TCA CABLE TV INC, DEF 14A, 1998-02-24

TCA CABLE TV INC
DEF 14A, 1998-02-24
CABLE & OTHER PAY TELEVISION SERVICES

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<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 sec. 240.14a-11(c) or sec. 240.14a-12

TCA CABLE TV, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

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

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.

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

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

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

- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
(5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

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

(1) Amount Previously Paid:

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

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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 2, 1998

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
TCA Cable TV, Inc., scheduled to be held on Thursday, March 26, 1998, at Willow
Brook Country Club, 3205 W. Erwin, 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 will be asked to elect ten directors and to
approve an amendment 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,

FRED R. NICHOLS
Chairman of the Board,
Chief Executive Officer
And President
<PAGE> 3

TCA CABLE TV, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MARCH 26, 1998

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
26, 1998, at 3:30 p.m. at Willow Brook Country Club, 3205 W. Erwin, Tyler,
Texas, for the following purposes:

(1) To elect ten 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 qualified;

(2) To approve an amendment to the Company's Amended and Restated Incentive
Stock Option Plan (the "Incentive Plan") to increase the number of
authorized shares of common stock, par value $.10 per share, available
for issuance upon the exercise of options granted under the Incentive
Plan from 660,000 to 960,000; 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, 1998, 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 as of February 20, 1998, 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,

/s/ KAREN L. GARRETT

KAREN L. GARRETT,
Corporate Secretary

Tyler, Texas
March 2, 1998
<PAGE> 4

TCA CABLE TV, INC.
3015 SSE LOOP 323
TYLER, TEXAS 75701
------------------

PROXY STATEMENT

FOR

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MARCH 26, 1998
------------------

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 Thursday, March 26, 1998, at 3:30 p.m.
at Willow Brook Country Club, 3205 W. Erwin, Tyler, Texas, 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 2, 1998.

All shares represented by valid proxies, unless the shareholder otherwise
specifies will be voted (i) FOR the election of the ten persons named under
"Election of Directors" as nominees for election as directors of the Company
with terms expiring in 1999; (ii) FOR the approval of the amendment to the
Company's Amended and Restated Incentive Stock Option Plan (the "Incentive
Plan"); and (iii) at the discretion of the proxy holders with regard to any
other matter that may properly come before the Annual Meeting or any
adjournments thereof.

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 or she 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, 1998, are
entitled to notice of, and to vote at, the Annual Meeting. At February 20, 1998,
there were approximately 24,895,613 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.
<PAGE> 5

In order to be elected as 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, and entitled to vote thereon 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 counted
toward a quorum, but will be excluded entirely from the vote and will have no
effect.

In order for the proposed amendment to the Company's Incentive Plan to be
effective, the Plan must receive the approval of the holders of a majority of
the shares of Common Stock present, in person or by proxy, and entitled to vote
thereon at the Annual Meeting, provided a quorum is present. Abstentions on the
proposal may be specified and will have the same effect as a vote against such
proposal.

The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held by brokers or nominees as to which they have no discretionary
power to vote on a particular matter and have received no instructions from the
beneficial owners or persons entitled to vote thereon), if any, as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. However, for purposes of determining the outcome of any matter requiring
discretionary voting, broker non-votes will be treated as not present and not
entitled to vote with respect to that matter (even though those shares are
considered entitled to vote for quorum purposes and may be entitled to vote on
other matters). Brokers or nominees have discretionary power to vote on Proposal
No. 1, but have no discretionary power to vote with respect to Proposal No. 2.
Accordingly, broker non-votes will not be counted with respect to Proposal No.
2.

