<PAGE> 1
SCHEDULE 14C
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Information Statement [ ] Confidential, for Use of the Commission
[ ] Definitive Information Statement Only (as permitted by Rule 14c-5(d)(2))
</TABLE>
IXC COMMUNICATIONS, INC.
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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 ACTION BY WRITTEN CONSENT OF STOCKHOLDERS
TO THE STOCKHOLDERS OF IXC COMMUNICATIONS, INC.:
The Board of Directors of IXC Communications, Inc. (the "Company") has
taken action to approve an amendment (the "Charter Amendment") of the Company's
Restated Certificate of Incorporation, as amended (the "Restated Certificate")
to permit payment of dividends on the Company's 7 1/4% Junior Convertible
Preferred Stock Due 2007 (the "Convertible Preferred Stock") with additional
shares of Convertible Preferred Stock. The Charter Amendment is more fully
described in the attached Information Statement.
A total of four stockholders holding an aggregate of approximately 59% of
the issued and outstanding shares of the Company's Common Stock, $.01 par value
(the "Common Stock"), have approved in writing the Charter Amendment. As
required by the Restated Certificate, approximately % (at least three-fourths)
of the holders of the issued and outstanding shares of the Company's 10% Junior
Series 3 Cumulative Redeemable Preferred Stock, $.01 par value (the "Series 3
Preferred Stock"), have also approved in writing the Charter Amendment. The
Series 3 Preferred Stock is not registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The authorization
of the Charter Amendment by the Board of Directors and stockholders of the
Company shall not become effective until at least twenty (20) days after the
mailing of the enclosed Information Statement. The Charter Amendment has been
approved by written consent without the need for any action to be taken by you.
Your consent is not required and is not being solicited in connection with
this action. Pursuant to Section 228 of the Delaware General Corporation Law,
you are hereby being provided with notice of the approval by less than the
unanimous written consent of the stockholders of the Company. Pursuant to the
1934 Act, with this letter you are being furnished with an Information Statement
relating to this action.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THE ATTACHED INFORMATION IS BEING SENT TO YOU FOR INFORMATION PURPOSES
ONLY.
By Order of the Board of Directors
JEFFREY C. SMITH
Secretary
Austin, Texas
, 1997
<PAGE> 3
IXC COMMUNICATIONS, INC.
5000 PLAZA ON THE LAKE, SUITE 200
AUSTIN, TEXAS 78746
------------------------
INFORMATION STATEMENT
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
THE APPROXIMATE DATE OF MAILING OF THIS INFORMATION STATEMENT IS
, 1997
This Information Statement is being furnished by IXC Communications, Inc.,
a Delaware corporation (the "Company" or "IXC Communications"), to the holders
of the Company's Common Stock, $.01 par value (the "Common Stock"), and the
Company's 10% Junior Series 3 Cumulative Redeemable Preferred Stock, $.01 par
value (the "Series 3 Preferred Stock"), in connection with the approval of an
amendment (the "Charter Amendment") of the Company's Restated Certificate of
Incorporation, as amended (the "Restated Certificate") to permit payment of
dividends on the Company's 7 1/4% Junior Convertible Preferred Stock Due 2007
(the "Convertible Preferred Stock") with additional shares of Convertible
Preferred Stock.
The Board of Directors of the Company has taken action to approve the
Charter Amendment which requires the approval by the affirmative vote of a
majority of the outstanding shares of Common Stock and Series 3 Preferred Stock,
voting as class, a majority of the outstanding shares of Common Stock, voting as
a class, and three-fourths ( 3/4ths) of the outstanding shares of Series 3
Preferred Stock, voting as a class. A total of four stockholders holding
approximately 59% of the issued and outstanding shares of the Company's Common
Stock have consented in writing to the Charter Amendment. As required by the
Restated Certificate, approximately % (at least three-fourths) of the holders
of the issued and outstanding shares of the Company's Series 3 Preferred Stock
have also consented in writing to the Charter Amendment. The Series 3 Preferred
Stock is not registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "1934 Act"). The authorization of the Charter Amendment by
the Board of Directors and stockholders of the Company shall not become
effective until at least twenty (20) days after the mailing of this Information
Statement.
Accordingly, all corporate actions necessary to authorize the Charter
Amendment have been taken. Pursuant to the regulations promulgated under the
1934 Act, the authorization of the Charter Amendment by the Board of Directors
and stockholders of the Company shall not become effective until at least twenty
(20) days after the Company has mailed this Information Statement to the
stockholders of the Company. Promptly following the expiration of this twenty
(20) day period, the Company intends to file a Certificate of Amendment to its
Restated Certificate to effectuate the Charter Amendment with the Delaware
Secretary of State. The Charter Amendment will become effective on the date of
such filing.
