GENERAL COMMUNICATION INC, DEF 14A, 1995-04-28

GENERAL COMMUNICATION INC
DEF 14A, 1995-04-28
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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GENERAL COMMUNICATION, INC.
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503
(907) 265-5600

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 1995

This Proxy Statement is submitted with the Notice of Annual Meeting of
Shareholders of General Communication, Inc. ("Company") to be held in the Denali
Ballroom of the Regal Alaskan Hotel at 4800 Spenard Road, Anchorage, Alaska at
6:00 p.m. (Alaska Daylight Time) on Tuesday, June 20, 1995 ("Meeting"). This
Proxy Statement, the letter to shareholders, Notice of Meeting, and the
accompanying Proxy are first being sent or delivered to shareholders of the
Company on or about April 28, 1995. A copy of the Company's Annual Report in the
form of a Form 10-K for the year ended December 31, 1994 accompanies this Proxy
Statement. See "ANNUAL REPORT".

DATED: April 28, 1995

<PAGE>

TABLE OF CONTENTS

PAGE

SOLICITATION OF PROXIES 3

OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS 3

MATTERS TO BE ACTED UPON AT THE MEETING 4

1. DIRECTOR ELECTIONS 4

2. AMENDMENT OF THE STOCK OPTION PLAN 18

3. OTHER BUSINESS 21

SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT 21

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 26

LITIGATION AND REGULATORY MATTERS 28

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS 28

ANNUAL REPORT 28

SUBMISSION OF SHAREHOLDER PROPOSALS 28

<PAGE>

SOLICITATION OF PROXIES

The accompanying form of Proxy is being solicited on behalf of the board of
directors of the Company ("Board") for use at the Meeting.

Subject to the conditions described in this section, the shares represented
by each Proxy executed in the accompanying form of Proxy will be voted at the
Meeting in accordance with the instructions in that Proxy. The Proxy will be
voted for management's nominees for directors as a classified board and as
otherwise specified in the Proxy, unless a contrary choice is specified.

A Proxy executed in the form enclosed may be revoked by the person signing
the Proxy at any time before the authority thereby granted is exercised by
giving written notice to the Secretary of the Board or by a duly executed Proxy
bearing a later date.

The expenses of this Proxy solicitation made by the Board for the Meeting,
including the cost of preparing, assembling and mailing the Notice of Meeting,
Proxy, Proxy Statement, and return envelopes, the handling and tabulation of
Proxies received, and charges of brokerage houses and other institutions,
nominees or fiduciaries for forwarding such documents to beneficial owners, will
be paid by the Company. In addition to the mailing of these proxy materials,
solicitation may be made in person or by telephone, telecopy, or telegraph by
officers, directors, or regular employees of the Company, none of whom will
receive additional compensation for that effort.

OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS

Outstanding Voting Securities

The holders of common stock of the Company ("Shareholders") as of the close
of business on April 21, 1995 ("Record Date") will be entitled to notice of, and
to vote at, the Meeting. As of the Record Date, the common stock of the Company
was divided into two classes: (1) Class A common stock for which the holder of a
share is entitled to one vote; and (2) Class B common stock, for which the
holder of a share is entitled to ten votes. On the Record Date, there were
19,543,002 shares of Class A common stock and 4,177,520 shares of Class B common
stock outstanding and entitled to be voted at the Meeting.

Voting Rights

Except as otherwise provided by applicable law or the Company's Revised
Articles of Incorporation, at any meeting of the Shareholders, a simple majority
of the issued and outstanding common stock of the Company entitled to be voted
as of the Record Date will constitute a quorum. As an example, since there were
a total of 19,543,002 shares of Class A and 4,177,520 shares of Class B common
stock issued and outstanding and entitled to be voted as of the Record Date, a
quorum would be established by the presence, in person or by proxy, of at least
7,682,742 shares of Class A common stock and all 4,177,520 shares of Class B
common stock. Because of the ten-for-one voting power of the Class B common
stock, shares of that stock have a more substantial impact on the voting power
for purposes of taking votes on matters addressed at the Meeting. The total
number of votes to which Class A common stock and Class B common stock were
entitled as of the Record Date were 19,543,002 and 41,775,200, respectively.

Adoption of the Meeting agenda items pertaining to the election of
directors and the amendments to the employee benefit plan will require an
affirmative vote of the holders of at least a simple majority of voting power of
the issued and outstanding Class A common stock of the Company and Class B

<PAGE>
common stock of the Company entitled to be voted as of the Record Date. The
Company's Revised Articles of Incorporation expressly provide for non-cumulative
voting in the election of directors.

All votes cast by holders of common stock of the Company as of the Record
Date, in person or by Proxy completed and executed in accordance with the
instructions on the Proxy, will be counted at the Meeting. A Proxy having one or
more clearly marked abstentions or having no indication of vote on one or more
of the proposals to be addressed at the Meeting will be honored as an abstention
or non-vote, respectively. However, such a Proxy will be counted for purposes of
establishing a quorum at the Meeting.

As of the Record Date, the percentage of outstanding shares entitled to
vote held by directors and executive officers of the Company and their
affiliates was approximately 42.4% for the Class A common stock and
approximately 60.7% for the Class B common stock. See, "SHAREHOLDINGS OF
PRINCIPAL SHAREHOLDERS AND MANAGEMENT."

MATTERS TO BE ACTED UPON AT THE MEETING

General

As indicated in the Notice of Meeting, the following matters will be
considered and voted upon at the Meeting:

(1) Election of two directors in Class III of the classified Board,
each for three year terms, and election of one director to complete the one
remaining year of the three year term in Class I of the Board;

(2) Amendment of the Stock Option Plan; and

(3) Transaction of such other business as may properly come before the
Meeting and any adjournment or adjournments of the Meeting ("Other Business").

1. DIRECTOR ELECTIONS

General

The Board is classified into three classes: Class I, Class II, and
Class III, with three, two, and two members per class, respectively.

On July 23, 1994 Messrs. Gerald H. Taylor (Class I) and Daniel M. Dennis
(Class III) tendered their respective letters of resignation from the Board for
personal reasons unrelated to the operation of the Company. On that date the
Board appointed Messrs. John W. Gerdelman and James M. Schneider to fill the
respective remaining terms of Messrs. Taylor and Dennis. Messrs. Gerdelman and
Schneider are individuals recommended by MCI pursuant to the Voting Agreement
described further elsewhere in this Proxy Statement. See, "SHAREHOLDINGS OF
PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Principal Shareholders, Changes in
Control - Voting Agreement."

At the Meeting two individuals will be elected to positions in Class III of
the Board for three year terms. In addition one individual will be elected to
complete the remaining year of the three year term in Class I of the Board
vacated with the resignation of Mr. Taylor. The individuals so elected will
serve subject to the provisions of the Bylaws and until the election and
qualification of their respective successors.
<PAGE>

Management believes that its proposed nominees for election as
directors are willing to serve as such, and it is intended that the proxy
holders named in the accompanying form of Proxy or their substitutes will vote
for the election of these nominees unless specifically instructed to the
contrary. However, if any nominee at the time of the election is unable or
unwilling or is otherwise unavailable for election and as a consequence, other
nominees are designated, the proxy holders named in the Proxy or their
substitutes will have discretion and authority to vote or refrain from voting in
accordance with their judgment with respect to other nominees.

Business Background of Directors, Nominees,
and Executive Officers of the Company

The nominees proposed by management for election at the Meeting as
directors are as follows: (1) in Class I of the Board -- John W. Gerdelman; and
(2) in Class III of the Board -- Donne F. Fisher and James M. Schneider. Further
information with respect to these nominees and all directors is set forth in the
following table as of the Record Date. In addition, similar information is
provided for executive officers of the Company. All executive officers are
elected for annual terms, subject to their earlier death, resignation or removal
in accordance with the Articles and Bylaws, until their successors are chosen
and qualify. There are no family relations of first cousin or closer, among the
persons named in the table, by blood, marriage, or adoption. During the past
five years, none of the persons named in the table has had any involvement in
such legal proceedings as would be material to an evaluation of that person's
integrity or ability to serve.

DIRECTORS, NOMINEES, AND EXECUTIVE OFFICERS OF THE COMPANY

Name Age Positions, Business Experience
<S> <C> <C>

Ronald A. Duncan 1 42 Director, President and Chief Executive Officer of
the Company since January 1, 1989. Prior to that,
Mr. Duncan was the Executive Vice President and a
director of the Company from 1979 through December,
1988.

Donne F. Fisher 1 56 Nominee. Director of the Company since 1980. Mr.
Fisher has been Treasurer of Tele-Communications,
Inc. ("TCI") since 1970, a director of TCI since
1980, was named Executive Vice President of TCI in
December, 1991, and has been a Senior Vice President
of TCI since 1982. In March, 1992, he was named an
executive officer of TCI's Office of Chief Executive
Officer. Mr. Fisher also serves as Vice President,
Treasurer and Chief Financial Officer of most of
TCI's subsidiaries. TCI is a cable television
company which owns and operates cable television
systems primarily located in the United States.

John W. Gerdelman 1 42 Nominee. Director of the Company since July, 1994.
Mr. Gerdelman has been President, Network Services
for MCI Telecommunications Corporation, a wholly
owned subsidiary of MCI Communications Corporation
("MCI") in Washington, D.C., since September, 1994.
Prior to that, he was Senior Vice President for MCI
Telecommunications Corporation from July, 1992 to
September, 1994. Prior to that, he was President of
MCI Services, Inc. in Sergeant Bluff, Iowa from July,
1989 to July, 1992. MCI through its subsidiaries
provides telecommunication and related services
throughout the country and internationally.
<PAGE>

Carter F. Page 1 63 Director and Chairman of the Board of the Company
since 1980. From December, 1987 to December, 1989,
Mr. Page served as a consultant to WestMarc
Communications, Inc., a wholly owned subsidiary of
TCI ("WSMC"), in matters related to the Company. He
served as President and director of WSMC from 1972 to
December, 1987. Since then and to the present, he has
been managing general partner of Semaphore Partners,
a general partnership and investment vehicle in the
communications industry.

Larry E. Romrell 1 55 Director of the Company since 1980. Mr. Romrell has
been an Executive Vice President of TCI since 1994
and Senior Vice President of TCI since 1991, is the
President of WSMC, and has been employed by WSMC in
various capacities from 1961.

