CAPITAL CITIES ABC INC /NY/, PRE 14A, 1994-03-18

CAPITAL CITIES ABC INC /NY/
PRE 14A, 1994-03-18
TELEVISION BROADCASTING STATIONS

Previous: CALIFORNIA WATER SERVICE CO, 8-A12B, 1994-03-18

Next: CENTRAL & SOUTH WEST CORP, POS AMC, 1994-03-18

<PAGE>

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[X] Preliminary Proxy Statement

[_] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

Capital Cities/ABC, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Capital Cities/ABC, Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).

[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:*

(4) Proposed maximum aggregate value of transaction:
- --------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.

[_] 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:

Notes:

<PAGE>

CAPITAL CITIES/ABC, INC.

77 WEST 66TH STREET

NEW YORK, NEW YORK 10023

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 1994

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

To The Shareholders:

The Annual Meeting of Shareholders of Capital Cities/ABC, Inc. (the
"Company") will be held at 11:00 A.M. on Thursday, May 19, 1994 at Decatur
House, 748 Jackson Place, N.W., Washington, D.C. for the following purposes:

1. To elect a Board of Directors of 13 members to serve until the next Annual
Meeting of Shareholders or until their successors are elected and qualified.

2. To consider and act upon a proposal to ratify the appointment of Ernst &
Young as the Company's independent auditors for 1994.

3. To consider and act upon a proposal to amend the Certificate of
Incorporation to increase the authorized shares, and reduce the par value, of
the common stock.

4. To consider and act upon a proposal to approve the Employee Stock Purchase
Plan, as amended.

5. To consider and act upon a shareholder proposal concerning minimum share
ownership by members of the Board of Directors.

6. To consider and act upon such other business as may properly come before
the meeting or any adjournment thereof.

Only shareholders of record at the close of business on March 30, 1994 will
be entitled to vote at the meeting and any adjournment thereof.

Whether or not you plan to attend the meeting, we urge you to date, execute
and mail the enclosed proxy/voting instruction card in order to assure
representation of your shares. For this purpose, and for your convenience, a
business reply envelope is enclosed. A shareholder who attends the meeting in
person may, if he wishes, vote at the meeting, thereby canceling any proxy vote
previously given.

Attendance at the meeting will be limited to shareholders of record as of the
record date or their authorized representatives, not to exceed two per
shareholder, and to guests of the Company.

By Order of the Board of Directors,

Philip R. Farnsworth
Secretary

March 31, 1994

ALL PERSONS TO WHOM THE ACCOMPANYING PROXY/VOTING INSTRUCTION CARD IS
ADDRESSED ARE REQUESTED TO DATE, EXECUTE AND RETURN IT PROMPTLY IN THE
ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE
UNITED STATES.
<PAGE>

CAPITAL CITIES/ABC, INC.

77 WEST 66TH STREET

NEW YORK, NEW YORK 10023

PROXY STATEMENT

This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Capital Cities/ABC, Inc. (the "Company") of proxies and
voting instructions in the accompanying form for use at the Annual Meeting of
Shareholders to be held at Decatur House, 748 Jackson Place, N.W., Washington,
D.C. at 11:00 A.M. on Thursday, May 19, 1994, and at all adjournments thereof.
Any shareholder may revoke his proxy at any time prior to the meeting by filing
with the Company a written notice to that effect or a duly executed
proxy/voting instruction card bearing a date later than his previously executed
proxy/voting instruction card, and, in the event that he attends the meeting,
he may, if he so desires, vote in person.

The enclosed proxy/voting instruction card also serves as voting instructions
to Bankers Trust Company, as Trustee under the Capital Cities/ABC, Inc. Savings
& Investment Plan (the "SIP"), for shares of the Company's common stock
credited to the account of each participant in the SIP as of the record date.
The Trustee will vote the shares credited to each participant's account as
instructed by each participant who returns an executed proxy/voting instruction
card in a timely manner (prior to May 13, 1994). If a SIP participant's
executed proxy/voting instruction card is not timely received, the shares
credited to that account will be voted by the Trustee in the same proportion as
those shares for which voting instructions have been timely received. Any SIP
participant may revoke his voting instructions prior to May 13, 1994 by filing
with the Trustee a written notice to that effect or a duly executed
proxy/voting instruction card bearing a date later than his previously executed
proxy/voting instruction card.

The shares represented by all proxies and voting instructions delivered
pursuant to this solicitation, if not revoked, will be voted at the meeting as
directed by the shareholders, or by the SIP participants as noted above. The
voting instruction of each SIP participant is confidential. Neither the Trustee
nor the tabulator of the votes at the shareholders meeting, Harris Trust
Company of New York, will reveal to the Company how an individual participant
votes his SIP interest. In addition, the same confidentiality is given to the
votes of any shares of the Company's common stock owned by a SIP participant
outside of the SIP and registered in his own name.

The cost of soliciting proxies and voting instructions will be borne by the
Company, which will reimburse brokerage firms, custodians, nominees and
fiduciaries for their expenses in forwarding proxy material to the beneficial
owners of the Company's common stock. Officers and other employees of the
Company may solicit proxies personally and by telephone. In addition, the
Company has retained Georgeson & Company Inc. to aid in the solicitation of
proxies at a fee of $7,500 plus out-of-pocket expenses.

On all matters that may come before the meeting, each shareholder, or his
proxy, will be entitled to one vote for each share of common stock, $1 par
value ("Common Stock"), of which such shareholder was the holder of record on
March 30, 1994. On such date there were outstanding and entitled to vote
xx,xxx,xxx shares of Common Stock, not including x,xxx,xxx shares held by the
Company as treasury shares.

The proxy statement and the proxy/voting instruction card are being mailed to
shareholders and SIP participants on or about March 31, 1994.

ANNUAL REPORT

The Annual Report of the Company for the year ended December 31, 1993,
including financial statements, is being mailed to shareholders together with
this proxy statement, and to SIP participants under separate cover. No part of
such annual report shall be regarded as proxy-soliciting material or as a
communication by means of which any solicitation is being or is to be made.
<PAGE>

ELECTION OF DIRECTORS

It is proposed to elect 13 directors of the Company to hold office for one
year and until their successors shall be elected and shall qualify. At the
meeting, the persons named in the enclosed proxy/voting instruction card intend
to vote the shares covered thereby for the election of the nominees to the
Board of Directors named below unless instructed to the contrary. Each nominee
is currently a director of the Company.

<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
NOMINEE AGE SINCE DURING THE PAST FIVE YEARS
------- --- -------- ---------------------------------------------------
<S> <C> <C> <C>
Robert P. Bauman 63 1985 Chairman of the Compensation Committee of the Com-
pany. Chief Executive of SmithKline Beecham p.l.c.
since 1989, and Chairman of the Board, Beecham
Group p.l.c. (manufacturer of consumer products
and pharmaceuticals) prior thereto. Director of
CIGNA Corporation, Reuters Holdings p.l.c.,
SmithKline Beecham p.l.c. and Union Pacific
Corporation.
Nicholas F. Brady 63 1993 Member of the Compensation Committee of the Compa-
ny. Chairman and Chief Executive Officer of Darby
Overseas Investments, Ltd. and Darby Advisors,
Inc. (investment firms) since February 1994 and
January 1993, respectively. Secretary of the
United States Department of the Treasury from 1988
to January 1993. Chairman of the Board of Dillon,
Read & Co. Inc. (investment banking) prior there-
to. Director of Christiana Companies, Inc., H. J.
Heinz Company and certain Templeton Investment
Companies.
Warren E. Buffett 63 1986 Chairman of the Finance Committee of the Company.
Chairman of the Board and Chief Executive Officer
of Berkshire Hathaway Inc. (insurance underwrit-
ing, newspaper publishing and various manufactur-
ing and marketing activities). Director of
Berkshire Hathaway Inc., The Coca-Cola Company,
The Gillette Company, Salomon Inc and USAir Group,
Inc.
Daniel B. Burke 65 1967 Member of the Executive and Finance Committees of
the Company. Retired President, Chief Executive
Officer and Chief Operating Officer of the Company
from June 1990 to February 1994. Prior thereto he
was President and Chief Operating Officer. Direc-
tor of Avon Products, Inc., Consolidated Rail Cor-
poration, Morgan Stanley Group Inc. and Rohm and
Haas Company.
Frank T. Cary 73 1986 Member of the Audit Committee of the Company. For-
mer Chairman of the Board and Chief Executive Of-
ficer of International Business Machines Corpora-
tion. Director of Celgene Corporation, Cygnus
Therapeutic Systems, Inc., DNA Plant Technology
Corporation, ICOS Corporation, Lincare Holdings
Inc. and SPS Transaction Services, Inc.
John B. Fairchild 67 1968 Executive Vice President of the Company and Chair-
man of the Company's Fairchild Publications Group.
Leonard H. Goldenson 88 1986 Chairman of the Executive Committee of the Company.
Retired Chairman of the Board and Chief Executive
Officer of American Broadcasting Companies, Inc.
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
NOMINEE AGE SINCE DURING THE PAST FIVE YEARS
------- --- -------- ---------------------------------------------------
<S> <C> <C> <C>
Frank S. Jones 65 1988 Member of the Audit Committee of the Company. Ford
Professor of Urban Affairs, Emeritus, Massachu-
setts Institute of Technology since 1992. Ford
Professor of Urban Affairs at MIT prior thereto.
Director of CIGNA Corporation, Polaroid Corpora-
tion and Scientific Games Holdings Corp.
Ann Dibble Jordan 59 1988 Member of the Audit Committee of the Company. For-
mer Director of Social Service Department, Univer-
sity of Chicago Medical School; former Assistant
Field Work Professor, University of Chicago School
of Social Service Administration; former Director
of Social Service, Chicago Lying-in Hospital, Uni-
versity of Chicago Medical Center. Director of Au-
tomatic Data Processing, Inc., Hechinger Company,
Johnson & Johnson, National Health Laboratories
Incorporated, Salant Corporation and The Travelers
Inc.
John H. Muller, Jr. 69 1971 Chairman of the Audit Committee and member of the
Executive and Compensation Committees of the Com-
pany. Chairman of the Executive Committee of Gen-
eral Housewares Corp. (manufacturer and marketer
of cookware and cutlery products) since 1992;
Chairman of the Board from 1990 to 1992; Chairman
of the Board and Chief Executive Officer thereof
prior thereto. Director of General Housewares
Corp.
Thomas S. Murphy 68 1957 Chairman of the Board and Chief Executive Officer
of the Company. From June 1990 to February 1994 he
was Chairman of the Board. Prior thereto he was
Chairman of the Board and Chief Executive Officer.
Member of the Executive and Finance Committees of
the Company. Director of International Business
Machines Corporation, Johnson & Johnson and Texaco
Inc.
Wyndham Robertson 56 1990 Member of the Audit Committee of the Company. Vice
President for Communications, The University of
North Carolina. Director of The Equitable Compa-
nies Incorporated and Wachovia Bank of North Caro-
lina, N.A.
M. Cabell Woodward, Jr. 65 1982 Member of the Executive and Audit Committees of the
Company. Retired Vice Chairman and Chief Financial
Officer of ITT Corporation (diversified multi-na-
tional enterprise). Director of Black & Decker
Corp. and Melville Corporation.
</TABLE>

