TCA CABLE TV INC, PRE 14A, 1999-02-16

TCA CABLE TV INC
PRE 14A, 1999-02-16
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 [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

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):

[ ] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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

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

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(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:

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(5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials.

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

(1) Amount Previously Paid:

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

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

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

(3) Filing Party:

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(4) Date Filed:

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<PAGE> 2

TCA CABLE TV, INC.

March 3, 1999

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
TCA Cable TV, Inc., scheduled to be held on Tuesday, March 30, 1999 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, to
approve an amendment to the Company's Articles of Incorporation, and to approve
amendments to the Company's Second Amended and Restated Incentive Stock Option
Plan. In addition, management will report to 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 30, 1999

Notice is hereby given that the Annual Meeting of Shareholders of TCA Cable
TV, Inc., a Texas corporation (the "Company"), will be held on Tuesday, March
30, 1999 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 Articles of Incorporation
to increase the number of shares of Common Stock, par value $.10 per share,
authorized for issuance from 60,000,000 to 120,000,000 shares;

(3) To approve amendments to the Company's Second Amended and Restated
Incentive Stock Option Plan; and

(4) 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 19, 1999 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 19, 1999 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,

Karen L. Garrett,
Corporate Secretary

Tyler, Texas
March 3, 1999
<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, 1999

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

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 Tuesday, March 30, 1999 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 following purposes: (i) 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; (ii) to approve an amendment to the Company's Articles of
Incorporation to increase the number of shares of Common Stock, par value $.10
per share, authorized for issuance from 60,000,000 to 120,000,000 shares; (iii)
to approve amendments to the Company's Second Amended and Restated Incentive
Stock Option Plan; and (iv) 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. 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 3, 1999.

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 2000; (ii) FOR the approval of the amendment to the
Company's Articles of Incorporation; (iii) FOR the approval of amendments to the
Company's Second Amended and Restated Incentive Stock Option Plan (the "Plan");
and (iv) at the discretion of the proxy holders with regard to any other matter
that may properly come before the Annual Meeting or any adjournment 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 19, 1999 (the "Record
Date") are entitled to notice of, and to vote at, the Annual Meeting. At
February 19, 1999 there were approximately shares of Common Stock
outstanding.

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<PAGE> 5

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.

Approval of Proposal No. 1 to elect the ten nominees to serve as members of
the Board of Directors for terms expiring at the Company's Annual Meeting of
Shareholders in 2000 requires 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.

Approval of Proposal No. 2 to amend the Company's Articles of Incorporation
to increase the number of shares of Common Stock authorized for issuance
requires the affirmative vote of two-thirds of the shares of Common Stock
outstanding and entitled to vote thereon at the Annual Meeting. Abstentions on
the proposal may be specified and will have the same effect as a vote against
such proposal.

In order to comply with certain rules promulgated under the Internal
Revenue Code and the Nasdaq National Market ("Nasdaq"), approval of Proposal No.
3 to approve amendments to the Plan requires the affirmative vote 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 and Proposal No. 2, but have no discretionary power to vote with respect
to Proposal No. 3. Accordingly, broker non-votes will not be counted with
respect to Proposal No. 3.

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<PAGE> 6

BENEFICIAL OWNERSHIP

The following table sets forth as of January 8, 1999 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 Named Executive Officers and directors of the Company
as a group. Share amounts reflect a two-for-one stock split effective July 15,
1998. Unless otherwise indicated, each person listed below has sole voting power
over the shares beneficially owned.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS(2)
- ---------------- ------------ --------
<S> <C> <C>
Louise H. Rogers............................................ 6,954,380(3) 14.0%
2512 Alta Mira
Tyler, TX 75701
Chieftain Capital Management, Inc........................... x,xxx,xxx(4) xx.x%
12 East 49th Street
New York, NY 10017
Berkshire Hathaway.......................................... x,xxx,xxx(5) x.x%
Fidelity Management......................................... x,xxx,xxx(6) x.x%
82 Devonshire Street
Boston, MA 02109-3614
Randall K. Rogers........................................... 1,668,529(7) 3.6%
A. W. Riter, Jr............................................. 1,304,930(8) 2.6%
Ben R. Fisch, M.D........................................... 1,242,542(9) 2.5%
Wayne J. McKinney........................................... 336,571(10) *
Fred R. Nichols............................................. 233,696(11) *
Fred W. Smith............................................... 45,000(12) *
Darrell L. Campbell......................................... 42,822(13) *
James F. Ackerman........................................... 37,000(14) *
Michael S. Shannon.......................................... 28,800(15) *
Robert B. Holland, III...................................... 17,000(16) *
Melvin R. Jenschke.......................................... 69,020(17) *
Jerry P. Yandell............................................ 36,984(18) *
Jimmie F. Taylor............................................ 22,122(19) *
Directors and Named Executive Officers as a group (thirteen
persons).................................................. 5,085,016(20) 10.2%
</TABLE>

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

* Less than 1.0%

(1) "Beneficially" owned shares, as defined by the Securities and Exchange
Commission ("SEC"), 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
exercisable within 60 days, divided by (b) the total number of shares
outstanding at January 8, 1999, plus the number of shares, if any, for
which options held by such person or group are exercisable within 60 days.

3
<PAGE> 7

(3) Includes 1,400,000 shares owned by Rogers Venture Enterprises, Inc., a
corporation which is owned 50% by Louise H. Rogers and 13% by Randall K.
Rogers. Includes 35,070 shares owned by Ms. Rogers' spouse.

(4) This information is based on a Schedule 13G filed with the SEC reporting
that, as of , Chieftain Capital Management, Inc., a registered
investment adviser ("Chieftain"), had shared voting and dispositive power
with respect to all 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.

(5)

(6)

(7) Includes 118,400 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 2,000 shares each for an
aggregate of 4,000 shares. Includes 1,400,000 shares owned by Rogers
Venture Enterprises, Inc., a corporation which is owned 50% by Louise H.
Rogers and 13% by Randall K. Rogers. Also includes 9,000 shares purchasable
pursuant to currently exercisable stock options granted under the Plan, and
1,749 shares under the Company's 401(k) Plan.

(8) Includes 285,810 shares owned by various trusts of which Mr. Riter is a
Co-trustee, and 160,000 shares owned by a family partnership of which a
trust controlled by Mr. Riter is the sole general partner. Includes 20,000
shares purchasable pursuant to currently exercisable stock options granted
under the Company's Non-Employee Directors Stock Option Plan.

(9) Includes 20,000 shares purchasable pursuant to currently exercisable stock
options granted under the Company's Non-Employee Directors Stock Option
Plan.