James M. Schneider 1 42 Nominee. Director of the Company since July, 1994.
Mr. Schneider has been Senior Vice President Finance
Consumer Markets for MCI Telecommunications
Corporation in Washington, D.C. since November,
1993. Prior to that, he was Corporate Headquarters
Controller for MCI from September, 1993 to November,
1993. Prior to that, Mr. Schneider was with the
accounting firm of Price Waterhouse from 1973 to
September, 1993 and was a partner in that firm from
October, 1983 to September, 1994.

Robert M. Walp 1 67 Director, Vice Chairman of the Company since January
1, 1989. Prior to that, Mr. Walp served as President
and Chief Executive Officer and a Director of the
Company from 1979.

William C. Behnke 37 Senior Vice President Marketing and Sales for the
Company since January, 1994. Prior to that Mr.
Behnke was Vice President of the Company and
President of GCI Network Systems, Inc. ("GNS") from
February, 1992 to January, 1994 when GNS, a
subsidiary of GCI Communication Corp. (a wholly owned
subsidiary of the Company, "GCC"), was merged into
GCC. Prior to that, he was Vice President of the
Company and General Manager of GNS from June, 1989 to
February, 1992. Prior to that, he was Senior Vice
President for Transalaska Data Systems, Inc. from
August, 1984 to June, 1989.

Richard P. Dowling 51 Senior Vice President - Corporate Development for the
Company since December, 1990. Prior to that, Mr.
Dowling was Senior Vice President-Operations and
Engineering for the Company from December, 1989 to
December, 1990. Prior to that he was Vice
President-Operations and Engineering for the Company
from 1981 to December, 1989.

G. Wilson Hughes 49 Executive Vice President and General Manager of the
Company since June, 1991. Prior to that, Mr. Hughes
was President and a member of the board of directors
of Northern Air Cargo, Inc. from March, 1989 to June,
1991. Prior to that, he was President and a member
of the board of directors of Enserch Alaska Services,
Inc. from June, 1984 to December, 1988.
<PAGE>

John M. Lowber 45 Senior Vice President and Chief Financial Officer for
the Company since December, 1989. Prior to that, Mr.
Lowber was Vice President-Administration for the
Company from 1985 to December, 1989. He has been
Chief Financial Officer for the Company since
January, 1987 and Secretary/Treasurer of the Company
since July, 1988. Prior to joining the Company, Mr.
Lowber was a senior manager at KPMG Peat Marwick.

Dana L. Tindall 33 Senior Vice President-Regulatory Affairs since
January, 1994. Prior to that Ms. Tindall was Vice
President-Regulatory Affairs for the Company from
January, 1991 to January, 1994. Prior to that, she
was Director Regulatory Affairs for the Company from
October, 1989 through December, 1990, and prior to
that she was Manager Regulatory Affairs for the
Company from 1985 to October, 1989.

<FN>

1 Messrs. Gerdelman, Page, and Walp were, as of the Record Date, Class I
directors whose terms will expire at the time of the 1996 annual shareholder
meeting. Messrs. Duncan and Romrell were, as of the Record Date, Class II
directors whose terms will expire at the time of the 1997 annual shareholder
meeting. Messrs. Fisher and Schneider were, as of the Record Date, Class III
directors whose terms will expire at the time of the Meeting.
</FN>
</TABLE>

In addition, one of the directors, Mr. Fisher, serves on the boards of
directors of most of TCI's subsidiaries.

Remuneration of Directors and Executive Officers

Summary Compensation. The following table sets forth a summary of the
compensation paid by the Company to its chief executive officer for services in
all capacities for each of the years ended December 31, 1992, 1993, and 1994,
respectively. It also sets forth similar information for the four most highly
compensated executive officers of the Company aside from the chief executive
officer rendering services to the Company and its subsidiaries, whose aggregate
salary and bonuses exceeded $100,000 for the year ended December 31, 1994 (Mr.
Duncan and these four executive officers, collectively, "Named Executive
Officers").

SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Other Annual Restricted Underlying All Other
Name & Compensa- Stock Options/SARs LTIP Compen-
Principal Salary 1 Bonus 1 tion 2,3 Awards (#) Payouts 4 sation 5
Position Year ($) ($) ($) ($) $) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Ronald A. Duncan 1994 89,550 99,960 41,322 -0- -0- -0- 110,400
President and Chief Exec. 1993 89,550 27,830 536,970 -0- -0- -0- 103,500
Officer 6 1992 91,021 60,000 40,820 -0- 200,000 -0- -0-

William C. Behnke 1994 190,168 136,194 90,049 -0- -0- -0- -0-
Senior Vice President, 1993 90,000 41,900 64,569 -0- -0- -0- -0-
Marketing and Sales 7 1992 90,000 35,600 116,612 -0- -0- -0- -0-

Richard P. Dowling 1994 110,002 81,417 764,413 -0- -0- -0- -0-
Senior Vice President, 1993 109,327 24,155 349,779 -0- -0- -0- -0-
Corporate Development 8 1992 89,011 40,000 5,064 -0- 150,000 -0- -0-

G. Wilson Hughes 1994 150,003 89,698 15,843 -0- -0- -0- 61,059
Executive Vice President 1993 149,547 31,666 9,342 -0- -0- -0- 58,074
and General Manager 9 1992 135,624 40,000 8,902 -0- -0- -0- 52,795

John M. Lowber 1994 125,514 117,757 12,814 -0- -0- -0- 65,000
Senior Vice President, 1993 125,000 32,746 177,792 -0- -0- -0- 65,000
Administration, Chief 1992 104,615 130,000 10,691 -0- 150,000 -0- 32,500
Financial Officer,
Secretary/Treasurer 10

<FN>

1 Amounts shown include cash and non-cash compensation earned and received by
executive officers as well as amounts earned but deferred at the election of
those officers, including employee base salary and contributions to the Stock
Purchase Plan (included in column (c) of this table) and bonuses (included in
column (d) of this table). Does not include Company contributions to the Stock
Purchase Plan for the account of the participating employee (included in column
(e) of this table). Does not include value of options granted as shown in column
(g) of this table in that they were not in-the-money at the time of grant. Mr.
Lowber was as of December 31, 1994, the only employee of the Company. The other
individuals named in this table were as of that date employees of GCC.
Management of the Company anticipated that this arrangement would continue under
current financing arrangements with its Senior Lender. See, "SHAREHOLDINGS OF
PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Change of Control - Pledges of Stock of
Subsidiaries."

2 Perquisites and other personal benefits, securities and property for each
Named Executive Officer did not exceed the lesser of either $50,000 or 10% of
the total of annual salary and bonus reported for that individual.

3 During the years ended December 31, 1992 through 1994, Messrs. Duncan,
Dowling, Lowber, and Hughes participated in the Company's Stock Purchase Plan
through which those persons contributed funds under a payroll deduction
arrangement, and the Company matched those contributions on a dollar-for-dollar
<PAGE>

basis. The contributions by the Company were made to all employees of the
Company and its subsidiaries who participated in the plan, including the
identified persons. Contributions identified in this column (e) are those of the
Company to the plan only, a portion or all of which was used to purchase common
stock of the Company in the name of the plan and for the benefit of the
respective participants in the plan, with the balance of such Company
contributions, if any, held in separate accounts along with employee
contributions for the benefit of the participants in the plan for future
purchases of stock. All securities were purchased or otherwise acquired at fair
market value on the date of purchase or acquisition. See, "MATTERS TO BE ACTED
UPON AT THE MEETING - 1. DIRECTOR ELECTIONS: Remuneration of Directors and
Executive Officers - Stock Purchase Plan."

4 The Company had no long term incentive plan during the three-year period end-
ed December 31, 1994.

5 All incidental compensation to each Named Executive Officer did not for the
years ended December 31, 1992 through 1994, exceed the lesser of $50,000 or 10%
of total annual salary and bonus reported for the officer.

6 For 1994, column (e) includes prepaid portion of salary for 1995 of $30,000.
For 1993, column (e) includes the value of options exercised (income derived),
calculated as the fair market value less the exercise price of the options at
$1.25 per share for 247,947 shares of Class A common stock granted in April,
1988, in the amount of $495,894 and includes prepaid portion of salary for 1994
of $30,000. For 1992, column (e) includes prepaid portion of salary for 1993 of
$30,000.

For 1993 and 1994, column (i), includes the deferred compensation agreement
entered into between Mr. Duncan and the Company dated August 13, 1993 ("Second
Duncan Deferred Compensation Agreement"). Under the Second Duncan Deferred
Compensation Agreement, the Company is to pay to Mr. Duncan deferred
compensation in an amount not to exceed $625,000 plus interest in addition to
the regular compensation he now earns or may in the future earn. This deferred
compensation is to be credited to Mr. Duncan each July 1 that he is employed by
the Company in amounts as follows:

Year Amount
1993 $100,000
1994 100,000
1995 125,000
1996 150,000
1997 150,000
Total $625,000

The full amount of deferred compensation plus accrued interest will be
due and payable to Mr. Duncan upon the termination of his employment with the
Company, provided that, should he voluntarily terminate his employment or his
employment is terminated for cause, only that portion of the deferred
compensation credited as of the December 31 immediately preceding that
termination plus interest will be due and payable and the remainder of the
deferred compensation will be canceled. No compensation was received by Mr.
Duncan under this agreement during the years ended December 31, 1993 or 1994.

7 For 1994, column (e) includes the value of options exercised (income derived),
calculated as the fair market value less the exercise price of the options at
$.001 per share for 17,500 shares of Class A common stock granted in June, 1989
in the amount of $89,983. For 1993, column (e) includes the value of options
exercised (income derived), calculated as the fair market value less the
exercise price of the options at $.001 per share for 15,000 shares of Class A
common stock granted in June, 1989 in the amount of $64,516. For 1992, column
(e) includes the value of options exercised (income derived), calculated as the
fair market value less the exercise price of the options at $.001 per share for
69,113 shares of Class A common stock granted in June, 1989, in the amount of
$116,559.

8 For 1994, column (e) includes the value of options exercised (income derived),
calculated as the fair market value less the exercise price of the options at
$.0005 per share for 160,297 shares of Class A and 74,028 shares of Class B
common stock granted in September, 1985, in the amount of $761,442. For 1993,
column (e), includes the value of options exercised (income derived), calculated
as the fair market value less the exercise price of the option at $0.0005 per
share for 106,862 shares granted in September, 1985, in the amount of $347,246.
For 1992, column (e), includes the following: (1) the Company's contribution to
the Stock Purchase Plan for the benefit of Mr. Dowling of $2,563; and (2) the
value of options exercised (income derived), calculated as the fair market value
less the exercise price of the options at $.75 per share for 2,075 shares
granted in 1987, in the amount of $2,334.