The Company has asked brokers and other custodians and fiduciaries to
forward this Information Statement to the beneficial owners of the Common Stock
and Series 3 Preferred Stock held of record by such persons and will reimburse
such persons for out-of-pocket expenses incurred in forwarding such materials.
THE AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION HAS BEEN
APPROVED BY THE STOCKHOLDERS WHO HOLD SUFFICIENT VOTING SECURITIES TO APPROVE
THE ACTION. THIS INFORMATION STATEMENT IS BEING PROVIDED TO YOU SOLELY FOR YOUR
INFORMATION. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY.
The executive offices of the Company are located at 5000 Plaza on the Lake,
Suite 200, Austin, Texas 78746. All holders of Common Stock and Series 3
Preferred Stock of record at the close of business on , 1997 will
receive this Information Statement.
2
<PAGE> 4
VOTING SECURITIES
The Board of Directors has fixed the close of business on ,
1997 as the record date (the "Record Date") for the determination of
stockholders entitled to vote with respect to stockholder authorization of the
Charter Amendment. As of the Record Date, the outstanding voting securities of
the Company were 30,799,560 shares of Common Stock and 12,550 shares of Series 3
Preferred Stock. Each stockholder was entitled to one vote for each share of
Common Stock and one vote for each shares of Series 3 Preferred Stock held on
the Record Date. The consent of the holders of a majority of the outstanding
shares of Common Stock and Series 3 Preferred Stock, voting as a class, a
majority of the holders of the outstanding shares of Common Stock, voting as a
class, and three quarters ( 3/4ths) of the outstanding shares of Series 3
Preferred Stock, voting as a class, was necessary to authorize the Charter
Amendment.
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
All directors and executive officers of
IXC Communications as a group (11
persons)(17)............................ 1,020.58 8.1 14,568,917 47.0
</TABLE>
3
<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 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. 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.
(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. Mr.
Vent became an executive officer of the Company effective April 1, 1997.
(11) Such shares are held by Trust for the Riordan & McKinzie Profit Sharing
and Savings Plan for the benefit of Carl W. McKinzie.
4
<PAGE> 6
(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.
(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.
AMENDMENT OF THE RESTATED CERTIFICATE TO PERMIT
PAYMENT OF DIVIDENDS ON THE CONVERTIBLE PREFERRED STOCK
WITH ADDITIONAL SHARES OF CONVERTIBLE PREFERRED STOCK
The Board of Directors and the holders of a majority of the outstanding
shares of the Common Stock and three-fourths ( 3/4ths) of the outstanding shares
of the Series 3 Preferred Stock approved the Charter Amendment. The complete
text of the Charter Amendment is set forth in Appendix A to this Information
Statement; however, such text is subject to change as may be required by the
Delaware Secretary of State. The Charter Amendment provides that the Company may
pay dividends on its Convertible Preferred Stock with additional shares of
Convertible Preferred Stock. Upon filing of the Charter Amendment with the
Delaware Secretary of State, the Charter Amendment will be effective (the
"Effective Date").
The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock, par value $.01 per share, and 3,000,000 shares of Preferred Stock,
par value $.01 per share (the "Preferred Stock") of which 12,550 shares have
been designated as Series 3 Preferred Stock, 2,000 shares have been designated
as Series 1 Preferred Stock and 1,400,000 shares have been designated as
Convertible Preferred Stock. All of the 12,550 shares of Series 3 Preferred
Stock are issued and outstanding, all of the previously outstanding shares of
Series 1 Preferred Stock have been redeemed and 1,000,000 shares of the
Convertible Preferred Stock are issued and outstanding.
The rights, privileges and preferences of the Series 3 Preferred Stock and
the Convertible Preferred Stock are set forth in the Restated Certificate and
the Company's Certificate of Designation of the Powers, Preferences and Relative
Participating, Optional and Other Special Rights of 7 1/4% Junior Convertible
Preferred Stock Due 2007 and Qualifications, Limitations and Restrictions
Thereof (the "Certificate of Designation"). Descriptions of the Series 3
Preferred Stock and the Convertible Preferred Stock herein do not purport to be
complete and are subject to, and qualified in their entirety by reference to,
the Restated Certificate, the Bylaws of the Company and the Certificate of
Designation.