(10) Includes 124,991 shares owned by various trusts of which Mr. McKinney's
spouse is Trustee and 5,000 shares purchasable pursuant to currently
exercisable stock options granted under the Company's Non-Employee
Directors Stock Option Plan.

(11) Includes 700 shares owned by Mr. Nichols' daughter who resides with him.
Also includes 145,000 shares purchasable pursuant to currently exercisable
stock options granted under the Plan, and 5,160 shares under the Company's
401(k) Plan.

(12) Includes 20,000 shares owned by a trust for which Mr. Smith is a
Co-trustee. Also includes 5,000 shares owned by a limited partnership of
which Mr. Smith is Managing Partner and 20,000 shares purchasable pursuant
to currently exercisable stock options granted under the Company's
Non-Employee Directors Stock Option Plan.

(13) Includes 320 shares granted under the Company's 401(k) Plan.

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

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

(16) Includes 15,000 shares purchasable pursuant to currently exercisable stock
options granted under the Company's Non-Employee Directors Stock Option
Plan.

(17) Includes 21,000 shares purchasable pursuant to currently exercisable stock
options granted under the Plan and 2,760 shares under the Company's 401(k)
Plan.

(18) Includes 8,000 shares purchasable pursuant to currently exercisable stock
options granted under the Plan and 2,844 shares under the Company's 401(k)
Plan.

(19) Includes 5,000 shares purchasable pursuant to currently exercisable stock
options granted under the Plan and 1,030 shares under the Company's 401(k)
Plan.

(20) Includes 188,000 shares purchasable pursuant to currently exercisable stock
options granted under the Plan, 13,863 shares under the Company's 401(k)
Plan, and 100,000 shares purchasable pursuant to currently exercisable
stock options under the Company's Non-Employee Directors Stock Option Plan.

4
<PAGE> 8

PROPOSAL NO. 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, Chief 52 1981
Executive Officer and President
James F. Ackerman(1)................. Director 74 1981
Darrell L. Campbell.................. Director and President, VPI Communications, 37 1997
Inc., a subsidiary of the Company
Ben R. Fisch, M.D.(2)................ Director 73 1981
Robert B. Holland, III(2)............ Director 46 1997
Wayne J. McKinney(1)................. Director 67 1981
A.W. Riter, Jr.(2)................... Director 74 1981
Randall K. Rogers.................... Director and Senior Vice 39 1989
President -- Operations
Michael S. Shannon(1)................ Director 40 1997
Fred W. Smith(2)..................... Director 64 1995
</TABLE>

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

(1) Member of Audit Committee.

(2) Member of Compensation and Stock Option Committee.

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
Board of Directors of the National Cable Television Association ("NCTA") and
Cable Telecommunications Association ("CATA"), both trade associations of the
cable industry, Telesynergy, a cable television programming purchasing
consortium, and 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. 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
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 NCTA and a member of the cable
television Pioneers' Club.

5
<PAGE> 9

Darrell L. Campbell has been President of TCA's advertising sales
subsidiary, VPI Communications, Inc. ("VPI"), since he founded the company in
1982. VPI was purchased by TCA in 1991.

Ben R. Fisch, M.D., has been retired from medical practice in Tyler, Texas
since July 1986.

Robert B. Holland, III was named Executive Vice President, General Counsel
and Secretary of Triton Energy Limited in February 1999. He served as Triton's
interim Chief Executive Officer from July 1998 to October 1998. From the time he
joined Triton in 1993 until July 1998, he served as the Senior Vice President,
General Counsel and Secretary of Triton Energy Limited. Prior to joining Triton,
he was a partner with Jackson Walker L.L.P., a Dallas law firm, since 1977.

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. Mr. McKinney is also Chairman and
CEO of B&W Finance Company, "Your Money Source", a small loan company.

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.

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.

Michael S. Shannon is President and Chief Executive Officer of KSL
Recreation Corporation, a corporation he co-founded 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
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. 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.

The Board of Directors held six meetings during fiscal 1998. 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 system of internal control. The Audit
Committee met two times during fiscal 1998, and its members are Wayne J.
McKinney, Chairman, James F. Ackerman and Michael S. Shannon.

The Compensation and Stock Option Committee met three times during 1998.
The functions performed by this committee include: reviewing and recommending
the Company's executive salary structure; reviewing the Plan (and granting
options thereunder); recommending directors' fees; and approving salary and
bonus

6
<PAGE> 10

awards to certain key employees. Its members are A. W. Riter, Jr., Chairman, Ben
R. Fisch, Robert B. Holland, III and Fred W. Smith.

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.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES AS DIRECTORS OF THE COMPANY.

PROPOSAL NO. 2
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
AUTHORIZED FOR ISSUANCE

On December 9, 1998, the Board of Directors unanimously approved, subject
to approval by the shareholders of the Company, a proposal to amend the
Company's Articles of Incorporation to increase the number of shares of Common
Stock authorized for issuance from 60 million to 120 million shares. Of the 60
million shares of Common Stock authorized for issuance approximately 8.5 million
shares are unissued and unreserved. As of the Record Date, there were
approximately 50 million shares issued and outstanding and approximately 1.5
million shares reserved for issuance under employee benefit plans. The
additional shares, if issued, would have the same rights as the shares of Common
Stock now outstanding. The Board has no present plans, agreements, commitments
or understandings for the issuance or use of these proposed additional shares.

If the increase is approved, generally, no shareholder approval would be
necessary for the issuance of all or any portion of the additional shares of
Common Stock unless required by law or any rule or regulations to which the
Company is subject, including those of the SEC and the Nasdaq, which has
promulgated rules requiring shareholder approval regarding certain issuances of
securities.

Depending upon the consideration per share received by the Company for any
subsequent issuance of Common Stock, such issuance could have a dilutive effect
on those shareholders who paid a higher consideration per share for their stock.
Additionally, future issuances will increase the number of outstanding shares of
Common Stock, thereby decreasing the percentage ownership in the Company (for
voting, distributions and all other purposes) represented by existing shares of
Common Stock. The availability for issuance of the additional shares of Common
Stock and any issuance thereof, or both, may be viewed as having the effect of
discouraging an unsolicited attempt by another person or entity to acquire
control of the Company. The Company is not aware of any person or entity who is
seeking to acquire control of the Company. Holders of Common Stock do not have
any preemptive rights to acquire any additional securities issued by the
Company.

Because an increase in the number of authorized shares could be viewed as
having an anti-takeover effect, SEC rules require us to disclose all Articles of
Incorporation, Bylaw and other provisions that could be viewed as having an
anti-takeover effect. These include: (i) the Company's Amended and Restated
Bylaws contain a provision limiting the number of directors to eleven; (ii) the
Company's shareholders rights plan could have a deterrent effect against a
hostile takeover of the Company; and (iii) the Board's authority to issue one or
more series of preferred stock up to a maximum number of approximately 4.9
million shares. This proposed increase in the shares of Common Stock authorized
for issuance is not intended as an anti-takeover measure nor does the Board have
any present intention to propose anti-takeover provisions in future proxy
solicitations, however, there can be no assurance that in the future the Board
may decide otherwise.