9 For 1994, column (e) includes the Company's contributions to the Stock Pur-
chase Plan for the benefit of Mr. Hughes in the amount of $15,000.

<PAGE>
For 1993, column (e) includes the Company's contributions to the Stock
Purchase Plan for the benefit of Mr. Hughes in the amount of $8,994.

For 1992, column (e), includes the Company's contribution to the Stock
Purchase Plan for the benefit of Mr. Hughes of $8,728.

For 1992 through 1994, column (i), amount accrued through a deferred
compensation agreement entered into between Mr. Hughes and the Company dated
April 30, 1991 ("Hughes Deferred Compensation Agreement") during and for the
years ended December 31, 1992, 1993, and 1994. The Company entered into the
Hughes Deferred Compensation Agreement, a five year deferred bonus agreement,
with Mr. Hughes dated April 30, 1991. Under the Hughes Deferred Compensation
Agreement, Mr. Hughes will receive deferred compensation of $50,000 per year
accrued annually on December 31 of each year of the agreement. The agreement
further provides that accumulated balances on Mr. Hughes deferred compensation
will accrue interest at 10% per year, compounded annually. The agreement
provides that after five years, or upon termination of his employment with the
Company, Mr. Hughes may elect to have the full balance of the deferred
compensation paid in cash, in a lump sum or in monthly installments for up to
ten years. The agreement provides that in the event of a deferred payment, the
residual balance will continue to accrue interest. Interest accrued under the
agreement in the amounts of $2,795, $8,074, and $11,059 during the years ended
December 31, 1992, 1993, and 1994, respectively. The agreement is part of an
employment agreement described further elsewhere in this section. See
"Employment Contracts and Termination of Employment and Change of Control
Arrangements."

10 For 1994, column (e) includes $11,844 of Company matching contributions
pursuant to the Company's Stock Purchase Plan. For 1993, column (e), includes
the value of options exercised (income derived), calculated as the fair market
value less the exercise price of the option at $1.00 per share for 75,000 shares
granted in April, 1988, in the amount of $168,750. For 1992, column (e),
includes the Company's contributions to the Stock Purchase Plan for the benefit
of Mr. Lowber of $8,728.

For 1992, 1993 and 1994, column (i), the amount accrued through the
Lowber Deferred Compensation Agreement ("Lowber Deferred Compensation
Agreement") during and for the years ended December 31, 1992 through 1994,
respectively. The Company entered into the Lowber Deferred Compensation
Agreement providing for deferred compensation of $65,000 per year in each year
of a seven year term and accruing annually on July 1 of each year of the term,
the proceeds of which were used to purchase a life insurance policy which has
been collaterally assigned to the Company to the extent of premiums paid by the
Company. At the earlier of termination of employment or upon election by Mr.
Lowber subsequent to the end of the seven year term of the agreement, the
collateral assignment will be terminated with the Company. The agreement
provides that if Mr. Lowber leaves the employment of the Company voluntarily, he
will lose the unvested portion of the compensation. The Lowber Deferred
Compensation Agreement is a part of Mr. Lowber's employment agreement with the
Company described further elsewhere in this section. See, "MATTERS TO BE ACTED
UPON AT THE MEETING - 1. DIRECTOR ELECTIONS: Compensation Committee Report on
Executive Compensation."
</FN>
</TABLE>

Option/SAR Grants. There were no individual grants of stock options
(including ones in tandem with stock appreciation rights) or full standing stock
appreciation rights made by the Company to its Named Executive Officers during
the Company's fiscal year end December 31, 1994.

Aggregated Option/SAR Exercises and Year-End Option/SAR Value. The
following table sets forth information concerning each exercise of stock options
during the year ended December 31, 1994, by each of the Named Executive Officers
and the fiscal year-end value of unexercised options. There were no tandem SARs
or freestanding SARs associated with the Company during this period.

<PAGE>

<TABLE>

AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUE TABLE

(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
at FY-End (#) FY-End ($) 1,2
Shares Acquired Value Realized
on Exercise ($) 1 Exercisable/ Exercisable/
Name (#) Unexercisable Unexercisable

Ronald A. Duncan -0- -0- 50,000/150,000 43,750/131,250
William C. Behnke 17,500 89,983 150,190/45,000 416,891/39,375
Richard P. Dowling 234,325 761,442 37,500/112,500 39,812/98,438
G. Wilson Hughes -0- -0- 150,000/100,000 318,750/212,500
John M. Lowber -0- -0- 137,500/112,500 345,313/98,438

<FN>

1 The dollar values in columns (c) and (e) of the table are calculated by
determining the difference between the fair market value of the securities
underlying the options and the exercise price of the options at exercise or
fiscal year-end, respectively.

2 An option is "in-the-money" if the fair market value of the underlying
securities exceeds the exercise price of the option.
</FN>
</TABLE>

Long-Term Incentive Plan Awards. The Company had no long-term incentive
plan in operation during the year ended December 31, 1994.

Stock Purchase Plan. The Company adopted the Qualified Employee Stock
Purchase Plan in December, 1986, and the plan has subsequently been amended
several times by shareholder and board of director action ("Stock Purchase
Plan"). The Stock Purchase Plan is qualified under Section 401 of the Internal
Revenue Code of 1986. The plan has been allocated 2.4 million shares of Class A
and 240,000 shares of Class B common stock of the Company for issuance to or
acquisition by the plan. Of those amounts, as of the Record Date, 816,851 shares
of Class A and 82,762 shares of Class B common stock remain available for
issuance or acquisition by the plan.

The Stock Purchase Plan permits each employee of the Company, each
employee of a subsidiary of the Company, and each employee of a subsidiary of a
subsidiary of the Company, who has completed one year of service and is at least
21 years of age to elect to participate in it. Eligible employees may elect to
reduce their compensation in any even dollar amount up to 10% of such
compensation through contributions to the plan up to a maximum of $9,240 for
<PAGE>
1995. This limit is adjusted annually based upon inflation, at the direction of
the Internal Revenue Service. An eligible employee may contribute up to 10% of
the employee's compensation with after-tax dollars, or the employee may elect a
combination of salary reductions and after-tax contributions.

The Company may under the plan match employee salary reductions and
after tax contributions in any amount up to 100% as elected by the Company each
year. However, no more than 10% of any one employee's compensation will be
matched in any year. The combination of salary reductions, after tax
contributions, and Company matching contributions cannot exceed 25% of any
employee's compensation (determined after salary reduction) for any year. The
Company's contributions will vest over six years. The employees' and the
Company's contributions are invested primarily in common stock of the Company.

The Stock Purchase Plan is administered through a plan committee whose
chair is the plan administrator. The assets of the plan are invested from time
to time by the plan administrator under the direction of the trustee which as of
the Record Date was the Board. As of the Record Date, the plan administrator was
Alfred J. Walker. The plan administrator and members of the committee were all
employees of the Company or its subsidiaries. The plan administrator and
committee members are appointed by the Board. The committee has broad
administrative discretion under the terms of the plan.

The purpose of the Stock Purchase Plan is to provide employees of the
Company, its subsidiaries, and their subsidiaries a convenient means of
investing in the Company. The plan provides an incentive to employees as
shareholders of the Company to redouble their efforts to make the Company
successful and thereby increase the value of their investments. Through
discretionary contributions by the Company to the plan which in turn increase
the stock ownership in the Company by participants in the plan, the plan
provides further incentive to employees of the Company.

Stock Option Plan. The Company adopted its 1986 Stock Option Plan in
December, 1986, and the plan has subsequently been amended several times by
shareholder and board of directors action ("Stock Option Plan"). The Stock
Option Plan is a non-qualified plan under the Internal Revenue Code of 1986.

The Stock Option Plan has been allocated 2,350,000 shares of Class A
common stock of the Company to be subject to options granted under the plan and
further subject to adjustment upon the occurrence of stock dividends, stock
splits, mergers, consolidations, or certain other changes in corporate structure
or capitalization. Of that amount, as of the Record Date, 109,553 shares of that
stock remained available for subsequent granting of options under the plan.

Through the Stock Option Plan, the Company acting through its board of
directors may provide special incentives to officers, non-employee directors,
and other key employees by offering them an opportunity to acquire an equity
interest in the Company. An option granted under the Stock Option Plan may have
an option exercise price less than, equal to, or greater than the fair market
value on the date of grant of the option. Options granted pursuant to the Stock
Option Plan are only exercisable if at the time of exercise the option holder is
an employee, or non-employee director, of the Company.

The Stock Option Plan presently provides that no options may be granted
after December 20, 1996, and that all options granted under the Option Plan must
expire not later than ten years after the date of grant. If an option expires or
terminates, the shares subject to the option will be available for future grants
of options under the Stock Option Plan.

The Stock Option Plan is administered by a committee composed of the
Board ("Committee"). Key employees, including officers and directors and
non-employee directors of the Company, are eligible to participate in the plan.
The Committee selects the eligible employees to whom options are granted and,
<PAGE>
subject to the terms of the Stock Option Plan, the number of shares subject to
each option. Subject to the provisions of the Stock Option Plan, the Committee
has broad discretion in administering the plan, and is authorized to determine
the times at which options will be granted and exercisable and the fair market
value of the shares covered by each option at the time of grant, to prescribe
the form evidencing options, to interpret the plan, and to prescribe, amend, and
rescind rules and regulations relating to the plan.

In April, 1993, the Company reregistered the remaining balance of
shares subject to option and shares in reserve and not then subject to option
pursuant to the federal Securities Act of 1933, as amended, for grant through
options by the Stock Option Plan. As of the Record Date there were 1,698,199
shares subject to outstanding options and 109,553 shares in reserve and not
subject to options under the plan.

Compensation To Directors. In July, 1994, each director of the Company
(with the exceptions of Messrs. Schneider and Gerdelman and the persons whom
they replaced on the Board (Messrs. Daniel M. Dennis and Gerald H. Taylor)
received $2,000 in director fees for the 12 month period July, 1994 - June,
1995. Messrs. Schneider, Gerdelman, Dennis, and Taylor as a matter of MCI policy
declined to accept such remuneration for serving on a board outside of MCI and
its subsidiaries. During the year ended December 31, 1994, the directors of the
Company received no other direct compensation for serving in those capacities
but were reimbursed for travel and out-of-pocket expenses incurred in connection
with attendance at meetings of the Board. The same policy was followed during
calendar year 1995 up through the Record Date, and management anticipated that
such policy would continue through the balance of 1995. It is anticipated that
the directors will receive similar director fees in July, 1995 for the 12 month
period July 1995 - June 1996.

