UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                          ----------------------------
                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                          ----------------------------

                        Hector Communications Corporation
             (Exact name of registrant as specified in its charter)

         Minnesota                                               41-166660
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                              211 South Main Street
                             Hector, Minnesota 55342
              (Address of Principal Executive Offices and zip code)
                          ----------------------------

                HECTOR COMMUNICATIONS CORPORATION 1999 STOCK PLAN
                            (Full title of the Plan)
                          ----------------------------

Curtis A. Sampson                                    Copy to:
Chief Executive Officer                              Richard A. Primuth, Esq.
Hector Communications Corporation                    Lindquist & Vennum P.L.L.P.
211 South Main Street                                4200 IDS Center
Hector, Minnesota 55342                              80 South Eighth Street
(320) 848-6611                                       Minneapolis, MN 55402
(Name, address and telephone                         (612) 371-3211
number, including area code,
of agent for service)
                           ----------------------------

                         CALCULATION OF REGISTRATION FEE

                                              Proposed     Proposed
Title of                                      Maximum      Maximum
Securities                    Amount          Offering     Aggregate   Amount of
to be                         to be           Price        Offering    Registra-
Registered                    Registered      Per Share(1) Price(1)    tion Fee

Common Stock,                 300,000 shares  $15.75       $4,725,000  $1313.55
$.01 par value,
to be issued pursuant
to Hector Communications
Corporation 1999 Stock Plan

(1)      Estimated  solely for the purpose of determining the  registration  fee
         pursuant to Rule 457(c) and based upon the average of the closing price
         of the Company's  Common Stock on the Nasdaq  National Market System on
         December 1, 1999.



<PAGE>

                                     PART I

         Pursuant to the Note to Part I of Form S-8, the information required by
Items 1 and 2 of Form S-8 is not filed as a part of this Registration Statement.

         PART II

Item 3.  Incorporation of Documents by Reference.

         The  following   documents  filed  with  the  Securities  and  Exchange
Commission are hereby incorporated by reference herein:

         (a) The Annual  Report of the  Company on Form 10-K for the fiscal year
ended December 31, 1998.

         (b) The Definitive Proxy Statement dated April 15, 1999 for the 1999
Annual Meeting of Shareholders held on May 18, 1999.

         (c) The Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999.

         (d) The description of the Company's Common Stock as set forth in the
Company's Registration Statement on Form 10 (File No. 0-18587).

         All documents  subsequently  filed by the Company  pursuant to Sections
13(a),  13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold,  shall
be deemed to be incorporated by reference in this Registration  Statement and to
be a part hereof from the date of filing of such documents.

Item 4.  Description of Securities.

         Not applicable.

Item 5.  Interests of Named Experts and Counsel.

         Richard A. Primuth, Secretary of the Company, is a partner of Lindquist
&  Vennum  P.L.L.P.,  which  is the law  firm  passing  on the  validity  of the
securities issued under the Plan.

Item 6.  Indemnification of Directors and Officers.

         The Company  Bylaws  provide that the  Registrant  shall  indemnify any
person  made or  threatened  to be made a party to any  threatened,  pending  or
completed  civil,   criminal,   administrative,   arbitration  or  investigative
proceeding,  including a proceeding  by or in the right of the  corporation,  by
reason of the former or present  official  capacity of the person,  provided the
person seeking indemnification meets five criteria set forth in Section 302A.521
of the Minnesota Business Corporation Act.

                                       1
<PAGE>

         The Company's  Bylaws also  authorize  the Board of  Directors,  to the
extent  permitted  by  applicable  law,  to  indemnify  any person or entity not
described  in the  Bylaws  pursuant  to,  and to the  extent  described  in,  an
agreement between the Company and such person, or as otherwise determined by the
Board of Directors in its discretion.

         Section  302A.521 of the Minnesota  Business  Corporation  Act provides
that a corporation  shall  indemnify the person  against  judgments,  penalties,
fines including,  without limitation,  excise taxes assessed against such person
with respect to an employee benefit plan, settlements,  and reasonable expenses,
including  attorneys'  fees  and  disbursements,  incurred  by  such  person  in
connection with the proceeding if, with respect to the acts or omissions of such
person complained of in the proceeding, such person (i) has not been indemnified
by another  organization  or employee  benefit plan for the same  expenses  with
respect to the same acts or omissions;  (ii) acted in good faith; (iii) received
no improper  personal  benefit  and Section  302A.255  (regarding  conflicts  of
interest),  if applicable,  has been  satisfied;  (iv) in the case of a criminal
proceeding, has no reasonable cause to believe the conduct was unlawful; and (v)
in the case of acts or omissions by persons in their  official  capacity for the
corporation,  reasonably  believed that the conduct was in the best interests of
the  corporation,  or in the  case of acts or  omissions  by  persons  in  their
capacity for other  organization,  reasonably  believed that the conduct was not
opposed to the best interests of the corporation.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing  provisions,  or  otherwise,  we have been advised that, in the
opinion of the SEC, such  indemnification  is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.

Item 7.  Exemption from Registration Claimed.

         Not applicable.

Item 8.  Exhibits.

Exhibit

    4.1     Hector Communications Corporation 1999 Stock Plan.

    5.1     pinion and Consent of Lindquist & Vennum P.L.L.P.

    23.1    Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1)

    23.2    Consent of Olsen Thielen & Co., Ltd., independent public accountants

    24.1    Power of Attorney (set forth on signature page hereof)

Item 9.  Undertakings.

    The Company hereby undertakes:

                                       2
<PAGE>


(a) (1) to file,  during any period in which  offers or sales are being made,  a
post-effective amendment to this registration statement:

         (i) to include any prospectus required by section 10(a)(3) of the
    Securities Act of 1933;

         (ii) to reflect in the prospectus any facts or events arising after the
    effective   date  of  the   registration   statement  (or  the  most  recent
    post-effective  amendment  thereof) which  individually or in the aggregate,
    represent  a  fundamental  change  in  the  information  set  forth  in  the
    registration  statement.  Notwithstanding  the  foregoing,  any  increase or
    decrease  in volume of  securities  offered  (if the total  dollar  value of
    securities  offered  would not  exceed  that which was  registered)  and any
    deviation from the low or high end of the estimated  maximum  offering range
    may be  reflected  in the  form of  prospectus  filed  with  the  Commission
    pursuant  to  Rule  424(b)  under  the  Securities  Act of 1933  if,  in the
    aggregate,  the  changes  in volume and price  represent  no more than a 20%
    change in the maximum aggregate offering price set forth in the "Calculation
    of Registration Fee" table in the effective registration statement; and

         (iii) to include any material  information  with respect to the plan of
    distribution not previously  disclosed in the registration  statement or any
    material change to such information in the registration statement.

    (2) that, for determining  liability under the Securities Act, to treat each
post-effective  amendment  as a new  registration  statement  of the  securities
offered,  and the offering of the securities at that time to be the initial bona
fide offering.

    (3) to file a  post-effective  amendment to remove from  registration any of
the securities that remain unsold at the end of the offering.

(b) The  Company  hereby  undertakes  that,  for  purposes  of  determining  any
liability under the Securities Act of 1933, each filing of the Company's  annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable,  each filing of an employee benefit plan's annual report
pursuant  to  Section  15(d) of the  Securities  Exchange  Act of 1934)  that is
incorporated by reference in the Registration  Statement shall be deemed to be a
new Registration  Statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

(h) Insofar as indemnification  for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to  directors,  officers,  and  controlling
persons of the small business  issuer pursuant to the foregoing  provisions,  or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is,  therefore,  unenforceable.  In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action,  suit  or  proceeding)  is  asserted  by  such  director,   officer,  or
controlling person in connection with the securities being registered, the small
business  issuer will,  unless in the opinion of its counsel the matter has been
settled by controlling precedent,  submit to a court of appropriate jurisdiction
the question  whether such  indemnification  by it is against  public  policy as
expressed  in the Act and will be  governed  by the final  adjudication  of such
issue.


                                       3
<PAGE>

                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Hector, State of Minnesota, on December 1, 1999.

                                            HECTOR COMMUNICATIONS CORPORATION


                                            By /s/ Curtis A. Sampson
                                               --------------------------------
                                                Curtis A. Sampson, Chairman and
                                                Chief Executive Officer
                                                (Principal Executive Officer)


                                POWER OF ATTORNEY

         The  undersigned  officers  and  directors  of  Hector   Communications
Corporation  hereby constitute and appoint Curtis A. Sampson and Paul N. Hanson,
or either of them, with power to act one without the other,  our true and lawful
attorney-in-fact  and agent, with full power of substitution and resubstitution,
for us and in our  stead,  in any  and  all  capacities  to  sign  any  and  all
amendments (including post-effective  amendments) to this Registration Statement
and all  documents  relating  thereto,  and to file the same,  with all exhibits
thereto,  and other documents in connection  therewith,  with the Securities and
Exchange Commission,  granting unto said  attorney-in-fact and agent, full power
and  authority  to do and  perform  each and every act and  thing  necessary  or
advisable  to be done in and about the  premises,  as fully to all  intents  and
purposes as he might or could do in person,  hereby ratifying and confirming all
that said  attorney-in-fact  and agent, or his  substitutes,  may lawfully do or
cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  Registration  Statement has been signed below by the following  persons on
December 1, 1999 and in the capacities indicated.

Signature                                   Title
---------------------                       ------------------------------------

/s/ Curtis A. Sampson                       Chairman of the Board of Directors,
Curtis A. Sampson                           Chief Executive Officer and Director


/s/ Steven H. Sjogren                       President, Chief Operating Officer,
Steven H. Sjogren                           and Director


/s/ Paul N. Hanson                          Vice President, Treasurer
Paul N. Hanson                              and Director


                                       4
<PAGE>


/s/ Charles R. Dickman                      Director
Charles R. Dickman


/s/ James O. Ericson                        Director
James O. Ericson


/s/ Paul A. Hoff                            Director
Paul A. Hoff


/s/ Wayne E. Sampson                        Director
Wayne E. Sampson


/s/ Edward E. Strickland                    Director
Edward E. Strickland


                                       5
<PAGE>




                                   Exhibit 4.
                        HECTOR COMMUNICATIONS CORPORATION
                                1999 STOCK PLAN

SECTION 1.  General Purpose of Plan; Definitions.

         The name of this  plan is the  HECTOR  COMMUNICATIONS  Stock  Plan (the
"Plan"). The purpose of the Plan is to enable HECTOR COMMUNICATIONS  CORPORATION
(the  "Company")  to retain  and  attract  executives  and other key  employees,
non-employee  directors and consultants who contribute to the Company's  success
by their  ability,  ingenuity and industry,  and to enable such  individuals  to
participate in the long-term  success and growth of the Company by giving them a
proprietary interest in the Company.

         For purposes of the Plan,  the following  terms shall be defined as set
forth below:

         a. "Board" means the Board of Directors of the Company as it may be
comprised from time to time.

         b. "Cause" means a felony conviction of a participant or the failure of
a  participant  to  contest  prosecution  for  a  felony,   willful  misconduct,
dishonesty or intentional  violation of a statute,  rule or  regulation,  any of
which, in the judgment of the Company,  is harmful to the business or reputation
of the Company.

         c. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.

         d. "Committee"  means the  Committee  referred  to in Section 2 of the
Plan. If at any time no Committee shall be in office,  then the functions of the
Committee specified in the Plan shall be exercised by the Board, unless the Plan
specifically states otherwise.

         e. "Consultant" means any person,  including an advisor, engaged by the
Company or a Parent of the Subsidiary of the Company to render  services and who
is  compensated  for such  services and who is not an employee of the Company or
any Parent Corporation or Subsidiary of the Company. A Non-Employee Director may
serve as a Consultant.

         f. "Company"  means Hector  Communication  Corporation,  a corporation
organized   under  the  laws  of  the  State  of  Minnesota  (or  any  successor
corporation).

         g. "Deferred  Stock"  means an award made  pursuant to Section 8 below
of the right to  receive  stock at the end of a specified deferral period.

         h. "Disability"  means permanent and total disability as determined by
the Committee.

         i. "Early  Retirement" means retirement,  with consent of the Committee
at the time of  retirement,  from  active  employment  with the  Company and any
Subsidiary or Parent Corporation of the Company.

