Document:

Exhibit 4.2
                                     BY LAWS

                                       OF

                       HUNGARIAN TELEPHONE AND CABLE CORP.
                              (as amended to date)

                                    ARTICLE 1

                                     OFFICES

                  SECTION 1. REGISTERED  OFFICE.  The registered office shall be
established and maintained at the office of XL Corporate Services, Inc., 15 East
North Street,  in the City of Dover,  in the County of Kent, and in the State of
Delaware  19901,  and said  corporation  shall be the  registered  agent of this
corporation in charge thereof.

                  SECTION  2.  OTHER  OFFICES.  The  corporation  may have other
offices, either within or without the State of Delaware, at such place or places
as the Board of  Directors  may from time to time appoint or the business of the
corporation may require.

                                   ARTICLE II

                                  SHAREHOLDERS

1.       Place of Meetings

                  Meetings of shareholders  shall be held at the principal place
of the  Corporation,  or at such other places within or without the State of New
York as the Board shall authorize.

2.       Annual Meetings

                  The annual  meeting  of the  shareholders  of the  Corporation
shall be held at 2:00 p.m.  on the last  Tuesday of the fifth month in each year
after the close of the  fiscal  year of the  Corporation,  if such date is not a
legal holiday and if a legal holiday, then on the next business day following at
the same hour, at which time the shareholders  shall elect a Board of Directors,
and transact such other business as may properly come before the meeting.

3.       Special Meetings

                  Special meetings of the shareholders may be called at any time
by the Board or by the  President,  and shall be called by the  President or the
Secretary  at the Written  request of the  holders of ten  percent  (10%) of the
outstanding shares entitled to vote there at, or as otherwise required by law.
<PAGE>

4.       Notice of Meetings

                  Written notice of each meeting of shareholders, whether annual
or special,  stating  the time when and place  where it is to be held,  shall be
served not less than ten nor more than fifty days before the meeting,  upon each
shareholder  of  record  entitled  to  vote at such  meeting,  and to any  other
shareholder  to whom the giving of notice may be  required  by law.  Notice of a
special  meeting  shall also state the purpose or purposes for which the meeting
is called,  and shall indicate that it is being issued by the person calling the
meeting. If, at any meeting action is proposed to be taken that would, if taken,
entitle  shareholders  to receive  payment for their shares,  the notice of such
meeting shall include a statement of the purpose and to that effect.  If mailed,
such notice shall be directed to each such  shareholder  at his  address,  as it
appears on the records of the shareholders of the  Corporation,  unless he shall
have  previously  filed with the Secretary of the  Corporation a written request
that notices  intended for him be mailed to some other address,  in which event,
it shall be mailed to the address designated in such request.

5.       Waiver

                  Notice of any meeting need not be given to any shareholder who
submits  a signed  waiver  of  notice  either  before  or after a  meeting.  The
attendance  of any  shareholder  at a  meeting,  in person  or by  proxy,  shall
constitute a waiver of notice by such shareholder.

6.       Fixing Record Date

                  For the purpose of determining  the  shareholders  entitled to
notice of or to vote at any meeting of shareholders or any adjournment  thereof,
or to express consent to or dissent from any proposal without a meeting,  or for
the  purpose of  determining  shareholders  entitled  to receive  payment of any
dividend or the allotment of any rights, or for the purpose of any other action,
the  Board  shall  fix,  in  advance,  a date as the  record  date  for any such
determination of  shareholders.  Such date shall not be more than fifty nor less
than ten days before the date of such meeting, nor more than fifty days prior to
any  other  action.  If no  record  date is  fixed it  shall  be  determined  in
accordance with the provisions of law.

7.       Quorum

                  (a)  Except  as  otherwise  provided  by  the  Certificate  of
Incorporation,  at all  meetings of the  shareholders  of the  Corporation,  the
presence  at the  commencement  of such  meetings,  in person  or by  proxy,  of
shareholders holding a majority of the total number of shares of the Corporation
then issued and  outstanding on the records of the  Corporation  and entitled to
vote,  shall  be  necessary  and  sufficient  to  constitute  a  quorum  for the
transaction  of any business.  If a specified item of business is required to be
voted on by a class or  classes,  the holder of a majority of the shares of such
class or classes shall constitute a quorum for the transaction of such specified
item of business.  The withdrawal of any shareholder after the commencement of a
meeting  shall have no effect on the  existence of a quorum,  after a quorum has
been established at such meeting.

                                       -2-
<PAGE>

                  (b)  Despite  the absence of a quorum at any annual or special
meeting of shareholders,  the  shareholders,  by a majority of the votes cast by
the holders of shares entitled to vote thereon, may adjourn the meeting.

8.       Voting

                  (a)  Except  as   otherwise  provided  by  statute or  by  the
Certificate of Incorporation,

                           (1)  directors shall be elected by a plurality of the
                  votes cast;

                           (2) all other corporate action to be taken by vote of
                  the  shareholders,  shall be authorized by a majority of votes
                  cast;

at a meeting of shareholders by the holders of shares entitled to vote thereon.