The Board believes that the proposed increase is in the best interests of
the Company and its shareholders. It is important for the Board to have the
flexibility to act promptly to meet future business needs as they arise.
Sufficient shares should be readily available to maintain the Company's
financing and capital raising flexibility, for stock splits and stock dividends,
acquisitions and mergers, employee benefit plans and other proper business
purposes. By having additional shares readily available for issuance, the Board
will be able to act expeditiously without spending the time and incurring the
expense of soliciting proxies and holding
7
<PAGE> 11

special meetings of shareholders. It is for these and similar reasons that
companies have authorized and unissued shares available for issuance.

SHAREHOLDER APPROVAL

Adoption of the proposal to increase the number of authorized shares of
Common Stock requires the affirmative vote of the holders of two-thirds of the
outstanding shares of Common Stock on the Record Date. If approved by the
shareholders, the increase in the number of authorized shares will become
effective upon the filing with the Secretary of the State of Texas of an
amendment to the Articles of Incorporation setting forth such increase. Unless
otherwise instructed, it is the intent of the persons named in the Proxy to vote
all Proxies "FOR" the adoption of this proposal.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF
THE COMPANY'S AMENDMENT TO THE ARTICLES OF INCORPORATION.

PROPOSAL NO. 3
AMENDMENTS TO THE SECOND AMENDED
AND RESTATED INCENTIVE STOCK OPTION PLAN

Proposal No. 3 relates to the amendment (the "Plan Amendment") to the
Company's Second Amended and Restated Incentive Stock Option Plan (the "Plan").
The Plan Amendment has been adopted by the Board of Directors, subject to the
approval of the shareholders, and principally is intended (i) to increase the
number of shares of Common Stock that may be issued upon the exercise of options
granted under the Plan from 1,920,000 to 3,000,000, (ii) to allow grants of
options under the Plan to qualify for the qualified performance-based
compensation exception under Section 162(m) of the Internal Revenue Code (the
"Code"), (iii) to extend the term of the Plan to March 29, 2009, and (iv)
provide that options granted following March 29, 1999 will automatically
terminate upon termination of an employee's employment with the Company for
cause. 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
Plan Amendment.

The Plan was adopted in January 1982 by the Company's shareholders and
amended in March 1988 (i) to increase the number of shares available for
issuance upon exercise of options under the Plan from 420,000 to 820,000 and
(ii) to extend the term of the plan until March 23, 1998. In March 1995, the
Plan was amended (i) to increase the number of shares available for issuance
upon exercise of options under the Plan from 820,000 to 1,120,000, (ii) to
extend the term of the plan until March 29, 2005, (iii) to allow the grant of
non-statutory stock options under the Plan, and (iv) to extend the period during
which options granted under the Plan may be exercisable following the death of
an optionee. In March 1998, the Plan was further amended to increase the number
of shares available for issuance under the Plan from 1,120,000 to 1,920,000. The
Plan, as amended to date, provides for the grant of options to acquire up to
1,920,000 shares. At October 31, 1998, options under the Plan to purchase
1,063,904 shares of Common Stock were outstanding, and options to purchase
121,078 shares of Common Stock remained available for grant.

SUMMARY OF THE PLAN

General

A copy of the 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 Plan and is qualified in its entirety by reference to the full
text of the Plan.

Current Provisions of the Plan. The Board of Directors has delegated its
authority to administer the 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 Plan. The Plan

8
<PAGE> 12

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, 1998,
approximately 260 persons were eligible to participate in the Plan. 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 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). The Plan currently provides that (i) in the event of an
optionee's termination of employment with the Company for any reason other than
death, any option held by the optionee 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, but 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
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 Plan will be at the discretion of the
Committee. The closing price of the Common Stock on February , 1999, as quoted
on the Nasdaq National Market Quotation System, was $ 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 principally is
intended (i) to increase the number of shares of Common Stock that may be issued
upon the exercise of options granted under the Plan from 1,920,000 to 3,000,000
shares, (ii) to allow grants of options under the Plan to qualify for the
qualified performance-based compensation exception under Section 162(m) of the
Code, (iii) to extend the term of the Plan to March 29, 2009 and (iv) to provide
that options granted following March 29, 1999 will automatically terminate
following termination of an employee's employment with the Company or a
Subsidiary for cause. Shareholders should carefully review Appendix "A" in its
entirety.

SUMMARY OF CERTAIN MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS

The following is a limited discussion of certain of the material federal
income tax consequences of grants of options under the Plan. No attempt has been
made to comment on all relevant tax matters related to the Plan nor those
dependent upon the particular circumstances of a recipient of an option. The
summary is based on current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), regulations thereunder, administrative rulings and court
decisions, all of which are subject to change (possibly retroactively). The
summary does not address state, local, or foreign income tax considerations, nor
federal income tax considerations of non-US. persons.

Incentive Stock Options. An optionee will not recognize taxable income and
the Company will not be entitled to a tax deduction upon either the grant or the
exercise of an incentive stock option. If an optionee holds the Common Stock
purchased pursuant to exercise of an incentive stock option for the longer of
(i) one year after the date of exercise and (ii) two years after the date of
grant (the "holding period"), upon disposition of the Common Stock, the optionee
will recognize long-term capital gain or loss equal to the difference between
the amount realized on the disposition and the exercise price. No tax deduction
will be available to the Company.

If the optionee disposes of the Common Stock purchased pursuant to exercise
of an incentive stock option prior to expiration of the holding period, the
optionee will recognize ordinary taxable income equal to the lesser of (i) the
excess, if any, of the fair market value of the Common Stock on the date of
exercise over
9
<PAGE> 13

the exercise price, or (ii) the excess, if any, of the amount realized on the
disposition over the exercise price. The Company will be entitled to a
corresponding tax deduction. Additionally, the optionee will recognize capital
gain or loss equal to the difference between (i) the amount realized on the
disposition and (ii) the sum of the exercise price and any amount recognized by
the optionee as ordinary taxable income. The capital gain or loss will be
long-term capital gain or loss if the optionee held the Common Stock for more
than one year. Otherwise the capital gain or loss will be short-term capital
gain or loss.

The difference between (i) the fair market value, on the date of exercise,
of Common Stock purchased upon exercise of an incentive stock option and (ii)
the exercise price, increases income for alternative minimum tax purposes.
Additional rules apply if the Common Stock is disposed of prior to expiration of
the holding period.

