ICG COMMUNICATIONS, INC.

                        SHARE PRICE APPRECIATION VESTING
                           NON-QUALIFIED STOCK OPTION

                                   Granted to

                              WILLIAM S. BEANS, JR.

                                    Optionee



   260,000                              $ 20.25
   ------------------                    -----------------
   Number of Shares                     Price Per Share
                                        (Fair Market Value on Date of Grant)

   DATE GRANTED: June 28, 1999       EXPIRATION DATE:  June 27, 2009












<PAGE>
                        SHARE PRICE APPRECIATION VESTING
                      NON-QUALIFIED STOCK OPTION AGREEMENT

     AGREEMENT   made  as  of  this  28th  day  of  June,   1999   between   ICG
Communications,  Inc., a Delaware  corporation (the  "Company"),  and William S.
Beans, Jr. (the "Employee").

                               W I T N E S E T H:

     WHEREAS,  the Company  desires,  in connection  with the  employment of the
Employee,  to provide the Employee with an  opportunity to acquire common stock,
$.01 par value  (hereinafter  referred to as "Common Stock"),  of the Company on
favorable terms and thereby  increase his proprietary  interest in the continued
progress and success of the business of the Company;

     NOW,  THEREFORE,  in  consideration  of the premises,  the mutual covenants
herein set forth and other good and valuable consideration,  the Company and the
Employee hereby agree as follows:

     1.  Confirmation  of Grant of Option.  Pursuant to a  determination  by the
Stock  Option  Committee  of the Board of  Directors  of the Company (the "Stock
Option  Committee"),  made on June 28, 1999 (the "Date of Grant"),  the Company,
subject to the terms of this  Agreement,  hereby  confirms that the Employee has
been granted as a matter of separate  inducement and agreement,  and in addition
to and not in lieu of salary or other  compensation  for services,  the right to
purchase  (hereinafter  referred to as the  "Option")  an  aggregate  of 260,000
shares of Common  Stock,  subject to  adjustment as provided in Section 8 hereof
(such shares, as adjusted, shall hereinafter be referred to as the "Shares").

     2. Purchase Price.  The purchase price of shares of Common Stock covered by
the Option will be $20.25 per share (the "Exercise Price") subject to adjustment
as provided in Section 8 hereof.

     3. Exercise of Option.  The Option shall vest and become exercisable on the
terms and conditions hereinafter set forth:

          A.  The  Option  shall  become  exercisable  cumulatively  as  to  the
     following amounts of the number of Shares originally subject thereto (after
     giving effect to any adjustment pursuant to Section 8 hereof), on the dates
     and subject to the terms and conditions indicated:

               1. Upon the six month  anniversary of the date of this Agreement,
          a number of Shares,  if any,  equal to 50% of the Earned  Shares Value
          (as defined  herein) shall vest to the Employee.  For purposes of this
          subparagraph,  "Earned  Shares  Value" shall be determined as follows:
          (i)  Subtract  the Base Price (as defined in  subparagraph  (C) below)
          from the applicable  Anniversary Price (as defined in subparagraph (B)
          below),  and then round such result down to the nearest  whole  number
          divisible by five (the "Increase Amount"),  and (ii) locate on Exhibit
<PAGE>

          "B" hereto the  corresponding  Earned  Shares Value for such  Increase
          Amount.  If the  Increase  Amount is less  than or equal to five,  the
          Earned  Shares  Value shall equal zero and no Shares will vest on such
          anniversary date.

               2. Upon every  succeeding  six month  anniversary  of the date of
          this Agreement until, but not including,  the fifth anniversary of the
          date of this Agreement, an incremental number of Shares subject to the
          Option shall vest to the Employee equal to the excess,  if any, of (a)
          50% of the  Earned  Shares  Value (as  defined  herein),  over (b) the
          aggregate  number of Shares  subject  to the Option  which  previously
          vested  under  this  Agreement.  For  purposes  of this  subparagraph,
          "Earned Shares Value" shall be determined by rounding the  Anniversary
          Price (as defined in subparagraph (B) below) down to the nearest whole
          number  divisible  by five (the  "Increase  Amount")  and locating the
          corresponding  Earned  Shares  Value  on  Exhibit  B  hereto  for such
          Increase Amount. If the Increase Amount is less than or equal to five,
          the Earned  Shares  Value  shall equal zero and no Shares will vest on
          such anniversary date.