                  (b)  Except  as  otherwise  provided  by  statute  or  by  the
Certificate of  Incorporation,  at each meeting of shareholders,  each holder of
record of shares of the Corporation  entitled to vote,  shall be entitled to one
vote  for  each  share  of  stock  registered  in his  name on the  books of the
Corporation.

                  (c) Each shareholder entitled to vote or to express consent or
dissent  without a  meeting,  may do so by proxy;  provided,  however,  that the
instrument  authorizing such proxy to act shall have been executed in writing by
the shareholder himself, or by his attorney-in-fact  duly authorized in writing.
No proxy shall be valid after the  expiration  of eleven months from the date of
its  execution,  unless  the proxy  shall  specify  the  length of time it is to
continue in force.  The proxy shall be delivered to the Secretary at the meeting
and shall be filed with the  records of the  Corporation.  Every  proxy shall be
revocable at the pleasure of the  shareholder  executing it, except as otherwise
provided by law.

                  (d) Any action that may be taken by vote may be taken  without
a meeting  on written  consent.  Such  action  shall  constitute  action by such
shareholders  with the same force and effect as if the same had been approved at
a duly called meeting of  shareholders  and evidence of such approval  signed by
all of the shareholders shall be inserted in the Minute Book of the Corporation.

                                       -3-
<PAGE>

                                   ARTICLE III

                               BOARD OF DIRECTORS

1.       Number

                  The number of the  directors of the  Corporation  shall be not
less than three (3) nor more than nine (9) unless all of the outstanding  shares
are owned of record by less than three shareholders,  in which event, the number
of directors shall not be less than the number of shareholders.

2.       Election

                  Except  as  may  otherwise  be  provided   herein  or  in  the
Certificate of Incorporation,  the members of the Board need not be shareholders
and  shall  be  elected  by a  majority  of  the  votes  cast  at a  meeting  of
shareholders, by the holders of shares entitled to vote in the election.

3.       Term of Office

                  Each  director  shall hold office until the annual  meeting of
the  shareholders  next  succeeding  his  election,  and until his  successor is
elected and qualified, or until his prior death, resignation or removal.

4.       Duties and Powers

                  The Board shall be responsible  for the control and management
of the affairs,  property and interests of the Corporation,  except those powers
expressly conferred upon or reserved to the shareholders.

5.       Annual

                  Regular annual meetings of the Board shall be held immediately
following the annual meeting of shareholders.

6.       Regular Meetings and Notice

                  The Board may provide by resolution for the holding of regular
meetings of the Board of Directors, and may fix the time and place thereof.

                  Notice of regular  meetings  shall not be required to be given
and if given,  need not specify the purpose of the meeting;  provided,  however,
that in the case  that the Board  shall  fix or change  the time or place of any
regular  meeting,  notice of such action be given to each director who shall not
have been  present at the meeting at which such action was taken within the time
limited,  and in the manner set forth at Section 7 of this Article  III,  unless
such notice shall be waived.

                                       -4-
<PAGE>

7.       Special Meetings and Notices

                  (a)  Special  meetings  of the  Board  shall be held  whenever
called by the  President or by one of the  directors,  at such time and place as
may be specified in the respective notices or waivers of notice thereof.

                  (b) Notice of special  meetings  shall be mailed  directly  to
each  director,  addressed  to him for such  purpose  or at his  usual  place of
business,  at least two (2) business days before the day on which the meeting is
to be held,  or delivered to him  personally  or given to him orally,  not later
than the business day before the day on which the meeting is to be held.

                  (c) Notice of a special  meeting  shall not be  required to be
given to any  director who shall  attend such  meeting,  or who submits a signed
waiver of notice.

8.       Chairman

                  At all meetings of the Board, the Chairman, if present,  shall
preside.  If there is no  Chairman,  or he shall be absent,  then the  President
shall  preside.  In his absence,  the Chairman  shall be chosen by the Directors
present.

9.       Quorum and Adjournment

                  (a) At all  meetings of the Board,  the presence of a majority
of the  entire  Board  shall  be  necessary  to  constitute  a  quorum  for  the
transaction of business, except as otherwise provided by law, by the Certificate
of Incorporation  or by these By-Laws.  Participation of any one or more members
of the  Board by means  of a  conference  telephone  or  similar  communications
equipment,  allowing all persons participating in the meeting to hear each other
at the same time, shall constitute presence in person at such meeting.

                  (b) A majority of the directors present at any regular meeting
or special meeting,  although less than a quorum, may adjourn the same from time
to time, without notice, until a quorum shall be present.

10.      Manner of Acting

                  (a) At all meetings of the Board,  each director present shall
have one vote.

                  (b) Except as otherwise provided by law, by the Certificate of
Incorporation,  or by these By-Laws,  the action of the directors present at any
meeting at which a quorum is present  shall be the act of the Board.  Any action
authorized,  in writing,  by all of the  directors  entitled to vote thereon and
filed  with  minutes of the  Corporation  shall be the act of the Board with the
same force and effect as if the same had been passed by unanimous vote at a duly
called meeting of the Board.