Nonqualified Stock Options. An optionee will not recognize taxable income
upon the grant of a nonqualified stock option, and no tax deduction will be
available to the Company, unless the nonqualified stock option has a readily
ascertainable value on the date of grant. A nonqualified stock option that is
not publicly traded ordinarily is not considered to have a readily ascertainable
value on the date of grant.

Upon exercise of a nonqualified stock option, the optionee will recognize
ordinary taxable income equal to the difference between (i) the fair market
value, on the date of exercise, of the Common Stock subject to the nonqualified
stock option, and (ii) the exercise price. The Company will be entitled to a
corresponding tax deduction. The optionee's tax basis in the Common Stock
purchased upon exercise of the nonqualified stock option will be the sum of (i)
the exercise price and (ii) the amount of ordinary taxable income recognized by
the optionee. Upon disposal of the Common Stock purchased pursuant to exercise
of a nonqualified stock option, the optionee will recognize capital gain or loss
equal to the difference between the amount realized on the disposition and the
tax basis of the Common Stock. The capital gain or loss will be long-term
capital gain or loss if the optionee held the Common Stock for more than one
year. Otherwise the capital gain or loss will be short-term capital gain or
loss. The exercise of a nonqualified stock option has no effect upon income for
alternative minimum tax purposes.

Code Section 162(m). Notwithstanding the foregoing, Section 162(m) of the
Code denies the Company a deduction with respect to the aggregate compensation
of certain covered employees to the extent a covered employee's aggregate
compensation for any taxable year exceeds $1,000,000. Covered employees include
the Company's chief executive officer and its four other highest compensated
officers for the applicable taxable year. Compensation resulting from the grant,
exercise or disposition of options is potentially subject to the Code Section
162(m) limitation. Certain qualified performance based compensation ("QPBC") is
excepted from the Section 162(m) limitation, however. Options granted under the
Plan should qualify for the QPBC exception.

10
<PAGE> 14

Issuances of Options under the Plan

The following table sets forth certain information regarding options
received under the Plan for the year ended October 31, 1998 by (i) the Company's
current Chief Executive Officer, (ii) the Company's Named Executive Officers (as
herein defined), (iii) all Named Executive Officers as a group, (iv) all current
directors who are not Named 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 PLAN OPTIONS
GRANTED FOR THE YEAR
INDIVIDUAL OR GROUP ENDED OCTOBER 31, 1998
- ------------------- ----------------------
<S> <C>
Fred R. Nichols............................................. 320,000
Randall K. Rogers........................................... 20,000
Jimmie F. Taylor............................................ 10,000
Melvin R. Jenschke.......................................... 10,000
Jerry P. Yandell............................................ 4,000
All Named Executive Officers as a group..................... 364,000
All current directors who are not Named Executive Officers
as a group................................................ --
All employees, including all current officers who are not
Named Executive Officers, as a group...................... 357,000
</TABLE>

The amounts that would be receivable by the individuals or groups named in
the table above under the Plan as proposed to be amended are not determinable at
this time.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF
AMENDMENTS TO THE COMPANY'S SECOND AMENDED AND RESTATED INCENTIVE STOCK OPTION
PLAN.

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 52
Randall K. Rogers.................... Senior Vice President -- Operations 39
Melvin R. Jenschke................... Vice President -- Engineering 57
Jimmie F. Taylor..................... Vice President, Chief Financial Officer and 45
Treasurer
Jerry P. Yandell..................... Vice President -- Operations 60
Robert A. Roseman.................... Vice President -- Business Development 41
</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

11
<PAGE> 15

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.

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.

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").

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION NUMBER OF
----------------- SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS COMPENSATION
- --------------------------- ------ -------- ------------ ------------
<S> <C> <C> <C> <C>
Fred R. Nichols 1998 $296,528 320,000 $12,383(2)
Chairman of the Board, 1997 251,437(1) 20,000 12,141
Chief Executive Officer, 1996 230,394(1) 80,000 10,498
President and Director
Randall K. Rogers 1998 150,284 20,000 3,660(3)
Vice President -- 1997 162,389(1) -- 3,482
Operations 1996 73,412(1) -- 2,146
Melvin R. Jenschke 1998 130,188 10,000 3,606(4)
Vice President -- 1997 120,219 -- 4,128
Engineering 1996 110,301 5,000 3,331
Jimmie F. Taylor 1998 130,011 10,000 4,043(5)
Vice President, Chief 1997 120,042 -- 3,726
Financial Officer and 1996 109,697 5,000 3,313
Treasurer
</TABLE>

12
<PAGE> 16

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

(1) Includes director's fees paid in 1996 and 1997. At the December 1997 board
meeting, a resolution was adopted in which employee directors no longer
receive fees.

(2) Consists of Company contributions under the Company's 401(k) Plan of $8,423,
premiums paid on term life insurance policies for the executive's benefit of
$360 and a $300/month car allowance.

(3) Consists of Company contributions under the Company's 401(k) Plan of $3,554
and premiums paid on term life insurance policies for the executive's
benefit of $106.

(4) Consists of Company contributions under the Company's 401(k) Plan of $3,438
and premiums paid on term life insurance policies for the executive's
benefit of $168.

(5) Consists of Company contributions under the Company's 401(k) Plan of $3,900
and premiums paid on term life insurance policies for the executive's
benefit of $143.

(6) Consists of Company contributions under the Company's 401(k) Plan of $3,312
and premiums paid on term life insurance policies for the executive's
benefit of $168.

OPTION GRANTS DURING 1998 FISCAL YEAR

The following table provides information related to options granted to the
Named Executive Officers during fiscal 1998.

<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
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS 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............ 20,000 2.77% $21.875 12/17/04 $ 178,106 $ 415,064
Fred R. Nichols............ 300,000 41.61 30.28 06/25/05 3,698,944 8,619,315
Randall K. Rogers.......... 20,000 2.77 21.875 12/17/04 178,106 415,064
Melvin R. Jenschke......... 10,000 1.39 21.875 12/17/04 89,053 207,532
Jimmie F. Taylor........... 10,000 1.39 21.875 12/17/04 89,053 207,532
Jerry P. Yandell........... 4,000 0.60 21.875 12/17/04 89,053 207,532
</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.

13
<PAGE> 17

(4) Options are exercisable with respect to 25% of the shares covered thereby on
each of December 17, 1998, 1999, 2000 and 2001 for the options expiring
December 17, 2004 and each of June 25, 1999, 2000, 2001 and 2002 for the
options expiring June 25, 2005. The exercise price was equal to the fair
market value of the Common Stock on the date of each grant.