               3. Upon the fifth anniversary of the date of this Agreement,  all
          of the remaining Shares subject to the Option but not yet vested shall
          vest to the Employee.

          B. The  "Anniversary  Price" shall mean the average  closing price per
     share of the Common Stock for the five trading  days  immediately  prior to
     the day as to which the Anniversary Price is being determined on the NASDAQ
     National Market or national stock exchange,  as the case may be, or, if the
     Common Stock is not included on the NASDAQ  National  Market or listed on a
     national  stock  exchange,  the average  closing  sales price of the Common
     Stock as reported for such five trading days on the NASDAQ  SmallCap Market
     or, if the Common  Stock shall not be so  included,  the average of the bid
     and asked  prices at the end of the day in the  over-the-counter  market as
     reported by NASDAQ for the five trading days  immediately  prior to the day
     on which the Anniversary  Price is being determined or, if the Common Stock
     is not included on NASDAQ,  as reported by the National  Quotation  Bureau,
     Inc. or any successor organization.

          C. The "Base Price"  shall mean the closing  price of the Common Stock
     as  reported  on the NASDAQ  National  Market on June 28,  1999,  which the
     parties agree was $20.25.

          D. The Option may be  exercised  pursuant  to the  provisions  of this
     Section 3, by notice and payment (including, but not limited to, a cashless
     exercise) to the Company as provided in Sections 11 and 16 hereof.

     4. Term of  Option.  The term of the  Option  shall be a period of ten (10)
years from the Date of Grant,  subject to earlier termination or cancellation as
provided in this Agreement. The Option, to the extent unexercised,  shall expire
on the day immediately  prior to the tenth anniversary of the Date of Grant. The
holder of the Option  shall not have any rights to dividends or any other rights
of a  stockholder  with  respect  to any shares of Common  Stock  subject to the
Option  until such  shares  shall have been issued to him (as  evidenced  by the


                                       2
<PAGE>

appropriate  entry  on the  books  of a duly  authorized  transfer  agent of the
Company)  provided that the date of issuance  shall not be earlier than the date
the Option is exercised  and  provision  of the purchase  price of the shares of
Common Stock (with  respect to which the Option is being  exercised)  is made to
the Company pursuant to the provisions contained herein.

     5.  Non-transferability  of Option.  The Option  shall not be  transferable
otherwise than by will or by the laws of descent and distribution or pursuant to
a domestic  relations order, and the Option may be exercised during the lifetime
of the  Employee  only by him.  More  particularly,  but  without  limiting  the
generality of the foregoing, the Option may not be assigned, transferred (except
as provided in the immediately  preceding sentence) or otherwise disposed of, or
pledged or  hypothecated  in any way,  and shall not be  subject  to  execution,
attachment or other process. Any assignment,  transfer, pledge, hypothecation or
other  disposition  of the Option  attempted  contrary to the provisions of this
Agreement, or any levy of execution,  attachment or other process attempted upon
the Option,  will be null and void and without  effect.  Any attempt to make any
such assignment,  transfer,  pledge,  hypothecation or other  disposition of the
Option or any attempt to make any such levy of  execution,  attachment  or other
process will cause the Option to terminate immediately upon the happening of any
such event; provided, however, that any such termination of the Option under the
foregoing provisions of this Section 5 will not prejudice any rights or remedies
which the Company or any Parent or Subsidiary  may have under this  Agreement or
otherwise.

