<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
United States Satellite Broadcasting Company, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
UNITED STATES SATELLITE BROADCASTING COMPANY, INC.
3415 UNIVERSITY AVENUE
ST. PAUL, MINNESOTA 55114
------------------------
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 17, 1997
------------------------
To the Shareholders:
The 1997 Annual Meeting of Shareholders of United States Satellite
Broadcasting Company, Inc., a Minnesota corporation (the "Company"), will be
held at The Historic State Theatre, 805 Hennepin Avenue, Minneapolis, Minnesota
55402 on November 17, 1997 at 10:00 a.m., Minneapolis time, to consider and act
upon the following matters:
1. To elect twelve Directors, including three directors to be elected by
the holders of Class A Common Stock, voting separately as a class, for
the ensuing year or until their successors are elected and qualified;
2. To ratify the selection by the Board of Directors of Arthur Andersen LLP
as the Company's independent auditors for its current fiscal period
ending December 31, 1997 and its 1998 fiscal year; and
3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Shareholders of record at the close of business on September 30, 1997 are
entitled to notice of, and to vote at, the Annual Meeting. For a period of ten
days prior to the Annual Meeting, a complete list of the shareholders entitled
to vote at the Annual Meeting will be available at the offices of the Company
for inspection by any shareholder of record for any purpose germane to the
Annual Meeting.
By order of the Board of Directors
/s/ Gerald D. Deeney
Gerald D. Deeney
SECRETARY
St. Paul, Minnesota
October 9, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD(S) AND PROMPTLY MAIL THE PROXY CARD(S) IN
THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE
ANNUAL MEETING. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED WITHIN
THE UNITED STATES.
<PAGE>
UNITED STATES SATELLITE BROADCASTING COMPANY, INC.
------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 17, 1997
---------------------
INTRODUCTION
Your Proxy is solicited by the Board of Directors of United States Satellite
Broadcasting Company, Inc. (the "Company") for use at the Annual Meeting of
Shareholders to be held on November 17, 1997, at 10:00 a.m., Minneapolis time,
at The Historic State Theatre, 805 Hennepin Avenue, Minneapolis, Minnesota
55402, and at any adjournment thereof, for the purposes set forth in the
attached Notice of Annual Meeting.
The cost of soliciting Proxies, including preparing, assembling and mailing
the Proxies and soliciting material, will be borne by the Company. Directors,
officers and employees of the Company may, without compensation other than their
regular compensation, solicit Proxies personally or by telephone. Brokers,
custodians, and fiduciaries will be requested to forward proxy soliciting
material to the owners of shares held in their names, and the Company will
reimburse them for their reasonable out-of-pocket expenses incurred in
connection with the distribution of such proxy materials.
Any shareholder giving a Proxy may revoke it at any time prior to its use at
the Annual Meeting by giving written notice of such revocation to the Secretary
of the Company. Such Proxies, if received in time for voting and not revoked,
will be voted at the Annual Meeting in accordance with the specification
indicated thereon. In the absence of such specification, the Proxies will be
voted in favor of the proposals set forth in the Notice of Annual Meeting and in
favor of the slate of directors proposed by the Board of Directors and listed
herein.
The mailing address of the Company's principal executive office is 3415
University Avenue, St. Paul, Minnesota 55114. The Company expects that this
Proxy Statement and the related Proxy and Notice of Annual Meeting will first be
mailed to Shareholders on or about October 9, 1997.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed September 30, 1997 as the
record date for determining shareholders entitled to vote at the Annual Meeting.
Persons who were not shareholders on such date will not be allowed to vote at
the Annual Meeting. At the close of business on September 30, 1997, 15,774,826
shares of the Company's Class A Common Stock were issued and outstanding and
74,035,949 shares of the Company's Common Stock were issued and outstanding.
Each share of Class A Common Stock is entitled to one vote on each matter with
respect to which the Class A Common Stock has the right to vote at the Annual
Meeting and each share of Common Stock is entitled to ten votes on each matter
with respect to which the Common Stock has the right to vote at the Annual
Meeting. The Class A Common Stock and the Common Stock vote together, as a
single class, on all matters submitted to a vote of the shareholders, except
with respect to the election of directors. The Company's Articles of
Incorporation provide that the holders of the Class A Common Stock, voting as a
class, are entitled to elect that number of directors which is not less than
twenty percent of the total number of directors (with all fractions rounded up
to the next whole number). As the Board of Directors has proposed a slate of 12
nominees, the holders of the Class A Common Stock are entitled to elect three
directors (the "Class A Directors"). The remaining nine directors are elected by
the holders of the Class A Common Stock and the Common Stock, voting as a single
class. See "Election of Directors" at page 5. There are no classes of
1
<PAGE>
stock of the Company outstanding other than the Common Stock and the Class A
Common Stock. Holders of the Class A Common Stock and holders of the Common
Stock are not entitled to cumulative voting rights in the election of directors.
The affirmative vote of a majority of the voting power represented by the
shares of Class A Common Stock and Common Stock present, in person or by proxy,
and entitled to vote at the Annual Meeting, is required to approve the matters
mentioned in the foregoing Notice of Annual Meeting, except with respect to the
election of directors. The affirmative vote of a majority of the shares of Class
A Common Stock present, in person or by proxy, and entitled to vote at the
Annual Meeting, is required to approve the election of the three Class A
directors. The affirmative vote of a majority of the voting power represented by
the shares of Class A Common Stock and Common Stock present, in person or by
proxy, and entitled to vote at the Annual Meeting, is required to approve the
election of all other directors. Proxies indicating abstention from a vote and
broker non-votes will be counted toward determining whether a quorum is present
at the Annual Meeting; however, abstentions and broker non-votes will not be
counted toward determining if a majority of the shares of Class A Common Stock
and/or Common Stock present has voted affirmatively. Broker non-votes are
proxies with respect to shares held in record name by brokers or nominees, as to
which (i) instructions have not been received from the beneficial owners or
persons entitled to vote, (ii) the broker or nominee does not have discretionary
voting power under applicable national securities exchange rules or the
instrument under which it serves in such capacity, and (iii) the record holder
has indicated on the proxy card or otherwise notified the Company that it does
not have authority to vote such shares on that matter.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information known to the Company with
respect to beneficial ownership of Class A Common Stock and Common Stock by (i)
each shareholder known by the Company to be the beneficial owner of more than 5
percent of either class, (ii) each nominee for director, (iii) each executive
officer, and (iv) all executive officers and directors of the Company as a
group. Such information is presented as of September 30, 1997.