On April 1, 1997, the Company issued and sold 1,000,000 shares of
Convertible Preferred Stock 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 of 1933, as
amended). 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
5
<PAGE> 7
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. After March 31, 1999, to the
extent and for so long as the Company is not permitted to pay cash dividends on
the Convertible Preferred Stock by the terms of any then outstanding
indebtedness or any other agreement or instrument to which the Company is
subject, the Company will be required to pay dividends, which shall accrue at
the rate per annum of 8 3/4%, through the issuance of additional shares of
Convertible Preferred Stock. On April 1, 1997, each of GEPT (the beneficial
owner of greater than five percent of the Company's Common Stock and Series 3
Preferred Stock), Mr. Swett (the Company's Chairman of the Board, President and
Chief Executive Officer and beneficial owner of greater than five percent of the
Company's Common Stock), Mr. Guthrie (an Executive Vice President of the
Company) and Mr. Irwin (a director of the Company and beneficial owner of
greater than five percent of the Company's Common Stock and Series 3 Preferred
Stock) acquired an aggregate of 300,000 shares, 3,500 shares, 1,000 shares and
6,000 shares of Convertible Preferred Stock, respectively, and each such person
or entity may receive any dividends in connection with the Convertible Preferred
Stock owned by such person or entity in additional shares of Convertible
Preferred Stock.
The holders of Series 3 Preferred Stock are entitled to receive annual
dividends, subject to the limitations of the Restated Certificate and in the
indenture for the Senior Notes, in an amount equal to $100 per share, plus an
amount determined by applying a 10% annual rate compounded annually, to any
accrued but unpaid dividend amount from the last day of the period when such
dividend accrues to the actual date of payment. Cumulative dividends, including
accrued but unpaid interest, with respect to the Series 3 Preferred Stock, as of
December 31, 1996, were approximately $6.5 million.
The Restated Certificate, as in effect immediately prior to the Effective
Date, prohibits the payment of dividends on the Convertible Preferred Stock with
cash or with additional shares of Convertible Preferred Stock until all accrued
and unpaid dividends on the Series 3 Preferred Stock (approximately $6.5 million
at December 31, 1996) have been paid in cash. After the Effective Date, the
Company may pay dividends on its Convertible Preferred Stock with additional
shares of Convertible Preferred Stock. The Board of Directors approved the
Charter Amendment to allow the Company to have the option to pay dividends which
accrue on the Convertible Preferred Stock with additional shares of Convertible
Preferred Stock in order to satisfy its obligations under the Certificate of
Designation. Payment of cash dividends on the Convertible Preferred Stock will
still require that the Company pay in full cash dividends on the Series 3
Preferred Stock. As long as at least 200,000 shares of Convertible Preferred
Stock remain outstanding, in the event payments of dividends on the Convertible
Preferred Stock are in arrears for an aggregate of six quarterly dividend
payments, the holders of a majority of the outstanding shares of Convertible
Preferred Stock (together with holders of other series of preferred stock having
similar rights) will be entitled to elect two directors to the Board of
Directors until such time as all dividend arrearages have been paid.
By Order of the Board of Directors
JEFFREY C. SMITH
Secretary
Austin, Texas
, 1997
6
<PAGE> 8
APPENDIX A
Form of Amended Section D.1(a) of Article ELEVENTH of the Restated
Certificate of Incorporation, as amended (with amended language in italics).
1. Dividends.
(a) The holders of shares of Series 1 Preferred Stock then
outstanding shall be entitled to receive, prior to the payment of any
dividend on any other Preferred Stock of the Corporation or the Common
Stock of the Corporation, when, as and if declared by the Board, out of
funds legally available for the payment of dividends, cumulative dividends
in an annual amount equal to $100 per share, plus an amount determined by
applying a 10% annual rate, compounded annually, to any accrued but unpaid
dividend amount from the last day of the period when such dividend accrues
to the actual date of payment of such dividend, and no more. The holders of
shares of Series 3 Preferred Stock then outstanding shall be entitled to
receive, prior to the payment of any dividend on any other Preferred Stock
of the Corporation (other than the Series 1 Preferred Stock) or the Common
Stock of the Corporation, when as and if declared by the Board, out of
funds legally available for the payment of dividends, cumulative dividends
in an annual amount equal to $100 per share, plus an amount determined by
applying a 10% annual rate, compounded annually, to any accrued but unpaid
dividend amount from the last day of the period when such dividend accrues
to the actual date of payment of such dividend, and no more; provided,
however, that the Corporation may pay dividends on the Corporation's 7 1/4%
Junior Convertible Preferred Stock due 2007 ("Convertible Preferred Stock")
with additional shares of Convertible Preferred Stock. Such dividends on
the outstanding shares of Series Preferred Stock shall be payable on such
date as the Board may from time to time determine (each such date being a
"dividend payment date"). The Board may fix a record date for the
determination of holders of shares of Series Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall not
be more than sixty (60) days prior to the date fixed for the payment
thereof. Each such annual dividend shall be fully cumulative and shall
accrue from day to day (whether or not declared) from the first day of each
period in which such dividend may be payable as herein provided, except
that the first annual dividend with respect to each share of Series
Preferred Stock shall accrue from the Original Issue Date of such share or
such other date as determined by the Board, except that dividends with
respect to each share of Series 3 Preferred Stock shall accrue from August
14, 1992. Dividends, when, as and if declared, shall be payable in cash.
A-1