                                       1
<PAGE>


         j. "Fair Market  Value" of Stock on any given date shall be  determined
by the  Committee  as follows:  (a) if the Stock is listed for trading on one of
more national securities exchanges, or is traded on the NASDAQ Stock Market, the
last  reported  sales price on the  principal  such exchange or the NASDAQ Stock
Market on the date in  question,  or if such Stock shall not have been traded on
such  principal  exchange on such date,  the last  reported  sales price on such
principal  exchange or the NASDAQ Stock Market on the first day prior thereto on
which such Stock was so traded; or (b) if the Stock is not listed for trading on
a national  securities exchange or the NASDAQ Stock Market, but is traded in the
over-the-counter  market, including the NASDAQ Small Cap Market, the closing bid
price for such Stock on the date in  question,  or if there is no such bid price
for such  Stock on such  date,  the  closing  bid  price on the  first day prior
thereto on which such price existed; or (c) if neither (a) or (b) is applicable,
by any means fair and reasonable by the Committee,  which determination shall be
final and binding on all parties.

         k.  "Incentive  Stock Option" means any Stock Option intended to be and
designated as an "Incentive  Stock Option"  within the meaning of Section 422 of
the Code.

         l. "Non-Employee  Director" means a "Non-Employee  Director" within the
meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934.

         m.  "Non-Qualified  Stock Option" means any Stock Option that is not an
Incentive  Stock  Option,  and  is  intended  to  be  and  is  designated  as  a
"Non-Qualified Stock Option."

         n. "Normal Retirement" means retirement from active employment with the
Company and any Subsidiary or Parent  Corporation of the Company on or after age
65.

         o.  "Outside  Director"  means a  Director  who:  (a) is not a  current
employee of the Company or any member of an affiliated  group which includes the
Company;  (b) is not a former employee of the Company who receives  compensation
for prior services (other than benefits under a tax-qualified  retirement  plan)
during the taxable  year;  (c) has not been an officer of the Company;  (d) does
not receive remuneration from the Company, either directly or indirectly, in any
capacity  other than as a director,  except as  otherwise  permitted  under Code
Section  162(m)  and  regulations  thereunder.  For this  purpose,  remuneration
includes any payment in exchange for good or services.  This definition shall be
further  governed  by the  provisions  of Code  Section  162(m) and  regulations
promulgated thereunder.

         p. "Parent  Corporation" means any corporation (other than the Company)
in an  unbroken  chain of  corporations  ending  with the Company if each of the
corporations  (other than the Company) owns stock  possessing 50% or more of the
total  combined  voting  power  of all  classes  of  stock  in one of the  other
corporations in the chain.

         q. "Restricted Stock" means an award of shares of Stock that are
subject to restrictions under Section 7 below.

         r. "Retirement" means Normal Retirement or Early Retirement.

         s. "Stock"  means the Common  Stock,  $.01 par value per share,  of the
Company.

                                       2
<PAGE>

         t.  "Stock  Appreciation  Right"  means the right  pursuant to an award
granted  under Section 6 below to surrender to the Company all or a portion of a
Stock Option in exchange for an amount equal to the difference  between (i) Fair
Market  Value,  as of the date such  Stock  Option or such  portion  thereof  is
surrendered, of the shares of Stock covered by such Stock Option or such portion
thereof,  and (ii) the  aggregate  exercise  price of such Stock  Option or such
portion thereof.

         u. "Stock Option" means any option to purchase shares of Stock granted
 pursuant to Section 5 below.

         v.  "Subsidiary"  means any corporation  (other than the Company) in an
unbroken  chain  of  corporations  beginning  with  the  Company  if each of the
corporations  (other than the last corporation in the unbroken chain) owns stock
possessing  50% or more of the total  combined  voting  power of all  classes of
stock in one of the other corporations in the chain.

SECTION 2.  Administration.

         The Plan  shall be  administered  by the  Board  of  Directors  or by a
Committee  appointed by the Board of Directors of the Company  consisting  of at
least two  Directors,  all of whom shall be Outside  Directors and  Non-Employee
Directors,  who  shall  serve at the  pleasure  of the  Board.  If the Board has
established a Compensation Committee,  the Compensation Committee shall serve as
the Committee for purposes of this Plan.

         The  Committee  shall have the power and authority to grant to eligible
employees or Consultants,  pursuant to the terms of the Plan: (i) Stock Options,
(ii) Stock Appreciation  Rights,  (iii) Restricted Stock, or (iv) Deferred Stock
awards.

         In particular, the Committee shall have the authority:

              (i) to select the officers and other key  employees of the Company
     and its  Subsidiaries  and other  eligible  persons to whom Stock  Options,
     Stock Appreciation  Rights,  Restricted Stock and Deferred Stock awards may
     from time to time be granted hereunder;

              (ii) to  determine  whether  and to what  extent  Incentive  Stock
     Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
     Stock and Deferred Stock awards, or a combination of the foregoing,  are to
     be granted hereunder;

              (iii) to determine the number of shares to be covered by each such
award granted hereunder;

              (iv) to determine the terms and conditions,  not inconsistent with
     the terms of the Plan, of any award granted hereunder  (including,  but not
     limited to, any  restriction  on any Stock Option or other award and/or the
     shares of Stock relating  thereto),  which  authority  shall be exclusively
     vested in the  Committee  (and not the Board) for purposes of  establishing
     performance  criteria used with Restricted Stock and Deferred Stock awards;
     provided,  however,  that in the  event of a  merger  or  asset  sale,  the
     applicable  provisions  of Sections  5(c) and 7(c) of the Plan shall govern
     the acceleration of the vesting of any Stock Option or awards;

              (v)  to  determine   whether,   to  what  extent  and  under  what
     circumstances  Stock and other  amounts  payable  with  respect to an award
     under this Plan shall be deferred either  automatically  or at the election
     of the participant.



                                       3
<PAGE>

     The Committee shall have the authority to adopt, alter and repeal such
administrative  rules,  guidelines and practices governing the Plan as it shall,
from time to time, deem advisable;  to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements  relating thereto);
and to otherwise  supervise the  administration  of the Plan.  The Committee may
delegate to  executive  officers of the Company the  authority  to exercise  the
powers specified in (i), (ii), (iii), (iv) and (v) above with respect to persons
who are not  either  the chief  executive  officer  of the  Company  or the four
highest paid officers of the Company other than the chief executive officer.

     All decisions made by the Committee  pursuant to the provisions of the Plan
shall be final and  binding  on all  persons,  including  the  Company  and Plan
participants.

SECTION 3.  Stock Subject to Plan.

     The total number of shares of Stock reserved and available for distribution
under the Plan shall be 300,000.  Such shares may consist,  in whole or in part,
of authorized and unissued shares.

     Subject to  paragraph  (b)(iv) of Section 6 below,  if any shares that have
been optioned cease to be subject to Stock Options,  or if any shares subject to
any Restricted Stock or Deferred Stock award granted  hereunder are forfeited or
such award otherwise terminates without a payment being made to the participant,
such shares shall again be available for  distribution in connection with future
awards under the Plan.

     In   the   event   of   any    merger,    reorganization,    consolidation,
recapitalization,  stock dividend, other change in corporate structure affecting
the Stock,  or spin-off or other  distribution of assets to  shareholders,  such
substitution  or  adjustment  shall be made in the  aggregate  number  of shares
reserved for issuance  under the Plan,  in the number and option price of shares
subject to  outstanding  options  granted  under the Plan,  and in the number of
shares  subject to Restricted  Stock or Deferred  Stock awards granted under the
Plan as may be  determined  to be  appropriate  by the  Committee,  in its  sole
discretion, provided that the number of shares subject to any award shall always
be a whole number.  Such  adjusted  option price shall also be used to determine
the amount  payable by the Company upon the  exercise of any Stock  Appreciation
Right associated with any Option.

SECTION 4.  Eligibility.

     Officers,  other key employees of the Company and Subsidiaries,  members of
the Board of Directors, and Consultants who are responsible for or contribute to
the management,  growth and profitability of the business of the Company and its
Subsidiaries  are  eligible  to be granted  Stock  Options,  Stock  Appreciation
Rights,  Restricted Stock or Deferred Stock awards under the Plan. The optionees
and  participants  under  the Plan  shall be  selected  from time to time by the
Committee, in its sole discretion,  from among those eligible, and the Committee
shall determine,  in its sole  discretion,  the number of shares covered by each
award.

SECTION 5.  Stock Options.

     Any  Stock  Option  granted  under  the Plan  shall be in such  form as the
Committee may from time to time approve.

                                       4
<PAGE>

     The Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified  Stock Options.  No Incentive Stock Options
shall be granted under the Plan after April 1, 2009.

     The  Committee  shall have the  authority to grant any  optionee  Incentive
Stock Options,  Non-Qualified  Stock Options,  or both types of options (in each
case with or without Stock Appreciation  Rights).  To the extent that any option
does not qualify as an Incentive  Stock Option,  it shall  constitute a separate
Non-Qualified Stock Option.

     Anything in the Plan to the contrary notwithstanding,  no term of this Plan
relating to Incentive  Stock Options shall be  interpreted,  amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code.  The  preceding  sentence  shall not preclude any  modification  or
amendment  to an  outstanding  Incentive  Stock  Option,  whether  or  not  such
modification or amendment results in disqualification of such Stock Option as an
Incentive  Stock  Option,  provided  the  optionee  consents  in  writing to the
modification or amendment.

     Options  granted under the Plan shall be subject to the following terms and
conditions  and  shall  contain  such  additional  terms  and  conditions,   not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.

     (a) Option Price. The option price per share of Stock  purchasable  under a
Stock Option shall be determined  by the  Committee at the time of grant.  In no
event shall the option price per share of Stock  purchasable  under an Incentive
Stock  Option be less than 100% of Fair  Market  Value on the date the option is
granted.  If an employee owns or is deemed to own (by reason of the  attribution
rules applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Parent Corporation or
Subsidiary and an Incentive Stock Option is granted to such employee, the option
price  shall be no less than 110% of the Fair  Market  Value of the Stock on the
date the option is granted.

     (b)  Option  Term.  The  term of each  Stock  Option  shall be fixed by the
Committee,  but no Incentive  Stock Option  shall be  exercisable  more than ten
years after the date the option is granted.  If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10% of the  combined  voting power of all classes of stock of the Company or any
Parent  Corporation  or Subsidiary  and an Incentive  Stock Option is granted to
such employee, the term of such option shall be no more than five years from the
date of grant.

     (c)  Exercisability.  Stock  Options shall be  exercisable  at such time or
times  as  determined  by  the  Committee  at or  after  grant,  subject  to the
restrictions  stated in Section 5(b) above.  If the Committee  provides,  in its
discretion,  that any option is exercisable only in installments,  the Committee
may waive such  installment  exercise  provisions  at any time.  Notwithstanding
anything  contained  in the Plan to the  contrary,  the  Committee  may,  in its
discretion,  extend  or vary the term of any  Stock  Option  or any  installment
thereof,  whether or not the optionee is then  employed by the Company,  if such
action is deemed to be in the best interests of the Company; provided,  however,
that in the event of a merger or sale of assets,  the provisions of this Section
5(c) shall govern vesting  acceleration.  Notwithstanding the foregoing,  unless
the Stock Option  provides  otherwise,  any Stock Option granted under this Plan
shall be  exercisable  in  full,  without  regard  to any  installment  exercise
provisions,  for a period  specified by the  Committee,  but not to exceed sixty
(60)  days,  prior  to  the  occurrence  of any of  the  following  events:  (i)

                                       5
<PAGE>

dissolution  or  liquidation  of the Company  other than in  conjunction  with a
bankruptcy  of  the  Company  or  any  similar  occurrence,   (ii)  any  merger,
consolidation,  acquisition, separation,  reorganization, or similar occurrence,
where the  Company  will not be the  surviving  entity or (iii) the  transfer of
substantially all of the assets of the Company or 75% or more of the outstanding
Stock of the Company.

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

     (d) Method of Exercise.  Stock Options may be exercised in whole or in part
at any time during the option period by giving written notice of exercise to the
Company  specifying  the number of shares to be purchased.  Such notice shall be
accompanied by payment in full of the purchase price, either by check, or by any
other  form of  legal  consideration  deemed  sufficient  by the  Committee  and
consistent  with the Plan's purpose and  applicable  law,  including  promissory
notes  or  a  properly   executed  exercise  notice  together  with  irrevocable
instructions  to a broker  acceptable to the Company to promptly  deliver to the
Company  the  amount of sale or loan  proceeds  to pay the  exercise  price.  As
determined  by the  Committee  at the  time of grant  or  exercise,  in its sole
discretion,  payment  in full or in part  may  also be made in the form of Stock
already owned by the optionee (which in the case of Stock acquired upon exercise
of an option have been owned for more than six months on the date of  surrender)
or, in the case of the  exercise of a  Non-Qualified  Stock  Option,  Restricted
Stock or Deferred Stock subject to an award hereunder  (based,  in each case, on
the Fair  Market  Value of the  Stock on the date the  option is  exercised,  as
determined  by the  Committee),  provided,  however,  that,  in the  case  of an
Incentive Stock Option, the right to make a payment in the form of already owned
shares may be  authorized  only at the time the option is granted,  and provided
further  that in the event  payment is made in the form of shares of  Restricted
Stock or a Deferred  Stock  award,  the  optionee  will receive a portion of the
option shares in the form of, and in an amount equal to, the Restricted Stock or
Deferred  Stock award  tendered as payment by the  optionee.  If the terms of an
option  so  permit,  an  optionee  may  elect  to pay all or part of the  option
exercise  price by having  the  Company  withhold  from the shares of Stock that
would  otherwise be issued upon exercise that number of shares of Stock having a
Fair Market Value equal to the aggregate  option  exercise  price for the shares
with respect to which such  election is made. No shares of Stock shall be issued
until full payment  therefor has been made. An optionee shall generally have the
rights to  dividends  and other rights of a  shareholder  with respect to shares
subject to the option when the  optionee has given  written  notice of exercise,
has  paid  in  full  for  such  shares,   and,  if  requested,   has  given  the
representation described in paragraph (a) of Section 12.

