IXC COMMUNICATIONS INC, DEF 14A, 1997-04-18

IXC COMMUNICATIONS INC
DEF 14A, 1997-04-18
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec.240.14a-11(c) or Sec.240.14a-12

IXC COMMUNICATIONS, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction
applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2

IXC COMMUNICATIONS, INC.
5000 PLAZA ON THE LAKE, SUITE 200
AUSTIN, TEXAS 78746

------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1997

TO THE STOCKHOLDERS OF IXC COMMUNICATIONS, INC.:

The 1997 Annual Meeting of Stockholders (the "1997 Annual Meeting") of IXC
Communications, Inc. (the "Company") will be held at 9:00 a.m., local time, on
Tuesday, May 6, 1997 at Barton Creek Conference Center, 8212 Barton Club Drive,
Austin, Texas 78735, for the following purposes:

1. To elect six Directors of the Company to serve during the ensuing
year and until their successors are elected and qualified.

2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only the stockholders of record at the close
of business on April 16, 1997 will be entitled to notice of and to vote at the
1997 Annual Meeting or any adjournment or postponement thereof.

A copy of the Company's Annual Report to Stockholders for the fiscal year
ended December 31, 1996 is being mailed with this Notice but is not to be
considered part of the proxy soliciting material.

By Order of the Board of Directors

[SIG]

JEFFREY C. SMITH
Secretary

April 18, 1997
Austin, Texas

YOU ARE URGED TO VOTE UPON THE MATTERS PRESENTED AND TO SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IT IS IMPORTANT FOR
YOU TO BE REPRESENTED AT THE MEETING. PROXIES ARE REVOCABLE AT ANY TIME AND THE
EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE
PRESENT AT THE MEETING.

------------------------

REQUESTS FOR ADDITIONAL COPIES OF PROXY MATERIALS SHOULD BE ADDRESSED TO
JEFFREY C. SMITH, CORPORATE SECRETARY, AT THE OFFICES OF THE COMPANY, 5000 PLAZA
ON THE LAKE, SUITE 200, AUSTIN, TEXAS 78746.
<PAGE> 3

IXC COMMUNICATIONS, INC.
5000 PLAZA ON THE LAKE, SUITE 200
AUSTIN, TEXAS 78746

------------------------

PROXY STATEMENT
1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1997

------------------------

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of IXC Communications, Inc., a
Delaware corporation (the "Company" or "IXC Communications"), for use at the
1997 Annual Meeting of Stockholders (the "1997 Annual Meeting") to be held on
Tuesday, May 6, 1997 at 9:00 a.m., local time, at Barton Creek Conference
Center, 8212 Barton Club Drive, Austin, Texas 78735, and any adjournment or
postponement thereof. This Proxy Statement and the form of proxy to be utilized
at the 1997 Annual Meeting were mailed or delivered to the stockholders of the
Company on or about April 18, 1997.

MATTERS TO BE CONSIDERED

The 1997 Annual Meeting has been called to (1) elect six Directors of the
Company to serve during the ensuing year and until their successors are elected
and qualified, and (2) transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.

RECORD DATE AND VOTING

The Board has fixed the close of business on April 16, 1997 as the record
date (the "Record Date") for the determination of stockholders entitled to vote
at the 1997 Annual Meeting and any adjournment or postponement thereof. As of
the Record Date, the outstanding voting securities of the Company were
30,799,560 shares of the Company's common stock (the "Common Stock") and 12,550
shares of the Company's 10% Junior Series 3 Preferred Stock (the "Series 3
Preferred Stock").

QUORUM AND VOTING REQUIREMENTS

The holders of record of a majority of the outstanding shares of Common
Stock and Series 3 Preferred Stock, taken together as a class, will constitute a
quorum for the transaction of business at the 1997 Annual Meeting. As to all
matters, each stockholder is entitled to one vote for each share of Common Stock
and one vote for each share of Series 3 Preferred Stock held. Abstentions and
broker non-votes are counted for purposes of determining the presence or absence
of a quorum for the transaction of business. As to all matters other than the
election of the Series 3 Preferred Director (as defined below), the Common Stock
and Series 3 Preferred Stock will vote as a single class. The Common Stock and
the Series 3 Preferred Stock will vote together as a single class with respect
to the election of five directors and the director nominees who receive the
greatest number of votes at the 1997 Annual Meeting will be elected to the Board
of Directors of the Company. The Series 3 Preferred Stock will vote as a single
class to elect one director. Votes against a candidate and votes withheld have
no legal effect. Stockholders are not entitled to cumulate votes. In matters
other than the election of Directors, abstentions are counted as votes against
in tabulations of the votes cast on proposals presented to stockholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.

All proxies which are properly completed, signed and returned prior to the
1997 Annual Meeting will be voted. Any proxy given by a stockholder may be
revoked at any time before it is exercised, by filing with the Secretary of the
Company an instrument revoking it, by delivering a duly executed proxy bearing a
later date
<PAGE> 4

or by the stockholder attending the 1997 Annual Meeting and expressing a desire
to vote his or her shares in person.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 1, 1997
regarding the beneficial ownership of: (i) each class of IXC Communications'
voting securities by each person who is known by IXC Communications to be the
beneficial owner of more than 5% of any class of IXC Communications' voting
securities, and (ii) each class of equity securities of IXC Communications by
(a) each director and executive officer of IXC Communications, (b) each of IXC
Communications' Named Executive Officers (as defined below), and (c) all
directors and executive officers of IXC Communications as a group.

<TABLE>
<CAPTION>
SERIES 3 PERCENT OF SHARES OF
PREFERRED STOCK SERIES 3 COMMON STOCK
NAME AND ADDRESS BENEFICIALLY PREFERRED BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER OWNED(1)(2) STOCK OWNED(1) COMMON STOCK
- ------------------------------------ --------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Ralph J. Swett(3)(4)................ 25.00 * 3,037,061 9.9%
Kenneth F. Hinther(3)(5)............ -- -- 1,353,738 4.4
John R. Fleming(3).................. -- -- 1,353,739 4.4
John J. Willingham(3)(6)............ -- -- 1,272,568 4.1
James F. Guthrie(3)(7).............. -- -- 80,830 *
David J. Thomas(3)(8)............... -- -- 81,118 *
Richard D. Irwin(9)................. 995.58 7.9% 6,951,174 22.6
Michael W. Vent(10)................. -- -- 24,249 *
Carl W. McKinzie(11)................ -- -- 231,917 *
300 S. Grand Avenue, 29th Floor,
Los Angeles, CA 90071
Wolfe H. Bragin..................... -- -- 2,000 *
2029 Century Park East,
Suite 1230
Los Angeles, CA 90067
Phillip L. Williams(12)............. -- -- 144,150 *
633 West Fifth Street, Suite 4000,
Los Angeles, CA 90071-2007
Joe C. Culp(13)..................... -- -- 60,622 *
#5 Hedge Lane,
Austin, TX 78746
Grumman Hill Investments,
L.P.(14).......................... -- -- 4,636,990 15.1
191 Elm Street,
New Canaan, CT 06840
Grumman Hill Associates, Inc........ 915.42 7.3 -- --
191 Elm Street,
New Canaan, CT 06840
Trustees of General Electric Pension
Trust............................. 6,725.00 53.6 8,289,258(15) 26.9
3003 Summer Street,
Stamford, CT 06905
Putnam Investments, Inc.(16)........ -- -- 2,532,799 8.2
One Post Office Square
Boston, MA 02109
</TABLE>

2
<PAGE> 5

- ---------------
* Less than 1%

(1) Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect
to securities. Shares of common stock relating to options currently
exercisable or exercisable within 60 days of March 1, 1997, are deemed
outstanding for computing the percentage of the person holding such
securities but are not deemed outstanding for computing the percentage of
any other person. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table above have
sole voting and investment power with respect to all shares shown as
beneficially owned by them.

