Belo DEF 14A 2006 Documents found in this filing:Table of Contents
UNITED STATES SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities
Belo Corp. (Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box):
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Robert W. Decherd
Chairman of the Board
President and Chief Executive Officer
April 5, 2006
Dear Fellow Shareholder:
We invite you to attend our annual meeting of shareholders that
will be held on May 9, 2006 in The Pavilion of the Belo
Mansion, at 2101 Ross Avenue, Dallas, Texas. At the meeting, you
will hear a report on Belos operations and have a chance
to meet your directors and executive officers. This package
includes the formal notice, proxy statement, and proxy card for
the meeting, together with our 2005 annual report.
The proxy statement tells you more about the agenda and voting
procedures for the meeting. It also describes how the Board
operates and provides information about our directors, including
those nominated for election at this years meeting.
Whether or not you attend the meeting, we encourage you to vote
your shares as soon as possible prior to the meeting either by
returning your proxy card or by voting using the telephone or
Internet voting procedures outlined in the enclosed materials.
Even if you own only a few shares, it is important that your
shares be represented at the meeting.
We hope to see you on May 9th.
Belo Corp. P. O. Box 655237 Dallas,
Texas 75265-5237 Tel. 214.977.6606 Fax
214.977.6603
www.belo.com Deliveries 400 South
Record Street Dallas, Texas 75202-4841
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Belo Corp.
P. O. Box 655237
Dallas, Texas 75265-5237
www.belo.com
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 9, 2006
To Belo Shareholders:
Please join us for the 2006 annual meeting of shareholders of
Belo Corp.. The meeting will be held in The Pavilion of the Belo
Mansion, at 2101 Ross Avenue, Dallas, Texas, on Tuesday,
May 9, 2006, at 11:00 a.m., Dallas, Texas time.
Refreshments will be served prior to the meeting, starting at
10:00 a.m..
At the meeting, the holders of Belo Series A common stock
and Belo Series B common stock will act on the following
matters:
All holders of record of shares of Belo Series A common
stock and Belo Series B common stock at the close of
business on March 17, 2006 are entitled to vote at the
meeting or at any postponement or adjournment of the meeting.
April 5, 2006
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Belo Corp.
P. O. Box 655237
Dallas, Texas 75265-5237
www.belo.com
PROXY STATEMENT
For the Annual Meeting of Shareholders
To Be Held On May 9, 2006
This proxy statement contains information related to the annual
meeting of shareholders of Belo Corp. to be held on Tuesday,
May 9, 2006, beginning at 11:00 a.m., Dallas, Texas
time, at The Pavilion of the Belo Mansion, 2101 Ross Avenue,
Dallas, Texas, and any postponement or adjournment of the
meeting.
This proxy statement and related proxy card will be distributed
to shareholders beginning on or about April 5, 2006.
ABOUT THE MEETING
What is the purpose of the annual meeting?
At the annual meeting, shareholders will act on matters outlined
in the accompanying notice, including the election of four
directors, the ratification of the appointment of
Ernst & Young LLP as the Companys independent
registered public accounting firm, and any other matters
properly brought before the meeting. Management will report on
Belos performance in 2005 and respond to questions and
comments from shareholders.
Who can attend the annual meeting?
Shareholders and guests of Belo may attend the annual meeting.
Who may vote at the meeting?
Only shareholders who owned Belo shares at the close of business
on March 17, 2006, the record date, or their duly appointed
proxies, are entitled to vote at the meeting. If you owned Belo
shares at the close of business on March 17, 2006, you are
entitled to vote all of the shares that you held on that date at
the meeting, or any postponement or adjournment of the meeting.
Our common stock is divided into two series: Series A
common stock and Series B common stock. Holders of either
series of common stock as of the close of business on the record
date will be entitled to vote at the meeting. At the close of
business on the record date, a total of 90,039,976 shares
of Series A common stock and 15,122,077 shares of
Series B common stock were outstanding and entitled to vote.
What are the voting rights of the holders of Series A
common stock and Series B common stock?
Holders of Series A and Series B common stock vote
together as a single class on all matters to be acted upon at
the annual meeting. Each outstanding share of Series A
common stock will be entitled to one vote on each matter. Each
outstanding share of Series B common stock will be entitled
to 10 votes on each matter.
What constitutes a quorum to conduct business at the
meeting?
In order to carry on the business of the meeting, we must have a
quorum present in person or by proxy. Both a majority of the
voting power of the outstanding shares eligible to vote and at
least one-third of the outstanding shares entitled to vote must
be present at the meeting, in person or by proxy, in order to
constitute a quorum.
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Abstentions and broker non-votes are counted as present at the
meeting for purposes of determining whether we have a quorum. A
broker non-vote occurs when a broker or other nominee returns a
proxy but does not vote on a particular proposal because the
broker or nominee does not have authority to vote on that
particular item and has not received voting instructions from
the beneficial owner.
How do I cast my vote?
You may vote by proxy, which gives the proxy holder the right to
vote your shares on your behalf, or you may vote in person at
the meeting.
You may receive more than one proxy card depending on how you
hold your shares. Shares registered in your name and any shares
held in your Belo Savings Plan account are covered by separate
proxy cards. Shares held in the Belo Savings Plan may be voted
only by the plan trustees. Also, if you hold shares indirectly
through someone else, such as a broker, you may receive material
from that person asking how you want to vote. It is important
that you follow the instructions on each proxy card and vote the
shares represented by each card separately.
How do I vote by proxy?
If you vote by proxy, you may vote by telephone, online via the
Internet, or by completing and returning your enclosed proxy
card in the envelope provided. All proxy cards that are properly
completed and submitted will be voted as specified. However, if
you sign, date, and return your proxy card but do not check any
boxes, the shares represented by that card will be voted FOR all
nominees standing for election as directors and FOR ratification
of the appointment of Ernst & Young LLP as the
Companys independent registered public accounting firm
and, at the discretion of the proxy holders, on any other matter
that properly may come before the meeting or any adjournment or
postponement of the meeting.
If you want to vote using the telephone or Internet, please
follow the instructions on each proxy card and have the proxy
card available when you call in or access the voting site. In
order to be included in the final tabulation of proxies,
completed proxy cards must be received by May 8, 2006 and votes
cast using the telephone or Internet must be cast prior to
5:00 p.m. (Eastern Time), on May 8, 2006.
If your shares are held indirectly, your broker or nominee may
not offer voting using the telephone or Internet. Please be
certain to check your proxy card or contact your broker or
nominee to determine available voting arrangements.
How do I vote in person?
You may vote in person by completing a ballot at the annual
meeting. If you plan to vote in person but hold shares through a
broker or other nominee, you must provide a legal proxy from the
broker or nominee evidencing your authority to vote shares the
broker held for your account at the close of business on
March 17, 2006. You must contact your brokerage firm
directly in advance of the annual meeting to obtain a legal
proxy.
Blank ballots will be available at the registration table at the
meeting. Completed ballots may be deposited at the registration
table and a call for completed ballots will be made during the
course of the meeting prior to the close of the polls.
Can I change my vote or revoke my proxy?
Yes. You may revoke your proxy (including a telephone or
Internet vote) by:
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If your shares are held through a broker or nominee, contact
that broker or nominee if you wish to change your voting
instructions.
Attendance at the meeting does not by itself revoke a previously
granted proxy.
How do I vote my shares held in the Belo Savings
Plan?
