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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

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ATLANTIC TELE-NETWORK, INC.
600 Cummings Center
Beverly, MA 01915

NOTICE OF 2011 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 14, 2011

May 2, 2011

Dear Stockholder:

        You are cordially invited to attend our Annual Meeting of Stockholders to be held at the Wylie Inn and Conference Center at 295 Hale Street, Beverly, MA 01915 on Tuesday, June 14, 2011 at 10:00 a.m. ET, for the following purposes:

1.

To approve an amendment to the Company's 2008 Equity Incentive Plan to increase the number of shares available for issuance under the plan;



2.

To hold an advisory vote on the compensation of our named executive officers;



3.

To hold an advisory vote on the frequency of future advisory votes on the compensation of our named executive officers;



4.

To elect the seven directors named in the accompanying Proxy Statement to hold office until the next annual meeting of stockholders and until their respective successors are elected and qualified;



5.

To ratify the selection of PricewaterhouseCoopers LLP (PwC) as our independent auditor for the fiscal year ending December 31, 2011; and



6.

To transact any other business that may properly come before the Annual Meeting or any adjournments or postponements thereof.

        Stockholders of record at the close of business on April 21, 2011 are entitled to notice of, and to vote at, the Annual Meeting. During the ten days prior to the Annual Meeting, a list of such stockholders will be available for inspection during our ordinary business hours at our office at the address above. Whether or not you expect to attend the meeting, please complete, date and sign the enclosed proxy card and mail it promptly in the enclosed postage prepaid envelope to ensure that your shares are represented at the Annual Meeting. If you attend the meeting and vote in person, your proxy will not be used.

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ATLANTIC TELE-NETWORK, INC.
600 Cummings Center
Beverly, MA 01915

PROXY STATEMENT
FOR THE 2011 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 2011

GENERAL INFORMATION ABOUT VOTING

        This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Atlantic Tele-Network, Inc., a Delaware corporation, for use at the 2011 Annual Meeting of Stockholders to be held on June 14, 2011, or any adjournments or postponements thereof.

        We are mailing this proxy statement together with our Annual Report to Stockholders for the year ended December 31, 2010 on or about May 10, 2011. Our Annual Report to Stockholders includes a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, excluding exhibits.

        Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on June 14, 2011: This Proxy Statement and our 2010 Annual Report to Stockholders are available at https://materials.proxyvote.com/049079.

Who Can Vote

        Only stockholders of record at the close of business on April 21, 2011 are entitled to vote at the Annual Meeting. On that date, 15,392,930 shares of common stock, par value $0.01 per share, were outstanding, each share entitled to one vote. If your shares are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares. If your shares are held in a brokerage account or by a bank or other holder of record, you are considered the beneficial owner of those shares. As a beneficial owner, you may direct your broker or other holder of record on how to vote your owned shares by following their instructions.

Voting

        You may vote your shares held of record either by attending the meeting and voting in person or by proxy. To vote in person, you must attend the Annual Meeting and cast your vote. You do not need to register in advance to attend the Annual Meeting. If you choose to vote by proxy, you must complete, sign and date the enclosed proxy card and return it in the enclosed postage prepaid envelope. No postage is necessary if the proxy card is mailed in the United States. If you vote by mail and your proxy card is received in time for voting and not revoked, your shares will be voted at the Annual Meeting in accordance with your instructions as set forth on your signed proxy card. If no instructions are indicated, the shares represented by the proxy card will be voted by the proxy holders:

•

FOR the approval of an amendment to the Company's 2008 Equity Incentive Plan to increase the number of shares available for issuance under the plan;



•

FOR the approval of the compensation of our named executive officers;



•

FOR an advisory vote to approve the compensation of our named executive officers to take place EVERY THREE YEARS;



•

FOR the election of the director nominees named herein;

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FOR the ratification of the appointment of PricewaterhouseCoopers LLP (PwC) as our independent auditor; and



•

in accordance with the judgment of the proxy holders named on the proxy card as to any other matter that is properly brought before the Annual Meeting, or any adjournments or postponements thereof.

        If you hold your shares through a bank, broker or other nominee, they will give you separate instructions for voting your shares and you must make arrangements with your broker, bank or other nominee in advance of the Annual Meeting to vote your shares in person.

Quorum

        The holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting, whether present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. If a quorum is not present at the Annual Meeting, the stockholders present may adjourn the Annual Meeting from time to time, without notice, other than by announcement at the meeting, until a quorum is present or represented. At any such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original meeting. Abstentions, votes withheld and broker non-votes will be counted for purposes of determining whether a quorum is present at the Annual Meeting.

Votes Required

        Proposal 1, the vote to approve an amendment to the Company's 2008 Equity Incentive Plan to increase the number of shares available for issuance under the plan, requires the affirmative vote of a majority of the shares present, or represented by proxy, and entitled to vote on the matter.

        Proposal 2, the advisory vote on the compensation of our named executive officers, requires the affirmative vote of a majority of the shares present, or represented by proxy, and entitled to vote on the matter.

        Proposal 3, the advisory vote to determine the frequency of future advisory votes on the compensation of our named executive officers, requires an affirmative vote of a plurality of the shares cast and entitled to vote on the matter.

        Proposal 4, the election of each director nominee, requires the affirmative vote of a plurality of the shares cast and entitled to vote on the matter.

        Proposal 5, the ratification of the appointment of PricewaterhouseCoopers LLP (PwC) as our independent auditor for 2011, requires the affirmative vote of a majority of the shares present, or represented by proxy, and entitled to vote on the matter.

        We will not count shares that abstain from voting ("abstentions") on a particular matter as votes in favor of such matter. Similarly, we will not count broker non-votes as votes in favor of such matter. A broker non-vote occurs when a broker cannot vote a customer's shares registered in the broker's name because the customer did not send the broker instructions on how to vote on the matter and the broker is prohibited by law or stock exchange regulations from exercising its discretionary voting authority in the particular matter. Accordingly, broker non-votes will have no effect on the outcome of voting on Proposals 1, 2, 3 or 4. Brokers will be entitled to vote a customer's shares in their discretion on Proposal 5, so there will be no broker non-votes on that proposal. However, abstentions will be considered to be votes present and entitled to vote on Proposals 1, 2 and 5, and they will have the effect of a vote against these proposals. Inspectors of election appointed by our Board will tabulate votes.

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Revocability of Proxies

        A proxy may be revoked at any time before it is exercised by delivering a written revocation or a duly executed proxy card bearing a later date to Atlantic Tele-Network, Inc., Attn: Secretary, 600 Cummings Center, Beverly, MA 01915. A proxy may also be revoked by voting in person at the Annual Meeting. If you hold your shares through a bank, broker or other nominee, you must make arrangements with your broker, bank or other nominee to revoke your proxy.