(2) The shares of Series 3 Preferred Stock vote together with the shares of
Common Stock as a class, except where otherwise required by law, and have
the right to elect one member of the Board of Directors.

(3) The address of such persons is c/o IXC Communications, Inc. 5000 Plaza on
the Lake, Suite 200, Austin, Texas 78746.

(4) Includes 484,980 shares held by Ralph J. Swett, Trustee of the EMS 1994
Trust and 484,980 shares held by Ralph J. Swett, Trustee of the RJS 1994
Trust. Does not include 14,919 shares of Common Stock issuable upon
conversion of the Convertible Preferred Stock. Upon conversion of shares of
the Company's 7 1/4% Junior Convertible Preferred Stock Due 2007 (the
"Convertible Preferred Stock") beneficially owned by Mr. Swett, Mr. Swett
would still beneficially own approximately 9.9% of the outstanding Common
Stock.

(5) Includes 181,867 shares held by Kenneth F. Hinther, Trustee of LISA's 1994
Trust, 181,867 shares held by Lisa Hinther, Trustee of KEN's 1994 Trust and
121,245 shares held by Craig A. Hinther, Trustee for the Kenneth A. Hinther
1996 Trust. Mr. Hinther retired from full time employment with the Company
effective April 1, 1997.

(6) Includes 121,915 shares held by John McC. Witherspoon, Trustee of trust for
the benefit of Jonica Lynn Willingham and 121,915 shares held by John McC.
Witherspoon, Trustee of trust for the benefit of Russell Dennis Willingham.

(7) Represents shares issuable with respect to the exercise of options. See
"Executive Officers, Compensation and Other Information -- Stock Options."
Does not include 4,262 shares of Common Stock issuable upon conversion of
the Convertible Preferred Stock. Upon conversion of Mr. Guthrie's shares of
Convertible Preferred Stock, Mr. Guthrie would still beneficially own less
than 1% of the outstanding Common Stock.

(8) Represents shares issuable with respect to the exercise of options. See
"Certain Transactions."

(9) Includes 1,628,216 shares held by The Irwin Family Limited Partnership
dated January 4, 1995, 341,341 shares held by The Irwin Family Limited
Partnership #2 and 150,148 shares held by The Irwin Family Limited
Partnership #3. Also includes 21.16 shares of Series 3 Preferred Stock held
by Richard D. Irwin Revocable Living Trust dated January 4, 1995, 915.42
shares of Series 3 Preferred Stock held by Grumman Hill Company, L.L.C. or
its predecessor ("Grumman Hill"), and 4,636,990 shares of Common Stock held
by Grumman Hill Investments, L.P. ("GHI"). Mr. Irwin is President of
Grumman Hill, and Mr. Irwin may be deemed a beneficial owner of the shares
owned by such entity. Does not include 25,575 shares of Common Stock
issuable upon conversion of the Convertible Preferred Stock. Upon
conversion of shares of Convertible Preferred Stock beneficially owned by
Mr. Irwin, Mr. Irwin would still beneficially own approximately 22.6% of
the outstanding Common Stock.

(10) Represents shares issuable with respect to the exercise of options. See
"Certain Transactions." Mr. Vent became an executive officer of the Company
effective April 1, 1997.

3
<PAGE> 6

(11) Such shares are held by Trust for the Riordan & McKinzie Profit Sharing and
Savings Plan for the benefit of Carl W. McKinzie.

(12) Such shares are held by Phillip L. Williams, as Trustee of the Phillip and
Jane Williams Living Trust, UDT August 20, 1985.

(13) Represents shares issuable with respect to the exercise of options. See
"Executive Officers, Compensation and Other Information -- Meetings and
Remuneration."

(14) The sole general partner of GHI is Grumman Hill of which Mr. Irwin, a
director of the Company, is the general manager and a beneficial owner of a
membership interest. Mr. Irwin may be deemed to have voting and investment
power with respect to the shares held of record by GHI.

(15) Does not include 1,278,772 shares of Common Stock issuable upon conversion
of the Company's Convertible Preferred Stock. Upon conversion of such
shares of Convertible Preferred Stock held by Trustees of General Electric
Pension Trust ("GEPT"), GEPT would beneficially own approximately 29.8% of
the outstanding Common Stock.

(16) Represents 2,451,599 shares held by Putnam Investment Management, Inc.
("PIM") and 81,200 shares held by Putnam Advisory Company, Inc. ("PAC").
PIM and PAC are each registered investment advisors that are wholly owned
by Putnam Investments, Inc. The share amounts for PIM and PAC are based
upon information contained in a Schedule 13G filed with the Commission on
January 30, 1997.

(17) Shares beneficially owned by Mr. Vent are not included because Mr. Vent
became an executive officer of the Company after March 1, 1997.

PROPOSAL 1 -- ELECTION OF DIRECTORS

Pursuant to the Company's Restated Certificate of Incorporation, as amended
(the "Restated Certificate"), the holders of the Series 3 Preferred Stock,
voting as a separate class, shall be entitled to elect one Director of the
Company (the "Series 3 Preferred Director"). The holders of the Series 3
Preferred Stock and the Common Stock, voting together as a single class, shall
elect the remaining five Directors. Accordingly, six directors are to be elected
and qualified at the 1997 Annual Meeting to serve until the next Annual Meeting
of Stockholders and until their respective successors have been duly elected and
qualified. The Board has nominated Mr. Irwin for election as the Series 3
Preferred Director. In the absence of instructions to the contrary, proxies
covering shares of Common Stock and Series 3 Preferred Stock will be voted in
favor of the election of the persons listed below as Directors of the Company
for a term commencing on the date of the 1997 Annual Meeting and continuing
until the next Annual Meeting of Stockholders and until their successors have
been duly elected and qualified. In the event that any nominee for Director
should become unavailable to serve, it is intended that votes will be cast,
pursuant to the enclosed proxy, for such substitute nominee as may be nominated
by the Company. Management has no present knowledge that any of the persons
named will be unavailable to serve.

No arrangement or understanding exists between any nominee and any other
person or persons pursuant to which any nominee was or is to be selected as a
Director or nominee. None of the nominees has any family relationship to any
other nominee or to any executive officer of the Company.

INFORMATION CONCERNING INCUMBENT DIRECTORS AND NOMINEES TO BOARD OF DIRECTORS.

Information is set forth below concerning the incumbent Directors, all of
whom are also nominees for election as Directors, and the year in which each
incumbent Director was first elected as a Director of the Company. Each nominee
has furnished the information as to his or her beneficial ownership of Common
Stock as of March 1, 1997 and, if not employed by the Company, the nominee's
principal occupation. Each

4
<PAGE> 7

nominee has consented to being named in this Proxy Statement as a nominee for
Director and has agreed to
serve as a Director if elected. Ages are shown as of March 1, 1997.

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH THE COMPANY SINCE
---- --- ------------------------------------------ --------
<S> <C> <C> <C>
Ralph J. Swett....... 62 Chairman of the Board, President, Chief 1992
Executive Officer and Director

Richard D. Irwin*.... 61 Director 1992

Wolfe H. Bragin*..... 53 Director 1993

Carl W. McKinzie+*... 57 Director 1993

Phillip L. Williams+. 74 Director 1996

Joe C. Culp+......... 63 Director 1996
</TABLE>

- ---------------
* Member of the Compensation Committee.