Only the plan trustees, Fidelity Management Trust Company and
Wells Fargo Bank, N.A., can vote the shares held by the Belo
Savings Plan. If you participate in the Belo Savings Plan and
had full shares of Belo common stock credited to your account as
of the record date, you will receive a separate voting
instruction card for the purpose of instructing the plan
trustees how to vote your plan shares. You may instruct the
trustees using the telephone or the Internet or by signing and
returning your card in the envelope provided. You will not be
able to vote these shares in person at the annual meeting.
Because of the time required to tabulate voting instructions
from Belo Savings Plan participants before the annual meeting,
the trustees must receive your voting instructions by
May 7, 2006. If you sign, date, and return a card but do
not check any boxes on the card, the trustees will vote your
shares FOR all nominees standing for election as directors and
FOR ratification of the appointment of Ernst & Young
LLP as the Companys independent registered public
accounting firm. In addition, at their discretion, the trustees
of the Belo Savings Plan are authorized to vote on any other
matter that properly may come before the meeting or any
adjournment or postponement of the meeting. If the trustees do
not receive instructions from you by that date, the trustees
will vote your shares in the same proportion as the shares in
the Belo Savings Plan for which voting instructions have been
received. You may revoke or modify previously given voting
instructions by May 7, 2006, by filing with the trustees
either a written notice of revocation or a properly completed
and signed voting instruction card bearing a later date.
What vote does the Board recommend?
The Board recommends a vote FOR all nominees standing for
election as directors and FOR ratification of the appointment of
Ernst & Young LLP as the Companys independent
registered public accounting firm. With respect to any other
matter that properly comes before the meeting, the proxy holders
will vote in their own discretion.
What number of votes is required to approve each
matter?
4Election
of directors The affirmative vote of a plurality
of the voting power represented at the annual meeting and
entitled to vote is required for the election of directors. This
means that the nominees receiving the highest number of votes
cast for the number of positions to be filled are elected. You
do not have the right to cumulate votes in the election of
directors. In other words, you cannot multiply the number of
shares you own by the number of directorships being voted on and
then cast the total for only one candidate or among any number
of candidates as you see fit. Abstentions and broker non-votes
have no effect on determinations of plurality, except to the
extent that they affect the total votes received by any
particular candidate. Votes that are instructed to be withheld
with respect to the election of one or more directors will not
be voted for the director or directors indicated, although they
will be counted for purposes of determining whether a quorum is
present.
4Ratification
of appointment of independent registered public accounting
firm The affirmative vote of a majority of the
voting power represented at the annual meeting and entitled to
vote is required to ratify the appointment of Ernst &
Young LLP as the independent registered public accounting firm
for the Company for 2006.
4Other
matters Unless otherwise required by law, the
affirmative vote of a majority of the voting power represented
at the annual meeting and entitled to vote is required for other
matters that may properly come before the meeting.
For matters requiring majority approval, abstentions have the
effect of negative votes, meaning that abstentions will be
counted in the denominator, but not the numerator, in
determining whether a matter has
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received sufficient votes to be approved. Broker non-votes are
not treated as shares entitled to vote on matters requiring
majority approval and are excluded from the calculation.
PROXY SOLICITATION
Your proxy is being solicited on behalf of Belos Board of
Directors. In addition to use of the mails, the solicitation may
also be made by use of facsimile, the Internet or other
electronic means, or by telephone or personal contact by
directors, officers, employees, and agents of Belo. Belo pays
the costs of this proxy solicitation.
We have hired Morrow & Co., Inc. to assist in
soliciting proxies from beneficial owners of shares held in the
names of brokers and other nominees, and have agreed to pay
Morrow & Co., Inc. a fee of $6,000 plus its related
costs and expenses. We also supply brokers, nominees and other
custodians with proxy forms, proxy statements and annual reports
for the purpose of sending proxy materials to beneficial owners.
We reimburse brokers, nominees and other custodians for their
reasonable expenses.
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STOCK OWNERSHIP
The following tables set forth information as of March 17,
2006, regarding the beneficial ownership of Belo common stock by
our directors, nominees for election as director, the executive
officers named in the summary compensation table on
page 23, all directors and executive officers as a group,
and by each person known to Belo to own more than 5% of the
outstanding shares of Series A or Series B common
stock. At the close of business on March 17, 2006, the
record date, there were 90,039,976 Series A shares,
15,122,077 Series B shares, and 105,162,053 combined
Series A and Series B shares issued and outstanding.
Under the rules of the Securities and Exchange Commission
(SEC), the beneficial ownership of a person or group
includes not only shares held directly or indirectly by the
person or group but also shares the person or group has the
right to acquire within 60 days of the record date (to and
including May 16, 2006) pursuant to exercisable options and
convertible securities. The information below, including the
percentage calculations, is based on beneficial ownership of
shares rather than direct ownership of issued and outstanding
shares.
Unless otherwise indicated, each person listed below has sole
voting power and sole dispositive power with respect to the
shares of common stock indicated in the table as beneficially
owned by such person. Series A common stock has one vote
per share and Series B common stock has 10 votes per share.
Consequently, the voting power of Series B holders is
greater than the number of shares beneficially owned. For
example, the shares of Belo common stock beneficially owned by
all directors and executive officers as a group, representing
17.2% of the outstanding shares of Series A and
Series B common stock, have combined voting power
of 57.6%.
Stock Ownership of Directors, Nominees and Executive
Officers
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Stock Ownership of Other Principal Shareholders (greater than
5%)
Section 16(a) Beneficial Ownership Reporting
Compliance
Federal securities laws require that Belos executive
officers and directors, and persons who own more than ten
percent of a registered class of Belo common stock, file reports
with the SEC within specified time periods disclosing their
beneficial ownership of Belo common stock and any subsequent
changes in beneficial ownership of Belo common stock. These
reporting persons are also required to furnish us with copies of
these reports. Based on information provided to us by these
reporting persons, we believe that all filings required to be
made by the reporting persons during 2005 were made on a timely
basis.
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PROPOSAL ONE: ELECTION OF DIRECTORS
Belos bylaws provide that the Board of Directors is
divided into three classes, approximately equal in number, with
staggered terms of three years so that the term of one class
expires at each annual meeting, and that a director will retire
on the date of the annual meeting of shareholders next following
his or her 68th birthday.
Nominees for Directors
The following candidates are nominated by the Board and each is
an incumbent director. The independence of each director is
addressed under Corporate Governance Director
Independence; see page 15. The four nominees for
Class II director will be eligible to serve a three-year
term until the 2009 annual meeting.
Class II Directors (Terms expire in 2009)
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The Board of Directors recommends a vote FOR
Proposal One for the election of each of the nominees.
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Directors Continuing in Office
Information regarding our directors continuing in office is
provided below.
Class III Directors (Terms expire in 2007)
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Class I Directors (Terms expire in 2008)
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PROPOSAL TWO: RATIFICATION
OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP served as our independent auditors
for the fiscal year ended December 31, 2005. The Audit
Committee has appointed Ernst & Young LLP to serve in
such capacity for 2006, subject to ratification by the
shareholders. If the shareholders do not approve the appointment
of Ernst & Young LLP, the Audit Committee will consider
the appointment of other independent registered public
accounting firms.
Representatives of Ernst & Young LLP will be present at
the annual meeting. They will have the opportunity to make a
statement if they desire to do so, and will be available to
respond to appropriate questions presented at the annual meeting.