SHARES OF CLASS A COMMON STOCK AND COMMON STOCK
BENEFICIALLY OWNED(1)
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS PERCENT OF PERCENT OF TOTAL VOTING
OF BENEFICIAL OWNER(2) NUMBER CLASS A COMMON STOCK POWER
- ------------------------------------------------- --------------------------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Hubbard Broadcasting, Inc. ("HBI") .............. 11,790 (Class A) * 62.8 61.5
3415 University Avenue 46,522,825
St. Paul, Minnesota 55114 (Common Stock)(3)
Stanley S. Hubbard............................... 7,740 (Class A) * 62.8 61.5
46,522,825 (Common Stock)(4)
Stanley E. Hubbard............................... 7,740 (Class A) * 62.2 60.9
46,051,225 (Common Stock)(5)
Robert W. Hubbard................................ 7,740 (Class A) * 62.2 60.9
46,051,225 (Common Stock)(5)
Nationwide Mutual Insurance Company ............. 5,065,500 -- 6.8 6.7
One Nationwide Plaza (Common Stock)
Columbus, Ohio 43216
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS PERCENT OF PERCENT OF TOTAL VOTING
OF BENEFICIAL OWNER(2) NUMBER CLASS A COMMON STOCK POWER
- ------------------------------------------------- --------------------------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Quantum Industrial Partners, L.D.C. ............. 4,941,150 -- 6.7 6.5
Kaya Flamboyan 9 (Common Stock)
Willemstad, Curacao
Netherlands Antilles
Peter G. Skinner ................................ 2,000 (Class A) -- 5.9 5.8
200 Liberty Street 4,411,800 (Common Stock)(6)
New York, New York 10281
Dow Jones & Company ............................. 1,000 (Class A)(7) -- 5.9 5.8
200 Liberty Street 4,411,800 (Common Stock)
New York, New York 10281
Pittway Corporation ............................. 4,167,375 -- 5.6 5.5
200 South Wacker Drive (Common Stock)
Chicago, Illinois 60606
Vulcan Ventures, Inc. ........................... 3,529,425 -- 4.8 4.7
110 110th Avenue Northeast (Common Stock)
Bellevue, Washington 98004
William D. Savoy ................................ 1,000 (Class A)(7) * 4.8 4.7
110 110th Avenue Northwest 3,529,425 (Common Stock)(8)
Bellevue, Washington 98004
John W. Marvin................................... 13,000 (Class A)(9) * 1.8 1.7
1,323,525 (Common Stock)(10)
Frank N. Magid................................... 661,225 (Class A)(11) 4.2 -- *
David S. Allen................................... 1,000 (Class A)(7) * * *
286,650 (Common Stock)
Kenneth G. Langone............................... 1,000 (Class A)(7) * * *
167,549 (Common Stock)(12)
Gerald D. Deeney................................. 3,000 (Class A) * * *
122,550 (Common Stock)
Ward L. Quaal.................................... 1,000 (Class A)(7) * * *
94,350 (Common Stock)
Herbert S. Schlosser............................. 1,000 (Class A)(7) * * *
83,775 (Common Stock)
Raymond A. Conover............................... 25,000 (Class A)(13) * * *
75,000 (Common Stock)
Mary Pat Ryan.................................... 75,000 (Class A)(14) * -- *
Robert D. Pacek.................................. 24,200 (Class A)(15) * -- *
Bernard J. Weiss................................. 20,500 (Class A)(16) * -- *
Joseph G. Ducey.................................. 20,090 (Class A)(17) * -- *
Carl S. Wegener.................................. 20,000 (Class A)(18) * -- *
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS PERCENT OF PERCENT OF TOTAL VOTING
OF BENEFICIAL OWNER(2) NUMBER CLASS A COMMON STOCK POWER
- ------------------------------------------------- --------------------------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Peter F. Frenzer................................. 3,000 (Class A)(19) * -- *
Louis G. Zachary, Jr............................. 1,000 (Class A)(7) * -- *
All directors and executive officers as a group
(20 persons)(20)................................. 884,805 (Class A) 5.5 76.5 75.0
56,617,449 (Common Stock)
</TABLE>
- ------------------------
* Less than one percent
(1) Each share of Common Stock is convertible into one share of Class A Common
Stock at the option of
the holder.
(2) Unless otherwise noted, the address is 3415 University Avenue, St. Paul,
Minnesota 55114.
(3) Includes (i) 2,025 shares of Class A Common Stock held by each of Stanley
S. Hubbard, Stanley E. Hubbard and Robert W. Hubbard and (ii) 471,600
shares of Common Stock held in trust for certain employees of HBI, for
which Stanley S. Hubbard acts as trustee.
(4) Includes (i) 46,051,225 shares of Common Stock held by HBI, (ii) 471,600
shares of Common Stock held in trust for certain employees of HBI, for
which Stanley S. Hubbard acts as trustee, and (iii) 5,715 shares of Class
A Common Stock held by HBI.
(5) Includes 46,051,225 shares of Common Stock held by HBI and 5,715 shares of
Class A Common Stock held by HBI.
(6) Includes options to purchase 1,000 shares of Class A Common Stock granted
to Dow Jones & Company, all of which are currently exercisable, and
4,411,800 of shares of Common Stock held by Dow Jones & Company, of which
Mr. Skinner is General Counsel, Secretary, Senior Vice President and
President of Television Operations.