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<PAGE> 6

BENEFICIAL OWNERSHIP

The following table sets forth as of January 9, 1998, 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 Named Executive Officers (as
herein defined), and the executive officers and directors of the Company as a
group.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP(1) CLASS(2)
---------------- -------------- ------------ --------
<S> <C> <C> <C>
Estate of Robert M. Rogers Common Stock 4,791,790(3) 19.3%
Kanaly Trust Company,
Executor
4550 Post Oak Place Drive,
Suite 139
Houston, TX 77027
Louise H. Rogers Common Stock 3,686,115(4) 14.8
2512 Alta Mira
Tyler, TX 75701
Chieftain Capital Common Stock 2,290,730(5) 9.2
Management, Inc.
12 East 49th Street
New York, NY 10017
A. W. Riter, Jr. Common Stock 658,265(6) 2.6
Ben R. Fisch, M.D. Common Stock 643,080(7) 2.6
Wayne J. McKinney Common Stock 166,972(8) *
Randall K. Rogers Common Stock 131,429(9) *
Fred R. Nichols Common Stock 83,666(10) *
Darrell L. Campbell Common Stock 19,054(11) *
James F. Ackerman Common Stock 16,000 *
Kenneth S. Gunter Common Stock 13,000(12) *
Fred W. Smith Common Stock 17,500(13) *
Michael S. Shannon Common Stock 6,500(14) *
Robert B. Holland, III Common Stock 6,000(15) *
Melvin R. Jenschke Common Stock 27,922(16) *
Jimmie F. Taylor Common Stock 9,135(17) *
Jerry P. Yandell Common Stock 17,655(18) *
Directors and executive
officers as a group
(fifteen persons) Common Stock 1,820,449(19) 7.3%
</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. Fractional shares have been rounded to the nearest
whole share.

(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

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<PAGE> 7

exercisable within 60 days, divided by (b) the total number of shares
outstanding at January 9, 1998, plus the number of shares, if any, for
which options held by such person or group are exercisable within 60 days.

(3) Robert M. Rogers, Founder, Chairman and Chief Executive Officer of the
Company passed away on September 18, 1997 after a long battle with cancer.
The Estate of Robert M. Rogers currently holds the shares reflected in this
table. Includes 160,000 shares owned by The Rogers Foundation, Inc., a
private charitable foundation of which Mr. Robert M. Rogers was President.
Also includes 50,000 shares owned by Mr. Rogers' widow and 800,000 shares
owned by Rogers Venture Enterprises, Inc., a corporation which is owned by
50% by the Estate of Robert M. Rogers and 50% by Louise H. Rogers. Also
includes 5,000 shares of currently exercisable stock options under the
Company's Incentive Plan, and 7,196 shares under the Company's 401(k) Plan.

(4) Includes 800,000 shares owned by Rogers Venture Enterprises, Inc., a
corporation which is owned 50% by Louise H. Rogers and 50% by the Estate of
Robert M. Rogers. Includes 18,535 shares owned by Ms. Rogers' spouse.

(5) This information is based on a Schedule 13G filed with the Securities and
Exchange Commission reporting that, as of February 5, 1998, Chieftain
Capital Management, Inc., a registered investment adviser ("Chieftain"),
had shared voting and dispositive power with respect to all 2,290,730
shares. Chieftain's clients are the direct owners of the shares shown. No
such client has an interest that relates to more than 5% of the class.

(6) Includes 62,905 shares owned by various trusts of which Mr. Riter is a
Co-trustee, and 80,000 shares owned by a family partnership of which a
trust controlled by Mr. Riter is the sole general partner. Includes 7,500
shares of currently exercisable stock options under the Company's
Non-Employee Directors Stock Option Plan.

(7) Includes 7,500 shares of currently exercisable stock options under the
Company's Non-Employee Directors Stock Option Plan.

(8) Includes 61,813 shares owned by various trusts of which Mr. McKinney's
spouse is Trustee.

(9) Includes 59,200 shares owned by The Rogers Family Trust of which Mr.
Randall K. Rogers is Trustee. Mr. Randall K. Rogers is Trustee for two
Texas Uniform Gift Minor Accounts which have 1,000 shares each for an
aggregate of 2,000 shares. Also includes 1,250 shares of currently
exercisable stock options under the Company's Incentive Plan, and 789
shares under the Company's 401(k) Plan.

(10) Includes 350 shares owned by Mr. Nichols' daughter who resides with him.
Also includes 57,500 shares of currently exercisable stock options under
the Company's Incentive Plan, and 2,398 shares under the Company's 401(k)
Plan.

(11) Includes 78 shares under the Company's 401(k) Plan.

(12) Shares are owned by a trust for which Mr. Gunter is Trustee. Also includes
7,500 shares of currently exercisable stock options under the Company's
Non-Employee Directors Stock Option Plan.