+ Member of the Audit Committee.

Mr. Swett has served as Chairman, Chief Executive Officer and President of
IXC Communications since its formation in July 1992. Prior to that, Mr. Swett
served as Chairman of the Board and Chief Executive Officer of Communications
Transmission, Inc. ("CTI") from 1986 to 1992. From 1969 to 1986, Mr. Swett
served in increasingly senior positions (Vice President, President and Chairman)
of Times Mirror Cable Television ("TMCT"), a subsidiary of The Times Mirror
Company ("Times Mirror") and a previous owner of IXC Carrier, Inc. ("IXC
Carrier") and as a Vice President of Times Mirror from 1981 to 1986. Mr. Swett
has served as Chairman of IXC Carrier since 1979, its Chief Executive Officer
since 1986 and its President since 1991. Mr. Swett has managed communications
businesses for the past 26 years.

Mr. Irwin has served as a director of IXC Communications since its
formation in July 1992. He has served as the President of Grumman Hill, a
merchant banking firm and the general partner of GHI, since 1985. Prior to the
formation of Grumman Hill, Mr. Irwin was a Managing Director of Dillon, Read &
Co. Inc., from 1983 to 1985. Prior to that, he served as Chief Executive Officer
of Fotomat Corporation for 12 years. Mr. Irwin is also a member of the Board of
Directors of PharmChem Laboratories, Inc. and was the Chairman of ALC
Communications Corporation ("ALC"), which was acquired by Frontier Corporation
("Frontier"), from August 1988 through August 1995.

Mr. Bragin has served as a director of IXC Communications since May 1993.
Mr. Bragin has served since 1985 as Vice President of General Electric
Investment Corporation ("GEIC"), a subsidiary of General Electric Company that
acts as an investment advisor to GEPT. Prior to joining GEIC in 1984, Mr. Bragin
served in numerous equipment leasing, investment and portfolio management
positions for General Electric Credit Corporation, now known as General Electric
Capital Corporation. Mr. Bragin is a member of the Board of Directors of a
number of private companies.

Mr. McKinzie has served as a director of IXC Communications since May 1993.
Mr. McKinzie has been a principal of Riordan & McKinzie, a Professional Law
Corporation ("Riordan & McKinzie"), since 1980.

Mr. Williams was elected a director of IXC Communications in June 1996. Mr.
Williams has been a private investor and business advisor since May 1993. Prior
to that, Mr. Williams served as Vice Chairman of the Board of Times Mirror from
1987 to May 1993. Mr. Williams is a member of the Board of Directors of Tejon
Ranch Company.

Mr. Culp was elected a director of IXC Communications in June 1996. Mr.
Culp has been President of Culp Communications Associates, a management and
marketing consulting firm, since 1990. From 1989 to 1990 Mr. Culp served as
Executive Vice President of CTI. Prior to that, Mr. Culp served as President and
Chief Executive Officer of Lightnet, Inc. from 1988 to 1989 and as President of
Rockwell International Corp.'s ("Rockwell International") Telecommunications
Group from 1982 until 1988. Mr. Culp has over 40 years experience in the
communications industry.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
EACH OF THE NOMINEES SET FORTH ABOVE.

5
<PAGE> 8

COMMITTEES

The standing committees of the Board are the Audit Committee (the "Audit
Committee") and the Compensation Committee (the "Compensation Committee"). The
Audit Committee, which presently consists of Messrs. Williams, Culp and McKinzie
met once during the fiscal year ended December 31, 1996 ("fiscal 1996"). The
Compensation Committee, which presently consists of Messrs. Irwin, Bragin and
McKinzie, did not meet during fiscal 1996.

The Board of Directors established the Audit Committee in June 1996 to: (i)
make recommendations concerning the engagement of independent public
accountants; (ii) review with the independent public accountants the plans for,
and scope of, the audit procedures to be utilized and results of the audit;
(iii) approve the professional services provided by the independent public
accountants; (iv) review the independence of the independent public accountants;
and (v) review the adequacy and effectiveness of the Company's internal
accounting controls.

The Board of Directors established the Compensation Committee in June 1996
consisting of Mr. Irwin, Mr. Bragin and Mr. McKinzie, none of whom are employees
of the Company. The Compensation Committee will determine the compensation for
the Company's executive officers and administer the 1996 Stock Plan (as defined
below), the 1994 Stock Plan (as defined below) and the Special Stock Plan (as
defined below), except that all grants of stock-based awards in 1996 were made
by the entire Board of Directors.

MEETINGS AND REMUNERATION

During fiscal 1996, the Board held seven meetings and took various actions
by written consent. Each incumbent Director attended at least 75% of the
aggregate of (i) the total number of meetings held by the Board during fiscal
1996 and (ii) the total number of meetings held by all committees of the Board
during that period within which he was a Director or member of such committee of
the Board.

Each Director is elected to hold office until the next annual meeting of
stockholders and until his respective successor is elected and qualified.
Non-employee directors currently receive annual compensation of $10,000 in cash
and certain non-employee directors (Messrs. Bragin, Culp and Williams) receive a
$20,000 annual contribution by the Company under the Phantom Stock Plan
(described below) for service to the Company as members of the Board of
Directors. All compensation which would otherwise be payable to Mr. Bragin as a
director of the Company is paid to GEPT. All directors receive reimbursement of
reasonable out-of-pocket expenses incurred in connection with meetings of the
Board. Mr. Culp was granted an option in 1994 in connection with consulting
services provided for the Company which is fully exercisable to purchase 60,622
shares of Common Stock at a purchase price of $3.01 per share. Mr. Swett
receives no compensation for services rendered as a director. The Company
adopted a Phantom Stock Plan in May 1996 for certain of its outside directors,
pursuant to which $20,000 per participating director per year of their
director's fees will be automatically deferred and treated as if it were
invested in Common Stock. No stock will be actually purchased under the plan,
and the participants will receive cash benefits equal to the value of the shares
that they are deemed to have purchased under the plan, with such value to be
determined on the date of distribution. The distribution of the benefits
generally will occur three years after the deferral. The Phantom Stock Plan is
administered by Messrs. Swett, Irwin and McKinzie, none of whom are participants
in the plan.

6
<PAGE> 9

EXECUTIVE OFFICERS, COMPENSATION AND OTHER INFORMATION

EXECUTIVE OFFICERS

Set forth in the table below are the names, ages (as of March 1, 1997) and
current offices held by all executive officers of the Company.

<TABLE>
<CAPTION>
EXECUTIVE OFFICER
NAME AGE POSITION WITH THE COMPANY SINCE
---- --- -------------------------------- -----------------
<S> <C> <C> <C>
Ralph J. Swett....................... 62 Chairman of the Board, 1992
President, Chief Executive
Officer and Director

John R. Fleming...................... 42 Executive Vice President 1994

John J. Willingham................... 40 Senior Vice President, Chief 1994
Financial Officer and Assistant
Secretary

David J. Thomas...................... 46 Executive Vice President 1996

James F. Guthrie..................... 52 Executive Vice President 1996

Michael W. Vent+..................... 44 Executive Vice President 1997

Kenneth F. Hinther+.................. 53 Executive Vice President 1992
</TABLE>

- ---------------
+ Mr. Hinther retired as Executive Vice President of the Company and Mr. Vent
was elected Executive Vice President effective April 1, 1997.