(7) Consists of options to purchase shares of Class A Common Stock, all of
which are currently exercisable.
(8) Consists of shares held by Vulcan Ventures, Inc., of which Mr. Savoy is
Vice President.
(9) Includes options to purchase 1,000 shares of Class A Common Stock, all of
which are currently exercisable.
(10) Consists of 1,323,525 shares of Common Stock held by Marvin Lumber and
Cedar Company, of which Mr. Marvin is Chief Operating Officer.
(11) Includes options to purchase 1,000 shares of Class A Common Stock, all of
which are currently exercisable.
(12) Consists of shares held by Invemed Associates, Inc. of which Mr. Langone
is Chairman of the Board, Chief Executive Officer and President as well as
the majority owner.
(13) Includes options to purchase 20,000 shares of Class A Common Stock, 4,000
of which are currently exercisable.
(14) Consists of options to purchase 75,000 shares of Class A Common Stock,
15,000 of which are currently exercisable.
(15) Includes options to purchase 21,200 shares of Class A Common Stock, 4,240
of which are currently exercisable.
4
<PAGE>
(16) Includes options to purchase 20,000 shares of Class A Common Stock, 4,000
of which are currently exercisable.
(17) Includes options to purchase 20,000 shares of Class A Common Stock, 4,000
of which are currently exercisable.
(18) Consists of options to purchase 20,000 shares of Class A Common Stock,
4,000 of which are currently exercisable.
(19) Includes options to purchase 1,000 shares of Class A Common Stock, all of
which are currently exercisable.
(20) Footnote (3) and Footnotes (6)-(19), inclusive, are incorporated herein by
reference.
ELECTION OF DIRECTORS
In the election of directors, (a) each Proxy submitted by a holder of Class
A Common Stock will be voted for (i) each of the nominees listed below under the
heading "Class A Directors" and (ii) each of the nominees listed under the
heading "Other Directors" and (b) each Proxy submitted by a holder of Common
Stock will be voted for each of the nominees listed under the heading "Other
Directors," in each case unless the Proxy withholds a vote for one or more of
such nominees. Each person elected as a director shall serve for a term which
expires as of the next Annual Meeting or until his successor is duly elected and
qualified. The twelve nominees listed below are members of the present Board of
Directors. While the Company's By-laws authorize a Board of Directors consisting
of fourteen members, nominees are not being submitted for two positions. The
Board of Directors may appoint directors to fill these vacancies prior to the
next Annual Meeting of Shareholders. The nominees for Class A Directors include
William D. Savoy, who was previously elected by the holders of the Class A
Common Stock and the Common Stock. Kenneth G. Langone, an incumbent Class A
Director, is not standing for reelection. If any of the nominees should be
unable to serve as a director by reason of death, incapacity or other unexpected
occurrence, the Proxies solicited by the Board of Directors shall be voted by
the proxy representative for such substitute nominee as is selected by the Board
or, in the absence of such selection, for such fewer number of directors as
results from such death, incapacity or other unexpected occurrence.
The following table provides certain information with respect to the
nominees for director.
<TABLE>
<CAPTION>
NOMINEE AGE POSITION WITH THE COMPANY
- ------------------------- --- -----------------------------------------------
<S> <C> <C>
CLASS A DIRECTORS
- -------------------------
Peter F. Frenzer......... 63 Director
William D. Savoy......... 33 Director
Louis G. Zachary, Jr..... 38 Director
OTHER DIRECTORS
- -------------------------
Stanley S. Hubbard....... 64 Chairman of the Board
Stanley E. Hubbard....... 36 Chief Executive Officer, President and Director
Robert W. Hubbard........ 32 Executive Vice President and Director
Herbert S. Schlosser..... 71 Director
David S. Allen........... 67 Director
Frank N. Magid........... 66 Director
Peter G. Skinner......... 53 Director
John W. Marvin........... 49 Director
Ward L. Quaal............ 78 Director
</TABLE>
5
<PAGE>
STANLEY S. HUBBARD is the founder of the Company and serves as its Chairman
of the Board. Mr. Hubbard served as Chief Executive Officer of the Company from
its inception to November 1995. Mr. Hubbard is also the Chairman of the Board,
President and Chief Executive Officer of HBI and divides his professional time
between the Company and HBI and its affiliates. Mr. Hubbard is an executive with
several other entities affiliated with HBI, including Conus, a satellite news
gathering firm. Mr. Hubbard, a graduate of the University of Minnesota, joined
HBI in 1951. He and his father, the founder of HBI, were co-recipients of the
Distinguished Service Award from the National Association of Broadcasters in
1995. Stanley S. Hubbard is the father of Stanley E. Hubbard and Robert W.
Hubbard. Mr. Hubbard is also a director of Fingerhut, Inc.
STANLEY E. HUBBARD was elected Chief Executive Officer of the Company in
November 1995. From February 1993 until November 1995, Mr. Hubbard served as
President and Chief Operating Officer of the Company. Prior thereto, he served
as Vice President of the Company. He has been a director of the Company since
1991. Mr. Hubbard has also been a Vice President of HBI for more than five years
and has a broad range of television experience. He holds positions in other
Hubbard companies, including director of HBI. Mr. Hubbard is also a director of
First Team Sports, Inc.
ROBERT W. HUBBARD was elected Executive Vice President of the Company in
February 1993 and elected a director of the Company in September 1992. Mr.
Hubbard has a broad range of television experience with various HBI affiliates
and divides his professional time between the Company and HBI and its
affiliates. Mr. Hubbard is also a director of HBI and serves as President of its
television group.
HERBERT S. SCHLOSSER was elected a director of the Company in March 1994.
Since 1986, Mr. Schlosser has served as Senior Advisor, Broadcasting and
Entertainment with Schroder & Co. Inc. Mr. Schlosser was Executive Vice
President of RCA Corporation from 1978 until 1985 and prior to that was
President of the National Broadcasting Company. Mr. Schlosser is also a director
of Data Broadcasting Corporation, an international data communications company,
and Central European Media Enterprises Ltd., a company which holds interests in
private commercial television stations in central and eastern Europe.