(13) Shares are owned by a trust for which Mr. Smith is a Co-trustee. Also
includes 7,500 shares of currently exercisable stock options under the
Company's Non-Employee Directors Stock Option Plan.

(14) Includes 5,000 shares of currently exercisable stock options under the
Company's Non-Employee Directors Stock Option Plan.

(15) Includes 5,000 shares of currently exercisable stock options under the
Company's Non-Employee Directors Stock Option Plan.

(16) Includes 8,000 shares covered by currently exercisable options granted
under the Company's Incentive Plan and 1,292 shares under the Company's
401(k) Plan.

(17) Includes 430 shares under the Company's 401(k) Plan.

(18) Includes 2,250 shares covered by currently exercisable options granted
under the Company's Incentive Plan and 1,335 shares under the Company's
401(k) Plan.

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<PAGE> 8

(19) Includes 69,765 shares covered by currently exercisable options granted
under the Company's Incentive Plan, 6,843 shares under the Company's 401(k)
Plan, and 40,000 shares of currently exercisable stock options under the
Company's Non-Employee Directors Stock Option Plan.

PROPOSAL 1 -- ELECTION OF DIRECTORS

NOMINEES FOR DIRECTORS

Ten 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>
Fred R. Nichols................. Chairman of the Board of Directors, 51 1981
Chief Executive Officer and President
James F. Ackerman(2)............ Director 73 1981
Darrell L. Campbell............. Director 36 1997
Ben R. Fisch, M.D.(2)........... Director 72 1981
Robert B. Holland, III.......... Director 45 1997
Wayne J. McKinney(1)............ Director 66 1981
A.W. Riter, Jr.(2).............. Director 73 1981
Randall K. Rogers............... Director and Senior Vice President -- 38 1989
Operations
Michael S. Shannon.............. Director 39 1997
Fred W. Smith(1)................ Director 63 1995
</TABLE>

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

(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.

Fred R. Nichols was named Chairman, Chief Executive Officer and President
in September 1997. He had been President and Chief Operating Officer since
September 1990. 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 on the
Executive Committee of the Board of Directors of the Cable Telecommunications
Association (CATA), a trade association of the cable industry, and on the Board
of C-SPAN, a cable television network.

James F. Ackerman has been President of Cardinal Ventures, LLC in
Indianapolis, Indiana since July 1993. Cardinal Ventures, LLC is an equity
investor in small businesses. He has been a Director of the Company since 1981.
Mr. Ackerman was 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 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

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<PAGE> 9

television operator, a position he had held from 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 Pioneers' Club.

Darrell L. Campbell was elected as a Director of the Company in December
1997. He has been President of TCA's advertising sales subsidiary, VPI
Communications, Inc., since its inception in 1982.

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.

Robert B. Holland, III has been Senior Vice President, General Counsel and
Secretary of Triton Energy Limited since 1993. Prior to joining Triton, he was a
partner with Jackson & Walker, L.L.P., a Dallas law firm he was with since 1977.
He was elected as a Director of the Company in December 1997.

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 Pioneers' Club since 1979, and is a Charter and Senior Member of the
Society of Cable Telecommunications Engineers.

A. W. Riter, Jr. retired as Senior Chairman of the Board of Directors of
NCNB Texas -- Tyler, Texas (successor to First RepublicBank Tyler), on September
30, 1988. He had served as Chairman and Chief Executive Officer until June 30,
1988 and 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 until 1979. Mr. Riter has served as a Director or officer of the Company or
its subsidiaries since 1965.

Randall K. Rogers was elected Senior Vice President -- Operations of TCA
Cable TV, Inc. and Executive Vice President of TCA Management Company in June
1997. He previously served as Vice President -- System Operations overseeing
operations in east and south Texas since 1996. He has been with the Company
since 1983, and also served as the general manager in Big Spring, Huntsville and
Bryan/College Station, Texas. He was elected as a Director of the Company in
1989. Mr. Rogers is the son of the late Robert M. Rogers.