COMPENSATION OF DIRECTORS

Nonemployee directors receive an annual retainer of $30,000 and a fee of
$1,000 for each Board and committee meeting attended. Nonemployee directors who
retire with at least five years of service on the Board (including service on
the Board of American Broadcasting Companies, Inc.) are eligible to receive an
annual retirement benefit equal to the cash amount of the annual retainer,
which will be paid to the director or the director's surviving spouse for the
number of years of Board service by the director.

3
<PAGE>

MEETINGS AND COMMITTEES

The Board of Directors had a total of six meetings during 1993. Messrs.
Brady, Buffett and Fairchild attended fewer than 75% of the aggregate of (1)
the total number of meetings held by the Board of Directors and (2) the total
number of meetings held by all committees of the Board on which such director
served. The Board of Directors has no Nominating Committee.

The Executive Committee consists of five directors: Mr. Goldenson, Chairman,
and Messrs. Burke, Muller, Murphy and Woodward. The committee meets on call or
acts by unanimous written consent and has authority to act on most matters
during the intervals between Board meetings.

The Audit Committee consists of six nonemployee directors: Mr. Muller,
Chairman, and Messrs. Cary, Jones and Woodward and Mses. Jordan and Robertson.
The committee reviews and evaluates the scope of the audit, internal controls,
security procedures, policy as to business ethics and other matters deemed
appropriate. There were two committee meetings during 1993.

The Compensation Committee consists of three nonemployee directors: Mr.
Bauman, Chairman, and Messrs. Brady and Muller. The committee establishes the
compensation structure of the Company and determines the compensation of the
executive officers and senior management. In so doing, it is empowered to make
awards under the Company's Incentive Compensation Plan and the Company's 1991
Stock Option Plan. See the "Report of the Compensation Committee" under
"Executive Compensation and Other Information" below for information on the
committee's 1993 compensation determinations for executive officers. There were
two committee meetings during 1993. The committee also acts by unanimous
written consent.

The Finance Committee consists of three directors: Mr. Buffett, Chairman, and
Messrs. Burke and Murphy. The committee was formed in 1994 and its primary
responsibilities are to review periodically the Company's long-term financial
strategies, policies and structure, and to review significant potential
corporate acquisitions.

4
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

At February 28, 1994, the only persons, as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, known to the
Company to be the beneficial owners of more than 5% of the outstanding Common
Stock are:

<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY PERCENT
OWNED OF CLASS
------------ --------
<S> <C> <C>
Berkshire Hathaway Inc.
1440 Kiewit Plaza
Omaha, Nebraska 68131................................ 2,000,000(1) 13.04
State Farm Mutual Automobile Insurance Company
and related entities
One State Farm Plaza
Bloomington, Illinois 61710.......................... 901,600(2) 5.88
</TABLE>
- --------
(1) Berkshire Hathaway Inc. ("Berkshire") owns these shares through certain
of its subsidiaries ("Berkshire Subsidiaries"). Mr. Buffett owns 40.7% of the
outstanding stock of Berkshire and therefore may be deemed to control the
stock of Berkshire and be the beneficial owner of these 2,000,000 shares.
While each of the Berkshire Subsidiaries owning the shares of Common Stock has
both voting and investment power with respect thereto, Mr. Buffett, through
his controlling stock ownership of Berkshire, may be deemed to be in control
of such Berkshire Subsidiaries and therefore to direct the voting and
investments of such subsidiaries. However, pursuant to agreements dated March
18, 1985, January 2, 1986 and October 29, 1993 (collectively, the "Stock
Purchase Agreement"), Berkshire and each of such Berkshire Subsidiaries
executed and delivered to the Company an irrevocable proxy to vote all shares
of the Company's Common Stock owned by them, and named as their attorney and
proxy Thomas S. Murphy so long as he shall be Chief Executive Officer of the
Company, or Daniel B. Burke so long as he shall be Chief Executive Officer of
the Company. Such proxies will expire upon such date as neither Mr. Murphy nor
Mr. Burke shall be Chief Executive Officer of the Company, or January 2, 1997,
whichever shall first occur. Mr. Murphy was Chief Executive Officer of the
Company until June 1, 1990, on which date Mr. Burke became Chief Executive
Officer of the Company
until February 14, 1994, on which date Mr. Murphy resumed the position of
Chief Executive Officer. In connection with the irrevocable proxy from
Berkshire and the Berkshire Subsidiaries, Mr. Murphy or Mr. Burke may be
deemed to have sole voting power but no investment power with respect to the
shares covered thereby, and Mr. Buffett may be deemed to have sole investment
power but no voting power with respect to such shares. However, Mr. Buffett's
investment power may be deemed to be restricted in that, pursuant to the Stock
Purchase Agreement, during the period ending on January 2, 1997, neither
Berkshire nor any of the Berkshire Subsidiaries may dispose of any Common
Stock without first offering such stock to the Company, or knowingly sell any
Common Stock to any entity or group if such a sale would give the entity or
group more than 5% of all outstanding voting stock of the Company. At the
forthcoming Annual Meeting, Mr. Murphy will have the power to vote these
shares beneficially owned by Mr. Buffett.

(2) As reported to the Company on a Schedule 13G as of December 31, 1993,
State Farm Mutual Automobile Insurance Company and related entities have sole
power to vote or to direct the vote and to dispose or to direct the
disposition of all of the shares beneficially owned by them.

5
<PAGE>

At February 28, 1994, the following shares of Common Stock and units under
the Company's Incentive Compensation Plan ("Shadow Stock units") were owned by
all directors and nominees, each executive officer named in the Summary
Compensation Table on page 10, and all directors and executive officers as a
group:

<TABLE>
<CAPTION>
COMMON STOCK PERCENT SHADOW STOCK
BENEFICIALLY OWNED(1) OF CLASS UNITS OWNED(2)
--------------------- -------- --------------
<S> <C> <C> <C>
Robert P. Bauman 200(3) (4) -0-
Nicholas F. Brady 400 (4) -0-
Warren E. Buffett 2,000,000(5) 13.04 -0-
Daniel B. Burke 42,631(6) .28 -0-
Frank T. Cary 300(3) (4) -0-
John B. Fairchild 15,504(6)(7) .10 -0-
Leonard H. Goldenson 10,000 .07 -0-
Frank S. Jones 15 (4) -0-
Ann Dibble Jordan 100 (4) -0-
John H. Muller, Jr. 200 (4) -0-
Thomas S. Murphy 103,283(3)(5)(6)(8) .67 -0-
Wyndham Robertson 300(9) (4) -0-
M. Cabell Woodward, Jr. 1,100(3) .01 -0-
Ronald J. Doerfler 10,177 .07 11,000
Robert A. Iger 528(10) (4) 21,500
Michael P. Mallardi 1,257(10) .01 12,000
Stephen A. Weiswasser 100(11) (4) 8,000
All directors and
executive officers
as a group 2,186,995(6)(10) 14.26 64,800
</TABLE>
- --------
(1) Each director and executive officer has sole voting and investment power
with respect to the shares of Common Stock beneficially owned, except as noted
above regarding Mr. Buffett and Berkshire Hathaway Inc., and as noted in
footnotes (7), (9), (10) and (11) below.