DAVID S. ALLEN has been a director of the Company since 1994. Mr. Allen is
currently President and Chief Executive Officer of The Boatworks, a boat sales
and service company. From 1980 through March 1993, Mr. Allen served as Chairman,
President and Chief Executive Officer of Petry, Inc., which provides services to
HBI relating to the sale of HBI's commercial time. Petry, Inc. is one of the
largest sales organizations of national television advertising in the U.S.
FRANK N. MAGID was elected a director of the Company in 1994. Mr. Magid has
been the Chairman and Chief Executive Officer of Frank N. Magid Associates, a
television industry research and consulting firm since 1957.
PETER G. SKINNER was elected a director of the Company in March 1994. Since
1985, Mr. Skinner has been General Counsel, Secretary, Senior Vice President
(since 1989) and President/Television (since 1995) for Dow Jones & Company, Inc.
("Dow Jones").
JOHN W. MARVIN was elected a director of the Company in March 1994. Since
1974, Mr. Marvin has held various positions with Marvin Lumber and Cedar
Company, including Plant Manager, Board Member and Chief Operating Officer.
WARD L. QUAAL was elected a director of the Company in September 1982. Mr.
Quaal has been President of Ward L. Quaal Company, management consultants to the
broadcasting industry, since October 1974. Previously, he was President of
Tribune Broadcasting Company. Mr. Quaal is a recipient of the Distinguished
Service Award from the National Association of Broadcasters.
PETER F. FRENZER was elected to the Board of Directors in July 1996. Mr.
Frenzer recently retired from Nationwide Insurance Enterprise after 21 years of
service. From 1991 to 1996, he was President of
6
<PAGE>
Nationwide Life Insurance Company and, from 1981 to 1995, he was Chief
Investment Officer of Nationwide Insurance Enterprise.
WILLIAM D. SAVOY was elected a director of the Company in March 1994. Since
1990, Mr. Savoy has served as Vice President of Vulcan Ventures, Inc.
("Vulcan"), a venture capital firm owned by Paul Allen, a co-founder of
Microsoft, Inc. From 1987 until November 1990, Mr. Savoy was employed by
Layered, Inc., a company controlled by Mr. Allen, and became its President in
1988. Mr. Savoy has served as President for Vulcan Northwest, Inc., a company
wholly-owned by Mr. Allen, from November 1990 until the present. Mr. Savoy
serves on the Advisory Board of Directors of DreamWorks SKG and the Board of
Directors of CINET, Inc.; Harbinger Corporation; HSN, Inc.; Telescan Inc.; and
Ticketmaster.
LOUIS G. ZACHARY, JR. was elected to the Board of Directors of the Company
in July 1996. Mr. Zachary is a Managing Director in the investment banking
department of Credit Suisse First Boston Corporation, which he joined in 1981.
Messrs. Stanley S. Hubbard, Robert W. Hubbard, Gerald D. Deeney and Raymond
A. Conover are also employed by, and spend a significant portion of their time
on, the businesses of HBI and its affiliates other than the Company. Mr. Stanley
E. Hubbard devotes his professional time primarily to the business of the
Company, but does hold positions with HBI and its affiliates which require a
certain amount of his time. The Company does not anticipate any material change
in the relative amount of time such persons will spend on the Company's matters.
Each of such persons who is a director has indicated to the Company that, should
a conflict of interest arise, he will promptly disclose such conflict to the
Company's Board of Directors and refrain from voting on such matter as a
director.
COMMITTEE AND BOARD MEETINGS
The Company's Board of Directors has an Audit Committee which (i) reviews
the Company's quarterly and annual financial statements, its filings on Forms
10-K and 10-Q and earnings releases regarding financial results, (ii) makes
recommendations regarding the Company's independent public accountants and scope
of their services, (iii) reviews the adequacy of accounting policies, compliance
assurance procedures and internal controls, (iv) reviews auditors' independence
and (v) reports to the Board on the adequacy of disclosures and adherence to
accounting principles. Messrs. Marvin, Skinner and Savoy comprised the Audit
Committee during fiscal 1997. The Audit Committee met five times during the
fiscal year ended June 30, 1997.
The Company's Board of Directors has a Compensation Committee which (i)
reviews compensation philosophy and major compensation plans for executives,
(ii) administers the Company's stock option plans and (iii) approves the
compensation of the Company's executive officers. Messrs. Langone, Quaal and
Schlosser comprised the Compensation Committee during fiscal 1997. The
Compensation Committee met one time during the fiscal year ended June 30, 1997.
The Company's Board of Directors has a Nominating Committee, which makes
recommendations to the Board of Directors as to nominees for election to the
Board. Messrs. Stanley S. Hubbard, Brownlee, Magid and Allen comprised the
Nominating Committee during fiscal 1997. The Nominating Committee met one time
during the fiscal year ended June 30, 1997.
The Board of Directors also has an Executive Committee, consisting of
Messrs. Stanley S. Hubbard, Stanley E. Hubbard, Robert W. Hubbard and Schlosser.
Between meetings of the Board of Directors, the Executive Committee exercises
all the powers of the Board of Directors in the management and direction of the
business and affairs of the Company, except as provided otherwise by law,
resolutions of the Board of Directors, the Company's By-laws, or its Articles of
Incorporation.
During fiscal 1997, the Board held four meetings. Each director attended 75%
or more of the meetings of the Board held while each was a director during such
fiscal year and of the meetings of
7
<PAGE>
Committees of which he was a member during such fiscal year, except that Mr.
Skinner did not attend two meetings of the Audit Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was, during the 1997 fiscal year or
previously, an officer or employee of the Company.