Michael S. Shannon is President and Chief Executive Officer of KSL
Recreation Corporation, a corporation he cofounded in 1993 which acquires,
operates, expands, repositions and/or markets businesses in recreation. From
1986 to 1992, he was President and Chief Executive Officer of Vail Associates, a
major resort in Colorado. He was Assistant Vice President of The First National
Bank of Chicago serving the commercial lending and investment banking department
within the communications and media industry from 1984 to 1986. Mr. Shannon was
elected as a Director of the Company in December 1997. He is also on the Board
of Directors of ING North America Financial Services International.

Fred W. Smith is Chairman of the Donald W. Reynolds Foundation, one of the
thirty largest private charitable foundations in the United States having served
in such capacity since 1990. Mr. Smith's entire business career has been with
the Donrey Media Group, which he joined in 1951. He served in various capacities
until 1993 when he retired as the company's President and Chief Executive
Officer. He has been a Director of the Company since 1995.

The Board of Directors held four meetings during fiscal 1997. The Board of
Directors has two standing committees -- the Audit Committee and the
Compensation and Stock Option 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

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<PAGE> 10

system of internal control. The Audit Committee met two times during fiscal
1997, and its members are Wayne J. McKinney, Chairman, Fred W. Smith and Kenneth
S. Gunter.

The Compensation and Stock Option Committee met twice during 1997. Its
members are James F. Ackerman, Chairman, Ben R. Fisch and A.W. Riter, Jr. The
functions performed by this committee include: reviewing and recommending the
Company's executive salary structure; reviewing the Company's Amended and
Restated 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 1997, each director attended all meetings of the Board of Directors
and respective committees on which he served except for Kenneth S. Gunter who
did not attend two regular quarterly meetings.

PROPOSAL 2 -- AMENDMENT TO THE
AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN

Proposal 2 relates to the amendment (the "Plan Amendment") to the Company's
Amended and Restated Incentive Stock Option Plan (the "Incentive Plan"). The
Plan Amendment has been adopted by the Board of Directors, subject to the
approval of the shareholders, and is intended to increase the number of shares
of Common Stock that may be issued upon the exercise of options granted under
the Incentive Plan from 660,000 to 960,000. 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 the amendment.

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.
In March 1995, the Incentive Plan was amended (1) to increase the number of
shares available for issuance upon exercise of options under the Incentive Plan
from 410,000 to 660,000, (2) to extend the term of the plan until March 29,
2005, (3) to allow the grant of non-statutory stock options under the Incentive
Plan, and (4) to extend the period during which options granted under the
Incentive Plan may be exercisable following the death of an optionee. The
Incentive Plan, as amended to date, provides for the grant of options to acquire
up to 660,000 of the Common Stock, which includes a 2-1 stock split in June
1989. At October 31, 1997, options under the Incentive Plan to purchase 207,322
shares of Common Stock were outstanding, and options to purchase 105,114 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 29, 2005.

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"). Any employee of the Company (including
officers, whether or not they are directors) shall be eligible to participate in
the Incentive Plan. The Plan provides for the grant of incentive stock options
(which qualify for favorable federal income tax treatment under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code")) and non-statutory
stock options, which are options that do not qualify as incentive stock options.
As of October 31, 1997, approximately 1,654 persons were eligible to participate
in the Incentive Plan. The Committee generally has the authority to fix the
terms and number of options to be granted and the employees

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<PAGE> 11

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
incentive stock 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 shall be exercisable 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 termination,
whichever is earlier, 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 within three months after
termination of employment, the optionee's Option shall be exercisable prior to
the expiration date of the Option or prior to one year 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. The maximum
aggregate fair market value (determined at the time the option is granted) of
the Common Stock with respect to which incentive stock options are exercisable
for the first time by any employee during any calendar year may not exceed
$100,000. The exercise price of each incentive stock 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 incentive stock options
granted to employees owning more than 10% of the Common Stock). The exercise
price for nonqualified options granted under the Incentive Plan will be at the
discretion of the Committee. The closing price of the Common Stock on January 9,
1998, as quoted on the Nasdaq National Market Quotation System, was $41.25 per
share. The option exercise price may be paid in shares of Common Stock owned by
optionees or in cash.

