<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant / /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TCA CABLE TV, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
TCA CABLE TV, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
TCA CABLE TV, INC.
March 1, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
TCA Cable TV, Inc. scheduled to be held on March 30, 1995, at the corporate
offices of the Company, 3015 SSE Loop 323, Tyler, Texas, commencing at 3:30 p.m.
Your Board of Directors and management look forward to personally greeting those
shareholders able to attend.
At the meeting, shareholders are being asked to elect eight directors and
to approve amendments to the Company's Amended and Restated Incentive Stock
Option Plan. In addition, management will report to the shareholders on the
operations and affairs of the Company.
It is important that your shares are represented at the meeting.
Accordingly please sign, date and return the enclosed proxy card in the envelope
provided for your convenience.
On behalf of the Board of Directors, thank you for your continued support.
Sincerely,
ROBERT M. ROGERS,
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
TCA CABLE TV, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 30, 1995
Notice is hereby given that the Annual Meeting of Shareholders of TCA Cable
TV, Inc., a Texas corporation (the "Company"), will be held on Thursday, March
30, 1995, at 3:30 p.m. at the corporate offices of the Company, 3015 SSE Loop
323, Tyler, Texas, for the following purposes:
(1) To elect eight directors (constituting the entire Board of Directors)
to serve until the next Annual Meeting of Shareholders or until their
respective successors shall be elected and shall qualify;
(2) To approve amendments to the Company's Amended and Restated Incentive
Stock Option Plan (the "Incentive Plan") (a) to increase the number of
shares of the Company's Common Stock available for issuance upon the
exercise of options granted under the Incentive Plan from 410,000 shares
to 660,000 shares, (b) to extend the term of such plan to March 29,
2005, (c) to allow the grant of non-statutory stock options under the
Incentive Plan, and (d) to extend the period during which options
granted under the Incentive Plan may be exercisable following the death
of an optionee; and
(3) To transact such other business as may properly come before the Annual
Meeting of Shareholders or any meetings to which such Annual Meeting may
be adjourned.
The accompanying Proxy Statement contains information regarding, and a more
complete description of, the items of business to be considered at the meeting.
The close of business on February 20, 1995, has been fixed as the record
date for determination of shareholders entitled to notice of, and to vote at,
such Annual Meeting of Shareholders and any adjournments thereof, and only
shareholders of record at February 20, 1995, are so entitled.
Please complete, date and sign the enclosed Proxy and return it promptly.
If you attend the meeting, you may vote in person. A reply envelope is provided
for this purpose and needs no additional postage if mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS,
MARTHA S. HENSLEY,
Secretary
Tyler, Texas
March 1, 1995
<PAGE> 4
TCA CABLE TV, INC.
3015 SSE LOOP 323
TYLER, TEXAS 75701
---------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 30, 1995
---------------
This Proxy Statement is being sent to shareholders of TCA Cable TV, Inc.
("TCA" or the "Company") in connection with the solicitation by the Board of
Directors of the Company of proxies for use at the Annual Meeting of
Shareholders of the Company to be held on March 30, 1995, or any meeting(s) to
which such annual meeting may be adjourned (the "Annual Meeting"). The Annual
Meeting will be held for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. Solicitation of proxies may be made in person or
by mail, telephone, or telegraph by directors, officers, and regular employees
of the Company. The Company may also request banking institutions, brokerage
firms, custodians, nominees, and fiduciaries to forward solicitation material to
the beneficial owners of the Company's Common Stock, par value $.10 per share
(the "Common Stock"), held of record by such persons, and the Company will
reimburse their forwarding expenses. The cost of solicitation of proxies will be
paid by the Company. This Proxy Statement was first mailed to shareholders on or
about March 1, 1995.
Any shareholder returning the form of proxy enclosed with this Proxy
Statement has the power to revoke such proxy at any time prior to its use by
written notice of such revocation received by the Company prior to its use. If
notice of revocation is not received prior to such time, a shareholder may
nevertheless revoke a proxy if he attends the Annual Meeting and desires to vote
in person.
VOTING SECURITIES
The voting securities of the Company are shares of its Common Stock, each
share of which entitles the holder thereof to one vote. Only shareholders of
record of the Company at the close of business on February 20, 1995, are
entitled to notice of, and to vote at, the Annual Meeting. At February 20, 1995,
there were approximately 24,530,531 shares of Common Stock outstanding.
QUORUM AND VOTING
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum. Each share represented at the Annual Meeting in person or
by proxy will be counted toward a quorum. In deciding all questions, a holder of
Common Stock on the Record Date shall be entitled to one vote for each share.
In order to be elected a director, a nominee must receive the affirmative
vote of the holders of a plurality of the shares of Common Stock present, in
person or by proxy, at the Annual Meeting, provided a quorum is present. With
regard to the election of directors, votes may be cast in favor or withheld;
votes that are withheld will be excluded entirely from the vote and will have no
effect.
In order to comply with Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), approval of the proposed amendments to the
Amended and Restated Incentive Stock Option Plan requires the favorable vote of
the holders of a majority of the shares present, or represented, and entitled to
vote at the meeting. Abstentions on such proposals may be specified and will
have the same effect as a vote
<PAGE> 5
against such proposals. Broker non-votes will not be counted as having been
voted with respect to such proposals.
BENEFICIAL OWNERSHIP
The following table sets forth as of January 6, 1995, information regarding
the beneficial ownership of the Company's Common Stock by each person known by
the Company to own five percent (5%) or more of the outstanding shares of Common
Stock, each director of the Company, the Company's Chief Executive Officer, the
Named Executive Officer (as herein defined), and the executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
TITLE OF BENEFICIAL OF
BENEFICIAL OWNER CLASS OWNERSHIP(1) CLASS(2)
----------------------------- ------------- ------------ --------
<S> <C> <C> <C>
Robert M. Rogers Common Stock 5,141,594(3) 20.9%
3015 SSE Loop 323
Tyler, TX 75701
Louise H. Rogers Common Stock 3,280,501(4) 13.4
2512 Alta Mira
Tyler, TX 75701
Putnam Investments, Inc. Common Stock 1,726,753(5) 7.0
One Post Office Square
Boston, MA 02109
The Capital Group Common Stock 1,663,000(6) 6.8
Companies, Inc.
333 South Hope Street
Los Angeles, CA 90071
A. W. Riter, Jr. Common Stock 691,795(7) 2.8
Ben R. Fisch, M.D. Common Stock 670,102 2.7
Fred R. Nichols Common Stock 49,968(8) *
Wayne J. McKinney Common Stock 126,291 *
James F. Ackerman Common Stock 10,000 *
Kenneth S. Gunter Common Stock 5,500 *
Randall K. Rogers Common Stock 126,120(9)(10) *
Directors and executive
officers as a group (twelve
persons) Common Stock 6,882,493(3)(7)(10)(11) 28.0%
</TABLE>
- ---------------
* Less than 1.0%
(1) "Beneficially" owned shares, as defined by the Securities and Exchange
Commission, are those shares as to which a person has voting or dispositive
power, or both. "Beneficial" ownership does not necessarily mean that the
named person is entitled to receive the dividends on, or the proceeds from
the sale of, the shares. The persons listed above have the sole power to
vote and dispose of the shares beneficially owned by them except as
otherwise indicated.