Employment Contracts and Termination of Employment and Change
of Control Arrangements

The Company entered into employment agreements with Mr. Hughes in April,
1991 and with Mr. Lowber in July, 1992 and has deferred compensation agreements
with Messrs. Duncan, Hughes and Lowber, the terms of which are described for
Messrs. Hughes and Lowber elsewhere in this Proxy Statement. See footnotes 9 and
10 to the Summary Compensation Table in "MATTERS TO BE ACTED UPON AT THE MEETING
- - - 1. DIRECTOR ELECTIONS: Remuneration of Directors and Executive Officers -
Summary Compensation."

The Company entered into a deferred compensation agreement with Mr.
Duncan in June, 1989 ("First Duncan Deferred Compensation Agreement"). Under the
First Duncan Deferred Compensation Agreement as of June 12, 1989, the Company
credited an account on its books with $325,000 for the benefit of Mr. Duncan as
a deferred bonus for Mr. Duncan's past service to the Company. Amounts in the
account were to accrue interest at 10% per annum unless there was an investment
election by Mr. Duncan to have the balance in the account treated as though it
was invested in the common stock of the Company, In July, 1989, Mr. Duncan made
the investment election, and the Company issued a total of 105,111 shares of
Class A common stock in its name for the benefit of Mr. Duncan. The stock is not
voted. The full amount of the deferred compensation will be due and payable to
Mr. Duncan upon the termination of his employment with the Company. The Company
entered into a Second Duncan Deferred Compensation Agreement with Mr. Duncan as
further described in footnote 6 to the Summary Compensation Table found
elsewhere in this Proxy Statement. See, "MATTERS TO BE ACTED UPON AT THE MEETING
- - - 1. DIRECTOR ELECTIONS: Remuneration of Directors and Executive Officers -
Summary Compensation."

The Hughes' employment agreement provides for base compensation and in
addition deferred compensation of $50,000 per year for five years accruing
interest at 10% per annum, compounded annually. This compensation is tied to
achievement of the Company's cash flow objectives with the opportunity for
significant increases in the level of compensation if the Company exceeds those
objectives. Mr. Hughes has also been granted stock options for 250,000 shares of
Class A common stock at $1.75 per share which will vest over a period of five
<PAGE>
years, but one-half of any remaining unvested portion of the options will be
vested at the option of the Company, should Mr. Hughes' employment with the
Company be terminated by the Company.

The Lowber employment agreement provides for base compensation and in
addition deferred compensation of $450,000 to vest over seven years at the rate
of $65,000 per year, with full vesting to occur should he die, his position in
the Company be terminated, or the Company terminate his employment. In addition,
Mr. Lowber is to receive an annual cash bonus of $30,000 based upon Company and
individual performance. The Company has no employment agreements with the other
Named Executive Officers.

Except as disclosed in this Proxy Statement, as of December 31, 1994
and the Record Date, there were no compensatory plans or arrangements including
payments to be received from the Company with respect to the Named Executive
Officers for the year ended December 31, 1994 where such a plan or arrangement
resulted in or will result from the resignation, retirement, or any other
termination of such individual's employment with the Company or its subsidiaries
or from a change of control of the Company or a change in the individual's
responsibilities following a change in control and where the amount involved,
including all periodic payments or installments, exceeded $100,000.

Report on Repricing of Options/SARs

During the year ended December 31, 1994, the Company did not adjust or
amend the exercise price of stock options or SARs previously awarded to any of
the Named Executive Officers, whether through amendment, cancellation or
replacement grants, or any other means.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is composed of the members of the Board, and
the identity and relationships of the members of the Compensation Committee to
the Company are described elsewhere in this section and in this Proxy Statement.
See, "SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT" and "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS." During the year ended December 31,
1994, both Messrs. Walp and Duncan, executive officers of the Company,
participated in deliberations of the Compensation Committee concerning executive
officer compensation but not including their respective compensations.

Compensation Committee Report on Executive Compensation

In January, 1994, the Board established a compensation committee
composed of all of the members of the Board ("Compensation Committee"). The
Board established the duties of the Compensation Committee as follows:

(1) Preparing, on an annual basis for the review of and action by the
Board, a statement of policies, goals, and plans for executive officer and Board
member compensation, if any, and, specifically a statement of expected
performance and compensation of and the criteria on which compensation is based
for the chief executive officer and such other executive officers of the Company
as the Board may designate for this purpose;

(2) Monitoring the effect of ongoing events on and the effectiveness of
existing compensation policies, goals, and plans, including but not limited to
the status of the premise that all pay systems correlate with the compensation
goals and policies of the Company, and, at its own direction or at the direction
of the Board;
<PAGE>

(3) Monitoring compensation-related publicity and public and private
sector developments on executive compensation;

(4) Familiarizing itself with and monitoring the tax, accounting,
corporate, and securities law ramifications of the compensation policies of the
Company, including but not limited to comprehending a senior executive officer's
total compensation package, its total cost to the Company and its total value to
the recipient, paying close attention to salary, bonuses, individual insurance
and health benefits, perquisites, loans made or guaranteed by the Company,
special benefits to specific executive officers, individual pensions, and other
retirement benefits;

(5) Establishing the overall cap on executive compensation, the meas-
ure of performance for executive officers, either by predetermined measurements
or by a subjective evaluation; and

(6) Striving to make the compensation plans of the Company simple,fair,
and structured so as to maximize shareholder value.

For the year ended December 31, 1994, the duties of the Compensation
Committee in the area of executive compensation specifically included addressing
the reasonableness of compensation paid to executive officers. In doing so, the
committee took into account how compensation compared to compensation paid by
competing companies as well as the Company's performance and available
resources.

The compensation policy of the Company as established by the
Compensation Committee is that a portion of the annual compensation of senior
executive officers relates to and is contingent upon the performance of the
Company. In addition, executive officers participating in deferred compensation
agreements established by the Company are under those agreements unsecured
creditors of the Company.

In January, 1994 prior to the establishment of the Compensation
Committee, the Board established compensation levels for all corporate officers
including the Named Executive Officers but not including the chief accounting
officer, whose compensation was set by management. Also at that time the Board
established structured annual incentive bonus agreements with Mr. Duncan and
with each of several of its executive officers, including Messrs. Behnke,
Dowling, Hughes and Lowber. The agreements included the premise that the
Company's performance, or that of a division or subsidiary, as the case may be,
for purposes of compensation would be measured by the Compensation Committee
against goals established at that time and were reviewed and approved by the
Board. The goals included targets for return on equity or cash flow standards
for the Company or the relevant division or subsidiary. Targeted objectives were
set and measured from time to time by the Compensation Committee. Other business
achievements of the Company obtained through the efforts of an executive officer
were also taken into consideration in the evaluation of performance. Based upon
these factors, the Board awarded incentive bonuses to Mr. Duncan and to other
executive officers in addition to their base compensation, both of which are as
set forth in the Summary Compensation Table found elsewhere in this Proxy
Statement. See, "MATTERS TO BE ACTED UPON AT THE MEETING - 1. DIRECTOR
ELECTIONS: Remuneration of Directors and Executive Officers - Summary
Compensation."

During the year ended December 31, 1994 the Compensation Committee
monitored and provided direction for the Company's Stock Purchase Plan and Stock
Option Plan and issued bonuses to the Named Executive Officers and other
executive officers of the Company and, through coordination with the boards of
directors of its subsidiaries, to the officers of those subsidiaries. In
addition, the Compensation Committee reviewed compensation levels of members of
management, evaluated the performance of management, and considered management
succession and related matters. The Compensation Committee reviewed in detail
<PAGE>
all aspects of compensation for the Named Executive Officers and other executive
officers of the Company. Corresponding duties were carried out by the boards of
directors of the subsidiaries of the Company with respect to employees of those
entities, and the same individuals served as directors of each of these boards.

The practice of the Compensation Committee in future years will likely be
to review directly the compensation and performance of Mr. Duncan as chief
executive officer and to review recommendations by Mr. Duncan for the
compensation of other senior executive offices.

Performance Graph

The following graph includes a line graph comparing the yearly
percentage change in the Company's cumulative total shareholder return on its
Class A common stock during the five year period from January 1, 1990 through
December 31, 1994. This return is measured by dividing (1) the sum of (a) the
cumulative amount of dividends for the measurement period (assuming dividend
reinvestment, if any) and (b) the difference between the Company's share price
at the end and the beginning of the measurement period, by (2) the share price
at the beginning of that measurement period. This line graph is compared in the
following graph with two other line graphs during that five year period: (1) a
market index and (2) a peer index. The market index is the Center for Research
in Securities Prices Index for the Nasdaq Stock Market for United States
companies. It presents cumulative total returns for a broad based equity market
assuming reinvestment of dividends and is based upon companies whose equity
securities are traded on the Nasdaq Stock Market. The peer index is the Center
for Research in Securities Prices Index for Nasdaq Telecommunications Stock. It
presents cumulative total returns for the equity market in the
telecommunications industry segment assuming reinvestment of dividends and is
based on companies whose equity securities are traded on the Nasdaq Stock
Market. The line graphs represent monthly index levels derived from compounding
daily returns.

In constructing each of the line graphs in the following graph, the
closing price at the beginning point of the five year measurement period has
been converted into a fixed investment, stated in dollars, in the Company's
Class A common stock (or in the stocks represented by a given index in the cases
of the two comparison indexes), with cumulative returns for each subsequent
fiscal year measured as a change from that investment. Data for each succeeding
fiscal year during the five-year measurement period are plotted with points
showing the cumulative total return as of that point. The value of a
shareholder's investment as of each point plotted on a given line graph is the
number of shares held at that point multiplied by the then prevailing share
price.

The Company's Class B common stock is traded over-the-counter on a more
limited basis, and therefore comparisons similar to those previously described
for the Class A common stock are not directly available. However, the
performance of Class B common stock may be analogized to that of the Class A
common stock in that the Class B common stock is readily convertible to Class A
common stock by request to the Company.

<PAGE>

<TABLE>

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS PERFORMANCE GRAPH
FOR GENERAL COMMUNICATION, INC., NASDAQ STOCK MARKET INDEX
FOR UNITED STATES COMPANIES, AND NASDAQ TELECOMMUNICATIONS STOCK

NASDAQ Stock Market NASDAQ Peer Index for
Measurement Period Index for U.S. Telecommunications
(Fiscal Year Covered) Company Companies Stock
<S> <C> <C> <C>
Measurement Point -
FYE 12/29/89 $100.00 $100.00 $100.00
FYE 12/31/90 78.75 84.92 67.41
FYE 12/31/91 71.25 136.28 92.97
FYE 12/31/92 97.50 158.58 114.19
FYE 12/31/93 190.00 180.93 175.98
FYE 12/31/94 155.00 176.92 145.79

</TABLE>

<PAGE>

Board Meetings

During the year ended December 31, 1994, the Company had standing Audit,
Compensation, and Finance Committees. However, it had no standing nominating
committee. Issues related to nominations to the Board were addressed by the
Board.