     (e)  Non-transferability  of Options. No Stock Option shall be transferable
by  the  optionee  otherwise  than  by  will  or by  the  laws  of  descent  and
distribution, and all Stock Options shall be exercisable,  during the optionee's
lifetime, only by the optionee.

     (f)  Termination by Death.  If an optionee's  employment by the Company and
any  Subsidiary  or Parent  Corporation  terminates  by  reason  of  death,  any
Incentive  Stock Option may thereafter be immediately  exercised,  to the extent
then exercisable, by the legal representative of the estate or by the legatee of
the optionee under the will of the optionee,  for a period of twelve months from
the date of such death or until the expiration of the stated term of the option,
whichever period is shorter. In the event of termination of employment by reason
of death,  if any Stock Option is exercised after the expiration of the exercise
periods  that apply for  purposes  of Section  422 of the Code,  the option will
thereafter be treated as a Non-Qualified Stock Option.

                                       6
<PAGE>

     (g) Termination by Reason of Disability. If an optionee's employment by the
Company  and any  Subsidiary  or  Parent  Corporation  terminates  by  reason of
Disability,  any Incentive  Stock Option held by such optionee may thereafter be
exercised,  to the extent it was  exercisable at the time of termination  due to
Disability,  but may not be exercised  after twelve months from the date of such
termination  of employment  or the  expiration of the stated term of the option,
whichever  period is the shorter.  In the event of  termination of employment by
reason of Disability,  if any Stock Option is exercised  after the expiration of
the exercise  periods  that apply for  purposes of Section 422 of the Code,  the
option will thereafter be treated as a Non-Qualified Stock Option.

     (h) Termination by Reason of Retirement. If an optionee's employment by the
Company  and any  Subsidiary  or  Parent  Corporation  terminates  by  reason of
Retirement  and the terms of the Stock Option so provide,  any  Incentive  Stock
Option held by such  optionee may  thereafter  be exercised to the extent it was
exercisable  at the  time of such  Retirement,  but may not be  exercised  after
twelve months from the date of such  termination of employment or the expiration
of the stated term of the option,  whichever period is the shorter. In the event
of  termination  of employment by reason of  Retirement,  if any Stock Option is
exercised  after the expiration of the exercise  periods that apply for purposes
of  Section  422 of the  Code,  the  option  will  thereafter  be  treated  as a
Non-Qualified Stock Option.

     (i) Other Termination. If an optionee's continuous status as an employee or
Consultant  terminates  (other than upon the  optionee's  death ,  Disability or
Retirement),  any Incentive Stock Option held by such optionee may thereafter be
exercised to the extent it was exercisable at the time of such termination,  but
may not be exercised after 90 days after such termination,  or the expiration of
the stated term of the option,  whichever period is the shorter. In the event of
termination  of employment by reason other than death,  Disability or Retirement
and if pursuant to its terms any Stock Option is exercised  after the expiration
of the exercise  periods that apply for purposes of Section 422 of the Code, the
option will thereafter be treated as a Non-Qualified  Stock Option. In the event
an  Optionee's  employment  with  the  Company  is  terminated  for  Cause,  all
unexercised Options granted to such Optionee shall immediately terminate.

     (j) Annual Limit on Incentive  Stock  Options.  The  aggregate  Fair Market
Value  (determined  as of the time the Stock  Option is  granted)  of the Common
Stock with  respect to which an  Incentive  Stock  Option under this Plan or any
other  plan  of  the  Company  and  any  Subsidiary  or  Parent  Corporation  is
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000.

     (k) Directors Who Are Not Employees. Each person who (i) is not an employee
of the Company,  any Parent Corporation or any Subsidiary and (ii) is elected or
re-elected as a Director by the Board or the shareholders subsequent to April 1,
1999, shall automatically be granted an Option to purchase 2,000 shares of Stock
as of the date of such  election or  re-election,  at an option  price per share
equal to 100% of the Fair  Market  Value of a share of Stock on the date of such
election or re-election.  The Board in appropriate  circumstances may adjust the
Option to be granted under this Section 5(k) to any such person who has received
a stock option from the Company in the three preceding  years.  All such Options
shall be designated as  Non-Qualified  Stock Options and shall be subject to the
same terms and  provisions  as are then in effect  with  respect to the grant of
Non-Qualified Stock Options to officers and key employees of the Company, except
that (1) the term of each such  Option  shall be equal to ten years,  which term
shall not expire  upon the  termination  of  service  as a Director  and (2) the
Option shall  become  exercisable  as to one-third of the shares  subject to the
Option beginning one year after the date the Option is granted, the second third
beginning  two years  after the date the  Option is  granted  and the last third
beginning three years after the date the Option is granted.  Upon termination of
such Director's service as a Director of the Company, the unvested portion of an

                                       7
<PAGE>

Option held by such Director shall not be exercisable. Subject to the foregoing,
all provisions of this Plan not  inconsistent  with the foregoing shall apply to
Options granted pursuant to this Section 5(k).

SECTION 6.  Stock Appreciation Rights.

     (a) Grant  and  Exercise.  Stock  Appreciation  Rights  may be  granted  in
conjunction  with all or part of any Stock Option granted under the Plan. In the
case of a  Non-Qualified  Stock Option,  such rights may be granted either at or
after the time of the grant of such Option.  In the case of an  Incentive  Stock
Option, such rights may be granted only at the time of the grant of the option.

     A Stock  Appreciation  Right or  applicable  portion  thereof  granted with
respect to a given Stock Option  shall  terminate  and no longer be  exercisable
upon the  termination  or exercise of the related  Stock  Option,  except that a
Stock  Appreciation  Right  granted with respect to less than the full number of
shares covered by a related Stock Option shall not be reduced until the exercise
or  termination  of the related  Stock  Option  exceeds the number of shares not
covered by the Stock Appreciation Right.

     A Stock Appreciation  Right may be exercised by an optionee,  in accordance
with paragraph (b) of this Section 6, by surrendering the applicable  portion of
the related Stock Option.  Upon such exercise and surrender,  the optionee shall
be  entitled  to  receive  an amount  determined  in the  manner  prescribed  in
paragraph (b) of this Section 6. Stock  Options which have been so  surrendered,
in whole or in part,  shall no longer be  exercisable  to the extent the related
Stock Appreciation Rights have been exercised.

     (b) Terms and  Conditions.  Stock  Appreciation  Rights shall be subject to
such terms and conditions,  not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

              (i) Stock  Appreciation  Rights shall be exercisable  only at such
     time or times and to the extent that the Stock Options to which they relate
     shall be  exercisable  in accordance  with the  provisions of Section 5 and
     this Section 6 of the Plan.

              (ii) Upon the exercise of a Stock Appreciation  Right, an optionee
     shall be entitled to receive up to, but not more than, an amount in cash or
     shares of Stock  equal in value to the excess of the Fair  Market  Value of
     one share of Stock over the option price per share specified in the related
     option  multiplied  by the  number of shares in  respect of which the Stock
     Appreciation Right shall have been exercised, with the Committee having the
     right to determine the form of payment.

              (iii) Stock  Appreciation  Rights shall be transferable  only when
     and to the extent that the  underlying  Stock Option would be  transferable
     under Section 5 of the Plan.

              (iv) Upon the exercise of a Stock  Appreciation  Right,  the Stock
     Option or part  thereof to which such Stock  Appreciation  Right is related
     shall be deemed to have been  exercised  for the purpose of the  limitation
     set forth in Sections 3 and 4 of the Plan on the total  number of shares of
     Stock to be issued  under the Plan and the  maximum  number of shares to be
     awarded to any one person in a fiscal  year,  but only to the extent of the
     number of shares issued or issuable under the Stock  Appreciation  Right at
     the time of exercise based on the value of the Stock  Appreciation Right at
     such time.

                                       8
<PAGE>

              (v) A Stock  Appreciation  Right  granted  in  connection  with an
     Incentive  Stock Option may be exercised  only if and when the market price
     of the Stock  subject to the  Incentive  Stock Option  exceeds the exercise
     price of such Option.

SECTION 7.  Restricted Stock.

     (a)  Administration.  Shares of Restricted Stock may be issued either alone
or in addition to other  awards  granted  under the Plan.  The  Committee  shall
determine  the  officers,  key  employees  and  Consultants  of the  Company and
Subsidiaries to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the time or times within which
such  awards may be  subject  to  forfeiture,  and all other  conditions  of the
awards.  The Committee may also condition the grant of Restricted Stock upon the
attainment of specified  performance  goals.  The provisions of Restricted Stock
awards need not be the same with respect to each recipient.

     (b) Awards  and  Certificates.  The  prospective  recipient  of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such  recipient has executed an agreement  evidencing the award
and  has  delivered  a fully  executed  copy  thereof  to the  Company,  and has
otherwise complied with the then applicable terms and conditions.

              (i) Each  participant  shall  be  issued  a stock  certificate  in
     respect  of shares  of  Restricted  Stock  awarded  under  the  Plan.  Such
     certificate  shall be registered in the name of the participant,  and shall
     bear  an  appropriate  legend  referring  to  the  terms,  conditions,  and
     restrictions applicable to such award, substantially in the following form:

              "The  transferability  of this certificate and the shares of stock
              represented  hereby  are  subject  to  the  terms  and  conditions
              (including  forfeiture) of the Hector  Communications  Corporation
              Stock Plan and an Agreement  entered  into between the  registered
              owner and Hector Communications  Corporation.  Copies of such Plan
              and Agreement are on file in the offices of Hector  Communications
              Corporation."

              (ii) The  Committee  shall  require  that the  stock  certificates
     evidencing  such  shares  be held  in  custody  by the  Company  until  the
     restrictions  thereon  shall have lapsed,  and that,  as a condition of any
     Restricted Stock award, the participant shall have delivered a stock power,
     endorsed in blank, relating to the Stock covered by such award.

     (c)  Restrictions  and Conditions.  The shares of Restricted  Stock awarded
pursuant  to the  Plan  shall  be  subject  to the  following  restrictions  and
conditions:

              (i)  Subject  to  the  provisions  of  this  Plan  and  the  award
     agreement, during a period set by the Committee commencing with the date of
     such  award  (the  "Restriction  Period"),  the  participant  shall  not be
     permitted to sell,  transfer,  pledge or assign shares of Restricted  Stock
     awarded under the Plan. Within these limits,  the Committee may provide for
     the lapse of such restrictions in installments where deemed appropriate.

              (ii) Except as provided in paragraph (c)(i) of this Section 7, the
     participant shall have, with respect to the shares of Restricted Stock, all
     of the rights of a shareholder of the Company,  including the right to vote
     the shares and the right to receive any cash dividends.  The Committee,  in

                                       9
<PAGE>

     its sole discretion, may permit or require the payment of cash dividends to
     be deferred and, if the Committee so  determines,  reinvested in additional
     shares of  Restricted  Stock (to the  extent  shares  are  available  under
     Section 3 and subject to  paragraph  (f) of Section 12).  Certificates  for
     shares of  unrestricted  Stock shall be delivered  to the grantee  promptly
     after,  and only after, the period of forfeiture shall have expired without
     forfeiture in respect of such shares of Restricted Stock.

              (iii)  Subject  to the  provisions  of  the  award  agreement  and
     paragraph (c)(iv) of this Section 7, upon termination of employment for any
     reason  during  the  Restriction   Period,  all  shares  still  subject  to
     restriction shall be forfeited by the participant.

              (iv)  In  the  event  of  special  hardship   circumstances  of  a
     participant   whose  employment  is  terminated  (other  than  for  Cause),
     including  death,  Disability  or  Retirement,   or  in  the  event  of  an
     unforeseeable  emergency of a participant  still in service,  the Committee
     may, in its sole  discretion,  when it finds that a waiver  would be in the
     best  interest  of the  Company,  waive  in  whole  or in  part  any or all
     remaining  restrictions  with  respect  to  such  participant's  shares  of
     Restricted Stock.