(2) This calculation is the quotient of (a) the number of shares currently
beneficially owned by the named individual or group, plus the number of
shares, if any, for which options held by such person or group are
exercisable within 60 days, divided by (b) the total number of shares
outstanding at January 6, 1995, plus the number of shares, if any, for
which options held by such person or group are exercisable within 60 days.
2
<PAGE> 6
(3) Includes 120,000 shares owned by The Rogers Foundation, Inc., a private
charitable foundation of which Mr. Robert M. Rogers is President. Also
includes 1,000,000 shares owned by Rogers Venture Enterprises, Inc., a
corporation wholly owned by Mr. Robert M. Rogers and Louise H. Rogers.
(4) Does not include 1,000,000 shares owned by Rogers Venture Enterprises,
Inc., a corporation owned 50% by Louise H. Rogers and 50% by Robert M.
Rogers. Ms. Rogers disclaims beneficial ownership of such shares.
(5) As indicated on Schedule 13-G dated February 2, 1995, Putnam Investment
Management, Inc. and The Putnam Advisory Company, Inc. (together with their
parent corporations, Putnam Investments, Inc. and Marsh & McLennan
Companies, Inc.), are considered "beneficial owners" in the aggregate of
1,726,753 shares, or 7% of shares outstanding, of the Company's voting
common stock, which shares were acquired for investment purposes by such
investment managers for certain of their advisory clients.
(6) As indicated on Schedule 13-G dated February 8, 1995, Capital Guardian
Trust Company and Capital Research and Management Company, operating
subsidiaries of The Capital Group Companies, Inc., exercised as of December
31, 1994, investment discretion with respect to 1,123,000 and 540,000
shares, respectively, or a combined total of 6.77% of outstanding stock
which was owned by various institutional investors.
(7) Includes 36,860 shares owned by various trusts of which Mr. Riter is
Co-trustee, and 20,000 shares owned by a family partnership of which a
trust controlled by Mr. Riter is the sole general partner.
(8) Includes 21,250 shares covered by currently exercisable options granted
under the Incentive Stock Option Plan and 700 shares owned by Mr. Nichols'
daughters who reside with him.
(9) Includes 1,500 shares covered by currently exercisable options granted
under the Incentive Stock Option Plan.
(10) Includes 59,200 shares owned by The Rogers Family Trust of which Mr.
Randall K. Rogers is a Trustee.
(11) Includes 46,625 shares covered by currently exercisable options granted
under the Incentive Stock Option Plan.
PROPOSAL 1 -- ELECTION OF DIRECTORS
NOMINEES FOR DIRECTORS
Eight directors are to be elected at the Annual Meeting, each director to
hold office for a term of one year or until his successor shall have been
elected and qualified. The shares represented by the proxy will be voted for the
nominees whose names appear therein, but the persons designated as proxies
reserve full discretion to cast votes for other persons in the event that any
such nominees are unable to serve. All of the nominees have indicated that they
are willing to stand for election and are willing to serve if elected.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE POSITION HELD AGE SINCE
- ---------------------- ------------------------------------ ---- --------
<S> <C> <C> <C>
Robert M. Rogers Chairman of the Board of Directors 68 1981
and Chief Executive Officer
Fred R. Nichols President, Chief Operating Officer 48 1981
and Director
Wayne J. McKinney(2) Director 63 1981
Ben R. Fisch, M.D.(1) Director 69 1981
A. W. Riter, Jr.(1) Director 70 1981
James F. Ackerman(2) Director 70 1981
Kenneth S. Gunter(2) Director 61 1984
Randall K. Rogers Director 35 1989
</TABLE>
3
<PAGE> 7
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(1) Member of Audit Committee.
(2) Member of Compensation and Stock Option Committee.
Each of the foregoing persons has served in the above capacities since the
inception of the Company in 1981 unless otherwise indicated.
Robert M. Rogers founded the Company and each of its subsidiaries and has
served as Chairman of the Board of Directors and CEO of the Company and each of
the Company's subsidiaries since their inception. Mr. Rogers was President of
the Company from its inception in 1981 until September, 1990. Mr. Rogers has
been actively involved in the ownership and operation of cable television
systems since 1954. Mr. Rogers is the Chairman of the Board of Directors and an
officer, director and shareholder of the two systems for which corporations
affiliated with the Company provide general management services. He is a member
of the cable television Pioneer's Club.
Fred R. Nichols is President, Chief Operating Officer and a director of the
Company. Prior to being named President in September, 1990, Mr. Nichols served
as Executive Vice President and a director of the Company since its inception,
Chief Operating Officer of the Company since December, 1983 and Secretary of the
Company from September, 1984 to December, 1990. He had been Treasurer of the
Company's subsidiaries from 1980 until 1985 when he was named President of TCA
Management Company and all other wholly-owned subsidiaries of the Company,
excluding VPI Communications, Inc. Mr. Nichols is currently Chairman of the
Cable Telecommunications Association (CATA), a trade association of the cable
industry. He is also on the Board of Directors of C-SPAN, a CATV network.
Wayne J. McKinney has been actively engaged in the cable television
business since 1958 and was employed by the Company or its subsidiaries from
1958 until his retirement in January, 1986, serving as a Director and Senior
Vice President -- Engineering of the Company from its inception and as Senior
Vice President or Vice President, Chief Engineer and/or Director of Engineering
of the Company's subsidiaries. Mr. McKinney has been a member of the cable
television Pioneer's Club since 1979, and is a charter member of the Society of
Cable Television Engineers.
Ben R. Fisch, M.D., has been a director of the Company or its subsidiaries
since 1967. Dr. Fisch has been retired from medical practice in Tyler, Texas
since July, 1986.
A. W. Riter, Jr. retired as Chairman of the Board of Directors and Chief
Executive Officer of NCNB Texas-Tyler, Texas (successor to First RepublicBank
Tyler), on September 30, 1988. He held the same positions with First
RepublicBank Tyler and its predecessor, InterFirst Bank Tyler, from August, 1979
to June, 1988 and served as President of Peoples National Bank (predecessor of
InterFirst Bank Tyler) from 1964 to 1979. Mr. Riter served as a director and
Vice President of most of the Company's subsidiaries from time to time from 1965
to 1974.
James F. Ackerman is President of Cardinal Ventures, LLC in Indianapolis,
Indiana. Cardinal Ventures, LLC is an equity investor in small businesses. He
had been President of Jim Ackerman and Associates, Inc., a financial consulting
firm to the cable television industry, from October, 1984 to December 31, 1994.