Solicitation Expenses

        We will bear all costs of solicitation of proxies. In addition to solicitations by mail, our directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, telecopy and personal interviews. We will request brokers, banks, and other holders of record to forward proxy soliciting material to beneficial owners. We will reimburse them for their reasonable out-of-pocket expenses incurred in connection with the distribution of the proxy materials. In addition, we engaged BNY Mellon Shareowner Services and Broadridge Investor Communications Solutions, Inc., professional solicitors, to assist in the distribution of proxy materials to banks, brokers, nominees and intermediaries. The estimated cost for engaging these entities is approximately $7,000 for any such services, plus reasonable out-of-pocket expenses.

Who to Contact for Additional Information

        If you have questions about how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card, please contact our proxy solicitor:

BNY Mellon Shareowner Services
c/o Mellon Investor Services
P.O. Box 358016
Pittsburgh, PA 15252-8016
Telephone (800) 522-6645

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information known to us as of April 21, 2011 (unless otherwise indicated in the footnotes to this table) with respect to the shares of our common stock that were beneficially owned as of such date by:

•

each person (including any partnership, syndicate or other group) known to us to be the beneficial owner of more than 5% of our outstanding shares of common stock;



•

each of our directors and each of the nominees seeking election as director;



•

each of the individuals named in the Summary Compensation Table in this Proxy Statement, whom we refer to collectively as our named executive officers; and



•

all of our current directors and executive officers as a group.

        The number of shares beneficially owned by each person listed below includes any shares which the person has a right to acquire on or before June 20, 2011 by exercising stock options or other rights to acquire shares. For each person listed below, the percentage set forth under "Percent of Class" was calculated based on 15,392,930 shares of common stock outstanding on April 21, 2011, plus any shares that person could acquire upon the exercise of any other rights exercisable on or before June 20, 2011. Except as indicated in the footnotes to this table, the persons named in the table have sole voting and investment power with respect to the shares shown as beneficially owned by them.

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Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of their initial ownership and of changes in ownership of our common stock and provide us with copies of those reports. To our knowledge, based solely on review of the copies of such forms furnished to us and written representations from our executive officers and directors, for the fiscal year ended December 31, 2010, all Section 16(a) reports applicable to our executive officers, directors and 10% stockholders were timely filed, except as described below.

        On November 22, 2010, Mr. M. Prior filed a late Form 4 reporting one transaction. On February 8, 2011, Mr. Cunningham filed a late Form 5, reporting a gift that took place in the December 31, 2009 fiscal year. On February 17, 2011, Mr. Kreisher filed a late Form 4 reporting one transaction. On February 18, 2011, Mr. Benincasa filed a late Form 4 reporting one transaction.

PROPOSAL 1: AMENDMENT TO THE 2008 EQUITY INCENTIVE PLAN TO INCREASE
THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE PLAN

        On March 16, 2011, our Board of Directors approved an amendment to the ATN 2008 Plan to increase the number of shares of our common stock ("ATN Common Stock") available for issuance under the Atlantic Tele-Network, Inc. 2008 Equity Incentive Plan, as amended (the "ATN 2008 Plan"), from 1,500,000 to 2,000,000 shares, subject to the approval of the Company's stockholders. The primary reason for this increase is to facilitate the new equity compensation arrangements that the Company has put in place in connection with its new subsidiary, Allied Wireless Communications Corporation ("AWCC"), as described below, as well as to have these shares available for general use under the terms of the ATN 2008 Plan.

Background

        In the second quarter of 2010, we completed our acquisition of a portion of the former Alltel business from Verizon Wireless (the "Alltel Acquisition"), the largest and most significant acquisition we have undertaken. As a result, we entered the competitive U.S. retail wireless business, established a headquarters for this business in Little Rock, Arkansas, recruited a management team for our AWCC subsidiary to operate the wireless assets as a stand-alone business and hired approximately 800 employees, many of whom are former employees of Alltel Corporation.

        In order to provide competitive compensation opportunities for our new AWCC employees, we established the Allied Wireless Communications Corporation 2011 Equity Incentive Plan (the "AWCC Plan") in January 2011. As discussed in our Form 10-K filed with the Commission on March 16, 2011, employees of AWCC are eligible to receive equity incentive awards of up to an aggregate of 1,050,000 shares of AWCC common stock, or approximately 10.5%, of the outstanding common stock of AWCC. AWCC has granted awards in the form of Restricted Stock and Stock Options to its employees representing an aggregate of 1,043,000 underlying shares of AWCC common stock under the AWCC Plan.

        Beginning in September 2012, employees who received Restricted Stock under the AWCC Plan have the ability to require AWCC to repurchase up to 650,000 shares of their vested Restricted Stock, subject to certain conditions (the "AWCC Employee Put Rights"). AWCC may satisfy the AWCC Employee Put Rights by purchasing such shares in cash or, at its election, in shares of ATN Common Stock (or a combination thereof) and pursuant to the terms and conditions of the Form of Shareholder Agreement filed herewith as Appendix A (the "AWCC Shareholder Agreement"). Any shares of ATN Common Stock issued in satisfaction of the AWCC Employee Put Rights would be issued pursuant to the ATN 2008 Plan.

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        The AWCC Shareholder Agreement, along with the AWCC Plan and the Form of Restricted Stock Grant Agreement, which were filed as Exhibit 10.17 and 10.18, respectively, to our Form 10-K filed with the Commission on March 16, 2011, are collectively referred to as the "AWCC Plan Documents" and are incorporated herein by reference. Capitalized terms that are used but not defined in this summary have the meanings given to them in the AWCC Plan Documents.

Purpose of Increase in ATN 2008 Plan

        We believe that the equity incentives provided in the AWCC Plan Documents, including the AWCC Put Rights in the AWCC Shareholder Agreement, will provide an effective means of recognizing employee contributions to the successful transition of our newly acquired U.S. retail wireless business, motivate high levels of performance for the future growth of the our U.S. Wireless segment as a whole and help us to attract and retain high-performing employees. As a privately held subsidiary, AWCC does not have publicly available shares whose value can be traded for cash on an open market. The purpose of the AWCC Employee Put Rights is to provide a direct means for selected AWCC employees to participate in the value they have created at AWCC and the Company, by providing liquidity in the form of cash or ATN Common Stock. Increasing the size of the ATN 2008 Plan will give us the flexibility to issue shares under the ATN 2008 Plan to satisfy, in part or in whole, the payment of the AWCC Employee Put Rights. If this Proposal is not approved, we may not have the flexibility to satisfy, in part or whole, any AWCC Employee Put Right with shares of ATN Common Stock and instead would be required to make such payments in cash or greatly reduce the reserve of shares available for issuance to all other Company employees under the ATN 2008 Plan.

        Furthermore, we reserve the right to use the increased size of the ATN 2008 Plan generally to make grants or awards, including awards of incentive stock options, to eligible persons in accordance with the terms of the ATN 2008 Plan. Our Board of Directors believes it is important to our continued success that we have an adequate reserve of shares available for issuance under the ATN 2008 Plan for use in attracting, motivating and retaining qualified employees, officers, directors and consultants.