(2) See "Incentive Compensation" under "Executive Compensation and Other
Information" below for a description of the Shadow Stock units under the
Incentive Compensation Plan.

(3) Shares of Common Stock shown do not include the following shares owned by
or for the benefit of family members, as to which stock the persons disclaim
any beneficial ownership: Mr. Bauman, 400; Mr. Cary, 102; Mr. Murphy, 42; and
Mr. Woodward, 500.

(4) Less than .01%.

(5) See page 5 regarding Berkshire Hathaway Inc. and the voting of the
2,000,000 shares of Common Stock beneficially owned by Mr. Buffett.

(6) Shares of Common Stock shown include the following shares subject to
employee stock options exercisable within 60 days after February 28, 1994: Mr.
Burke, 3,840; Mr. Fairchild, 750; Mr. Murphy, 1,340; and all other executive
officers, 900.

(7) Includes 1,810 shares of Common Stock held by a trust of which Mr.
Fairchild is a co-trustee, sharing voting power and investment power, and in
which trust he has a remainder interest.

(8) Does not include an aggregate of 2,839 shares of Common Stock held by an
estate and a related trust for the benefit of a non-family member, with respect
to which stock Mr. Murphy, in his fiduciary capacity as executor or trustee,
shares voting power and investment power (which may be exercised by him only
with the approval of another fiduciary) but as to which Mr. Murphy disclaims
any beneficial ownership.

(9) These shares of Common Stock are held by a trust of which Ms. Robertson
is beneficiary, but with respect to which stock she has no voting power or
investment power.

(10) Mr. Iger, Mr. Mallardi and three executive officers not named in the
table hold shares of Common Stock beneficially through the SIP, for which plan
the shareholding information is as of December 31, 1993.

(11) Mr. Weiswasser shares with his wife voting and investment power with
respect to the shares of Common Stock he beneficially owns.

6
<PAGE>

EXECUTIVE COMPENSATION AND OTHER INFORMATION

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors (the "Committee") is
responsible for determining the compensation of the executive officers and
senior management. Set forth below are the factors and criteria used by the
Committee in establishing that key executive compensation.

COMPENSATION OF ALL EXECUTIVE OFFICERS. In order to achieve the best
corporate performance, the Company must be able to attract, motivate and retain
persons of outstanding talent and ability who will make a substantial
contribution to the growth and success of the Company and its subsidiaries. The
Committee endeavors to reach this goal by providing executive officers with
competitive compensation programs of salary and bonus, and by linking long-term
incentive compensation to the growth of the market price of the Company's
Common Stock, thereby aligning the interests of executive officers and all
shareholders. The Committee also endeavors to provide an executive officer
compensation package that recognizes individual contributions as well as
corporate results.

In the Committee's establishment of the Company's compensation structure, it
reviews in detail the compensation of the nine most highly compensated
executive officers, including the individuals whose compensation is detailed in
this proxy statement, and sets policies for and reviews in general the
compensation of approximately 50 other members of senior management. These
reviews are designed to ensure consistency for all key executives throughout
the compensation program.

The Committee reviews the total compensation package for the Company's key
executives, such total compensation package consisting of two basic elements--
annual compensation and long-term incentive compensation. In setting executive
officers' total compensation package the Committee does not use a precise
formula that would "peg" the executive officers' compensation at an exact level
of comparability with executives at other companies. However, in establishing
the executives' total compensation package the Committee seeks to set the
Company's executives' base salaries at the lower end of the comparative scale
of base salaries of executives in similar positions at many advertiser-
supported media and entertainment companies and companies of comparable size,
and the Company's "at risk" bonuses and long-term incentive awards at the
higher end of the comparative scale when the Company, the operating unit and
the individual have met certain generalized performance targets as judged by
the Committee. For each executive's total compensation package, the Committee
seeks to provide a level of compensation that, in a comparison with other
companies, is in the middle range or higher depending upon performance.

Annual compensation. The annual compensation package is also divided into two
parts--base salary and annual bonus. Base salary of an executive officer is
determined subjectively and is not subject to specific measurable factors and
criteria but rather the Committee's general assessment of the responsibilities
of the position held, the experience of the individual, and the executive's
performance in his job. In setting executive officers' base salaries, the
Committee looks to the competitive marketplace for executive talent, with
specific comparative reference to executives in similar positions as provided
by the 1993 Towers Perrin Entertainment Industry Survey, the 1993 Towers Perrin
Media Industry Compensation Survey, and the 1993 Towers Perrin Compensation
Data Bank Executive Compensation Survey, the first two surveys being widely
used by entertainment and media businesses, respectively, and the latter survey
being widely used throughout all industries, for comparisons of executive
compensation.

The annual bonus of an executive officer is dependent upon individual and
Company performance, and for an executive officer with responsibilities in a
particular operating unit of the Company, the performance of that operating
unit. The business performance measures that are considered in establishing
annual bonuses are the overall operating income and net income of the Company,
and with respect to individual operating units, operating income, cost
performance compared to the annual budget and the prior year, market and
audience share and long-term strategic growth and market position. Performance
evaluations are made annually, and adjustments are made where warranted;
adjustments also take into account new responsibilities

7
<PAGE>

of an executive. The Committee's annual performance evaluation of each
executive is subjective, and not based upon an exact formula for determining
the relative importance of each of the factors considered, nor is there a
precise measure of how each of the individual factors relates to the
Committee's determination of each executive's ultimate annual compensation.

Long-term incentive compensation. The "at risk" long-term incentive
compensation is also divided into two parts--awards under the Incentive
Compensation Plan and awards of stock options. These awards are designed to
provide a greater community of interest between the Company's shareholders and
key employees through gains in the price of the Common Stock over an extended
period, and to encourage such employees to remain in the employ of the Company.
Long-term incentive compensation awards have historically represented the
largest portion of executive officers' overall compensation. Long-term
incentive compensation awards are dependent upon the Committee's general
assessment of the responsibilities of the position held, individual and Company
performance, and for an executive officer with responsibilities in a particular
operating unit of the Company, the performance of that operating unit. The
business performance measures that are considered in establishing these long-
term incentive compensation awards are the overall operating income and net
income of the Company, and with respect to individual operating units,
operating income, cost performance compared to the annual budget and the prior
year, market and audience share and long-term strategic growth and market
position.

As with the Committee's performance evaluation of each executive for annual
compensation purposes, the Committee's performance evaluation for long-term
compensation awards purposes is subjective, and not based upon an exact formula
for determining the relative importance of each of the factors considered, nor
is there a precise measure of how each of the individual factors relates to the
Committee's determination of each executive's ultimate long-term compensation
awards. In the Committee's periodic determination of awards under the Incentive
Compensation Plan and awards of stock options, the Committee also considers the
number and value or price of each type of award the executive has at that time.

The Committee grants "units" under the Incentive Compensation Plan to
executive officers and other key employees of the Company. Each unit bears a
value equal to the excess of the market price of one share of the Company's
Common Stock over a specified dollar floor, plus an interest component. These
awards have been granted historically to executive officers and other key
employees approximately every two and one-half years. Each recipient of such an
award gains vested rights in the award on a graduated basis over the five-year
period of employment following the grant, and an award recipient is only
entitled to the annually credited interest on that award upon completion of the
full five-year period of employment. Awards are paid after those five years in
cash or in part in Common Stock, at the discretion of the Committee. The latest
Incentive Compensation Plan was approved by shareholders in 1988, with
shareholder approval in 1993 of additional units authorized for granting
thereunder.

The Committee also grants options to executive officers and other key
employees of the Company under the 1991 Stock Option Plan. All options
presently outstanding permit each recipient to exercise an option commencing
one year after grant and then only in cumulative annual portions at the rate of
25% of the total number of shares subject to the option. The exercise price of
an option is equal to the market price of the Common Stock on the date of
grant.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. On February 14, 1994 Mr. Burke
retired as President, Chief Executive Officer and Chief Operating Officer. His
1993 salary, as set forth in the Summary Compensation Table on page 10, was
established by the Committee in December 1992, and his 1993 bonus was
established by the Committee in December 1993. Each of these elements of Mr.
Burke's compensation package was determined subjectively. The Committee did not
base Mr. Burke's 1993 salary upon specific, individually calculable performance
measures, nor upon a precise level of comparability with Chief Executive
Officers of other companies, but generally established its salary decision upon
figures compiled by management that compared salaries of Chief Executive
Officers of other advertiser-supported media and entertainment companies (CBS
Inc., Dow Jones & Company, Inc., Gannett Co., Inc., Tribune Company and

8
<PAGE>

The Washington Post Company) as set forth in the stock performance graphs on
page 15, plus The Walt Disney Company, Paramount Communications Inc., Tele-
Communications, Inc., Time Warner Inc. and Viacom Inc. In establishing Mr.
Burke's 1993 salary, the Committee considered also the level of bonus and long-
term incentive awards paid upon the Committee's determination of Mr. Burke's
attainment of generalized performance targets in 1992. With these two separate
levels of compensation, the Committee sought to provide Mr. Burke with a total
compensation package in the middle range of comparability with those of the
other companies mentioned above. Mr. Burke's 1993 salary, as established by the
Committee in December 1992, was a continuation of his 1992 salary with no
increase. The Committee's determination of this 1993 salary, which was a part
of Mr. Burke's overall 1992 compensation package, was based upon the
Committee's subjective considerations set forth in detail in the Company's 1993
proxy statement, and reflected progress by the Company on strategic goals while
under Mr. Burke's leadership.