     6. Exercise Upon Cessation of  Employment.  (a) If the Employee at any time
ceases to be an employee of the  Company  and of any parent  corporation  of the
Company (a  "Parent")  within the  meaning  of  Section  424(e) of the  Internal
Revenue Code of 1986, as amended (the "Code"), or subsidiary  corporation of the
Company (a  "Subsidiary")  within the  meaning of Section  424(f) of the Code by
reason of his discharge for Good Cause (as defined below),  the Option shall, at
the time of such  termination  of  employment,  terminate and the Employee shall
forfeit all rights  hereunder.  If,  however,  the Employee for any other reason
(other than Disability or death) ceases to be such an employee,  the Option may,
subject to the  provisions  of  Sections  5 and 8 hereof,  be  exercised  by the
Employee to the same extent the Employee  would have been entitled under Section
3  hereof  to  exercise  the  Option  immediately  prior  to such  cessation  of
employment,  at any time  within  three  (3)  months  after  such  cessation  of
employment,  at the end of which  period  the  Option,  to the  extent  not then
exercised,  shall terminate and the Employee shall forfeit all rights hereunder,
even if the  Employee  subsequently  returns to the employ of the Company or any
Parent or Subsidiary.  In no event,  however,  may the Option be exercised after
the expiration of the term provided in Section 4 hereof.

     As used herein, "Good Cause" shall mean (i) the Employee's willful or gross
misconduct or willful or gross  negligence in the  performance of his duties for
the Company or for any Parent or Subsidiary  after prior written  notice of such
misconduct or  negligence  and the  continuance  thereof for a period of 30 days
after receipt by the Employee of such notice, (ii) the Employee's intentional or
habitual  neglect of his duties for the Company or for any Parent or  Subsidiary
after prior written  notice of such neglect,  or (iii) the  Employee's  theft or
misappropriation  of funds of the  Company  or of any  Parent or  Subsidiary  or
commission of a felony.


                                       3
<PAGE>

     (b) The Option shall not be affected by any change of duties or position of
the  Employee so long as he continues to be an employee of the Company or of any
Parent or Subsidiary thereof who is regularly employed on a salaried basis.

     7. Exercise Upon Death or Disability.  (a) If the Employee dies while he is
employed  by the  Company or by any Parent or  Subsidiary  (or within  three (3)
months after his Retirement (as defined  below),  and on or after the first date
upon  which he would  have  been  entitled  to  exercise  the  Option  under the
provisions  of Section 3 hereof,  the Option may,  subject to the  provisions of
Sections 5 and 8 hereof,  be  exercised  with  respect to all or any part of the
shares of Common Stock as to which the deceased  Employee had not  exercised the
Option  at the  time  of his  death  (but  only to the  extent  the  Option  was
exercisable at the earlier of (i) the date of his Retirement or (ii) the date of
his  death),  by the estate of the  Employee  (or by the  person or persons  who
acquire the right to exercise the Option by written designation of the Employee)
at any  time  within  the  period  ending  one (1)  year  after  the date of the
Employee's  death  (in no  event,  however,  after  the  expiration  of the term
provided in Section 4 hereof),  at the end of which  period the  Option,  to the
extent not then exercised, shall terminate and the estate or other beneficiaries
shall forfeit all rights hereunder.

     As used herein,  "Retirement"  shall mean the  termination of employment by
the Employee from the Company or from any Parent or Subsidiary,  who at the time
of  such  termination  is at  least  fifty-five  (55)  years  of age and who has
completed at least ten (10) years of service (at least 1,000 hours in any fiscal
year) with the Company or any Parent or Subsidiary, or any combination thereof.

     (b) In the event that the employment of the Employee by the Company and any
Parent or  Subsidiary  is  terminated  by reason of the  Disability  (as defined
below) of the  Employee on or after the first date upon which he would have been
entitled to exercise the Option under the  provisions  of Section 3 hereof,  the
Option may,  subject to the provisions of Sections 5 and 8 hereof,  be exercised
with respect to all or any part of the shares of Common Stock as to which he had
not exercised the Option at the time of his  Disability  (but only to the extent
the Option was exercisable at such time) by the Employee, at any time within the
period ending one (1) year after the date of such  termination of employment (in
no event,  however,  after the  expiration  of the term  provided  in  Section 4
hereof),  at the  end of  which  period  the  Option,  to the  extent  not  then
exercised,  shall terminate and the Employee shall forfeit all rights  hereunder
even if the  Employee  subsequently  returns to the employ of the Company or any
Parent or Subsidiary.  As used herein,  "Disability" shall have the same meaning
as the term "permanent and total disability" under Section 22(e)(3) of the Code.