Executive officers of the Company are elected by and serve at the
discretion of the Board. None of the executive officers has any family
relationship to any nominee for Director or to any other executive officer of
the Company. Set forth below is a brief description of the business experience
for the previous five years of all executive officers except Mr. Swett. See
"Information Concerning Incumbent Directors and Nominees to Board of Directors."

Mr. Fleming has served as Executive Vice President of IXC Communications
since March 1996 and as Senior Vice President of IXC Communications from October
1994 through March 1996. He served as Vice President of Sales and Marketing of
IXC Communications from its formation in July 1992 until October 1994. Prior to
that, Mr. Fleming served as Director of Business Development and Director of
Carrier Sales of CTI from 1986 to March 1990 and as Vice President -- Marketing
and Sales of CTI from March 1990 to July 1992. Mr. Fleming was a Branch Manager
for Satellite Business Systems from 1983 to 1986. Mr. Fleming has been employed
with IXC Carrier since 1986 and a Vice President of IXC Carrier since 1990. Mr.
Fleming has over 16 years experience in the telecommunications industry.

Mr. Willingham has served as Chief Financial Officer of IXC Communications
since July 1992, as Senior Vice President of IXC Communications since October
1994 and as Assistant Secretary of IXC Communications since February 1997. He
served as Vice President of IXC Communications from July 1992 through September
1994 and as Secretary of IXC Communications from July 1992 through January 1997.
Mr. Willingham served as Vice President and Controller from September 1989 to
June 1990 and as Vice President and Chief Financial Officer from June 1990 to
July 1992 of CTI. Prior to joining CTI, Mr. Willingham was employed by Ernst &
Young LLP for eight years as a certified public accountant. Mr. Willingham has
been a Vice President of IXC Carrier since 1989 and Chief Financial Officer of
IXC Carrier since 1990. Mr. Willingham has over 10 years experience in the
telecommunications industry.

Mr. Thomas has served as Executive Vice President of IXC Communications
since March 1996 and as Senior Vice President of IXC Communications from August
1995 through March 1996. He was employed with ALC from 1983 to 1995, serving as
Vice President from 1991 to 1995 and as Treasurer from 1989 to 1995. Mr. Thomas
has over 14 years experience in the telecommunications industry.

Mr. Guthrie has served as Executive Vice President of IXC Communications
since March 1996 and as Senior Vice President, Strategic Planning of IXC
Communications from December 1995 through March

7
<PAGE> 10

1996. Prior to that, Mr. Guthrie served as Vice President and Chief Financial
Officer of Times Mirror from 1993 to 1995 and as the Chief Financial Officer of
TMCT from 1982 to 1993.

Mr. Vent was elected Executive Vice President of IXC Communications, Inc.
effective April 1, 1997 and has served as Senior Vice President -- Network
Planning and Implementation of IXC Communications from December 1996 through
March 1997. Prior to that, Mr. Vent served as Vice President and General Manager
of Broadband Services of IXC Communications from October 1995 through November
1996 and Vice President and General Manager of Switch Services of IXC
Communications from October 1994 through September 1995. Mr. Vent served as Vice
President of Management Information Systems and Network Services of WCT
Communications, Inc. from September 1993 through August 1994, and Vice President
and Chief Information Officer of Advanced Technologies of Progressive
Communications Technology, Inc. from August 1992 through August 1993. He was
employed by MCI Communication Corporation from 1979 through July 1992, serving
as Director of Network and Computer Operations from January 1990 through July
1992. Mr. Vent has over 22 years of experience in the telecommunications
industry.

Mr. Hinther served as Executive Vice President of IXC Communications from
March 1996 through March 1997 and as Senior Vice President of IXC Communications
from July 1992 through March 1996. Prior to that, Mr. Hinther served as Senior
Vice President -- Engineering and Operations of CTI from 1989 to July 1992 and
as Vice President -- Network Operations of CTI from 1986 to 1989. Mr. Hinther
served IXC Carrier as Manager of Engineering from 1979 to 1982, and as Director
of Business Development from 1982 to 1986, and as Vice President since 1986. Mr.
Hinther was Product Manager, Satellite Communications at Rockwell International
prior to joining IXC Carrier. He has over 25 years of experience in the
telecommunications industry. Mr. Hinther retired as Executive Vice President of
IXC Communications effective April 1, 1997 and has entered into a consulting
agreement with IXC Communications.

COMPENSATION

The following table sets forth all compensation awarded to, earned by or
paid to the Chief Executive Officer and the four most highly compensated
executive officers other than the Chief Executive Officer (the "Named Executive
Officers") for their services to the Company for the years ended December 31,
1995 and December 31, 1996.

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ -----------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR SALARY BONUS (1) OPTIONS/SARS(#) (2)
- -------------------------- ---- -------- -------- ------------ ----------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Swett............ 1996 $299,712 $175,000 $ 10,000 -- $ 21,986(3)
Chairman, President and 1995 285,000 -- 10,000 -- 883,813(3)
Chief Executive Officer
Kenneth F. Hinther+....... 1996 165,519 100,000 7,500 -- 14,207
Executive Vice President 1995 212,083(4) -- 7,500 -- 444,739(5)
John R. Fleming........... 1996 165,519 100,000 7,500 -- 14,322
Executive Vice President 1995 212,083(4) -- 7,500 -- 444,739(5)
John J. Willingham........ 1996 143,519 100,000 7,500 -- 12,415
Senior Vice President 1995 183,417(6) -- 7,500 -- 442,871(5)
and Chief Financial
Officer
James F. Guthrie.......... 1996 200,000 -- 8,000 342,490 17,842
Executive Vice President 1995 -- -- -- -- --
</TABLE>

- ---------------
+ Mr. Hinther retired as Executive Vice President of the Company effective
April 1, 1997.

(1) These amounts represent automobile allowances paid to the Named Executive
Officers in 1996 and 1995.

(2) Includes payments in 1995 of $862,027 (with respect to Mr. Swett) and
$431,014 (with respect to each of Mr. Hinther, Mr. Fleming and Mr.
Willingham) made in connection with a prior incentive arrangement. The
incentive payments were earned in 1993 but did not become payable until
1995.

8
<PAGE> 11

(3) Includes an employer contribution of $13,500 and $13,700 under the 401(k)
Plan (as defined herein) in 1995 and 1996, respectively, and payments of
$8,286 for term life insurance premiums in 1995 and 1996.

(4) Represents $153,750 in salary and an additional amount of $58,333 in
compensation earned and deferred in prior years but paid in 1995.

(5) Includes employer contributions of $13,725 and $14,207 for Mr. Hinther,
$13,725 and $14,322 for Mr. Fleming and $11,858 and $12,415 for Mr.
Willingham under the 401(k) Plan in 1995 and 1996, respectively.

(6) Represents $131,750 in salary and an additional amount of $51,667 in
compensation earned and deferred in prior years but paid in 1995.

EMPLOYMENT AGREEMENTS

Mr. Guthrie entered into an employment agreement with IXC Communications in
December 1995 for a term of three years pursuant to which Mr. Guthrie is
entitled to an annual base salary of $200,000, subject to adjustment in
accordance with IXC Communications' policies and procedures, and an annual bonus
of up to $75,000 if approved by the Board of Directors. Mr. Guthrie was also
granted an option to purchase 242,490 shares of Common Stock pursuant to the
terms of his employment agreement. Other than Mr. Guthrie, none of the Named
Executive Officers have entered into employment agreements with the Company.