From 1973 to December 1, 1984, he was Senior Vice President of A. G. Becker
Paribas, Inc. Mr. Ackerman has been engaged in investment banking activities
with respect to the cable television industry since 1959 and had served as a
partner of Becker Communications Associates, a cable television investment
partnership, from 1973 to 1989. He was also Chairman and Chief Executive Officer
of Cardinal Communications, Inc., an Indiana cable television operator, a
position he had held since 1971 until the company was sold in 1993. Mr. Ackerman
is a former President and Director of the Indiana Cable Television Association,
a past Director of the National Cable Television Association and a member of the
cable television Pioneer's Club.
Kenneth S. Gunter has been Executive Vice President of Columbia
International, Inc., a cable television multiple system operator, since 1985.
From 1972 to 1985, he served as Executive Vice President of UA-Columbia
Cablevision, Inc. Mr. Gunter has 36 years experience in the cable television
industry, working in all
4
<PAGE> 8
phases of management and engineering. He is a past Director of the National
Cable Television Association, a Senior Member and past Director of the Society
of Cable Television Engineers, and a member of the cable television Pioneer's
Club.
Randall K. Rogers has been with TCA since 1983, previously serving as
system manager in Big Spring and Huntsville, Texas. Since 1989, Mr. Rogers has
served as general manager of the Company's operations in Bryan/College Station,
Texas. Mr. Rogers is the son of Robert M. Rogers.
The Board of Directors held four meetings during fiscal 1994. The Board of
Directors has two standing committees -- the Audit Committee and the Stock
Option and Compensation Committee.
The functions performed by the Audit Committee include: recommending to the
Board of Directors selection of the Company's independent accountants for the
ensuing year; reviewing with the independent accountants and management the
scope and result of the audit; reviewing the independence of the independent
accountants; reviewing actions by management and independent accountants'
recommendations; and meeting with management and the independent auditors to
review the effectiveness of the Company's system of internal control. The Audit
Committee met two times during fiscal 1994.
The Compensation and Stock Option Committee met twice during 1994. The
functions performed by this committee include: reviewing and recommending the
Company's executive salary structure; reviewing the Company's Incentive Stock
Option Plan (and granting options thereunder); recommending directors' fees; and
approving salary and bonus awards to certain key employees.
The Board of Directors does not have a nominating committee. Functions
customarily attributed to a nominating committee are performed by the Board of
Directors as a whole.
During 1994, each director attended all meetings of the Board of Directors
and respective committees on which he served with the exception of one director
who was unable to attend one meeting.
PROPOSAL 2 -- AMENDMENTS TO THE
AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN
Proposal 2 relates to certain amendments (the "Plan Amendments") to the
Company's Amended and Restated Incentive Stock Option Plan (the "Incentive
Plan"). The Plan Amendments have been unanimously adopted by the Board of
Directors, subject to the approval of the shareholders, and are intended (i) to
increase the number of shares of Common Stock that may be issued upon the
exercise of options granted under the Incentive Plan from 410,000 shares to
660,000 shares, (ii) to extend the term of such plan until March 29, 2005, (iii)
to allow the grant of non-statutory stock options under the Incentive Plan, and
(iv) to extend the period during which options granted under the Incentive Plan
may be exercisable following the death of an optionee. The Board of Directors
believes that the continued success of the Company depends upon its ability to
attract and retain highly qualified and competent key employees and that options
enhance that ability and provide motivation to key employees to advance the
interests of the Company and its shareholders. The Board of Directors therefore
recommends that shareholders vote in favor of such amendments.
The Incentive Plan was adopted in January, 1982 by the Company's
shareholders and amended in March, 1988 (1) to increase the number of shares
available for issuance upon exercise of options under the Incentive Plan from
105,000 to 205,000, and (2) to extend the term of the plan until March 23, 1998.
The Incentive Plan, as amended to date, provides for the grant of options to
acquire up to 410,000 shares of the Common Stock, which includes a 2-1 stock
split in June, 1989. At October 31, 1994, options under the Incentive Plan to
purchase 152,206 shares of Common Stock were outstanding, and options to
purchase 16,514 shares of Common Stock remained available for grant. Unless
extended or earlier terminated by action of the Board of Directors, the
Incentive Plan will terminate on March 23, 1998.
5
<PAGE> 9
SUMMARY OF THE INCENTIVE PLAN
General
A copy of the Incentive Plan, as proposed to be amended, is attached to
this Proxy Statement as Appendix A. The following is a brief summary of certain
provisions of the Incentive Plan and is qualified in its entirety by reference
to the full text of the Incentive Plan.
Current Provisions of the Incentive Plan. The Board of Directors has
delegated its authority to administer the Incentive Plan to the Compensation and
Stock Option Committee (the "Committee"). The Committee generally has the
authority to fix the terms and number of options to be granted and the employees
to receive the options. The Incentive Plan provides that options must be
exercised within ten years from the date of grant (or five years in the case of
options granted to employees owning more than 10% of the Common Stock). Options
issued under the Incentive Plan are generally exercisable commencing after one
year from the date of grant to the extent of 25 percent of the aggregate number
of shares originally covered by the option each successive year. After four
years from the date the option was granted, the option may be exercised in whole
or in part, and generally expires seven years from the date of grant, except in
the event of termination from employment, disability or death of an optionee.
The Incentive Plan currently provides that (i) in the event of an optionee's
termination of employment with the Company for any reason other than death, the
optionee's option may be exercised within three months (one year in the case of
termination by reason of disability) from the date of termination but not past
the normal expiration date of the option and only to the extent the optionee had
the right to exercise such Option on the date of such termination and (ii) in
the event of an optionee's death while in the employ of the Company (or
employment by reason of retirement with consent of the Company), the optionee's
option shall be exercisable prior to the expiration date of the option or within
three months after the death of the optionee, whichever is earlier, but only to
the extent that the optionee had the right to exercise such Option on the date
of the optionee's death. With respect to options granted after December 31,
1986, the maximum aggregate fair market value (determined at the time the option
is granted) of the Common Stock with respect to which options are exercisable
for the first time by any employee during any calendar year may not exceed
$100,000. The exercise price of each option granted under the Incentive Plan may
not be less than 100% of the fair market value of the Common Stock on the date
of grant (or 110% in the case of options granted to employees owning more than
10% of the Common Stock). The closing price of the Common Stock on January 6,
1995, as quoted on the NASDAQ National Market Quotation System, was $22.125 per
share. The option exercise price may be paid in shares of Common Stock owned by
optionees or in cash.