     8. Adjustments. In the event there is any change in the Common Stock of the
Company by reason of any  reorganization,  recapitalization,  stock split, stock
dividend or otherwise,  there shall be substituted for or added to each share of
Common Stock theretofore appropriated or thereafter subject, or which may become
subject,  to this  Option  the  number  and  kind of  shares  of  stock or other
securities into which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchanged,  or to which each such share be
entitled,  as the case may be,  and the per share  price  thereof  also shall be
appropriately adjusted.


                                       4
<PAGE>

     9. Merger,  Consolidation  or Change in Control of the Company.  Subject to
the provisions of Section 8 hereof,  upon (a) the merger or consolidation of the
Company with or into another corporation  (pursuant to which the stockholders of
the Company  immediately  prior to such merger or consolidation  will not, as of
the date of such merger or consolidation, own a beneficial interest in shares of
voting  securities of the  corporation  surviving  such merger or  consolidation
having at least a majority of the combined  voting  power of such  corporation's
then outstanding  securities),  if the agreement of merger or consolidation does
not provide for (i) the  continuance of this Option or (ii) the  substitution of
new  option(s)  for this  Option,  or for the  assumption  of such Option by the
surviving corporation, (b) the dissolution, liquidation or sale of substantially
all the assets of the Company or (c) a Change in Control  (as defined  below) of
the  Company,  any options  which remain  unvested  shall be forfeited as of the
effective time of any merger, consolidation,  dissolution,  liquidation, sale of
assets or Change in Control of the Company.

     As used  herein,  a "Change in Control of the  Company"  shall be deemed to
have occurred if any person  (including  any  individual,  firm,  partnership or
other entity) together with all Affiliates and Associates (as defined under Rule
12b-2 of the General  Rules and  Regulations  promulgated  under the  Securities
Exchange Act of 1934, as amended, and the rules and regulations  thereunder (the
"Exchange Act")) of such person,  but excluding (i) a trustee or other fiduciary
holding  securities  under  an  employee  benefit  plan  of the  Company  or any
subsidiary of the Company, (ii) a corporation owned, directly or indirectly,  by
the stockholders of the Company in  substantially  the same proportions as their
ownership of the Company,  (iii) the Company or any subsidiary of the Company or
(iv) only as  provided  in the  immediately  following  sentence,  the  Employee
together with all Affiliates  and Associates of the Employee,  is or becomes the
Beneficial Owner (as defined in Rule 13d-3  promulgated under the Exchange Act),
directly or indirectly, of securities of the Company representing 40% of more of
the combined  voting power of the Company's then  outstanding  securities,  such
person being hereinafter  referred to as an Acquiring Person.  The provisions of
clause (iv) of the immediately  preceding sentence shall apply only with respect
to the  Option(s)  held by the  Employee if,  together  with his  Affiliates  or
Associates,  if any, he is or becomes the direct or indirect Beneficial Owner of
the percentage of securities set forth in such clause.

     10.  Registration.  The shares of Common Stock subject  hereto and issuable
upon the exercise hereof may not be registered under the Securities Act of 1933,
as amended,  and, if required  upon the request of counsel to the  Company,  the
Employee will give a representation  as to his investment intent with respect to
such shares prior to their issuance as set forth in Section 11 hereof.

     The  Company may  register or qualify the shares  covered by the Option for
sale  pursuant to the  Securities  Act of 1933,  as  amended,  and the rules and
regulations  thereunder (the "Securities Act") at any time prior to or after the
exercise in whole or in part of the Option.