              (v) Notwithstanding  the foregoing,  all restrictions with respect
     to any  participant's  shares of Restricted  Stock shall lapse, on the date
     determined by the Committee, prior to, but in no event more than sixty (60)
     days  prior  to,  the  occurrence  of  any  of the  following  events:  (i)
     dissolution or liquidation of the Company, other than in conjunction with a
     bankruptcy  of the  Company or any  similar  occurrence,  (ii) any  merger,
     consolidation,   acquisition,   separation,   reorganization,   or  similar
     occurrence, where the Company will not be the surviving entity or (iii) the
     transfer of  substantially  all of the assets of the Company or 75% or more
     of the outstanding Stock of the Company.

     SECTION 8.  Deferred Stock Awards.

     (a)  Administration.  Deferred  Stock  may be  awarded  either  alone or in
addition to other awards granted under the Plan. The Committee  shall  determine
the officers,  key employees and Consultants of the Company and  Subsidiaries to
whom and the time or times at which Deferred Stock shall be awarded,  the number
of  Shares  of  Deferred  Stock to be  awarded  to any  participant  or group of
participants,  the duration of the period (the "Deferral  Period") during which,
and the conditions under which,  receipt of the Stock will be deferred,  and the
terms and  conditions  of the award in addition to those  contained in paragraph
(b) of this Section 8. The  Committee  may also  condition the grant of Deferred
Stock upon the  attainment of specified  performance  goals.  The  provisions of
Deferred Stock awards need not be the same with respect to each recipient.

     (b)      Terms and Conditions.

              (i)  Subject  to  the  provisions  of  this  Plan  and  the  award
     agreement,  Deferred Stock awards may not be sold,  assigned,  transferred,
     pledged  or  otherwise  encumbered  during  the  Deferral  Period.  At  the
     expiration  of the Deferral  Period (or  Elective  Deferral  Period,  where
     applicable),  share certificates shall be delivered to the participant,  or
     his legal  representative,  in a number equal to the shares  covered by the
     Deferred Stock award.

              (ii) Amounts equal to any dividends  declared  during the Deferral
     Period  with  respect to the number of shares  covered by a Deferred  Stock
     award will be paid to the  participant  currently or deferred and deemed to

                                       10
<PAGE>

     be reinvested in additional Deferred Stock or otherwise reinvested,  all as
     determined  at  the  time  of  the  award  by the  Committee,  in its  sole
     discretion.

              (iii)  Subject  to the  provisions  of  the  award  agreement  and
     paragraph (b)(iv) of this Section 8, upon termination of employment for any
     reason during the Deferral Period for a given award,  the Deferred Stock in
     question shall be forfeited by the participant.

              (iv)  In  the  event  of  special  hardship   circumstances  of  a
     participant whose employment is terminated (other than for Cause) including
     death,  Disability  or  Retirement,  or in the  event  of an  unforeseeable
     emergency of a participant still in service, the Committee may, in its sole
     discretion,  when it finds that a waiver  would be in the best  interest of
     the Company, waive in whole or in part any or all of the remaining deferral
     limitations   imposed   hereunder  with  respect  to  any  or  all  of  the
     participant's Deferred Stock.

              (v) A participant  may elect to further defer receipt of the award
     for a specified  period or until a specified event (the "Elective  Deferral
     Period"),  subject  in each case to the  Committee's  approval  and to such
     terms as are  determined  by the  Committee,  all in its  sole  discretion.
     Subject to any  exceptions  adopted by the  Committee,  such  election must
     generally be made prior to  completion  of one half of the Deferral  Period
     for a Deferred Stock award (or for an installment of such an award).

              (vi) Each award  shall be  confirmed  by, and subject to the terms
     of, a Deferred Stock agreement executed by the Company and the participant.

     SECTION 9.  Transfer, Leave of Absence, etc.

     For  purposes  of the  Plan,  the  following  events  shall not be deemed a
termination of employment:

     (a) a transfer of an employee from the Company to a Parent  Corporation  or
Subsidiary,  or from a Parent Corporation or Subsidiary to the Company,  or from
one Subsidiary to another;

     (b) a leave of absence,  approved in writing by the Committee, for military
service or  sickness,  or for any other  purpose  approved by the Company if the
period of such leave does not exceed  ninety (90) days (or such longer period as
the Committee may approve, in its sole discretion); and

     (c) a leave of absence in excess of ninety  (90) days,  approved in writing
by the Committee, but only if the employee's right to reemployment is guaranteed
either by a statute or by contract,  and provided that, in the case of any leave
of absence,  the  employee  returns to work within 30 days after the end of such
leave.

     SECTION 10.  Amendments and Termination.

     The Board may amend,  alter,  or  discontinue  the Plan,  but no amendment,
alteration,  or discontinuation  shall be made (i) which would impair the rights
of an optionee or participant  under a Stock Option,  Restricted  Stock or other
Stock-based award theretofore  granted,  without the optionee's or participant's
consent,  or (ii) which without the approval of the  stockholders of the Company
would cause the Plan to no longer  comply  with Rule 16b-3 under the  Securities
Exchange  Act of  1934,  Section  422  of  the  Code  or  any  other  regulatory
requirements.

                                       11
<PAGE>

     The  Committee  may amend  the  terms of any  award or  option  theretofore
granted,  prospectively  or  retroactively  to  the  extent  such  amendment  is
consistent  with the terms of this Plan, but no such amendment  shall impair the
rights of any holder without his or her consent except to the extent  authorized
under the  Plan.  The  Committee  may also  substitute  new  Stock  Options  for
previously granted options,  including  previously granted options having higher
option prices.

SECTION 11.  Unfunded Status of Plan.

     The Plan is intended to  constitute  an  "unfunded"  plan for incentive and
deferred  compensation.  With  respect  to  any  payments  not  yet  made  to  a
participant or optionee by the Company,  nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other  arrangements to meet the obligations  created under
the Plan to  deliver  Stock or  payments  in lieu of or with  respect  to awards
hereunder,  provided,  however,  that  the  existence  of such  trusts  or other
arrangements is consistent with the unfunded status of the Plan.

SECTION 12.  General Provisions.

     (a) The Committee may require each person  purchasing  shares pursuant to a
Stock  Option  under the Plan to  represent  to and agree  with the  Company  in
writing that the optionee is acquiring the shares without a view to distribution
thereof.  The  certificates  for such shares may  include  any legend  which the
Committee deems appropriate to reflect any restrictions on transfer.

     All  certificates  for shares of Stock delivered under the Plan pursuant to
any  Restricted  Stock,  Deferred  Stock or other  Stock-based  awards  shall be
subject to such  stock-transfer  orders and other  restrictions as the Committee
may deem advisable under the rules,  regulations,  and other requirements of the
Securities and Exchange  Commission,  any stock exchange upon which the Stock is
then  listed,  and any  applicable  Federal or state  securities  laws,  and the
Committee  may cause a legend or legends to be put on any such  certificates  to
make appropriate reference to such restrictions.

     (b)  Subject  to  paragraph  (d) below,  recipients  of  Restricted  Stock,
Deferred  Stock and other  Stock-based  awards  under the Plan (other than Stock
Options)  are not  required to make any payment or provide  consideration  other
than the rendering of services.

     (c) Nothing  contained  in this Plan shall  prevent the Board of  Directors
from  adopting  other  or  additional  compensation  arrangements,   subject  to
stockholder approval if such approval is required;  and such arrangements may be
either  generally  applicable or applicable only in specific cases. The adoption
of the Plan shall not confer upon any employee of the Company or any  Subsidiary
any right to continued employment with the Company or a Subsidiary,  as the case
may be,  nor shall it  interfere  in any way with the right of the  Company or a
Subsidiary to terminate the employment of any of its employees at any time.

     (d) Each participant  shall, no later than the date as of which any part of
the value of an award first  becomes  includible  as  compensation  in the gross
income of the participant  for Federal income tax purposes,  pay to the Company,
or make  arrangements  satisfactory to the Committee  regarding  payment of, any
Federal,  state,  or local taxes of any kind required by law to be withheld with
respect to the award.  The  obligations  of the Company  under the Plan shall be
conditional  on such payment or  arrangements  and the Company and  Subsidiaries
shall,  to the extent  permitted by law, have the right to deduct any such taxes

                                       12
<PAGE>

from any payment of any kind otherwise due to the  participant.  With respect to
any award under the Plan,  if the terms of such award so permit,  a  participant
may  elect by  written  notice  to the  Company  to  satisfy  part or all of the
withholding  tax  requirements  associated with the award by (i) authorizing the
Company to retain  from the number of shares of Stock  that would  otherwise  be
deliverable to the participant, or (ii) delivering to the Company from shares of
Stock  already  owned by the  participant,  that  number  of  shares  having  an
aggregate  Fair  Market  Value  equal to part or all of the tax  payable  by the
participant  under this Section 12(d).  Any such election shall be in accordance
with,  and subject to,  applicable  tax and  securities  laws,  regulations  and
rulings.

     (e) At the time of grant,  the Committee may provide in connection with any
grant made under this Plan that the shares of Stock received as a result of such
grant shall be subject to a repurchase  right in favor of the Company,  pursuant
to which  the  participant  shall be  required  to  offer  to the  Company  upon
termination  of  employment  for any  reason  any  shares  that the  participant
acquired under the Plan,  with the price being the then Fair Market Value of the
Stock or, in the case of a  termination  for Cause,  an amount equal to the cash
consideration paid for the Stock,  subject to such other terms and conditions as
the Committee may specify at the time of grant.  The Committee  may, at the time
of the grant of an award under the Plan,  provide the Company  with the right to
repurchase,  or require the forfeiture of, shares of Stock acquired  pursuant to
the Plan by any participant who, at any time within two years after  termination
of  employment  with the Company,  directly or indirectly  competes  with, or is
employed by a competitor of, the Company.

     (f) The  reinvestment  of dividends in additional  Restricted  Stock (or in
Deferred  Stock  or  other  types of Plan  awards)  at the time of any  dividend
payment shall only be  permissible  if the  Committee  (or the  Company's  chief
financial  officer)  certifies in writing that under Section 3 sufficient shares
are available for such reinvestment  (taking into account then outstanding Stock
Options and other Plan awards).

     (g) The Plan is expressly made subject to the approval by  shareholders  of
the Company. If the Plan is not so approved by the shareholders on or before one
year after this Plan's  adoption by the Board of Directors,  this Plan shall not
come into effect.  The offering of the shares hereunder shall be also subject to
the effecting by the Company of any  registration or qualification of the shares
under any  federal or state law or the  obtaining  of the consent or approval of
any governmental  regulatory body which the Company shall determine, in its sole
discretion,  is necessary or desirable as a condition to or in connection  with,
the offering or the issue or purchase of the shares covered thereby. The Company
shall make every reasonable  effort to effect such registration or qualification
or to obtain such consent or approval.


                                       13
<PAGE>

Exhibit 5.1


                                December 1, 1999





Hector Communications Corporation
211 South Main Street
Hector, Minnesota  55342

     Re:    Opinion of Counsel as to Legality of 300,000 Shares of Common Stock
            to be registered under the Securities Act of 1933

Ladies and Gentlemen:

     This opinion is furnished in  connection  with the  registration  under the
Securities Act of 1933 on Form S-8 of 300,000  shares of Common Stock,  $.01 par
value, of Hector Communications Corporation (the "Company") offered to employees
of the Company pursuant to the Hector Communications Corporation 1999 Stock Plan
(the "Plan").

     As general  counsel for the Company,  we advise you that it is our opinion,
based  on  our  familiarity  with  the  affairs  of the  Company  and  upon  our
examination of pertinent  documents,  that the 300,000 shares of Common Stock to
be issued by the Company  under the Plan,  will,  when paid for and  issued,  be
validly issued and lawfully outstanding,  fully paid and nonassessable shares of
Common Stock of the Company.

     The  undersigned  hereby  consent  to the filing of this  opinion  with the
Securities and Exchange  Commission as an Exhibit to the Registration  Statement
with respect to said shares of Common Stock under the Securities Act of 1933.

                                                 Very truly yours,

                                                 LINDQUIST & VENNUM P.L.L.P.

                                                 /s/ Lindquist & Vennum P.L.L.P.


<PAGE>



Exhibit 23.2


                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this  Registration  Statement of
Hector  Communications  Corporation  on Form S-8  relating  to the  increase  in
authorized  shares of common stock under the Hector  Communications  Corporation
1999 Stock Plan of our report  dated  February  17,  1999 on the 1998  financial
statements, appearing in the Annual Report on Form 10-K of Hector Communications
Corporation  for the year ended  December  31, 1998 and to the  reference  to us
under  the  heading  "Experts"  in  the  Prospectus,   which  is  part  of  this
Registration Statement.


 OLSEN THIELEN & CO., LTD.