Proposed Amendment. The Plan Amendment has been adopted by the Board of
Directors, subject to the approval of the shareholders, and is intended to
increase the number of shares of Common Stock that may be issued upon the
exercise of options granted under the Incentive Plan from 660,000 to 960,000
shares. Shareholders should carefully review Appendix A in its entirety.

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 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 until a date
that is 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 optionee disposes of the shares 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 under Section
162(m) of the Code (the "Deduction Limitation") on the deduction that an
employer may claim for compensation of certain executives and does not satisfy
an exception to the Deduction Limitation. Any further gain or loss will be
taxable as long-term or short-term capital gain or loss depending upon the
holding period before disposition. Certain special rules, which are beyond the
scope of this discussion, 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 that are beyond the scope of this discussion also may apply in
certain cases (i) where there are subsequent sales of shares in disqualifying
dispositions and (ii) to determine the basis of the stock for purposes of
computing alternative minimum taxable income on a subsequent sale of the shares.
8
<PAGE> 12

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 it 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 the 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 capital gain,
depending upon the period for which the participant held the shares following
exercise of the non-statutory stock option. If the amount received is less than
the fair market value of the shares on the date of exercise, the loss will be
treated as a long-term or short-term capital loss, depending upon the period for
which the participant held 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 for the year ended October 31, 1997 by (i) the
Company's current Chief Executive Officer, (ii) the Company's Named Executive
Officers (as herein defined), (iii) all current executive officers as a group,
(iv) all current directors who are not executive officers as a group, and (v)
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 FOR THE YEAR
INDIVIDUAL OR GROUP ENDED OCTOBER 31, 1997
------------------- ----------------------
<S> <C>
Robert M. Rogers............................................ --
Fred R. Nichols............................................. 10,000
Randall K. Rogers........................................... 1,000
Jerry P. Yandell............................................ --
Jimmie F. Taylor............................................ --
Melvin R. Jenschke.......................................... --
All current executive officers as a group................... 11,000
All current directors who are not executive officers as a
group..................................................... --
All employees, including all current officers who are not
executive officers, as a group............................ 16,000
</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.

9
<PAGE> 13

EXECUTIVE OFFICERS

The executive officers of the Company are:

<TABLE>
<CAPTION>
NAME PRESENT OFFICE OR POSITION AGE
---- -------------------------- ---
<S> <C> <C>
Fred R. Nichols........ Chairman, Chief Operating Officer and President 51
Randall K. Rogers...... Senior Vice President -- Operations 38
Melvin R. Jenschke..... Vice President -- Engineering 56
Jimmie F. Taylor....... Vice President, Chief Financial Officer and 44
Treasurer
Jerry P. Yandell....... Vice President -- Operations 59
Robert A. Roseman...... Vice President -- Business Development 40
</TABLE>

Randall K. Rogers was named Senior Vice President -- Operations of the
Company and Executive Vice President of TCA Management Company in June 1997. He
has been with TCA since 1983, and was elected to the Board of Directors in 1989.
In 1996, Mr. Rogers was named Vice President -- System Operations, overseeing
operations in east and south Texas. He has also served as general manager of the
Company's system operations in Big Spring, Huntsville and Bryan/College Station,
Texas. Mr. Rogers is the son of Robert M. Rogers.

Melvin R. Jenschke has served as a Vice President of the Company since
March 25, 1987. He has been with the Company since 1969 serving in several
capacities prior to becoming Senior Vice President -- Engineering for TCA
Management Company in 1983.

Jimmie F. Taylor is Vice President, Chief Financial Officer and Treasurer
of TCA Cable TV, Inc. Mr. Taylor was named Vice President of the Company in
December 1990, and has served as Chief Financial Officer and Treasurer since
November 1, 1986. He has served as Senior Vice President, Chief Financial
Officer and Treasurer of TCA Management Company since 1990, serving as
Controller from May 1984 to November 1986. Immediately prior to joining the
Company, he was employed for nine years in public accounting. Mr. Taylor is a
Certified Public Accountant.

Jerry P. Yandell is Vice President -- Operations of the Company. Prior to
being named Vice President -- Operations in 1990, he had served as Vice
President since 1987. He has served as Senior Vice President -- Operations of
TCA Management Company since 1990, and as Senior Vice President -- Personnel
from 1979 until 1990. Immediately prior to joining the Company, he was employed
as Personnel Director for General Electric in Tyler, Texas, where he had been
for eighteen years. Mr. Yandell has served on the Board of Directors of the
Texas Cable and Telecommunications Association since 1992.