     11. Method of Exercise of Option.  (a) Subject to the terms and  conditions
of this  Agreement,  the Option shall be exercisable by notice in the manner set
forth in  Exhibit A hereto  (the  "Notice")  and  provision  for  payment to the


                                       5
<PAGE>

Company in accordance  with the procedure  prescribed  herein.  Each such Notice
shall:

               (i) state the  election to exercise  the Option and the number of
          Shares in respect of which it is being exercised;

               (ii) contain a  representation  and  agreement  as to  investment
          intent,  if required by counsel to the  Company  with  respect to such
          Shares, in form satisfactory to counsel for the Company;

               (iii) be signed by the Employee or the person or persons entitled
          to exercise  the Option and, if the Option is being  exercised  by any
          person or persons other than the Employee,  be  accompanied  by proof,
          satisfactory  to counsel for the Company,  of the right of such person
          or persons to exercise the Option; and

               (iv) be  received  by the  Company  on or before  the date of the
          expiration of this Option. In the event the date of expiration of this
          Option  falls on a day  which  is not a  regular  business  day at the
          Company's executive offices in Englewood,  Colorado, then such written
          notice must be  received at such office on or before the last  regular
          business day prior to such date of expiration.

     (b) Payment of the purchase price of any shares of Common Stock, in respect
of which the Option  shall be  exercised,  shall be made by the Employee or such
person or persons at the place  specified  by the Company at the time the Notice
is delivered to the Company (i) by delivering to the Company a certified or bank
cashier's  check payable to the order of the Company,  (ii) by delivering to the
Company   properly   endorsed   certificates  of  shares  of  Common  Stock  (or
certificates   accompanied  by  an  appropriate   stock  power)  with  signature
guaranties by a bank or trust company,  (iii) by having  withheld from the total
number of shares of Common Stock to be acquired upon the exercise of this Option
a  specified  number  of such  shares  of  Common  Stock,  (iv)  by any  form of
"cashless" exercise or (v) by any combination of the above.

     (c) The Option shall be deemed to have been  exercised  with respect to any
particular  shares of Common Stock if, and only if, the preceding  provisions of
this Section 11 and the provisions of Section 12 hereof shall have been complied
with,  in which event the Option  shall be deemed to have been  exercised on the
date the Notice of exercise of the Option was received by the Company.  Anything
in this Agreement to the contrary notwithstanding,  any notice of exercise given
pursuant to the  provisions of this Section 11 shall be void and of no effect if
all the preceding provisions of this Section 11 and the provisions of Section 12
shall not have been complied with.

     (d) The certificate or certificates  for shares of Common Stock as to which
the Option shall be exercised will be registered in the name of the Employee (or
in the name of the  Employee's  estate  or other  beneficiary  if the  Option is
exercised  after the  Employee's  death),  or if the Option is  exercised by the
Employee  and if the Employee so requests in the notice  exercising  the Option,
will be registered in the name of the Employee and another person jointly,  with
right of survivorship  and will be delivered as soon as practical after the date
the  Notice  (and  full  payment)  is  received  by the  Company,  but only upon
compliance with all of the provisions of this Agreement.


                                       6
<PAGE>

     (e) If the Employee fails to accept delivery of and pay for all or any part
of the  number  of Shares  specified  in such  Notice  upon  tender or  delivery
thereof,  his right to  exercise  the Option  with  respect to such  undelivered
Shares may be terminated in the sole discretion of the Board of Directors of the
Company. The Option may be exercised only with respect to full Shares.

     (f) The Company  shall not be required to issue or deliver any  certificate
or  certificates  for shares of its Common Stock  purchased upon the exercise of
any part of this Option prior to the payment to the Company, upon its demand, of
any amount requested by the Company for the purpose of satisfying its liability,
if any,  to  withhold  state  or  local  income  or  earnings  tax or any  other
applicable tax or assessment (plus interest or penalties thereon, if any, caused
by a delay in making such  payment)  incurred by reason of the  exercise of this
Option or the transfer of shares  thereupon.  Such payment  shall be made by the
Employee  in cash or,  with the  consent of the  Company,  by  tendering  to the
Company  shares of Common  Stock  equal in value to the  amount of the  required
withholding.  In the alternative,  the Company may, at its option,  satisfy such
withholding  requirements  by withholding  from the shares of Common Stock to be
delivered  to the  Employee  pursuant  to an exercise of this Option a number of
shares of Common Stock equal in value to the amount of the required withholding.