/s/ Olsen Thielen & Co., Ltd.
December 1, 1999
St. Paul, Minnesota
<PAGE>
[{"type": "S-8", "sequence": "1", "description": "HECTOR COMMUNICATIONS CORP. 1999 STOCK PLAN", "secsgml_size_bytes": 65372}]
{"company-data": {"conformed-name": "HECTOR COMMUNICATIONS CORP", "cik": "0000863437", "assigned-sic": "4813", "irs-number": "411666660", "state-of-incorporation": "MN", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-91967", "film-number": "99767863"}, "business-address": {"street1": "211 S MAIN ST", "street2": "P O BOX 428", "city": "HECTOR", "state": "MN", "zip": "55342", "phone": "6128486611"}, "mail-address": {"street1": "P O BOX 428", "street2": "211 S MAIN ST", "city": "HECTOR", "state": "MN", "zip": "55342"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                          ----------------------------
                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                          ----------------------------

                        Hector Communications Corporation
             (Exact name of registrant as specified in its charter)

         Minnesota                                               41-166660
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                              211 South Main Street
                             Hector, Minnesota 55342
              (Address of Principal Executive Offices and zip code)
                          ----------------------------

                HECTOR COMMUNICATIONS CORPORATION 1999 STOCK PLAN
                            (Full title of the Plan)
                          ----------------------------

Curtis A. Sampson                                    Copy to:
Chief Executive Officer                              Richard A. Primuth, Esq.
Hector Communications Corporation                    Lindquist & Vennum P.L.L.P.
211 South Main Street                                4200 IDS Center
Hector, Minnesota 55342                              80 South Eighth Street
(320) 848-6611                                       Minneapolis, MN 55402
(Name, address and telephone                         (612) 371-3211
number, including area code,
of agent for service)
                           ----------------------------

                         CALCULATION OF REGISTRATION FEE

                                              Proposed     Proposed
Title of                                      Maximum      Maximum
Securities                    Amount          Offering     Aggregate   Amount of
to be                         to be           Price        Offering    Registra-
Registered                    Registered      Per Share(1) Price(1)    tion Fee

Common Stock,                 300,000 shares  $15.75       $4,725,000  $1313.55
$.01 par value,
to be issued pursuant
to Hector Communications
Corporation 1999 Stock Plan

(1)      Estimated  solely for the purpose of determining the  registration  fee
         pursuant to Rule 457(c) and based upon the average of the closing price
         of the Company's  Common Stock on the Nasdaq  National Market System on
         December 1, 1999.
PART I

         Pursuant to the Note to Part I of Form S-8, the information required by
Items 1 and 2 of Form S-8 is not filed as a part of this Registration Statement.

         PART II

Item 3.  Incorporation of Documents by Reference.

         The  following   documents  filed  with  the  Securities  and  Exchange
Commission are hereby incorporated by reference herein:

         (a) The Annual  Report of the  Company on Form 10-K for the fiscal year
ended December 31, 1998.

         (b) The Definitive Proxy Statement dated April 15, 1999 for the 1999
Annual Meeting of Shareholders held on May 18, 1999.

         (c) The Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999.

         (d) The description of the Company's Common Stock as set forth in the
Company's Registration Statement on Form 10 (File No. 0-18587).

         All documents  subsequently  filed by the Company  pursuant to Sections
13(a),  13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold,  shall
be deemed to be incorporated by reference in this Registration  Statement and to
be a part hereof from the date of filing of such documents.

Item 4.  Description of Securities.

         Not applicable.

Item 5.  Interests of Named Experts and Counsel.

         Richard A. Primuth, Secretary of the Company, is a partner of Lindquist
&  Vennum  P.L.L.P.,  which  is the law  firm  passing  on the  validity  of the
securities issued under the Plan.

Item 6.  Indemnification of Directors and Officers.

         The Company  Bylaws  provide that the  Registrant  shall  indemnify any
person  made or  threatened  to be made a party to any  threatened,  pending  or
completed  civil,   criminal,   administrative,   arbitration  or  investigative
proceeding,  including a proceeding  by or in the right of the  corporation,  by
reason of the former or present  official  capacity of the person,  provided the
person seeking indemnification meets five criteria set forth in Section 302A.521
of the Minnesota Business Corporation Act.

                                       1
The Company's  Bylaws also  authorize  the Board of  Directors,  to the
extent  permitted  by  applicable  law,  to  indemnify  any person or entity not
described  in the  Bylaws  pursuant  to,  and to the  extent  described  in,  an
agreement between the Company and such person, or as otherwise determined by the
Board of Directors in its discretion.

         Section  302A.521 of the Minnesota  Business  Corporation  Act provides
that a corporation  shall  indemnify the person  against  judgments,  penalties,
fines including,  without limitation,  excise taxes assessed against such person
with respect to an employee benefit plan, settlements,  and reasonable expenses,
including  attorneys'  fees  and  disbursements,  incurred  by  such  person  in
connection with the proceeding if, with respect to the acts or omissions of such
person complained of in the proceeding, such person (i) has not been indemnified
by another  organization  or employee  benefit plan for the same  expenses  with
respect to the same acts or omissions;  (ii) acted in good faith; (iii) received
no improper  personal  benefit  and Section  302A.255  (regarding  conflicts  of
interest),  if applicable,  has been  satisfied;  (iv) in the case of a criminal
proceeding, has no reasonable cause to believe the conduct was unlawful; and (v)
in the case of acts or omissions by persons in their  official  capacity for the
corporation,  reasonably  believed that the conduct was in the best interests of
the  corporation,  or in the  case of acts or  omissions  by  persons  in  their
capacity for other  organization,  reasonably  believed that the conduct was not
opposed to the best interests of the corporation.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing  provisions,  or  otherwise,  we have been advised that, in the
opinion of the SEC, such  indemnification  is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.

Item 7.  Exemption from Registration Claimed.

         Not applicable.

Item 8.  Exhibits.

Exhibit

    4.1     Hector Communications Corporation 1999 Stock Plan.

    5.1     pinion and Consent of Lindquist & Vennum P.L.L.P.

    23.1    Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1)

    23.2    Consent of Olsen Thielen & Co., Ltd., independent public accountants

    24.1    Power of Attorney (set forth on signature page hereof)

Item 9.  Undertakings.

    The Company hereby undertakes:

                                       2
(a) (1) to file,  during any period in which  offers or sales are being made,  a
post-effective amendment to this registration statement:

         (i) to include any prospectus required by section 10(a)(3) of the
    Securities Act of 1933;

         (ii) to reflect in the prospectus any facts or events arising after the
    effective   date  of  the   registration   statement  (or  the  most  recent
    post-effective  amendment  thereof) which  individually or in the aggregate,
    represent  a  fundamental  change  in  the  information  set  forth  in  the
    registration  statement.  Notwithstanding  the  foregoing,  any  increase or
    decrease  in volume of  securities  offered  (if the total  dollar  value of
    securities  offered  would not  exceed  that which was  registered)  and any
    deviation from the low or high end of the estimated  maximum  offering range
    may be  reflected  in the  form of  prospectus  filed  with  the  Commission
    pursuant  to  Rule  424(b)  under  the  Securities  Act of 1933  if,  in the
    aggregate,  the  changes  in volume and price  represent  no more than a 20%
    change in the maximum aggregate offering price set forth in the "Calculation
    of Registration Fee" table in the effective registration statement; and

         (iii) to include any material  information  with respect to the plan of
    distribution not previously  disclosed in the registration  statement or any
    material change to such information in the registration statement.

    (2) that, for determining  liability under the Securities Act, to treat each
post-effective  amendment  as a new  registration  statement  of the  securities
offered,  and the offering of the securities at that time to be the initial bona
fide offering.

    (3) to file a  post-effective  amendment to remove from  registration any of
the securities that remain unsold at the end of the offering.

(b) The  Company  hereby  undertakes  that,  for  purposes  of  determining  any
liability under the Securities Act of 1933, each filing of the Company's  annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable,  each filing of an employee benefit plan's annual report
pursuant  to  Section  15(d) of the  Securities  Exchange  Act of 1934)  that is
incorporated by reference in the Registration  Statement shall be deemed to be a
new Registration  Statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

(h) Insofar as indemnification  for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to  directors,  officers,  and  controlling
persons of the small business  issuer pursuant to the foregoing  provisions,  or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is,  therefore,  unenforceable.  In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action,  suit  or  proceeding)  is  asserted  by  such  director,   officer,  or
controlling person in connection with the securities being registered, the small
business  issuer will,  unless in the opinion of its counsel the matter has been
settled by controlling precedent,  submit to a court of appropriate jurisdiction
the question  whether such  indemnification  by it is against  public  policy as
expressed  in the Act and will be  governed  by the final  adjudication  of such
issue.

                                       3
SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Hector, State of Minnesota, on December 1, 1999.

                                            HECTOR COMMUNICATIONS CORPORATION

                                            By /s/ Curtis A. Sampson
                                               --------------------------------
                                                Curtis A. Sampson, Chairman and
                                                Chief Executive Officer
                                                (Principal Executive Officer)

                                POWER OF ATTORNEY

         The  undersigned  officers  and  directors  of  Hector   Communications
Corporation  hereby constitute and appoint Curtis A. Sampson and Paul N. Hanson,
or either of them, with power to act one without the other,  our true and lawful
attorney-in-fact  and agent, with full power of substitution and resubstitution,
for us and in our  stead,  in any  and  all  capacities  to  sign  any  and  all
amendments (including post-effective  amendments) to this Registration Statement
and all  documents  relating  thereto,  and to file the same,  with all exhibits
thereto,  and other documents in connection  therewith,  with the Securities and
Exchange Commission,  granting unto said  attorney-in-fact and agent, full power
and  authority  to do and  perform  each and every act and  thing  necessary  or
advisable  to be done in and about the  premises,  as fully to all  intents  and
purposes as he might or could do in person,  hereby ratifying and confirming all
that said  attorney-in-fact  and agent, or his  substitutes,  may lawfully do or
cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  Registration  Statement has been signed below by the following  persons on
December 1, 1999 and in the capacities indicated.

Signature                                   Title
---------------------                       ------------------------------------

/s/ Curtis A. Sampson                       Chairman of the Board of Directors,
Curtis A. Sampson                           Chief Executive Officer and Director

/s/ Steven H. Sjogren                       President, Chief Operating Officer,
Steven H. Sjogren                           and Director

/s/ Paul N. Hanson                          Vice President, Treasurer
Paul N. Hanson                              and Director

                                       4
/s/ Charles R. Dickman                      Director
Charles R. Dickman

/s/ James O. Ericson                        Director
James O. Ericson

/s/ Paul A. Hoff                            Director
Paul A. Hoff

/s/ Wayne E. Sampson                        Director
Wayne E. Sampson

/s/ Edward E. Strickland                    Director
Edward E. Strickland

                                       5
Exhibit 4.
                        HECTOR COMMUNICATIONS CORPORATION
                                1999 STOCK PLAN

SECTION 1.  General Purpose of Plan; Definitions.

         The name of this  plan is the  HECTOR  COMMUNICATIONS  Stock  Plan (the
"Plan"). The purpose of the Plan is to enable HECTOR COMMUNICATIONS  CORPORATION
(the  "Company")  to retain  and  attract  executives  and other key  employees,
non-employee  directors and consultants who contribute to the Company's  success
by their  ability,  ingenuity and industry,  and to enable such  individuals  to
participate in the long-term  success and growth of the Company by giving them a
proprietary interest in the Company.

         For purposes of the Plan,  the following  terms shall be defined as set
forth below:

         a. "Board" means the Board of Directors of the Company as it may be
comprised from time to time.

         b. "Cause" means a felony conviction of a participant or the failure of
a  participant  to  contest  prosecution  for  a  felony,   willful  misconduct,
dishonesty or intentional  violation of a statute,  rule or  regulation,  any of
which, in the judgment of the Company,  is harmful to the business or reputation
of the Company.

         c. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.

         d. "Committee"  means the  Committee  referred  to in Section 2 of the
Plan. If at any time no Committee shall be in office,  then the functions of the
Committee specified in the Plan shall be exercised by the Board, unless the Plan
specifically states otherwise.

         e. "Consultant" means any person,  including an advisor, engaged by the
Company or a Parent of the Subsidiary of the Company to render  services and who
is  compensated  for such  services and who is not an employee of the Company or
any Parent Corporation or Subsidiary of the Company. A Non-Employee Director may
serve as a Consultant.

         f. "Company"  means Hector  Communication  Corporation,  a corporation
organized   under  the  laws  of  the  State  of  Minnesota  (or  any  successor
corporation).

         g. "Deferred  Stock"  means an award made  pursuant to Section 8 below
of the right to  receive  stock at the end of a specified deferral period.

         h. "Disability"  means permanent and total disability as determined by
the Committee.

         i. "Early  Retirement" means retirement,  with consent of the Committee
at the time of  retirement,  from  active  employment  with the  Company and any
Subsidiary or Parent Corporation of the Company.

