UNITED VIDEO SATELLITE GROUP INC, DEF 14A, 1997-04-22

UNITED VIDEO SATELLITE GROUP INC
DEF 14A, 1997-04-22
CABLE & OTHER PAY TELEVISION SERVICES

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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate line:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Paragraph 240.14a-11(c) or
Paragraph 240.14a-12

UNITED VIDEO SATELLITE GROUP, INC.
- -----------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

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

(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate line):

[X] No fee required.
[ ] 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:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials.

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

1) Amount Previously Paid:

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

2) Form Schedule or Registration Statement No.:

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

3) Filing Party:

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4) Date Filed:

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<PAGE>

UNITED VIDEO SATELLITE GROUP, INC.
7140 S. Lewis Avenue, Tulsa, Oklahoma 74136-5422

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

Notice of Annual Meeting of Stockholders
to be held on May 14, 1997

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

TO THE STOCKHOLDERS OF UNITED VIDEO SATELLITE GROUP, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
United Video Satellite Group, Inc. (the "Company"), a Delaware
corporation, will be held on Wednesday, May 14, 1997, at 10:00 a.m., in
Salon E of the Southern Hills Marriott Hotel, 1902 East 71st Street,
Tulsa, Oklahoma, for the following purposes:

1. To elect a Board of ten directors for the ensuing year.

2. To approve the Company's Equity Incentive Plan and to approve
an amendment to the Equity Incentive Plan to permit the use
of the Company's Class A Common Stock to be issued in
settlement of stock appreciation rights granted under the
Equity Incentive Plan and in settlement of other incentive
compensation awards, to permit certain forfeited shares to be
used for additional awards, to provide that the Board may
appoint a special Board committee to administer the Plan and
to make certain other changes.

3. To transact such other business as may properly come before
the meeting or any adjournment or postponement of the
meeting.

The Board of Directors has fixed the close of business on April 8, 1997
as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof.

ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO
ENSURE YOUR REPRESENTATION AT THE MEETING, HOWEVER, YOU ARE URGED TO
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
A POSTAGE PREPAID ENVELOPE IS ENCLOSED FOR THAT PURPOSE. ANY
STOCKHOLDER ATTENDING THE MEETING MAY VOTE IN PERSON EVEN IF THAT
STOCKHOLDER HAS RETURNED A PROXY.

By Order of the Board of Directors,

/s/ Peter C. Boylan
----------------------------------
Peter C. Boylan III
Executive Vice President and
Chief Operating Officer

Tulsa, Oklahoma
April 22, 1997

<PAGE>

UNITED VIDEO SATELLITE GROUP, INC.
7140 S. Lewis Avenue, Tulsa, Oklahoma 74136-5422

PROXY STATEMENT

General

The enclosed proxy is solicited by the Board of Directors of
United Video Satellite Group, Inc. (the "Company") for use at the
Annual Meeting of Stockholders to be held on Wednesday, May 14, 1997,
or at any adjournment or postponement of that meeting, for the purposes
set forth in the foregoing Notice of Annual Meeting. This Proxy
Statement is being furnished to holders of Class A Common Stock and
Class B Common Stock, each $.01 par value per share (collectively
"Common Stock"), of the Company. Copies of solicitation material will
be furnished to brokers, fiduciaries and custodians to forward to
beneficial owners of the Company's Class A Common Stock held in their
names. The Company will reimburse brokers and other persons
representing beneficial owners of shares for their reasonable expenses
in forwarding solicitation material to such beneficial owners. This
Proxy Statement and accompanying proxy will be mailed on or about April
22, 1997 to all stockholders entitled to vote at the meeting. Unless
the context otherwise requires, the term "Company" includes the Company
and its consolidated subsidiaries.

Annual Report

The Annual Report to Stockholders covering the Company's fiscal
year ended December 31, 1996, including audited financial statements,
is enclosed herewith. The Annual Report to Stockholders does not form
any part of the material for the solicitation of proxies.

Stockholder Proposals

Proposals of stockholders that are intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received by the
Secretary of the Company not later than December 31, 1997 in order to
be included in the proxy statement and proxy relating to the 1998
Annual Meeting.

Voting Rights

Any stockholder giving a proxy has the power to revoke it any time
before it is exercised. It may be revoked by filing with the Secretary
of the Company at the principal executive office of the Company, 7140
S. Lewis Avenue, Tulsa, Oklahoma 74136-5422, a written notice of
revocation, or a duly executed proxy bearing a later date. It may also
be revoked by attendance at the meeting and election to vote in person.

Only stockholders of record at the close of business on April 8,
1997 are entitled to notice of and to vote at the meeting. At the
close of business on April 8, 1997, the record date, the Company had
outstanding 24,362,320 shares of Class A Common Stock, par value $.01
per share, and 12,373,294 shares of Class B Common Stock, par value
$.01 per share. Each share of Class A Common Stock has one vote and
each share of Class B Common Stock has ten votes. Abstentions and
broker non-votes are counted for purposes of determining the presence
or absence of a quorum for the transaction of business. The
affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy at the Annual Meeting and entitled to
vote will be required to ratify or approve a proposal. Directors are
elected by a plurality of the shares represented in person or by proxy
and entitled to vote. All votes will be tabulated by the inspector of
election appointed for the meeting, who will separately tabulate
affirmative and negative votes, abstentions and broker non-votes.
Abstentions will be counted toward the tabulation of votes cast on
proposals presented to the stockholders and will have the same effect
as negative votes. Broker non-votes are not counted for any purpose in
determining whether a matter has been approved.

<PAGE>

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information as of April 8,
1997 regarding ownership of the Company's Common Stock by (1) each
person believed by the Company to be the beneficial owner of more than
five percent of its outstanding Common Stock; (2) each Director and
nominee for Director and by the Chief Executive Officer and each of the
other executive officers listed under the "Summary Compensation Table"
below ("Named Executive Officers"), and (3) all current executive
officers and directors of the Company as a group. Shares of Class B
Common Stock are convertible immediately into shares of Class A Common
Stock on a one-for-one basis, and accordingly, the holder of the Class
B Common Stock is deemed to own beneficially the same number of shares
of Class A Common Stock in addition to the number of shares of Class A
Common Stock otherwise beneficially owned by it. The table below does
not reflect such beneficial ownership of Class A Common Stock.

COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

Number of Shares Percent of Class
------------------ ------------------
Percent of
Class Class Class Class Vote of All
A B A B Outstanding
Common Common Common Common Common
Beneficial Owner Stock Stock Stock Stock Stock
- ---------------- ------- ------- ------- ------- -----------

Tele-Communications,
Inc. (1)(2) 2,145,466 12,373,294 8.8% 100.0% 85.0%

David P. Beddow (3) 3,000 -- * -- *

William J. Bresnan
(3) 3,000 -- * -- *

Donne F. Fisher (3) 3,000 -- * -- *

Paul A. Gould (3) 3,000 -- * -- *

Camille K. Jayne (3) 3,000 -- * -- *

Larry E. Romrell (3) 3,000 -- * -- *

J.C. Sparkman (3) 3,000 -- * -- *

J. David Wargo (3) 3,000 -- * -- *

Lawrence Flinn, Jr.
(4)(5) 12,573,094 -- 51.6% -- 8.5%

Roy L. Bliss
(5)(6) 775,084 -- 3.2% -- *

Peter C. Boylan
III (7) 225,122 -- * -- *

Rick Brattin (8) 42,666 -- * -- *

Charles Butler Ammann
(9) 2,800 -- * -- *

Craig M. Waggy (9) 2,800 -- * -- *

All Directors and
Executive
Officers as a
Group (12 persons)
(10) 12,827,816 -- 52.1% -- 8.5%