     12.  Approval of Counsel.  The  exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to approval
by the Company's counsel of all legal matters in connection therewith, including
compliance with the  requirements of the Securities Act and the Exchange Act and
the  requirements  of any stock exchange upon which the Common Stock may then be
listed.

     13.  Resale of Common Stock.  (a) If so requested by the Company,  upon any
sale or transfer of the Common Stock purchased upon exercise of the Option,  the
Employee shall deliver to the Company an opinion of counsel  satisfactory to the
Company to the effect that either (i) the Common Stock to be sold or transferred
has been  registered  under  the  Securities  Act and that  there is in effect a
current  prospectus  meeting the requirements of Section 10(a) of the Securities
Act which is being or will be delivered to the  purchaser  or  transferee  at or
prior to the time of delivery of the certificates evidencing the Common Stock to
be sold or  transferred,  or (ii) such  Common  Stock  may then be sold  without
violating Section 5 of the Securities Act.

     (b) The Common  Stock  issued upon  exercise  of the Option  shall bear the
following legend if required by counsel for the Company:

                  THE  SHARES  EVIDENCED  BY THIS  CERTIFICATE  MAY NOT BE SOLD,
                  TRANSFERRED,  PLEDGED,  HYPOTHECATED OR OTHERWISE  DISPOSED OF
                  UNLESS THEY HAVE FIRST BEEN  REGISTERED  UNDER THE  SECURITIES
                  ACT OF 1933, AS AMENDED,  OR UNLESS, IN THE OPINION OF COUNSEL
                  FOR THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.


                                       7
<PAGE>

     14.  Reservation  of Shares.  To the extent  shares of Common Stock are not
readily tradable over an established securities market, the Company shall at all
times during the term of the Option  reserve and keep  available  such number of
shares of the class of stock then subject to the Option as will be sufficient to
satisfy the requirements of this Agreement.

     15.  Limitation of Action.  The Employee and the Company each  acknowledges
that  every  right of  action  accruing  to him or it,  as the case may be,  and
arising out of or in  connection  with this  Agreement  against the Company or a
Parent or  Subsidiary,  on the one hand, or against the  Employee,  on the other
hand, shall, irrespective of the place where an action may be brought, cease and
be barred by the  expiration of three years from the date of the act or omission
in respect of which such right of action arises.

     16. Notices.  Each notice relating to the Agreement shall be in writing and
delivered in person or by certified mail to the proper  address.  All notices to
the Company or the Committee  shall be addressed to them at 161 Inverness  Drive
West, Englewood,  Colorado 80112, Attn:  Secretary.  All notices to the Employee
shall be  addressed  to the  Employee  or such  other  person or  persons at the
Employee's  address  specified in the Agreement.  Anyone to whom a notice may be
given under this Agreement may designate a new address by notice to that effect.

     17. Benefits of Agreement.  The Agreement shall inure to the benefit of and
be binding  upon each  successor  and  assign of the  Company.  All  obligations
imposed  upon the  Employee  and all rights  granted to the  Company  under this
Agreement shall be binding upon the Employee's heirs, legal  representatives and
successors.

     18.  Severability.  In the event  that any one or more  provisions  of this
Agreement  shall be deemed to be illegal or  unenforceable,  such  illegality or
unenforceability  shall  not  affect  the  validity  and  enforceability  of the
remaining legal and enforceable  provisions hereof,  which shall be construed as
if such illegal or unenforceable provision or provisions had not been inserted.

     19.  Governing  Law.  This  Agreement  will be  construed  and  governed in
accordance with the laws of the State of Delaware.