Proposed Amendments. The Plan Amendments have been unanimously adopted by
the Board of Directors, subject to the approval of the shareholders, and are
intended (i) to increase the number of shares of Common Stock that may be issued
upon the exercise of options granted under the Incentive Plan from 410,000
shares to 660,000 shares, (ii) to extend the term of such plan until March 29,
2005, (iii) to allow the grant of non-statutory stock options under the
Incentive Plan, and (iv) to extend the period during which options granted under
the Incentive Plan may be exercisable following the death of optionee.
Specifically, if an optionee ceases to be employed by the Company for any reason
other than death, an option shall be exercisable by the optionee at any time
prior to the expiration date of the option or within three months (or one year
in the case of termination by reason of disability) after the date of such
termination, whichever is earlier, but only to the extent the optionee had the
right to exercise such option at the date of such termination. In the event of
death of an optionee while in the employ of the Company or within three months
after termination of employment, his option shall be exercisable by the person
or persons to whom such optionee's rights pass by will or by the laws of descent
and distribution at any time prior to the expiration date of the option or prior
to one year after the date of such death, whichever is earlier, but only to the
extent the optionee had the right to exercise such option on the date of his
death. Appendix A reflects certain other amendments to the Incentive Plan that
have been unanimously approved by the Board of Directors, none of which require
the approval of shareholders. Shareholders should, however, carefully review
Appendix A in its entirety.
6
<PAGE> 10
Summary of Certain Federal Income Tax Consequences of Incentive Stock
Options. Incentive stock options granted pursuant to the Incentive Plan are
intended to qualify as "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code, as amended (the "Code") for favorable tax
treatment to the optionees. No taxable income is realized by an optionee and no
tax deduction is available to the Company upon either the grant or exercise of
an incentive stock option. If an optionee holds the shares acquired upon the
exercise of an incentive stock option for more than one year after the issuance
of the shares upon exercise of the incentive stock option and more than two
years after the date of the grant of the incentive stock option ("holding
period"), the difference between the exercise price and the amount realized upon
the sale of the shares will be treated as a long-term capital gain or loss and
no deduction will be available to the Company. If the shares are transferred
before the expiration of the holding period, the optionee will realize ordinary
income and the Company will be entitled to a deduction on the portion of the
gain, if any, equal to the difference between the incentive stock option
exercise price and the fair market value of the shares on the date of exercise
or, if less, the difference between the amount realized on the disposition and
the adjusted basis of the stock, unless such amount exceeds the one million
dollar limitation on the deduction that an employer may claim for compensation
of certain executives under Section 162(m) of the Code (the "Deduction
Limitation") and does not satisfy an exception to the Deduction Limitation. Any
further gain or loss will be taxable as a long-term or short-term capital gain
or loss depending upon the holding period before disposition. Certain special
rules apply if an incentive stock option is exercised by tendering stock. The
difference between the incentive stock option exercise price and the fair market
value, at the time of exercise, of the Common Stock acquired upon the exercise
of an incentive stock option may give rise to alternative minimum taxable income
subject to an alternative minimum tax. Special rules also may apply in certain
cases where there are subsequent sales of shares in disqualifying dispositions
and to determine the basis of the stock for purposes of computing alternative
minimum taxable income on a subsequent sale of the shares.
Summary of Certain Federal Income Tax Consequences of Non-Statutory Stock
Options. No taxable income generally is realized by the participant upon the
grant of a non-statutory stock option, and no deduction generally is then
available to the Company. Upon exercise of a non-statutory stock option, the
excess of the fair market value of the shares on the date of exercise over the
exercise price will be taxable to the participant as ordinary income. Such
amount will also be deductible by the Company unless such amount exceeds the
Deduction Limitation and does not satisfy an exception to the Deduction
Limitation. The tax basis of shares acquired by the participant will be the fair
market value on the date of exercise. When a participant disposes of shares
acquired upon exercise of a non-statutory stock option, any amount realized in
excess of the fair market value of the shares on the date of exercise generally
will be treated as a capital gain and will be long-term or short-term, depending
on the holding period of the shares. The holding period commences upon exercise
of the non-statutory stock option. If the amount received is less than such fair
market value, the loss will be treated as a long-term or short-term capital
loss, depending on the holding period of the shares. The exercise of a
non-statutory stock option will not trigger the alternative minimum tax
consequences applicable to incentive stock options.
Issuances of Options under the Incentive Plan
The following table sets forth certain information regarding options
received under the Incentive Plan from its inception through October 31, 1994 by
(i) the Company's Chief Executive Officer, (ii) the Company's sole executive
officer, other than the CEO, whose total annual salary and bonus exceeded
$100,000 in fiscal 1994 (the "Named Executive Officer") individually, (iii) all
current executive officers as a group, (iv) all current directors who are not
executive officers as a group, (v) each nominee for election as a director, (vi)
each associate of any of such directors, executive officers or nominees, (vii)
each person who has
7
<PAGE> 11
received 5% or more of such options and (viii) all employees, including all
current officers who are not executive officers, as a group.
<TABLE>
<CAPTION>
AGGREGATE AMOUNT
OF COMMON STOCK
SUBJECT TO
INCENTIVE PLAN OPTIONS
GRANTED FROM
INCEPTION THROUGH
INDIVIDUAL OR GROUP OCTOBER 31, 1994
------------------------------------------------------------------ ----------------------
<S> <C>
Robert M. Rogers.................................................. -0-
Fred R. Nichols................................................... 83,500
All current executive officers as a group......................... 158,400
All current directors who are not executive officers as a group... 3,750
Wayne J. McKinney................................................. -0-
Ben R. Fisch, M.D................................................. -0-
A. W. Riter, Jr................................................... -0-
James F. Ackerman................................................. -0-
Randall K. Rogers................................................. 3,750
Associate of any director, executive officer or nominee for
election
as a director................................................... -0-
Jerry P. Yandell.................................................. 21,000
Jimmie F. Taylor.................................................. 21,750
Melvin R. Jenschke................................................ 26,000
All employees, including all current officers who are not
executive officers, as a group.................................. 235,086
</TABLE>
The amounts that would be receivable by the individuals or groups named in
the table above under the Incentive Plan as proposed to be amended are not
determinable at this time.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during the Company's last three fiscal years to the Company's Chief
Executive Officer and the Named Executive Officer.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION NUMBER OF
-------------------- SECURITIES ALL OTHER
NAME AND FISCAL SALARY UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) OPTIONS/SARS ($)(2)
--------------------------------- ------ ------- ------------ ------------
<S> <C> <C> <C> <C>
Robert M. Rogers, 1994 191,250 -- 5,572
Chairman of the Board and 1993 176,482 -- 5,234
Chief Executive Officer 1992 171,320 -- 5,080
Fred R. Nichols, 1994 186,566 25,000 5,885
President, Chief Operating 1993 170,885 10,000 5,067
Officer and Director 1992 161,723 -- 4,792
</TABLE>
- ---------------
(1) Includes director's fee paid to the named executive officer.