<PAGE>

NOTES:
* Less than 1%

(1) The address of Tele-Communications, Inc. ("TCI") is 5619 DTC
Parkway, Englewood, Colorado 80111-3000.
(2) TCI is party to a Stockholder Agreement with the Company
providing for certain matters relating to the voting of equity
securities of the Company held by it. See "Stockholder Agreement
with TCI".
(3) Includes 3,000 shares of Class A Common Stock subject to options
that will become exercisable within 60 days.
(4) Includes 199,800 shares of Class A Common Stock owned by the
Lawrence Flinn, Jr., Charitable Trust of which Mr. Flinn is
Trustee. Mr. Flinn disclaims beneficial ownership of such
shares.
(5) The address of Mr. Flinn is 411 West Putnam Avenue, Suite 305,
Greenwich, Connecticut 06830. The address of Mr. Bliss is 2868
East 72nd Street, Tulsa, Oklahoma 74136.
(6) Mr. Bliss resigned from his position as a Director and President
and Chief Operating Officer of the Company effective December 3,
1996.
(7) Includes 190,244 shares of Class A Common Stock subject to
presently exercisable options and 30,000 shares of Class A Common
Stock subject to options that will become exercisable within 60
days.
(8) Includes 40,000 shares of Class A Common Stock subject to
presently exercisable options.
(9) Includes 2,800 shares of Class A Common Stock subject to
presently exercisable options.
(10) Includes 195,844 shares of Class A Common Stock subject to
presently exercisable options and 54,000 shares of Class A Common
Stock subject to options that will become exercisable within 60
days.

Section 16 of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who own more
than ten percent of a registered class of the Company's equity
securities (collectively, the "reporting persons") to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission and to furnish the Company with copies of these reports.
Based solely upon a review of copies of such reports filed with the
Company, and written representations received from the reporting
persons, the Company believes that all filings required to be made by
the reporting persons for the last fiscal year were made on a timely
basis except as follows: Mr. Albert M. Stem, President and Chief
Operating Officer of SpaceCom Systems, Inc. and former Vice President
of the Company, and Mr. Roy L. Bliss, the former President and Chief
Operating Officer of the Company and a former director of the Company,
were each late in filing one Form 4, which reported the disposition of
shares of Class A Common Stock.

<PAGE>

PROPOSAL 1 - ELECTION OF DIRECTORS

Directors

The number of Directors of the Company to be elected at the annual
meeting is ten. The Company's Restated Certificate of Incorporation
provides that each Director, if elected, will serve on the Board of
Directors until the next annual meeting or until his or her earlier
death, resignation or removal. Each person nominated for election has
agreed to serve, if elected, and management has no reason to believe
that any of the ten nominees will be unavailable for service. Shares
represented by executed proxies will be voted, if authority to do so is
not withheld, for the election of the ten nominees. If any of the ten
nominees should become unavailable for election due to an unexpected
occurrence, such shares will be voted for the election of such
substitute nominee as the Board of Directors may propose, unless the
Board of Directors reduces the number of Directors.

Name Age Principal Occupation Held with the Company
- ---- --- ------------------------------------------

Lawrence Flinn, Jr. 61 Chairman of the Board of Directors and
Chief Executive Officer
David P. Beddow 53 President and Director
Peter C. Boylan III 33 Executive Vice President, Chief Operating
Officer and Director
William J. Bresnan 63 Director
Donne F. Fisher 58 Director
Paul A. Gould 51 Director
Camille K. Jayne 44 Director
Larry E. Romrell 57 Director
J. C. Sparkman 64 Director
J. David Wargo 43 Director

<PAGE>

Set forth below is a description of the backgrounds of the
Directors and nominees for Directors of the Company.

Lawrence Flinn, Jr. has been the Chairman of the Board of
Directors and Chief Executive Officer since he acquired a majority
ownership interest in the Company in 1976. Mr. Flinn has been a full-
time professional participant in the cable television industry for
nearly 30 years. Until recently, Mr. Flinn was the principal owner of
two privately held companies that owned cable television systems having
over 160,000 subscribers. Mr. Flinn is a director of LodgeNet
Entertainment Corporation.

David P. Beddow was appointed the Company's President in December
1996. Mr. Beddow also currently serves as Senior Vice President of TCI
Technology Ventures, Inc. ("TCITV"), a position held since September
1994. He previously served as Vice President of TCI Technology, Inc.
from June 1993 to September 1994 and Chief Operating Officer of
Primestar Partners, a provider of direct-to-home satellite services,
from March 1990 to June 1993. Mr. Beddow is currently a director of
TCI Satellite Entertainment, Inc.

Peter C. Boylan III, was appointed the Company's Chief Operating
Officer in December 1996. He joined the Company in October 1994 as
Executive Vice President and Chief Financial Officer. Beginning in
1992, Mr. Boylan served with Hallmark Cards, Inc. in its Corporate
Development and Strategy Group, focusing primarily on the
communications and entertainment industries. From 1986 until he joined
Hallmark, Mr. Boylan served as Vice President in the development,
acquisitions, portfolio management and investment management areas with
LaSalle Partners, a privately held real estate investment management
firm.

William J. Bresnan has served since 1984 as the President of
Bresnan Communications, Inc. ("BCI"). BCI is the managing general
partner of BCI (USA), L.P., which is the managing general partner of
Bresnan Communications Company, a partnership that operates cable
systems in the United States. Through its affiliates, Bresnan
International Partners (Chile) and Bresnan International Partners
(Poland), BCI operates or invests in cable systems overseas. TCI or an
affiliate of TCI has an interest in each of the foregoing partnerships.
Currently, Mr. Bresnan is a director of Brooks Fiber Properties, Inc.

Donne F. Fisher was Executive Vice President of TCI from January
1994 to January 1996. On January 1, 1996, Mr. Fisher resigned as
Executive Vice President of TCI. Mr. Fisher was Executive Vice
President of TCI Communications, Inc. ("TCIC") from December 1991 to
October 1994 and was previously Senior Vice President of TCIC since
1982 and Treasurer since 1970. Mr. Fisher is currently a director of
TCI, DMX, Inc., and General Communication, Inc.

<PAGE>

Paul A. Gould has been a Managing Director and Executive Vice
President of Allen & Company Incorporated for over five years.
Currently, Mr. Gould is also serving as a director of TCI, Tele-
Communications International, Inc., Choice Hotels International and
National Patent Development Corporation.

Camille K. Jayne has been the Senior Vice President for the
Digital TV business unit of TCIC since January 1996. Ms. Jayne was
President of BHC Consultants from June 1994 to December 1995 and Senior
Director of New Ventures at Ameritech from January 1991 to June 1994.
From 1986 until she joined Ameritech, Ms. Jayne was First Vice
President of Marketing and Corporate Advertising at Comerica Bank.

Larry E. Romrell has been an Executive Vice President of TCI since
January 1994 and President and Chief Executive Officer of TCITV since
September 1994. Mr. Romrell served as TCIC's Senior Vice President
from January 1991 to September 1994. Prior to January 1991, Mr.
Romrell served as President and Chief Executive Officer of WestMarc
Communications, Inc. and its subsidiaries. Currently, Mr. Romrell is a
director of General Communication, Inc. and Teleport Communications
Group, Inc.

J. C. Sparkman served as Executive Vice President of TCI from
January 1994 through March 1995. Mr. Sparkman retired from TCI in
March 1995. Mr. Sparkman also served as Executive Vice President of
TCIC from 1987 until October 1994. Mr. Sparkman is a director of DMX,
Inc., Texscan Corporation and Shaw Communications, Inc.

J. David Wargo has been President of Wargo & Company, a private
investment company specializing in the communications industry, since
January 1993. Mr. Wargo was a Managing Director of The Putnam
Companies from December 1989 to December 1992.

There are no family relationships among any of the directors and
executive officers of the Company.

Management and the Board of Directors recommend a vote
FOR each nominee.