Shares Currently Available Under the ATN 2008 Plan

        Through April 21, 2011, we have granted awards of 370,875 options (excluding forfeitures) and 111,341 shares of restricted stock that remain outstanding under the ATN 2008 Plan, leaving us unused capacity of approximately 1,017,100 shares based on the authorized shares in effect prior to this Proposal. If approved by stockholders, we will add 500,000 additional shares of ATN Common Stock to the ATN 2008 Plan, for a total of 2,000,000 shares authorized for issuance under the ATN 2008 Plan. As of April 21, 2011, there were 15,392,930 shares of ATN Common Stock outstanding and the closing price of the Common Stock on NASDAQ on April 21, 2011, was $35.41 per share.

        As of April 21, 2011, the following options had been granted and remain outstanding under the ATN 2008 Plan to the individuals and groups indicated: an aggregate of 211,000 options to our named executive officers, including 80,000 options to our CEO, Michael T. Prior, 46,000 options to our CFO, Justin D. Benincasa, 28,000 options to our Senior Vice President, Corporate Development, William F. Kreisher, 30,000 options to our Senior Vice President and General Counsel, Leonard Q. Slap, 15,000 options to our Senior Vice President and Corporate Controller, Karl D. Noone, 6,000 options to our Vice President of Financial Analysis, John Audet, 6,000 options to our Vice President of Government and Regulatory Affairs, Douglas J. Minster; and an aggregate of 156,125 options to all current employees who are not also named executive officers. There have been no options granted to our non-employee directors or our Chairman.

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Terms of the ATN 2008 Plan

        A summary of the significant terms of the ATN 2008 Plan is set forth as Appendix B to this Proxy Statement, and the ATN 2008 Plan itself is set forth as Appendix C to this Proxy Statement. We are not proposing any changes to the existing ATN 2008 Plan, other than the increase in the authorized shares thereunder. Appendix B is intended to provide only a summary of the principal features of the ATN 2008 Plan and is in all respects qualified by, and subject to, the actual terms and provisions of the attached ATN 2008 Plan.

        The amendment described in this Proposal would increase the number of authorized shares under the ATN 2008 Plan to approximately 13% of the total outstanding ATN Common Stock as of April 21, 2011, from a number which currently represents about 10% of such outstanding shares. At this time, we cannot determine the exact number of shares of ATN Common Stock needed to satisfy the AWCC Employee Put Rights, as this number depends on several variables, including (i) the extent to which the AWCC Restricted Stock vests; (ii) the extent to which employees exercise their AWCC Employee Put Rights; (iii) the purchase price calculation, as described below; (iv) whether we elect to satisfy the purchase price with shares of ATN Common Stock or cash at the time of each exercise; and (v) the closing trading price of the ATN Common Stock at the time of each exercise. Our Board, however, believes that the level of increase sought in the Proposal is a reasonable request for this purpose, including for general awards under the ATN 2008 Plan.

AWCC Employee Put Rights

        As noted above, of the 1,043,000 shares of AWCC common stock subject to outstanding awards, 650,000 shares of AWCC common stock that were awarded to certain executives of AWCC contain an AWCC Employee Put Right. These AWCC Employee Put Rights only apply to a designated number of vested shares (the "Putable Shares") and the vesting occurs over a four-year graded vesting schedule commencing on an executive's hire date with AWCC (the "Effective Date"). The AWCC Employee Put Rights are exercisable in an amount up to (i) 50% of the Putable Shares between the third and fifth anniversary of the Effective Date and (ii) all or a portion of the amount of the remaining Putable Shares following the fifth anniversary of the Effective Date. Notwithstanding the foregoing, an executive may not "put" to AWCC more than 25% of his or her Putable Shares in one fiscal quarter. The AWCC Employee Put Rights expire upon any change in control of AWCC or the Company.

        If the AWCC Employee Put Right is exercised, the purchase price payable by AWCC equals the "fair value" of the AWCC common stock as of the date of exercise of the AWCC Employee Put Right, determined as follows: The fair value of AWCC common stock generally means a per share value that is determined by applying an implied multiple to AWCC's historical EBITDA (earnings before interest, taxes, depreciation and amortization). This implied multiple is based on the relationship between the Company's prior 60-day average trading price and its historical EBITDA. In other words, subject to certain adjustments for cash, indebtedness and preferred equity in AWCC held by the Company, AWCC common stock is generally valued for purposes of the AWCC Employee Put Right by applying the same EBITDA to price multiple to AWCC's EBITDA as is reflected by the multiple derived from the Company's trading price in relation to its EBITDA. At AWCC's sole discretion, it may pay the purchase price in cash or by issuing shares of ATN Common Stock (or a combination thereof). The value of any ATN Common Stock to be issued is determined based on the last reported sale price on NASDAQ on the trading day immediately prior to such date of determination. Any shares issued to AWCC executives in payment of purchase price shall be issued from the ATN 2008 Plan. No payments pursuant to the AWCC Put Rights have been made as of the date of this Proxy Statement.

        Our Board has approved the performance of the Company's obligation under the AWCC Shareholder Agreements, including the issuance of shares of ATN Common Stock, at AWCC's election, in payment of the AWCC Put Rights and as further described herein.

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        The foregoing is only a summary of the principal features of the AWCC Shareholder Agreement, and is in all respects qualified by, and subject to, the actual terms and provisions of AWCC Shareholder Agreement attached hereto as Appendix A.

New Plan Benefits

        If the amendment of the ATN 2008 Plan is approved, our Board and Compensation Committee will be able to grant awards to eligible participants at its discretion. Consequently, with the exception noted below with respect to non-employee directors, it is not possible to determine at this time the amount or dollar value of awards to be provided under the ATN 2008 Plan. We grant to each of our non-employee directors (excluding our Chairman) an annual retainer, which includes shares of common stock valued at $35,000 on the date of grant. No payments pursuant to the AWCC Put Rights have been made as of the date of this Proxy Statement.

Required Vote

        The approval of the amendment of the ATN 2008 Plan to increase the number of shares available for issuance under the ATN 2008 Plan by 500,000 shares requires a majority of the votes present, or represented by proxy, at the Annual Meeting and entitled to vote thereon.

Recommendation of our Board of Directors

        OUR BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE 2008 EQUITY INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE PLAN.

Securities Authorized for Issuance Under Equity Compensation Plans

        The following table provides information regarding our equity compensation plans as of December 31, 2010:

Equity Compensation Plan Information

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PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

        Our Board is providing stockholders with the opportunity to cast an advisory vote on the compensation of our named executive officers for the fiscal year ended December 31, 2010. This proposal, also commonly referred to as a "Say on Pay" vote, gives our stockholders the opportunity to approve or not approve our executive compensation policies and programs and the compensation actually paid to our named executive officers. This resolution is required pursuant to Section 14A of the Securities Exchange Act.