STOCK OPTIONS

The following table sets forth information concerning each grant of stock
options made during 1996 to each of the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------ POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK PRICE
SHARES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(1)
OPTIONS EMPLOYEES PRICE PER EXPIRATION -----------------------
NAME GRANTED IN PERIOD SHARE DATE 5% 10%
- ------------------------------- ---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Swett................. -- -- -- --
Kenneth F. Hinther............. -- -- -- --
John R. Fleming................ -- -- -- --
John J. Willingham............. -- -- -- --
James F. Guthrie(2)............ 242,490(3) 21.4% $ 3.01 1/08/06 $ 459,027 $1,163,265
100,000(4) 8.8% $ 22.25 10/28/06 $1,399,291 $3,546,077
</TABLE>

- ---------------
(1) The potential realizable value is calculated based on the term of the option
at its time of grant (ten years). It is calculated by assuming that the
stock price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term of the option.

(2) All of Mr. Guthrie's options become immediately exercisable upon the sale of
substantially all of the Company's assets, a successful tender offer for
greater than fifty percent (50%) of the outstanding capital stock of the
Company or a merger or consolidation in which the stockholders of the
Company immediately preceding such merger or consolidation will not hold a
majority of the outstanding capital stock of the surviving corporation
immediately after such merger or consolidation.

(3) The options become exercisable in three equal installments beginning on
January 19, 1997 and continuing on the two successive annual anniversary
dates thereafter.

(4) The options become exercisable in four equal installments beginning on
October 29, 1997 and continuing on the three successive annual anniversary
dates thereafter.

9
<PAGE> 12

The following table sets forth the number and value as of December 31, 1996
of shares underlying unexercised options held by each of the Named Executive
Officers.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AS OF IN-THE-MONEY OPTIONS AS OF
DECEMBER 31, 1996 DECEMBER 31, 1996(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ralph J. Swett..................... -- -- -- --
Kenneth F. Hinther................. -- -- -- --
John R. Fleming.................... -- -- -- --
John J. Willingham................. -- -- -- --
James F. Guthrie................... 0 342,490 0 $ 7,576,673
</TABLE>

- ---------------
(1) Based on the fair market value (the closing price for the Company's Common
Stock as reported on the Nasdaq National Market as of December 31, 1996,
($30.75 per share)), less the exercise price payable upon exercise of such
options.

1996 STOCK PLAN

In May 1996, IXC Communications adopted the IXC Communications, Inc. 1996
Stock Plan (the "1996 Stock Plan"), a stock incentive plan covering 2,121,787
shares of Common Stock of IXC Communications that may be awarded in order to
attract, retain and reward employees, directors and other persons providing
services to the Company. The Compensation Committee administers the 1996 Stock
Plan, except that all grants of stock-based awards in 1996 were made by the
entire Board of Directors. Any employee, director or other person providing
services to the Company is eligible to receive awards under the 1996 Stock Plan,
at the discretion of the Board of Directors. Awards available under the 1996
Stock Plan include Common Stock options with exercise prices at least equal to
the fair market value of the Common Stock on the date of grant. Mr. Guthrie was
the only Named Executive Officer granted options to acquire stock of IXC
Communications in 1996.

1994 STOCK PLAN

In November 1994, IXC Communications adopted a stock incentive plan (the
"1994 Stock Plan") covering 1,212,450 shares of Common Stock of IXC
Communications to attract, retain and reward employees, directors and other
persons providing services to the Company. The Compensation Committee
administers the 1994 Stock Plan, except that all grants of stock-based awards
are made by the entire Board of Directors. Any employee, director or other
person providing services to the Company is eligible to receive awards under the
1994 Stock Plan, at the Board's discretion. Awards available under the 1994
Stock Plan include Common Stock purchase options and restricted Common Stock.
Mr. Culp is the only director who holds options to acquire stock. No options
were granted in 1996 to Named Executive Officers under the 1994 Stock Plan.

SPECIAL STOCK PLAN

In October 1996, IXC Communications adopted a stock incentive plan (the
"Special Stock Plan") covering 67,900 shares of Common Stock of IXC
Communications to induce certain individuals to become employed with the Company
and/or its subsidiaries. The Compensation Committee administers the Special
Stock Plan. Any employee, director or other person providing services to the
Company is eligible to receive awards under the Special Stock Plan, at the
Board's discretion. Awards available under the Special Stock Plan include Common
Stock purchase options and restricted Common Stock. All available options to
acquire stock under the Special Stock Plan were granted in 1996, none of which
were granted to a Named Executive Officer of the Company.

10
<PAGE> 13

401(K) PLAN

The IXC Carrier, Inc. 401(k) and Pension Plan and Trust (the "401(k) Plan")
is a tax-qualified retirement plan. In general, all employees of IXC Carrier
(substantially all the employees of the Company) who have attained age 18 and
completed one year of service are eligible to participate in the 401(k) Plan.
Participants may make pre-tax contributions to the 401(k) Plan, in an amount
currently not to exceed $9,500 per year. IXC Carrier may elect to make matching
contributions each year, which are allocated among participants depending on the
amount that they contribute to the 401(k) Plan. IXC Carrier may also elect to
make profit-sharing contributions to the 401(k) Plan, which are allocated among
participants as a percentage of compensation.

INDEMNIFICATION AND EXCULPATION ARRANGEMENTS

The Restated Certificate limits the liability of directors to IXC
Communications or its stockholders to the fullest extent permitted by the
Delaware General Corporation Law (the "DGCL"). Accordingly, pursuant to the
provisions of the DGCL presently in effect, directors of IXC Communications will
not be personally liable for monetary damages for breach of a director's
fiduciary duty as a director, except for liability: (i) for any breach of the
director's duty of loyalty to the Company or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in Section 174 of the DGCL; or (iv) for
any transaction from which the director derived an improper personal benefit. In
addition, the bylaws of IXC Communications require IXC Communications to
indemnify its directors and officers to the fullest extent permitted by the laws
of the State of Delaware.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to June 1996, IXC Communications did not have a compensation
committee or any other committee of the Board of Directors performing equivalent
functions. All decisions regarding executive compensation were made by the Board
of Directors of IXC Communications prior to the establishment of the
Compensation Committee, none of whom, other than Mr. Swett, was an executive
officer of IXC Communications. Decisions with respect to Mr. Swett's
compensation were approved by all members of the Board other than Mr. Swett. The
Company's Compensation Committee, which was established in June 1996, consists
of Messrs. Irwin, Bragin and McKinzie, none of whom was at any time during
fiscal 1996 or at any other time an officer or employee of the Company. There
are no compensation committee interlocks between the Company and other entities
involving the Company's executive officers and Board members who serve as
executive officers or Board members of such other entities. See the seventh
paragraph of "Certain Transactions" for more information regarding Mr. McKinzie,
a member of the Compensation Committee.

REPORT OF THE COMPENSATION COMMITTEE AND
THE BOARD OF DIRECTORS REGARDING COMPENSATION

The Compensation Committee, which consists of Messrs. Irwin, Bragin and
McKinzie, who are three non-employee directors, was established in June 1996 to
oversee the general compensation policies of the Company and the Company's
compensation and stock plans, to establish the compensation of Mr. Swett, who is
the Company's Chairman of the Board, Chief Executive Officer and President, and
to review and approve Mr. Swett's recommendations as to the compensation levels
for the other executive officers. Prior to June 1996, all decisions regarding
executive compensation were made by the Board of Directors of the Company, none
of whom was an executive officer of the Company, other than Mr. Swett. Decisions
with respect to Mr. Swett's compensation were approved by all members of the
Board other than Mr. Swett. Therefore, salary levels for 1996 and bonuses
awarded in 1996 for performance in 1995 were determined by the Board of
Directors of the Company.