<PAGE>

PROPOSAL 2 - APPROVAL OF EQUITY INCENTIVE PLAN AND
AMENDMENTS THERETO.

The Board of Directors of the Company has adopted an amendment to
the Company's Equity Incentive Plan (the "Plan" or the "Equity
Incentive Plan") to permit the use of shares of the Company's Class A
Common Stock to settle amounts payable to participants in the Equity
Incentive Plan upon the exercise of stock appreciation rights or to
settle other incentive compensation arrangements with employees, to
permit certain shares of Common Stock that are forfeited or used to pay
tax withholding or the option exercise price to again be used for the
grant of awards under the Plan, to permit the Board of Directors to
appoint additional committees to administer portions of the Plan with
respect to the grant of awards to certain employees, and to make
certain other technical changes to the Plan. The Company's
stockholders are being asked to approve the entire Plan, as well as the
amendments.

Reasons for the Approval of the Plan and the Amendments

Under the provisions of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), compensation paid to certain
Named Executive Officers during a taxable year in excess of $1,000,000
is generally not deductible. There are certain exceptions to this
limitation for compensation attributable to stock options and stock
appreciation rights if, among other things, the stockholders of the
Company have approved the Plan. Although the Plan was originally
approved by the stockholders prior to the initial public offering of
Common Stock of the Company, the regulations under Section 162(m) of
the Code require that the Plan be approved again at this stockholders
meeting in order for future grants of stock options and stock
appreciation rights to be eligible for the exemption from the deduction
limitation. Therefore, the stockholders of the Company are being asked
at this time to approve both the Plan and the amendments to the Plan
described below.

Another requirement contained in the regulations under Section
162(m) of the Code that must be satisfied in order to be eligible for
the exception to the deduction limitation is that option and stock
appreciation rights grants under a plan must be made by a committee
composed solely of two or more outside directors who meet certain
criteria. Because of the narrow definition of outside directors under
the regulations, it may be necessary from time to time to appoint a
special committee to administer grants of stock options and stock
appreciation rights to individuals who are, or who may be expected to
be, Named Executive Officers. Therefore, the Board of Directors has
provided in the amendment for the discretion to appoint more than one
committee to administer certain aspects of the Plan so that it would be
possible to create a special committee for this purpose that would
satisfy the requirements of Section 162(m) of the Code.

The regulations under Section 162(m) of the Code also require that
a plan set forth a maximum limit on the number of shares that may be
granted to an employee pursuant to stock options or stock appreciation
rights. Under the regulations, such limit may be adjusted to reflect
certain changes in the corporate structure or outstanding shares of the
employer. The Board of Directors has amended the Plan to specify that
no more than 800,000 shares of the Company's Class A Common Stock may
be granted to any one employee under an option, or under a stock
appreciation right, and that such limit will be automatically adjusted
to reflect changes in the capital structure of the Company such as
stock dividends, recapitalizations, etc.

The Board of Directors believes that shares of Common Stock that
become available under the Plan as a result of certain forfeitures or
through the use of shares of Common Stock to pay tax withholding or the
option exercise price should be available for future grants under the
Plan and has so provided in the amendment. This portion of the
amendment is effective as of January 1, 1997 and will allow 342,448
shares of Class A Common Stock that were used to pay the exercise price
of stock options since that date to be used for the grant of further
awards under the Plan.

Finally, the amendment will permit the issuance of shares of the
Company's Class A Common Stock as payment upon the exercise of a stock
appreciation right under the Plan or as payment of other incentive
compensation arrangements. At the present time, the Plan requires that
all stock appreciation rights be settled in cash. In order to provide
greater flexibility to the Committee of the Board of Directors which
administers the Plan to make payment upon exercise of stock
appreciation rights and to settle other incentive compensation
arrangements, the amendment approved by the Board of Directors permits
such Committee to make payment for stock appreciation rights either in
cash, in shares of the Company's Class A Common Stock, or a combination
thereof, and to settle other incentive compensation arrangements
through the issuance of Common Stock under the Plan.

The benefits or amounts that will be received by executive
officers and employees under the Plan are not determinable. The
Company granted 518,000 stock options under the Plan in 1996, of which
286,500 were subsequently forfeited.

<PAGE>

Description of the Equity Incentive Plan

The Equity Incentive Plan provides for the grant of non-qualified
stock options, incentive stock options, stock appreciation rights,
restricted stock and other stock based incentive compensation. Under
the Equity Incentive Plan, the maximum number and kind of shares as to
which options, stock appreciation rights, restricted stock or stock
units may be granted (subject to adjustment in certain events as
described below) is 4,000,000 shares of Class A Common Stock (adjusted
for stock splits). Upon the expiration, termination or cancellation
(in whole or in part) of unexercised non-qualified or incentive stock
options, the shares of Class A Common Stock subject thereto will again
be available for option, grant or award under the Equity Incentive
Plan. Pursuant to the amendment adopted by the Board of Directors,
shares of Class A Common Stock covered by an option, or portion
thereof, which are surrendered upon exercise of a stock appreciation
right, shares of restricted stock which are subsequently forfeited,
shares of stock that are used as payment of the exercise price of an
option and shares of stock that are withheld for the payment of taxes
will also be available for option or grant under the Equity Incentive
Plan. No more than 4,000,000 shares of Class A Common Stock may be
issued under the Plan pursuant to incentive stock options.

The Plan has been administered by the Compensation Committee of
the Board of Directors of the Company. Pursuant to the amendment
described above, the Board of Directors has the authority to appoint
additional Board committees to administer the Plan or to make grants of
awards to specified groups of employees. The Board of Directors has
appointed a separate Board committee (the "Special Compensation
Committee") consisting of Messrs. Fisher and Gould to make grants of
awards under, and to administer, the Equity Incentive Plan.

As of April 1, 1997, up to 50% of the employees of the Company and
its subsidiaries may be considered eligible for the grant of awards
under the Plan.

Options, stock appreciation rights, restricted stock and other
stock based incentive compensation may be granted by the Special
Compensation Committee to eligible employees in such numbers and at
such times during the term of the Equity Incentive Plan as the Special
Compensation Committee shall determine, except that the maximum number
of shares subject to one or more options or, as amended, stock
appreciation rights, that can be granted to any employee, in the
aggregate, is 800,000 shares of the Class A Common Stock. In granting
options, stock appreciation rights, restricted stock and other stock
based incentive compensation, the Special Compensation Committee will
take into account such factors as it may deem relevant in order to
accomplish the Equity Incentive Plan's purposes, including one or more
of the following: the extent to which performance goals have been met,
the duties of the respective employees and their present and potential
contributions to the Company's success.

<PAGE>

All non-qualified options granted under the Equity Incentive Plan
will be options which do not meet the requirements of Section 422 of
the Code and will be subject to the following terms and conditions: (i)
the option price per share will be determined by the Special
Compensation Committee but will not in any event be less than 100% of
the fair market value of the Class A Common Stock on the date the
option is granted, (ii) in no event will any option be exercisable more
than ten years after the date the option is granted, and (iii) an
option may not be transferred, except that it may be exercised by an
optionee's legal representative or heirs. If the optionee's employment
is terminated due to disability or death, the option may be exercised
to the extent shares were then purchasable (except that the Special
Compensation Committee may determine in a specific case that particular
limitations shall not apply), but only if exercised by the optionee
within one year of the date of such termination (unless the Special
Compensation Committee shall provide for a different period at the time
the option is granted). If the optionee's employment is terminated by
voluntary resignation with the consent of the Special Compensation
Committee, the option may be exercised to the extent shares were then
purchasable (except that the Special Compensation Committee may
determine in a specific case that particular limitations shall not
apply), but only if exercised by the optionee within three months of
the date of such termination (unless the Special Compensation Committee
shall provide for a different period at the time the option is
granted). If the optionee's employment is terminated for any other
reason, the option will expire immediately unless otherwise specified
by the Special Compensation Committee. The Special Compensation
Committee, at the time it grants an option, may specify other or
additional consequences that would result upon the termination of an
optionee's employment with the Company. The Special Compensation
Committee will determine, with respect to each option grant, the nature
and extent of the restrictions, if any, to be imposed on the shares
which may be purchased thereunder.