The Audit Committee is composed of all seven members of the Board. The
committee's duties include (1) making recommendations to the Board on conducting
the annual audit of the Company and its subsidiaries including the selection of
an external auditor to conduct the annual audit and such other audits or
accounting reviews of those entities as the committee deems necessary, (2)
reviewing the plan or scope of an audit or review and the results of such audit
or review, and (3) carrying out other duties as delegated in writing by the
Board. The Audit Committee met three times during the year ended December 31,
1994.

The Compensation Committee is composed of all seven members of the Board.
The committee's duties are outlined elsewhere in this Proxy Statement. See
"MATTERS TO BE ACTED UPON AT THE MEETING - 1. DIRECTOR ELECTIONS: Compensation
Committee Report on Executive Compensation." The Compensation Committee met one
time during the year ended December 31, 1994.

The Finance Committee is composed of Messrs. Donne F. Fisher, Carter F.
Page, and John M. Lowber. The committee's duties are to review from time to time
and provide guidance to the chief financial officer on Company finance matters.
The Finance Committee did not meet during the year ended December 31, 1994.

The Board held four meetings during the year ended December 31, 1994. All
incumbent directors as disclosed in this Proxy Statement attended 100% of the
meetings of the Board and of committees of the Board for which they were seated
as directors, with the exception of Mr. Romrell who only attended 75% of the
meetings for which he was seated as a director.

Certain Legal Proceedings

The Board is unaware of any legal proceedings which may have occurred
during the past five years and which would be material to an evaluation of the
ability or integrity of any director or executive officer of the Company.

Recommendation

The Board, through this Proxy Statement, recommends to the Shareholders a
vote "FOR" the slate of one nominee for director in Class I and two nominees for
directors in Class III as set forth in proposal number 1 of the Proxy. The
voting rights of Shareholders on this proposal are set forth elsewhere in this
Proxy Statement. See, "OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS: Voting
Rights."

2. AMENDMENT OF THE STOCK OPTION PLAN

General

The terms, history, and purpose of the Stock Option Plan are discussed
elsewhere in this Proxy Statement. See, "MATTERS TO BE ACTED UPON AT THE MEETING
- - - 1. DIRECTOR ELECTIONS: Remuneration of Directors and Executive Officers- Stock
Option Plan." Management wishes to increase the number of shares authorized and
allocated to the Stock Option Plan by 850,000 shares of Class A common stock of
the Company ("Stock Option Plan Amendment"). The Company has, under its
Articles, sufficient shares of Class A common stock authorized and unissued to
<PAGE>
satisfy the proposed Stock Option Plan Amendment and allocation for its use in
the plan.

As of the Record Date, options had been granted pursuant to the Stock
Option Plan (and remained outstanding or had been exercised as of the Record
Date) involving 2,240,447 shares of Class A common stock of the Company.
Therefore, only 109,553 shares remained of the 2,350,000 shares authorized and
allocated to the Stock Option Plan. There were, as of the Record Date, six
executive officers including all of the Named Executive Officers, no current
directors who are not executive officers, and 42 other employees (including
officers who are not executive officers), participating in the plan out of a
total of seven eligible executive officers, five Named Executive Officers, no
current directors who are not executive officers, and 384 employees (including
officers who are not executive officers).

Management also wishes to eliminate arbitrary termination dates and
terms of effectiveness specified in the Stock Option Plan so as to make its term
terminable by action of the Board.

The Plan

Under the Stock Option Plan, key employees of the Company, a subsidiary
of the Company, or a subsidiary of a subsidiary of the Company (including
officers and directors who are employees) and non-employee directors of the
Company or those subsidiaries are eligible for selection by the plan's Committee
as optionees under the plan. In selecting an individual to whom options are to
be granted, as well as in determining the number of shares subject to each
option, the Committee is to take into consideration the recommendations of the
members of the Committee who are also employees of the Company and such factors
as it deems relevant in connection with accomplishing the purpose of the plan.

No maximum or minimum exists with regard to the amount, either in
dollars or in numbers, of options that may be exercised in any year, either by
any single optionee or by all optionees under the Stock Option Plan. That is,
there are no fixed limitations on the number or amounts of securities being
offered, other than the practical limitations imposed by the number of employees
eligible to participate in the plan and the total number of shares of stock
authorized and available for granting under the plan. Shares of stock subject to
option under the plan may be unissued shares as the Board may determine from
time to time. Shares covered by options which have terminated or expired for any
reason prior to their exercise are available for the grant of additional options
pursuant to the plan.

The present Stock Option Plan provides at Section 5 that no option
shall be granted under the plan after December 20, 1996. The plan further
provides at Section 13(a) that the plan shall terminate ten years from the date
on which it is adopted by the Board and that prior to that date the plan may be
suspended or terminated by action of the Board or granting of options may be
discontinued at the discretion of the Board. Section 13(a) further provides that
any such suspension, termination, or discontinuance shall not affect any options
then outstanding under the plan. Section 13(b) of the Stock Option Plan requires
shareholder approval of action by the Board including to amend the plan if the
amendment will materially increase the number of shares which will be available
and reserved for issuance under the plan or which will extend the term of the
plan beyond the period provided in Section 13. The Board proposes to amend
Sections 5 and 13(a) and other portions of the plan as necessary to exclude any
express date or term by which the plan will terminate or after which granting of
options is prohibited. In this way, the Board shall have the flexibility to
continue to administer the Stock Option Plan for so long as the Board believes
the plan provides an incentive to officers and employees of the Company and for
so long as there remain shares of Class A common stock allocated to the plan
which are not subject to outstanding options. In the future, should the plan
have no more shares of Class A common stock allocated to it, the Board would
have the choice of seeking approval from the shareholders for another allocation
of shares to the plan, discontinuing further granting of options, or suspending
or terminating the plan.

<PAGE>
The only effect on the Stock Option Plan of the proposed Stock Option
Plan Amendment will be to make more stock available for options granted under
the plan, and to allow the plan to continue at the discretion of the Board, thus
allowing the Company to continue to use the plan as an incentive plan for an
indefinite period of time. While the number of shares of Class A common stock
allocated to but unused by the plan has dwindled, management's policy of using
incentive options to urge key employees and officers to work diligently in the
best interests of the Company has not been curtailed or otherwise limited in the
past. It is therefore impossible for the Company to determine to what extent the
proposed Stock Option Plan Amendment would have had on the level of grants of
options under the plan had the amendment been effective throughout the year
ended December 31, 1994.

Management believes that the Stock Option Plan has proven to be useful
and beneficial to the Company as a special incentive to officers, non-employee
directors, and other key employees, especially when recruiting and retaining new
personnel. It has provided a means for these persons to acquire an equity
interest in the Company. The Stock Option Plan has been in operation for
approximately nine years. Furthermore, the business expansion by the Company
during the past several years has increased the number of persons to whom
management may wish to grant options under the plan. For these reasons,
management believes that the number of shares of Class A common stock allocated
to the plan should be increased so that the Company may continue to provide the
special incentive of stock options to its expanded cadre of officers,
non-employee directors, and key employees.

As of the Record Date the closing sales price on the Nasdaq Stock
Market was $4.00 per share for the Class A common stock of the Company.

The federal income tax consequences of an optionee's participation in
the Stock Option Plan are complex and subject to change. The following
discussion is only a summary of the general rules applicable to the options
offered pursuant to the plan. The Company assumes no responsibility in
connection with the income tax liability of any optionee. Under the
administration of the plan, optionees are urged to obtain competent professional
advice regarding the applicability of federal, state, and local tax laws.

The options granted under the Stock Option Plan are characterized for
federal income tax purposes as non-qualified stock options. The options are not
actively traded on an established securities market and when granted will not
have a readily ascertainable fair market value. Accordingly, an optionee will
not be subject to tax upon grant of such an option. However, upon exercise of
the option, the excess of the then fair market value of the shares purchased
over the aggregate option exercise price for the shares will constitute ordinary
income to the optionee. To the extent that the optionee realizes ordinary income
(which ordinary income is subject to federal income tax withholding by the
Company), the Company is entitled to claim a deduction against its gross income,
provided that the cost to the Company constitutes an ordinary and necessary
business expense.

Upon resale of any shares acquired pursuant to the exercise of an
option, the difference between the sale price and the optionee's basis in the
shares will be treated as a capital gain or loss and will be characterized as
long-term capital gain or loss if the shares have been held for more than 12
months at the date of their disposition. The optionee's basis for determination
of gain or loss upon any subsequent disposition of shares acquired upon the
exercise of the option will be the amount paid for such shares, plus any
ordinary income recognized as a result of the exercise.

Generally, there will be no federal income tax consequence to the
Company upon the grant or termination of an option under the Stock Option Plan
or the sale or disposition of the shares acquired upon the exercise of the
option. However, upon the exercise of an option, the Company will be entitled to
a deduction, for federal income tax purposes, equal to the amount of ordinary
income the optionee is required to recognize as a result of the exercise,
<PAGE>
provided the Company has satisfied its withholding obligations under the
Internal Revenue Code of 1986.

Recommendation

The Board has passed a resolution expressly to adopt the Stock Option
Plan Amendment. As a further step in the adoption of the proposed Stock Option
Plan Amendment, the following resolution will be offered at the Meeting for
consideration by the Shareholders:

"RESOLVED, that the following amendments to the Revised 1986
Stock Option Plan ("Stock Option Plan") of General
Communication, Inc. ("Company"), adopted by the board of
directors of the Company at its February 9, 1995 meeting, are
hereby approved and otherwise ratified by the shareholders of
the Company: (1) to increase the number of shares authorized
and allocated to the Stock Option Plan by 850,000 shares of
Class A common stock, i.e., to increase the number of such
shares from 2,350,000 to 3,200,000 shares of Class A common
stock; and (2) to remove any provision of the plan for
termination of granting of options under it after December 20,
1996 or otherwise for its mandatory termination after ten
years.

The Board through this Proxy Statement, recommends to the Shareholders a
vote "FOR" the adoption of the proposed Stock Option Plan Amendment, i.e.,
proposal number 2 of the Proxy. The voting rights of Shareholders on this
proposal are set forth elsewhere in this Proxy Statement. See, "OUTSTANDING
VOTING SECURITIES AND VOTING RIGHTS: Voting Rights."