To determine Mr. Burke's 1993 bonus the Committee in December 1993 did not
use specifically calculable performance measures, but based its subjective
decision upon the Committee's general assessment of the Company's performance
under Mr. Burke's leadership in 1993. The Committee's decision was not based
upon an exact formula for determining the relative importance of each of the
factors considered, nor was there a precise measure of how each of the
individual factors related to the Committee's determination of Mr. Burke's
ultimate compensation. The performance criteria considered in the Committee's
evaluation of Mr. Burke for the determination of his 1993 bonus were: the
Company's operating income increased 19% from $721,805,000 in 1992 to
$862,149,000 in 1993, and income per share on a comparable basis before
extraordinary charge in 1993 and cumulative effect of accounting changes in
1992 increased 22% from $23.45 in 1992 to $28.53 in 1993; operating costs and
expenses in 1993 were favorable compared to the annual budget; and growth in
market shares and audience shares for most of the Company's operating units
improved during 1993. In establishing Mr. Burke's 1993 bonus, the Committee
recognized that the Company under Mr. Burke's leadership over the last four
years has successfully weathered a sluggish economy and a depressed state of
the advertiser-supported media business, and in 1993 the Company made
significant gains in each of these performance criteria under Mr. Burke's
direction, and upon his retirement on February 14, 1994 Mr. Burke left the
Company in a position of strength to face the future.

For the Chief Executive Officer, as for all executive officers, the largest
portion of total compensation is performance based variable elements. The
Committee intends to continue this link between executive compensation and
performance.

OTHER COMPENSATION MATTERS. In 1993 Congress enacted Section 162(m) of the
Internal Revenue Code, which generally disallows an income tax deduction to
public companies for compensation over $1,000,000 paid in a year to any one of
the Chief Executive Officer or the four most highly compensated other executive
officers, to the extent that this compensation is not "performance based"
within the meaning of Section 162(m). The Committee believes that the Company's
long-term incentive plans, as they currently exist, permit the award of future
grants that will result in performance based compensation within the meaning of
Section 162(m). It is the Committee's intention that, under normal
circumstances, future grants to those persons whose compensation would be
subject to the application of Section 162(m) will be made with the limitation
of that section in mind.

For shareholder assistance in a review of the Company's historical
performance, a ten-year performance comparison chart is presented in
conjunction with the five-year performance comparison chart on page 15. The
Committee believes that both comparisons are useful in understanding the
Company's total shareholder return. The ten-year performance comparison was not
considered by the Committee in its 1993 compensation decisions.

The Compensation Committee:
Robert P. Bauman, Chairman
Nicholas F. Brady
John H. Muller, Jr.

9
<PAGE>

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth information with respect to the compensation
of the Chief Executive Officer and the four most highly compensated other
executive officers of the Company at December 31, 1993, in comparison with
their compensation for 1992 and 1991.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ------------------------
SECURITIES
UNDER- LONG-TERM
NAME AND LYING INCENTIVE
PRINCIPAL POSITION OTHER ANNUAL OPTIONS PLAN ALL OTHER
AT DECEMBER 31, 1993 YEAR SALARY($) BONUS($) COMPENSATION($) (#) PAYOUTS($) COMPENSATION($)
- -------------------- ---- --------- -------- --------------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Daniel B. Burke 1993 $555,000 $600,000 $29,000 -0- -0- $164,689(1)
President, Chief Execu- 1992 555,000 330,000 22,500 10,000 $2,310,172(2) 125,653(1)
tive 1991 520,000 300,000 22,000 -0- 2,839,142(3) 252,169(4)
Officer and Chief
Operating Officer
Robert A. Iger 1993 625,000 325,000 -0- 3,000 435,978(5) 5,896(6)
Executive Vice Presi- 1992 575,000 250,000 -0- -0- -0- 5,722(6)
dent, 1991 545,000 200,000 -0- -0- 325,912(7) 5,556(6)
and President of ABC
Television Network Group
Michael P. Mallardi 1993 465,000 400,000 6,000 2,000 1,185,132(8) 5,896(6)
Senior Vice President, 1992 465,000 315,000 5,500 -0- -0- 5,722(6)
and President of 1991 430,000 285,000 5,500 -0- 3,406,970(3) 5,556(6)
Broadcast Group
Ronald J. Doerfler 1993 450,000 400,000 4,000 2,500 1,185,132(8) 120,464(1)
Senior Vice President 1992 450,000 330,000 4,000 -0- -0- 110,427(1)
and 1991 410,000 300,000 4,000 -0- 2,839,142(3) 102,342(1)
Chief Financial Officer
Stephen A. Weiswasser 1993 420,000 350,000 7,200 2,000 888,849(8) 108,864(1)
Senior Vice President 1992 420,000 290,000 11,400 -0- -0- 94,477(1)
and 1991 385,000 250,000 6,600 -0- 1,793,247(3) 89,333(1)
General Counsel, and
President of Multimedia
Group
</TABLE>
- --------
(1) This amount was allocated under the Company's Employee Profit Sharing
Plan (the "Profit Sharing Plan") and the Company's Supplemental Profit Sharing
Plan. The Supplemental Profit Sharing Plan provides to eligible participants
those amounts that would have been allocated to them under the Profit Sharing
Plan but for the limitations of: (i) Internal Revenue Code Section 415 -- which
imposes a limit on the amount of Company contributions that may be allocated
for the benefit of any Profit Sharing Plan participant for any year; and (ii)
Internal Revenue Code Section 401(a)(17) -- which provides that no more than a
given amount of any participant's compensation can be taken into account under
the Profit Sharing Plan for a particular year. For 1993 that amount was
$235,840; for 1992 that amount was $228,860; and for 1991 that amount was
$222,220. (For 1994 that amount is $150,000, as established by Congress under
the Revenue Reconciliation Act of 1993.)

(2) Under a supplementary compensation agreement entered into with Mr. Burke
in 1977, benefits became fully vested in 1981, and he elected to defer receipt
of his benefits until the year following the year of his termination of
employment. Interest was earned on the vested benefits. In 1992, the Board of
Directors amended the agreement, providing for the payment in December 1992 of
the vested benefits and the earned interest.

10
<PAGE>

(3) This award under the Incentive Compensation Plan was made in April 1986,
became fully vested in March 1991, and was paid in December 1991.
(4) This amount consists of: (i) $118,742--amount allocated under the Profit
Sharing Plan and the Supplemental Profit Sharing Plan (see footnote (1) above),
and (ii) $133,427--interest earned on vested benefits under the supplementary
compensation agreement entered into in 1977 (see footnote (2) above).

(5) This amount consists of: (i) $148,142, representing an award under the
Incentive Compensation Plan that was made in July 1988, became fully vested in
June 1993, and was paid in December 1993; and (ii) $287,836, representing an
award under the same plan that was made in October 1988, became fully vested in
September 1993, and was paid in December 1993.

(6) This amount was the Company's matching contribution under the SIP, a
qualified defined contribution retirement plan under Section 401(k) of the
Internal Revenue Code.

(7) This award under the Incentive Compensation Plan was made in July 1986,
became fully vested in June 1991, and was paid in December 1991.

(8) This award under the Incentive Compensation Plan was made in July 1988,
became fully vested in June 1993, and was paid in December 1993.

RETIREMENT BENEFITS

Individuals who become employees of the Company subsequent to 1988, and
employees of American Broadcasting Companies, Inc. ("ABC") and those of other
subsidiaries and divisions of the Company that were previously a part of or
affiliates of ABC, are entitled upon retirement to receive benefits under the
Company's Retirement Plan, as provided for therein. Compensation for pension
purposes under the Retirement Plan consists of the participant's base salary,
commissions, any profit participation based upon written agreement, sales and
incentive bonuses, and overtime and extended workweek compensation, in each
case before giving effect to elections by participants to reduce their taxable
compensation and have contributions made under the SIP and other Company
benefit programs in the amounts of such reductions. Mr. Iger and Mr. Mallardi
participate in the Retirement Plan and are presently credited for pension
purposes with 18 and 25 years of service, respectively.