The table below sets forth the Ernst & Young LLP fees
related to the audits of our financial statements for the fiscal
years ended December 31, 2005 and December 31, 2004
and the reviews of our financial statements for the quarterly
periods within those fiscal years, and all other fees
Ernst & Young LLP has billed us for services rendered
during the fiscal years ended December 31, 2005 and
December 31, 2004:
The Audit Committee has adopted a policy and procedures that set
forth the manner in which the Audit Committee will review and
approve all services to be provided by Ernst & Young
LLP before the firm is retained to provide such services. The
policy requires Audit Committee pre-approval of the terms and
fees of the annual audit services engagement, as well as any
changes in terms and fees resulting from changes in audit scope
or other items. The Audit Committee also pre-approves, on an
annual basis, other audit services, and audit-related and tax
services set forth in the policy, subject to estimated fee
levels pre-approved by the committee. Any other services to be
provided by the independent auditors must be separately
pre-approved by the Audit Committee. In addition, if the fees
for any pre-approved services exceed by 5% or more the estimated
fee levels previously approved by the Audit Committee, the
services must be separately pre-approved by the committee. As a
general guideline, annual fees paid to the independent auditors
for services other than audit, audit-related, and tax services
should not exceed one half the dollar amount of fees to be paid
for these three categories of services collectively. The Audit
Committee has delegated to the committee chair and other
committee members the authority to pre-approve services in
amounts up to $500,000 per engagement. Services
pre-approved pursuant to delegated authority must be reported to
the full committee at its next scheduled meeting. The Chief
Financial Officer reports periodically to the Audit Committee on
the status of pre-approved services, including projected fees.
All of the services reflected in the above table were approved
by the Audit Committee.
Vote Required for Approval
The affirmative vote of a majority of the voting power
represented at the annual meeting and entitled to vote on this
proposal is required for approval.
The Board of Directors recommends a vote FOR Proposal
Two for the ratification of the appointment of Ernst &
Young LLP as Belos independent registered public
accounting firm.
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CORPORATE GOVERNANCE
Introduction
Our Board periodically reviews and evaluates Belos
corporate governance policies and practices in light of the
Sarbanes-Oxley Act of 2002, SEC regulations implementing this
legislation, corporate governance listing standards adopted by
the New York Stock Exchange (NYSE), and evolving
best practices. The Board has formalized its corporate
governance guidelines, approved a code of business conduct and
ethics applicable to Belos directors, management and other
Belo employees, and adopted a charter for each Board committee.
The Nominating and Corporate Governance Committee reviews
Belos corporate governance guidelines and Board committee
charters annually and recommends changes to the Board as
appropriate. These documents are posted on our Web site at
www.belo.com under About Belo Corporate
Governance, and are available in print, without charge,
upon written or oral request to Belo Corp., Attention: Guy H.
Kerr, Secretary, P.O. Box 655237, Dallas, Texas 75265-5237,
(214) 977-6606. In addition, our current Audit Committee
charter is attached to this proxy statement as Appendix A.
Belos corporate governance documents codify our existing
corporate governance practices and policies.
Director Independence
To assist it in making determinations of a directors
independence, the Board has adopted independence standards,
which are set forth in Belos corporate governance
guidelines, the applicable portion of which is attached to this
proxy statement as Appendix B. These standards incorporate
the director independence criteria included in the NYSE listing
standards, as well as additional, more stringent criteria
established by the Board. The Board has determined that the
following directors are independent under these standards: Henry
Becton, Louis Caldera, France Córdova, Judy Craven, Roger
Enrico, Larry Hirsch, Wayne Sanders, Bill Solomon, Anne Szostak,
Lloyd Ward, and Don Williams. In assessing director
independence, the Board considered in particular with respect to
Bill Solomon that he is non-executive chairman of the Board of
Austin Industries, Inc., the parent company of an entity with
which Belo entered into a construction contract in 2005. The
Board concluded, based on all the facts and circumstances, that
this relationship (which is discussed in more detail under
Certain Relationships below) does not affect
Bills independence as a director. Each of the Audit,
Compensation, and Nominating and Corporate Governance Committees
is composed entirely of independent directors. In accordance
with SEC requirements, NYSE listing standards and the
independence standards set forth in Belos corporate
governance guidelines, all members of the Audit Committee meet
additional independence standards applicable to audit committee
members.
Meetings of the Board
The Board held five regularly-scheduled meetings in 2005. Each
director attended at least 75% of the aggregate of (1) the
total number of meetings held by the Board and (2) the
total number of meetings held by all committees on which he or
she served. Directors are expected to attend annual meetings of
shareholders, and 12 of the 13 current directors attended the
2005 Annual Meeting of Shareholders.
The Board convenes executive sessions of non-management
directors without Company management at each regularly-scheduled
meeting. The lead director is responsible for presiding at the
executive sessions of the non-management directors. In addition,
the independent directors meet in executive session at least
annually. The Board has designated Don Williams, the chairman of
the Executive Committee, as the lead director. Board committee
chairs preside at executive sessions of their respective
committees.
Committees of the Board
The Board has the following committees:
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Compensation of Directors
During 2005, non-employee directors received an annual retainer
package valued at $120,000. One-half of the Boards annual
retainer was paid in the form of stock options to purchase
Belos Series B common stock. Effective on the date of
the 2006 Annual Shareholders Meeting, non-employee directors
will receive an annual retainer package valued at $140,000,
one-half of which will be divided equally between time-vested
restricted stock units for Belo Series A common stock and
options to purchase Belo Series B common stock. Directors
elect in advance to receive all or a portion of the remaining
amount of their annual retainer in additional stock options for
Series B common stock or in cash.
Non-employee director stock option awards are valued according
to the Black-Scholes method of option valuation, with the
exercise price equal to the closing price of Series A
shares on the date of grant. Options vest one year from the date
of grant and expire ten years from the date of grant.
Non-employee director time-vested restricted stock units have
dividend equivalent rights. The restricted stock units vest one
year from the date of grant, and are paid two years following
the vesting date (i.e., three years from the date granted).
During 2005, directors who served as committee chairs received
an additional $10,000 in cash per year. (Fees for committee
chairs remain unchanged for 2006.) Belo reimburses all directors
for travel expenses incurred in attending meetings. No
additional fee is paid to directors for attendance at Board and
committee meetings. Robert Decherd, who was chairman of the
board, chief executive officer and president of the Company
during 2005, did not receive separate compensation for Board
service.
Audit Committee Report
As described more fully in our written charter (attached to this
proxy statement as Appendix A), the Audit Committee
represents the Board in its oversight of Belos financial
reporting processes. In this context, the Audit Committee has
reviewed and discussed with management and Ernst &
Young LLP, our independent auditors, Belos audited
consolidated financial statements and the audit of the
effectiveness of Belos internal control over financial
reporting. The Audit Committee has discussed with
Ernst & Young LLP various matters, including their
judgments as to the quality of Belos accounting principles
and other matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit
Committees). In addition, the Audit Committee has received from
Ernst & Young LLP the written disclosures and the
letter required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees) and
discussed with them their independence from Belo and our
management team.
In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board, and the Board has
approved, that the audited consolidated financial statements be
included in Belos annual report on
Form 10-K for the
fiscal year ended December 31, 2005, for filing with the
SEC.
Respectfully submitted,
Audit Committee
Henry P. Becton, Jr., Chairman
Louis E. Caldera
Wayne R. Sanders
Communications with the Board
The Company has a process for shareholders and other interested
parties to communicate with the Board. These parties may
communicate with the Board by writing c/o the corporate
Secretary, P.O. Box 655237, Dallas, Texas 75265-5237.