4. OTHER BUSINESS

Other than the foregoing, the Board does not intend to bring any other
matter before the Meeting and does not know of any other matter which anyone
else proposes to present for action at the Meeting. However, if any other
matters properly come before the Meeting, the persons named in the accompanying
form of Proxy or their duly constituted substitutes acting at the Meeting will
be deemed authorized to vote or otherwise act upon those matters in accordance
with their judgment.

As part of such Other Business, the Shareholders will be asked to
approve the minutes of the annual meeting of shareholders of the Company held on
June 1, 1994. The Proxy will then also be used in the discretion of the proxy
holder to vote for the adoption of those minutes. A vote for the adoption of
those minutes will be an affirmation that the minutes, as written, properly
reflect the proceedings of that meeting and the action taken at that meeting but
will not be an action constituting approval or disapproval of the matters
referred to in those minutes.

SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

Principal Shareholders

So far as is known to management of the Company, as of the Record Date,
the following persons each owned beneficially more than 5% of the outstanding
shares of Class A common stock or Class B common stock of the Company. A
beneficial owner includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise, has or shares
the following powers within 60 days of the Record Date: (1) voting power, which
includes the power to vote or to direct the voting of shares of common stock of
<PAGE>
the Company; or (2) investment power, which includes the power to dispose of or
to direct the disposition of, such shares of common stock of the Company. So far
as is known to the Company, the persons named in the table had sole voting and
investment power with respect to the shares indicated as owned by them except as
otherwise stated in the footnotes to the table. Shares issuable upon exercise of
outstanding options and warrants are deemed to be outstanding for the purpose of
computing the percentage of ownership of persons owning such options or warrants
but have not been deemed to be outstanding for the purpose of computing the
percentage of ownership of any other person.

<TABLE>

SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS

Title Amount and Nature
of Name and Address of Beneficial Percent
Class of Beneficial Owner Ownership of Class

Class A Ronald A. Duncan 1,263,083 1 6.4
Class B 2550 Denali St., Suite 1000 247,826 1 5.9
Anchorage, Alaska 99503

Class A General Communication, Inc. 1,583,149 7.4
Class B Employee Stock Purchase Plan 157,238 3.6
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503

Class A Kearns-Tribune Corporation 300,200 1.5
Class B 400 Tribune Building 225,000 5.4
Salt Lake City, Utah

Class A Bob Magness 273,992 2,3 1.4
Class B Chairman of the Board 815,048 2 19.5
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111

Class A MCI Telecommunications 6,251,509 4 31.8
Class B Corporation 1,275,791 4 30.5
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006

Class A Robert M. Walp 582,845 5 3.0
Class B 804 P Street, No. 4 303,457 5 7.3
Anchorage, Alaska 99501

Class A Voting Agreement 7,648,900 6 38.9
Class B c/o General Communication, Inc. 2,400,591 6 57.5
2550 Denali Street, Suite 1000
Anchorage, Alaska 99503
Attn: Ronald A. Duncan

Class A Wellington Management Co. 1,370,800 7 7.0
Class B 75 State Street -0- --
Boston, Massachusetts 02109

Class A TCI GCI, Inc. -0- --
Class B 5619 DTC Parkway 590,043 8 14.1
Englewood, Colorado 80111

<PAGE>

<FN>

1 Includes 18,560 shares of Class A and 8,242 shares of Class B common stock
gifted by Mr. Duncan to the Amanda Miller Trust, where Ms. Miller is the
daughter of Mr. Duncan's spouse, Dani Bowman, and Mr. Duncan has a reversionary
interest in those shares. Includes 105,111 shares of Class A common stock of the
Company held by the Company in its name but for the benefit of Mr. Duncan
pursuant to the terms of the First Duncan Deferred Compensation Agreement. See
"MATTERS TO BE ACTED UPON AT THE MEETING - 1. DIRECTOR ELECTIONS: Remuneration
of Directors and Executive Officers - Summary Compensation." Includes 852,775
shares of Class A and 233,708 shares of Class B common stock of the Company
owned by Mr. Duncan but subject to a Voting Agreement. See, "SHAREHOLDINGS OF
PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control - Voting Agreement."
Does not include 5,760 shares of Class A or 27,020 shares of Class B common
stock held by Ms. Bowman, to which Mr. Duncan disavows any interest.

Mr. Duncan had as of the Record Date the following interests in the shares
beneficially owned by him: (1) sole power to vote or to direct the vote - no
shares of Class A or Class B common stock; (2) shared power to vote or to direct
the vote -852,775 shares of Class A and 233,708 shares of Class B common stock;
(3) sole power to dispose or to direct the disposition - 3,341 shares of Class A
and no shares of Class B common stock; and (4) shared power to dispose or to
direct the disposition - 936,071 shares of Class A and 239,780 shares of Class B
common stock.

2 Includes 177,324 shares of Class A common stock of the Company and 194,440
shares of Class B common stock of the Company from the Estate of Betsy Magness,
in which Mr. Magness is beneficial owner and executor.

3 Mr. Magness owns 25 percent, beneficially and of record, and another 25
percent, beneficially as executor of the Estate of Betsy Magness, of the stock
of KGBB, Inc., a Colorado corporation which holds 40,000 shares of Class A
common stock of the Company, and as a result may be deemed to have shared voting
and investment power over those 40,000 shares. The number of shares in the table
includes 20,000 shares of Class A common stock of the Company directly and
beneficially owned by Mr. Magness due to his shareholdings in KGBB, Inc.

4 All of these shares are subject to a Voting Agreement. See, "SHAREHOLDINGS
OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control - Voting Agreement."

MCI Telecommunications Corporation had as of the Record Date the following
interests in the shares beneficially owned by it: (1) sole power to vote or to
direct the vote - no shares of Class A or Class B common stock; (2) shared power
to vote or to direct the vote - 6,251,509 shares of Class A common stock and
1,275,791 shares of Class B common stock; (3) sole power to dispose or to direct
the disposition - 6,251,509 shares of Class A and 1,275,791 shares of Class B
common stock; (4) shared power to dispose or to direct the disposition - no
shares of Class A or Class B common stock.

5 Includes 544,616 shares of Class A and 301,049 shares of Class B common
stock of the Company owned by Mr. Walp but subject to a Voting Agreement. See,
"SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control -
Voting Agreement."

Mr. Walp had as of the Record Date the following interests in the shares
beneficially owned by him: (1) sole power to vote or to direct the vote - no
shares of Class A or Class B common stock; (2) shared power to vote or to direct
the vote - 544,616 shares of Class A and 301,049 shares of Class B common stock;
(3) sole power to dispose or to direct the disposition - 544,616 shares of Class
A and 301,049 shares of Class B common stock; and (4) shared power to dispose or
to direct the disposition - 38,229 shares of Class A and 2,408 shares of Class B
common stock.

6 The Voting Agreement is described elsewhere in this Proxy Statement.
See "SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control
- - - Voting Agreement."

7 Number of shares beneficially owned by the reporting person with
shared dispositive power. Number of shares beneficially owned by the reporting
person with shared voting power was 720,800 shares.

8 All of these shares are subject to the Voting Agreement. See, "SHARE-
HOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control - Voting
Agreement."

TCI GCI, Inc. had as of the Record Date the following interests in the
shares beneficially owned by it: (1) sole power to vote or to direct the vote -
no shares of Class A or Class B common stock; (2) shared power to vote or to
direct the vote - no shares of Class A common stock and 590,043 shares of Class
B common stock; (3) sole power to dispose or to direct the disposition - no
shares of Class A common stock and 590,043 shares of Class B common stock; (4)
shared power to dispose or to direct disposition - no shares of Class A or Class
B common stock.
</FN>
</TABLE>
<PAGE>
Management

The following table sets forth information with respect to the
beneficial ownership of shares of the Company's Class A and Class B common stock
as of the Record Date by each director and nominee of the Company, by the Named
Executive Officers and by all directors and executive officers of the Company as
a group. Shares issuable upon exercise of outstanding options and warrants are
deemed to be outstanding for the purpose of computing the percentage of
ownership of the individual owning such options or warrants but have not been
deemed to be outstanding for the purpose of computing the percentage of
ownership of any other individual. So far as is known to the Company, the
individuals identified in the table had sole voting and investment power with
respect to the shares indicated as owned by them except as otherwise stated in
the footnotes to the table.
<TABLE>

<CAPTION>
SHAREHOLDINGS OF MANAGEMENT OF THE COMPANY

Amount and Nature
Title of Beneficial Percent
Class Name of Beneficial Owner Ownership 1,2 of Class 3

<S> <C> <C> <C>
Class A William C. Behnke 195,274 1.0
Class B -0- --
Class A Richard P. Dowling 346,393 1.8
Class B 77,155 1.9
Class A Ronald A. Duncan 1,263,083 4 6.4
Class B 247,826 4 5.9
Class A Donne F. Fisher 211,307 5 1.1
Class B 27,688 5 *
Class A John W. Gerdelman -0- 6 --
Class B -0- 6 --
Class A G. Wilson Hughes 275,577 1.4
Class B 2,660 *
Class A John M. Lowber 307,353 1.5
Class B 6,140 *
Class A Carter F. Page 207,327 1.1
Class B 25,246 *
Class A Larry E. Romrell -0- 5 --
Class B 328 5 *
Class A James M. Schneider -0- 6 --
Class B -0- 6 --
Class A Robert M. Walp 582,845 7 3.0
Class B 303,457 7 7.3
Class A All Directors and 3,685,352 5,6 17.6
Class B Executive Officers as a 699,129 5,6 16.7
Group
(13 Persons)

<FN>

1 Includes interests of executive officers and directors in shares of
common stock of the Company held as of December 31, 1994 by the trustees the
Company's Stock Purchase Plan in that allocations under the plan are made only
twice a year on June 30 and December 31. These shares are not immediately
accessible to participants in that plan. See, "MATTERS TO BE ACTED UPON AT THE
MEETING - 1. DIRECTOR ELECTIONS: Remuneration of Directors and Executive
Officers - Stock Purchase Plan."
<PAGE>

2 Includes options and warrants granted to individual directors and
executive officers as of the Record Date.

3 An asterisk (*) means the person is the beneficial owner of less than 1%
of the corresponding class of common stock.

4 Includes 18,560 shares of Class A and 8,242 shares of Class B common
stock gifted by Mr. Duncan to the Amanda Miller Trust, where Ms. Miller is the
daughter of Mr. Duncan's spouse Dani Bowman, and Mr. Duncan has a reversionary
interest in those shares. Includes 105,111 shares of Class A common stock of the
Company held by the Company in its name but for the benefit of Mr. Duncan
pursuant to the terms of the First Duncan Deferred Compensation Agreement. See,
"MATTERS TO BE ACTED UPON AT THE MEETING - 1. DIRECTOR ELECTIONS: Remuneration
of Directors and Executive Officers - Summary Compensation." Includes 852,775
shares of Class A and 233,708 shares of Class B common stock of the Company
owned by Mr. Duncan but subject to a Voting Agreement. See, "SHAREHOLDINGS OF
PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control - Voting Agreement."
Does not include 5,760 shares of Class A or 27,020 shares of Class B common
stock held by Ms. Bowman, to which Mr. Duncan disavows any interest.