OPTION EXERCISES DURING 1998 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES

The following table provides information related to options exercised by
the Named Executive Officers during the 1998 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 OPTIONS
SHARES VALUE OPTIONS AT FY-END AT FY-END(1)
ACQUIRED REALIZED --------------------------- ---------------------------
NAME ON EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fred R. Nichols............... -- -- 115,000 375,000 $1,725,045 $868,750
Randall K. Rogers............. -- -- 3,500 22,500 52,063 150,945
Melvin R. Jenschke............ -- -- 17,250 13,750 264,743 111,960
Jimmie F. Taylor.............. 4,500 -- 1,250 13,750 18,985 111,960
Jerry P. Yandell.............. -- -- 5,750 7,750 84,081 77,082
</TABLE>

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

(1) The closing price for the Company's Common Stock as reported by Nasdaq on
October 31, 1998 was $27.688. Value is calculated on the basis of the
difference between the option exercise price and $27.688 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, Rogers, Jenschke, Taylor, Yandell and Roseman (the "Employment
Agreements") that, among other things, provide 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 non-employee directors receives the following
compensation: (i) $1,000 per quarter for service as a director, (ii) $1,000 for
each meeting attended, and (iii) reimbursement of all travel related expenses.
The non-employee directors are Messrs. Ackerman, Fisch, Holland, McKinney,
Riter,

14
<PAGE> 18

Shannon and Smith. Each non-employee director is also 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. Each of Messrs. Holland and Shannon received an option to purchase
5,000 shares in December 1997, and all non-employee directors received an option
to purchase 2,500 shares in March 1998.

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., Robert B.
Holland, III and Fred W. Smith. In determining the compensation to be paid to
the Company's executive officers in fiscal 1998, 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 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, 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 1996, 1997 and 1998. The stock price decreased in
1996 and increased in 1997 and 1998; 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
1997 and June 1998, 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.

Mr. Nichols is the Company's Chairman of the Board, Chief Executive Officer
and President. The Committee set the fiscal 1998 compensation for Mr. Nichols'
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. As
previously stated, the Committee found Mr. Nichols' compensation on the low end
of compensation of chief executive officers of companies to which comparisons
were made. As a result, the Committee increased Mr. Nichols yearly salary
$50,000 to $350,000 per year effective November 1, 1998; provided for a $50,000
bonus contingent on the Company making its budgeted cash flow and net income for
fiscal 1998 to be paid in fiscal 1999; and granted an option to purchase 25,000
shares effective November 1, 1998. Mr. Nichols' fiscal 1998 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.

15
<PAGE> 19

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

A. W. Riter, Jr., Chairman
Ben R. Fisch, M.D.
Robert B. Holland, III
Fred W. Smith

COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation and Stock Option Committee are A. W. Riter,
Jr., Chairman, Ben R. Fisch, M.D., Robert B. Holland, III and Fred W. Smith.
None of these individuals was an officer or employee of the Company during
fiscal 1998.

STOCK PERFORMANCE CHART

The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's Common Stock during the five fiscal
years ended October 31, 1998 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, 1993 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.

TOTAL SHAREHOLDER RETURNS
[SHAREHOLDER RETURNS GRAPH]

<TABLE>
<CAPTION>
MEASUREMENT PERIOD TCA CABLE S&P 500
(FISCAL YEAR COVERED) TV INC. INDEX PEER GROUP
<S> <C> <C> <C>
OCT 93 100 100 100
OCT 94 81.89 103.87 77.00
OCT 95 105.20 131.33 80.01
OCT 96 96.96 162.97 75.30
OCT 97 152.30 215.31 125.08
OCT 98 206.85 262.66 211.70
</TABLE>

16
<PAGE> 20

CERTAIN TRANSACTIONS

The Company leases its headquarters building from Rogers Venture
Enterprises, Inc., a company which is partially owned by Randall K. Rogers, an
officer and director of the Company, and Louise H. Rogers, a shareholder of the
Company beneficially owning over 10% of the outstanding shares of the Company.
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 1998 were $318,515.

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 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 1998, 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 Darrell L.
Campbell filed late one Form 4 reporting one transaction.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The Company's principal auditors are KPMG LLP. A representative of KPMG LLP
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.

On March 30, 1998, the Company dismissed Coopers & Lybrand, L.L.P.
("Coopers & Lybrand") as its principal independent accountants. The decision to
dismiss Coopers & Lybrand was approved by the Company's Board of Directors as
well as the Audit Committee of the Board of Directors. Coopers & Lybrand's
report on the Company's financial statements for each of the fiscal years ended
October 31, 1997 and 1996 did not contain an adverse opinion or disclaimer of
opinion. Neither were such reports qualified or modified as to uncertainty,
audit scope or accounting principles.

During the Company's past two fiscal years and the periods following
October 31, 1997, there were no disagreements between the Company and Coopers &
Lybrand on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure which if not resolved to the
satisfaction of Coopers & Lybrand would have caused it to make reference to the
subject matter(s) of the disagreement(s) in connection with its reports.

On March 27, 1998, the Company retained KPMG LLP ("KPMG") to serve as the
Company's principal independent accountants. During the Company's past two
fiscal years and the periods following October 31, 1997, the Company did not
consult KPMG regarding the application of accounting principles to a specified
transaction or the type of audit opinion that might be rendered on the Company's
financial statements.

17
<PAGE> 21

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 2000 Annual Meeting of Shareholders
such proposals must be received by the Company not later than November 3, 1999.
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 person 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, 1998, accompanies this Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, BUT NOT INCLUDING EXHIBITS
WILL BE FURNISHED AT NO CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS
DELIVERED UPON THE WRITTEN REQUEST OF SUCH PERSON ADDRESSED TO TCA CABLE TV
INC., ATTN: SECRETARY, 3015 SSE LOOP 323, TYLER, TEXAS 75701.

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,

Karen L. Garrett
Corporate Secretary

Tyler, Texas
March 3, 1999

18
<PAGE> 22

APPENDIX A

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

ARTICLE I

THE PLAN

1.1 Name. This Plan shall be known as the TCA Cable TV, Inc. Amended and
Restated Incentive Stock Option Plan. This Plan amends and restates the "TCA
Cable TV, Inc. Second Amended and Restated Incentive Stock Option Plan."
Capitalized terms used herein are defined in Article VI hereof.

1.2 Purpose. The purpose of the Plan is to advance the interests of the
Company and its shareholders by encouraging and enabling selected key Employees
to acquire and retain a proprietary interest in the Company by ownership of its
capital stock and to provide an incentive for such Employees to remain in the
employ of and to serve the Company and its Subsidiaries. It is intended that
Options issued pursuant to Article III shall constitute "incentive stock
options" within the meaning of Section 422 of the Code.