(2) Consists solely of (i) Company contributions under the Company's Deferred
Savings and Retirement Plan, and (ii) premiums paid on term life insurance
policies for the executive's benefit.
8
<PAGE> 12
OPTION GRANTS DURING 1994 FISCAL YEAR
The following table provides information related to options granted to the
named executive officers during fiscal 1994.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL
NUMBER OF REALIZABLE VALUE
SECURITIES AT ASSUMED ANNUAL
UNDERLYING 10% OF TOTAL RATES OF STOCK
OPTIONS/ OPTIONS/SARS PRICE APPRECIATION
SARS GRANTED TO EXERCISE OR FOR OPTION TERM(1)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ------------------
NAME (#)(2) FISCAL YEAR ($/SH)(3) DATE 5% 10%
- ----------------------------------------------- ---------- ------------ ----------- -------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Rogers............................... -- -- -- -- -- --
Fred R. Nichols................................ 25,000(4) 52.9 25.13 Dec. 16, 2000 255,761 596,032
</TABLE>
- ---------------
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
to the expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the term of the options.
These numbers do not take into account provisions of certain options
providing for termination of the option following termination of
employment, nontransferability or vesting over periods of up to four years.
(2) Options to acquire shares of Common Stock.
(3) The option exercise price may be paid in shares of Common Stock owned by
the executive officer, in cash, or in any other form of valid considera-
tion or a combination of any of the foregoing, as determined by the
Stock Option Committee in its discretion.
(4) Options become exercisable with respect to 25% of the shares covered
thereby on each of December 16, 1994, 1995, 1996 and 1997. The exercise
price was equal to the fair market value of the Common Stock on the date
of grant.
OPTION/SAR EXERCISES DURING 1994 FISCAL YEAR AND FISCAL YEAR END OPTION/SAR
VALUES
The following table provides information related to options exercised by
the named executive officers during the 1994 fiscal year and the number and
value of options held at fiscal year end. The Company does not have any
outstanding stock appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
ACQUIRED VALUE OPTIONS/SARS AT FY-END (#) AT FY-END ($)(1)
ON EXERCISE REALIZED ------------------------------- -----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- ----------- -------- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Rogers............... -- -- -- -- -- --
Fred R. Nichols................ -- -- 12,500 32,500 58,075 20,625
</TABLE>
- ---------------
(1) The closing price for the Company's Common Stock as reported by NASDAQ on
October 31, 1994 was $23.50. Value is calculated on the basis of the
difference between the option exercise price and $23.50 multiplied by the
number of shares of Common Stock underlying the option.
COMPENSATION OF DIRECTORS
Each of the Company's directors receives $500 per quarter for service as a
director. Additionally, Messrs. Fisch, McKinney and Riter receive $500 per
meeting attended and Messrs. Ackerman and Gunter receive $1,000 per meeting
attended.
9
<PAGE> 13
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE OF THE BOARD OF
DIRECTORS ON EXECUTIVE COMPENSATION
The members of the Compensation and Stock Option Committee (the
"Committee") are Kenneth S. Gunter, Chairman, James F. Ackerman and Wayne J.
McKinney. In determining the compensation to be paid to the Company's executive
officers in fiscal 1994, the Committee employed compensation policies designed
to align the compensation with the Company's overall business strategy. These
policies are intended to (i) reward executives for long-term strategic
management and the enhancement of shareholder value, (ii) support a
performance-oriented environment that rewards achievement of initial Company
goals and recognizes Company performance compared to performance levels of
comparable companies in the cable industry, and (iii) attract and retain
executives whose abilities are critical to the long-term success and
competitiveness of the Company.
The key components of executive officer compensation, salary and stock
option awards, are determined annually in the discretion of the Committee. The
Committee considers each executive officer's level of responsibility in setting
executive compensation, meaning that the Company pays higher levels of
compensation to persons having higher levels of responsibility. The Committee
also considers compensation levels among other public companies in the cable
television industry in setting executive officer compensation. These businesses
include, but are not limited to, the companies reflected in the peer group index
in the Stock Performance Chart. The Committee makes these comparisons in an
effort to determine whether the Company's executive compensation is reasonable
and remains competitive enough to allow the Company to retain skilled
executives. The Committee believes that the compensation paid to its executive
officers, including its Chief Executive Officer ("CEO"), are on the low end of
the compensation of executive officers of companies to which these comparisons
are made. Finally, in setting executive officer compensation the Committee
considers the Company's performance in terms of stock price, earnings and cash
flow. Earnings and cash flow increased during fiscal 1992, 1993 and 1994. The
stock price increased in fiscal 1992 and 1993 and decreased in fiscal 1994.
However, no part of executive compensation is strictly tied to performance
criteria. Therefore, even in a year in which stock price, earnings and cash flow
were flat or down the Committee could, in its discretion, grant increases in
executive compensation. The Committee traditionally has not granted bonuses to
executive officers but may, in its discretion, grant bonuses from time to time
as it deems appropriate. In determining executive compensation levels, the
Company believes that it affords approximately equal weight to each of the
factors described herein. No stock option awards were made to executive officers
during fiscal 1992. Fred R. Nichols was granted a stock option of 10,000 shares
in fiscal 1993 at an exercise price of $20.75 and a stock option of 25,000
shares in fiscal 1994 at an exercise price of $25.13. In each case, the stock
option exercise price was the fair market value of the Company's Common Stock on
the dates granted. When making stock option awards to executive officers, the
Committee bases the size of the awards on the foregoing factors. In determining
the amount of options granted to Mr. Nichols in fiscal 1993 and 1994, the
Committee considered the amount and terms of options already held by Mr.
Nichols.
The Committee increased the CEO's salary approximately $11,000 to
approximately $184,000 in fiscal 1994. The Committee set the fiscal 1994
compensation of the Company's CEO on the basis of the CEO's level of
responsibility, comparisons to salaries of chief executive officers of
businesses the Committee deemed comparable (as described above) and the
Company's performance in terms of stock price, earnings and cash flow. Earnings
and cash flow increased in fiscal 1992, 1993 and 1994. The stock price increased
in fiscal 1992 and 1993 and decreased in fiscal 1994. As stated previously, the
Committee believes that the CEO's compensation is on the low end of compensation
of chief executive officers of companies to which comparisons were made, but the
Committee believes that the CEO's compensation remains competitive enough to
allow the Company to retain a skilled chief executive officer. The CEO's fiscal
1994 compensation was based in part on the Company's stock price, earnings and
cash flow but was in no way specifically tied to any of those factors pursuant
to a formula or other objective criteria. The CEO was not paid a bonus during
fiscal 1994. The current CEO is a major shareholder of the Company. The
Committee believes, therefore, that the CEO's interests are strongly tied to the
Company's stock performance and has not granted stock options to the current
CEO.
10
<PAGE> 14
This report is submitted by the members of the Compensation and Stock
Option Committee:
Kenneth S. Gunter, Chairman
James F. Ackerman
Wayne J. McKinney
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Stock Option Committee are Kenneth S.