Mr. Duncan had as of the Record Date the following interest in the
shares beneficially owned by him: (1) sole power to vote or to direct the vote -
no shares of Class A or Class B common stock; (2) shared power to vote or to
direct the vote -852,775 shares of Class A and 233,708 shares of Class B common
stock; (3) sole power to dispose or to direct the disposition - 3,341 shares of
Class A and no shares of Class B common stock; and (4) shared power to dispose
or to direct the disposition - 936,071 shares of Class A and 239,780 shares of
Class B common stock.

5 Does not include holdings of TCI GCI, Inc. in the Company, where TCI GCI,
Inc. is a subsidiary of TCI and Messrs. Fisher and Romrell are officers of TCI.

6 Does not include holdings of MCI Telecommunications Corporation in the
Company, where Messrs. Gerdelman and Schneider are officers of that corporation.

7 Includes 544,616 shares of Class A and 301,049 shares of Class B common
stock of the Company owned by Mr. Walp but subject to a Voting Agreement. See,
"SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control -
Voting Agreement."

Changes in Control

Voting Agreement. As a part of the agreement for the issuance of
6,251,509 shares of Class A and 1,275,791 shares of Class B common stock of the
Company to MCI Telecommunications Corporation in 1993 ("MCI Stock"), the Company
agreed to assure the corporation that it may appoint a minimum of two members to
the Company's expanded seven member board of directors. On May 28, 1993, three
principal shareholders, including two officers and directors of the Company
(Messrs. Duncan and Walp and WSMC), entered into a voting agreement ("Voting
Agreement") with MCI Telecommunications Corporation which provides in part, that
the voting stock of these persons will be voted at shareholder meetings as a
block in favor of no more than two nominees by the corporation for no more than
two positions on the board of directors at any one time. The Voting Agreement
similarly commits MCI and the other three parties to vote their shares for four
board nominees proposed by and allocated between the other parties. As of the
Record Date, Messrs. Gerdelman and Schneider remained the recommended appointees
to the Board for MCI Telecommunications Corporation. It is anticipated that the
parties to the Voting Agreement will cast all of their votes for Messrs. Fisher,
Gerdelman, and Schneider. As of the Record Date, the voting stock of the parties
to the Voting Agreement (in April, 1995 WSMC transferred its shareholdings in
the Company to TCI GCI, Inc., and TCI GCI, Inc. became subject to the Voting
Agreement) constituted in excess of a simple majority of the outstanding voting
power of the Company. The term of the Voting Agreement will be through the
<PAGE>
completion of the annual meeting of shareholders of the Company taking place in
1997 or until there is only one party to that agreement, which ever first
occurs. However, the parties may extend the term upon unanimous consent.

Pledges of Stock of Subsidiaries. Should the Company default on its
obligations under the Credit Agreement with its present Senior Lender, that
lender may exercise the pledge of stock provisions of that agreement pertaining
to the subsidiaries of the Company and thereby gain direct control of the
essential operating assets through which the Company and its subsidiaries
provide telecommunication services. See, "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS: Certain Transactions with Management and Others - Credit
Agreement."

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Transactions with Management and Others

MCI Agreements. In December, 1992, MCI Telecommunications Corporation
and the Company entered into a letter of intent outlining the general terms and
conditions of several proposed arrangements between them to be subsequently
reduced to separate agreements ("MCI Agreements"). Under the MCI Agreements, in
addition to MCI Telecommunications Corporation acquiring a substantial portion
of the outstanding common stock of the Company and entering into the Voting
Agreement to ensure that it would be able to appoint or otherwise elect at least
two members to the Board, MCI and the Company have established or will establish
various business arrangements between them. These arrangements include the
following: (1) providing telecommunications services by each party to the other;
(2) licensing of certain MCI service marks to the Company for use in Alaska; (3)
leasing by MCI from the Company and the subleasing back by the Company of
one-ninth of the undersea fiber optic cable linking Seward, Alaska with Pacific
City, Oregon; (4) purchasing by MCI of certain service marks of the Company; (5)
other communication network sharing; and (6) sharing of various marketing,
engineering, and operating resources. As of the Record Date, the Company had
executed access service, carrier, 1-800 collect service mark and product, and
undersea fiber optic cable agreements with MCI pertaining to items (1)-(3) and
was in the process of negotiating agreements pertaining to items (4)-(6). These
arrangements have during the year ended December 31, 1994 resulted in revenues
to MCI and its subsidiaries of approximately $8.3 million and revenues to the
Company of approximately $19.5 million.

Credit Agreement. In May, 1993, the Company completed a refinancing
which provided a new $15 million senior facility ("Credit Agreement") with
NationsBank in Dallas, Texas ("Senior Lender"). The Credit Agreement continues a
number of conditions imposed under previous credit agreements entered into by
the Company. In compliance with one of those conditions, the Company previously
formed GCC, an Alaska corporation and wholly owned subsidiary of the Company. On
November 30, 1990 all of the Company's operating assets were transferred to GCC,
where all of the outstanding capital stock of GCC was pledged to the then senior
lenders of the Company. This reorganization proposal was approved by the
shareholders of the Company at the June 7, 1990 annual shareholders meeting.
That pledge is now made to the Senior Lender and will remain in place for so
long as the Credit Agreement remains in effect. As of the Record Date, the
outstanding common stock of GCC remained pledged to the Senior Lender.
Throughout the year ended December 31, 1994 and from that date through the
Record Date, the Company was in full compliance with all terms of the Credit
Agreement. See, "ANNUAL REPORT."

WSMC Agreements. The Company purchased services and used some
facilities of WSMC to allow the Company to provide its telecommunication
services in other states in the country. The total of such purchases from WSMC
by the Company during the year ended December 31, 1994 was approximately
$257,000.

<PAGE>
Duncan Lease. The Company entered into a long-term capital lease
agreement in 1991 with a partnership of which Mr. Duncan, the Company's
president, was a 50% owner. Mr. Duncan sold his interest in the partnership in
1992 but remained a guarantor on the note used to finance acquisition of the
property. During 1993, Mr. Duncan married Dani Bowman, the individual to whom he
sold his interest in the partnership, and as of the Record Date, the property
was owned in its entirety by the president's spouse. The property under lease
consists of a building presently occupied by the Company. The lease term is 15
years with monthly payments of $14,400, increasing in $800 increments at each
two year anniversary of the lease. The first incremental increase occurred in
1993. If the owner sells the premises prior to the end of the tenth year of the
lease, the owner will rebate to the Company one-half of the net sales price
received in excess of $900,000. If the property is not sold prior to the tenth
year of the lease, the owner will pay the Company the greater of one-half of the
appreciated value of the property over $900,000, or $500,000. The leased asset
was capitalized in 1991 at the owner's cost of $900,000 and the related
obligation was recorded in the financial statements for the Company as reflected
in the Annual Report. See, "ANNUAL REPORT."

Indebtedness of Management

On August 13, 1993 Mr. Duncan obtained a loan of $500,000 from the
Company ("Duncan Loan") and executed a non-recourse promissory note to the
Company which bears an interest rate equal to the variable rate paid by the
Company on its Credit Agreement with its Senior Lender. Mr. Duncan is to pay off
the Duncan Loan in one payment of principal and accrued interest 90 days after
the termination of his employment with the Company or July 30, 1998, whichever
is earlier. The money was used to pay down a portion of the indebtedness of Mr.
Duncan on the WSMC Loans allowing for the release to Mr. Duncan of 223,000
shares of Class A common stock used as collateral on that loan. Those shares
were then pledged as collateral to secure the Duncan Loan. See, "SHAREHOLDINGS
OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT: Changes in Control - Duncan Stock
Pledges." The largest outstanding balance of principal and interest on the
Duncan Loan during the year ended December 31, 1994 was $548,174 on that date.
As of the Record Date the outstanding balance of principal and interest on the
Duncan Loan was $558,742.

During 1994, Mr. Duncan obtained cash advances from the Company
totalling approximately $22,715. The debt is unsecured and non-interest bearing.
As of December 31, 1994, $5,704 in payments had been made on the advances. In
May, 1994 Mr. Duncan received additional loans totalling $55,000 from the
Company and executed two promissory notes totalling that amount. The terms were
for interest to accrue at 7% per annum with principal to be paid in August,
1994. The notes were extended, and interest was paid current through December
31, 1994. The full principal and interest in the amount of $55,686 was paid on
March 6, 1995.

In April, 1993 Mr. Behnke obtained a loan from the Company in the
amount of $48,000 and executed a promissory note. The note bears interest at 9%
per annum, is secured by options to purchase 95,190 shares of Class A common
stock of the Company, and is due on December 31, 1995. Accrued interest totalled
$7,213 at December 31, 1994 and $8,533 on the Record Date.

In August, 1994 and April, 1995 Mr. Dowling received loans from the
Company of $224,359 and $86,000 respectively, secured by 160,297 shares of
Company Class A and 74,028 shares of Class B common stock. The notes bear
interest at 10% per annum and are payable in ten equal installments of principal
and interest with the first payment on each due in August, 1995. Accrued
interest totalled $7,868 at December 31, 1994 and $14,879 on the Record Date.

Except as disclosed in this Proxy Statement, neither as a group nor
individually did any director, executive officer, nominee for election as a
director, any member of the immediate family of these persons, or any
<PAGE>
corporation or organization of which such director, executive officer, or
nominee is an executive officer or partner and is directly or indirectly the
beneficial owner of 10% or more of any class of equity securities of that
corporation, or any trust or other estate in which such director, executive
officer, or nominee of the Company has a substantial beneficial interest or as
to which such person serves as a trustee or in a similar capacity have during
the year ended December 31, 1994 nor during the portion of calendar year 1995
ended on the Record Date, an indebtedness to the Company in an amount in excess
of $60,000.