Communications intended for a specific director or directors
(such as the lead director or non-management directors) should
be addressed to his, her or their attention c/o the
corporate Secretary at this address. Communications received
from shareholders are forwarded directly to Board members as
part of the materials mailed in advance of the next scheduled
Board meeting following receipt of the communications, although
the Board has authorized management, in its discretion, to
forward communications on a more expedited basis if
circumstances warrant or to exclude a communication if it is
illegal, unduly hostile or threatening, or similarly
inappropriate. Advertisements, solicitations for periodical or
other subscriptions, and other similar communications generally
are not forwarded to the directors.
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EXECUTIVE OFFICERS
Belos executive officers are as follows:
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EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Compensation Committee
The Compensation Committee, all independent directors,
determines the compensation of the chief executive officer and
makes recommendations to Belos non-employee directors as
to the compensation of Belos other senior executives
listed in the summary compensation table on page 23,
referred to herein as the senior executives. We also
administer Belos Executive Compensation Plan (ECP),
implemented January 1, 1989, under which we make
recommendations to Belos non-employee directors regarding
salaries for Belos other senior executives. Under the ECP
we also make, based upon management recommendations, the final
determination regarding the senior executives bonuses and
awards of stock options, restricted stock units, and other
stock-based compensation. Compensation levels for ECP
participants (other than the senior executives) are determined
in a manner similar to that for the senior executives, except as
described below.
Executive Compensation Plan
The ECPs key elements are an annual base salary, an annual
performance bonus opportunity, and long-term incentive awards
for certain participants. Officers of Belo and its subsidiaries,
including Belos chief executive officer and its other
senior executives, are eligible to participate in the ECP.
Additional ECP participants are selected based on
managements evaluation of their ability to affect
significantly Belos profitability.
The goals of the ECP are: (1) to establish a
competitive compensation program to attract, retain, motivate
and reward employees in those positions that most directly
affect Belos overall performance, and (2) to
encourage coordinated and sustained effort toward maximizing
Belos value to its shareholders. Bonus payments to ECP
participants other than the senior executives are principally
dependent upon the achievement of Belo or subsidiary financial
performance targets. In some cases in 2005, portions of the
bonus were also dependent upon the financial performance of the
Internet Web sites related to the participants
organizational entity.
Base salaries and performance bonus opportunities are
established in late November or early December with respect to
the following year. At the same time, long-term incentive awards
(currently stock options and restricted stock units) are granted
as part of the following years compensation. In the first
quarter following the fiscal-year performance measurement
period, the actual amount of bonus payments and restricted stock
units are determined and awarded. SEC rules require compensation
reporting on a calendar year basis. Consequently, the
compensation presented in this report and in the summary
compensation table on page 23 includes base salaries and
performance bonus opportunities established in December 2004
with respect to calendar year 2005, stock options granted in
December 2005, time-based restricted stock units awarded in
February 2006, and performance-related restricted stock units
granted in December 2005. The number of time-based restricted
stock units awarded was based upon 2005 financial performance.
The actual number of performance-related restricted stock units
awarded will be determined based upon 2006 financial performance.
In determining compensation levels for ECP participants, we
refer to comparative compensation data based on a survey of peer
media companies for base salaries and performance bonus
opportunities and a general compensation survey for long-term
incentive awards. We believe an appropriate level for each
element of a participants compensation is generally near
the median indicated by this comparative compensation data. We
believe that this median target, when adjusted according to
individual performance, level of responsibility, and other
applicable factors, gives us the ability to attract and retain
outstanding executives. The surveys we use are conducted by
Towers Perrin, a nationally recognized compensation consultant.
The companies included in both the general compensation survey
and the peer media company survey vary somewhat from those
included in the group of public peer companies indicated in the
performance graph on page 29 because some companies
included in the public peer group do not participate in the
compensation survey and some companies that participate in the
compensation survey are not public companies.
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Base Salary. The 2005 base salaries of the senior
executives were set at levels approximating the median target
indicated by the peer media company survey, as adjusted to
recognize varying levels of responsibility and individual
performance.
Annual Performance Bonus Opportunity. Each ECP
participant has an opportunity to earn an annual bonus based
primarily upon the financial performance of the
participants organizational entity. With respect to
participants other than the senior executives, a performance
bonus opportunity range is established using a percent of the
participants base salary, based on survey comparisons.
Generally, 100% of a participants 2005 bonus was
determined by the earnings of his or her organizational entity.
In the case of certain participants who are employees of
subsidiaries with a related Internet Web site and who have the
ability to impact the performance of Internet operations, 15% of
their annual bonus was based on the financial performance of the
Internet Web site related to the participants
organizational entity. We approve annually minimum, target and
maximum levels of financial performance for ECP
participants organizational entities based on business
plans developed by Belos senior management. If minimum
performance levels are not achieved, participants earn no
bonuses. Performance at the target level earns participants 100%
of their target bonus amounts, and performance at the maximum
level earns participants 200% of their target bonus amounts. If
performance falls between the minimum level and the target
level, participants receive a prorated amount, with a minimum
bonus pay-out of 10% of the participants target bonus
amount. If performance falls between the target level and the
maximum level, participants receive 100% of their bonus amount,
plus an additional prorated amount reflecting performance in
excess of the target level. We believe that linking bonus
opportunity directly to financial performance, with an
opportunity to earn 200% of target bonus amount if maximum
performance is achieved, gives participants an incentive to
achieve shareholder objectives.
We established a specific annual performance target for each
senior executive for 2005, as permitted by the ECP and in
compliance with the performance-based compensation exemption
under Section 162(m) of the Internal Revenue Code of 1986,
as amended (the Code). The performance target is
defined as a specific percentage of consolidated net income,
which establishes an incentive pool from which both cash and
other equity-based incentives are awarded. Based upon 2005
financial performance, we awarded cash bonuses to senior
executives by first considering the amounts that would have been
paid to the senior executives under the method described above
for calculating bonuses for other ECP participants, and then
adjusting the awards to take into consideration individual
performance, including achievement of specific non-financial
objectives, scope of responsibility and their respective
contributions toward Belos performance.
Long-Term Incentive Awards. The long-term incentive
component of the ECP, represented by stock option grants and
restricted stock units, is designed to encourage the retention
and motivation of, and to reward key executives, as well as
provide them with competitive compensation. The ultimate value
of the long-term incentive awards is determined by the market
price of Belo common stock. Annual long-term incentive awards
are made automatically only to ECP participants at the officer
level. Long-term incentive awards may be made to other ECP
participants for exceptional performance, as recommended by Belo
senior management. In 2005, we undertook with a
nationally-recognized independent executive compensation
consultant, a review of our long-term incentive program and the
Committee determined that, in addition to stock option grants,
the use of time-vested restricted stock units as a key program
component was warranted in order to motivate and retain key
executives. Accordingly, the Committee reduced the number of
stock options granted to certain ECP participants and senior
executives and also awarded restricted stock units.
We generally strive to set long-term incentive levels for
participants who receive awards near the median of the survey we
use. In determining long-term incentive awards for participants
who receive them, we consider the current value of the awards
based on the market price of Belo common stock, which is
expressed as a multiple of the participants base salary.
The multiple is dependent upon a range of values reflected by a
survey of executives from general industry. In addition, we may
adjust the awards upwards or downwards, depending on the
participants level of responsibility and his or her past
and potential contribution toward Belos performance.