                                       -5-
<PAGE>

11.      Vacancies

                  Any  vacancy  in the  Board  of  Directors  resulting  from an
increase   in   the   number   of   directors,   or  the   death,   resignation,
disqualification,  removal or inability to act of any director,  shall be filled
for the unexpired portion of the term by a majority of the remaining  directors,
though  less than a quorum,  at any  regular  meeting or special  meeting of the
Board called for the purpose.

12.      Resignation

                  Any director may resign at any time by giving  written  notice
to the  Board,  the  President  or the  Secretary  of  the  Corporation.  Unless
otherwise  specified in such written notice,  such resignation shall take effect
upon the receipt  thereof by the Board or such  officer,  and the  acceptance of
such resignation shall not be necessary to make it effective.

13.      Removal

                  Any director  may be removed,  with or without  cause,  at any
time by the  shareholders,  at a special meeting of the shareholders  called for
that purpose and may be removed for cause by action of the Board.

14.      Compensation

                  The  directors  shall be eligible to  participate  in the 1992
Incentive Stock Plan, as amended,  and any other  compensation  plan that may be
adopted by the Company  from time to time.  In  addition,  the  directors,  by a
resolution of the Board,  may receive a fixed sum and expenses for attendance at
each regular or special meeting of the Board.  Nothing herein contained shall be
construed  to preclude any director  from serving the  Corporation  in any other
capacity and receiving compensation therefor.

15.      Contracts

                  (a) No contract or other transaction  between this Corporation
and any other business  shall be affected or invalidated  nor shall any director
be liable in any way by reason of the fact that a director  of this  Corporation
is interested in, or is a director,  officer,  or is  financially  interested in
such other business, provided such fact is disclosed to the Board.

                                       -6-
<PAGE>

                  (b) Any director may be a party to or may be interested in any
contract or transaction of this  Corporation  individually and no director shall
be liable in any way by reason of such interest,  provided that the fact of such
participation  or interest be disclosed to the Board and provided that the Board
shall authorize or ratify such contract or transaction by the vote (not counting
the vote of any such  director) of a majority of a quorum,  notwithstanding  the
presence of any such director at the meeting at which such action is taken. Such
director may be counted in determining the presence of a quorum at such meeting.
This  Section  shall not be  construed  to  invalidate  or in any way affect any
contract  or other  transaction  which  would  otherwise  be valid under the law
applicable thereto.

16.      Committees

                  The Board,  by resolution  adopted by a majority of the entire
Board,  may,  from time to time,  designate  from among its members an executive
committee and such other  committees and alternate  members  thereof as they may
deem desirable,  each consisting of three or more members,  with such powers and
authority  (to  the  extent  permitted  by  law)  as may  be  provided  in  such
resolution. Each such committee shall remain in existence at the pleasure of the
Board.  Participation  of any one or more  members of a committee  by means of a
conference  telephone or similar means of communication  equipment  allowing all
persons  participating in the meeting to hear each other at the same time, shall
constitute  a  director's  presence  in person at any such  meeting.  Any action
authorized  in writing by all of the members of a  committee  and filed with the
minutes of the committee  shall be the act of the committee  with the same force
and effect as if the same had been  passed by  unanimous  vote at a duly  called
meeting of the committee.

                                   ARTICLE IV

                                     OFFICES

1.       Number and Qualifications

                  The officers of the corporation consist of a President, one or
more Vice  Presidents,  a  Secretary,  a  Treasurer,  and such  other  officers,
including a Chairman of the Board,  as the Board of Directors,  may from time to
time, deem  advisable.  Any officer other than the Chairman of the Board may be,
but is not  required  to be,  a  director  of the  Corporation.  Any two or more
offices  may be held by the same  person,  except the offices of  President  and
Secretary.

2.       Election

                  The Officers of the Corporation  shall be elected by the Board
at the  regular  annual  meeting of the Board  following  the annual  meeting of
shareholders.

                                       -7-

<PAGE>

3.       Term of Office

                  Each officer shall hold office until the annual meeting of the
Board next  succeeding  his election,  and until his  successor  shall have been
elected and qualified, or until his death, resignation or removal.

4.       Resignation

                  Any  officer may resign at any time by giving  written  notice
thereof to the Board,  the President or the Secretary of the  Corporation.  Such
resignation  shall  take  effect  upon  receipt  thereof by the Board or by such
officer,  unless otherwise  specified in such written notice.  The acceptance of
such resignation shall not be necessary to make it effective.

5.       Removal

                  Any officer, whether elected or appointed by the Board, may be
removed by the Board,  either with or without cause, and a successor  elected by
the Board at any time.

6.       Vacancies

                  A vacancy  in any  office  by  reason  of death,  resignation,
inability  to act,  disqualification,  or any  other  cause,  may at any time be
filled for the unexpired portion of the term by the Board.

7.       Duties

                  Unless  otherwise  specified  by the  Board,  Officers  of the
Corporation shall each have such powers and duties as generally pertain to their
respective offices, such powers and duties as may be set forth in these By-Laws,
and such powers and duties as may be specifically provided for by the Board. The
President shall be the chief executive officer of the Corporation.

8.       Sureties & Bonds

                  At the request of the Board, any Officer, employee or agent of
the Corporation shall execute for the Corporation,  a bond in sum, and with such
surety as the Board may direct, conditioned upon the faithful performance of his
duties to the Corporation,  including, responsibility for negligence and for the
accounting for all property,  funds or securities of the  Corporation  which may
come into his hands.