11
<PAGE> 14

COMPENSATION POLICY

The goal of the Company's executive compensation policy is to provide a
strong and direct link among stockholder values, Company performance and
executive compensation through the design and implementation of sound
compensation programs that will attract and retain highly qualified personnel.
Compensation programs are intended to complement the Company's short- and
long-term business objectives and to focus executive efforts on the fulfillment
of these objectives. The Company's executive compensation policy is (i) designed
to establish an appropriate relationship between executive pay and the Company's
annual performance, its long-term growth objectives and its ability to attract
and retain qualified executive officers; and (ii) based on the belief that the
interests of the executives should be closely aligned with those of the
Company's stockholders. The Compensation Committee attempts to achieve these
goals by integrating competitive annual base salaries with (i) annual incentive
bonuses based on individual and corporate performance for such fiscal year, and
(ii) stock options issued under the 1994 Plan and 1996 Plan. The Board believes
that cash compensation in the form of salary and performance-based bonuses
provides Company executives with short-term rewards for success in operations,
and that long-term compensation through existing stock ownership and/or the
award of stock options provides Company executives with a stake in the long-term
performance and success of the Company. It should be noted that Mr. Swett
currently owns 9.9% of the Company's common stock and two other Company
executives, Messrs. Fleming and Willingham, each own more than 4.0% of the
Company's common stock.

Base Salary. In establishing 1996 base salary levels for executive officer
positions in early 1996, the Board approved the base salaries of the executive
officers based on (i) salaries paid to executive officers with comparable
responsibilities employed by companies with comparable businesses, (ii)
performance and achievement of objectives of the Company in fiscal 1995, (iii)
individual performance reviews for fiscal 1995, and (iv) the subjective
recommendations of Mr. Swett.

Bonuses. The Company's executive officers other than Mr. Swett were
eligible for annual bonuses based upon recommendations made by Mr. Swett. The
Board independently determined the bonus for Mr. Swett. The bonuses paid in
early 1996 for performance in 1995 were based on individual performance and the
Company's achievement of certain operating objectives in 1995. In 1996, $100,000
bonuses were paid to each of the Company's Named Executive Officers for 1995
other than Mr. Swett and Mr. Guthrie. A $175,000 bonus was awarded by the Board
of Directors to Mr. Swett. Mr. Guthrie was not employed by the Company until
March 1996 and therefore did not receive a bonus for 1995.

The amounts awarded to Named Executive Officers other than Mr. Swett were
determined principally by the Board's and Mr. Swett's subjective assessment of
the individual's contribution to the Company's overall performance for 1995.
Among the objectives achieved in 1995 were the successful completion of a $285
million debt offering, the commencement of a coast-to-coast fiber expansion and
preparation for the entry into the business of selling switched long distance
services to long distance resellers. Consideration also was given to factors
such as the individual's successful completion of special projects, significant
increases or decreases in the level of the executive's responsibilities and the
Board's and Mr. Swett's subjective evaluation of the individual's overall
efforts and ability to discharge the responsibilities of his position.

Stock Options. The Board of Directors and the Compensation Committee
believe that stock options encourage and reward effective management, which
results in long-term corporate financial success, as measured by stock price
appreciation. Stock options under the Company's 1994 and 1996 stock plans were
granted to three executive officers of the Company, (Messrs. Guthrie, Thomas and
Vent) as well as 76 other employees of the Company, during fiscal 1996. Mr.
Swett and three of the other Named Executive Officers of the Company, Messrs.
Fleming, Willingham and Hinther, already are significant owners of the Company's
common stock. The number of options that each executive officer or employee was
granted in 1996 was based primarily on the executive's or employee's
responsibilities and ability to influence the Company's long-term growth and
profitability. The Board of Directors and the Compensation Committee believe
that stock ownership and/or option grants afford a desirable long-term
compensation method because they closely ally the interests of management with
those of the stockholders. Ownership of the Company's common stock or potential
ownership through grants of stock options are believed to be the best way to
motivate executive

12
<PAGE> 15

officers to improve long-term stock market performance. The vesting provisions
of options granted under the plans are designed to encourage longevity of
employment with the Company and generally extend over a three- or four-year
period.

COMPENSATION OF CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT

The Board believes that Ralph J. Swett, the Company's Chairman of the
Board, Chief Executive Officer and President, provides valuable services to the
Company and that his compensation should therefore be competitive with that paid
to executives at comparable companies. The Board also believes that Mr. Swett's
9.9% ownership of the Company's common stock provides Mr. Swett with a
significant incentive to increase values for all of the Company's stockholders.
Mr. Swett's base salary of $299,712 for 1996 was determined by the Board of
Directors to be appropriate based on comparable chief executive salaries of a
peer group of companies and of direct competitors, the Company's overall
performance and accomplishments in 1995 and Mr. Swett's efforts and
contributions to the Company. The annual incentive bonus of $175,000 was paid to
Mr. Swett based on (i) completion of the Company's $285 million debt offering;
(ii) the Company's progress in 1995 toward preparing for the Company's entry
into the switched long distance services business and the commencement of the
Company's major expansion of its network; (iii) significant increases in cash
flow and earnings that are expected to be achieved upon completion of the
network expansion and development of its switched services business; (iv) the
efforts and contributions made by Mr. Swett in discharging his responsibilities
as Chairman of the Board, Chief Executive Officer and President; and (v) the
efforts and contributions by the other executives of the Company under Mr.
Swett's leadership.

INTERNAL REVENUE CODE SECTION 162(M)

Under Section 162(m) of the Internal Revenue Code of 1986, as amended, the
amount of compensation paid to certain executives that is deductible with
respect to the Company's corporate income taxes is limited to $1,000,000
annually. It is the current policy of the Board to maximize, to the extent
reasonably possible, the Company's ability to obtain a corporate tax deduction
for compensation paid to executive officers of the Company to the extent
consistent with the best interests of the Company and its stockholders.

COMPENSATION COMMITTEE

Wolfe H. Bragin
Richard D. Irwin
Carl W. McKinzie

REMAINING MEMBERS OF THE
BOARD OF DIRECTORS

Ralph J. Swett
Phillip L. Williams
Joe C. Culp

13
<PAGE> 16

COMPANY PERFORMANCE

The following graph shows a comparison of cumulative total returns for the
Company, the NASDAQ Stock Market -- U.S. Index and the NASDAQ Telecommunications
Index for the period during which the Company's Common Stock has been registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The comparison assumes $100 invested on July 3, 1996 in the
Common Stock with the reinvestment of all dividends, if any. Total stockholder
returns for the prior period is not an indication of future returns.

COMPARISON OF 6 MONTH CUMULATIVE TOTAL RETURN*
AMONG IXC COMMUNICATIONS, INC., THE NASDAQ STOCK MARKET -- U.S. INDEX
AND THE NASDAQ TELECOMMUNICATIONS INDEX

<TABLE>
<CAPTION>
NASDAQ
MEASUREMENT PERIOD IXC COM- NASDAQ STOCK TELECOM-
(FISCAL YEAR COVERED) MUNICATIONS MARKET - US MUNICATIONS
<S> <C> <C> <C>
07/03/96 100 100 100
12/31/96 192 109 94
</TABLE>

* ASSUMES $100 INVESTED ON JULY 3, 1996 IN STOCK OR ON JUNE 30, 1996 IN INDEX.
TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31, 1996.