Restricted Stock Units. The restricted stock unit awards
for Belo Series A common stock are granted with dividend
equivalent rights. Restrictions on the units will not lapse
unless and until ECP participants, including
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senior executives, complete additional service with the Company.
Restricted stock units may be employment-related (time-based) or
performance-related. Time-based restricted stock units awarded
to ECP participants, including senior executives, are based upon
continued employment with the Company and vest at the end of a
three-year period. Time-based restricted stock unit awards made
to senior executives are granted out of a pool amount set for
each executive, based upon a percentage of consolidated net
income, designed to allow for deductibility under
Section 162(m) of the Code.
Performance-related restricted stock units are awarded to ECP
participants, including senior executives, based upon the
minimum, target and maximum levels of financial performance
established annually. The performance measurement period for
performance-related restricted stock unit grants is the fiscal
year following the grant date. The number of performance-based
restricted stock units earned is determined using the same
target-level methodology as that used for determining cash bonus
awards for ECP participants. Once earned, the
performance-related restricted stock units vest at a rate of
331/3% per
year over a three-year period. For corporate-level senior
executives, the financial performance measure is earnings per
share, as determined by the Compensation Committee for purposes
of the ECP. For James M. Moroney III, the financial
performance measure is based on the performance of
The Dallas Morning News, with specific weight being
given to The Dallas Morning News EBITDA (earnings
before interest, tax, depreciation and amortization) and the
remainder based upon revenue of the Internet Web site related to
The Dallas Morning News, in each case as determined by
the Compensation Committee for purposes of the ECP. On
December 8, 2005, the Compensation Committee established
the minimum, target and maximum performance levels for each
senior executive based upon the 2006 financial plan approved by
the Board of Directors. At the same time, the Compensation
Committee approved 2006 target level grants of
performance-related restricted stock units for senior
executives, including the chief executive officer, but excluding
our vice chairman, who is scheduled to retire in 2006 and
accordingly was granted additional time-based restricted stock
units, the vesting of which will accelerate upon his retirement.
In addition, in February 2006, a total of 160,200 time-based
restricted stock units were awarded to the senior executives
under the stock plans. These awards include a one-time increase
to the top of the median target band generally used in
determining the awards. The Committee approved these increased
awards to assure competitive compensation and to encourage
continued retention of senior executives, particularly in light
of the Companys reduction of executive compensation in
2001 that included a 5% base-salary reduction for certain senior
executives and a reduction in long-term awards in 2002 and 2003.
The reduction in long-term compensation was made in order to
insure that a sufficient number of equity awards remained
available for issuance until shareholder approval was obtained
in 2004 for additional equity awards under the ECP.
Stock Options. Stock option awards are granted for shares
of Belo Series B common stock at an exercise price equal to
the market price of Belos Series A common stock on
the date of grant. The option awards vest 40% on the first
anniversary of the date of grant, an additional 30% on the
second anniversary, and the remaining 30% on the third
anniversary of the date of grant. All options expire on the
tenth anniversary of the date of grant.
Based upon the methodology set forth above, we granted a total
of 246,500 options for shares of Series B common stock
under the ECP to the senior executives, including the chief
executive officer. We established an exercise price for the
options equal to the market price of Series A shares on the
date of grant. (See the Option/ SAR Grants in 2005
table on page 25.) We have never granted options at
exercise prices other than the market price of Series A
shares on the date of grant and have never adjusted exercise
prices retroactively (except as called for by antidilution
provisions of the options in connection with various stock
dividends).
While the value realizable from exercisable stock options
depends on the market price of Belos common stock at any
particular time, each individual executive decides whether this
value will be realized in any particular year. Accordingly, in
analyzing annual compensation levels, we do not consider gains
realized during any particular year by any of the senior
executives as a result of individual decisions to exercise stock
options or to sell restricted shares received in previous years.
(See the Aggregated Option/ SAR Exercises in 2005 and
2005 Year-End Option/ SAR Values table on
page 25 for the amounts realized by the senior executives
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from option exercises in 2005 and the estimated unrealized value
of unexercised options held by them as of December 31,
2005.)
CEO Compensation
We meet with the other non-management directors each year in
executive session to evaluate the performance of Robert Decherd,
Belos Chief Executive Officer. The results of this
evaluation are considered in determining Roberts
compensation, consistent with the policies described above. We
also consult with the Committees independent advisor in
setting the Chief Executive Officers compensation.
Roberts base salary for 2005 was set at a level
approximating the median indicated by the peer media company
survey.
Robert is a participant in the ECP. Based upon the achievement
of his 2005 financial performance target, as expressed by a
specific percentage of Belos consolidated net income, an
incentive pool amount was established for Robert from which a
cash bonus and time-based restricted stock unit awards were made
under the ECP. We awarded Robert a cash bonus of $475,000 for
2005. In determining this amount, we first considered the amount
that would have been paid to Robert under the method for
calculating cash bonuses for other participants in the ECP, and
adjusted the bonus award based upon an assessment of
Roberts individual performance in achieving the
Companys 2005 financial plan, and in particular we
considered Roberts leadership role in guiding the Company
in 2005 to record revenues for a non-political year. We also
considered Roberts scope of responsibility, his past and
potential contribution toward Belos financial performance,
and his achievement of non-financial objectives for 2005. Robert
spent considerable time during the year focused on leadership
development and succession planning, which resulted in several
key promotions and a significant senior management transition.
Roberts time-based restricted stock unit award of 59,500
units is based on a multiple of Roberts base salary, which
is derived from a general industry executive compensation
survey, and also considers the average market price of Belo
common stock. As with other senior executives, Roberts
time-based restricted stock unit award was adjusted for a
one-time increase to the top of the median target band generally
used in determining awards. Finally, we granted Robert stock
options for 112,000 Series B shares. The methodology used
to determine Roberts awards was the same as that used in
determining all senior executive awards.
One Million Dollar Limit on the Deductibility of Executive
Compensation
The Code places a $1 million annual limit on the tax
deductibility of certain compensation paid to the chief
executive officer and the other senior executives. Some
compensation, including performance-related compensation meeting
specified requirements, is exempt from the limit. None of
Belos stock plans prohibit Belo from granting awards that
are not subject to the tax deduction limit established by
Section 162(m) of the Code. We intend to grant awards that
are not subject to the deduction limit to the extent that the
structure of such awards is consistent with corporate
performance and executive compensation objectives.
Respectfully submitted,
Compensation Committee
Judith L. Craven, M.D., M.P.H., Chair
Laurence E. Hirsch
Lloyd D. Ward
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Summary Compensation Table
The following information summarizes annual and long-term
compensation awarded to, earned by or paid to Belos chief
executive officer and the four other most highly paid executive
officers (the senior executives) for services in all
capacities to Belo for the fiscal years ended December 31,
2005, 2004, and 2003.
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Option/SAR Grants in 2005
The stock options described below were awarded under the 2004
Executive Compensation Plan. During 2005, all options granted
were for Series B shares, and no stock appreciation rights
were granted. The following table provides additional
information regarding stock options granted during 2005 to the
senior executives:
Aggregated Option/ SAR Exercises in 2005 and
2005 Year-End Option/ SAR Values
The following table shows information concerning the exercise of
stock options during 2005 by the senior executives and the value
of unexercised options held by these individuals at year-end:
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Equity Compensation Plan Information
The following table provides information regarding Series A
and Series B common stock authorized for issuance under
Belos equity compensation plans as of December 31,
2005:
Benefits
Pension Plan. Until July 1, 2000, we maintained a
non-contributory pension plan which was available to
substantially all of our employees who had completed one year of
service and had reached 21 years of age as of June 30,
2000. We amended this pension plan effective July 1, 2000.
As a result, individuals who were participants or eligible to
become participants prior to July 1, 2000, were offered an
election to either (1) remain eligible to participate in
and accrue benefits under the pension plan, or (2) cease
accruing benefits under the pension plan effective June 30,
2000. Those employees who elected to cease accruing benefits
under the pension plan became eligible for enhanced benefits
under the Belo Savings Plan. Following the effective date of the
amendment to the pension plan, as a general matter, no employee
first hired on or after July 1, 2000 is eligible to
participate in the pension plan, and no former employee who is
rehired on or after July 1, 2000 will accrue additional
benefits under the pension plan.