                                       -8-
<PAGE>

9.       Shares of Other Corporations

                  Whenever the  Corporation is the holder of shares of any other
Corporation,  any right or power of the Corporation as such shareholder shall be
exercised  on  behalf  of the  Corporation  in  such  manner  as the  Board  may
authorize.

                                    ARTICLE V

                                 SHARES OF STOCK

1.       Certificates

                  (a) The  certificates  representing  shares in the Corporation
shall be in such form as shall be  approved  by the Board and shall be  numbered
and  registered in the order  issued.  They shall bear the holder's name and the
number of shares,  and shall be signed by (i) the  Chairman  of the Board or the
President  or a Vice  President,  and (ii) the  Secretary or  Treasurer,  or any
Assistant Secretary or Assistant Treasurer, and shall bear the corporate seal.

                  (b) Certificate  representing shares shall not be issued until
they are fully paid for.

                  (c) The Board may authorize the issuance of  certificates  for
fractions of a share which shall entitle the holder to exercise  voting  rights,
receive dividends and participate in liquidating distributions, in proportion to
the fractional holdings.

2.       Lost or Destroyed Certificates

                  Upon   notification   by  the   holder   of  any   certificate
representing shares of the Corporation of the loss or destruction of one or more
certificates  representing  the same, the Corporation may issue new certificates
in place of any certificates  previously  issued by it, and alleged to have been
lost or destroyed.  Upon production of evidence of loss or destruction,  in such
form as the Board in its sole discretion may require,  the Board may require the
owner of the lost or destroyed  certificates to provide the  Corporation  with a
bond in which  sum as the  Board  may  direct,  and with  such  surety as may be
satisfactory  to the Board,  to indemnify  the  Corporation  against any claims,
loss,  liability  or damage it may suffer on account of the  issuance of the new
certificate. A new certificate may be issued without requiring any such evidence
or bond when, in judgment of the Board, it is proper to do so.

3.       Transfer of Shares

                  (a) Transfers of shares of the  Corporation may be made on the
share records of the Corporation solely by the holder of such records, in person
or by a  duly  authorized  attorney,  upon  surrender  for  cancellation  of the
certificates  representing such shares,  with an assignment or power of transfer
endorsed  thereon or delivered  therewith,  duly executed and with such proof of
the authenticity of the signature, and the authority to transfer and the payment
of transfer taxes as the Corporation or its agents may require.

                                       -9-
<PAGE>

                  (b) The  Corporation  shall be entitled to treat the holder of
record of any shares as the  absolute  owner  thereof for all purposes and shall
not be bound to recognize any legal  equitable or other claim to, or interest in
such  shares  on the part of any  other  person,  whether  or not it shall  have
express or other notice thereof, except as otherwise expressly provided by law.

4.       Record Date

                  In lieu of closing the share records of the  Corporation,  the
Board may fix, in advance, a date not less than ten days and not more than fifty
days,  as the record  date for the  determination  of  shareholders  entitled to
receive  notice of, and to vote at, any  meeting  of  shareholders  entitled  to
receive payment of any dividends, or allotment of any rights, or for the purpose
of any  other  action.  If no  record  date is fixed,  the  record  date for the
determination  of shareholders  entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business of the day immediately  preceding
the day on which  notice is given,  or, if no notice is given,  the day on which
the meeting is held; the record date for determining  shareholders for any other
purpose shall be at the close of business on the day on which the  resolution of
the directors relating thereto is adopted.  When a determination of shareholders
of record  entitled to notice of or to vote at any meeting of  shareholders  has
been  made as  provided  for  herein,  such  determination  shall  apply  to any
adjournment  thereof,  unless  the  directors  fix a new  record  date  for  the
adjourned meeting.

                                   ARTICLE VI

                                    DIVIDENDS

                  Subject  to  this   Certificate  of   Incorporation,   and  to
applicable  law,  dividends may be declared and paid out of any funds  available
therefore,  as often, in such amount, and at such time or times as the Board may
determine. Before payment of any dividend, there may be set aside out of the net
profits of the  Corporation  available  for  dividends,  such sum or sums as the
Board,  from  time  to  time,  in  its  sole  discretion,  or for  repairing  or
maintaining  any property of the  Corporation,  or for such other purpose as the
Board shall think conducive to the interests of the  Corporation,  and the Board
may modify or abolish any such reserve.

                                   ARTICLE VII

                                   FISCAL YEAR

                  The fiscal year of the Corporation shall be fixed by the Board
from time to time, subject to applicable law.

                                      -10-

<PAGE>

                                  ARTICLE VIII

                                 CORPORATE SEAL

                  The corporate  seal, if any, shall be in such form as shall be
approved from time to time by the Board.

                                   ARTICLE IX

                                   AMENDMENTS

1.       By Shareholders

                  All By-Laws of the  Corporation  shall be subject to revision,
amendment  or repeal,  and new  By-Laws may be adopted  from time to time,  by a
majority vote of the  shareholders  who are at such time entitled to vote in the
election of directors.