Robert A. Roseman has served as Vice President -- Business Development of
the Company since September 1997. He is also Vice President -- Business
Development of TCA Management Company, a position held since June 1995. From
November 1986 through May 1995, he served as Controller of TCA Management
Company. Mr. Roseman is a Certified Public Accountant.

10
<PAGE> 14

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 Officers and the Company's four other most highly compensated
executive officers (collectively, the "Named Executive Officers"). Mr. Robert M.
Rogers served as the Company's Chairman of the Board and Chief Executive Officer
until he passed away on September 18, 1997. Mr. Fred R. Nichols, who formerly
served as the Company's President and Chief Operating Officer, has served as the
Company's Chairman of the Board and Chief Executive Officer since September 18,
1997 and continues to serve as President.

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION NUMBER OF
-------------------- SECURITIES ALL OTHER
NAME AND FISCAL SALARY UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) OPTIONS/SARS ($)
------------------ -------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Robert M. Rogers, 1997 198,057(1) -- 7,040(2)
Chairman of the Board and 1996 211,280(1) 20,000 6,293
Chief Executive Officer 1995 192,422(1) -- 5,723
Fred R. Nichols 1997 251,437(1) 10,000 12,141(3)
Chairman of the Board, 1996 230,394(1) 40,000 10,498
Chief Executive Officer, 1995 203,958(1) -- 10,172
President and Director
Randall K. Rogers 1997 162,389(1) -- 3,482(4)
Senior Vice President -- 1996 73,412(1) -- 2,146
Operations and Director 1995 69,860(1) 2,000 2,036
Melvin R. Jenschke 1997 120,219 -- 4,128(5)
Vice President -- 1996 110,301 2,500 3,331
Engineering 1995 105,209 2,500 3,442
Jimmie F. Taylor 1997 120,042 -- 3,726(6)
Vice President, Chief 1996 109,697 2,500 3,313
Financial Officer and Treasurer 1995 100,698 2,500 3,135
Jerry P. Yandell 1997 120,105 -- 4,152(7)
Vice President -- 1996 110,306 2,500 3,331
Operations 1995 101,697 2,500 3,485
</TABLE>

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

(1) Includes director's fees paid.

(2) Consists of Company contributions under the Company's 401(k) Plan of $5,912
and premiums paid on term life insurance policies for the executive's
benefit of $1,128.

(3) Consists of Company contributions under the Company's 401(k) Plan of $7,498,
premiums paid on term life insurance policies for the executive's benefit of
$1,043 and a $300/month car allowance.

(4) Consists of Company contributions under the Company's 401(k) Plan of $3,452
and premiums paid on term life insurance policies for the executive's
benefit of $30.

(5) Consists of Company contributions under the Company's 401(k) Plan of $3,579
and premiums paid on term life insurance policies for the executive's
benefit of $549.

(6) Consists of Company contributions under the Company's 401(k) Plan of $3,601
and premiums paid on term life insurance policies for the executive's
benefit of $124.

(7) Consists of Company contributions under the Company's 401(k) Plan of $3,603
and premiums paid on term life insurance policies for the executive's
benefit of $549.

11
<PAGE> 15

OPTION GRANTS DURING 1997 FISCAL YEAR

The following table provides information related to options granted to the
Named Executive Officers during fiscal 1997.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(1)
-------------------------------------------------------------- ---------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#)(2) FISCAL YEAR ($/SH)(3) DATE(4) 5% 10%
---- ------------- ------------ ----------- ----------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Fred R. Nichols........ 10,000 37.0 29.38 December 11, 2003 119,606 278,733
Randall K. Rogers...... 1,000 3.7 29.38 December 11, 2003 11,961 27,873
</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 consideration or a
combination of any of the foregoing, as determined by the Compensation and
Stock Option Committee in its discretion.

(4) Options become exercisable with respect to 25% of the shares covered thereby
on each of December 11, 1997, 1998, 1999 and 2000. The exercise price was
equal to the fair market value of the Common Stock on the date of grant.