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The following table reflects the expected annual benefits,
computed on a 10-year
certain and life annuity basis, payable under the pension plan
to a fully vested senior executive upon retirement at
age 65 after the credited years of service and at the
annual remuneration levels set forth in the table.
Our pension plan provides for the payment of a monthly
retirement benefit based on credited years of service and the
average of five consecutive years of highest annual compensation
out of the ten most recent calendar years of employment.
Compensation covered under the pension plan includes regular pay
plus overtime, bonuses, commissions, and any contribution made
by us on behalf of an employee pursuant to a deferral election
under any benefit plan containing a cash or deferred
arrangement. Covered compensation excludes certain non-cash
earnings and Belo matching contributions to the Belo Savings
Plan. A participants interest in the pension plan
ordinarily becomes fully vested upon completion of five years of
credited service, or upon attainment of age 62, whichever
first occurs. Retirement benefits under the pension plan are
paid to participants upon normal retirement at the age of 65 or
later, or upon early retirement, which may occur at age 62
(or age 55 with five years of service). However, as a
result of the plan amendment described above, any participant
employed by Belo on July 1, 2000 is fully vested without
regard to years of service or the age of the participant. The
pension plan also provides for the payment of death benefits. As
of December 31, 2005, the named senior executives have
credited years of service under the pension plan as follows:
Robert Decherd 32 years; Jack
Sander 3 years; Dunia Shive
7 years; Jim Moroney 27 years; and Dennis
Williamson 22 years. The covered compensation
of these persons under the pension plan is substantially the
same as the annual compensation indicated in the summary
compensation table on page 23, except that such covered
compensation was capped at $210,000 for all participants in 2005.
Upon the occurrence of certain events, (1) the benefits of
all active participants in the pension plan become fully vested
and nonforfeitable and (2) the excess of pension plan
assets over the present value of accrued benefits, if any, are
applied to provide active participants with an additional vested
benefit equivalent to the benefit such participants should have
received under Department of Labor regulations, as in effect
prior to July 1, 1996, if the pension plan had then
terminated. The events giving rise to (1) and
(2) above are generally identical to those giving rise to a
change in control, as defined in the Executive
Compensation Plans. A change in control is generally
defined in each of the Executive Compensation Plans (unless the
Board stipulates to the contrary for purposes of the applicable
plan) as the commencement of a tender offer or exchange offer, a
change in control (which is deemed to occur when any group,
entity, or other person that theretofore beneficially owned less
than 30% of the total number of outstanding shares of common
stock acquires shares, which acquisition results in such group,
entity, or person having more than 30% beneficial ownership),
approval or consummation of certain mergers, sales, exchanges,
or dispositions of Belos assets, or certain changes in the
composition of Belos Board during any period of two
consecutive years.
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Supplemental Executive Retirement Plan. The SERP was
adopted by the Compensation Committee in December 1992 for key
executives selected by the Compensation Committee, including the
senior executives named in the summary compensation table above.
The purpose of the SERP is to help offset the Code limits on our
qualified retirement plans. However, because the SERP is a
defined contribution plan, the actual benefit to be received by
any participant will depend on the participants account
balance at the time of retirement. Initially, the specific
objective of the SERP was to provide a benefit at age 65
that, when combined with the benefit under our pension plan, is
60% of final average pay (the average of the total salary and
target bonus during the last five completed calendar years of
employment) for a target group of executives, which included
Robert Decherd, Jack Sander, Dunia Shive, and Jim Moroney.
Effective January 1, 2000, the SERP was amended to restore
benefits to additional participants selected by the Compensation
Committee, limited by the annual compensation cap for
determining pension benefits imposed by the Code. The SERP was
amended again in December 2003 such that all SERP participants
(other than Jack Sander) became subject to the pension-based
restoration formula for determining targeted supplemental
retirement benefits. A one-time contribution was made to the
SERP trust for participants whose target benefit decreased
because of the new restoration formula. (See footnote
(4) to the summary compensation table on page 23 for
information with regard to these
make-up contribution
amounts and for the amounts contributed to the SERP by Belo on
behalf of the named senior executives for 2005.) We have
established a trust to hold the contributions to the SERP, which
contributions are subject to the claims of creditors. As a
result of the establishment of the trust, benefits payable under
the SERP will be protected in the event of a change in control
of Belo.
Certain Relationships
Effective October 1, 2005, the Company entered into a
construction contract with Austin Commercial, L.P. relating to
the new Dallas Morning News South Plant. The contract
provides for total payments of approximately $16.5 million,
of which approximately $555,664 was paid during the year ended
December 31, 2005. Director Bill Solomon is non-executive
chairman of the Board of Austin Industries, Inc., the parent
company of Austin Commercial, L.P..
Anne Szostaks husband, Michael Szostak, has been a
sportswriter and columnist for The Providence Journal
since May 1977. The Providence Journal is published
by The Providence Journal Company, a subsidiary of Belo Corp..
Mr. Szostaks salary and bonus for 2005 was $63,460.
His base salary for 2006 is $64,195 plus a performance bonus
opportunity.
Robert Decherds son, William Decherd, has been employed by
Belo Corp. since August 2005. He serves as Product Development
Manager and staffs the Companys Strategy Council. Prior to
joining Belo, William worked in an analyst role for The Goldman
Sachs Group, Inc., McKinsey & Company, and Hicks, Muse,
Tate & Furst Incorporated (now known as HM Capital
Partners LLC), a Dallas-based private equity firm.
Williams compensation for 2005 was $47,014. His base
salary for 2006 is $125,000 with a performance bonus opportunity.
The Company is not aware of any other related party transactions
that would require disclosure.
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STOCK PERFORMANCE
The following graph compares (1) the annual cumulative
shareholder return on an investment of $100 on December 31,
2000 in Belos Series A common stock, based on the
market price of the Series A common stock and assuming
reinvestment of dividends, with (2) the cumulative total
return of a similar investment in companies on the
Standard & Poors 500 Stock Index and in a group
of peer companies selected on a
line-of-business basis
and weighted for market capitalization. For 2005, the
Companys peer group included the following companies: Dow
Jones & Company, Inc.; Gannett Co., Inc.; Hearst-Argyle
Television, Inc.; Knight-Ridder, Inc.; Lee Enterprises, Inc.;
LIN TV Corp.; McClatchy Newspapers, Inc.; Media General,
Inc.; The New York Times Company; The E.W. Scripps Company;
Tribune Company; The Washington Post Company; and Young
Broadcasting Corporation. Pulitzer Publishing Company, which was
previously included in the peer group, was acquired by Lee
Enterprises, Inc. in 2005 and is no longer included in the peer
group. Belo is not included in the calculation of peer group
cumulative total shareholder return on investment.