2.       By Directors

                  The Board shall have power to make,  adopt,  alter,  amend and
repeal, from time to time, By-Laws of the Corporation,  provided,  however, that
the  shareholders  entitled  to vote with  respect  thereto as  provided  for by
Section 1 of this  Article IX may alter  amend or repeal the  By-Laws as made by
the Board.  The Board shall have no power to change the quorum for meetings with
respect to the removal of  directors  or the filling of  vacancies  in the Board
resulting from the removal of one or more directors by the shareholders.  If any
By-Law  regulating  an impending  election of  directors is adopted,  amended or
repealed  by the  Board,  there  shall be set  forth in this  notice of the next
annual  meeting of  shareholders  for the election of  directors,  the By-Law so
adopted,  amended or repealed,  together with a concise  statement of the change
made.

                                    ARTICLE X

                     INDEMNIFICATION OF OFFICERS & DIRECTORS

                  The  Corporation  shall indemnify any and all of its Directors
or Officers or former Directors or Officers or any person who may have served at
its  request as a Director  or Officer of another  Corporation  in which it owns
shares of capital stock or of which it is a creditor against  expenses  actually
and  necessarily  incurred by them in connection with the defense of any action,
suit or proceeding in which they, or any of them, are made parties,  or a party,
by reason of being or having  been  Directors  or a  Director  of Officer of the
Corporation,  or such other  corporation,  except,  in relation to matters as to
which any such Director or Officer or former Director or Officer or person shall
be adjudged in such action,  suit or proceeding  to be liable for  negligence or
misconduct, in the performance of duty.

                                      -11-Exhibit 4.3

                       HUNGARIAN TELEPHONE AND CABLE CORP.

         1992 INCENTIVE STOCK OPTION PLAN, AS AMENDED AS OF MAY 25, 2000

         1.  Purpose.  The purpose  of  the  1992 Incentive Stock Option Plan of
Hungarian  Telephone and Cable Corp. (the "Corporation") is to provide incentive
to employees of the Corporation,  to encourage employee  proprietary interest in
the  Corporation,  to  encourage  employees  to  remain  in  the  employ  of the
Corporation,  and to attract to the  Corporation  individuals  of experience and
ability to serve as employees, directors and consultants.

         2.  Definitions.
             -----------

                  (a)  "Board"  shall   mean  the  Board  of  Directors  of  the
             Corporation.

                  (b)  "Code"  shall  mean  the Internal Revenue Code of 1986 as
             amended from time to time.

                  (c)  "Common Stock"  shall  mean  the  $.001  par value Common
             stock of the Corporation.

                  (d)  "Committee" shall  mean  the  Committee  appointed by the
             Board in accordance with Section 4 of the Plan.

                  (e)  "Corporation" shall  mean  Hungarian  Telephone and Cable
             Corp.,  a  Delaware  corporation,   its   parent  or  any  of   its
             subsidiaries.

                  (f)  "Disability"  shall mean the condition of an Employee who
             is unable to engage in any  substantial  gainful activity by reason
             of any medically  determinable  physical or mental impairment which
             can  be  expected  to result in death or which has lasted or can be
             expected to  last for  a  continuous period of not less than twelve
             (12) months.

                  (g) "Employee" shall mean an individual (who may be an officer
             or a director)  employed by the Corporation  (within the meaning of
             the Code section 3401 and the regulations thereunder).

                  (h) "Exercise  Price" shall mean the price per Share of Common
             Stock, determined by the Committee,  at  which  an  Option  may  be
             exercised.

                  (i) "Fair Market  Value" of a share of Common Stock on any day
             shall  mean  the  average of the daily closing prices for the prior
             twenty  (20)  trading  days  of  a share  of the  Company's  Common
             Stock on  the  American Stock  Exchange,  or, if the shares are not
             listed  or  admitted to trading on such Exchange,  on the principal
             United States securities exchange  or  on the  NASDAQ/NMS  on which
             the  shares  are   listed  or admitted  to  trading,  or   if   the
             shares are not  listed or  admitted to trading on any such exchange

<PAGE>

             or on  the  NASDAQ/NMS,  the mean between the closing  high bid and
             low asked  quotations  with respect to a share on such dates on the
             National   Association   of  Securities  Dealers,   Inc.  Automated
             Quotations  System, or  any  similar  system  then in use, or if no
             such quotations  are  available, the fair market value on such date
             of a share as the Committee shall determine.

                  (j)  "Incentive  Stock  Option" shall mean an Option described
             in Code section 422(b).

                  (k)  "Nonstatutory  Stock  Option"  shall  mean  an Option not
             described in Code sections 422(b) or 423(b).

                  (l)  "Option" shall  mean  a  stock option granted pursuant to
             the Plan.

                  (m)  "Purchase Price" shall mean the Exercise  Price times the
             number  of  whole  Shares  with   respect   to  which  an Option is
             exercised.

                  (n)  "Optionee" shall  mean  an Employee to whom an option has
             been granted.

                  (o)  "Plan" shall  mean  this  Hungarian  Telephone  and Cable
             Corp. 1992 Incentive Stock Option Plan.

                  (p)  "Share" shall mean one Share of Common Stock, adjusted in
             accordance with Section 10 of the Plan (if applicable).