At the election of the optionee, all or a portion of the exercise
price of the option may be paid by the surrender of previously acquired
Class A Common Stock owned by the optionee, subject to certain
restrictions. In addition, the Special Compensation Committee may
permit the optionee to pay amounts due under applicable withholding tax
laws upon exercise of options by authorizing the Company to accept
shares of Class A Common Stock.

The Special Compensation Committee may also grant incentive stock
options as defined under Section 422 of the Code. All incentive stock
options issued under the Equity Incentive Plan shall be subject to the
same terms and conditions as the non-qualified options granted under
the Equity Incentive Plan. The aggregate fair market value (determined
as of the date the incentive stock option is granted) of the shares of
Class A Common Stock, with respect to which incentive stock options are
exercisable for the first time by an optionee during any calendar year,
under the Equity Incentive Plan or any other stock option plan adopted
by the Company or any subsidiary or parent, shall not exceed $100,000.
In addition, if an incentive option is granted to an employee who owns
10% or more of the total combined voting power of all classes of the
Company's common stock, the option price for the option must be at
least equal to 110% of the fair market value of the Class A Common
Stock on the date of grant of the option and the option must terminate
no more than five years from the date of grant.

<PAGE>

The Special Compensation Committee may grant a stock appreciation
right either in connection with an option, at the time of grant or by
amendment, or separate from an option. Each stock appreciation right
shall entitle the holder to receive from the Company, upon exercise,
either (i) an amount equal to the excess of the fair market value of
Class A Common Stock over the fair market value per share on the date
of grant times the number of shares as to which the stock appreciation
right is exercised, or (ii) an amount determined on the basis of such
other factors as may be specified by the Special Compensation Committee
at the time of the grant of the stock appreciation right. If the stock
appreciation right was issued in connection with the grant of an
option, the number of shares as to which the stock appreciation right
is exercised shall reduce, on a share-per-share basis, the number of
shares thereafter subject to the option. Pursuant to the amendment
approved by the Board of Directors, payment may be made in shares of
Class A Common Stock valued at fair market value, or in cash, or partly
in shares and partly in cash, as determined by the Special Compensation
Committee in its discretion. The Special Compensation Committee may
permit the holder to pay amounts due under applicable withholding tax
laws upon receipt of shares of Class A Common Stock by authorizing the
Company to withhold or accept shares of Class A Common Stock.

The Special Compensation Committee may also grant shares of
restricted stock to an eligible employee. Such shares shall be
restricted for such periods as the Special Compensation Committee in
its discretion shall determine (the "Restricted Period"), and the
Special Compensation Committee may also specify other terms and
conditions to the right of an employee to receive the shares without
restriction ("Vesting Conditions"). During the Restricted Period and
prior to the satisfaction of any Vesting Conditions, the employee shall
have the entire beneficial interest in, and all rights and privileges
of a stockholder as to, such shares, including the right to vote such
shares and, unless the Special Compensation Committee determines
otherwise, the right to receive dividends, subject to the following
restrictions: (i) the employee shall not be entitled to delivery of
the stock certificate until expiration of the Restricted Period and the
satisfaction of any Vesting Conditions; (ii) none of the shares may be
sold, transferred, assigned, pledged or otherwise encumbered or
disposed of during the Restricted Period or prior to the satisfaction
of any Vesting Conditions; and (iii) all of the shares shall be
forfeited and all rights of the participant to such shares shall
terminate unless the participant remains in continuous employment of
the Company or a subsidiary during the Restricted Period and until any
applicable Vesting Conditions have been satisfied, except as provided
below. On any termination of employment, the Special Compensation
Committee may, in its discretion, permit the participant to retain
restricted stock which would otherwise be forfeited. The Special
Compensation Committee may permit a participant to pay amounts due
under applicable withholding tax laws on lapse of restrictions on
restricted stock by authorizing the Company to withhold shares of Class
A Common Stock.

<PAGE>

The Special Compensation Committee may also grant other types of
stock based incentive compensation to an eligible employee. Such stock
based incentive compensation arrangements shall contain such provisions
as may be established from time to time by the Special Compensation
Committee in its discretion, including vesting requirements,
performance requirements, required payments by the employees or
otherwise. Pursuant to the amendment adopted by the Board of
Directors, the Special Compensation Committee may also grant shares of
Common Stock in satisfaction of other incentive compensation
arrangements. Upon the satisfaction of the conditions established by
the Special Compensation Committee, an employee will be eligible to
receive shares of Class A Common Stock.

In the event of recapitalizations, stock splits, stock dividends,
combinations or exchanges of shares, or other changes in the corporate
structure or shares of the Company, the Equity Incentive Plan provides
that the Special Compensation Committee may make such equitable
adjustments as it deems appropriate in the number and kind of shares
authorized by the Equity Incentive Plan, in the number of shares that
may be issued to individual participants pursuant to options and stock
appreciation rights, in the option price and in the number and kind of
shares or other securities or property subject to options, stock
appreciation rights, awards of restricted stock or other stock based
incentive compensation arrangements.

In the event of certain mergers, consolidations, sales or
liquidations involving the Company, the Equity Incentive Plan provides
that the Company may make provision for the assumption of outstanding
options and other awards under the Equity Incentive Plan by any
acquiring company or may provide for the acceleration of exercisability
of options and stock appreciation rights and the full vesting of
restricted stock and other awards.

No option, stock appreciation right, restricted stock or other
stock based incentive compensation arrangement may be granted pursuant
to the Equity Incentive Plan after the tenth anniversary of the date of
the Equity Incentive Plan's adoption. The Board of Directors may at
any time terminate the Equity Incentive Plan with respect to any shares
of Class A Common Stock not at the time subject to an option, stock
appreciation right, restricted stock award or other stock based
incentive compensation arrangement and may alter or amend the Equity
Incentive Plan (including any amendment deemed necessary to ensure that
the Company may obtain any required regulatory approval or to ensure
that the grant or exercise of options or stock appreciation rights, or
the grant or payment of restricted stock or the grant of other stock
based compensation arrangements or any other provision of the Equity
Incentive Plan complies with Section 16(b) of the Securities Exchange
Act of 1934), provided, however, that the approval of the stockholders
of the Company is required for any amendment if necessary to satisfy
any applicable statutory or regulatory requirement. No change may be
made in any award previously granted that would impair the rights of an
employee with respect thereto without his or her consent.

<PAGE>

Federal Income Tax Consequences of Issuance and Exercise of Options

Under present federal income tax laws and regulations, the federal
income tax consequences to employees and the Company as a result of the
grant and exercise of non-qualified stock options and incentive stock
options should be as described below.

Non-Qualified Stock Options. Employees will not have taxable
income upon the grant of a non-qualified stock option. Upon the
exercise of a non-qualified stock option, the federal income tax
consequences to the employee depend upon whether or not the stock
issued upon exercise is both non-transferable and subject to a
substantial risk of forfeiture. If one or both of the foregoing
conditions are not present, the employee will recognize ordinary income
(subject to withholding by the Company) at the time of such exercise
equal to the excess of the fair market value of the Class A Common
Stock on the date of exercise over the option price. If both
conditions are present, recognition of income and withholding upon the
exercise of a non-qualified stock option will be postponed until the
Stock becomes transferable or is no longer subject to a substantial
risk of forfeiture unless the employee elects to be taxed upon
exercise. At that time, the employee will recognize ordinary income
from exercising the option equal to the excess of the then fair market
value of the Class A Common Stock over the option price. The employee
generally will have a tax basis in the shares of Class A Common Stock
received pursuant to the exercise of a non-qualified stock option equal
to the fair market value of such shares on the date on which the
employee recognizes income.