The following table sets forth estimated annual pensions pursuant to the
terms of the Retirement Plan, including amounts attributable to the Company's
Benefit Equalization Plan (the "BEP") based on indicated levels of average
annual compensation assuming retirement at age 65. Such estimated annual
pensions have been computed on the basis of straight life annuity amounts, and
include offsets with respect to Social Security. The BEP provides to eligible
participants those amounts that would have been allocated to them under the SIP
or accrued for their benefit under the Retirement Plan or the Company's
Supplemental Pension Plan but for the limitations of: (i) Internal Revenue Code
Section 415--which imposes a limit on the amount of Company contributions that
may be allocated to the account of any SIP participant for any year and limits
the amount that may be accrued for the benefit of any Retirement Plan or
Supplemental Pension Plan participant for any year; and (ii) Internal Revenue
Code Section 401(a)(17)--which provides that no more than a given amount of any
participant's compensation can be taken into account in computing SIP,
Retirement Plan or Supplemental Pension Plan benefits for a particular year.
For 1994 that amount is $150,000, as established by Congress under the Revenue
Reconciliation Act of 1993.

11
<PAGE>

RETIREMENT PLAN TABLE

<TABLE>
<CAPTION>
AVERAGE ANNUAL ESTIMATED ANNUAL PENSION BASED ON
COMPENSATION ON YEARS OF CREDITED SERVICE INDICATED
WHICH RETIREMENT -----------------------------------------------------
BENEFITS ARE BASED 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
------------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$250,000 $ 57,265 $ 76,353 $ 95,441 $114,530 $133,618 $153,618
350,000 81,265 108,353 135,441 162,530 189,618 217,618
450,000 105,265 140,353 175,441 210,530 245,618 281,618
550,000 129,265 172,353 215,441 258,530 301,618 345,618
650,000 153,265 204,353 255,441 306,530 357,618 409,618
750,000 177,265 236,353 295,441 354,530 413,618 473,618
850,000 201,265 268,353 335,441 402,530 469,618 537,618
950,000 225,265 300,353 375,441 450,530 525,618 601,618
1,050,000 249,265 332,353 415,441 498,530 581,618 665,618
1,150,000 273,265 364,353 455,441 546,530 637,618 729,618
</TABLE>

Messrs. Burke, Doerfler and Weiswasser are covered under the Supplemental
Pension Plan. The normal retirement benefit formula of the Supplemental Pension
Plan (taking into account the BEP) is the same as the normal retirement benefit
formula of the Retirement Plan (taking into account the BEP), as set forth in
the Retirement Plan Table above. However, a participant's retirement benefit
under the Supplemental Pension Plan is offset by the amount of his benefit
under the Profit Sharing Plan and the Supplemental Profit Sharing Plan. It is
estimated that the following annual benefits would be payable under the
Supplemental Pension Plan (including amounts attributable to the BEP), based
upon a retirement at normal retirement age 65, after the Profit Sharing Plan
and the Supplemental Profit Sharing Plan offsets are taken into account: Mr.
Burke, $164,030; Mr. Doerfler, $264,287; and Mr. Weiswasser, $26,550.

The BEP and the Supplemental Profit Sharing Plan provide that each
participating employee would be entitled to receive immediate payment of his
benefits upon the occurrence of an "Accelerating Event". An Accelerating Event
shall be deemed to have occurred if (i) any person or group, other than
Berkshire and the Berkshire Subsidiaries, shall have acquired beneficial
ownership of 20% or more of the outstanding Common Stock, or if Berkshire and
the Berkshire Subsidiaries shall have acquired beneficial ownership of more
than 30% of the outstanding Common Stock; (ii) more than 50% of the membership
of the Board of Directors shall have been replaced without the approval of a
majority of the incumbent Directors; or (iii) the shareholders of the Company
shall have approved a complete reorganization, merger or consolidation,
liquidation or dissolution of the Company, or the sale or other disposition of
all or substantially all of the assets of the Company, other than in certain
specified circumstances which do not constitute a change in control of the
management or the equity ownership of the Company. See "Security Ownership of
Certain Beneficial Owners and Management" above.

Upon the occurrence of an Accelerating Event, all benefits under the BEP and
the Supplemental Profit Sharing Plan would be deemed to be fully vested and
nonforfeitable and each participant would be entitled to receive immediate
payment of his benefits thereunder in a single lump-sum distribution. This
provision and similar provisions in the Incentive Compensation Plan and the
1991 Stock Option Plan are designed to ensure that, notwithstanding the
occurrence of an Accelerating Event, the Company's management and employees
would receive the benefits previously awarded to them. See "Incentive
Compensation" and "Stock Options" below.

INCENTIVE COMPENSATION

The following table provides information concerning awards made in 1993 to
the named executives under the Incentive Compensation Plan. As provided in this
plan, each unit bears a value equal to the excess of the market price of one
share of Common Stock as at the earlier of the date of the employee's
termination of employment or the fifth anniversary of the date of grant of the
unit to him, over a specified dollar floor. Each employee's units are credited
with 6% interest for the portion of the year during which his units were
outstanding, computed on the basis of the fair market value of the Common Stock
in excess of the specified

12
<PAGE>

dollar floor at December 31 of the year for which the computation was made. An
employee gains vested rights in his units on a graduated basis over the five-
year period following the grant of the units to him. However, he only becomes
entitled to the accumulated interest credits upon completion of the full five-
year period of employment from the date of the grant. An employee's vested
benefits may be paid to him in a lump sum or in installments following his
completion of the vesting period or, if he so elects, payment of such amounts
can be deferred until after termination of his employment. Unpaid benefits earn
interest at 75% of prime rate. At the discretion of the Compensation Committee
of the Board of Directors, benefits may be paid in whole or in part in shares
of Common Stock. The units granted in 1993 to Mr. Iger in the following table
have a $475 floor.

LONG-TERM INCENTIVE PLAN AWARDS IN 1993

<TABLE>
<CAPTION>
PERIOD UNTIL
NUMBER OF MATURATION
NAME UNITS (#) OF GRANT
---- --------- ------------
<S> <C> <C>
Daniel B. Burke -0-
Robert A. Iger 5,000 5 years
Michael P. Mallardi -0-
Ronald J. Doerfler -0-
Stephen A. Weiswasser -0-
</TABLE>

The Incentive Compensation Plan provides that, upon the occurrence of an
Accelerating Event (see "Retirement Benefits" above), all benefits with respect
to units which had not yet vested under the five-year graduated schedule would
be deemed to be fully vested and nonforfeitable (the "Accelerated Units"). The
amount of benefits which an employee would receive with respect to his
Accelerated Units would be equal to the excess of the "Accelerating Event fair
market value" of one share of Common Stock over its specified dollar floor,
rather than the market price valuation applicable to vested units.
"Accelerating Event fair market value" would be the higher of (i) the highest
reported principal securities exchange-reported market price of a share of
Common Stock during the 60-day period prior to the occurrence of the
Accelerating Event and (ii) if the Accelerating Event occurs as a result of any
transaction other than a change in more than 50% of the membership of the Board
of Directors without the approval of a majority of the incumbent directors, the
highest price per share of Common Stock paid in such transaction or series of
transactions. Each employee would be entitled to receive immediate payment of
his benefits under the Incentive Compensation Plan (whether accruing from
vested units or Accelerated Units), as well as the accumulated interest credits
with respect to his units, in a single lump-sum distribution in cash.

STOCK OPTIONS

The following table sets forth information on stock options awarded in 1993
under the 1991 Stock Option Plan. These options awarded are nonqualified
options, and upon exercise the Company will be entitled to an income tax
deduction and the employee will have taxable ordinary income equal to the
excess of the fair market value of the shares acquired over the option exercise
price. In accordance with the provisions of the 1991 Stock Option Plan, unless
an Accelerating Event occurs (see "Retirement Benefits" above), the options may
not be exercised earlier than one year from the grant date, and are exercisable
in cumulative annual portions at the rate of 25% of the total number of shares
subject to the options. The options shall be exercisable in full if an
Accelerating Event occurs more than six months after the grant date. The 1991
Stock Option Plan also provides that options may be exercised within three
months after an optionee's termination of employment (or within 12 months after
that date if the optionee's termination of employment was on account of his
death or disability), but only to the extent the options are otherwise
exercisable on the date of termination. The 1991 Stock Option Plan further
provides that the exercise price of an option may be paid, at the optionee's
election, either in cash or by his delivery of shares of Common Stock
previously held by him at their fair market value. In the table below, the
amounts shown as "potential realizable value" are based on arbitrarily assumed
annualized rates of Common Stock price appreciations of five percent and ten
percent over the full term of the options, as required by Securities and
Exchange Commission regulations. Actual gains, if any, upon option exercise
will depend on the fair market value of the Common Stock on the date of
exercise.