Gunter, James F. Ackerman and Wayne J. McKinney. None of these individuals was
an officer or employee of the Company during fiscal 1994. Wayne J. McKinney is a
former officer of the Company, having retired in 1986.
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five fiscal
years ended October 31, 1994 with the cumulative total return on (i) the S&P 500
Index and (ii) a peer group consisting of businesses engaged in the cable
television industry selected by the Company for use in this proxy statement
("Peer Group"). The comparison assumes $100 was invested on October 31, 1989 in
the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
The businesses included in the Peer Group are: Adelphia Communications
Corporation (Class A Stock); Cablevision Systems Corporation (Class A Stock);
Century Communications Corp. (Class A Stock); Comcast
Cablevision -- Philadelphia; Comcast Corporation (Class A Stock); Falcon Cable
Systems Company, a California Limited Partnership; Galaxy Cablevision, L.P.;
Jones Intercable Investors, L.P. (Class A Stock); Jones Intercable, Inc.; Jones
Spacelink, Ltd. (Class A Stock); the Company; Tele-Communications, Inc. (Class A
Stock); Time Warner Inc.; and The Times Mirror Company (Series A Stock). The
returns of each component issuer in the foregoing group have been weighted
according to the respective issuer's stock market capitalization.
<TABLE>
<CAPTION>
Measurement Period S&P 500 INDEX TCA CABLE TV INC PEER GROUP
(Fiscal Year Covered)
<S> <C> <C> <C>
Oct-89 100 100 100
Oct-90 92.52 62.36 52.92
Oct-91 123.51 109.80 98.66
Oct-92 135.81 117.99 99.91
Oct-93 156.10 187.40 187.01
Oct-94 162.14 153.47 143.99
</TABLE>
11
<PAGE> 15
CERTAIN TRANSACTIONS
LEASED PROPERTY
Rogers Venture Enterprises, Inc. ("RVE"), a corporation owned 50% by Robert
M. Rogers, Chairman of the Board and Chief Executive Officer of the Company,
owns the building in which the Company's principal executive offices are
located. In November, 1993, the Company paid $32,812 for its monthly lease, with
lessor providing utilities, maintenance and janitorial services. In December,
1993, this lease between the Company and RVE was amended to provide for monthly
payments of $26,542.92, with the Company paying for utilities and janitorial
services. The Company believes that the terms of such lease are at least as
favorable as would be obtainable from a third-party lessor. Total amounts paid
by the Company under this lease during fiscal 1994 were $324,784.
SECTION 16 REQUIREMENTS
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the "SEC") and
NASDAQ. Such persons are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it with
respect to fiscal 1994, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
directors, officers and persons who own more than 10% of a registered class of
the Company's equity securities have been complied with, except that James F.
Ackerman and Fred R. Nichols each filed one Form 4 late covering one transaction
each, and Kenneth S. Gunter filed two Form 4's late covering one transaction
each.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's principal auditors are Coopers & Lybrand LLP. A
representative of Coopers & Lybrand will be present at the Annual Meeting of
Shareholders and will have the opportunity to make any desired statement and
will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for shareholder
action at subsequent annual meetings of the Company consistent with Rule 14a-8
of the Exchange Act. For such proposals to be considered for inclusion in the
Proxy Statement and Proxy relating to the 1995 Annual Meeting of Shareholders
such proposals must be received by the Company not later than November 3, 1995.
Such proposals should be directed to TCA Cable TV, Inc., Investor Relations,
P.O. 130489, Tyler, Texas 75713-0489.
OTHER MATTERS
Management does not know of any matters to be brought before the meeting
other than those referred to herein. If any matters properly come before the
meeting, the persons designated as proxies will vote thereon in accordance with
their best judgment in the interest of the Company.
MISCELLANEOUS
The Annual Report to Shareholders of the Company, including financial
statements for the fiscal year ended October 31, 1994, accompanies this Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.
12
<PAGE> 16
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST
CONVENIENCE IN THE ENVELOPE PROVIDED FOR THAT PURPOSE. NO POSTAGE IS REQUIRED
FOR MAILING IN THE UNITED STATES.
BY ORDER OF THE BOARD OF DIRECTORS,
MARTHA S. HENSLEY,
Secretary
Tyler, Texas
March 1, 1995
13
<PAGE> 17
APPENDIX A
TCA CABLE TV, INC.
AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN
ARTICLE I
THE PLAN
1.1 Purpose of Plan. This Amended and Restated Incentive Stock Option Plan
(hereinafter called the "Plan") provides for the granting of options to certain
key employees of TCA Cable TV, Inc. (hereinafter called the "Company"), a Texas
corporation. The purposes of the Plan are to advance the interests of the
Company and its stockholders by encouraging and enabling selected key employees
to acquire and retain a proprietary interest in the Company by ownership of its
stock and to provide an incentive for such employees to remain in the employ of
and to serve the Company. It is intended that options issued pursuant to Article
III shall constitute "incentive stock options" within the meaning of Section 422
of the Internal Revenue Code, as amended (the "Code").
With respect to employees who are subject to the reporting requirements of
Section 16 of the Securities Exchange Act of 1934, as amended (hereinafter
called the "Act"), transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the Act. To the
extent that any provision of the Plan or action by the Committee (as herein
defined) fails to so comply, it shall be deemed null and void to the extent
permitted by law and deemed advisable by the Committee.
1.2 Shares Subject to Plan. There are hereby authorized and reserved for
issuance upon the exercise of options to be granted from time to time under the
Plan (hereinafter called the "Options"), an aggregate of 660,000 shares
(hereinafter called the "Plan Shares") of common stock, par value of $.10 per
share (hereinafter called the "Common Shares"), of the Company, which shares may
be in whole or in part, as the Board of Directors of the Company (hereinafter
called the "Board of Directors"), shall from time to time determine, authorized
but unissued Common Shares or issued Common Shares which shall have been
acquired by the Company. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares covered thereby
shall (unless the Plan shall have been terminated) be added to the shares
otherwise available for Options which may be granted in accordance with the
terms of the Plan.
1.3 Effective Date. The effective date of the Plan, as amended and
restated, shall be March 30, 1995, that is, the date on which it was approved
and adopted by the Board of Directors; provided that any grants to employees
hereunder are conditioned upon approval of the Plan by the stockholders of the
Company; and provided further that no Option may be exercised unless the Plan is
approved by a vote of the majority of the stockholders of the Company's Common
Shares present or represented and entitled to vote at a meeting of the
stockholders of the Company held within twelve (12) months following the date of
the Plan's adoption by the Board of Directors.
1.4 Eligibility. Any employee of the Company (including officers, whether
or not they are directors) shall be eligible to participate in the Plan. An
optionee may hold more than one Option, but only on the terms and subject to the
restrictions hereafter set forth.
