.21%	0% - 8.48%
Quarterly dividend per share	$0.05	$0.215

The following table provides selected information about the Company’s share-based compensation for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Total compensation cost for share-based payments	$	969	$	1,188	$	2,662	$	2,620
Weighted average grant-date fair value of equity instruments granted (per share)	$	2.25	$	8.00		2.68	$	8.04
Total fair value of shares vested during the period	$	100	$	99		2,534		4,111
Total intrinsic value of options exercised	$	—	$	—		—		1,930
Unamortized share-based payments	$	2,839	$	5,119		2,839		2,887
Weighted average period (in years) to be recognized as expense		1.3		2.2		1.3		2.2

The Alaska Communications Systems Group, Inc. 2012 Employee Stock Purchase Plan (“2012 ESPP”) was approved by the Company’s shareholders in June 2012 and replaced the Alaska Communications Systems Group, Inc. 1999 Employee Stock Purchase Plan, as amended (“1999 ESPP”). The 2012 ESPP will terminate upon the earlier of (i) the last exercise date prior to the tenth anniversary of the adoption date, unless sooner terminated in accordance with the 2012 ESPP; or (ii) the date on which all purchase rights are exercised in connection with a change in ownership of the Company. The terms of the 2012 ESPP are similar to those of the 1999 ESPP. Under the terms of the 2012 ESPP, all ACS employees and all employees of designated subsidiaries generally will be eligible to participate in the 2012 ESPP, other than employees whose customary employment is not more than 20 hours per week and five months in a calendar year, or who are ineligible to participate due to restrictions under the Internal Revenue Code. A participant in the 2012 ESPP will be granted a purchase right to acquire shares of common stock at six-month intervals on an ongoing basis, subject to the continuing availability of shares under the 2012 ESPP. Each participant may authorize periodic payroll deductions in any multiple of 1% (up to a maximum of 15%) of eligible compensation to be applied to the acquisition of common stock at semiannual intervals. The 2012 ESPP imposes certain limitations upon a participant’s rights to acquire common stock, including (i) purchase rights granted to a participant may not permit the individual to purchase more than $25 worth of common stock for each calendar year in which those purchase rights are outstanding at any time; (ii) purchase rights may not be granted to any individual if the individual would, immediately after the grant, own or hold outstanding options or other rights to purchase, stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any of its subsidiaries; and (iii) no participant may purchase more than 10 shares of common stock during any six month offering period. The offering dates are January 1 and July 1 and the purchase dates are June 30 and December 31. The initial purchase date under the 2012 ESPP is December 31, 2012. Shares are purchased on the open market or issued from authorized but unissued shares on behalf of the participant on the purchase date. No participant will have any shareholder rights with respect to the shares covered by their purchase rights until the shares are actually purchased on the participant’s behalf. No adjustments will be made for dividends, distributions or other rights for which the record date is prior to the date of the actual purchase.

The Company reserved 1,500 shares of its common stock for issuance under the 2012 ESPP, which were also available for issuance for the January 1, 2012 through June 30, 2012 offering period under the 1999 ESPP. Any shares issued to employees in respect to the January 1, 2012 through June 30, 2012 offering period under the 1999 ESPP reduced (on a one for one basis) the aggregate number of shares available for issuance thereafter under the 2012 ESPP. Since adoption of the 1999 ESPP, an aggregate of 1,050 shares of common stock were reserved for issuance under the 1999 ESPP, and 1,017 shares were issued. The remaining 33 shares will not be added to the 1,500 new shares reserved for issuance under the 2012 ESPP. The fair value of each purchase right under the 2012 ESPP and 1999 ESPP is charged to compensation expense over the offering period to which the right pertains, and is reflected in total compensation cost for share-based payments in the above table.