OPTION/SAR EXERCISES DURING 1997 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 1997 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
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS OPTIONS/SARS
ACQUIRED VALUE 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................ -- -- 5,000 15,000 58,754 176,261
Fred R. Nichols................. -- -- 38,750 46,250 644,844 631,981
Randall K. Rogers............... -- -- 1,000 2,000 16,250 28,120
Melvin R. Jenschke.............. -- -- 6,375 4,125 108,031 62,219
Jimmie F. Taylor................ 7,250 85,549 625 4,125 8,594 62,219
Jerry P. Yandell................ 7,250 70,383 625 4,125 8,594 62,219
</TABLE>

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

(1) The closing price for the Company's Common Stock as reported by Nasdaq on
October 31, 1997 was $41.25. Value is calculated on the basis of the
difference between the option exercise price and $41.25 multiplied by the
number of shares of Common Stock underlying the option.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with each of Messrs.
Nichols, Randall Rogers, Jenschke, Taylor, Yandell and Roseman (the "Employment
Agreements") that, among other things, provide

12
<PAGE> 16

for salary and benefits under both the Employment Agreement and upon
termination. Under the Employment Agreements, the Company may terminate the
employment of each employee with or without cause or upon the death or
disability of the employee. The employee may terminate his employment upon
ninety (90) days notice without cause or in the event the Company demotes the
employee or decreases the employee's salary or benefits and perquisites below
the level provided in the Employment Agreement (a "Constructive Termination").
Absent a change of control, (i) in the event that an employee's employment is
terminated by the Company for cause or by the employee other than pursuant to a
Constructive Termination, the employee is compensated through the date of
termination, (ii) in the event that the employee's employment is terminated by
the Company without cause or by the employee following a Constructive
Termination, the employee is entitled to receive base salary for 90 days
following termination and (iii) in the event of the termination of an employee's
employment because of disability, the employee is entitled to receive his base
salary for a period of 180 days following termination. The Employment Agreements
provide that in the event the employee is terminated by the Company for any
reason following a change of control or the employee terminates his employment
due to a Constructive Termination following a change of control, the employee
shall be entitled to receive an amount of cash equal to 2.99 times the
employee's average annual compensation during the previous five full taxable
years and insurance benefits substantially similar to those received immediately
prior to termination for the employee and his immediate family. The Company is
also obligated to pay legal fees and expenses incurred by the employee to
enforce the change of control provision. Additionally, the Employment Agreements
contain a covenant not to divulge confidential information about the Company and
a covenant not to compete with the Company for a period of one year following
termination.

COMPENSATION OF DIRECTORS

Each of the Company's directors receives $500 per quarter for service as a
director. Additionally, in fiscal 1997, Messrs. Fisch, McKinney and Riter
received $500 per meeting attended and Messrs. Ackerman, Gunter and Smith
received $1,000 per meeting attended. Shareholders approved the adoption of the
Non-Employee Directors Stock Option Plan at last year's Annual Meeting. Each
non-employee director is eligible to receive an option to purchase 5,000 shares
upon initial election to the board and an option to purchase 2,500 shares each
year upon election at the Company's Annual Meeting. Also, at the December 1997
board meeting, directors' fees were changed to allow compensation to be paid
only to non-employee directors as follows: (1) $1,000 per quarter for service as
a director, (2) $1,000 for each meeting attended, and (3) reimbursement of all
travel related expenses. Each of Messrs. Ackerman, Fisch, Gunter, Riter and
Smith received an option to purchase 5,000 shares in February 1997 and an option
to purchase 2,500 shares in March 1997. Each of Messrs. Holland and Shannon
received an option to purchase 5,000 shares in December 1997.

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 James F. Ackerman, Chairman, Ben R. Fisch, M.D. and A.W. Riter,
Jr. In determining the compensation to be paid to the Company's executive
officers in fiscal 1997, 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

13
<PAGE> 17

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 1995, 1996 and 1997. The stock
price increased in 1995, decreased in 1996 and increased in 1997; 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. In December 1995 and 1996, some executive officers were granted stock
options. Exercise prices for all stock option grants are made at 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, the
Committee considers the amount and terms of options already held.