                                       1
j. "Fair Market  Value" of Stock on any given date shall be  determined
by the  Committee  as follows:  (a) if the Stock is listed for trading on one of
more national securities exchanges, or is traded on the NASDAQ Stock Market, the
last  reported  sales price on the  principal  such exchange or the NASDAQ Stock
Market on the date in  question,  or if such Stock shall not have been traded on
such  principal  exchange on such date,  the last  reported  sales price on such
principal  exchange or the NASDAQ Stock Market on the first day prior thereto on
which such Stock was so traded; or (b) if the Stock is not listed for trading on
a national  securities exchange or the NASDAQ Stock Market, but is traded in the
over-the-counter  market, including the NASDAQ Small Cap Market, the closing bid
price for such Stock on the date in  question,  or if there is no such bid price
for such  Stock on such  date,  the  closing  bid  price on the  first day prior
thereto on which such price existed; or (c) if neither (a) or (b) is applicable,
by any means fair and reasonable by the Committee,  which determination shall be
final and binding on all parties.

         k.  "Incentive  Stock Option" means any Stock Option intended to be and
designated as an "Incentive  Stock Option"  within the meaning of Section 422 of
the Code.

         l. "Non-Employee  Director" means a "Non-Employee  Director" within the
meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934.

         m.  "Non-Qualified  Stock Option" means any Stock Option that is not an
Incentive  Stock  Option,  and  is  intended  to  be  and  is  designated  as  a
"Non-Qualified Stock Option."

         n. "Normal Retirement" means retirement from active employment with the
Company and any Subsidiary or Parent  Corporation of the Company on or after age
65.

         o.  "Outside  Director"  means a  Director  who:  (a) is not a  current
employee of the Company or any member of an affiliated  group which includes the
Company;  (b) is not a former employee of the Company who receives  compensation
for prior services (other than benefits under a tax-qualified  retirement  plan)
during the taxable  year;  (c) has not been an officer of the Company;  (d) does
not receive remuneration from the Company, either directly or indirectly, in any
capacity  other than as a director,  except as  otherwise  permitted  under Code
Section  162(m)  and  regulations  thereunder.  For this  purpose,  remuneration
includes any payment in exchange for good or services.  This definition shall be
further  governed  by the  provisions  of Code  Section  162(m) and  regulations
promulgated thereunder.

         p. "Parent  Corporation" means any corporation (other than the Company)
in an  unbroken  chain of  corporations  ending  with the Company if each of the
corporations  (other than the Company) owns stock  possessing 50% or more of the
total  combined  voting  power  of all  classes  of  stock  in one of the  other
corporations in the chain.

         q. "Restricted Stock" means an award of shares of Stock that are
subject to restrictions under Section 7 below.

         r. "Retirement" means Normal Retirement or Early Retirement.

         s. "Stock"  means the Common  Stock,  $.01 par value per share,  of the
Company.

                                       2
t.  "Stock  Appreciation  Right"  means the right  pursuant to an award
granted  under Section 6 below to surrender to the Company all or a portion of a
Stock Option in exchange for an amount equal to the difference  between (i) Fair
Market  Value,  as of the date such  Stock  Option or such  portion  thereof  is
surrendered, of the shares of Stock covered by such Stock Option or such portion
thereof,  and (ii) the  aggregate  exercise  price of such Stock  Option or such
portion thereof.

         u. "Stock Option" means any option to purchase shares of Stock granted
 pursuant to Section 5 below.

         v.  "Subsidiary"  means any corporation  (other than the Company) in an
unbroken  chain  of  corporations  beginning  with  the  Company  if each of the
corporations  (other than the last corporation in the unbroken chain) owns stock
possessing  50% or more of the total  combined  voting  power of all  classes of
stock in one of the other corporations in the chain.

SECTION 2.  Administration.

         The Plan  shall be  administered  by the  Board  of  Directors  or by a
Committee  appointed by the Board of Directors of the Company  consisting  of at
least two  Directors,  all of whom shall be Outside  Directors and  Non-Employee
Directors,  who  shall  serve at the  pleasure  of the  Board.  If the Board has
established a Compensation Committee,  the Compensation Committee shall serve as
the Committee for purposes of this Plan.

         The  Committee  shall have the power and authority to grant to eligible
employees or Consultants,  pursuant to the terms of the Plan: (i) Stock Options,
(ii) Stock Appreciation  Rights,  (iii) Restricted Stock, or (iv) Deferred Stock
awards.

         In particular, the Committee shall have the authority:

              (i) to select the officers and other key  employees of the Company
     and its  Subsidiaries  and other  eligible  persons to whom Stock  Options,
     Stock Appreciation  Rights,  Restricted Stock and Deferred Stock awards may
     from time to time be granted hereunder;

              (ii) to  determine  whether  and to what  extent  Incentive  Stock
     Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
     Stock and Deferred Stock awards, or a combination of the foregoing,  are to
     be granted hereunder;

              (iii) to determine the number of shares to be covered by each such
award granted hereunder;

              (iv) to determine the terms and conditions,  not inconsistent with
     the terms of the Plan, of any award granted hereunder  (including,  but not
     limited to, any  restriction  on any Stock Option or other award and/or the
     shares of Stock relating  thereto),  which  authority  shall be exclusively
     vested in the  Committee  (and not the Board) for purposes of  establishing
     performance  criteria used with Restricted Stock and Deferred Stock awards;
     provided,  however,  that in the  event of a  merger  or  asset  sale,  the
     applicable  provisions  of Sections  5(c) and 7(c) of the Plan shall govern
     the acceleration of the vesting of any Stock Option or awards;

              (v)  to  determine   whether,   to  what  extent  and  under  what
     circumstances  Stock and other  amounts  payable  with  respect to an award
     under this Plan shall be deferred either  automatically  or at the election
     of the participant.

                                       3
The Committee shall have the authority to adopt, alter and repeal such
administrative  rules,  guidelines and practices governing the Plan as it shall,
from time to time, deem advisable;  to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements  relating thereto);
and to otherwise  supervise the  administration  of the Plan.  The Committee may
delegate to  executive  officers of the Company the  authority  to exercise  the
powers specified in (i), (ii), (iii), (iv) and (v) above with respect to persons
who are not  either  the chief  executive  officer  of the  Company  or the four
highest paid officers of the Company other than the chief executive officer.

     All decisions made by the Committee  pursuant to the provisions of the Plan
shall be final and  binding  on all  persons,  including  the  Company  and Plan
participants.

SECTION 3.  Stock Subject to Plan.

     The total number of shares of Stock reserved and available for distribution
under the Plan shall be 300,000.  Such shares may consist,  in whole or in part,
of authorized and unissued shares.

     Subject to  paragraph  (b)(iv) of Section 6 below,  if any shares that have
been optioned cease to be subject to Stock Options,  or if any shares subject to
any Restricted Stock or Deferred Stock award granted  hereunder are forfeited or
such award otherwise terminates without a payment being made to the participant,
such shares shall again be available for  distribution in connection with future
awards under the Plan.

     In   the   event   of   any    merger,    reorganization,    consolidation,
recapitalization,  stock dividend, other change in corporate structure affecting
the Stock,  or spin-off or other  distribution of assets to  shareholders,  such
substitution  or  adjustment  shall be made in the  aggregate  number  of shares
reserved for issuance  under the Plan,  in the number and option price of shares
subject to  outstanding  options  granted  under the Plan,  and in the number of
shares  subject to Restricted  Stock or Deferred  Stock awards granted under the
Plan as may be  determined  to be  appropriate  by the  Committee,  in its  sole
discretion, provided that the number of shares subject to any award shall always
be a whole number.  Such  adjusted  option price shall also be used to determine
the amount  payable by the Company upon the  exercise of any Stock  Appreciation
Right associated with any Option.

SECTION 4.  Eligibility.

     Officers,  other key employees of the Company and Subsidiaries,  members of
the Board of Directors, and Consultants who are responsible for or contribute to
the management,  growth and profitability of the business of the Company and its
Subsidiaries  are  eligible  to be granted  Stock  Options,  Stock  Appreciation
Rights,  Restricted Stock or Deferred Stock awards under the Plan. The optionees
and  participants  under  the Plan  shall be  selected  from time to time by the
Committee, in its sole discretion,  from among those eligible, and the Committee
shall determine,  in its sole  discretion,  the number of shares covered by each
award.

SECTION 5.  Stock Options.

     Any  Stock  Option  granted  under  the Plan  shall be in such  form as the
Committee may from time to time approve.

                                       4
The Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified  Stock Options.  No Incentive Stock Options
shall be granted under the Plan after April 1, 2009.

     The  Committee  shall have the  authority to grant any  optionee  Incentive
Stock Options,  Non-Qualified  Stock Options,  or both types of options (in each
case with or without Stock Appreciation  Rights).  To the extent that any option
does not qualify as an Incentive  Stock Option,  it shall  constitute a separate
Non-Qualified Stock Option.

     Anything in the Plan to the contrary notwithstanding,  no term of this Plan
relating to Incentive  Stock Options shall be  interpreted,  amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code.  The  preceding  sentence  shall not preclude any  modification  or
amendment  to an  outstanding  Incentive  Stock  Option,  whether  or  not  such
modification or amendment results in disqualification of such Stock Option as an
Incentive  Stock  Option,  provided  the  optionee  consents  in  writing to the
modification or amendment.

     Options  granted under the Plan shall be subject to the following terms and
conditions  and  shall  contain  such  additional  terms  and  conditions,   not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.

     (a) Option Price. The option price per share of Stock  purchasable  under a
Stock Option shall be determined  by the  Committee at the time of grant.  In no
event shall the option price per share of Stock  purchasable  under an Incentive
Stock  Option be less than 100% of Fair  Market  Value on the date the option is
granted.  If an employee owns or is deemed to own (by reason of the  attribution
rules applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Parent Corporation or
Subsidiary and an Incentive Stock Option is granted to such employee, the option
price  shall be no less than 110% of the Fair  Market  Value of the Stock on the
date the option is granted.

     (b)  Option  Term.  The  term of each  Stock  Option  shall be fixed by the
Committee,  but no Incentive  Stock Option  shall be  exercisable  more than ten
years after the date the option is granted.  If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10% of the  combined  voting power of all classes of stock of the Company or any
Parent  Corporation  or Subsidiary  and an Incentive  Stock Option is granted to
such employee, the term of such option shall be no more than five years from the
date of grant.

     (c)  Exercisability.  Stock  Options shall be  exercisable  at such time or
times  as  determined  by  the  Committee  at or  after  grant,  subject  to the
restrictions  stated in Section 5(b) above.  If the Committee  provides,  in its
discretion,  that any option is exercisable only in installments,  the Committee
may waive such  installment  exercise  provisions  at any time.  Notwithstanding
anything  contained  in the Plan to the  contrary,  the  Committee  may,  in its
discretion,  extend  or vary the term of any  Stock  Option  or any  installment
thereof,  whether or not the optionee is then  employed by the Company,  if such
action is deemed to be in the best interests of the Company; provided,  however,
that in the event of a merger or sale of assets,  the provisions of this Section
5(c) shall govern vesting  acceleration.  Notwithstanding the foregoing,  unless
the Stock Option  provides  otherwise,  any Stock Option granted under this Plan
shall be  exercisable  in  full,  without  regard  to any  installment  exercise
provisions,  for a period  specified by the  Committee,  but not to exceed sixty
(60)  days,  prior  to  the  occurrence  of any of  the  following  events:  (i)

                                       5
dissolution  or  liquidation  of the Company  other than in  conjunction  with a
bankruptcy  of  the  Company  or  any  similar  occurrence,   (ii)  any  merger,
consolidation,  acquisition, separation,  reorganization, or similar occurrence,
where the  Company  will not be the  surviving  entity or (iii) the  transfer of
substantially all of the assets of the Company or 75% or more of the outstanding
Stock of the Company.

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

     (d) Method of Exercise.  Stock Options may be exercised in whole or in part
at any time during the option period by giving written notice of exercise to the
Company  specifying  the number of shares to be purchased.  Such notice shall be
accompanied by payment in full of the purchase price, either by check, or by any
other  form of  legal  consideration  deemed  sufficient  by the  Committee  and
consistent  with the Plan's purpose and  applicable  law,  including  promissory
notes  or  a  properly   executed  exercise  notice  together  with  irrevocable
instructions  to a broker  acceptable to the Company to promptly  deliver to the
Company  the  amount of sale or loan  proceeds  to pay the  exercise  price.  As
determined  by the  Committee  at the  time of grant  or  exercise,  in its sole
discretion,  payment  in full or in part  may  also be made in the form of Stock
already owned by the optionee (which in the case of Stock acquired upon exercise
of an option have been owned for more than six months on the date of  surrender)
or, in the case of the  exercise of a  Non-Qualified  Stock  Option,  Restricted
Stock or Deferred Stock subject to an award hereunder  (based,  in each case, on
the Fair  Market  Value of the  Stock on the date the  option is  exercised,  as
determined  by the  Committee),  provided,  however,  that,  in the  case  of an
Incentive Stock Option, the right to make a payment in the form of already owned
shares may be  authorized  only at the time the option is granted,  and provided
further  that in the event  payment is made in the form of shares of  Restricted
Stock or a Deferred  Stock  award,  the  optionee  will receive a portion of the
option shares in the form of, and in an amount equal to, the Restricted Stock or
Deferred  Stock award  tendered as payment by the  optionee.  If the terms of an
option  so  permit,  an  optionee  may  elect  to pay all or part of the  option
exercise  price by having  the  Company  withhold  from the shares of Stock that
would  otherwise be issued upon exercise that number of shares of Stock having a
Fair Market Value equal to the aggregate  option  exercise  price for the shares
with respect to which such  election is made. No shares of Stock shall be issued
until full payment  therefor has been made. An optionee shall generally have the
rights to  dividends  and other rights of a  shareholder  with respect to shares
subject to the option when the  optionee has given  written  notice of exercise,
has  paid  in  full  for  such  shares,   and,  if  requested,   has  given  the
representation described in paragraph (a) of Section 12.