Mr. Quaal is the President of Ward L. Quaal Company, which performs
government relations work for both the Company and HBI. The Company has paid
$316,000, $153,128 and $112,414 in fiscal 1995, fiscal 1996 and fiscal 1997,
respectively, to such company.
CERTAIN TRANSACTIONS
The Company was organized in 1981 by HBI. From the Company's inception until
June 30, 1991, the Company's operations were financed through advances from HBI
and the provision of personnel, office space and other services. HBI's aggregate
advances to the Company were approximately $31.2 million, all of which were
converted into equity prior to and during fiscal 1994.
Pursuant to a Management Services Agreement between the Company and HBI, HBI
provided virtually all administrative and management services to the Company
during fiscal 1992 through fiscal 1994. The Company accrued $10.0 million with
respect to such services. None of such amount has been paid to date. The Company
has no obligation to do so until the Company's Board of Directors determines
that it has adequate working capital to do so.
Pursuant to an Administrative Services Agreement between HBI and the
Company, HBI charges the Company a portion of the expenses of the HBI
departments that provide services to the Company, namely legal, management
information systems, tax, risk management, payroll and accounts payable.
Pursuant to this Agreement, the Company paid $844,000 to HBI in fiscal 1995,
$960,000 in fiscal 1996 and $996,000 in fiscal 1997 and expects to pay HBI
approximately $1,252,000 in fiscal 1998.
The Company and HBI have filed combined state tax returns as required in
Minnesota and New Mexico. Utilizing the Company's net operating loss
carryforwards, HBI realized benefits as to the state returns of approximately
$1.5 million in fiscal 1995, $1.2 million in fiscal 1996 and $0.8 million in
fiscal 1997. HBI and the Company have entered into a Tax Sharing Agreement
relating to such filings. Under this Agreement, HBI will reimburse the Company
for such benefits in the year they would otherwise be realized by the Company.
The Company leases 15,043 square feet of office and administrative space in
St. Paul, Minnesota from HBI under a lease expiring on June 30, 1998. Under such
lease, the Company paid HBI $60,323, $79,065 and $90,616 in fiscal 1995, 1996
and 1997, respectively, and expects to pay approximately $188,000 in fiscal
1998.
The Company owns its National Broadcast Center in Oakdale, Minnesota, which
consists of 20,500 square feet. The land for the facility was purchased in May
1993, from Minnesota Mining and Manufacturing Company, and the Company and HBI
agreed to provide advertising time on USSB programming and/ or HBI's television
stations in value equal to the purchase price of $340,000. HBI has agreed to
provide all of such advertising time at no cost to the Company.
The Company has entered into various agreements with Conus Communications
Company Limited Partnership ("Conus") for the provision of engineering and other
services. HBI and Stanley S. Hubbard, the Chairman of the Board of the Company,
are each general partners of Conus. For such services, the Company paid Conus
$888,000 in fiscal 1995, $205,000 in fiscal 1996 and $213,424 in fiscal 1997.
The Company anticipates that it will pay Conus approximately $225,000 in fiscal
1998 for such services.
8
<PAGE>
The ALL NEWS CHANNEL is a joint venture of Viacom Satellite News, Inc. and
Conus. Pursuant to its programming agreement with the ALL NEWS CHANNEL, the
Company paid such joint venture $607,000 in fiscal 1995, $2,348,000 in fiscal
1996 and $4,378,000 in fiscal 1997. The agreement is in effect for fiscal 1998.
The Company is unable to predict the amount of payments which will be made in
fiscal 1998. Since such payments are related to the number of subscribers, it
expects such amount to be substantially higher in fiscal 1998 due to the growth
in the Company's subscriber base.
The Company has entered into programming development agreements with certain
of its shareholders. It has agreed with Vulcan that in the event Vulcan can
develop viable specialty programming related to computers, and the Company has
sufficient transponder capacity, Vulcan shall be the exclusive provider of such
programming, other than such programming as may be included as incidental
programming by the Company's other programming providers. The Company has agreed
to broadcast up to ten hours of such programming per week. At present, the
Company is unaware of any such programming being developed by Vulcan. William D.
Savoy, a director of the Company, is Vice President of Vulcan.
The Company has also agreed with Dow Jones that Dow Jones shall have
development rights with respect to business and financial programming and shall
be the exclusive third-party provider of business and financial programming
carried on the Company's programming other than such as may be included as
incidental programming by the Company's other programmers. Dow Jones has the
right to require the Company to broadcast up to six hours per weekday of such
programming if such programming becomes available. Peter G. Skinner, a director
of the Company, is General Counsel, Secretary and President of Television
Operations of Dow Jones.
Certain directors and former directors of the Company perform or have
performed consulting services for the Company. Dennis J. Brownlee, who resigned
from the Board of Directors on August 20, 1997, is President of Advance, Inc.,
which provided consulting services to the Company relating to computers,
customer service data bases and information systems. The Company paid $171,000,
$696,163 and $814,780 to Advance, Inc. in fiscal 1995, fiscal 1996 and fiscal
1997, respectively.
Frank N. Magid Associates, Inc., of which Mr. Magid is President, performs
research for both the Company and HBI. The Company has paid $142,900, $634,375
and $856,473 in fiscal 1995, fiscal 1996 and fiscal 1997, respectively, to such
company, and anticipates payments of approximately $900,000 in fiscal 1998.
Mr. Quaal is the President of Ward L. Quaal Company, which performs
government relations work for both the Company and HBI. The Company has paid
$316,000, $153,128 and $112,414, in fiscal 1995, fiscal 1996 and fiscal 1997,
respectively, to such company. The Company expects to pay such company
approximately $115,000 in fiscal 1998.
The Company believes that all of the foregoing transactions have been on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission ("SEC") initial reports of
ownership and changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than ten percent shareholders
are required by SEC regulation to furnish the Company with all Section 16(a)
forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to
officers, directors and greater than ten percent shareholders were satisfied,
except that Mr. Magid did not timely file a Form 4 with respect to conversion of
his shares from Common Stock to Class A Common Stock.