During fiscal 1997, Mr. Robert M. Rogers served as the Company's CEO until
his death on September 18, 1997. Mr. Nichols served as the Company's President
and Chief Operating Officer until Mr. Rogers' death, at which time he assumed
the office of Chairman of the Board, Chief Executive Officer and remained as
President. The Committee did not increase Mr. Rogers' salary during fiscal 1997.
The Committee did increase Mr. Nichols' salary by $20,000 to approximately
$251,000 in fiscal 1997. The Committee set the fiscal 1997 compensation for Mr.
Rogers' based on his 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 1995, 1996 and 1997. The stock
price increased in 1995, decreased in 1996 and increased in 1997. As stated
previously, the Committee believes that Mr. Rogers' compensation was 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
remained competitive enough to allow the Company to retain a skilled chief
executive officer. Mr. Rogers' fiscal 1997 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.
Neither Mr. Rogers' nor Mr. Nichols' were paid a bonus during fiscal 1997.

This report is submitted by the members of the Compensation and Stock
Option Committee:

James F. Ackerman, Chairman
Ben R. Fisch, M.D.
A.W. Riter, Jr.

COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation and Stock Option Committee are James F.
Ackerman, Ben R. Fisch, M.D. and A.W. Riter, Jr. None of these individuals was
an officer or employee of the Company during fiscal 1997.

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, 1997 with the cumulative total return on (i) the S&P 500
Index and (ii) 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, 1992 in
the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.

14
<PAGE> 18

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.

TOTAL SHAREHOLDER RETURNS
(DIVIDENDS REINVESTED)

<TABLE>
<CAPTION>
MEASUREMENT PERIOD TCA CABLE TV
(FISCAL YEAR COVERED) INC S&P 500 INDEX PEER GROUP
<S> <C> <C> <C>
OCT-92 100 100 100
OCT-93 158.83 114.94 187.18
OCT-94 130.07 119.39 144.12
OCT-95 167.08 150.96 149.76
OCT-96 154.01 187.33 140.94
OCT-97 241.90 247.48 234.13
</TABLE>

CERTAIN TRANSACTIONS

The Company leases its headquarters building from Rogers Venture
Enterprises, Inc., a company which is owned 50 % by the Estate of Robert M.
Rogers and 50% by Louise H. Rogers. The Company currently pays $26,542.92 per
month for its lease, 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 1997 were $318,515.

The Company purchased distribution system construction services from a
partnership partially owned by a director of the Company. During 1997, 1996 and
1995, transactions with the partnership totaled $7,894,454, $7,572,130 and
$4,603,694, respectively, all of which were capitalized. Effective June 1, 1997,
this partnership was merged with a corporation 100% owned by the Company.

15
<PAGE> 19

SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

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 1997, 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 Robert M.
Rogers filed late one Form 4 reporting two transactions and one Form 5 reporting
one transaction. Wayne J. McKinney and Ben Fisch each filed late one Form 4
reporting one transaction. Randall Rogers, Jimmie Taylor, Fred Smith, James
Ackerman and Kenneth S. Gunter each filed late one Form 5 reporting one
transaction.

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 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 1999 Annual Meeting of Shareholders
such proposals must be received by the Company not later than November 2, 1998.
Such proposals should be directed to TCA Cable TV, Inc., Corporate Secretary,
P.O. Box 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.

16
<PAGE> 20

MISCELLANEOUS

The Annual Report to Shareholders of the Company, including financial
statements for the fiscal year ended October 31, 1997, accompanies this Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.

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,

/s/ KAREN L. GARRETT

KAREN L. GARRETT
Corporate Secretary

Tyler, Texas
March 2, 1998

17
<PAGE> 21

APPENDIX A

TCA CABLE TV, INC.
SECOND AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN

ARTICLE I

THE PLAN

1.1 Purpose of Plan. This Second 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 960,000 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 December 17, 1997, 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 Options (to the extent not
theretofore exercised) and authorize the granting of new Options in substitution
therefor (to

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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)(i)-(v) of this
subsection. The term "person" for purposes of this Section refers to an
individual or a
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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 them 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 by 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.

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.
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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.

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 optionee, 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.
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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.

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