CERTAIN TRANSACTIONS

Prior to the sale of the Company's outstanding $285.0 million principal
amount of 12 1/2% Senior Notes due 2005 (the "Senior Notes"): (i) GHI, a
partnership whose general partner is Grumman Hill, a limited liability company
of which Mr. Irwin is a member, and GEPT each held 598 shares of IXC
Communications' 10% Senior Series 1 Cumulative Redeemable Preferred Stock
("Series 1 Preferred Stock"); (ii) Messrs. Swett, Williams, Hinther and Fleming
owned 78, 60, 13 and 13 shares of Series 1 Preferred Stock, respectively; and
(iii) Mr. McKinzie, a director of IXC Communications and a principal of Riordan
& McKinzie owned 100 shares of Series 1 Preferred Stock. The Series 1 Preferred
Stock was redeemed with a portion of the proceeds of the sale of the Senior
Notes at a price equal to the amount paid for such stock plus accrued but unpaid
dividends at 10% per annum. The approximate amounts received by such persons
with respect to such redemption were: (i) GHI, $813,544; (ii) GEPT, $813,544;
(iii) Mr. Swett, $106,114; (iv) Mr. Williams, $76,229; (v) Mr. Hinther, $17,686;
(vi) Mr. Fleming, $17,686; and (vii) Mr. McKinzie, $120,554.

Prior to the sale of the Senior Notes, GHI and GEPT held shares of
preferred stock of a subsidiary of IXC Communications. Such preferred stock was
redeemed with a portion of the proceeds of the sale of the

14
<PAGE> 17

Senior Notes at a price equal to the amount paid for such stock plus accrued but
unpaid dividends at 10% per annum. The approximate amounts received by such
persons with respect to such redemption were: (i) GHI, $905,934; and (ii) GEPT,
$897,115.

Certain debentures of IXC Communications and one of its subsidiaries also
were redeemed at the original purchase price plus accrued but unpaid interest
with a portion of the proceeds of the sale of the Senior Notes. The approximate
amounts received by the following persons with respect to such redemption were:
(i) GEPT, $6,760,602; (ii) GHI, $6,788,635; (iii) Mr. Swett, $301,400; (iv) Mr.
Hinther, $50,233; and (v) Mr. Fleming, $50,233.

In 1994, IXC Communications and ALC (which has since been acquired by
Frontier) formed a corporation to acquire all of the equity interests in MSM
Associates, Limited Partnership for an aggregate purchase price of $1,500,000
from a wholly owned subsidiary of General Electric Capital Corporation, an
affiliate of GEIC. In addition, in 1995, IXC Communications entered into a
ten-year agreement with GE Capital Communication Services Corporation, an
affiliate of GEIC, to supply it with switched products to be resold by GE
Capital Communication Services Corporation. Mr. Bragin, a director of IXC
Communications, is Vice President of GEIC, which is the investment advisor to
GEPT.

Prior to the sale of the Senior Notes, a subsidiary of IXC Communications
was indebted to GEPT under the terms of a note agreement (the "GEPT Note
Agreement"). Certain stockholders of IXC Communications, including Messrs.
Swett, Hinther, Fleming, Williams, Willingham and Irwin and GHI, had pledged
their stock and debentures of IXC Communications (and, in the case of GHI, its
stock and debentures of a subsidiary of IXC Communications) as security for such
indebtedness. Such indebtedness, in the approximate principal amount of
$5,571,348, was repaid with a portion of the proceeds of the sale of the Senior
Notes and such pledges were released.

Mr. Swett, Mr. Hinther, Mr. Fleming, GEPT and GHI purchased Senior Notes in
the amounts of $250,000, $50,000, $50,000, $20,000,000 and $5,000,000,
respectively, on October 5, 1995.

For the years ended December 31, 1994, 1995 and 1996, the law firm of
Riordan & McKinzie, of which Mr. McKinzie, a director and stockholder of IXC
Communications, is a principal, provided certain legal services to IXC
Communications in the amount of approximately $1.4 million, $2.6 million and
$3.5 million, respectively.

Grumman Hill, a corporation whose president is Mr. Irwin, receives an
annual fee of $100,000 from the Company for performing certain advisory services
with respect to the management, operation and business development activities of
IXC Communications.

Culp Communications Associates, of which Mr. Culp is President, received
approximately $8,000, $106,000 and $67,600 in connection with Mr. Culp's
consulting services provided to the Company in 1994, 1995 and 1996,
respectively. Mr. Culp is continuing to provide such consulting services to the
Company in 1997.

Mr. Williams received fees for serving as an advisor to the Company's Board
of Directors of $12,500 in 1994 and 1995 and $14,375 in 1996.

Mr. Thomas entered into an employment agreement with IXC Communications in
August 1995 for a term of three years pursuant to which Mr. Thomas is entitled
to an annual base salary of $160,000, subject to adjustment in accordance with
IXC Communications' policies and procedures, and an annual bonus of up to
$75,000 if approved by the Board of Directors. Mr. Thomas was granted stock
options on August 28, 1995 for 243,353 shares of Common Stock at a price of
$3.01 per share vesting over a three-year period which, subject to certain
conditions, vest immediately upon a change of control of IXC Communications as
set forth in his employment agreement and stock option agreement. Additionally,
Mr. Thomas receives an annual automobile allowance of $8,000 and received
reimbursement of certain relocation costs. On October 29, 1996, Mr. Thomas was
granted additional stock options for 100,000 shares of Common Stock at a price
of $22.25 per share vesting over a four-year period.

15
<PAGE> 18

On December 16, 1994 and October 29, 1996, Mr. Vent was granted stock
options for 48,498 shares and 100,000 shares of Common Stock at a price of $3.01
and $22.25 per share, respectively, each vesting over a four-year period.

In order to reduce the dilution of GEPT's stock ownership caused by the
initial public offering of the Company's common stock (the "IPO"), GEPT acquired
840,053 shares of Common Stock from the Company at a per share price of $14.88
(the price paid by the underwriters in the IPO, that is, the public offering
price per share less underwriters' discounts and commissions) for an aggregate
purchase price of $12.5 million in a private placement which occurred
simultaneously with the closing of the IPO on July 9, 1996 (the "GEPT Private
Placement"). Although GEPT received Common Stock which was not registered under
the Securities Act of 1933, as amended (the "Securities Act"), it received
registration rights with respect to such stock and all other Company Common
Stock it owns. The Company is able to use the $12.5 million proceeds, if it so
elects, to pursue the opportunity in Mexico with respect to Marca-Tel S.A. de
C.V., a joint venture in which the Company indirectly holds a minority interest.

In connection with the IPO and the GEPT Private Placement, GEPT, GHI and
Messrs. Irwin, Swett, Willingham, McKinzie and Williams have entered into an
agreement with IXC Communications pursuant to which they were granted
registration rights with respect to shares of IXC Communications Common Stock
held by them.

Pursuant to the terms of a letter agreement dated August 22, 1996 among IXC
Communications, GEPT and Messrs. Swett, Hinther and Fleming, each of GEPT and
Messrs. Swett, Hinther and Fleming (the "Affiliate Senior Note Holders") waived
the right to require the Company to file a shelf registration statement for the
Senior Notes held by the Affiliate Senior Note Holders on or prior to August 30,
1996 in exchange for the Company granting the Affiliate Senior Note Holders of
at least 70% of the then remaining transfer restricted Senior Notes the right to
require the Company to file a shelf registration statement as long as such
Affiliate Senior Note Holders hold transfer-restricted Senior Notes.