        Please review the Compensation Discussion and Analysis beginning on page 23 and the accompanying tabular and other disclosures on executive compensation beginning on page 30, and cast a vote either to endorse or not endorse our executive compensation program. A vote "For" this proposal is an advisory vote approving the compensation of our named executive officers, including its compensation practices and principles and their implementation, as discussed and disclosed pursuant to the Securities and Exchange Commission's compensation disclosure rules in the Compensation Discussion and Analysis, the compensation tables, and any narrative executive compensation disclosure contained in this proxy statement.

        The Compensation Committee and the Board believe our executive compensation programs use appropriate structures and policies that are effective in achieving our Company goals and objectives. Accordingly, the Board recommends that you vote in favor of the following resolution:

"RESOLVED, that the stockholders approve the compensation of the Company's named executive officers, as disclosed in the Compensation Discussion and Analysis and Executive Compensation sections contained in this Proxy Statement."

        The Say on Pay vote is advisory in nature, and therefore, is not binding on our Compensation Committee or Board. Although the vote is non-binding, our Compensation Committee will review the voting results, seek to determine the cause or causes of any significant negative voting, and take them into consideration when making future decisions regarding executive compensation programs.

Required Vote

        The approval, on an advisory and non-binding basis, of the compensation of our named executive officers requires the affirmative vote of a majority of the shares present, or represented by proxy, and entitled to vote thereon.

Recommendation of our Board of Directors

        OUR BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

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PROPOSAL 3: ADVISORY VOTE ON FREQUENCY
OF EXECUTIVE COMPENSATION VOTE

        The following proposal gives our stockholders the opportunity to inform us as to how often you wish the Company to include a "Say on Pay" proposal (similar to Proposal 2) in our Proxy Statement. This resolution is required pursuant to Section 14A of the Securities Exchange Act. You may elect to have the vote held every year, every two years or every three years, or you may abstain. While our Board intends to carefully consider the stockholder vote resulting from the proposal when making decisions regarding the inclusion of "Say on Pay" proposals in future proxy statements, the final vote is advisory in nature and will be non-binding. At least once every six years, stockholders will be asked to vote on the frequency with which a "Say on Pay" proposal should be included in future proxy statements.

        The Board of Directors recommends that you vote to hold an advisory vote on executive compensation every three years. We believe that a triennial vote on executive compensation will provide stockholders with a more accurate window for evaluating Company performance trends and allow our Board the time for more thoughtful analysis in weighing our compensation policies against the Company's performance. We believe in taking a long term approach to operating our Company's business, and believe that our approach to management compensation should mirror this strategy. By reviewing executive compensation every three years, stockholders will have the benefit of multiple performance periods to better evaluate the way our Board has measured executive compensation against Company performance over that time period.

Required Vote

        The Stockholders will indicate their selection, on an advisory and non-binding basis, the frequency with which "Say on Pay" proposals are included in future proxy statements by a plurality of the votes cast.

Recommendation of our Board of Directors

        OUR BOARD RECOMMENDS THAT YOU VOTE FOR APPROVAL OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION OCCURRING EVERY THREE YEARS.

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PROPOSAL 4: ELECTION OF DIRECTORS

        Stockholders are being asked to elect the following seven members to our Board of Directors to hold office until our next annual meeting of stockholders and until their respective successors are elected and qualified, subject to their earlier retirement, resignation or removal:

Cornelius B. Prior, Jr.
Martin L. Budd
Thomas V. Cunningham
Michael T. Flynn
Michael T. Prior
Charles J. Roesslein
Brian A. Schuchman

        Each nominee has consented to his nomination and is expected to stand for election. However, if any nominee is unable or unwilling to serve, proxies will be voted for a replacement candidate nominated by our Board. Biographical information for each of the nominees is set forth below under "Director and Nominee Experience and Qualifications."

Required Vote

        Each director nominee must be elected by an affirmative vote of a plurality of shares present, or represented by proxy, at the Annual Meeting and entitled to vote on the election of directors.

Recommendation of our Board of Directors

        OUR BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH OF THESE NOMINEES.

DIRECTOR AND NOMINEE EXPERIENCE AND QUALIFICATIONS

        Set forth below is biographical information about our current directors, each of whom is a director nominee.

        Cornelius B. Prior, Jr., 77, is the Chairman of our Board of Directors. He served as our Chief Executive Officer and Chairman of the Board from 1998 through December 2005, at which time he retired as Chief Executive Officer. Mr. C.B. Prior, Jr. is a director of our subsidiary, Bermuda Digital Communications ("BDC"). Mr. C.B. Prior, Jr. has served as the Chairman of CANTO (the Caribbean Association of National Telecommunication Organizations) and presently is the Chairman of CCAA (Caribbean and Central American Action). He was a managing director and stockholder of Kidder, Peabody & Co. Incorporated, where he directed the Telecommunications Finance Group. A former Naval Officer and Fulbright Scholar, Mr. C.B. Prior, Jr. started his career as an attorney with Sullivan & Cromwell in New York. He is a former Trustee of Holy Cross College and member of the Visiting Committee to Harvard Law School. He is the father of Michael T. Prior, our President and Chief Executive Officer. Mr. C.B. Prior, Jr. earned his legal degree from the Harvard Law School.

        Mr. C.B. Prior, Jr. was selected to serve as a director on our Board because of his extensive strategic involvement with the Company, including as its founder, former Chief Executive Officer and largest stockholder of the Company. Mr. C.B. Prior, Jr. has extensive knowledge of the telecommunications markets in the Caribbean, and brings valuable expertise and business judgment to the Company. For additional information regarding the Company's decision to select Mr. C.B. Prior, Jr. as a director and Chairman, please see "Corporate Governance—Board Leadership and Structure."

        Martin L. Budd, 70, has been a director of ours since May 2007, and is the Chair of our Compensation Committee and a member of our Audit Committee. He retired as a partner of the law

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firm of Day, Berry and Howard LLP (now Day Pitney LLP) effective December 31, 2006. Mr. Budd chaired that firm's Business Law Department and its Business Section and had particular expertise in federal securities laws, merger and acquisition transactions and strategic joint ventures. Mr. Budd is Chairman of the Connecticut Appleseed Center for Law and Justice and has served on the Legal Advisory Board of the National Association of Securities Dealers. He is a member of the National Executive Committee of the Anti-Defamation League. Mr. Budd earned his legal degree from the Harvard Law School.

        Mr. Budd was selected to serve as a director on our Board because of his extensive background providing legal, regulatory and corporate governance advice to public companies.

        Thomas V. Cunningham, 43, has been a director of ours since May 2008. He is currently the Chief Executive Officer of PTL Corporation, an internet services firm and, with his wife, owns the Baltimore Technology Park, LLC, a carrier-neutral data center serving the Baltimore, MD and Washington, D.C. area. He served as Chief Executive Officer of Alabanza Corporation from 1995 until 2007 when the company was sold to Navisite. He was the Chief Executive Officer of Bulkregister.com, Inc. from 1999 until 2006 when it was sold to Demand Media. He is a founding board member of the Institute for the Psychological Sciences, a graduate school in Crystal City, Virginia, and is a member of the Lumen Institute in Washington, D.C. In 2002, Mr. Cunningham was named Regional Entrepreneur of the Year by Ernst & Young.