                  (q)  "Subsidiary" shall  mean   those   subsidiaries  of   the
             Corporation as defined in section 424(f) of the code.

         3.  Effective Date.    This   Plan   was  approved  by  the  Board  and
Shareholders effective April 30, 1992.

         4.  Administration.  The  Plan  shall  be  administered by the Board of
Directors or by the Stock Option  Committee (the  "Committee")  appointed by the
Board,  consisting of not less than two members thereof. The Board may from time
to time remove members from, or add members to, the Committee.  Vacancies on the
Committee, however caused, shall be filled by the Board.

             The Committee  shall hold meetings at such times and places as it
may determine. Acts of a majority of the Committee at which a quorum is present,
or acts  reduced to or  approved  in writing by a majority of the members of the
Committee,  shall be the valid acts of the Committee.  The Committee  shall from
time to time at its discretion make determinations with respect to Employees who
shall be granted  Options,  the number of Shares to be  optioned to each and the
designation  of such Options as Incentive  Stock Options or  Nonstatutory  Stock
Options.

                                      -2-
<PAGE>

             The  interpretation  and  construction  by   the  Committee  of any
provisions of the Plan or of any Option granted  thereunder  shall be final.  No
member of the Committee shall be liable for any action or determination  made in
good faith with respect to the Plan or any Option granted thereunder.

         5.  Eligibility.  Optionees  shall  be such key  Employees  (who may be
officers, whether or not they are directors), or directors or consultants of the
Corporation  who  perform  services  of special  importance  to the  management,
operation and  development  of the business of the  Corporation as the Committee
shall select, but subject to the terms and conditions set forth below.

                  (a) Each Option  shall be  designated  in the  written  option
         agreement as either an Incentive  Stock Option or a Nonqualified  Stock
         Option. However,  notwithstanding such designations, to the extent that
         the  aggregate  fair market  value of the Shares with  respect to which
         Options  designated as Incentive  Stock Options are exercisable for the
         first time by any Optionee during any calendar year (under all plans of
         the  Company)  exceeds  $100,000,  such  Options  shall be  treated  as
         Nonqualified Stock Options.

                  (b) For purposes of Section 5(a),  Options shall be taken into
         account in the order in which they were  granted,  and the fair  market
         value of the Shares shall be  determined as of the time the Option with
         respect to such Shares is granted.

                  (c) Nothing in the Plan or any Option granted  hereunder shall
         confer upon any  Optionee  any right with  respect to  continuation  of
         employment with the Company, nor shall it interfere in any way with the
         Optionee's  right or the Company's  right to terminate  the  employment
         relationship at any time, with or without cause.

         6. Stock.  The stock subject to Options granted under the Plan shall be
Shares of the Corporation's  authorized but unissued or reacquired Common Stock.
The aggregate number of Shares which may be issued under Options exercised under
this Plan shall not exceed  1,250,000.  The number of Shares  subject to Options
outstanding  under  the Plan at any time may not  exceed  the  number  of Shares
remaining  available  for issuance  under the Plan. In the event that any Option
outstanding  under the Plan expires for any reason or is terminated,  the Shares
allocable to the unexercised portion of such Option may again be subjected to an
Option under the Plan.

            The  limitations  established  by this Section 6 shall be subject to
adjustment  upon  the  occurrence  of the  events  specified  and in the  manner
provided in Section 10 hereof.

         7. Terms and  Conditions of Options.  Options  granted  pursuant to the
Plan shall be  evidenced  by written  agreements  in such form as the  Committee
shall from time to time  determine,  which  agreements  shall comply with and be
subject to the following terms and conditions:

                                      -3-
<PAGE>

                  (a) Date of Grant.  Each option  shall  specify its  effective
         date (the "date of grant"),  which shall be the date  specified  by the
         Board or the Committee,  as the case may be, in its action  relating to
         the grant of the Option.

                  (b) Optionee's Agreement.  Each Optionee shall agree to remain
         in the employ of and to render to the  Corporation  his or her services
         for a period  of one (1) year  from  the  date of the  granting  of the
         Option,  but such agreement  shall not impose upon the  Corporation any
         obligation to retain the Optionee in their employ for any period.

                  (c) Number of Shares.  Each  Option  shall state the number of
         Shares  to which it  pertains  and  shall  provide  for the  adjustment
         thereof in accordance with the provisions of Section 10 hereof.

                  (d) Exercise Price and Consideration.

                           (i) The per Share  exercise  price  under each Option
                  shall be such price as is determined by the Board,  subject to
                  the following:

                           a)   In the case of an Incentive Stock Option

                                    i) granted to an  Employee  who, at the time
                  of the  grant  of such  Incentive  Stock  Option,  owns  stock
                  representing  more than ten percent  (10%) of the voting power
                  of all  classes  of  stock of the  Company  or any  Parent  or
                  Subsidiary, the per Share exercise price shall be no less than
                  110% of the fair market value per share on the date of grant.

                                    ii) granted to any other  Employee,  the per
                  Share  exercise  price  shall be no less than 100% of the fair
                  market value per Share on the date of grant.