13
<PAGE>

OPTIONS GRANTS IN 1993
<TABLE>
<CAPTION>
INDIVIDUAL GRANT POTENTIAL REALIZABLE
--------------------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES PRICE APPRECIATION
UNDERLYING % OF TOTAL OPTIONS EXERCISE FOR OPTION TERM
OPTIONS GRANTED TO PRICE ($) EXPIRATION ---------------------
NAME GRANTED (#) EMPLOYEES IN 1993 PER SHARE DATE 5% ($) 10% ($)
- ---- ----------- ------------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Daniel B. Burke -0-
Robert A. Iger 3,000 15.7% $634.75 12/7/03 $1,197,570 $3,034,890
Michael P. Mallardi 2,000 10.5% 634.75 12/7/03 798,380 2,023,260
Ronald J. Doerfler 2,500 13.1% 634.75 12/7/03 997,975 2,529,075
Stephen A. Weiswasser 2,000 10.5% 634.75 12/7/03 798,380 2,023,260
</TABLE>

The following table provides information concerning stock options exercised
in 1993 under the Employee Stock Option Plan (the "ESO Plan"), and stock
options held at year-end under the ESO Plan and the 1991 Stock Option Plan, by
the named executives. All options outstanding under the ESO Plan (which plan
was adopted in 1981) are fully exercisable. Value realized for stock options
exercised represents the difference between the market price of the Common
Stock on the date of exercise and the exercise price of such options. Value of
"in-the-money" outstanding stock options represents the spread between the
exercise price of such options and the closing price of the Common Stock on
December 31, 1993. These values, unlike the amount set forth in the column
headed "Value realized", have not been realized. Actual gains, if any, upon
option exercise will depend on the fair market value of the Common Stock on the
date of exercise. "Unexercisable" options are those that are not able to be
exercised in whole or in part because they have not been held long enough to
meet the vesting requirements set forth in the option plan.

AGGREGATED OPTION EXERCISES IN 1993 AND OPTION VALUES AS OF DECEMBER 31, 1993

<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1993 (#) DECEMBER 31, 1993 ($)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel B. Burke -0- 3,840 7,500 $899,138 $956,250
Robert A. Iger -0- -0- 3,000 -0- -0-
Michael P. Mallardi -0- -0- 2,000 -0- -0-
Ronald J. Doerfler 800 $353,300 -0- 2,500 -0- -0-
Stephen A. Weiswasser -0- -0- 2,000 -0- -0-
</TABLE>

14
<PAGE>

FIVE-YEAR AND TEN-YEAR PERFORMANCE COMPARISONS

The following graphs compare the cumulative total shareholder returns on the
Company's Common Stock, the Standard & Poor's Composite Index of 500 Stocks,
and the capital stocks of a representative group of advertiser-supported media
and entertainment companies (CBS Inc., Dow Jones & Company, Inc., Gannett Co.,
Inc., Tribune Company (in the ten-year graph, only since 1984) and The
Washington Post Company). The year-end values of each investment are based on
share price appreciation plus dividends, with the dividends reinvested at the
ex-dividend date for each quarter, or, for 1984, at the end of the month paid.

[GRAPH APPEARS HERE]

<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG CAPITAL CITIES/ABC, INC., S&P 500 INDEX AND REPRESENTATIVE GROUP

<CAPTION>
Measurement period Capital Cities/ S&P 500 Representative
(Fiscal year Covered) ABC, Inc. Index group
- --------------------- --------------- ------- --------------
<S> <C> <C> <C>
Measurement PT -
12/31/88 $ 100 $ 100 $ 100

FYE 12/31/89 $ 156 $ 132 $ 122
FYE 12/31/90 $ 127 $ 128 $ 100
FYE 12/31/91 $ 120 $ 166 $ 112
FYE 12/31/92 $ 140 $ 179 $ 131
FYE 12/31/93 $ 171 $ 197 $ 165
</TABLE>

[GRAPH APPEARS HERE]

<TABLE>
COMPARISON OF TEN YEAR CUMULATIVE RETURN
AMONG CAPITAL CITIES/ABC, INC., S&P 500 INDEX AND REPRESENTATIVE GROUP

FYE 1984 $ 114 $ 106 $ 109
FYE 1985 $ 156 $ 140 $ 154
FYE 1986 $ 187 $ 166 $ 183
FYE 1987 $ 240 $ 175 $ 204
FYE 1988 $ 253 $ 203 $ 207
FYE 1989 $ 394 $ 268 $ 253
FYE 1990 $ 320 $ 260 $ 208
FYE 1991 $ 303 $ 339 $ 231
FYE 1992 $ 355 $ 364 $ 271
FYE 1993 $ 433 $ 401 $ 343
</TABLE>

15
<PAGE>

PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors is seeking shareholder ratification of the appointment
of Ernst & Young as its independent auditors for 1994.

The Audit Committee of the Board of Directors has reviewed and evaluated all
relevant criteria in assessing the performance of Ernst & Young, such as the
quality of its audit work, its knowledge of the industry and the Company's
affairs, its understanding of the Company's system of operational autonomy, the
availability of its professional advice on a timely basis, and the
reasonableness of its fees. Based upon such review and evaluation, the
engagement of Ernst & Young as independent auditors has been approved. If
shareholders do not ratify the appointment of Ernst & Young, the appointment of
independent auditors will be reconsidered by the Audit Committee. Even if the
appointment is ratified, the Audit Committee in its discretion may nevertheless
appoint another firm of independent auditors at any time during the year if the
Audit Committee determines that such a change would be in the best interests of
the shareholders and the Company.

Ernst & Young has audited the Company's financial statements annually since
1968. A representative of Ernst & Young is expected to attend the shareholders
meeting, and will have the opportunity to make a statement if he desires to do
so and will be able to respond to appropriate questions from shareholders.

The Board of Directors recommends a vote FOR ratification of the appointment
of Ernst & Young.

16
<PAGE>

PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED
SHARES, AND REDUCE THE PAR VALUE, OF THE COMMON STOCK

DESCRIPTION OF THE PROPOSED AMENDMENT

The Board of Directors proposes and recommends that the shareholders approve
an amendment of the Certificate of Incorporation of the Company to increase the
number of shares of Common Stock which the Company is authorized to issue from
80,000,000 shares of Common Stock to 300,000,000 shares of Common Stock, and
reduce the par value of all shares of Common Stock from $1 per share to $.10
per share. If the amendment is approved by the shareholders, the Board intends
to effect a 10-for-1 stock split on the Common Stock, by reclassifying each
outstanding share of Common Stock, $1 par value, into ten shares of Common
Stock, $.10 par value.

As of the date hereof, of the 80,000,000 shares of Common Stock presently
authorized, 15,338,311 shares are outstanding, 3,055,185 are held as treasury
shares and 1,337,171 shares of Common Stock are reserved for issuance under
various stock option and other stock related incentive and benefit plans which
have previously been approved by shareholders. The remaining 60,269,333 shares
are available to be issued by the Company. The proposed additional 220,000,000
shares would be a part of the existing class of Common Stock and, if and when
issued, would have the same rights and privileges as the shares of Common Stock
presently issued and outstanding. The holders of Common Stock of the Company
are not entitled to preemptive rights or cumulative voting. The proposed
amendment would not affect the number of shares of Preferred Stock authorized,
which is 4,000,000 shares without par value.

PURPOSES AND EFFECTS OF THE PROPOSED AMENDMENT

If the proposed amendment is approved by the shareholders, there would be
300,000,000 shares authorized, of which approximately 197,000,000 shares would
be required as of the date hereof in order to effect a 10-for-1 stock split and
to provide a reserve for shares to be issued under various stock option and
other stock related incentive and benefit plans. There would be approximately
103,000,000 authorized shares that would be available for issuance by the Board
of Directors in connection with any future stock dividends or stock splits,
financings, acquisitions, management incentive or employee benefit plans and
for other general corporate purposes.

No further action or authorization by shareholders would be necessary prior
to issuance of additional shares of Common Stock except as may be required by
law or applicable stock exchange regulations. Current New York Stock Exchange
regulations would require shareholder approval in connection with an issuance
of Common Stock (including securities convertible into Common Stock) in a
transaction or a series of related transactions, other than a public offering
for cash, if (i) the Common Stock to be issued has voting power equal to or in
excess of 20% of the voting power outstanding before such issuance, (ii) the
number of shares of Common Stock to be issued is equal to or in excess of 20%
of the Common Stock outstanding before such issuance, or (iii) the issuance
would result in a change of control of the Company.

The Board of Directors has no present plans for issuing any of the additional
Common Stock except as would be required in connection with its intention to
effect a 10-for-1 stock split and as would be required in connection with
Common Stock presently reserved for issuance under various of the Company's
stock option and other stock related incentive and benefit plans.

The proposed amendment's reduction of the par value of the authorized shares
of Common Stock from $1 per share to $.10 per share would decrease the tax
payable by the Company under the tax laws of the State of New York which would
be due as a result of an increase in authorized shares. Because the decrease in
par value would occur in combination with a relative increase in the number of
shares outstanding, there would be no change in the Stockholders' Equity on the
Company's Consolidated Balance Sheet.

17
<PAGE>

PURPOSES AND EFFECTS OF THE BOARD'S INTENDED STOCK SPLIT

The Board anticipates that the increase in the number of outstanding shares
of Common Stock resulting from its intended 10-for-1 stock split would place
the market price of the Common Stock in a range more attractive to investors,
particularly individuals, and may result in a broader market for the shares.