        Mr. Cunningham was selected to serve as a director on our Board due to his entrepreneurial background in the data center industry.

        Michael T. Flynn, 62, has been a director of ours since June 2010 and is a member of our Audit and Compensation Committees. Mr. Flynn is currently a director of Airspan Networks, Inc., a provider of wireless broadband equipment, CALIX, Inc., a manufacturer of broadband equipment, and iLinc Communications, Inc., a developer of internet conferencing software. Mr. Flynn has forty years of experience in the telecommunications wireline and wireless businesses, and spent ten years as an officer at Alltel Corporation prior to his retirement in 2004. He also previously served as an officer of Southwestern Bell Telephone Co. from 1987-1994. Mr. Flynn has previously served on the board of directors of WebEx Communications, Inc., a provider of internet collaboration services, from 2004 until 2007, and of Equity Media Holding Corporation, an owner and operator of television stations throughout the United States, from 2007 to 2008.

        Mr. Flynn was selected to serve as a director on our Board due to his lengthy and broad operating experience in the telecommunications industry and his familiarity with certain of the assets and members of the senior executive team of the Company's U.S. wireless business.

        Michael T. Prior, 46, has been our President and Chief Executive Officer since December 2005. He was elected to the Board in May 2008. Mr. M. Prior also serves as a director of AWCC, BDC and ION Holdco, LLC. Mr. M. Prior joined the Company in 2003 as our Chief Financial Officer and Treasurer. Before joining us, Mr. M. Prior was a partner with Q Advisors LLC, a Denver-based investment banking and financial advisory firm focused on the telecommunications sector. From 1999 to 2002, he headed corporate development for LighTrade, Inc., a telecommunications infrastructure provider. From 1998 to 1999, Mr. M. Prior was a member of ComSpace Development LLC, a seed investment concern in the communications industry and an early investor in LighTrade. From 1992 to 1998, Mr. M. Prior was a corporate lawyer with Cleary Gottlieb Steen & Hamilton in London and New York and Perkins Coie LLP in Seattle. Mr. Prior also serves on the Board of Directors and is currently Vice Chairman of the Rural Cellular Association. He is the son of Cornelius B. Prior, Jr., Chairman of our Board. In 2008, Mr. M. Prior was named Entrepreneur of the Year for the New England Region by Ernst & Young and One of America's Best CEOs by DeMarche Associates, Inc.

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        Mr. M. Prior was selected to serve as a director on our Board due to his position as Chief Executive Officer of the Company and his broad experience in many sectors of the telecommunications industry.

        Charles J. Roesslein, 62, has been a director of ours since April 2002 and is the Chair of our Audit Committee and a member of our Compensation Committee. He currently is the Chief Executive Officer of Austin Tele-Services Partners, LP and has been a director of National Instruments Corporation since July 2000. He is a retired officer of SBC Communications. Mr. Roesslein previously served as Chairman of the Board of Directors, President and Chief Executive Officer of Prodigy Communications Corporation from June of 2000 until December of 2000. He served as President and Chief Executive Officer of SBC-CATV from October 1999 until May 2000, and as President and Chief Executive Officer of SBC Technology Resources from August 1997 to October 1999.

        Mr. Roesslein was selected to serve as a director on our Board due to his financial expertise, and previous and current positions held with other telecommunications companies. Mr. Roesslein is qualified as an "audit committee financial expert" under SEC guidelines.

        Brian A. Schuchman, 42, is the founder of Commnet Wireless, LLC, which we acquired in 2005. He joined our Board in May 2007. Mr. Schuchman has spent more than 15 years as an operator and entrepreneur in the wireless telecommunications industry. He founded Commnet Wireless, LLC in 2000 and served as its Chairman and Chief Executive Officer from its inception until July 2006. In 2000, he also co-founded a wireless telecommunications equipment distributor, Commnet Supply, which was sold in April 2004. In the early and mid 1990's, Mr. Schuchman partnered with rural cellular license holders to build-out and manage numerous wireless markets which were later sold. In 1995, Mr. Schuchman founded Cellular Infrastructure Supply (CIS), one of the first companies to resell cellular switching and base station equipment. CIS was sold to World Access, Inc. in 1997. He continued to manage CIS until early 2000. In 2003, Mr. Schuchman was named Entrepreneur of the Year for the Greater Chicago Region by Ernst & Young.

        Mr. Schuchman was selected to serve as a director on our Board due to his previous experience with the Company's Commnet subsidiary, and his broad experience and repeated success as an entrepreneur in the telecommunications industry.

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PROPOSAL 5: RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR

        The Audit Committee of our Board of Directors has selected PricewaterhouseCoopers LLP (PwC) as our independent auditor to perform the audit of our financial statements and our internal control over financial reporting for 2011. In making its selection, the Audit Committee conducted a thorough review of PwC's performance, including consideration of the following:

•

PwC's performance on the audit, including the quality of the engagement team and the firm's experience, client service, responsiveness and technical expertise;



•

The record of the firm against comparable accounting firms in various matters such as regulatory, litigation and accounting matters;



•

The firm's financial strength and performance; and



•

The appropriateness of fees charged by the firm.

        PwC was our independent auditor for the year ended December 31, 2010.

        The Board of Directors recommends that stockholders ratify the selection of PwC as our independent auditor. Although ratification is not required by our bylaws or otherwise, the Board is submitting the selection of PwC to our stockholders for ratification as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.

Required Vote

        The ratification of the appointment of PwC as our independent auditor for 2011 requires the affirmative vote of a majority of the shares present, or represented by proxy, at the Annual Meeting and entitled to vote thereon.

Recommendation of our Board of Directors

        OUR BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF THE INDEPENDENT AUDITOR.

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CORPORATE GOVERNANCE

General

        The role of the Board of Directors is to ensure that we are managed for the long-term benefit of our stockholders. The Board periodically reviews and advises management with respect to our annual operating plans and strategic initiatives. The Board has adopted corporate governance principles to assure full and complete compliance with all applicable corporate governance standards.

        During the past year, we have reviewed our corporate governance practices in comparison to the practices of other public companies and to ensure they comport with guidance and interpretations provided by the SEC and the Nasdaq Stock Market.

        We have adopted a written Code of Ethics that applies to all of our employees and agents, including, but not limited to, our principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. Our Code of Ethics, Compensation Committee Charter and Audit Committee Charter are available on our website at ir.atni.com and may be obtained free of charge upon request by writing to us at Atlantic Tele-Network, Inc., Attn: Secretary, 600 Cummings Center, Beverly, MA 01915.