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ANNUAL REPORT AND ADDITIONAL MATERIALS
Our 2005 annual report to shareholders is being distributed with
this proxy statement. Copies of our annual report on
Form 10-K for the
fiscal year ended December 31, 2005 may be obtained without
charge upon written or oral request to Belo Corp., Attention:
Guy H. Kerr, Secretary, P.O. Box 655237, Dallas, Texas
75265-5237, (214) 977-6606. Our annual report on
Form 10-K is also
available free of charge on www.belo.com, along with our
quarterly reports on
Form 10-Q, current
reports on
Form 8-K, and
amendments to all these reports as soon as reasonably
practicable after the reports are electronically filed with or
furnished to the SEC.
If you and others who share your mailing address own common
stock in street name, meaning through bank or brokerage
accounts, you may have received a notice that your household
will receive only one annual report and proxy statement from
each company whose stock is held in such accounts. This
practice, known as householding, is designed to
reduce the volume of duplicate information and reduce printing
and postage costs. Unless you responded that you did not want to
participate in householding, a single copy of this proxy
statement and the 2005 annual report have been sent to your
address. (Each shareholder will continue to receive a separate
proxy voting form.) If you hold shares through a bank or
brokerage firm and would like to receive a separate copy of this
proxy statement and the 2005 annual report, please contact the
Investor Relations Department of Belo Corp.
(P.O. Box 655237, Dallas, Texas
75265-5237,
(214) 977-6606),
and we will promptly send additional copies on request. In
addition, if you wish in the future to receive your own set of
proxy materials or if your household is currently receiving
multiple copies of the proxy materials and you would like in the
future to receive only a single set of proxy materials at your
address, please contact the Householding Department of ADP
Investor Communication Service by mail at 51 Mercedes Way,
Edgewood, New York 11717, or by calling
(800) 542-1061,
and indicate your name and the name of each of your brokerage
firms or banks where your shares are held. You may also have an
opportunity to opt in or opt out of householding by following
the instructions on your proxy voting form supplied with this
proxy by your bank or broker.
SHAREHOLDER PROPOSALS FOR 2007 MEETING
In order to propose business for consideration or nominate
persons for election to the Board, a shareholder must comply
with the advance notice provisions of our bylaws. The bylaws
provide that any such proposals or nominations must be submitted
to us between February 9, 2007 and March 11, 2007 in
order to be considered at the 2007 annual meeting, and must
satisfy the other requirements in our bylaws regarding such
proposals or nominations. If the shareholder does not also
comply with the requirements of SEC
Rule 14a-4, we may
exercise discretionary voting authority under proxies we solicit
to vote on any such proposal or nomination made by a
shareholder. A shareholder who is interested in submitting a
proposal for inclusion in our proxy materials for the 2007
annual meeting may do so by submitting the proposal to the
attention of Belos Secretary by no later than
December 6, 2006 and following the procedures described in
SEC Rule 14a-8.
Copies of the bylaws and SEC
Rules 14a-4 and
14a-8 may be obtained
by contacting Belos Secretary at P.O. Box 655237,
Dallas, Texas 75265-5237, or by telephone at
(214) 977-6606, and submissions pursuant to these
provisions should be addressed to Belos Secretary at this
same address.
GENERAL
At the date of this proxy statement, we do not know of any
matters to be presented for action at the annual meeting other
than those described in this proxy statement. If any other
matters should come before the annual meeting, the persons named
in the accompanying form of proxy will have discretionary
authority to vote all proxies in accordance with their best
judgment, unless otherwise restricted by law.
Dated: April 5, 2006
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APPENDIX A
AUDIT COMMITTEE CHARTER
1. Members.
The Board of Directors shall appoint an Audit Committee of at
least three members, consisting entirely of independent
directors of the Board, and shall designate one member as
chairperson. For purposes hereof, the term
independent shall mean a director who meets the New
York Stock Exchange (NYSE) standards of
independence for directors and audit committee
members, as determined by the Board. The criteria used by the
Board in assessing independence are included in the
Companys Corporate Governance Guidelines, as adopted by
the Board and as amended from time to time. Each member of the
Companys Audit Committee must be financially literate, as
determined in the Boards judgment, and at least one member
of the Audit Committee shall be an audit committee
financial expert, as defined in rules promulgated by the
Securities and Exchange Commission (SEC).
2. Purposes,
Duties, and Responsibilities.
The purposes of the Audit Committee shall be to:
Among its specific duties and responsibilities, the Audit
Committee shall, consistent with and subject to applicable law
and rules and regulations promulgated by the SEC, NYSE or other
regulatory authority:
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3. Outside
Advisors. The Audit Committee shall have the authority to
retain such outside counsel, accountants, experts and other
advisors as it determines appropriate to assist the Audit
Committee in the performance of its functions and shall receive
appropriate funding from the Company, as determined by the Audit
Committee, for payment of compensation to any such advisors.
4. Meetings.
The Audit Committee will meet as often as may be deemed
necessary or appropriate in its judgment, either in person or
telephonically, and at such times and places as the Audit
Committee shall determine. The Audit Committee shall meet
separately in executive session, periodically, with each of
management, the principal internal auditor of the Company and
the outside auditing firm. The Audit Committee shall report
regularly to the Board with respect to its meetings. The
majority of the members of the Audit Committee shall constitute
a quorum.
Last revised: September 30, 2005
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APPENDIX B
INDEPENDENCE STANDARDS
Excerpted from Belo Corp.
Corporate Governance Guidelines
The complete current version of the guidelines as approved and
adopted by the
Board on September 30, 2005 is posted on Belos Web
site at www.belo.com.
A copy of the guidelines may be obtained without charge upon
written or oral request to
Belo Corp., Attention: Guy H. Kerr, Secretary,
P.O. Box 655237, Dallas, Texas 75265-5237,
(214) 977-6606.
Board Composition & Qualifications
Independence
A substantial majority of the directors comprising the Board
shall be independent directors. An independent
director is a director who meets the New York Stock Exchange
(NYSE) standards of independence, as determined by
the Board. The Board has adopted the standards set forth on
Attachment A to these Guidelines to assist it in making
determinations of a directors independence.
Board Committees
Number, Structure and Independence of Committees
The Board has four standing committees: Audit, Compensation,
Nominating and Corporate Governance, and Executive. All members
of the Audit, Compensation, and Nominating and Corporate
Governance Committees shall be directors who meet the NYSE
standards of independence as determined by the
Board. Directors who serve on the Audit Committee must meet
additional independence criteria described in Attachment
A to these Guidelines.
Attachment A: Independence Standards
A director shall be independent if the director meets each of
the following standards and otherwise has no material
relationship with Belo, either directly, or as a partner,
stockholder, or officer of an organization that has a
relationship with Belo. For purposes of these standards,
Belo means Belo Corp. and its consolidated
subsidiaries, collectively.
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The Board may determine that a director or nominee is
independent even if the director or nominee does not
meet each of the standards set forth in
paragraphs (7) through (10) above as long as the
Board determines that such person is independent of management
and free from any relationship that in the judgment of the Board
would interfere with such persons independent judgment as
a member of the Board and the basis for such determination is
disclosed in Belos annual proxy statement.
In addition, a director is not considered independent for
purposes of serving on the Audit Committee, and may not serve on
that committee, if the director: (1) receives, either
directly or indirectly, any consulting, advisory or other
compensatory fee from Belo Corp. or any of its subsidiaries
other than: (a) fees for service as a director, and
(b) fixed amounts of compensation under a retirement plan
(including deferred compensation) for prior service with Belo;
or (2) is an affiliated person of Belo Corp. or
any of its subsidiaries; each as determined in accordance with
Securities and Exchange Commission regulations.