9
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
------------------------- --- -----------------------------------------
<S> <C> <C>
Stanley S. Hubbard....... 64 Chairman of the Board
Stanley E. Hubbard....... 36 Chief Executive Officer and President
Robert W. Hubbard........ 32 Executive Vice President
Gerald D. Deeney......... 73 Treasurer, Chief Financial
Officer and Secretary
Mary Pat Ryan............ 41 Senior Vice President, Marketing
Bernard J. Weiss......... 43 Vice President, Finance and
Administration
Raymond A. Conover....... 47 Vice President, Engineering
Carl S. Wegener.......... 44 Vice President, Dealer Marketing
Joseph G. Ducey.......... 38 Vice President, Operations
Robert D. Pacek.......... 54 Vice President, Information Services
</TABLE>
Executive Officers serve at the discretion of the Board of Directors.
Information regarding Messrs. Stanley S. Hubbard, Stanley E. Hubbard and Robert
W. Hubbard may be found under the caption "Election of Directors."
GERALD D. DEENEY was elected Treasurer of the Company in June 1981, Chief
Financial Officer of the Company in September 1995 and Secretary in January
1996. Mr. Deeney has been with HBI for more than thirty-five years and has been
Vice President and Treasurer of HBI for more than twenty-five years. In 1992,
Mr. Deeney was elected a director of HBI.
MARY PAT RYAN joined the Company as Vice President, Marketing in February
1994 and now is Senior Vice President, Marketing. From 1983 to 1993, Ms. Ryan
was at Draft Direct, one of the largest direct marketing agencies in the world,
and served as Executive Vice President and Director of Client Services. At Draft
Direct, Ms. Ryan managed marketing programs for HBO's Cable and Satellite
Divisions, Time Warner Cable, The Sega Channel and American Express Travelers
Cheque Group, and oversaw all administrative, business development and training
functions for client services.
BERNARD J. WEISS joined the Company in January 1994 and has been Vice
President of Finance and Administration of the Company since January 1995. From
April 1990 until January 1994, Mr. Weiss served in various financial and
operating positions at Northwest Airlines Inc., including Director of Budgets
and Analysis. From June 1986 to 1990, Mr. Weiss served as Vice President and
acting division head of the media and communications division of First Banks.
Mr. Weiss is a Certified Public Accountant.
RAYMOND A. CONOVER has been Vice President of Engineering of the Company
since March 1994. Mr. Conover has held various positions with HBI and its
affiliates since 1972, most recently as Vice President and Director of
Engineering of Conus.
CARL S. WEGENER joined the Company in 1993 as Director of Consumer
Electronics Marketing and was promoted to Vice President, Dealer Marketing, in
December 1994. Mr. Wegener has more than 20 years of experience in the consumer
electronics industry, including positions with RCA and Philips N.V.
JOSEPH G. DUCEY was appointed Vice President, Operations in July 1996. From
June 1991 to July 1996, he had been employed by HBI and affiliates in a number
of engineering/research positions, including Engineering Program Manager for
Conus and Director of Technical Operations.
ROBERT D. PACEK joined the Company as Vice President, Information Services
in March 1996. From September 1992 to March 1996, Mr. Pacek was Vice President,
Operations, of Advance, Inc., a consulting firm retained by the Company in the
area of information services. Prior thereto, he served as Deputy Director of
Information Services for the United States Navy for three years.
10
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The Summary Compensation Table shows compensation information for the
Company's Chief Executive Officer and the four most highly compensated executive
officers of the Company for services rendered in all capacities during the
fiscal years ended June 30, 1995, 1996 and 1997.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------- ALL OTHER
SALARY COMPENSATION
NAME AND PRINCIPAL POSITION FISCAL YEAR ($) BONUS ($) ($)
- ------------------------------------------------- ----------- --------- --------- -------------
<S> <C> <C> <C> <C>
1997 343,269 -- --
Stanley E. Hubbard .............................. 1996 100,000 -- --
CEO, President 1995 100,000 -- --
1997 245,193 -- --
Robert W. Hubbard ............................... 1996 100,000 -- --
Executive V.P. 1995 100,000 -- --
1997 229,327 100,000 7,732(1)
Mary Pat Ryan ................................... 1996 224,000 100,000 --
Sr. V.P., Marketing 1995 200,000 75,000 29,000(2)
1997 132,308 25,000 5,592(1)
Carl S. Wegener ................................. 1996 125,000 25,000 --
V.P. Dealer Marketing 1995 119,000 17,000 --
1997 142,308 50,000 6,600(1)
Bernard J. Weiss ................................ 1996 130,000 50,000 --
V.P. Finance and Administration 1995 120,000 25,000 --
</TABLE>
- ------------------------
(1) Consists of an employer matching contribution to the 401(k) plan in which
such executive officer participates.
(2) Consists of payment of moving expenses.
DIRECTOR COMPENSATION
The Company pays non-employee directors an annual retainer of $15,000 and
$500 for each Board of Directors or committee meeting which they attend (with
committee chairpersons receiving $750 per committee meeting). In fiscal 1997,
the Board of Directors and the shareholders approved a non-employee director
option plan which provides for the automatic grant of options to purchase 1,000
Class A Common Shares to each non-employee director upon election (and each
re-election) to the Board. The compensation earned by certain directors,
including options, is paid (or granted, in the case of options) directly to the
employers of such directors.
EMPLOYMENT AGREEMENTS
The Company does not have employment agreements with any of its executive
officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
There were no option or stock appreciation rights grants made to executive
officers in fiscal 1997.
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ROLE OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is responsible for making
recommendations to the Board of Directors regarding the compensation of the
Chief Executive Officer and the other executive officers of the Company named in
the Company's Proxy Statement. The Committee is also responsible for approving
executive compensation programs and general compensation policies for the
Company, and administering the Company's stock option plans.
OVERVIEW OF THE EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program is designed to attract,
motivate, reward and retain the management talent needed to achieve its business
objectives and goals.