Board Leadership Structure

        Our Board of Directors is committed to maintaining responsible and effective corporate governance and is focused on the interests of our stockholders. It has determined that its leadership structure, including Mr. Cornelius B. Prior, Jr. serving as Chairman, our Chief Executive Officer serving as a director, and the composition of independent directors for each of the Audit and Compensation Committees of the Board, best serves the Company and its stockholders. Our Board brings strong leadership and industry expertise to inform the management and direction of the Company on behalf of our stockholders. Mr. C.B. Prior, Jr., who has served as our Chairman since 1997, was also our Chief Executive Officer until December 2005. He controls approximately 36% of our outstanding common stock and possesses extensive investment and financial management experience and has a long history and familiarity with the Company and many of its Caribbean operating markets. Management and the Board of Directors work together to try to focus the Board on major questions of governance, succession and setting the Company's overall operating and investment strategy.

Determination of Independence

        Nasdaq rules require that a majority of our directors be "independent" and that we maintain a minimum three-person audit committee whose members satisfy heightened independence requirements. A director qualifies as "independent" if our Board affirmatively determines that the director does not have a relationship with us, an affiliate of ours, or otherwise which, in the opinion of the Board, would interfere with the exercise of independent judgment in discharging his or her duties as a director. Nasdaq rules preclude an affirmative determination by the Board that a director is independent if:

•

a director who is, or was at any time during the past three years, employed by us or by any subsidiary of ours;



•

a director who accepted or has a family member who accepted any compensation from us or any subsidiary of ours in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than: (i) compensation for board or board committee service, (ii) compensation paid to a family member who is an employee (other than the executive officer) of the company, or (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation;



•

a director who is a family member of an individual who is, or at any time during the past three years was, employed by us or a subsidiary of ours as an executive officer;

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•

a director who is, or has a family member who is, a partner in, or a controlling stockholder or an executive officer of, any organization to which we made, or from which we received, payments for property or services in the current or any of the past three fiscal years that exceed the greater of 5 percent of the recipient's consolidated gross revenues for that year, or $200,000, whichever is more, other than: (i) payments arising solely from investments in our securities or (ii) payments under non-discretionary charitable contribution matching programs;



•

a director who is, or has a family member who is, employed as an executive officer of another entity where at any time during the past three years any of our executive officers have served on the compensation committee of such other entity; or



•

a director who is, or has a family member who is, a current partner of our outside auditor, or was a partner or employee of our outside auditor who worked on our audit at any time during any of the past three years.

        Based on the Nasdaq rules, our Board has determined that Messrs. Budd, Cunningham, Flynn and Roesslein are independent for purposes of SEC rules and Nasdaq listing compliance. Our Board's determinations included reviewing the following relationships and transactions, which the Board concluded did not affect the independence of the applicable director or director nominee:

Mr. Budd.    Mr. Budd is a former partner of the law firm of Day, Berry and Howard, LLP, which is now known as Day Pitney LLP ("Day Pitney"), and had served as our general outside counsel for a number of years until his retirement on December 31, 2006. From time to time, our Chairman has engaged, in an individual capacity, Day Pitney for legal services.

Mr. Cunningham.    Baltimore Technology Park, LLC, which is majority owned by Mr. Cunningham and his wife, manages the web hosting facilities of the University of the Virgin Islands Research and Technology Park (the "Technology Park"), located in the US Virgin Islands. Tropical Tower, Ltd., a separate company majority owned by our Chairman, has provided certain telecommunications services to the Technology Park.

Director Nomination Process

        Our Board does not have a standing nominating committee or any other committee performing similar functions or a charter governing the nomination process. Instead, our independent directors consider director nominees, whether proposed by a stockholder or identified through the Company's processes, in accordance with our Nominating Guidelines and Procedures, as adopted by the Board in February 2007. The independent directors do not rely on a fixed set of qualifications for director nominees but apply general criteria intended to ensure that the Board includes members with significant breadth of experience, knowledge and abilities as well as financial and industry expertise to assist the Board in performing its duties. Minimum qualifications for director nominees include: a reputation for integrity, honesty and adherence to high ethical standards; demonstrated business acumen, experience and judgment related to the objectives of the Company; and the commitment to understand the Company and its industry and actively participate on the Board. Our Board is committed to diversity, and also considers nominees based on their differences of viewpoint, professional experience, education, skill and other characteristics. Director nominees are then recommended to the Board by a majority of our independent directors. In view of the responsibility conferred on the independent directors and the procedures and criteria identified in the Nominating Guidelines and Procedures, our Board feels that there is no additional benefit to us or to our stockholders from the creation of a nominating committee at this time.

        In selecting director nominees pursuant to the Nominating Guidelines and Procedures, the Board's independent directors shall consider candidates submitted by stockholders and shall evaluate such candidates in the same manner and using the same criteria as all other director nominee candidates. To submit a director nominee candidate, stockholders should submit the following information: (a) the

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candidate's name, age and address, (b) a brief statement of the reasons the candidate would be an effective director, (c) the candidate's principal occupation or employment for the past five years and information about any positions on the board of directors of other companies, (d) any business or other significant relationship the candidate has had with us and (e) the name and address of the stockholder making the submission. The Board's independent directors may also seek additional information regarding the director nominee candidate and the stockholder making the submission. All submissions of director nominee candidates made by stockholders should be sent to Atlantic Tele-Network, Inc., Attn: Secretary, 600 Cummings Center, Beverly, MA 01915 and must comply with applicable timing requirements.

Risk Management and Risk Assessment

        In accordance with Nasdaq requirements, our Audit Committee has the primary responsibility for the oversight of risk management and risk assessment, including the Company's major financial risk exposures and the steps management has undertaken to control such risks. Our Board of Directors remains actively involved in such oversight of risk management and assessment and receives periodic presentations from our executive officers and certain of their direct reports, as the Board of Directors may deem appropriate. This includes discussions of the Company's balance sheet and capital structure in light of potential capital needs and projections of operating cash flows and the risks to such cash flows. While the Board of Directors maintains such oversight responsibility, management is responsible for the day-to-day risk management processes and makes detailed recommendations on sources and uses of capital. The Board of Directors believes this division of responsibility is the most effective approach for addressing the risks facing the Company. As a general matter, management and the Board of Directors' seek to mitigate major risks to the Company's financial condition by striving to maintain a level of debt to cash flows that allows the Company to survive short-term unforeseen reductions in cash flow or unanticipated large capital spending needs. To date, the Board of Directors believes that the Company has maintained a much more conservative level of debt (relative to cash flows) than most of its peers in the telecommunications industry.

        For the year ended December 31, 2011, our management, in consultation with the Board, reviewed the Company's compensation policies and practices for employees generally as they relate to risk management. As part of this process, management reviewed the Company's cash and equity incentive compensation plans and practices applicable to all employees to determine whether such programs create incentives that might motivate inappropriate or excessive risk-taking. In the course of such review, the following mitigating features of the Company's incentive compensation programs were considered: (1) the Company's focus on multiple year vesting periods for all equity compensation; (2) management's practice of conservative awards of annual cash bonus payments; (3) the relatively low level of stock option participation among senior management; and (4) the use of restricted stock awards to encourage management to balance "upside" and "downside" risk. As a result of this process, there were no recommended changes to the Company's incentive compensation programs.