1.3 Shares Subject to Plan. Subject to adjustment pursuant to the
provisions of Section 5.3, the maximum aggregate number of shares of Common
Stock that may be issued hereunder shall not exceed 3,000,000 shares. The
maximum aggregate number of shares of Common Stock with respect to which Options
may be granted to any Optionee during the term of the Plan shall not exceed
1,500,000 shares. The shares of Common Stock to be issued pursuant to the Plan
shall either be authorized and unissued shares of Common Stock or shares of
Common Stock issued and thereafter acquired by the Company.

1.4 Options and Shares Granted under Plan. Plan Shares with respect to
which an Option has been exercised shall not again be available for grant
hereunder. If an Option terminates for any reason without being wholly
exercised, a new Option may be granted hereunder covering the number of Plan
Shares to which the termination relates; provided, that with respect to the
Optionee who held the terminated Option, the number of Plan Shares subject to
such terminated Option shall continue to count against the maximum number of
Plan Shares for which Options may be granted to the Optionee pursuant to the
Plan.

1.5 Effective Date. The effective date of the Plan shall be January 27,
1999, that is, the date on which it was approved and adopted by the Board;
provided, that any grants of Options hereunder are conditioned upon approval of
the Plan by the shareholders 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 shareholders of the Company's Common Stock present or represented and
entitled to vote at a meeting of the shareholders of the Company held within
twelve (12) months following the date of the Plan's adoption by the Board.

1.6 Eligibility. Any Employee 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 hereinafter set forth.

1.7 Reservation of Shares of Common Stock. During the term of the Plan,
the Company shall at all times reserve and keep available such number of shares
of Common Stock as shall be necessary to satisfy the requirements of the Plan as
to the number of Plan Shares. In addition, the Company shall from time to time,
as is necessary to accomplish the purposes of the Plan, seek or obtain from any
regulatory agency having jurisdiction any requisite authority that is necessary
to issue Plan Shares hereunder. The inability of the Company to obtain from any
regulatory agency having jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance of any Plan Shares shall relieve
the Company of any liability in respect of the nonissuance of Plan Shares as to
which the requisite authority shall not have been obtained.

1.8 Tax Withholding and Reporting.

(a) Condition Precedent. The issuance of Plan Shares pursuant to the
exercise of any Option is subject to the condition that if at any time the
Committee shall determine, in its discretion, that the satisfaction of
withholding tax or other withholding liabilities under any federal, state,
or local law is

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<PAGE> 23

necessary or desirable as a condition of, or in connection with such
issuance, then the issuance of Plan Shares shall not be effected unless the
withholding shall have been effected or obtained in a manner acceptable to
the Committee.

(b) Manner of Satisfying Withholding Obligation. When the Committee
requires an Optionee to pay an amount required to be withheld under
applicable income tax laws in connection with subsection (a) above, such
payment shall be made, as the Committee may in each case in its discretion
determine, (i) in cash, (ii) by check, (iii) by delivery of shares of
Common Stock already owned by the Optionee having a Fair Market Value on
the Tax Date equal to the amount required to be withheld, (iv) through the
withholding by the Company of a portion of the Plan Shares acquired upon
the exercise of an Option having a Fair Market Value on the Tax Date equal
to the amount required to be withheld, or (v) in any other form of valid
consideration.

(c) Notice of Disposition of Plan Shares. The Company may require as a
condition to the issuance of Plan Shares covered by any Incentive Stock
Option that the party exercising the Option give a written representation
to the Company, satisfactory in form and substance to its counsel and upon
which the Company may reasonably rely, that such party shall report to the
Company any disposition of such Plan Shares prior to the expiration of the
holding periods specified by Section 422(a)(1) of the Code. If, and to the
extent that, the realization of income in such a disposition imposes upon
the Company or any Subsidiary federal, state, or local withholding tax
requirements or any such withholding is required to secure for the Company
or any Subsidiary an otherwise available tax deduction, the Company shall
have the right to require that the recipient remit an amount sufficient to
satisfy those requirements; and the Company may require as a condition to
the issuance of Plan Shares covered by an Incentive Stock Option that the
party exercising such Option give a satisfactory written representation
promising to make such a remittance.

1.9 Payment of Option Price. Upon exercise of an Option, the purchase
price for the Plan Shares subject to the Option shall be paid in full (i) in
cash, or (ii) by delivery of shares of Common Stock already owned by the
Optionee with a Fair Market Value on the date of exercise equal to the purchase
price.

1.10 Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any Plan Shares subject to an Option until the date
of issuance of a stock certificate representing such Plan Shares to the
Optionee. 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.

1.11 Modification, Extension and Renewal of Options. Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
extend or renew any outstanding Option (to the extent not previously exercised)
and authorize the granting of a new Option or Options in substitution therefor
(to the extent not previously exercised). The Committee shall not, however,
modify any outstanding Option so as to specify a lower purchase price for the
Plan Shares subject to the Option or accept the surrender of an outstanding
Option and authorize the granting of a new Option in substitution therefor
specifying such lower purchase 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 previously granted under the
Plan.

1.12 Compliance with Securities Laws. Plan Shares shall not be issued
pursuant to the exercise of any Option unless the issuance and delivery of the
Plan Shares shall comply with all relevant provisions of state and federal law
(including without limitation (i) the Securities Act and the rules and
regulations promulgated thereunder and (ii) the requirements of any stock
exchange upon which the Plan Shares may then be listed) and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. The Committee may also require an Optionee to furnish evidence
satisfactory to the Company, including without limitation a written and signed
representation letter and consent to be bound by any transfer restrictions
imposed by law, legend, condition, or otherwise, that the Plan Shares are being
acquired only for investment and without any present intention to sell or
distribute such Plan Shares in violation of any state or federal law, rule, or
regulation. Further, each Optionee shall consent to the imposition of a legend
on the certificate
A-2
<PAGE> 24

representing the Plan Shares issued pursuant to exercise of an Option,
restricting their transfer as required by law or this Section.