1.5 Payment of Option Price. The Option price shall be paid in full in
cash or with Common Shares of the Company upon the exercise of the Option.
1.6 Rights as a Stockholder. An optionee or transferee of an Option shall
have no rights as a stockholder with respect to any shares covered by his Option
until the date of issuance of a stock certificate to him for such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued.
1.7 Modification, Extension and Renewal of Options. Subject to the terms
and conditions and within the limitations of the Plan, the Committee (as herein
defined) may modify, extend or renew outstanding
A-1
<PAGE> 18
Options (to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor (to the extent not theretofore exercised).
The Committee shall not, however, modify any outstanding Options so as to
specify a lower price or accept the surrender of outstanding Options and
authorize the granting of new Options in substitution therefor specifying a
price. Notwithstanding the foregoing, however, no modification of an Option
shall, without the consent of the optionee, alter or impair any rights or
obligations under any Option theretofore granted under the Plan.
1.8 Investment Purpose. Each Option under the Plan shall be granted on the
condition that the purchases of shares thereunder shall be for investment
purposes, and not with a view to resale or distribution except that in the event
the shares subject to such Option are registered under the Securities Act of
1933, as amended (the "Securities Act"), or in the event a resale of such shares
without such registration would otherwise be permissible, such conditions shall
be inoperative if in the opinion of counsel for the Company such condition is
not required under the Securities Act or any other applicable law, regulation,
or rule of any governmental agency.
1.9 Acceleration in Certain Events. The Committee may accelerate the
exercisability of any Option in whole or in part at any time. Notwithstanding
the provisions of any option agreement, the following provisions shall apply:
(a) Mergers and Reorganizations. If the Company or its stockholders
enter into an agreement to dispose of all or substantially all of the
assets of the Company by means of a sale, merger, or other reorganization,
liquidation or otherwise, all Options shall become immediately exercisable
with respect to the full number of shares subject to such Options during
the period commencing as of the date of the agreement to dispose of all or
substantially all of the assets or stock of the Company and ending when the
disposition of assets or stock contemplated by that agreement is
consummated or the Options are otherwise terminated in accordance with its
provisions or the provisions of this Plan, whichever occurs first. The
Options shall not become immediately exercisable, however, if the
transaction contemplated in the agreement is a merger or reorganization in
which the Company shall survive and the stockholders of the Company who are
stockholders on the date the Options in question were granted shall
continue to own at least 50% of the total combined voting power of all
classes of stock of the Company after the transaction.
(b) Change in Control. In the event of a change in control or
threatened change in control of the Company, all Options granted prior to
the change in control or threatened change in control shall become
immediately exercisable. The term "change in control" for purposes of this
Section refers to the acquisition of 15% or more of the voting securities
of the Company by any person or by persons acting as a group within the
meaning of Section 13(d)(3) of the Act (other than an acquisition by (i) a
person or group meeting the requirements of clauses (i) and (ii) of Rule
13d-1(b)(1) promulgated under the Act or (ii) any employee pension benefit
plan (within the meaning of Section 3(2) of ERISA) of the Company or of its
subsidiaries, including a trust established pursuant to such plan);
provided that no change in control or threatened change in control shall be
deemed to have occurred (i) if prior to the acquisition of, or offer to
acquire, 15% or more of the voting securities of the Company, the full
Board of Directors has adopted by not less than two-thirds vote a
resolution specifically approving such acquisition or offer or (ii) from
(A) a transfer of the Company's voting securities by a person who is the
beneficial owner, directly or indirectly, of 15% or more of the voting
securities of the Company (a "15 Percent Owner") to (i) a member of such 15
Percent Owner's immediate family (within the meaning of Rule 16a-1(e) of
the Act) either during such 15 Percent Owner's lifetime or by shall or the
laws of descent and distribution; (ii) any trust as to which such 15
Percent Owner or a member (or members) of his immediate family (within the
meaning of Rule 16a-1(e) of the Act) is the beneficiary; (iii) any trust as
to which such 15 Percent Owner is the settlor with sole power to revoke;
(iv) any entity over which such 15 Percent Owner has the power, directly or
indirectly, to direct or cause the direction of the management and policies
of the entity, whether through the ownership of voting securities, by
contract or otherwise; or (v) any charitable trust, foundation or
corporation under Section 501(c)(3) of the Code that is funded by such 15
Percent Owner; or (B) the acquisition of voting securities of the
Corporation by either (i) such 15 Percent Owner or (ii) a person, trust or
other entity described in the foregoing clauses
A-2
<PAGE> 19
(A)(i)-(v) of this subsection. The term "person" for purposes of this
Section refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically
listed herein. Whether a change in control is threatened shall be
determined solely by the Board of Directors.
1.10 Termination of Employment or Death. If an optionee ceases to be
employed by the Company for any reason other than death, an Option shall be
exercisable by the optionee at any time prior to the expiration date of the
Option or within three months (or one year in the case of termination by reason
of disability) after the date of such termination, whichever is earlier, but
only to the extent the optionee had the right to exercise such Option at the
date of such termination. In the event of death of an optionee while in the
employ of the Company or within three months after termination of employment,
his Option shall be exercisable by the person or persons to whom such optionee's
rights pass by will or by the laws of descent and distribution at any time prior
to the expiration date of the Option or prior to one year after the date of such
death, whichever is earlier, but only to the extent the optionee had the right
to exercise such Option on the date of his death.
ARTICLE II
ADMINISTRATION
2.1 Administration. The Plan shall be administered by a committee of not
fewer than two members of the Board of Directors (the "Committee") and each
member shall be a "disinterested person" within the meaning of Rule 16b-3 under
the Act (each hereinafter called a "Committee Member" and collectively the
"Committee Members"). Subject to the provisions of the Plan, the Committee shall
have the sole discretion and authority to determine from time to time the
employees to whom Options shall be granted and the number of Plan Shares subject
to each Option, to interpret the Plan, to prescribe, amend and rescind any rules
and regulations necessary or appropriate for the administration of the Plan, to
determine and interpret the details and provisions of each option agreement, to
modify or amend any option agreement or waive any conditions or restrictions
applicable to any Options (or the exercise thereof), and to make all other
determinations necessary or advisable for the administration of the Plan. The
Board of Directors may from time to time remove members from, or add members to,
the Committee. Vacancies on the Committee, howsoever caused, shall be filled by
the Board of Directors. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it may determine.
Actions by a majority of the Committee at which a quorum is present, or actions
reduced to or approved in writing by a majority of the Committee Members, shall
be the valid actions of the Committee. No Committee Member shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option granted under it.