The Company seeks to utilize competitive base salaries, provide incentives
to achieve Company objectives, reward executive officers for exceptional
performance by the Company and recognize superior individual achievement.
Accordingly, assessments of both individual and corporate performance
influence executive officers' compensation levels. This includes the ability to
implement the Company's business plans as well as to react to unanticipated
external factors that can have a significant impact on corporate performance.
Compensation decisions for all executive officers, including the Chief Executive
Officer, are based on the same criteria.
In light of the start-up nature of the Company with the resulting losses for
fiscal 1997, and the size of the equity holdings of Hubbard Broadcasting, Inc.
in the Company, Stanley S. Hubbard, Stanley E. Hubbard and Robert W. Hubbard
requested that they not be considered for compensation in addition to their base
salaries, and that their base salaries not be increased in the upcoming fiscal
year. The Committee concurred with this request.
ENGAGEMENT OF AN EXECUTIVE COMPENSATION CONSULTANT
In fiscal 1997, the Committee retained an executive compensation consulting
firm (the "Committee Advisor") to consult with the Committee and management
regarding the levels of executive officer compensation, and to make
recommendations regarding the development of the Company's executive
compensation program.
The Committee Advisor compared the Company's executive compensation levels
to median pay practices of other companies in the Company's industry and related
industries. While it is difficult to find companies that are directly comparable
to the Company, the Committee considered the Committee Advisor's findings in
determining total fiscal 1997 compensation levels for executive officers.
While the Company's executive compensation program in fiscal 1996 included
the elements of base salary, short term incentive awards consisting of annual
bonus, and long term incentive compensation consisting of awards of stock
options, the Committee Advisor has recommended that the Company's executive
compensation program become more formal and, to the extent appropriate, utilize
quantifiable performance measures. The Committee expects to work with management
in fiscal 1998 to develop a more formal executive compensation program.
BASE SALARY
A competitive base salary is vital to support the philosophy of management
development and career orientation of executives and is consistent with the long
term nature of the Company's business.
Salary levels and adjustments to salaries are a result of reviews of
competitive positioning (how the Company's salary structure for comparable
positions compares with that of other companies), business performance and
general economic factors. There is no specific weighting of these factors, which
are
12
<PAGE>
assessed subjectively by the Committee. All executive officers receive an annual
performance review and, based upon such review, may receive an adjustment in
base salary.
Based on the comparative information provided to it by the Committee
Advisor, the Committee has determined that base salary levels for the executive
officers fiscal 1997 were generally within competitive norms. These executive
officers received either no increase or a modest increase in base salaries for
fiscal 1998.
Based on the comparative information provided to it by the Committee
Advisor, the Committee has also determined that the base salary of the Chief
Executive Officer for 1997 was within competitive norms. The Chief Executive
Officer was paid a base salary of $350,000 for fiscal 1997.
ANNUAL BONUS
Bonus awards to executive officers are granted in cash to recognize
significant contributions to the business, and, when combined with base salary,
are essential to ensure competitive pay packages for senior management.
The specific bonus an executive receives is dependent on overall Company
performance as well as assessment of the individual's relative performance.
Factors include initiative, business judgment, technical expertise and
management skills, executive's accomplishments in building the business and the
Company's need to retain key executive talent for the long term. There is no
specific weighting of such factors, which are assessed subjectively by
management and the Committee.
Based on the comparative information provided to it by the Committee
Advisor, the Committee has made bonus awards for fiscal 1997 for the executive
officers who are not members of the Hubbard family which are within competitive
norms. Such executive officers were awarded an aggregate of $275,000 in bonus
awards. These awards were generally equivalent to the bonus awards paid to such
executive officers in fiscal 1996. No annual bonus was awarded to the Chief
Executive Officer for fiscal 1997.
The Committee expects management to submit a more formal annual bonus plan
for executive officers in fiscal 1998 for the Committee's review and approval.
STOCK OPTION AWARDS
The Committee believes that it is important for the Company's executive
officers to focus on the long term development and financial health of the
Company.
In light of the fact that a formal program for periodically awarding options
to executive officers under the Company's stock option plan is not in place, no
options were awarded to any executive officer, including the Chief Executive
Officer, in fiscal 1997. However, based on comparative information provided to
it by the Committee Advisor, the Committee concluded that the lack of a such a
long term incentive component places total fiscal 1997 compensation for the
executive officers who are not members of the Hubbard family somewhat below
competitive norms.
The Committee expects to address this matter in fiscal 1998 by requesting
management to develop a program for review and approval by the Committee which
would bring the long term incentive component of the executive compensation
program into line with industry standards in order to continue to provide the
proper incentive for the Company's key executive officers.
Herbert S. Schlosser
Ward L. Quaal
SHARE INVESTMENT PERFORMANCE
The following graph shows, since January 31, 1996 (the effective date of the
Company's initial public offering), changes in the value of $100 invested in (1)
the Company's Class A Common Stock; (2) the
13
<PAGE>
NASDAQ Index; and (3) and an industry group of thirteen companies. The industry
group, which was determined by the Company, consists of the eight companies
(excluding the Company) which comprise the "DBS/Wireless Cable" group of stocks
followed by the industry publication MULTICHANNEL NEWS, together with five major
cable television companies, as follows:
American Telecasting Inc.
British Sky Broadcasting Group
Cablevision Systems (Class A)
CAI Wireless Systems Inc.
Cellularvision U.S.A. Inc.
Comcast (Special Stock)
Cox Communications Inc.
Echostar Communications Corp.
General Motors Corp. (Class H)
Heartland Wireless Communications
Peoples Choice TV Corp.