1.13 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 shareholders
enter into an agreement to dispose of all or substantially all of the
assets or stock of the Company by means of a sale, merger, or other
reorganization, liquidation or otherwise, each outstanding Option shall
become immediately exercisable with respect to the full number of Plan
Shares subject to such Option during the period commencing on the effective
date of the agreement to dispose of all or substantially all of the assets
or stock of the Company and ending on the date that (i) the disposition of
assets or stock contemplated by the agreement is consummated or (ii) the
Option is otherwise terminated in accordance with its terms or the
provisions of this Plan, whichever occurs first. Outstanding Options shall
not become immediately exercisable, however, if the transaction
contemplated in the agreement is a merger or reorganization in which the
Company survives and the shareholders of the Company who are shareholders
on the date the Options in question were granted shall continue to own at
least fifty percent (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 fifteen percent (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 Exchange 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 Exchange 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 if (i) prior
to the acquisition of, or offer to acquire, fifteen percent (15%) or more
of the voting securities of the Company, the Board has adopted, by not less
than two-thirds ( 2/3) vote, a resolution specifically approving such
acquisition or offer, or (ii) the acquisition consists of (A) a transfer of
the Company's voting securities by a person who is the beneficial owner,
directly or indirectly, of fifteen percent (15%) or more of the voting
securities of the Company (a "15 Percent Owner") to (1) a member of the 15
Percent Owner's immediate family (within the meaning of Rule 16a-1(e)
promulgated under the Exchange Act) either during the 15 Percent Owner's
lifetime or pursuant to the laws of descent and distribution; (2) any trust
as to which the 15 Percent Owner or a member (or members) of the 15 Percent
Owner's immediate family (within the meaning of Rule 16a-1(e) promulgated
under the Exchange Act) is the beneficiary; (3) any trust as to which the
15 Percent Owner is the settlor with sole power to revoke; (4) any entity
over which the 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 (5) any charitable trust, foundation or corporation under
Section 501(c)(3) of the Code that is funded by the 15 Percent Owner; or
(B) the acquisition of voting securities of the Company by either (i) a 15
Percent Owner or (ii) a person, trust or other entity described in the
foregoing clauses (A)(1)-(5) of this Section. 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.

1.14 Employment of Optionee. Nothing in the Plan or in any Option shall
confer upon any Employee any right to continued employment by the Company or any
Subsidiary or limit in any way the right of the Company or any Subsidiary at any
time to terminate or alter the terms of that employment.

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<PAGE> 25

1.15 Termination of Employment.

(a) If an Optionee ceases to be employed by the Company or a
Subsidiary for any reason other than death or for Cause, any Option held by
the Optionee shall be exercisable by the Optionee at any time prior to the
expiration date of the Option or prior to the date that is three (3) months
(one (1) year in the case of termination by reason of Permanent Disability)
after the date of termination, whichever is earlier, but only to the extent
that the Optionee had the right to exercise the Option on the date of
termination.

(b) If an Optionee dies while employed by the Company or a Subsidiary
or within three (3) months after termination of employment, any Option held
by the Optionee shall be exercisable by the person or persons to whom the
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 the date
that is one (1) year after the date of the Optionee's death, whichever is
earlier, but only to the extent that the Optionee had the right to exercise
the Option on the date of the Optionee's death.

(c) Effective with respect to Options granted after the Effective
Date, if an Optionee ceases to be employed by the Company or a Subsidiary
because the Optionee's employment with the Company or a Subsidiary is
terminated for Cause, any Option held by the Optionee shall automatically
expire on the date of such termination. If any facts that would constitute
Cause for termination or removal of an Optionee are discovered after the
Optionee's employment with the Company or a Subsidiary has ended, any
Option then held by the Optionee may be immediately terminated by the
Committee.

1.16 Transferability of Awards. Except as may be agreed upon by the
Committee in accordance with this Section, Options shall not be transferable
other than by will or the laws of descent and distribution or, with respect to
Nonqualified Stock Options, pursuant to the terms of a qualified domestic
relations order as defined by the Code or Title I of ERISA, or the rules
thereunder, and, with respect to Incentive Stock Options, may be exercised
during the lifetime of an Optionee only by the Optionee or by his legally
authorized representative. The designation by an Optionee of a beneficiary shall
not constitute a transfer of the Option. The Committee may, in its discretion,
provide in an Option agreement that Nonqualified Stock Options may be
transferred to members of the Optionee's immediate family, trusts for the
benefit of such immediate family members, and partnerships in which such
immediate family members are the only partners, provided that there is no
consideration for the transfer.

ARTICLE II

ADMINISTRATION

2.1 Administration. The Plan shall be administered by a Committee of not
fewer than two members of the Board and each member shall be a "Non-Employee
Director" within the meaning of Rule 16b-3 promulgated under the Exchange Act
and an "outside director" within the meaning Section 162(m) of the Code and the
regulations issued pursuant thereto. 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 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. 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 members 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 members of the Board or the Committee,
Committee members shall be indemnified by the Company
A-4
<PAGE> 26

against the reasonable expenses, including attorneys' 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 a Committee member is liable for negligence or misconduct in the
performance of such member's duties; provided, that within sixty (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. The terms and conditions of Options granted
under this Article may differ from one another as the Committee shall, in its
discretion, determine, as long as all Options granted under this Article satisfy
the requirements of this Article.

3.2 Purchase Price. The purchase price for Plan Shares acquired pursuant
to the exercise, in whole or in part, of any Option granted under this Article
shall not be less than the Fair Market Value of the Plan Shares on the date of
grant.

3.3 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 the Option be exercisable after the expiration of ten (10)
years from the date of grant. 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 ten (10) percent of the total combined voting power of all classes of
stock of the Company or any Subsidiary shall meet the following conditions: (i)
the purchase price for Plan Shares acquired pursuant to the exercise, in whole
or in part, of the Option shall not be less than one hundred ten percent (110%)
of the Fair Market Value of the Plan Shares on the date of grant; and (ii) the
Option shall not be exercisable after the expiration of five (5) years from the
date of grant.

3.5 Maximum Amount of Options First Exercisable in Any Calendar Year. The
aggregate Fair Market Value of Plan Shares (determined on the date the Option is
granted) with respect to which Options issued under this Article are exercisable
for the first time by any Optionee during any calendar year under all incentive
stock option plans of the Company and its Subsidiaries shall not exceed
$100,000. Any portion of an Option granted hereunder in excess of the foregoing
limit shall be considered granted pursuant to Article IV.

3.6 Individual Option Agreements. Each Optionee receiving Options pursuant
to this Article shall be required to enter into a written Option agreement with
the Company. In such Option agreement, the Optionee shall agree to be bound by
the terms and conditions of the Plan, the Options granted hereunder, and such
other matters as the Committee deems appropriate.

ARTICLE IV

NONQUALIFIED STOCK OPTIONS

4.1 Terms and Conditions of Options. The terms and conditions of Options
granted under this Article may differ from one another as the Committee shall,
in its discretion, determine, as long as all Options granted under this Article
satisfy the requirements of this Article.

4.2 Purchase Price. Effective with respect to Options granted after the
Effective Date, the purchase price for Plan Shares acquired pursuant to the
exercise, in whole or in part, of any Option granted under this Article shall
not be less than the Fair Market Value of the Plan Shares on the date of grant.
A-5
<PAGE> 27

4.3 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 the Option be exercisable after the expiration of ten (10)
years from the date of grant. In addition, each Option shall be subject to early
termination as provided elsewhere in the Plan.