Under current rulings, if the employee uses previously held shares
of Class A Common Stock in satisfaction of part or all of the exercise
price of a non-qualified stock option, no gain will be recognized on
the disposition of such previously held shares or on receipt of the
equivalent number of shares acquired on exercise. The tax basis (and
holding period) of such previously held shares will be allocated to the
same number of shares acquired on exercise as the number of previously
held shares used to pay the exercise price. The fair market value of
any shares of Class A Common Stock received by the employee in excess
of the number of shares used to pay the exercise price (less the amount
of cash, if any, paid by the employee) will be taxed in accordance with
the rules described in the immediately preceding paragraph. The tax
basis of such shares will be equal to the fair market value of such
shares on the date on which the employee recognizes income, and the
holding period for such additional shares will commence on the date of
exercise of the option.

The Company (or a subsidiary) will be entitled to a deduction, for
federal income tax purposes, in the same amount as the income that the
employee recognizes and in the taxable year in which the employee
recognizes the income.

<PAGE>

Incentive Stock Options. Employees will not have taxable income
upon the grant of an incentive stock option. Upon the exercise of an
incentive stock option, the employee will not have taxable income,
provided the employee at all times from the date of the granting of the
incentive stock option to a date three months before the date of
exercise has been an employee of the Company or a parent or subsidiary.
In the case of an employee who is disabled within the meaning of
Section 22(e)(3) of the Code, the three-month period is extended to one
year, and in the case of an employee's death, there is no time limit
for such tax treatment. However, the excess of the fair market value
of the shares of Class A Common Stock purchased over the exercise price
(the "spread") will increase the alternative minimum taxable income of
the employee, which may cause such employee to incur "alternative
minimum tax." The date on which the spread will be determined is
generally as follows: (i) in the case of an employee who is not an
officer or director of the Company, the date of exercise and (ii) in
the case of an employee who is an officer or director of the Company,
the date on which a sale of such Class A Common Stock would no longer
subject the employee to a claim under Section 16(b) of the Securities
Exchange Act of 1934.

If the employee makes a "disqualifying disposition" of Class A
Common Stock acquired pursuant to the exercise of an incentive stock
option the employee will recognize ordinary income in the year of the
disqualifying distribution equal to the amount by which the fair market
value of the option stock at the time of exercise (or, if less, the
amount realized on such disposition) exceeds the exercise price. To
the extent the amount realized in the disqualifying disposition less
the exercise price of the incentive stock option exceeds the amount
recognized as ordinary income under the rules in the preceding
sentence, such excess would ordinarily constitute a capital gain. If
the exercise price exceeds the amount realized in the disqualifying
disposition, such excess would ordinarily constitute a capital loss. A
disqualifying disposition generally includes a sale, exchange, gift, or
transfer of legal title within one year of exercise of the incentive
stock option or within two years of grant, whichever is later.

The Company and its subsidiaries will not be entitled to any
federal income tax deductions upon the grant or exercise of an
incentive stock option unless the employee makes a disqualifying
disposition of the option stock. If an employee makes such a
disposition, the Company or a subsidiary will then be entitled to a tax
deduction equal to the amount by which the fair market value of the
option stock at the time of exercise (or, if less, the amount realized
on such disposition) exceeds the option price.

<PAGE>

Tax Code Limitations on Deductibility. Section 162(m) of the Code
limits the deductibility, for federal income tax purposes, of
compensation paid to certain employees of the Company to $1,000,000
with respect to any such employee during any taxable year of the
Company. However, certain exceptions apply to this limitation,
including exceptions for compensation paid because of the attainment of
certain performance goals. The Company intends that the approval of
the Equity Incentive Plan by its stockholders and the description of
the Equity Incentive Plan contained herein will satisfy certain of the
requirements of the Code and the regulations for the performance based
exception with respect to certain awards under the Equity Incentive
Plan. The Company generally intends to comply with the requirements of
the Code with respect to the grant and payment of performance based
awards under the Equity Incentive Plan so as to be eligible for the
performance based exception, but it may not be practicable to do so in
all cases. Additionally, the Company may, in its sole discretion,
determine in one or more cases that it is in the Company's best
interests not to satisfy the requirements of the Code for the
exemption.

Management and the Board of Directors recommend a vote
FOR this proposal.

<PAGE>

Compensation of Directors

Directors who are not also employees of the Company or its
subsidiaries receive a fee of $4,000 per meeting attended in person and
a fee of $2,000 per committee meeting attended in person, unless such
committee meeting is held on the same day as a meeting of the full
Board of Directors. Telephonic meetings of boards and committees are
compensable at the rate of $400. Directors who are also employees of
the Company or its subsidiaries receive no additional compensation for
serving as directors. The Company reimburses all of its directors for
reasonable travel and out-of-pocket expenses in connection with their
attendance at meetings of the Board of Directors.

The Company adopted the United Video Satellite Group, Inc. Stock
Option Plan for Non-Employee Directors (the "Directors Plan") on March
8, 1996, subject to stockholder approval, which was given on May 15,
1996. The Company has reserved 165,000 shares of Class A Common Stock
to be issued pursuant to the exercise of options granted under the
Directors Plan. The Directors Plan provided each non-employee director
as of May 15, 1996, an option to purchase 15,000 shares of Class A
Common Stock. Each non-employee director who is newly elected to the
Board of Directors will be granted an option to purchase 15,000 shares
of Class A Common Stock if sufficient shares are then available for
grant thereunder or, if not, an option to purchase the number of shares
then available for grant thereunder. Options granted under the
Directors Plan vest at the rate of 20% per year, beginning one year
after the date of grant; however, upon a change in control of the
Company, as defined in the Directors Plan, the options fully vest.

<PAGE>

Committees and Meetings

The Board of Directors has standing Executive, Audit and
Compensation Committees and has recently established a Special
Compensation Committee. It does not have a nominating committee.

The Executive Committee was established to serve as a
representative committee of the Board of Directors to transact the
ordinary business of the Company when the full membership of the Board
of Directors, or a quorum of the Board, cannot reasonably be convened.
The Executive Committee currently consists of Messrs. Beddow, Flinn
(Chairman) and Romrell.

The Audit Committee was established to recommend selection of the
Company's independent auditors and to review the financial statements
and reports of the Company and the reports of the independent auditors.
The Audit Committee currently consists of Messrs. Beddow, Boylan,
Fisher, Gould and Wargo (Chairman).

The Compensation Committee was established to make recommendations
regarding compensation, including incentive compensation, stock bonus,
stock option, and other incentive or stock plans, and previously
administered the Company's Equity Incentive Plan. The Compensation
Committee also reviews and approves, subject to ratification by the
Board of Directors, all compensation to the executive officers. The
Compensation Committee currently consists of Messrs. Fisher, Flinn,
Gould and Romrell (Chairman).

The Special Compensation Committee was established to grant awards
under the Company's Equity Incentive Plan and to make other
compensation awards where necessary in order to comply with the
requirements of Section 162(m) of the Code. The Special Compensation
Committee currently consists of two members of the Compensation
Committee, Messrs. Fisher and Gould.

During 1996, the Board of Directors held five meetings. Each
Director attended more than 75% of the aggregate number of Board
meetings held during the year. The Audit Committee met separately from
the Board of Directors three times during 1996, the Compensation
Committee met separately four times and the Executive Committee met
separately twice.

Compensation Committee Interlocks and Insider Participation in
Compensation Decisions

Messrs. H. Arthur Bellows, Jr., Abraham H. Frumkin and James M.
Rupp (retired directors) were members of the Compensation Committee
through January 25, 1996. Messrs. Beddow, Gould and Romrell served on
the Compensation Committee through the remainder of 1996.