     20.  Employment.  Nothing contained in this Agreement shall be construed as
(a) a contract of employment  between the Employee and the Company or any Parent
or  Subsidiary,  (b) as a right of the Employee to be continued in the employ of
the Company or any Parent or Subsidiary,  or (c) as a limitation on the right of
the Company or any Parent or  Subsidiary  to discharge the Employee at any time,
with or without cause.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its name by its Chairman of the Board,  President or one of its  Executive  Vice


                                       8
<PAGE>

Presidents and the Employee has hereunto set his hand all as of the date,  month
and year first above written.

                                        ICG COMMUNICATIONS, INC.



                                        By:  /s/ John Kane
                                           --------------------------------
                                        Name:  John Kane
                                             ---------------------------
                                        Title: President
                                              --------------------------

                                         /s/ William S. Beans, Jr.
                                        -----------------------------------
                                        William S. Beans, Jr.


                                        -----------------------------------
                                        Social Security Number







                                       9
<PAGE>

EXHIBIT A

                        SHARE PRICE APPRECIATION VESTING
                    NON-QUALIFIED STOCK OPTION EXERCISE FORM

                                     [DATE]

ICG Communications, Inc.
161 Inverness Drive West
Englewood, Colorado 80112

Dear Sirs:

                  Pursuant to the  provisions  of the Share  Price  Appreciation
Vesting  Non-Qualified  Stock Option  Agreement dated  _________________,  1999,
whereby you have granted to me a Share Price Appreciation Vesting  non-qualified
stock option to purchase  260,000 shares of Common Stock of ICG  Communications,
Inc. (the "Company"),  I hereby notify you that I elect to exercise my option to
purchase  [ ] of the  shares  covered  by such  option  at the  price  specified
therein.  In full payment of the price for the shares being purchased  hereby, I
am delivering to you herewith (a) a certified or bank cashier's check payable to
the order of the Company in the amount of  $____________,1  or (b) a certificate
or certificates for [ ] shares of Common Stock of the Company,  and which have a
fair market value as of the date hereof of $___________, and a certified or bank
cashier's  check,  payable  to the  order  of the  Company,  in  the  amount  of
$________________.2  Any such stock certificate or certificates are endorsed, or
accompanied by an appropriate stock power, to the order of the Company,  with my
signature  guaranteed  by a bank or trust company or by a member firm of the New
York Stock Exchange. [I hereby acknowledge that I am purchasing these shares for
investment purposes only and not for resale.]

                              Very truly yours,


                              ------------------------------
                              [Name]
                              [Address]

                              (For notices, reports, dividend checks and other
                              communications to stockholders.)

__________________________

1.   $______________of  this amount is the purchase price of the shares, and the
     balance  represents  payment  of  withholding  taxes  as  follows:  Federal
     $______________, State $____________ and Local $____________.

2.   $______________of this amount is at least equal to the current market value
     of Common  Stock of the  Company,  and the  balance  represents  payment of
     withholding taxes as follows: Federal $______________,  State $____________
     and Local $____________.



                                       10
<PAGE>

EXHIBIT B
              Increase Amount
                 (in Dollars)             Earned Shares Value
             -----------------            -------------------
                               5                                       0
                              10                                   20000
                              15                                   30000
                              20                                   40000
                              25                                   50000
           --------------------------------------------------------------
                              30                                   60000
                              35                                   70000
                              40                                   80000
                              45                                   90000
                              50                                  100000
           --------------------------------------------------------------
                              55                                  110000
                              60                                  120000
                              65                                  125000
                              70                                  130000
                              75                                  135000
           --------------------------------------------------------------
                              80                                  140000
                              85                                  145000
                              90                                  150000
                              95                                  155000
                             100                                  160000
           --------------------------------------------------------------
                             105                                  165000
                             110                                  170000
                             115                                  175000
                             120                                  180000
                             125                                  185000
           --------------------------------------------------------------
                             130                                  190000
                             135                                  195000
                             140                                  200000
                             145                                  205000
                             150                                  210000
           --------------------------------------------------------------
                             155                                  215000
                             160                                  220000
                             165                                  225000
                             170                                  230000
                             175                                  235000
           --------------------------------------------------------------
                             180                                  240000
                             185                                  245000
                             190                                  250000
                             195                                  255000
                             200                                  260000


                                       11