2.2 Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or Committee Members, the
Committee Members shall be indemnified by the Company against the reasonable
expenses, including attorney's fees actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of the may be a part by reason of
any action taken or failure to act under or in connection with the Plan or any
Option thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the company) or paid any them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee Member is liable
for negligence or misconduct in the performance of his duties; provided that
within 60 days after institution of any such action, suit or proceeding the
Committee Member shall in writing offer the Company the opportunity, at its own
expense, to handle and defend the same.
A-3
<PAGE> 20
ARTICLE III
INCENTIVE STOCK OPTIONS
3.1 Terms and Conditions of Options. Each employee receiving Options
pursuant to this Article shall be required to enter into a written agreement
with the Company and such agreement shall comply with and be subject to the
terms and conditions of this Plan.
3.2 Option Price. Each Option granted under this Article shall state the
Option price, which shall not be less than 100% of the fair market value, as
determined by the Committee, of the Common Shares of the Company on the date of
the granting of the Option.
3.3 Term and Exercise of Options. Each Option granted pursuant to this
Article and all rights thereunder shall expire on the date determined by the
Committee, but in no event shall the Option be exercisable after the expiration
of ten years from the date it is granted. During the lifetime of the optionee,
Options granted under this Article shall be exercisable only by him and shall
not be assignable or transferable by him other than by will or the laws of
descent and distribution. In addition, each Option shall be subject to early
termination as provided elsewhere in the Plan.
3.4 Ten Percent Shareholders. Any Option granted pursuant to this Article
to an individual who, at the time the Option is granted, owns shares possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company shall meet the following conditions:
(i) The Option price shall not be less than 110% of the fair market value,
as determined by the Committee, of the Common Shares of the Company on
the date of the granting of the Option; and
(ii) Such Option shall not be exercisable after the expiration of five
years from the date such Option is granted.
3.5 Maximum Amount of Options First Exercisable in Any Calendar Year. The
maximum aggregate Fair Market Value of Plan Shares (determined at the time the
Option is granted) with respect to which Options granted under this Article and
under all incentive stock option plans of the Company's subsidiaries and
affiliates are exercisable for the first time by an optionee during any calendar
year may not exceed $100,000. The portion of any Option which exceeds the
foregoing limit shall be deemed granted pursuant to Article IV.
ARTICLE IV
NONQUALIFIED STOCK OPTIONS
4.1 Terms and Conditions of Options. Each employee receiving Options
pursuant to this Article shall be required to enter into a written agreement
with the Company and such agreement shall comply with and be subject to the
terms and conditions of this Plan.
4.2 Duration of Options. Each Option granted pursuant to this Article and
all rights thereunder shall expire on the date determined by the Committee, but
in no event shall any Option granted under this Article expire later than 10
years after the date on which the Option is granted. In addition, each Option
shall be subject to early termination as provided elsewhere in the Plan.
4.3 Option Price. The purchase price for the Plan Shares acquired pursuant
to the exercise, in whole or in part, of any Option granted under this Article
shall be determined by the Committee in its discretion.
A-4
<PAGE> 21
ARTICLE V
TERMINATION, AMENDMENT AND ADJUSTMENT
5.1 Term of Plan. The Plan shall terminate on March 29, 2005 and no
Options shall be granted under the Plan thereafter.
5.2 Amendment of the Plan. The Board of Directors of the Company may,
insofar as permitted by law, from time to time, with respect to any shares at
the time not subject to Options, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever; provided that, without shareholder approval,
no amendment or revision may (i) increase the maximum aggregate number of Plan
Shares, except as permitted under Section 5.3, (ii) change the minimum purchase
price for shares or (iii) permit the granting of an Option to anyone other than
as provided in the Plan; and provided further that, without shareholder
approval, no amendment to the Plan shall be effective that materially increases
the benefits accruing to optionees, materially increases the number of
securities that may be issued under the Plan or otherwise materially modifies
the requirements as to eligibility for participation in the Plan, all within the
meaning of Rule 16b-3. Furthermore, the Plan may not, without the approval of
the stockholders, be amended in any manner that will cause options issued under
it to fail to meet the requirements of "incentive stock options" so defined in
Section 422 of the Code.
5.3 Capital Adjustments Affecting Stock. In the event of a capital
adjustment resulting from a stock dividend, stock split, reorganization, merger,
consolidation, or a combination or exchange of shares, the number of shares of
stock subject to this Plan and the number of shares under option shall be
adjusted consistent with such capital adjustment. The granting of an Option
pursuant to this Plan shall not affect in any way the right or power of the
Company to make adjustments, reorganization, reclassifications, or changes of
its capital or business structure or to merge, consolidate, dissolve, liquidate,
or sell or transfer all or any part of its business assets.
A-5
<PAGE> 22
FORM OF PROXY
TCA CABLE TV, INC.
PROXY - ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Robert M. Rogers and Fred R. Nichols, or
either of them, with full power of substitution, as Proxies to vote, as
designated below, all stock of TCA Cable TV, Inc., owned by the undersigned at
the Annual Meeting of Shareholders to be held at the Corporate Offices of the
Company, 3015 SSE Loop 323, Tyler, Texas on Thursday, March 30, 1995, at
3:30 p.m., local time, upon such business as may properly come before the
meeting, or any adjournment thereof, including the following:
(1) Election of Directors:
_____ FOR all nominees listed below (except as marked to the
contrary below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
James F. Ackerman Fred R. Nichols
Ben R. Fisch, M.D. A. W. Riter, Jr.
Kenneth S. Gunter Randall K. Rogers
Wayne J. McKinney Robert M. Rogers
(Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below.)
_____________________________________________________________________
(2) Approval of amendments to the Company's Amended and Restated
Incentive Stock Option Plan as described in the proxy statement.
_____ FOR approval of the amendments.
_____ AGAINST the amendments.
_____ ABSTENTION with respect to the amendments.
(3) In their discretion on any other matter that may properly come before
the meeting or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFIC DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED (1) FOR THE ELECTION OF THE EIGHT NOMINEES FOR DIRECTOR,
(2) FOR THE PROPOSED AMENDMENTS TO THE INCENTIVE PLAN, EXCEPT THAT BROKER
NON-VOTES WILL NOT BE COUNTED WITH RESPECT TO SUCH PROPOSAL, AND (3) AT THE
DISCRETION OF THE PROXY HOLDERS WITH REGARD TO ANY OTHER MATTER THAT MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
(Continued, and to be signed and dated, on reverse side)
<PAGE> 23
FORM OF PROXY
(Continued from other side)
Dated: __________________________, 1995 No. of shares: ________________
__________________________________ ________________________________________
Signature (Signature if held jointly)
Please date, sign and mail promptly this proxy in the enclosed envelope.
Where there is more than one owner, each should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your title
as such. If executed by a corporation, the proxy should be signed by a duly
authorized officer. If executed by a partnership, please sign in the
partnership name by an authorized person.
THIS PROXY MAY BE REVOKED PRIOR TO THE EXERCISE OF THE
POWERS CONFERRED BY THE PROXY.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