For purposes of this Attachment A, an immediate
family member means a persons spouse, parents,
children, siblings, mother and
father-in-law, sons and
daughters-in-law,
brothers and
sisters-in-law, and
anyone (other than domestic employees) who shares such
persons home.
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2477-PS-06
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NOTICE TO PARTICIPANTS
IN THE
BELO SAVINGS PLAN
Dear Belo Savings Plan Participant:
Enclosed with this notice is a proxy statement of Belo Corp.
describing the annual meeting of shareholders to be held on
May 9, 2006. The annual meeting will be held for the
purpose of electing four directors, ratifying the appointment of
Ernst & Young LLP as the Companys independent
registered public accounting firm, and considering any other
matters that may properly come before the meeting or any
postponement or adjournment of the meeting.
Directions to the Trustees
Only Fidelity Management Trust Company and Wells Fargo Bank,
N.A., as the trustees of the Belo Savings Plan, can vote the
shares of Belo stock held by the Belo Savings Plan. However,
under the terms of the Belo Savings Plan, you are entitled to
instruct the trustees how to vote the shares of Belo stock that
were allocated to your plan account at the close of business on
March 17, 2006.
Enclosed with this notice is a confidential voting instruction
card provided to you for the purpose of instructing the trustees
how to vote your plan shares. Your participation is important.
Please take the time to complete the instruction card and return
it in the enclosed self-addressed and stamped envelope or vote
your plan shares by toll-free telephone number or the Internet.
The trustees will vote all Belo shares held by the Belo Savings
Plan in accordance with the voting instructions that are
received via mail, telephone, or Internet on or before
May 7, 2006, unless the trustees determine such
instructions are contrary to the requirements of the Employee
Retirement Income Security Act of 1974, as amended (ERISA). If
you sign, date, and return a voting instruction card but do not
check any boxes on the card, the trustees will vote your plan
shares FOR all nominees standing for election as directors and
FOR ratification of the appointment of Ernst & Young
LLP as the Companys independent registered public
accounting firm. In addition, at their discretion, the trustees
of the Belo Savings Plan are authorized to vote on any other
matter that properly may come before the meeting or any
adjournment or postponement of the meeting.
Confidentiality and Instructions
Your voting instructions to the trustees are strictly
confidential and will not be revealed, directly or indirectly,
to any director, officer, or other employee of Belo or to anyone
else, except as otherwise required by law. Therefore, you should
feel completely free to instruct the trustees to vote your plan
shares in the manner you think best.
Voting Deadline
Because of the time required to tabulate voting instructions
from participants before the annual meeting, the trustees must
establish a cut-off date for receipt of voting instructions.
The cut-off date is May 7, 2006. The trustees cannot
ensure that voting instructions received after the cut-off date
will be tabulated. Therefore, it is important that you act
promptly to vote your plan shares on or before May 7, 2006.
If the trustees do not receive timely instructions from you with
respect to your plan shares, the trustees will vote your shares
in the same proportion as the shares for which voting
instructions have been received from other participants.
Further Information
If you are a direct shareholder of Belo, you will also find
enclosed a separate proxy card with respect to your
directly-owned shares. You must vote your directly-owned shares
and your plan shares separately, either by returning the proxy
card and voting instruction card by mail, or by separately
voting by telephone or Internet with respect to your
directly-held and your plan shares. You may not use the proxy
card or the voter
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identification information with respect to your directly-held
shares to vote your plan shares. Your direct vote of non-plan
shares is not confidential.
If you have questions regarding the information provided to you,
you may contact the plan administrator at (800) 835-5098
between 8:00 a.m. and 5:00 p.m., Central Time, Monday
through Friday.
Your ability to instruct the trustees how to vote your plan
shares is an important part of your rights as a participant.
Please consider the enclosed material carefully and return your
voting instructions to us promptly.
April 5, 2006
FIDELITY MANAGEMENT TRUST COMPANY
WELLS FARGO BANK, N.A.
as Trustees of the BELO SAVINGS PLAN
2477-LTR-06
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YOUR PROXY CARD IS ATTACHED BELOW.
PLEASE READ AND FOLLOW THE INSTRUCTIONS CAREFULLY AND DETACH AND RETURN YOUR COMPLETED PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE DO NOT MAIL YOUR
PROXY CARD IF YOU VOTE BY TELEPHONE OR INTERNET YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
The undersigned hereby appoints Robert W. Decherd, Dennis A. Williamson, and Guy H. Kerr, or
any one or more of them, as proxies,
each with the power to appoint his substitute, and hereby authorizes each of them to represent and
to vote as designated below all
the shares of the common stock of Belo Corp. held of record by the undersigned on March 17, 2006,
at the 2006 Annual Meeting of
Shareholders, and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY COMPLETED AND RETURNED BY YOU, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES STANDING FOR ELECTION AS DIRECTORS AND FOR THE RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS THE COMPANYS INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM.
Please sign exactly as your name appears. When shares are held by joint tenants, both should sign.
When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in partnership name by
authorized person.
(Continued and to be dated and signed on the reverse side)
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There is
no charge to vote by telephone. As with all Internet access, usage or
service fees must be paid by the user.
Your telephone or Internet vote authorizes the named proxies to vote
your shares in the same manner as if you marked, signed, and returned your proxy card. Please
note all votes cast via the telephone or the Internet must be cast
prior to 5:00 p.m. (Eastern Time), May 8, 2006.
(Instructions: To withhold authority to vote for any individual nominee, mark the
*Exceptions box and write that nominees name in the space provided below.)
This proxy, when properly completed and returned, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted FOR all nominees standing for election as directors and
FOR the ratification of the appointment of Ernst & Young LLP as the Companys
independent registered public accounting firm.
Please sign exactly as your name appears. When shares are held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership
name by authorized person.
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YOUR VOTING INSTRUCTION CARD FOR YOUR
BELO SAVINGS PLAN SHARES IS ATTACHED BELOW PLEASE READ AND FOLLOW THE INSTRUCTIONS
CAREFULLY AND DETACH AND RETURN YOUR COMPLETED VOTING INSTRUCTION CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. DO NOT MAIL YOUR
VOTING INSTRUCTION CARD IF YOU VOTE BY TELEPHONE OR INTERNET YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
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There is
no charge to vote by telephone. As with all Internet access, usage or service fees must be paid by the user.
Your telephone or Internet vote authorizes the trustees to vote your
shares in the same manner as if you marked, signed, and returned your
voting instruction card. Please
note all votes cast via the telephone or the Internet must be cast
prior to 12:00 midnight (Eastern Time), May 7, 2006.
(Instructions: To withhold authority to vote for any individual nominee, mark the
*Exceptions box and write that nominees name in the space provided below.)
The
trustees of the Belo Savings Plan, and each of them, are hereby
instructed to vote in the manner directed herein or, if no direction
is made, to vote FOR all nominees standing for election as directors and
FOR the ratification of the appointment of Ernst & Young LLP as the Companys
independent registered public accounting firm.
I hereby
authorize Fidelity Management Trust Company and Wells Fargo Bank,
N.A., as trustees under the Belo Savings Plan, to vote the full shares
of Belo common stock credited to my account under the Belo Savings
Plan at the 2006 Annual Meeting in accordance with instructions given
above. Each of the trustees has appointed The Bank of New York as
agent to tabulate the votes.
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