Tele-Communications Inc. (Series A)
Telewest Communications PLC (American Depository Receipts)
The ending values of each investment are based on the ending share price
plus dividends paid in cash, if any, assuming the reinvestment of dividends. The
calculations exclude trading commissions and taxes.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
U.S. SATELLITE BROADCASTING CO. PEER GROUP INDEX NASDAQ MARKET INDEX
<S> <C> <C> <C>
02/01/96 $100.00 $100.00 $100.00
06/30/96 $108.63 $96.05 $111.68
06/30/97 $23.74 $92.05 $134.54
</TABLE>
14
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Subject to ratification by the shareholders, the Board of Directors has
selected the firm of Arthur Andersen LLP as the Company's independent auditors
for the current fiscal period ending December 31, 1997 and its 1998 fiscal year.
Arthur Andersen LLP has served as the Company's independent auditors since 1992.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from shareholders.
If the shareholders do not ratify the selection of Arthur Andersen LLP as
the Company's independent auditors, the selection of such auditors will be
reconsidered by the Board of Directors.
The Board of Directors recommends that the shareholders vote FOR the
ratification of the selection of Arthur Andersen LLP to serve as the Company's
independent auditors for the current fiscal period ending December 31, 1997 and
its 1998 fiscal year.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at the
meeting. If any other matter does properly come before the meeting, the
appointees named in the Proxies will vote the Proxies in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 1998 Annual Meeting must be received by the
Company at its office by June 5, 1998, to be considered for inclusion in the
Company proxy statement and related proxy for the 1998 Annual Meeting.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended June 30, 1997, including financial statements, accompanies this Notice of
Annual Meeting and Proxy Statement. No portion of the Annual Report is
incorporated herein or is to be considered proxy soliciting material, except for
such financial statements.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 1997, TO ANY SHAREHOLDER OF THE
COMPANY UPON WRITTEN REQUEST.
REQUESTS SHOULD BE SENT TO INVESTOR RELATIONS, UNITED STATES SATELLITE
BROADCASTING COMPANY, INC., 3415 UNIVERSITY AVENUE, ST. PAUL, MINNESOTA 55114.
Dated: October 9, 1997
St. Paul, Minnesota
15
<PAGE>
COMMON STOCK PROXY
UNITED STATES SATELLITE BROADCASTING COMPANY, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 17, 1997
The undersigned hereby appoints STANLEY E. HUBBARD and GERALD D. DEENEY,
and each of them, with full power of substitution, as proxies to represent and
vote, as designated below, all shares of Common Stock of United States Satellite
Broadcasting Company, Inc. registered in the name of the undersigned at the
Annual Meeting of Shareholders of the Company to be held at The Historic State
Theatre, 805 Hennepin Avenue, Minneapolis, Minnesota 55402 at 10:00 a.m.
(Minneapolis time) on November 17, 1997, and at any adjournment thereof, and the
undersigned hereby revokes all proxies previously given with respect to the
meeting.
The Board of Directors recommends that you vote for each proposal below.
1. Elect Directors. Nominees: Stanley S. Hubbard, Stanley E. Hubbard, Robert
W. Hubbard, Herbert S. Schlosser, David S. Allen, Frank N. Magid, Peter G.
Skinner, John W. Marvin and Ward L. Quaal
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY to vote for
(except those whose names have been all nominees listed above.
written in below).
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the line below.)
________________________________________________________________________________
2. Ratify selection of Arthur Andersen LLP as the Company's independent
auditors for its current fiscal period ending December 31, 1997 and its
1998 fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
The proxies are authorized, in their discretion, to vote upon such other
business as may properly come before the Meeting.
<PAGE>
[LOGO]
UNITED STATES SATELLITE
BROADCASTING COMPANY, INC.
The Historic State Theatre
805 Hennepin Avenue
Minneapolis, MN 55402
November 17, 1997
10:00 a.m. (Minneapolis time)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Date: , 1997
--------------------------------------------
(Signature)
--------------------------------------------
(Signature)
PLEASE DATE AND SIGN ABOVE exactly as name
appears at the left, indicating, where
appropriate, office position or
representative capacity. For stock held in
joint tenancy, each joint owner should sign.
<PAGE>
CLASS A PROXY
UNITED STATES SATELLITE BROADCASTING COMPANY, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 17, 1997
The undersigned hereby appoints STANLEY E. HUBBARD and GERALD D. DEENEY,
and each of them, with full power of substitution, as proxies to represent and
vote, as designated below, all shares of Class A Common Stock of United States
Satellite Broadcasting Company, Inc. registered in the name of the undersigned
at the Annual Meeting of Shareholders of the Company to be held at The Historic
State Theatre, 805 Hennepin Avenue, Minneapolis, Minnesota 55402 at 10:00 a.m.
(Minneapolis time) on November 17, 1997, and at any adjournment thereof, and the
undersigned hereby revokes all proxies previously given with respect to the
meeting.
The Board of Directors recommends that you vote for each proposal below.
Elect Directors. Nominees: Louis G. Zachary, Jr., Peter F. Frenzer,
1. William D. Savoy, Stanley S. Hubbard, Stanley E. Hubbard, Robert W.
Hubbard, Herbert S. Schlosser, David S. Allen, Frank N. Magid, Peter G.
Skinner, John W. Marvin and Ward L. Quaal
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY to vote for
(except those whose names have all nominees listed above.
been written in below).
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line below.)
________________________________________________________________________________
2. Ratify selection of Arthur Andersen LLP as the Company's independent
auditors for its current fiscal period ending December 31, 1997 and its
1998 fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
The Proxies are authorized, in their discretion, to vote upon such other
business as may properly come before the Meeting.
<PAGE>
[LOGO]
UNITED STATES SATELLITE
BROADCASTING COMPANY, INC.
The Historic State Theatre
805 Hennepin Avenue
Minneapolis, MN 55402
NOVEMBER 17, 1997
10:00 A.M. (MINNEAPOLIS TIME)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Date: , 1997
--------------------------------------------
(Signature)
--------------------------------------------
(Signature)
PLEASE DATE AND SIGN ABOVE exactly as name
appears at the left, indicating, where
appropriate, office position or
representative capacity. For stock held in
joint tenancy, each joint owner should sign.