Mr. Beddow was appointed President of the Company effective
December 4, 1996.

Mr. Romrell is an Executive Vice President of TCI. TCI purchased
$8.1 million of video, program promotion and guide services and
subscriber management services from the Company during 1996.
Additionally, an affiliate of TCI purchased system integration services
from the Company totaling $3.1 million during 1996. The Company
purchased $34.1 million of programming from a TCI affiliate and
production services from its cable operations during 1996.

On August 9, 1996, the Company and Liberty Media Corporation
("Liberty") executed an amended and restated agreement under which the
Company's Superstar division and Liberty's Netlink division contributed
their retail C-band home satellite dish businesses' assets, obligations
and operations, effective April 1, 1996, to a new entity owned 50% each
by UVSG and Liberty. Liberty is a wholly-owned subsidiary of TCI. The
Company has voting control over the venture's operations.

Executive Compensation

The following Summary Compensation Table sets forth a summary of
the compensation paid by the Company during the last three fiscal years
ended December 31, 1996, 1995 and 1994, to the Named Executive
Officers during the fiscal year ended December 31, 1996. During the
last three fiscal years, none of the Named Executive Officers received
any restricted stock awards or long-term incentive payouts nor did any
of the Named Executive Officers receive any other annual compensation.

<PAGE>

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
ANNUAL ANNUAL AWARDS ALL OTHER
NAME AND PRINCIPAL COMPENSATION COMPENSATION OPTIONS COMPENSATION
POSTION (1) YEAR SALARY(S) BONUS(S) SARS(#) (2) ($) (3)

Lawrence Flinn, Jr. 1996 $646,875 $212,710 -- $35,711
Chairman of the Board 1995 $568,750 $351,000 -- $49,970
and Chief Executive Officer 1994 $543,334 $333,000 -- $22,512

Roy L. Bliss (4) 1996 $421,875 $212,710 262,500 $19,736
Retired President and 1995 $375,000 $351,000 -- $40,446
Chief Operating Officer 1994 $325,000 $333,000 -- $17,457

Peter C. Boylan III (5) 1996 $259,721 $212,710 150,000 $21,571
Executive Vice President 1995 $230,644 $200,000 -- $49,529
Chief Operating Officer 1994 $ 46,010 $125,000 200,000 $ 8,610

Rick Brattin (6) 1996 $197,899 $ 50,000 -- $13,099
President Superstar 1995 $172,500 $187,714 -- $18,163
Satellite Entertainment 1994 $128,750 $203,000 135,744 $ 5,382

Charles Butler Ammann (7) 1996 $166,000 $ 25,000 14,000 $ 260
Senior Vice President and 1995 -- -- -- --
General Counsel 1994 -- -- -- --

Craig M. Waggy (8) 1996 $ 99,117 $ 46,170 14,000 $ 3,276
Vice President Finance 1995 $ 51,154 $ 30,000 -- $ 17
and Treasurer 1994 -- -- -- --

</TABLE>

<PAGE>

(1) The positions shown represent the offices held by such persons at
the end of 1996.
(2) All grants for 1996 and 1994 represent stock options to acquire
Class A Common Stock under the Company's Equity Incentive Plan,
except that Mr. Brattin's 1994 award included 95,744 stock
appreciation rights with an initial value of $71,400 applicable to
the Company's Superstar Satellite Entertainment division only.
(3) Includes contributions under (i) the Company's SERP and 401(k)
Plans and, (ii) the compensation component of term life insurance
premiums, respectively as follows for 1996: Mr. Flinn, $32,903
and $2,808; Mr. Bliss, $18,584 and $1,152; Mr. Boylan, $21,355 and
$216; Mr. Brattin, $12,861 and $238; Mr. Ammann, none and $260;
and Mr. Waggy, $3,167 and $109.
(4) Mr. Bliss resigned from his position as a Director and President
and Chief Operating Officer of the Company effective December 3,
1996.
(5) Mr. Boylan joined the Company on October 18, 1994.
(6) Effective December 4, 1996, Mr. Brattin ceased to be an officer of
the Company.
(7) Mr. Ammann joined the Company on January 16, 1996.
(8) Mr. Waggy joined the Company on June 19, 1995.

The following table sets forth information about option and stock
appreciation right grants.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

PERCENT
OF TOTAL POTENTIAL REALIZABLE POTENTIAL REALIZABLE
OPTIONS SARS VALUE OF ASSUMED ANNUAL VALUE OF ASSUMED ANNUAL
GRANTED TO EXERCISE RATES OF STOCK PRICE RATES OF STOCK PRICE
OPTIONS/ EMPLOYEES OF BASE APPRECIATION FOR APPRECIATION FOR
SARS IN FISCAL PRICE EXPIRATION OPTION TERM - OPTION TERM -
NAME GRANTED(#) YEAR (1) ($/SHARE) DATE 5% ($) 10% ($)

Lawrence Flinn, Jr. -- -- -- -- -- --

Roy L. Bliss (2)(3) 262,500 50.7% $22.75 04-23-06 $3,755,680 $9,517,631

Peter C. Boylan III (2) 150,000 29.0% $22.75 04-23-06 $2,146,103 $5,438,646

Rick Brattin -- -- -- -- -- --

Charles Butler Ammann 14,000 2.7% $12.50 01-15-06 $ 110,057 $ 278,905
(2)

Craig M. Waggy (2) 14,000 2.7% $12.50 01-15-06 $ 110,057 $ 278,905

</TABLE>

<PAGE>

(1) Computation excludes 120,000 options granted under the United
Video Satellite Group, Inc. Stock Option Plan for Non-Employee
Directors.
(2) Incentive and non-qualified stock options to acquire shares of the
Company's Class A Common Stock.
(3) The 1996 option grants to Mr. Bliss were cancelled effective
December 3, 1996, the date he resigned from his position as a
Director and President and Chief Operating Officer of the Company.

The following table sets forth information concerning outstanding
options and stock appreciation rights held by the Named Executive
Officers at December 31, 1996.

AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES

NUMBER OF VALUE OF UNEXERCISED IN-
SHARES UNEXERCISED OPTIONS/SARS THE-MONEY OPTIONS/SARS
ACQUIRED ON VALUE AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)(1)(2)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE

Lawrence Flinn, Jr. -- -- -- / -- -- / --

Roy L. Bliss -- -- -- / -- -- / --

Peter C. Boylan III
Stock Options 9,756 $28,963 190,244 / 150,000 $1,379,269 / --

Rick Brattin
Stock Options (3) -- -- 32,000 / 48,000 $ 259,360 / $333,720
Stock Appreciation
Rights (4) -- -- 236,734 / 172,298 $ 531,746 / $281,729

Charles Butler Ammann -- -- -- / 14,000 $ -- / $ 70,000
(5)

Craig M. Waggy (5) -- -- -- / 14,000 $ -- / $ 70,000

</TABLE>

<PAGE>

(1) The SARs generally allow the holders to receive payments from the
issuer of the SAR upon termination of employment with the Company
or its subsidiaries in an amount equal to the increase in value,
based upon a formula valuation approach tied to the issuer's
EBITDA (earnings before interest, taxes, depreciation and
amortization), income before income taxes or net income, as the
case may be, between the date the SARs were issued and the
employment termination date. The Company has a preference that
requires a certain amount of annual growth (generally 8-10%)
before the SAR appreciates. Additionally, in certain
circumstances, the Company has the ability to retire the SARs. In
the event of a material adverse change in the issuing Company's
operating condition, the issuing company, in its sole discretion,
may elect to use an appraised value instead of the formula value
provided in the SARs. The Company believes that a material
adverse change has occurred with respect to its Superstar
Satellite Entertainment division and has adjusted the value
attributed to all SARs of that division to their estimated values.
(2) The value of unexercised in-the-money options is calculated based
upon the last reported sales price per share of the Company's
Class A Common Stock on the Nasdaq National Market on December 31,
1996 ($17.50), less the exercise price.
(3) Effective January 1, 1997, 8,000 of the unexercisable options
shown became vested and, therefore, exercisable.
(4) SARs shown for Mr. Brattin are applicable to the Company's
Superstar Satellite Entertainment division only.
(5) Effective January 16, 1997, 2,800 of the unexercisable options
shown became vested and, therefore, exercisable.