The intended stock split would not change the shareholders' equity or
interest in the Company, nor would the split affect the relative rights of any
shareholder or result in a dilution or diminution of any shareholder's
proportionate interest in the Company. However, since the stock split would
result in each shareholder's interest being represented by a greater number of
shares, it is possible that higher brokerage commissions may be payable after
the intended stock split upon a sale or transfer of a shareholder's same
relative interest in Common Stock because that interest would be represented by
a greater number of shares.

The Company has been advised by counsel that the intended stock split would
not result in the recognition of a taxable gain or loss to the shareholders for
federal income tax purposes. In addition, the tax basis for shares in the hands
of a shareholder prior to the distribution of the stock split shares would
become the tax basis for the total number of shares to be held by such
shareholder immediately after such distribution, and the holding period of the
newly acquired shares would be deemed to be the same as the holding period of
the corresponding shares held prior to the stock split.

In 1989 the Board of Directors declared a dividend of one Preferred Share
Purchase Right (a "Right") for each outstanding share of Common Stock. Each
Right entitles the registered holder to purchase from the Company one one-
hundredth of a share of Series A Preferred Stock, no par value (the "Preferred
Shares"), of the Company at a price of $2,000 per one one-hundredth of a
Preferred Share, subject to adjustment, upon a distribution date related to an
attempted takeover of the Company (all as defined in the Rights Agreement
between the Company and Harris Trust Company of New York, a summary of which
was previously furnished to all shareholders). Upon the occurrence of the
intended stock split, the number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right would
be automatically adjusted.

The number of shares of Common Stock available for the Company's stock option
and other stock related incentive and benefit plans, and, where applicable, the
purchase price therefor, would be proportionately adjusted to give effect to
the intended stock split.

The Board of Directors recommends a vote FOR the amendment of the Certificate
of Incorporation to increase the number of shares of Common Stock which the
Company is authorized to issue and to reduce the par value thereof, in order
for the Board to be able to effect its intended 10-for-1 stock split of the
Common Stock.

18
<PAGE>

PROPOSAL TO APPROVE THE EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED

The Board of Directors has adopted certain amendments to the Employee Stock
Purchase Plan (the "Plan"), and is seeking shareholder approval of the Plan, as
amended.

BACKGROUND

For a number of years, the Company has sought to provide a greater community
of interest between the Company's shareholders and its employees and those of
its designated subsidiaries ("Designated Subsidiaries"). To this end the
Company has maintained the Plan to expand the Company's stock option program
(otherwise available to executives and key employees) by extending the benefits
of this policy throughout the employee community.

At the Company's 1977 annual meeting, shareholders adopted the Plan which
authorized the granting of options to purchase an aggregate of 600,000 shares
(adjusted to reflect a two-for-one stock split in 1978) of Common Stock. At the
Company's 1981, 1986 and 1989 annual meetings, shareholders extended the
termination date of the Plan and approved a total of an additional 800,000
shares of Common Stock for use under the Plan. The Plan is presently scheduled
to terminate on December 31, 1994. On March 14, 1994, the Board of Directors
adopted certain amendments to the Plan, and the Plan, as amended, is subject to
shareholder approval (see "Amendments to the Plan" below).

As of February 28, 1994, an aggregate of 1,135,873 shares of Common Stock
have been acquired by employees pursuant to the grant and exercise of options
under the Plan; and approximately 17,000 employees of the Company and its
Designated Subsidiaries are eligible to participate in the Plan.

AMENDMENTS TO THE PLAN

Amendments to the Plan which, under the terms of the Plan, require
shareholder approval are:

(i) An additional 400,000 shares of Common Stock are to be made available
for use under the Plan;

(ii) The Plan's termination date is to be extended so that the Plan will
remain effective for the grant of options through the end of 1999 and the
subsequent exercise of such options (see "Option to Purchase Shares" under
"Summary of the Plan" below).

SUMMARY OF THE PLAN

The following is a summary of the principal provisions of the Plan, as
amended:

Eligibility. All employees of the Company and of its Designated Subsidiaries
are eligible to receive options, except any of the following:

1. Officers of the Company;

2. Employees who customarily work 20 hours per week or less;

3. Employees who customarily work five months or less in a year;

4. Employees whose continuous service with the Company and its Designated
Subsidiaries is less than 15 months.

Option to Purchase Shares. All employees who are eligible to participate in
the Plan as of the Date of Grant (as defined below) in each year will be
offered an option to purchase that number of shares of Common Stock for each
$1,000 of such employee's Annual Compensation as is specified by the committee
which administers the Plan (see "Administration" herein), but no employee may
be granted an option to purchase more than $25,000 worth of Common Stock in any
year. "Annual Compensation" is defined in the Plan to include salary in a
current year, plus other compensation such as commissions, talent fees, bonuses
or overtime, if any, earned in the preceding year.

19
<PAGE>

Eligible employees will receive an offer once in each year during the term of
the Plan (the date of offer is known as the "Date of Grant"). The Date of Grant
is presently the first business day of April in each year, but it may be
changed by the committee which administers the Plan. The number of shares
granted is subject to adjustment to reflect stock splits, dividends or any
changes in the outstanding Common Stock (see "Administration" herein). Each
option will expire when the shares subject to it are purchased (see "Method of
Purchase of Shares" herein) or sooner if the holder is no longer employed by
the Company or a Designated Subsidiary, or has died or otherwise ceased to be
eligible to participate in the Plan or if he has withdrawn his accumulated
contributions (see "Participation" herein).

Options are non-assignable and may be exercised only by the employee to whom
they have been granted.

Participation. An eligible employee participates in the Plan by delivering a
written authorization to the Company to make a monthly payroll deduction of not
more than 1/12 of 85% of the aggregate Date of Grant value of the shares
subject to his option, and not less than $40. An employee may authorize such
payroll deduction at any time after the Date of Grant but not later than 90
days prior to the Date of Purchase (see "Method of Purchase of Shares" herein)
and he may increase or decrease the amount of the deduction or discontinue it
entirely once during the term of the option. An employee who has made payroll
deduction contributions continuously for three months may also make a one-time
payment into the Plan of up to 5% of his Annual Compensation at any time until
January 10 of the calendar year following the Date of Grant. However, an
employee's total payments into the Plan (including his payroll deduction
contributions) may not exceed 85% of the aggregate Date of Grant value of the
shares subject to his option. An employee's payments into the Plan (including
his payroll deduction contributions) will be credited to an account maintained
for him and will bear interest at an annual rate to be fixed by the committee
which administers the Plan. (The current annual interest rate is 5%.) All
payments into the Plan by participating employees will be held with the general
funds of the Company and will not be segregated.

An employee may withdraw all of his accumulated payments (plus interest) at
any time up to thirty days prior to the Date of Purchase whereupon his option
will terminate (see "Method of Purchase of Shares" herein).

Method of Purchase of Shares. The year following the Date of Grant, each
employee's accumulated payments, including accrued interest thereon, will be
used to purchase from the Company, at the price set forth herein under
"Purchase Price", up to the maximum number of shares of Common Stock subject to
his option. Any balance remaining in the employee's account after such purchase
will be returned to him. Unless changed by the committee which administers the
Plan, the Date of Purchase will be the first business day in April of each year
during the term of the Plan. As soon as practicable after each Date of
Purchase, each participant will be furnished a report containing all relevant
information concerning the status of his account.

Purchase Price. The purchase price per share of Common Stock will be the
lesser of:

(a) 85% of its fair market value on the Date of Grant; or

(b) 85% of its fair market value on the Date of Purchase.

Fair market value is deemed to be the mean of the high and low prices of the
Common Stock on the New York Stock Exchange.

Termination and Amendment. The Plan will remain effective for the grant of
options through the end of 1999 and the subsequent exercise of such options,
unless it is sooner terminated by the Board of Directors. The Board of
Directors, in its discretion and at any time, may modify, amend or terminate
the Plan; however, no modification or amendment may be made, without the
approval of the shareholders, which would increase the maximum aggregate number
of shares which may be optioned under the Plan, change the designation of
corporations whose employees are eligible to participate in the Plan, reduce
the purchase price for options to be granted to less than the amount set forth
herein under "Purchase Price", or extend the termination date of the Plan.

20
<PAGE>

Administration. The Plan is administered by the Executive Committee of the
Board of Directors, unless the Board of Directors or its designee appoints a
Stock Purchase Plan Committee. No such Stock Purchase Plan Committee has been
appointed to administer the Plan. The members of the Executive Committee serve
at the pleasure of the Board of Directors. A majority of the members of the
committee which administers the Plan (the "Committee") must consist of
individuals who are ineligible to participate in the Plan. The Committee has
the authority, subject to the express provisions of the Plan, to designate the
Date of Grant and the Date of Purchase in any year; to change the number of
shares to be granted to employees each year; to prescribe the terms and
provisions regarding payroll deductions and the amount of interest to be
credited to employee withholdings; to make adjustments in the number of shares
of Common Stock subject to option and/or the purchase price in the event of a
change in the outstanding Common Stock as a result of any stock dividend, split
up, recapitalization, merger, consolidation, combination or similar change; to
designate the subsidiaries of the Company whose employees shall be eligible to
participate in the Plan; to change the purchase price of the shares of Common
Stock with respect to options not yet granted, provided that the purchase price
shall not be less than that set forth herein under "Purchase Price"; and to
make all rules and regulations to administer the Plan.