Certain Legal Proceedings

Compliance with Section 16(a) of the Exchange Act

Mr. Page, a member of the Board, failed to file timely a Form 4 in
accordance with Section 16(a) of the Securities Exchange Act of 1934
pertaining to his gifting of 2,100 shares of Class A common stock to charity in
December, 1993. The form was filed by Mr. Page on April 6, 1994.

LITIGATION AND REGULATORY MATTERS

The Company was, as of the Record Date, involved in several administrative
matters primarily related to its long distance markets in Alaska and the
remaining 49 states and other regulatory matters. These actions are discussed in
detail in the Company's Annual Report. See, "ANNUAL REPORT."

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The Board retained KPMG Peat Marwick as the independent certified
public accountants for the Company during the fiscal year ended December 31,
1994. It is anticipated that the Board will appoint KPMG Peat Marwick as the
Company's independent, certified public accountants for the fiscal year ending
December 31, 1995. A representative of KPMG Peat Marwick is expected to be
present at the Meeting. The representative will have the opportunity to make a
statement, if so desired, and will be able to respond to appropriate questions.

ANNUAL REPORT

The Annual Report to shareholders of the Company in the form of Form
10-K for the year ended December 31, 1994 is enclosed with this Proxy Statement.

SUBMISSION OF SHAREHOLDER PROPOSALS

Certain matters are required to be considered at an annual meeting of
shareholders of the Company, e.g., the election of directors. From time to time,
the board of directors of the Company may wish to submit to those shareholders
other matters for consideration. Additionally, those shareholders may be asked
to consider and take action on proposals submitted by shareholders who are not
members of management that cover matters deemed proper under regulations of the
Securities and Exchange Commission and applicable state laws.

<PAGE>

Stockholder eligibility to submit proposals, proper subjects and the
form of shareholder proposals are regulated by Rule 14a-8 under Section 14(a) of
the Securities Exchange Act of 1934. Each proposal submitted should be sent to
the Secretary of the Company at the corporate offices of the Company. Such
proposals should include the full and correct registered name and address of the
shareholders making the proposal, the number of shares owned and their date of
acquisition. If beneficial ownership is claimed, proof thereof should be
submitted with the proposal. Such shareholders or their representatives must
appear in person at the annual meeting and must present the proposal, unless
they can show good cause for not doing so.

Shareholder proposals must be received by the Secretary of the Company
not later than December 27, 1995 for such proposals to be included in proxy
materials for the 1996 annual meeting of shareholders of the Company.

Management carefully considers all proposals and suggestions from
shareholders. When adoption of a suggestion or proposal is clearly in the best
interest of the Company and the shareholders generally, and does not require
shareholder approval, it is usually adopted by the Board, if appropriate, rather
than being included in the proxy statement.

<PAGE>

PROXY PROXY

GENERAL COMMUNICATION, INC.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

ANNUAL MEETING

JUNE 20, 1995

The undersigned, having received the Notice of Annual Meeting and Proxy
Statement dated April 28, 1995 and holding Class A common stock or Class B
common stock of General Communication, Inc. ("Company") of record determined as
of April 21, 1995, hereby appoints Ronald A. Duncan, on behalf of the board of
directors the Company, and each of them, the proxy of the undersigned, with full
power of substitution, to attend the annual meeting ("Meeting") of shareholders,
to be held in the Denali Ballroom of the Regal Alaskan Hotel at 4800 Spenard
Road in Anchorage, Alaska at 6:00 p.m. (Alaska Daylight Time) on Tuesday, June
20, 1995 and any adjournment or adjournments of the Meeting, and at the Meeting
to vote, as specified in this Proxy, all of the shares of common stock of the
undersigned in the Company which the undersigned would be entitled to vote if
personally present, as follows:

(1) To elect two directors, each for three-year terms, as part of Class
III of a seven member classified board of directors and to elect one director to
complete the one remaining year of the three year term in Class I of that board
as identified in the Proxy:

( ) FOR all nominees listed below (except as marked to the contrary)

( ) WITHHOLD AUTHORITY to vote for all nominees listed below

Class I: John W. Gerdelman

Class III: Donne F. Fisher and James M. Schneider

INSTRUCTIONS:

To withhold authority under this Proxy to vote for one or more
individual nominees, draw a line through the name of the nominee for which
authority to vote will be withheld.

Should the undersigned choose to mark this proxy as withholding
authority to vote for one or more nominees as listed above, this Proxy will,
nevertheless, be used for purposes of establishing a quorum at the Meeting.

(2) To increase the number of shares of the Company's common stock
allocated to the Company's Revised 1986 Stock Option Plan by 850,000 shares of
Class A common stock and to approve and ratify removing any provision of the
plan for termination of granting of options under it after December 20, 1996 or
otherwise for its mandatory termination after ten years.

( ) FOR ( ) AGAINST ( ) ABSTAIN

(3) To transact such other business as may properly come before the
Meeting (including the adoption but not the ratification of the minutes of the
June 1, 1994 Annual Meeting of Shareholders of the Company) and any adjournment
or adjournments of the Meeting. The Board at present knows of no other business
to be presented by or on behalf of the Company or the Board at the Meeting.

The undersigned hereby ratifies and confirms all that said proxy holder
or the holder's substitute will lawfully do or cause to be done by virtue of
this Proxy and hereby revokes any and all proxies heretofore given by the
undersigned to vote at the Meeting or any adjournments of the Meeting. The
undersigned acknowledges receipt of the Notice of the Meeting and the Proxy
Statement accompanying the Notice.

DATED: _________________

- - --------------------------------------
Signature of Shareholder
Print Name: ___________________________

- - ---------------------------------------
Signature of Shareholder
Print Name: ___________________________

Please date this Proxy, sign it above as your name(s) appear(s) at the
beginning of this Proxy, and return it in the enclosed envelope which requires
no postage. Joint owners should each sign personally. When signing as attorney,
executor, trustee, guardian, administrator, or officer of a corporation, please
give that title.

THE BOARD RECOMMENDS A VOTE "FOR" PROPOSAL NOS. (1) AND (2). THE PROXY,
WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT
WILL BE VOTED "FOR" PROPOSAL NOS. (1) AND (2). IF ANY OTHER BUSINESS IS PROPERLY
PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BEST
JUDGMENT AND DISCRETION OF THE PROXY HOLDER.

<PAGE>

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 1995

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

April 28, 1995
TO THE SHAREHOLDERS OF
GENERAL COMMUNICATION, INC.

NOTICE IS HEREBY GIVEN that, pursuant to the Bylaws of General
Communication, Inc. ("Company") and the call of the board of directors of the
Company ("Board"), the annual meeting ("Meeting") of shareholders of the Company
will be held in the Denali Ballroom of the Regal Alaskan Hotel at 4800 Spenard
Road, Anchorage, Alaska at 6:00 p.m. (Alaska Daylight Time) on Tuesday, June 20,
1995, for the purpose of considering and voting upon the following matters:

(1) Election of two directors in Class III of the classified Board for
three year terms; and the election of one director to complete the remaining one
year of the three year term in Class I of the classified Board;

(2) Increasing the number of shares of the Company's common stock allocated
to the Company's Revised 1986 Stock Option Plan by 850,000 shares of Class A
common stock and approving and ratifying the removal of any provision of the
plan for termination of granting of options under it after December 20, 1996 or
otherwise for its mandatory termination after ten years; and

(3) Transaction of such other business as may properly come before the
meeting and any adjournment or adjournments of it.

All of the above matters are more fully described in the accompanying
Proxy Statement. A reception for shareholders will precede the Meeting,
commencing at 5:00 p.m.

By resolution adopted by the Board, the close of business on April 21,
1995 has been fixed as the record date for the Meeting ("Record Date"). Only
holders of shares of Class A or Class B common stock of the Company of record as
of the Record Date will be entitled to notice of and to vote at the Meeting or
any adjournment or adjournments of it.

The accompanying form of Proxy is solicited by the Board. Reference is
made to the attached Proxy Statement for further information with regard to the
business to be transacted at the Meeting. A list of shareholders of the Company
as of the Record Date will be kept at the Company's offices at 2550 Denali
Street, Suite 1000, Anchorage, Alaska for a period of 30 days prior to the
meeting and will be subject to inspection by any shareholder at any time during
normal business hours.

If you do not expect to attend the meeting in person, please sign and
date the enclosed Proxy and mail it to the secretary of the Board in the
enclosed, addressed and stamped envelope. If you send in your Proxy and later do
attend the Meeting, you may then withdraw your Proxy should you desire to do so,
provided you revoke your Proxy in writing and present that written revocation at
the Meeting. Thereafter you may then vote in person if you wish. The Proxy may
be revoked at any time prior to its exercise.

BY ORDER OF THE BOARD OF DIRECTORS

-------------------------------------
John M. Lowber, Secretary

<PAGE>

[GCI Logo]

LETTER TO SHAREHOLDERS

April 28, 1995

Re: 1995 Annual Meeting of Shareholders
of General Communication, Inc.

Dear Shareholder:

The board of directors of General Communication, Inc. cordially invites
and encourages you to attend the annual meeting of shareholders of the Company.
The meeting will be held in the Denali Ballroom of the Regal Alaskan Hotel at
4800 Spenard Road, Anchorage, Alaska at 6:00 p.m. (Alaska Daylight Time) on
Tuesday, June 20, 1995. The board has chosen the close of business on April 21,
1995 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting. A reception for shareholders will be held prior
to the meeting from 5:00 p.m. to 6:00 p.m. at the site of the meeting.

Copies of the Notice of Annual Meeting of Shareholders, Proxy, Proxy
Statement, and Annual Report to Shareholders in the form of the Form 10-K for
the year ended December 31, 1994 covering the formal business to be conducted at
the meeting are enclosed.

At the meeting, the shareholders will be asked to elect individuals to
fill three positions on the board of directors as a classified board as required
by the Bylaws of the Company, to consider amendments to the Company's Revised
1986 Stock Option Plan, and to conduct other business as described more fully in
the Proxy Statement and as may properly come before the meeting. Regardless of
the number of shares you own, your careful consideration of and vote on these
matters is important.

In order to ensure that we have a quorum and that your shares will be
voted at the meeting, please complete, date and sign the enclosed Proxy and
return it promptly in the enclosed addressed and stamped envelope.

In addition to conducting the formal business at the meeting, we shall
also review the Company's activities over the past year and its plans for the
future. I sincerely hope you will be able to join us.

Sincerely,

- - -------------------------------
Ronald A. Duncan
President and Chief Executive Officer