4.4 Individual Option Agreements. Each Optionee receiving Options pursuant
to this Article shall be required to enter into a written Option agreement with
the Company. In such Option agreement, the Optionee shall agree to be bound by
the terms and conditions of the Plan, the Options granted hereunder, and such
other matters as the Committee deems appropriate.

ARTICLE V

TERMINATION, AMENDMENT AND ADJUSTMENT

5.1 Term of Plan. The Plan shall terminate on the date that is one day
prior to the tenth (10th) anniversary of the Plan's effective date and no
Options shall be granted under the Plan thereafter.

5.2 Amendment of the Plan. The Board may from time to time, with respect
to any Plan Shares at the time not subject to Options, suspend or discontinue
the Plan or revise or amend it in any respect whatsoever; provided, that no
amendment or revision may be made without the approval of the shareholders of
the Company if such approval is required under the Code, Rule 16b-3 promulgated
under the Exchange Act or any other applicable law or rule. No amendment,
suspension, or termination of the Plan shall, without the consent of the
Optionee who has received an Option hereunder, alter or impair any of that
Optionee's rights or obligations under any Option granted prior to that
amendment, suspension, or termination.

5.3 Capital Adjustments Affecting Stock. In the event of a capital
adjustment to the outstanding Common Stock of the Company resulting from a stock
dividend, stock split, reorganization, merger, consolidation, or a combination
or exchange of shares, the number of shares of Common Stock subject to this Plan
and the number of Plan Shares under Option shall be adjusted consistent with
such capital adjustment. The granting of an Option hereunder shall not affect in
any way the right or power of the Company to make adjustments, reorganizations,
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.

ARTICLE VI

DEFINITIONS

6.1 Definitions. As used herein, the following terms have the meanings
hereinafter set forth unless the context clearly indicates to the contrary:

"Board" means the Board of Directors of the Company.

"Cause" has the meaning set forth in an Employee's written employment
agreement with the Company or a Subsidiary; provided, that with respect to an
Employee that does not have such a written agreement with the Company or a
Subsidiary, Cause shall be determined in accordance with the policies and
procedures of the Company or a Subsidiary.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means the Committee appointed in accordance with Section 2.1.

"Common Stock" means the Common Stock, par value $0.10 per share, of the
Company or, in the event that the outstanding shares of such Common Stock are
hereafter changed into or exchanged for shares of a different stock or security
of the Company or some other corporation, such other stock or security.

"Company" means TCA Cable TV, Inc., a Texas corporation.

"Employee" means an employee (within the meaning of Section 3401(c) of the
Code and the regulations thereunder) of the Company or of any Subsidiary of the
Company that adopts the Plan, including officers.
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<PAGE> 28

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fair Market Value" means such value as determined by the Committee on the
basis of such factors as it deems appropriate; provided, that if the Common
Stock is traded on a national securities exchange or transactions in the Common
Stock are quoted on the Nasdaq National Market System, such value as shall be
determined by the Committee on the basis of the reported sales prices for the
Common Stock on the date for which such determination is relevant, as reported
on the national securities exchange or the Nasdaq National Market System, as the
case may be. If the Common Stock is not listed and traded upon a recognized
securities exchange or on the Nasdaq National Market System, the Committee shall
make a determination of Fair Market Value on a reasonable basis which may
include the mean between the closing bid and asked quotations for such stock on
the date for which such determination is relevant (as reported by a recognized
stock quotation service) or, in the event that there shall be no bid or asked
quotations on the date for which such determination is relevant, then on the
basis of the mean between the closing bid and asked quotations on the date
nearest preceding the date for which such determination is relevant for which
such bid and asked quotations were available.

"Incentive Stock Option" means an Option granted pursuant to Article III.

"Nonqualified Stock Option" means an Option granted pursuant to Article IV.

"Option" means an Incentive Stock Option or a Nonqualified Stock Option.

"Optionee" means an Employee to whom an Option has been granted hereunder.

"Permanent Disability" has the meaning provided for that term in Section
22(e)(3) of the Code.

"Plan" means the TCA Cable TV, Inc. Amended and Restated Incentive Stock
Option Plan, as set forth herein and as amended from time to time.

"Plan Shares" means shares of Common Stock issuable pursuant to the Plan.

"Securities Act" means the Securities Act of 1933, as amended.

"Subsidiary" means a subsidiary corporation of the Company, as defined in
Section 424(f) of the Code.

"Tax Date" means the date on which the amount of tax to be withheld is
determined.

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FORM OF PROXY
TCA CABLE TV, INC.

PROXY -- ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby appoints Fred R. Nichols and Karen L. Garrett each
with the power to act without the other and with full power of substitution, as
Proxies to represent and 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 Willow Brook Country Club, 3205 W. Erwin, Tyler, Texas on Tuesday, March
30, 1999, at 3:30 p.m., local time, upon such business as may properly come
before the meeting, or any adjournments thereof, including the following:
- --------------------------------------------------------------------------------

(1) Election of Directors:

<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as listed to the contrary below). all nominees listed below.
</TABLE>

JAMES F. ACKERMAN, DARRELL L. CAMPBELL, BEN R. FISCH, M.D., ROBERT B.
HOLLAND, III, WAYNE J. MCKINNEY, FRED R. NICHOLS, A.W. RITER, JR., RANDALL
K. ROGERS, MICHAEL S. SHANNON AND FRED W. SMITH

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)

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

(2) Approval of an amendment to the Company's Articles of Incorporation to
increase the number of shares of Common Stock, par value $.10 per share,
authorized for issuance from 60,000,000 to 120,000,000 shares.

<TABLE>
<S> <C> <C>
[ ] FOR approval of the amendment. [ ] AGAINST the amendment. [ ] ABSTENTION with respect to the amendment.
</TABLE>

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

(3) Approval of amendments to the Company's Second Amended and Restated
Incentive Stock Option Plan as described in the proxy statement.

<TABLE>
<S> <C> <C>
[ ] FOR approval of the amendments. [ ] AGAINST the amendments. [ ] ABSTENTION with respect to the
amendments.
</TABLE>

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

(4) In their discretion on any other matter that may properly come before
the meeting or any adjournments 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 TEN NOMINEES FOR DIRECTOR, (2)
FOR THE PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION, (3) FOR
THE PROPOSED AMENDMENTS TO THE COMPANY'S SECOND AMENDED AND RESTATED INCENTIVE
STOCK OPTION PLAN, AND (4) AT THE DISCRETION OF THE PROXY HOLDERS WITH REGARD TO
ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.

Dated: , 1999
-------------------

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.