                           b) In the case of a Nonqualified Stock Option the per
                  Share  exercise  price may be less than,  equal to, or greater
                  than the fair market value per Share on the date of grant.

                           (ii) The fair  market  value per  Share  shall be the
                  closing  price per share of the Common  Stock on the  National
                  Association   of  Securities   Dealers   Automated   Quotation
                  ("NASDAQ") National Market System on the date of grant. If the
                  Common Stock ceases to be listed on the NASDAQ National Market
                  System,  the Board shall  designate an  alternative  method of
                  determining the fair market value of the Common Stock.

                                      -4-
<PAGE>

                  (e) Medium  and Time  Payment.  The  Purchase  Price  shall be
         payable  in full in United  States  dollars  upon the  exercise  of the
         Option; provided, however, that, with the consent of the Committee, the
         Purchase  Price may be paid by the surrender of Shares in good form for
         transfer,  owned by the person  exercising the option and having a Fair
         Market Value on the date of exercise  equal to the Purchase Price or in
         any combination of cash and Shares, so long as the total of the cash so
         paid and the Fair  Market  Value of the Shares  surrendered  equals the
         Purchase Price.  No Share shall be issued until full payment  therefore
         has been made.

                  (f)  Term  and  Exercise  of  Options;  Nontransferability  of
         Options.  Each  Option  shall  state the time or times  when it becomes
         exercisable. No option shall be exercisable after the expiration of ten
         (10) years from the date it is  granted.  During  the  lifetime  of the
         Optionee,  the Option  shall be  exercisable  only by the  Optionee and
         shall not be assignable or transferable. In the event of the Optionee's
         death, no Option shall be  transferable by the Optionee  otherwise than
         by will or the laws of descent and distribution.

                  (g) Termination of Employment  Except Death. In the event that
         an  Optionee  shall cease to be  employed  by the  Corporation  for any
         reason other than his or her death, such Optionee shall have the right,
         subject to the  restrictions of Subsection (f) hereof,  to exercise the
         Option at any time  within the earlier of (x) the  original  expiration
         date of the Option or (y) three (3) months  after such  termination  of
         employment  in the case of an Incentive  Stock Option and eighteen (18)
         months  after  such   termination  of  employment  in  the  case  of  a
         Nonstatutory  or  Non-Qualified  Stock  Option,  (twelve (12) months if
         termination  was due to  Disability  in the case of an Incentive  Stock
         Option),  to the  extent  that,  on  the  day  preceding  the  date  of
         termination of employment, the Optionee's right to exercise such Option
         had accrued pursuant to the terms of the option  agreement  pursuant to
         which such Option was granted, and had not previously been exercised.

                  For this purpose, the employment  relationship will be treated
         as  continuing  intact  while the Optionee is on military  leave,  sick
         leave or other bona fide leave of absence (to be determined in the sole
         discretion of the Committee,  in accordance  with rules and regulations
         construing Code section 422(a)(2)).  Notwithstanding the foregoing,  in
         the case of an Incentive Stock Option,  employment  shall not be deemed
         to continue  beyond the ninetieth  (90th) day after the Optionee ceased
         active  employment,  unless  the  Optionee's  reemployment  rights  are
         guaranteed by statute or by contract.

                  (h) Death if Optionee.  If the Optionee shall die while in the
         employ  of the  Corporation  and  shall not have  fully  exercised  the
         Option, an Option may be exercised in full, subject to the restrictions
         of  Subsection  (f) hereof,  to the extent it had not  previously  been
         exercised,  at any time within twelve (12) months after the  Optionee's
         death,  by the executors or  administrators  of his or her estate or by
         any person or persons who shall have acquired the Option  directly from
         the Optionee by bequest or inheritance.

                                      -5-
<PAGE>

                  If the Optionee  shall die  following the  termination  of his
         employment  with the  Company  and such death  shall occur prior to the
         earlier of (x) the original  expiration date of the option or (y) three
         (3) months  following the  termination  of employment in the case of an
         Incentive  Stock Option,  and (18) months  following the termination of
         employment in the case of a Nonstatutory or Non-Qualified Stock Option,
         and such Option shall not have been fully  exercised,  an Option may be
         exercised  (subject to the limitations on  exercisability  set forth in
         Subsection  (f) hereof) to the extent that, at the date of  termination
         of employment, the Optionee's right to exercise such Option had accrued
         pursuant to the terms of the  applicable  option  agreement and had not
         previously been exercised,  at any time within twelve (12) months after
         the  Optionee's  death,  by  the  executors  or  administrators  of the
         Optionee's  estate or by any person or persons who shall have  acquired
         the Option directly from the Optionee by bequest or inheritance.

                  (i) Rights as a Stockholder. An Optionee or a transferee of an
         Optionee  shall  have no rights as a  stockholder  with  respect to any
         Shares covered by his or her Option until the date of the issuance of a
         stock  certificate  for such shares.  No  adjustment  shall be made for
         dividends  (ordinary or extraordinary,  whether in cash,  securities or
         other property) or  distributions  or other rights for which the record
         date is prior to the date such stock  certificate is issued,  except as
         provided in Section 10.

