THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Alaska Communications Systems Group, Inc. (ALSK)

6/26/2006 Proxy Information

From January 2004 to March 2005 the members of our Compensation and Personnel Committee were Messrs. Paine, Rogers, and Egan. Mr. Paine, who departed the Compensation and Personnel Committee in February 2005, and joined the Nominating and Corporate Governance Committee, is the President of Fox Paine & Company, LLC. Mr. Gibson who joined the Committee in 2005 and left in February 2006 is the Executive Managing Director for Fox Paine & Company, LLC. Fox Paine & Company, LLC received an annual management fee in the amount of 1% of the Company’s net income before interest expense, income taxes and depreciation and amortization, calculated without regard to the fee prior to 2005. We have paid in 2005, 2004, and 2003 certain cash management fees to Fox Paine in connection with assistance rendered in structuring a stock offering and refinancing transaction for us and for the termination of our management fee agreement with them, which we paid to Fox Paine during the first quarter of 2005.

During 2003, the Company spun off its Directory Business to ACS Media LLC and subsequently sold 99.9% of its interest in ACS Media LLC to the public through a Canadian income fund. As part of that transaction, the Company entered into several long-term contracts with ACS Media LLC, including a 50-year publishing agreement, a 50-year license agreement, a 45-year non-compete agreement, and a 10-year billing and collection agreement. At December 31, 2005, the Company had recorded in accounts payable – affiliates, $2.8 million due to ACS Media LLC under these contracts, primarily under the billing and collection agreement. The Company has a right to minority representation of one manager of the permitted nine managers of ACS Media LLC so long as its contracts with ACS Media LLC are in effect. Currently, Leonard A. Steinberg, an officer of the Company, is a manager of ACS Media LLC.

7/1/2005 Proxy Information

Fox Paine & Company, our largest stockholder, received an annual management fee in the amount of 1% of our net income before interest expense, interest income, income taxes, depreciation and amortization, and equity in earnings (loss) of investments, calculated without regard to the fee pursuant to an agreement dated May 14, 1999. The management fee expense for 2004, 2003 and 2002 was $942,810, $930,416 and $1,316,000 respectively. The management fee payable at December 31, 2004 and 2003 was $945,539 and $950,002 respectively. The annual management fee obligation to Fox Paine was terminated effective for periods beginning after December 31, 2004 as partial consideration for a $2.7 million transaction fee paid to Fox Paine in February 2005 in connection with assistance rendered in structuring a stock offering and refinancing transaction which we completed during the first quarter of 2005. Our Board of Directors approved the transaction fee agreement terms.

Our Board of Directors approved the payment to Fox Paine & Company of a fee equal to 1% of the gross proceeds generated from the sale of the our Directories Business upon closing such sale, plus expenses in connection with such transaction, including the reimbursement by us of the $250,000 consulting fee and transaction bonus paid to an officer under the agreement described below. We paid Fox Paine & Company a fee of $2.1 million on May 8, 2003.

Fox Paine & Company entered into a consulting agreement with one of our officers for services rendered for our benefit related to the sale of our Directories Business. Under this agreement, the officer was paid a lump sum consulting fee and transaction bonus of $250,000 in May 2003. As described above, Fox Paine & Company was reimbursed for this expense.

In August 2003, our board of directors also approved the payment of a fee equal to 1% of the gross proceeds generated from the refinancing of our debt. We paid Fox Paine & Company $3.8 million on August 28, 2003.

On September 19, 2003, Fox Paine entered into a consulting agreement with one of our retiring officers. The consulting term began on January 1, 2004, continued for one year, and was terminated on December 31, 2004. During the consulting term, the retired officer advised Fox Paine on and evaluated potential opportunities in the telecommunications industry, and Fox Paine paid the former officer a monthly fee of $20,000 for those services.

Two of our current Directors, Messrs. Saul A. Fox and W. Dexter Paine, III are co-founders of Fox Paine and currently serve as Fox Paine's Chief Executive Officer and President. A third director, Mr. Wray T. Thorn, is a former director of Fox Paine.

Liane J. Pelletier, Our Chair, Chief Executive Officer and President, serves on the board of directors of WJ Communications, Inc. (Nasdaq—WJCI) as does Director W. Dexter Paine, III, who is the chairman of WJ's board and co-founder of Fox Paine. WJ Communications, Inc. common stock is 41.7% beneficially owned by Fox Paine as of March 31, 2005. Fox Paine beneficially owns 47.19% of the Company's common stock as of June 20, 2005.

On April 17, 2001, we issued an interest bearing note receivable to one of our former officers totaling $328,000. The note bore interest at the Mid-Term Applicable Federal Rate and was due on April 15, 2005. The note was secured by a pledge of 100,000 shares of our common stock held in the officer's name. In accordance with an addendum to the officer's employment agreement dated May 3, 2001, the loan was to be forgiven ratably over a three year period ending April 16, 2004. Accordingly, $114,000 was forgiven on April 16, 2002 and recognized as compensation expense. Upon the closing of the sale of the our Directories Business on May 8, 2003 for which the officer received a fee of $840,000, he waived certain rights under his employment agreement, including the forgiveness terms of this indebtedness that would have occurred during 2003 and 2004. On May 8, 2003, the officer paid off the note balance of $238,000, including accrued interest.

During 2003, we spun off our Directory Business to ACS Media LLC and subsequently sold 99.9% of our interest in ACS Media LLC to the public through a Canadian income fund. As part of that transaction, we entered into several long-term contracts with ACS Media LLC, including a 50-year publishing agreement, a 50-year license agreement, a 45-year non-compete agreement, and a 10-year billing and collection agreement. At December 31, 2004, and 2003, respectively, we had recorded in accounts payable—affiliates $3.0 million and $2.9 million due to ACS Media LLC under these contracts, primarily under the billing and collection agreement. We have a right to minority representation of one manager of the permitted nine managers of ACS Media LLC so long as its contracts with ACS Media LLC are in effect. Currently, Leonard A. Steinberg, one of our officers, is a manager of ACS Media LLC.

On September 14, 2003, we entered into an agreement with a retiring officer to reacquire approximately 267,000 shares of our stock owned by the officer in January 2004 at a purchase price per share equal to the highest average closing price of a share of our stock during any 5-consecutive day trading period in January 2004. The officer delivered the shares to us in 2004, and we made repurchase payments totaling $1,262,000 to the officer in four equal quarterly installments during 2004.

On May 14, 1999, we entered into a stockholders' agreement with Fox Paine Capital Fund, investors affiliated with Fox Paine Capital Fund and several non-fund investors, including co-investors and some of our former officers. Under the stockholders' agreement, subject to limited exceptions, Fox Paine Capital Fund and its affiliates, as a group, may make up to six demands for registration under the Securities Act of their shares of common stock, and we are obligated to bear the fees and expenses of such registration and offering other than underwriting discounts. In December 2004, we registered with the SEC 19,598,879 shares beneficially owned by Fox Paine or its affiliates on a shelf registration statement on Form S-3 under the auspices of the stockholders' agreement.