On April 1, 1997, the Company issued and sold 1,000,000 shares of
Convertible Preferred Stock at a purchase price of $100 per share in a private
placement to two initial purchasers, which shares were subsequently sold to
"qualified institutional buyers" and certain "accredited investors" (as defined
in the Securities Act). The Convertible Preferred Stock is convertible at the
option of the holders, unless previously redeemed, at any time after May 31,
1997, into shares of Common Stock at a rate (subject to adjustment in certain
events) of 4.263 shares of Common Stock for each share of Convertible Preferred
Stock, equivalent to a conversion price of $23.46 for each share of Common
Stock. Dividends on the Convertible Preferred Stock accrue at a rate per annum
of 7 1/4% per share on the liquidation preference thereof of $100 per share
($7.25 per annum per share). Dividends payable prior to or on March 31, 1999,
are, at the option of the Company, payable (i) in cash or (ii) through the
issuance of additional shares of Convertible Preferred Stock equal to the
dividend amount divided by the liquidation preference of such additional shares.
On April 1, 1997, each of GEPT, Mr. Swett, Mr. Guthrie and Mr. Irwin (the
"Affiliate Convertible Preferred Stock Holders") acquired an aggregate of
300,000 shares, 3,500 shares, 1,000 shares and 6,000 shares of Convertible
Preferred Stock, respectively, at a purchase price of $100 per share. The
Affiliate Convertible Preferred Stock Holders, together with the other holders
of Convertible Preferred Stock, received registration rights with respect to the
Convertible Preferred Stock and the Common Stock issuable upon conversion
thereof.

16
<PAGE> 19

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
directors and certain of its officers, and persons who own more than 10% of a
registered class of the Company's equity securities (collectively, "Insiders"),
to file reports of ownership and changes in ownership with the Commission.
Insiders are required by Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5s were
required for those persons, the Company believes that its Insiders complied with
all applicable Section 16(a) filing requirements for fiscal 1996.

AUDITORS

The Company has appointed Ernst & Young LLP to continue as the Company's
auditors and to audit the books of account and other records of the Company for
the fiscal year ending December 31, 1997. Ernst & Young LLP served as the
Company's independent public accountants for fiscal 1996. A member of that firm
is expected to be present at the 1997 Annual Meeting, will have an opportunity
to make a statement if so desired, and will be available to respond to
appropriate questions.

OTHER BUSINESS

The Company is not aware of any other business to be presented at the 1997
Annual Meeting. All shares represented by Company proxies will be voted in favor
of the proposals of the Company described herein unless otherwise indicated on
the form of proxy. If any other matters properly come before the meeting,
Company proxy holders will vote thereon according to their best judgment.

SUBMISSION OF STOCKHOLDER PROPOSALS

Any stockholder who wishes to present a proposal for action at the
Company's 1998 Annual Meeting of Stockholders and who wishes to have it set
forth in the corresponding proxy statement and identified in the corresponding
form of proxy prepared by management must notify the Company no later than
December 18, 1997 in such form as required under the rules and regulations
promulgated by the Commission.

ANNUAL REPORTS

A COPY OF THE 1996 ANNUAL REPORT TO STOCKHOLDERS IS BEING MAILED TO EACH
STOCKHOLDER OF RECORD TOGETHER WITH THIS PROXY STATEMENT. THE COMPANY HAS ALSO
FILED WITH THE COMMISSION ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1996. THIS REPORT CONTAINS INFORMATION CONCERNING THE COMPANY
AND ITS OPERATIONS. A COPY OF THIS REPORT WILL BE FURNISHED TO STOCKHOLDERS
WITHOUT CHARGE UPON REQUEST IN WRITING TO JEFFREY C. SMITH AT 5000 PLAZA ON THE
LAKE, SUITE 200, AUSTIN, TEXAS 78746. SUCH REPORTS ARE NOT A PART OF THE
COMPANY'S SOLICITING MATERIAL.

PROXIES AND SOLICITATION

Proxies for the 1997 Annual Meeting are being solicited by mail directly
and through brokerage and banking institutions. The Company will pay all
expenses in connection with the solicitation of proxies. In addition to the use
of mails, proxies may be solicited by Directors, officers and regular employees
of the Company personally or by telephone. The Company will reimburse banks,
brokers custodians, nominees and fiduciaries for any reasonable expenses in
forwarding proxy materials to beneficial owners.

All stockholders are urged to complete, sign and promptly return the
enclosed proxy card.

By Order of the Board of Directors

[SIG]

JEFFREY C. SMITH
Secretary
Austin, Texas
April 18, 1997

17
<PAGE> 20

APPENDIX-1
FORM OF PROXY FOR COMMON STOCK

PROXY IXC COMMUNICATIONS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
appoints Ralph J. Swett and John J. Willingham, and each of them, proxies with
full power of substitution, to vote all shares of Common Stock of IXC
Communications, Inc. (the "Company") held of record by the undersigned as of
April 16, 1997, the record date with respect to this solicitation, at the Annual
Meeting of Stockholders of the Company to be held at Barton Creek Conference
Center, 8212 Barton Club Drive, Austin, Texas 78735, beginning at 9:00 a.m.,
local time, on Tuesday, May 6, 1997, and at any adjournments thereof, upon the
following matters:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:

1. ELECTION OF DIRECTORS

[ ] FOR ALL NOMINEES LISTED BELOW (EXCEPT AS NOTED BELOW)

[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW

(Instructions: To withhold authority to vote for any nominee, line through or
otherwise strike out the nominee's name below.)

Ralph J. Swett Wolfe H. Bragin Joe C. Culp
Carl W. McKinzie Phillip L. Williams

2. OTHER MATTERS

In their discretion, Ralph J. Swett and John J. Willingham are authorized to
vote upon such other business as may properly come before the meeting.

(continued, and to be signed, on other side)
<PAGE> 21

(continued from other side)

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR THE NOMINEES NAMED IN PROPOSAL 1 ABOVE. IF ANY NOMINEE DECLINES OR IS UNABLE
TO SERVE AS A DIRECTOR, THEN THE PERSONS NAMED AS PROXIES SHALL HAVE FULL
DISCRETION TO VOTE FOR ANY OTHER PERSON DESIGNATED BY THE BOARD OF DIRECTORS.

PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR
CORPORATE OFFICER, PLEASE GIVE FULL TITLE AS SUCH.

Dated: 1997
-------------------,

--------------------------------
(Signature)

THE SIGNER HEREBY REVOKES ALL
PROXIES HERETOFORE GIVEN BY THE
SIGNOR TO VOTE AT SAID MEETING
OR AND ADJOURNMENTS THEREOF.
<PAGE> 22

APPENDIX-2
FORM OF PROXY FOR SERIES 3 PREFERRED STOCK

PROXY IXC COMMUNICATIONS, INC.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:

1. ELECTION OF DIRECTORS

[ ] FOR ALL NOMINEES LISTED BELOW (EXCEPT AS NOTED BELOW)

[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW

(Instructions: To withhold authority to vote for any nominee, line through or
otherwise strike out the nominee's name below.)

<TABLE>
<S> <C> <C>
Ralph J. Swett Richard D. Irwin* Wolfe H. Bragin
Carl W. McKinzie Phillip L. Williams Joe C. Culp
</TABLE>

* Series 3 Preferred Director nominee

2. OTHER MATTERS

In their discretion, Ralph J. Swett and John J. Willingham are authorized to
vote upon such other business as may properly come before the meeting.

(continued, and to be signed, on other side)
<PAGE> 23

(continued from other side)

Dated: 1997
-------------------,

--------------------------------
(Signature)

THE SIGNER HEREBY REVOKES ALL
PROXIES HERETOFORE GIVEN BY THE
SIGNOR TO VOTE AT SAID MEETING
OR AND ADJOURNMENTS THEREOF.