Communications from Stockholders and Other Interested Parties

        To communicate with our Audit Committee regarding issues or complaints about questionable accounting, internal accounting controls or auditing matters, contact the Audit Committee by writing to Audit Committee, Atlantic Tele-Network, Inc., 600 Cummings Center, Beverly, MA 01915.

        To send communications to the Board or to individual directors, stockholders should write to Board of Directors, Atlantic Tele-Network, Inc., 600 Cummings Center, Beverly, MA 01915. All communications received will be directly sent to the Board or to individual members of our Board, as addressed.

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Board of Directors' Meetings and Committees

        During 2010, our Board met five times either by conference call or in person. In 2010, no director attended fewer than 75% of the meetings of the Board or the meetings of the committee(s) on which he served. Although we do not have a policy requiring our directors to attend the Annual Meeting, all of our then-current directors attended last year's annual meeting of stockholders.

        Our Board has established two standing committees: the Audit Committee and the Compensation Committee. The current membership of each committee is as follows:

        All members of both committees are independent as defined in the listing standards of Nasdaq. Copies of the charters of the Audit Committee and Compensation Committee, as adopted and amended by our Board, are available on the "Corporate Governance" section of our website at ir.atni.com.

Audit Committee

        During 2010, the Audit Committee met eleven times either by conference call or in person. The functions of the Audit Committee include:

•

Appointing, compensating, evaluating and overseeing our independent auditor;



•

Reviewing with our independent auditor the plan and scope of the audit, its status during the year and any recommendations the independent auditor may have for improving or changing the audit and control environment;



•

Pre-approving the services provided by our independent auditor;



•

Discussing with management and our independent auditor the adequacy of internal accounting and financial controls and, if deemed necessary or appropriate, discussing with each of them, independently of the other, any recommendations on matters that any of them considers to be of importance;



•

Reviewing our accounting principles, policies and practices and financial reporting policies and practices;



•

Reviewing our Code of Ethics, the Audit Committee Charter, any other relevant Company policies and the oversight of other compliance matters;



•

Reviewing, prior to publication or filing, our annual audited financial statements, quarterly earnings releases and the disclosures that are to be included in our reports on Form 10-Q and Form 10-K, as well as such other information as the Committee deems desirable; and



•

Undertaking other duties as assigned by our Board.

        Our Board has determined that each current member of the Audit Committee meets the financial literacy requirements of Nasdaq. It has also determined that Mr. Roesslein, who is currently the Chair of the Audit Committee and a director nominee for re-election, qualifies as an "audit committee financial expert" under the rules of the SEC and meets the financial sophistication requirements of Nasdaq. In addition, our Board has determined that each of the current members of our Audit Committee meet the Nasdaq and SEC standards for audit committee member independence.

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Compensation Committee

        The Compensation Committee met twice during 2010, and the Chairman of the Compensation Committee consulted and met several times with our Chief Executive Officer. The Compensation Committee also met once during 2011 to discuss 2010 compensation and bonus awards. The functions of the Compensation Committee include:

•

Reviewing and determining the compensation of our Chief Executive Officer and reviewing and recommending to the Board the compensation of our other executive officers;



•

Reviewing with the Chief Executive Officer the non-equity compensation of the managers of the Company's key operating units;



•

Developing, administering and taking all action required or permitted to be taken by the Board under our stock-based incentive plan;



•

Reviewing and recommending to the Board the compensation of our directors;



•

Reviewing and making recommendations to the Board regarding the level, coverage, and competitiveness (based on industry data) of our compensation (including salary and bonus), incentives (both current and long-term), benefits (including profit sharing, group health coverage, disability coverage and life insurance benefits, and use of our stock in option, bonus, or appreciation arrangements), and other perquisites; and



•

Undertaking such other functions as are assigned to the Compensation Committee by the Board.

        The Compensation Committee meets several times each year to carry out these responsibilities. Early in the year, the Compensation Committee begins its analysis by reviewing the compensation trends and practices of the Company's identified peer group against the current compensation of the Company's Chief Executive Officer and to some extent, the Company's other executive officers. Following this review, the Chief Executive Officer typically meets with the Chairman in order to discuss the draft compensation recommendations, performance analysis and future objectives of each of the executive officers of the Company and provides the Compensation Committee with a memorandum detailing the Company's performance and individual executive officer performance for the year. Upon the request of the Compensation Committee, the Chief Executive Officer may engage in a detailed discussion of the performance of an executive officer or a manager of the Company's key operating units. The Compensation Committee, upon authorization by the Board of Directors, has delegated to the Chief Executive Officer the power to make a limited number of awards under the Company's 2008 Equity Plan to certain key employees of the Company, following consultation with the Compensation Committee.

        The Compensation Committee determines the compensation of the Chief Executive Officer in an executive session, following its review of the CEO's performance against his goals for the year, the growth and performance of the Company, his leadership skills for the previous year, his self-analysis and for the prior year's performance, and any other relevant factors.

        For further information about the Compensation Committee's practices, please see "Compensation Discussion and Analysis," under "Executive Officer Compensation," below.

Compensation Committee Interlocks and Insider Participation

        During or prior to the fiscal year ended December 31, 2010, no member of our Compensation Committee was an officer or employee of ours or our subsidiaries or, to our knowledge, had relationships requiring disclosure under the SEC rules. In making these statements, we have relied in part upon representations of those directors.

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INDEPENDENT AUDITOR

        PwC has audited our accounts since 2002. Our Audit Committee has appointed PwC to be our independent registered public accounting firm for 2011 and we are asking stockholders to ratify this appointment in Proposal 5. The services provided by PwC in 2011 are expected to include, in addition to performing the consolidated audit, audits of certain domestic and foreign subsidiaries; review of quarterly reports; issuance of letters to underwriters in connection with registration statements, if any, we may file with the SEC and consultation on accounting, financial reporting, tax and related matters. A representative of PwC is expected to be at the meeting and will have an opportunity to make a statement and respond to questions.

Independent Auditor Fees and Services

        The following table presents the aggregate fees for professional services rendered to us by PwC for the years ended December 31, 2010 and 2009:

Audit Committee Pre-Approval Policy and Procedures

        In accordance with its written charter, our Audit Committee pre-approves all audit and non-audit services, including the scope of contemplated services and the related fees, to be performed by PwC, our independent registered public accounting firm. The Audit Committee's pre-approval of non-audit services involves consideration of the impact of providing such services on PwC's independence. The Audit Committee is also responsible for ensuring that any approved non-audit services are disclosed to stockholders in our reports filed with the SEC. PwC did not perform any non-audit services for us in fiscal years 2010 or 2009.

Audit Committee Report

        As members of the Audit Committee of the Board of Directors of Atlantic Tele-Network, Inc., we have reviewed and discussed with management our audited financial statements as of and for the year ended December 31, 2010.

        The Audit Committee discussed with the independent registered public accountants the matters required to be discussed by Statement of Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

        The Audit Committee received from the independent registered public accountants the written disclosures and letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accountants' communications with the Audit Committee concerning independence, discussed their independence with them and satisfied itself as to the independence of the independent registered public accountants.