     (e)  Non-transferability  of Options. No Stock Option shall be transferable
by  the  optionee  otherwise  than  by  will  or by  the  laws  of  descent  and
distribution, and all Stock Options shall be exercisable,  during the optionee's
lifetime, only by the optionee.

     (f)  Termination by Death.  If an optionee's  employment by the Company and
any  Subsidiary  or Parent  Corporation  terminates  by  reason  of  death,  any
Incentive  Stock Option may thereafter be immediately  exercised,  to the extent
then exercisable, by the legal representative of the estate or by the legatee of
the optionee under the will of the optionee,  for a period of twelve months from
the date of such death or until the expiration of the stated term of the option,
whichever period is shorter. In the event of termination of employment by reason
of death,  if any Stock Option is exercised after the expiration of the exercise
periods  that apply for  purposes  of Section  422 of the Code,  the option will
thereafter be treated as a Non-Qualified Stock Option.

                                       6
(g) Termination by Reason of Disability. If an optionee's employment by the
Company  and any  Subsidiary  or  Parent  Corporation  terminates  by  reason of
Disability,  any Incentive  Stock Option held by such optionee may thereafter be
exercised,  to the extent it was  exercisable at the time of termination  due to
Disability,  but may not be exercised  after twelve months from the date of such
termination  of employment  or the  expiration of the stated term of the option,
whichever  period is the shorter.  In the event of  termination of employment by
reason of Disability,  if any Stock Option is exercised  after the expiration of
the exercise  periods  that apply for  purposes of Section 422 of the Code,  the
option will thereafter be treated as a Non-Qualified Stock Option.

     (h) Termination by Reason of Retirement. If an optionee's employment by the
Company  and any  Subsidiary  or  Parent  Corporation  terminates  by  reason of
Retirement  and the terms of the Stock Option so provide,  any  Incentive  Stock
Option held by such  optionee may  thereafter  be exercised to the extent it was
exercisable  at the  time of such  Retirement,  but may not be  exercised  after
twelve months from the date of such  termination of employment or the expiration
of the stated term of the option,  whichever period is the shorter. In the event
of  termination  of employment by reason of  Retirement,  if any Stock Option is
exercised  after the expiration of the exercise  periods that apply for purposes
of  Section  422 of the  Code,  the  option  will  thereafter  be  treated  as a
Non-Qualified Stock Option.

     (i) Other Termination. If an optionee's continuous status as an employee or
Consultant  terminates  (other than upon the  optionee's  death ,  Disability or
Retirement),  any Incentive Stock Option held by such optionee may thereafter be
exercised to the extent it was exercisable at the time of such termination,  but
may not be exercised after 90 days after such termination,  or the expiration of
the stated term of the option,  whichever period is the shorter. In the event of
termination  of employment by reason other than death,  Disability or Retirement
and if pursuant to its terms any Stock Option is exercised  after the expiration
of the exercise  periods that apply for purposes of Section 422 of the Code, the
option will thereafter be treated as a Non-Qualified  Stock Option. In the event
an  Optionee's  employment  with  the  Company  is  terminated  for  Cause,  all
unexercised Options granted to such Optionee shall immediately terminate.

     (j) Annual Limit on Incentive  Stock  Options.  The  aggregate  Fair Market
Value  (determined  as of the time the Stock  Option is  granted)  of the Common
Stock with  respect to which an  Incentive  Stock  Option under this Plan or any
other  plan  of  the  Company  and  any  Subsidiary  or  Parent  Corporation  is
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000.

     (k) Directors Who Are Not Employees. Each person who (i) is not an employee
of the Company,  any Parent Corporation or any Subsidiary and (ii) is elected or
re-elected as a Director by the Board or the shareholders subsequent to April 1,
1999, shall automatically be granted an Option to purchase 2,000 shares of Stock
as of the date of such  election or  re-election,  at an option  price per share
equal to 100% of the Fair  Market  Value of a share of Stock on the date of such
election or re-election.  The Board in appropriate  circumstances may adjust the
Option to be granted under this Section 5(k) to any such person who has received
a stock option from the Company in the three preceding  years.  All such Options
shall be designated as  Non-Qualified  Stock Options and shall be subject to the
same terms and  provisions  as are then in effect  with  respect to the grant of
Non-Qualified Stock Options to officers and key employees of the Company, except
that (1) the term of each such  Option  shall be equal to ten years,  which term
shall not expire  upon the  termination  of  service  as a Director  and (2) the
Option shall  become  exercisable  as to one-third of the shares  subject to the
Option beginning one year after the date the Option is granted, the second third
beginning  two years  after the date the  Option is  granted  and the last third
beginning three years after the date the Option is granted.  Upon termination of
such Director's service as a Director of the Company, the unvested portion of an

                                       7
Option held by such Director shall not be exercisable. Subject to the foregoing,
all provisions of this Plan not  inconsistent  with the foregoing shall apply to
Options granted pursuant to this Section 5(k).

SECTION 6.  Stock Appreciation Rights.

     (a) Grant  and  Exercise.  Stock  Appreciation  Rights  may be  granted  in
conjunction  with all or part of any Stock Option granted under the Plan. In the
case of a  Non-Qualified  Stock Option,  such rights may be granted either at or
after the time of the grant of such Option.  In the case of an  Incentive  Stock
Option, such rights may be granted only at the time of the grant of the option.

     A Stock  Appreciation  Right or  applicable  portion  thereof  granted with
respect to a given Stock Option  shall  terminate  and no longer be  exercisable
upon the  termination  or exercise of the related  Stock  Option,  except that a
Stock  Appreciation  Right  granted with respect to less than the full number of
shares covered by a related Stock Option shall not be reduced until the exercise
or  termination  of the related  Stock  Option  exceeds the number of shares not
covered by the Stock Appreciation Right.

     A Stock Appreciation  Right may be exercised by an optionee,  in accordance
with paragraph (b) of this Section 6, by surrendering the applicable  portion of
the related Stock Option.  Upon such exercise and surrender,  the optionee shall
be  entitled  to  receive  an amount  determined  in the  manner  prescribed  in
paragraph (b) of this Section 6. Stock  Options which have been so  surrendered,
in whole or in part,  shall no longer be  exercisable  to the extent the related
Stock Appreciation Rights have been exercised.

     (b) Terms and  Conditions.  Stock  Appreciation  Rights shall be subject to
such terms and conditions,  not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

              (i) Stock  Appreciation  Rights shall be exercisable  only at such
     time or times and to the extent that the Stock Options to which they relate
     shall be  exercisable  in accordance  with the  provisions of Section 5 and
     this Section 6 of the Plan.

              (ii) Upon the exercise of a Stock Appreciation  Right, an optionee
     shall be entitled to receive up to, but not more than, an amount in cash or
     shares of Stock  equal in value to the excess of the Fair  Market  Value of
     one share of Stock over the option price per share specified in the related
     option  multiplied  by the  number of shares in  respect of which the Stock
     Appreciation Right shall have been exercised, with the Committee having the
     right to determine the form of payment.

              (iii) Stock  Appreciation  Rights shall be transferable  only when
     and to the extent that the  underlying  Stock Option would be  transferable
     under Section 5 of the Plan.

              (iv) Upon the exercise of a Stock  Appreciation  Right,  the Stock
     Option or part  thereof to which such Stock  Appreciation  Right is related
     shall be deemed to have been  exercised  for the purpose of the  limitation
     set forth in Sections 3 and 4 of the Plan on the total  number of shares of
     Stock to be issued  under the Plan and the  maximum  number of shares to be
     awarded to any one person in a fiscal  year,  but only to the extent of the
     number of shares issued or issuable under the Stock  Appreciation  Right at
     the time of exercise based on the value of the Stock  Appreciation Right at
     such time.

                                       8
(v) A Stock  Appreciation  Right  granted  in  connection  with an
     Incentive  Stock Option may be exercised  only if and when the market price
     of the Stock  subject to the  Incentive  Stock Option  exceeds the exercise
     price of such Option.

SECTION 7.  Restricted Stock.

     (a)  Administration.  Shares of Restricted Stock may be issued either alone
or in addition to other  awards  granted  under the Plan.  The  Committee  shall
determine  the  officers,  key  employees  and  Consultants  of the  Company and
Subsidiaries to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the time or times within which
such  awards may be  subject  to  forfeiture,  and all other  conditions  of the
awards.  The Committee may also condition the grant of Restricted Stock upon the
attainment of specified  performance  goals.  The provisions of Restricted Stock
awards need not be the same with respect to each recipient.

     (b) Awards  and  Certificates.  The  prospective  recipient  of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such  recipient has executed an agreement  evidencing the award
and  has  delivered  a fully  executed  copy  thereof  to the  Company,  and has
otherwise complied with the then applicable terms and conditions.

              (i) Each  participant  shall  be  issued  a stock  certificate  in
     respect  of shares  of  Restricted  Stock  awarded  under  the  Plan.  Such
     certificate  shall be registered in the name of the participant,  and shall
     bear  an  appropriate  legend  referring  to  the  terms,  conditions,  and
     restrictions applicable to such award, substantially in the following form:

              "The  transferability  of this certificate and the shares of stock
              represented  hereby  are  subject  to  the  terms  and  conditions
              (including  forfeiture) of the Hector  Communications  Corporation
              Stock Plan and an Agreement  entered  into between the  registered
              owner and Hector Communications  Corporation.  Copies of such Plan
              and Agreement are on file in the offices of Hector  Communications
              Corporation."

              (ii) The  Committee  shall  require  that the  stock  certificates
     evidencing  such  shares  be held  in  custody  by the  Company  until  the
     restrictions  thereon  shall have lapsed,  and that,  as a condition of any
     Restricted Stock award, the participant shall have delivered a stock power,
     endorsed in blank, relating to the Stock covered by such award.

     (c)  Restrictions  and Conditions.  The shares of Restricted  Stock awarded
pursuant  to the  Plan  shall  be  subject  to the  following  restrictions  and
conditions:

              (i)  Subject  to  the  provisions  of  this  Plan  and  the  award
     agreement, during a period set by the Committee commencing with the date of
     such  award  (the  "Restriction  Period"),  the  participant  shall  not be
     permitted to sell,  transfer,  pledge or assign shares of Restricted  Stock
     awarded under the Plan. Within these limits,  the Committee may provide for
     the lapse of such restrictions in installments where deemed appropriate.

              (ii) Except as provided in paragraph (c)(i) of this Section 7, the
     participant shall have, with respect to the shares of Restricted Stock, all
     of the rights of a shareholder of the Company,  including the right to vote
     the shares and the right to receive any cash dividends.  The Committee,  in

                                       9
its sole discretion, may permit or require the payment of cash dividends to
     be deferred and, if the Committee so  determines,  reinvested in additional
     shares of  Restricted  Stock (to the  extent  shares  are  available  under
     Section 3 and subject to  paragraph  (f) of Section 12).  Certificates  for
     shares of  unrestricted  Stock shall be delivered  to the grantee  promptly
     after,  and only after, the period of forfeiture shall have expired without
     forfeiture in respect of such shares of Restricted Stock.

              (iii)  Subject  to the  provisions  of  the  award  agreement  and
     paragraph (c)(iv) of this Section 7, upon termination of employment for any
     reason  during  the  Restriction   Period,  all  shares  still  subject  to
     restriction shall be forfeited by the participant.

              (iv)  In  the  event  of  special  hardship   circumstances  of  a
     participant   whose  employment  is  terminated  (other  than  for  Cause),
     including  death,  Disability  or  Retirement,   or  in  the  event  of  an
     unforeseeable  emergency of a participant  still in service,  the Committee
     may, in its sole  discretion,  when it finds that a waiver  would be in the
     best  interest  of the  Company,  waive  in  whole  or in  part  any or all
     remaining  restrictions  with  respect  to  such  participant's  shares  of
     Restricted Stock.