                  (j) 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 outstanding Options granted under
         the Plan, or accept the exchange of outstanding  Options (to the extent
         not  theretofore  exercised and subject to the  provisions of paragraph
         7(d) above) for the granting of new Options in  substitution  therefor.
         Notwithstanding  the foregoing,  however,  no modification of an Option
         shall, without the consent of the optionee,  alter or impair any rights
         or obligations under any Option theretofore granted under the Plan.

                  (k) Other Provisions.  The option agreements  authorized under
         the Plan shall contain such other provisions not inconsistent  with the
         terms of the Plan, including, without limitation, restrictions upon the
         exercise of the Option, as the Committee shall deem advisable.

         8.  Limitation on Annual Awards.

                  General  Rule.  Each Option shall be designated in the written
option  agreement as either an Incentive  Stock Option or a  Nonqualified  Stock
Option.  However,  notwithstanding  such  designations,  to the extent  that the
aggregate  fair  market  value of the  Shares  with  respect  to  which  Options
designated as Incentive  Stock Options are exercisable for the first time by any
Optionee  during any  calendar  year  (under all plans of the  Company)  exceeds
$100,000, such Options shall be treated as Nonqualified Stock Options.

                                      -6-
<PAGE>

         9.  Term of Plan.  Options  may  be  granted pursuant to the Plan until
the termination of the Plan on April 30, 2002.

        10.  Recapitalization.    Subject  to  any   required   action  by   the
stockholders,  the number of Shares  covered by this Plan as provided in Section
6, the number of Shares  covered by each  outstanding  Option,  and the Exercise
Price thereof shall be proportionately  adjusted for any increase or decrease in
the number of issued Shares  resulting  from a subdivision or  consolidation  of
Shares, stock split, or the payment of a stock dividend.

             Subject  to  any   required  action  by  the  stockholders,  if the
Corporation  shall be the surviving  corporation in any merger or consolidation,
each  outstanding  Option shall  pertain and apply to the  securities to which a
holder of the number of Shares subject to the Option would have been entitled. A
dissolution or liquidation of the  Corporation or a merger or  consolidation  in
which  the  Corporation  is not  the  surviving  corporation  shall  cause  each
outstanding Option to terminate, unless the agreement of merger or consolidation
shall otherwise  provide,  provided that each Optionee shall in such event, if a
period  of one (1) year  from the date of the  grant of the  Option  shall  have
elapsed, have the right immediately prior to such dissolution or liquidation, or
merger  or   consolidation  in  which  the  Corporation  is  not  the  surviving
corporation,  to exercise the Option in whole or in part, subject to limitations
on exercisability under Section 7(k) hereof.

              In  the  event  of  a change  in  the  Common  Stock as  presently
constituted,  which is limited to a change of all of its authorized  shares with
par value into the same number of shares  with a different  par value or without
par value,  the shares  resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.

              To  the extent that  the  foregoing  adjustments  related to stock
or  securities  of the  Corporation,  such  adjustments  shall  be  made  by the
Committee,  whose  determination  in that  respect  shall be final,  binding and
conclusive.

              Except  as  hereinbefore  expressly  provided  in this Section 10,
the Optionee shall have no rights by reason of any subdivision or  consolidation
of  shares of stock of any  class,  stock  split,  or the  payment  of any stock
dividend  or any other  increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or consolidation
or  spin-off  of assets or stock of  another  corporation,  and any issue by the
Corporation  of  shares  of stock of any class or  securities  convertible  into
shares of stock of any class,  shall not  affect,  and no  adjustment  by reason
thereof shall be made with respect to, the number or price of Shares  subject to
the Option.

              The  grant  of  an  Option  pursuant  to the Plan shall not affect
in  any  way  the  right  or  power  of the  Corporation  to  make  adjustments,
reclassifications,  reorganizations  or  changes  of  its  capital  or  business
structure or to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.

                                      -7-
<PAGE>

         11.  Securities  Law  Requirements.  No Shares shall be issued upon the
exercise of any Option unless and until the Corporation has determined that: (i)
it and the Optionee have taken all actions required to register the Shares under
the  Securities  Act of 1933 or  perfect  an  exemption  from  the  registration
requirements  thereof;  (ii) any  applicable  listing  requirement  of any stock
exchange on which the Common Stock is listed has been  satisfied;  and (iii) any
other applicable provision of state or Federal Law has been satisfied.

         12.  Amendment of the Plan. The Board may, insofar as permitted by law,
from  time to time,  with  respect  to any  Shares  at the time not  subject  to
Options,  suspend or  discontinue  the Plan or revise or amend it in any respect
whatsoever except that,  without approval of the stockholders,  no such revision
or amendment shall:

                  (a)  Increase  the  number  of Shares issuable pursuant to the
         Plan; or

                  (b)  Change   the   requirements   as   to   eligibility   for
         participation in the Plan.

                  (c)  Materially   increase  benefits  accruing to participants
         under the Plan.

         13.  Application of Funds.  The  proceeds  received  by the Corporation
from the sale of Common Stock pursuant to the exercise of an Option will be used
for general corporate purposes.

         14.  No Obligation to Exercise Option.  The granting of an Option shall
impose no obligation upon the Optionee to exercise such Option.

                                      -8-

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