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        We have also considered whether the provision of services by PwC not related to the audit of the financial statements referred to above and to the reviews of the interim financial statements included in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010, is compatible with maintaining the independence of PricewaterhouseCoopers LLP.

        Based on the reviews and discussions referred to above, we have recommended to the Board of Directors that the audited financial statements referred to above be included in our Annual Report on Form 10-K for the year ended December 31, 2010.

By the Audit Committee

Charles J. Roesslein, Chair
Martin L. Budd
Michael T. Flynn

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EXECUTIVE OFFICER COMPENSATION

Compensation Discussion and Analysis

        Our Compensation Committee of the Board of Directors has responsibility for establishing, implementing and maintaining the compensation program for our executive officers. For the purposes of this Compensation Discussion and Analysis, "executive officers" and "executives" means the individuals who served as our Chief Executive Officer and Chief Financial Officer during fiscal 2010, as well as the other individuals included in the Summary Compensation Table on page 30 below.

Compensation Philosophy

        The primary objective of our executive compensation program is to attract, retain and reward executive officers who contribute to our long-term success and to maintain a reasonably competitive compensation structure as compared with similarly situated companies. We seek to align compensation with the achievement of business objectives and individual and Company performance. The annual cash bonus opportunity together with equity compensation that we provide our executive officers are our main incentive compensation tools to accomplish this alignment, as described below.

        A core principle of our compensation philosophy is that we believe a successful compensation program requires the application of judgment and subjective determinations of individual performance. We do not apply a formulaic or mathematical approach to executive compensation. Our Compensation Committee retains discretion to apply its judgment to adjust and align each individual element of our compensation program with the broader objectives of our compensation program and the overall performance and condition of our company at the time final compensation decisions are made. We believe that our relatively lean management structure, the level of communications between our Board of Directors and our senior management team and our corporate culture give us the opportunity to use this approach.

        We do not have any employment, severance or change of control agreements with any of our executive officers. To date, we have not relied on executive compensation consultants. From time to time, our Compensation Committee does consider the compensation of executive officers at other companies in order to assess the compensation that we offer our executive officers, as discussed below.

External Market Practices and Our Positioning

        Generally, we seek to offer executive compensation that is reasonably competitive with companies of a similar size particularly publicly traded telecommunications companies. Defining a relevant "peer group" for us has been historically difficult because we have the complexity and geographic diversity (and attendant travel demands) of large multi-national companies but have similar total revenues and market capitalization to companies that tend to be focused on a very limited geographic area and provide limited services. Nonetheless, we believe that comparisons to certain other companies can provide us with a useful basic check, mainly for the compensation of our Chief Executive Officer and Chief Financial Officer.

        For 2010, our Compensation Committee referred to the executive compensation paid in previous years at the following group of companies: Alaska Communications Systems Group, Inc., iPCS, Inc., Cincinnati Bell, Inc., Knology, Inc., NTELOS Holdings Corp., and Leap Wireless International Inc. Our Compensation Committee believed that these companies provided us with helpful indicators of competitive executive compensation levels and pay mix because, as a group, they had the following characteristics that are similar to ours: (1) they are telecommunications and technology companies; (2) several of them have both wireless and wireline operations; and (3) several of them are of similar size to the Company. However, our Compensation Committee regards comparisons of us to these companies as reference points only—as such; we did not seek to establish any benchmark in reference

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to these companies or to require changes in our executive compensation to match changes in those companies' compensation.

Role of Chief Executive Officer in Compensation Decisions

        At the end of the year, our Chief Executive Officer evaluates the performance of our other executive officers and makes compensation recommendations to our Compensation Committee based upon those evaluations. Our Board has delegated to our Compensation Committee full discretion in its determination of the compensation to be paid to our Chief Executive Officer. The Compensation Committee interacts directly with the Chief Executive Officer to evaluate his performance, in addition to conducting its own independent assessment of his performance and the performance of the Company during the year.

Elements of Compensation

Overview

        Our executive compensation program is focused on three separate elements:

•

base salary;



•

annual cash bonuses; and



•

equity awards.

        Other than as described below, our Compensation Committee does not have any specific policies or targets for the allocation or "pay mix" of these compensation elements.

Base Salary

        We seek to set the base salary of each executive at a level that is competitive, taking into account the overall compensation history of the particular executive and our other executives and the base salaries paid by similarly situated companies. In addition to merit-based changes when warranted, our Compensation Committee generally recommends that base salaries increase annually at a rate that is slightly above or below cost-of-living adjustments, as represented by indicators like the Consumer Price Index. In addition to merit-based changes, larger increases (or decreases) may be made based on a change in responsibilities for the executive. Factors such as the expansion of the Company and the financial condition and prospects of the Company may also influence the amount of annual salary adjustments. From time to time, comparative market factors also may cause the Compensation Committee to make or recommend increases above or below the normal cost-of-living range.

        Below is a chart showing the base salary rates for 2010 for our named executive officers, in comparison to those in effect in 2009. The base salary increases for 2010 (with the exception of our Chief Executive and Chief Financial Officers) were all roughly in the range of cost-of-living increases, with the individual increases falling above or below that range based on previous increases, the history of the executive's compensation with the Company, any expansion or diminution of the executive's

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responsibilities and the Board's general sense of whether the executive's compensation is at or below the executive's value to the Company.

        For 2011, the Compensation Committee determined to increase Mr. M. Prior's base annual salary to $540,000, an increase of 2.9%, compared to his annual base salary for 2010. This increase was broadly consistent with cost of living increases for other executives. The Committee believes that Mr. Prior's salary is below market for his position, particularly considering the geographic breadth of the Company's operations and the complexity of operating in different segments and different countries and other political jurisdictions. However, Mr. Prior expressed a preference towards keeping his salary increase in line with increases for other executives.

Annual Cash and Equity Bonuses

Annual Cash Bonus

        We believe that a significant bonus opportunity, as measured as a percentage of the executive's base salary, motivates executive performance because it makes a significant amount of the executive's overall compensation contingent upon individual and company performance. Further, this approach enables the Company to avoid a higher fixed cost of annual base salaries and gives us the ability to control a major piece of compensation expense if the Company ever experiences a major business reversal.

        For 2010, the annual bonus opportunity for our executive officers was as follows:

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(1)

The amounts in this column reflect the grant date fair value presented in accordance with FASB ASC Topic 718, of awards granted pursuant to our equity incentive plans. Assumptions used in the calculation of these amounts for 2008 and 2009 awards are included in Note 9 to our Consolidated Financial Statements for the fiscal year ended December 31, 2010 included in our Annual Report on Form 10-K filed with the SEC on March 16, 2011. With respect to 2010 awards, which were granted on March 15, 2011, the grant date fair value of the options were determined using a Black Scholes option pricing model, based on the following assumptions:

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(1)

Vesting occurs 25% annually commencing one year from the date of grant.