              (v) Notwithstanding  the foregoing,  all restrictions with respect
     to any  participant's  shares of Restricted  Stock shall lapse, on the date
     determined by the Committee, prior to, but in no event more than sixty (60)
     days  prior  to,  the  occurrence  of  any  of the  following  events:  (i)
     dissolution or liquidation of the Company, other than in conjunction with a
     bankruptcy  of the  Company or any  similar  occurrence,  (ii) any  merger,
     consolidation,   acquisition,   separation,   reorganization,   or  similar
     occurrence, where the Company will not be the surviving entity or (iii) the
     transfer of  substantially  all of the assets of the Company or 75% or more
     of the outstanding Stock of the Company.

     SECTION 8.  Deferred Stock Awards.

     (a)  Administration.  Deferred  Stock  may be  awarded  either  alone or in
addition to other awards granted under the Plan. The Committee  shall  determine
the officers,  key employees and Consultants of the Company and  Subsidiaries to
whom and the time or times at which Deferred Stock shall be awarded,  the number
of  Shares  of  Deferred  Stock to be  awarded  to any  participant  or group of
participants,  the duration of the period (the "Deferral  Period") during which,
and the conditions under which,  receipt of the Stock will be deferred,  and the
terms and  conditions  of the award in addition to those  contained in paragraph
(b) of this Section 8. The  Committee  may also  condition the grant of Deferred
Stock upon the  attainment of specified  performance  goals.  The  provisions of
Deferred Stock awards need not be the same with respect to each recipient.

     (b)      Terms and Conditions.

              (i)  Subject  to  the  provisions  of  this  Plan  and  the  award
     agreement,  Deferred Stock awards may not be sold,  assigned,  transferred,
     pledged  or  otherwise  encumbered  during  the  Deferral  Period.  At  the
     expiration  of the Deferral  Period (or  Elective  Deferral  Period,  where
     applicable),  share certificates shall be delivered to the participant,  or
     his legal  representative,  in a number equal to the shares  covered by the
     Deferred Stock award.

              (ii) Amounts equal to any dividends  declared  during the Deferral
     Period  with  respect to the number of shares  covered by a Deferred  Stock
     award will be paid to the  participant  currently or deferred and deemed to

                                       10
be reinvested in additional Deferred Stock or otherwise reinvested,  all as
     determined  at  the  time  of  the  award  by the  Committee,  in its  sole
     discretion.

              (iii)  Subject  to the  provisions  of  the  award  agreement  and
     paragraph (b)(iv) of this Section 8, upon termination of employment for any
     reason during the Deferral Period for a given award,  the Deferred Stock in
     question shall be forfeited by the participant.

              (iv)  In  the  event  of  special  hardship   circumstances  of  a
     participant whose employment is terminated (other than for Cause) including
     death,  Disability  or  Retirement,  or in the  event  of an  unforeseeable
     emergency of a participant still in service, the Committee may, in its sole
     discretion,  when it finds that a waiver  would be in the best  interest of
     the Company, waive in whole or in part any or all of the remaining deferral
     limitations   imposed   hereunder  with  respect  to  any  or  all  of  the
     participant's Deferred Stock.

              (v) A participant  may elect to further defer receipt of the award
     for a specified  period or until a specified event (the "Elective  Deferral
     Period"),  subject  in each case to the  Committee's  approval  and to such
     terms as are  determined  by the  Committee,  all in its  sole  discretion.
     Subject to any  exceptions  adopted by the  Committee,  such  election must
     generally be made prior to  completion  of one half of the Deferral  Period
     for a Deferred Stock award (or for an installment of such an award).

              (vi) Each award  shall be  confirmed  by, and subject to the terms
     of, a Deferred Stock agreement executed by the Company and the participant.

     SECTION 9.  Transfer, Leave of Absence, etc.

     For  purposes  of the  Plan,  the  following  events  shall not be deemed a
termination of employment:

     (a) a transfer of an employee from the Company to a Parent  Corporation  or
Subsidiary,  or from a Parent Corporation or Subsidiary to the Company,  or from
one Subsidiary to another;

     (b) a leave of absence,  approved in writing by the Committee, for military
service or  sickness,  or for any other  purpose  approved by the Company if the
period of such leave does not exceed  ninety (90) days (or such longer period as
the Committee may approve, in its sole discretion); and

     (c) a leave of absence in excess of ninety  (90) days,  approved in writing
by the Committee, but only if the employee's right to reemployment is guaranteed
either by a statute or by contract,  and provided that, in the case of any leave
of absence,  the  employee  returns to work within 30 days after the end of such
leave.

     SECTION 10.  Amendments and Termination.

     The Board may amend,  alter,  or  discontinue  the Plan,  but no amendment,
alteration,  or discontinuation  shall be made (i) which would impair the rights
of an optionee or participant  under a Stock Option,  Restricted  Stock or other
Stock-based award theretofore  granted,  without the optionee's or participant's
consent,  or (ii) which without the approval of the  stockholders of the Company
would cause the Plan to no longer  comply  with Rule 16b-3 under the  Securities
Exchange  Act of  1934,  Section  422  of  the  Code  or  any  other  regulatory
requirements.

                                       11
The  Committee  may amend  the  terms of any  award or  option  theretofore
granted,  prospectively  or  retroactively  to  the  extent  such  amendment  is
consistent  with the terms of this Plan, but no such amendment  shall impair the
rights of any holder without his or her consent except to the extent  authorized
under the  Plan.  The  Committee  may also  substitute  new  Stock  Options  for
previously granted options,  including  previously granted options having higher
option prices.

SECTION 11.  Unfunded Status of Plan.

     The Plan is intended to  constitute  an  "unfunded"  plan for incentive and
deferred  compensation.  With  respect  to  any  payments  not  yet  made  to  a
participant or optionee by the Company,  nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other  arrangements to meet the obligations  created under
the Plan to  deliver  Stock or  payments  in lieu of or with  respect  to awards
hereunder,  provided,  however,  that  the  existence  of such  trusts  or other
arrangements is consistent with the unfunded status of the Plan.

SECTION 12.  General Provisions.

     (a) The Committee may require each person  purchasing  shares pursuant to a
Stock  Option  under the Plan to  represent  to and agree  with the  Company  in
writing that the optionee is acquiring the shares without a view to distribution
thereof.  The  certificates  for such shares may  include  any legend  which the
Committee deems appropriate to reflect any restrictions on transfer.

     All  certificates  for shares of Stock delivered under the Plan pursuant to
any  Restricted  Stock,  Deferred  Stock or other  Stock-based  awards  shall be
subject to such  stock-transfer  orders and other  restrictions as the Committee
may deem advisable under the rules,  regulations,  and other requirements of the
Securities and Exchange  Commission,  any stock exchange upon which the Stock is
then  listed,  and any  applicable  Federal or state  securities  laws,  and the
Committee  may cause a legend or legends to be put on any such  certificates  to
make appropriate reference to such restrictions.

     (b)  Subject  to  paragraph  (d) below,  recipients  of  Restricted  Stock,
Deferred  Stock and other  Stock-based  awards  under the Plan (other than Stock
Options)  are not  required to make any payment or provide  consideration  other
than the rendering of services.

     (c) Nothing  contained  in this Plan shall  prevent the Board of  Directors
from  adopting  other  or  additional  compensation  arrangements,   subject  to
stockholder approval if such approval is required;  and such arrangements may be
either  generally  applicable or applicable only in specific cases. The adoption
of the Plan shall not confer upon any employee of the Company or any  Subsidiary
any right to continued employment with the Company or a Subsidiary,  as the case
may be,  nor shall it  interfere  in any way with the right of the  Company or a
Subsidiary to terminate the employment of any of its employees at any time.

     (d) Each participant  shall, no later than the date as of which any part of
the value of an award first  becomes  includible  as  compensation  in the gross
income of the participant  for Federal income tax purposes,  pay to the Company,
or make  arrangements  satisfactory to the Committee  regarding  payment of, any
Federal,  state,  or local taxes of any kind required by law to be withheld with
respect to the award.  The  obligations  of the Company  under the Plan shall be
conditional  on such payment or  arrangements  and the Company and  Subsidiaries
shall,  to the extent  permitted by law, have the right to deduct any such taxes

                                       12
from any payment of any kind otherwise due to the  participant.  With respect to
any award under the Plan,  if the terms of such award so permit,  a  participant
may  elect by  written  notice  to the  Company  to  satisfy  part or all of the
withholding  tax  requirements  associated with the award by (i) authorizing the
Company to retain  from the number of shares of Stock  that would  otherwise  be
deliverable to the participant, or (ii) delivering to the Company from shares of
Stock  already  owned by the  participant,  that  number  of  shares  having  an
aggregate  Fair  Market  Value  equal to part or all of the tax  payable  by the
participant  under this Section 12(d).  Any such election shall be in accordance
with,  and subject to,  applicable  tax and  securities  laws,  regulations  and
rulings.

     (e) At the time of grant,  the Committee may provide in connection with any
grant made under this Plan that the shares of Stock received as a result of such
grant shall be subject to a repurchase  right in favor of the Company,  pursuant
to which  the  participant  shall be  required  to  offer  to the  Company  upon
termination  of  employment  for any  reason  any  shares  that the  participant
acquired under the Plan,  with the price being the then Fair Market Value of the
Stock or, in the case of a  termination  for Cause,  an amount equal to the cash
consideration paid for the Stock,  subject to such other terms and conditions as
the Committee may specify at the time of grant.  The Committee  may, at the time
of the grant of an award under the Plan,  provide the Company  with the right to
repurchase,  or require the forfeiture of, shares of Stock acquired  pursuant to
the Plan by any participant who, at any time within two years after  termination
of  employment  with the Company,  directly or indirectly  competes  with, or is
employed by a competitor of, the Company.

     (f) The  reinvestment  of dividends in additional  Restricted  Stock (or in
Deferred  Stock  or  other  types of Plan  awards)  at the time of any  dividend
payment shall only be  permissible  if the  Committee  (or the  Company's  chief
financial  officer)  certifies in writing that under Section 3 sufficient shares
are available for such reinvestment  (taking into account then outstanding Stock
Options and other Plan awards).

     (g) The Plan is expressly made subject to the approval by  shareholders  of
the Company. If the Plan is not so approved by the shareholders on or before one
year after this Plan's  adoption by the Board of Directors,  this Plan shall not
come into effect.  The offering of the shares hereunder shall be also subject to
the effecting by the Company of any  registration or qualification of the shares
under any  federal or state law or the  obtaining  of the consent or approval of
any governmental  regulatory body which the Company shall determine, in its sole
discretion,  is necessary or desirable as a condition to or in connection  with,
the offering or the issue or purchase of the shares covered thereby. The Company
shall make every reasonable  effort to effect such registration or qualification
or to obtain such consent or approval.

                                       13
Exhibit 5.1

                                December 1, 1999

Hector Communications Corporation
211 South Main Street
Hector, Minnesota  55342

     Re:    Opinion of Counsel as to Legality of 300,000 Shares of Common Stock
            to be registered under the Securities Act of 1933

Ladies and Gentlemen:

     This opinion is furnished in  connection  with the  registration  under the
Securities Act of 1933 on Form S-8 of 300,000  shares of Common Stock,  $.01 par
value, of Hector Communications Corporation (the "Company") offered to employees
of the Company pursuant to the Hector Communications Corporation 1999 Stock Plan
(the "Plan").

     As general  counsel for the Company,  we advise you that it is our opinion,
based  on  our  familiarity  with  the  affairs  of the  Company  and  upon  our
examination of pertinent  documents,  that the 300,000 shares of Common Stock to
be issued by the Company  under the Plan,  will,  when paid for and  issued,  be
validly issued and lawfully outstanding,  fully paid and nonassessable shares of
Common Stock of the Company.

     The  undersigned  hereby  consent  to the filing of this  opinion  with the
Securities and Exchange  Commission as an Exhibit to the Registration  Statement
with respect to said shares of Common Stock under the Securities Act of 1933.

                                                 Very truly yours,

                                                 LINDQUIST & VENNUM P.L.L.P.

                                                 /s/ Lindquist & Vennum P.L.L.P.
Exhibit 23.2

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this  Registration  Statement of
Hector  Communications  Corporation  on Form S-8  relating  to the  increase  in
authorized  shares of common stock under the Hector  Communications  Corporation
1999 Stock Plan of our report  dated  February  17,  1999 on the 1998  financial
statements, appearing in the Annual Report on Form 10-K of Hector Communications
Corporation  for the year ended  December  31, 1998 and to the  reference  to us
under  the  heading  "Experts"  in  the  Prospectus,   which  is  part  of  this
Registration Statement.

 OLSEN THIELEN & CO., LTD.

/s/ Olsen Thielen & Co., Ltd.
December 1, 1999
St. Paul, Minnesota