<PAGE>

Compensation Committee Report

The report of the Compensation Committee of the Board of Directors
(the "Compensation Committee") shall not be deemed incorporated by
reference by any general statement incorporating by reference this
proxy statement into any filing under the Securities Act of 1933 or
under the Securities Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.

Goals. The Company is committed to providing an executive
compensation program that promotes and supports the Company's mission
and its stockholder objectives. This commitment requires an executive
compensation program that is managed as an investment in the Company's
executives. In return, these executives are expected to contribute to
the Company's successful financial performance and help provide an
above average return to its stockholders. The Company's executive
compensation program must also:

- Align the interests of the executives with those of the
Company's stockholders by focusing executives on achieving
performance objectives that enhance stockholder value on a
continuing basis;

- Enable the Company to attract, retain and motivate high caliber
executives who are among the most skilled, talented and
persistent individuals available in a very competitive market
place;

- Inspire executives to innovatively and aggressively pursue
individual, team, department and Company goals;

- Emphasize "pay for performance" by having a significant portion
of our executives' total compensation "at risk";

- Establish a general corporate atmosphere that encourages a
willingness to take calculated risks, undertake mutually
supportive team efforts and develop leadership to maintain a
company that acts quickly and flexibly for the benefit of its
customers and stockholders; and

- Require each executive to own and maintain a meaningful equity
interest in the Company and together manage the business from
the perspective of a long-term investor and business owner.

The Company's Executive Compensation Policy is implemented by the
Compensation Committee of its Board of Directors.

<PAGE>

The Company has designed its executive compensation program using
the above objectives as its foundation. The following describes the
three components of this program and how each relates to Company goals.

Base Salary. Base compensation for the Chief Executive Officer
and the company's other executive officers in 1996, to the extent not
specified by employment agreements, was proposed by the Chief Executive
Officer to the Compensation Committee. The Chief Executive Officer
arrived at his proposal after consultation with an independent
compensation consulting firm who conducted an extensive survey at
similar companies, among others. The factors considered by the Chief
Executive Officer in determining base compensation were largely based
upon the study, but considered the goals stated above. The salary
levels proposed were evaluated by the Compensation Committee based upon
the study and are intended to be consistent with competitive practices
(including companies with comparable market valuations, lines of
business and/or revenues) and level of responsibility (with salary
increases reflecting competitive and economic trends, the overall
financial performance of the Company and the performance of the
individual executive). Factors considered in gauging the Company's
overall financial performance include the Company's revenues and
profits, but market performance of the Company's common stock was not
directly considered.

Annual Bonus. The Company regularly pays cash bonuses to its
executive officers. Bonuses for executive officers in 1996 who were
responsible for a specific aspect of the Company's operations were
based upon the performance of those operations, specifically by the
growth in pretax income of the particular subsidiary or division and
other factors negotiated with the individual officers. Bonuses for
executive officers who had Company-wide responsibility, including the
Chief Executive Officer, were allocated from a bonus pool equal to
seven percent of the growth in the Company's pretax income (the
"Executive Pool"). Once the amount of the bonus pool was established,
the Chief Executive Officer and the Chief Operating Officer recommended
to the Compensation Committee the distribution of the pool to the
various participants. The recommendation, and the Compensation
Committee's evaluation, were based upon the attainment of specified
goals, the completion of special projects undertaken during the past
fiscal year, contribution to strategic acquisitions and alliances and
development of new lines of business for the Company in addition to
other criteria, mainly subjective.

Stock Option Plan. Long-term management incentives are intended
to be provided by periodically granting stock options to executives.
No specific formulas are used in determining stock option grants.
Factors taken into account in awarding stock options are generally the
same as those used in setting base salaries and in awarding annual
bonuses. The number of options previously awarded to and held by
executive officers is also reviewed in determining current option
grants. During 1996, five executive officers of the Company were
granted stock options due to either the performance of the Company or
the performance of the specific division of the Company for which the
officer is responsible; one executive officer was granted a stock
option as a recruiting incentive.

Stock Retention. The Company requires that all executives retain
at least 10% of shares obtained through exercise of stock options. The
Company believes all stockholders benefit when the Company is managed
with a goal of maximizing the long-term return to stockholders.
Stockholder return can only be maximized when executives are
stockholders and, therefore, also conduct business in their own best
self-interests.

Other Matters. Provisions of the Internal Revenue Code limit,
with certain exceptions, the deductibility by the Company for federal
income tax purposes of any Named Executive Officer's annual
compensation exceeding $1,000,000. None of the Company's current named
executive officers have received otherwise deductible compensation that
would be subject to this limit and could do so at current salary levels
only in connection with the exercise of stock options or payment of
bonuses. The Company generally intends to comply with the requirements
of the Code for the available exemption from the $1,000,000 limitation,
but it may not be practicable to do so in all cases. Accordingly, the
Company may, in its sole discretion, determine in one or more cases
that it is in the Company's best interests not to satisfy the
requirements of the Code for the exemption.

COMPENSATION COMMITTEE

Donne F. Fisher
Lawrence Flinn, Jr.
Paul A. Gould
Larry E. Romrell

<PAGE>

Stock Price Performance Graph

The stock price performance graph shall not be deemed incorporated
by reference by any general statement incorporating by reference this
proxy statement into any filing under the Securities Act of 1933 or
under the Securities Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.

The graph below compares the cumulative return of the Company's
Class A Common Stock against the Total Return Index for the Nasdaq
Stock Market (U.S.) and a peer group which is comprised of the Total
Return Index for the Nasdaq Telecommunications Stocks, excluding
telephone communications companies. The cumulative return depicted is
based upon an initial investment of $100 over the period November 19,
1993 through December 31, 1996. The stock price performance on the
graph is not necessarily an indicator of future price performance.

The cumulative return of the Company's Class A Common Stock is
based upon its initial public offering price of $8.00, adjusted for
stock split, and the last reported sale price of the Class A Common
Stock as reported on the Nasdaq National Market System on the last
trading day of 1996 ($17.50).

Total Cumulative Shareholder Return Since IPO

[Performance Graph appears in this space.]

Assumes $100 invested on November 19, 1993 in United Video Satellite
Group, Inc. Class A Common Stock, Nasdaq Stock Market (US Companies)
Index and Peer Group Index.

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

November 19, December 31,
------------ ----------------------------------
1993 1993 1994 1995 1996
---- ---- ---- ---- ----

United Video
Satellite Group,
Inc. $100 $ 81 $150 $169 $219

Nasdaq Stock Market
(US Companies)
Index $100 $103 $101 $142 $175

Peer Group Index $100 $104 $ 87 $111 $ 92

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

<PAGE>

Employment Agreements

The Company has employment agreements with Messrs. Flinn and
Boylan. The agreements have terms ending on January 25, 1999, and
provide for 1997 base salaries of $698,625 and $284,765 for Messrs.
Flinn and Boylan, respectively, with annual increases of 8% in base
salary for Mr. Flinn and 12.5% in base salary for Mr. Boylan. Bonuses
may be granted from time to time at the discretion of the Compensation
Committee. Messrs. Flinn and Boylan have each agreed they will not
compete against the Company during the period they are employed by the
Company and for three years after termination of the agreement.
Employment may be terminated by the Company at any time, with or
without cause. If employment is terminated without cause, the
terminated individual is entitled to (i) a continuation of certain
employee benefits, (ii) a severance payment equal to the amount of the
base salary that would have been receivable through the later of the
remainder of the agreement's term or one year from the date of
termination, and (iii) payment of one-half of the base salary for the
balance of the three-year period of the agreement not to compete
(unless the terminated individual is employed or engaged as a full-time
consultant). If employment is terminated by the Company or if the
individual resigns after being assigned to a position of lesser
responsibility, in either case within a six-month period after a change
of control, the individual is entitled to a continuation of certain
employee benefits and a severance payment equal to the amount of their
base salary for the remainder of a two-year period following the change
in control.