TAX ASPECTS

Under the Internal Revenue Code of 1986, an employee will realize no taxable
income upon the grant or exercise of an option if he does not dispose of the
stock acquired within two years after the date the option was granted and
within one year after he acquired the stock. Any gain realized on subsequent
disposition of the stock will be taxable at that time as ordinary income to the
extent of the lesser of (a) 15% of the fair market value of the stock on the
date the option was granted or (b) the profit realized on the disposition. Any
further gain would be taxable as long-term capital gain. The Company will not
be entitled to a deduction for federal income tax purposes in connection with
either the grant or the exercise of the option. On the other hand, if the
employee acquires stock by the exercise of an option granted under the Plan and
disposes of it before the expiration of the holding periods described above, he
will realize ordinary compensation income in the year in which the disposition
occurs. The amount of that income will be the excess of the fair market value
of the acquired stock on the date the option was exercised over the purchase
price of the stock. In this case, the Company would be entitled to a deduction
for federal income tax purposes at the same time and in the same amount. Any
additional gain realized by the employee on disposition of the acquired stock
would be taxable as a capital gain. If the stock had declined in value since
the Date of Purchase, the amount of the decline would be treated as a capital
loss for federal income tax purposes.

The Plan is not qualified under Section 401(a) of the Internal Revenue Code
of 1986 and is not subject to any of the provisions of the Employee Retirement
Income Security Act of 1974.

GRANT OF BENEFITS UNDER THE PLAN

No benefits under the Plan will be received by any officer of the Company. In
1993, all eligible employees as a group purchased under the Plan a total of
72,585 shares at a dollar value of $39,177,753.

The mean of the high and low prices of the Common Stock on the New York Stock
Exchange on March 30, 1994 was $ .

The Board of Directors recommends a vote FOR approval of the Employee Stock
Purchase Plan, as amended.

21
<PAGE>

SHAREHOLDER PROPOSAL CONCERNING DIRECTORS' MINIMUM STOCK OWNERSHIP

The Company has been informed that Evelyn Y. Davis, Watergate Office
Building, 2600 Virginia Avenue, N.W., Suite 215, Washington, D.C. 20037, the
owner of 10 shares of Common Stock, intends to propose at the meeting the
adoption of the following proposal:

SHAREHOLDER PROPOSAL

"Resolved: That the shareholders of Capital Cities/ABC assembled in annual
meeting in person and by proxy, hereby recommend that the Board of Directors
take the necessary steps to require all members of the Board of Directors to
own a minimum of 100 shares of voting stock in Capital Cities/ABC.

"Reasons: Stock ownership by directors makes them partners with other
shareholders.

"Certainly 100 shares is a reasonable minimum amount for ALL directors to own
in view of the director fees and perks they receive.

"Last year the owners of 579,989 shares voting, representing approximately
4.6% of shares voting, voted FOR this proposal.

"If you AGREE, please mark your proxy FOR this proposal."

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS.

Requiring all directors to own a predetermined number of Company shares would
not improve the quality of the Board of Directors and could be
counterproductive. The Company looks for experience, ability and judgment in
selecting candidates to recommend to shareholders for election to the Board of
Directors. The ownership of stock would not enhance the qualifications of a
candidate, nor affect the performance of such person as a director. To impose a
stockholding requirement could limit the Company's ability to obtain the
services of the best qualified persons as directors.

The Board of Directors therefore recommends a vote AGAINST this proposal.

22
<PAGE>

DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

On February 1, 1994, the Company renewed its directors' and officers'
liability insurance policy with Federal Insurance Company for a one-year period
at a total cost of $315,000. The policy insures up to an aggregate of
$10,000,000 (a) the directors and officers of the Company and its subsidiaries
and officers of certain divisions thereof against certain losses from claims
against them in their capacities as directors and officers to the extent such
losses are not indemnified by the Company or such subsidiaries and (b) the
Company and such subsidiaries to the extent they indemnify such directors and
officers for losses as permitted under applicable law. No payments have been
made by the insurance company under this policy or the prior policies as of the
date hereof.

VOTE REQUIRED AND OTHER BUSINESS

Directors will be elected by a plurality of the votes cast at the
shareholders meeting. Approval of the amendment to the Certificate of
Incorporation and the Employee Stock Purchase Plan, as amended, will require
the affirmative vote of the holders of a majority of all outstanding shares
entitled to vote. Approval of each other matter will require the affirmative
vote of a majority of the votes cast thereon, for which purpose only those
votes cast "for" or "against" will be included. On all matters to come before
the meeting other than the proposal to approve the Certificate of Incorporation
and the proposal to approve the Employee Stock Purchase Plan, as amended,
abstentions and broker non-votes will not be considered as votes cast, and will
be counted only for purposes of determining whether a quorum is present at the
meeting. In the tabulation of the vote on the proposal to approve the Employee
Stock Purchase Plan, as amended, a recent interpretation of the Securities and
Exchange Commission requires that abstentions in voting on an employee benefit
plan proposal have the same legal effect as a vote against this proposal.

As of the date of this proxy statement, management knows of no other business
that it intends to present or that others will present at the Shareholders
meeting.

ADDITIONAL INFORMATION

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own
beneficially more than 10 percent of the Common Stock, to file reports of
ownership and changes in ownership of the Common Stock with the Securities and
Exchange Commission and the New York Stock Exchange. The Company is required by
regulations of the Securities and Exchange Commission to identify anyone who
did not timely file a required report. Former director and executive officer
John B. Sias filed one late report of three sales of stock on a date subsequent
to his retirement in March 1993.

1995 SHAREHOLDER PROPOSALS

Shareholders are entitled to submit proposals on matters appropriate for
shareholder action consistent with regulations of the Securities and Exchange
Commission. In order for shareholder proposals for the 1995 Annual Meeting of
Shareholders to be eligible for inclusion in the Company's proxy statement,
they must be received by the Secretary of the Company at the Company's
principal executive offices not later than December 2, 1994.

By Order of the Board of Directors,

Philip R. Farnsworth
Secretary
March 31, 1994

23
<PAGE>

LOGO of Recycled Paper Symbol
printed on recycled paper

<PAGE>

PROXY/VOTING
CAPITAL CITIES/ABC, INC. INSTRUCTION CARD
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 19, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Thomas S. Murphy, Ronald J. Doerfler and Philip
R. Farnsworth, and each of them, with all the powers which the undersigned
would have, if personally present thereat, to vote with respect to all shares
registered in the name or credited to the account of the undersigned upon all
matters that may properly come before the meeting or any adjournment or
adjournments thereof, including the matters described in the Proxy Statement
furnished herewith, subject to any directions indicated on the reverse side
hereof.

This card also provides voting
instructions (for shares
credited to the account of the
undersigned, if any) to the
trustee, Bankers Trust Company,
for the Capital Cities/ABC, Inc.
Savings & Investment Plan (the
"SIP") as more fully described
on page 1 of the accompanying
Proxy Statement.

PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE
<PAGE>

CAPITAL CITIES/ABC, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /

1994

Y
For All
For Against Except Nominee(s)
Written Below

1. Election of Directors--Nominees: R. P. / / / / / /
Bauman, N. F. Brady, W. E. Buffett,
D. B. Burke, F. T. Cary, J. B.
Fairchild, L. H. Goldenson, F. S.
Jones, A. D. Jordan, J. H. Muller, Jr.,
T. S. Murphy, W. Robertson, M. C.
Woodward, Jr.

2. Ratification of Appointment of / / / / / /
Independent Auditors

3. Approval of Amendment of Certificate of / / / / / /
Incorporation to Increase Authorized
Shares

UNLESS OTHERWISE DIRECTED, WHEN PROPERLY EXECUTED, THIS PROXY/VOTING
INSTRUCTION CARD WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4, AND AGAINST
-------
PROPOSAL 5, AND THE TRUSTEE OF THE SIP WILL VOTE AS DESCRIBED ON PAGE 1 OF THE
PROXY STATEMENT.

For Against Abstain

4. Approval of Employee Stock Purchase Plan, / / / / / /
as amended

5. Shareholder Proposal Concerning Directors' / / / / / /
Minimum Stock Ownership

A VOTE FOR ITEMS 1, 2, 3 AND 4 AND AGAINST ITEM 5 IS RECOMMENDED BY THE BOARD
--- -------
OF DIRECTORS

Dated__________________________________________________ , 1994

- --------------------------------------------------------------------------------
Signature

NOTE: Please sign exactly as name appears hereon. For joint accounts both
owners should sign. When signing as executor, administrator, attorney, trustee
or guardian, etc., please sign your full title.

<PAGE>

GRAPHICS APPENDIX LIST

PAGE WHERE
GRAPHIC
APPEARS DESCRIPTION OF GRAPHIC OR CROSS REFERENCE
- --------------------------------------------------------------------------------
page 13 SEE DESCRIPTION OF GRAPHIC IN TEXT
- --------------------------------------------------------------------------------