Mr. Flinn has announced his intention to resign as Chairman of the
Board and Chief Executive Officer of the Company during the Spring of
1997 due to health concerns. Mr. Flinn will continue to serve on the
Board of Directors, Executive Committee and Compensation Committee and
as an advisor to the Company at a reduced salary.

Separation Agreement

In connection with Mr. Bliss' resignation from his position with
the Company, the Company entered into a separation agreement with Mr.
Bliss which provides for, among other things, annual payments of
$474,609, $533,936 and $215,995 for the years ended December 31, 1997,
1998 and 1999, respectively, and health, dental and disability coverage
through January 30, 1999. Pursuant to his Employment Agreement,
certain of the payments scheduled to be made during 1999 will be
forfeited by Mr. Bliss in the event he commences work as a full-time
employee or consultant during that time period. The amounts payable
and other benefits due under the term of Mr. Bliss' separation
agreement are consistent with but in lieu of any amounts that would
have been payable or due arising from his employment or resignation
from employment, including payment due under his Employment Agreement.

<PAGE>

Stockholder Agreement with TCI

On January 25, 1996, TCI acquired a controlling interest in the
Company from Mr. Flinn, the Company's Chairman and Chief Executive
Officer, when the Company merged (the "Merger") with a wholly owned
subsidiary of TCI pursuant to an Agreement and Plan of Merger dated as
of July 10, 1995, as amended (the "Merger Agreement"), among the
Company, TCI and TCI Merger Sub, Inc. In connection with the Merger,
the Company and TCI entered into a Stockholder Agreement dated as of
January 25, 1996, which currently requires TCI to vote its shares of
the Company's equity securities in any general election of directors in
favor of the election of Mr. Boylan as a director so long as he is an
executive officer of the Company and of Mr. Flinn as a director so long
as he owns at least 20% of the then outstanding equity securities of
the Company (or lesser amounts in certain circumstances). The
Stockholder Agreement in certain circumstances also limits TCI's
ability to vote its equity securities of the Company at a stockholders'
meeting in favor of certain transactions requiring stockholder
approval.

Pursuant to the terms of the Merger Agreement, holders of the
Company's Class A Common Stock had the right to elect to have up to 50%
of their shares of Class A Common Stock converted into "Merger
Consideration" consisting of one share of TCI's Redeemable Convertible
TCI Group Preferred Stock, Series G, par value $.01 per share ("TCI
Group Preferred Stock"), and one share of TCI's Redeemable Convertible
Liberty Media Group Preferred Stock, Series H, par value $.01 per share
("Liberty Media Group Preferred Stock"). Prior to the Merger, 50% of
the then outstanding shares of the Company's Class B Common Stock, all
of which were owned by Mr. Flinn, were converted into shares of the
Company's Class A Common Stock, and the remaining shares of the
Company's Class B Common Stock held by Mr. Flinn, upon consummation of
the Merger, each were converted into Merger Consideration consisting of
one share of TCI Group Preferred Stock and one share of Liberty Media
Group Preferred Stock. As a consequence of the Merger, TCI acquired
2,145,466 shares of the Company's Class A Common Stock and 12,373,294
shares of the Company's Class B Common Stock, which represented
approximately 86% of the voting power of all of the Company's
outstanding Common Stock.

Certain Transactions

In 1995, the Company loaned to Mr. Bliss, a total of $443,000 to
pay the exercise price of stock options granted to him. The largest
aggregate amount outstanding under the demand loan during the fiscal
year ended December 31, 1996 was $509,444. Mr. Bliss repaid the full
amount of the loan plus accrued interest, at 8% compounded annually, in
March 1997.

TCI purchased $8.1 million of video, program promotion and guide
services and subscriber management services from the Company during
1996. Additionally, an affiliate of TCI purchased system integration
services from the Company totaling $3.1 million during 1996. The
Company purchased $34.1 million of programming from a TCI affiliate and
production services from its cable operations during 1996.

See also "Compensation Committee Interlocks and Insider
Participation in Compensation Decisions".

Independent Auditors

The Company's independent auditors for the year ended December 31,
1996 were Ernst & Young LLP. Representatives of Ernst & Young LLP, who
are expected to be present at the Annual Meeting, will have an
opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.

<PAGE>

OTHER MATTERS

The Board of Directors knows of no other business to be presented
at the meeting, but if other matters do properly come before the
meeting, it is intended that the persons named in the proxy will vote
in respect thereof in accordance with their best judgment.

The Board of Directors encourages you to have your shares voted by
signing and returning the enclosed proxy. The fact that you will have
returned your proxy in advance will not affect your right to vote in
person should you find it possible to attend. However, by signing and
returning the proxy, you have assured your representation at the Annual
Meeting. Thank you for your cooperation.

By Order of the Board of Directors,

/s/ Charles Ammann
-----------------------------------
Charles Butler Ammann
Secretary

Tulsa, Oklahoma
April 22, 1997

30
<PAGE>

APPENDIX - FORM OF PROXY

Definitive Copy

PROXY
COMMON STOCK
(CLASS A)

UNITED VIDEO SATELLITE GROUP, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

UNITED VIDEO SATELLITE GROUP, INC.

Annual Meeting of Shareholders - May 14, 1997

The undersigned hereby appoints David P. Beddow, Peter C. Boylan III
and Charles B. Ammann, or any of them, with full power of substitution
in each, proxies to vote all stock of the undersigned in United Video
Satellite Group, Inc. at the Annual Meeting of Shareholders to be held
in Salon E at the Southern Hills Marriott Hotel, 1902 East 71st Street,
Tulsa, Oklahoma, on May 14, 1997, at 10:00 a.m., local time, and at any
and all adjournments thereof, upon the matter of the election of
directors, the proposal referred to in Item 2 of this proxy and any
other business that may properly come before the Annual Meeting.

Shares will be voted as specified. IF NO SPECIFICATION IS MADE, SHARES
WILL BE VOTED TO ELECT THE DIRECTORS AS PROPOSED. The proxies or
substitutes may vote accordingly in their discretion upon any other
business that may properly come before this Annual Meeting or any
adjournments thereof.

This Proxy is Continued on the Reverse Side
Please Sign on the Reverse Side and Return Promptly

--- Please mark your
| X | vote as in this
--- example

1: ELECTION OF DIRECTORS: Nominees: Lawrence Flinn, Jr., Peter C.
Boylan III, David P. Beddow, William J. Bresnan, Donne F. Fisher, Paul
A. Gould, Camille K. Jayne, Larry E. Romrell, J. C. Sparkman and J.
David Wargo.

VOTE FOR VOTE WITHHELD
All nominees from all nominees

__ __
|__| |__|

To withhold authority to vote for any nominee, write that
nominee's name on the space below.

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

2. To ratify and approve the United Video Satellite Group, Inc. Equity
Incentive Plan and amendments thereto.

FOR AGAINST ABSTAIN

__ __ __
|__| |__| |__|

Please mark, sign, date and return this proxy card promptly.

SIGNATURE DATE
-------------------------- -----------------------

NOTE: Please sign this proxy exactly as your name appears hereon,
including the title "Executor", "Trustee", etc., if same is indicated.
If joint account, each joint owner should sign. If stock is held by a
corporation, this proxy should be executed by a proper officer thereof.

<PAGE>