UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
BELO CORP.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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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:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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(BELO LOGO)
ROBERT W. DECHERD
Chairman of the Board
President and Chief Executive Officer
April 4, 2003
Dear Fellow Shareholder:
We invite you to attend our annual meeting of shareholders on May 13, 2003 in
Dallas, Texas. At the meeting, you will hear a report on Belo's 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 2002 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 year's
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 only own a few shares, it is important that your
shares be represented at the meeting.
We hope to see you on May 13th.
Sincerely,
/s/ ROBERT DECHERD
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
(BELO LOGO)
BELO CORP.
P. O. BOX 655237
DALLAS, TEXAS 75265-5237
WWW.BELO.COM
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 2003
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To Belo Shareholders:
Please join us for the 2003 annual meeting of shareholders of Belo Corp.. The
meeting will be held in the Dallas Museum of Art Auditorium, 1717 North Harwood
Street, Dallas, Texas, on TUESDAY, MAY 13, 2003, AT 10:30 A.M., Dallas, Texas
time. Refreshments will be served prior to the meeting starting at 9:00 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:
1. Election of seven director nominees, consisting of one Class I director,
five Class II directors, and one Class III director; and
2. Any other matters that may properly come before the meeting.
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 20, 2003 are entitled to vote at
the meeting or at any postponement or adjournment of the meeting.
By Order of the Board of Directors
GUY H. KERR
Secretary
April 4, 2003
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
About the Meeting........................................... 1
Proxy Solicitation.......................................... 3
Stock Ownership............................................. 4
Proposal: Election of Directors............................. 9
Corporate Governance........................................ 14
Independent Auditors........................................ 16
Executive Officers.......................................... 17
Executive Compensation...................................... 18
Stock Performance........................................... 26
Annual Report and Additional Materials...................... 26
Shareholder Proposals for 2004 Meeting...................... 27
General..................................................... 27
Appendix A -- Audit Committee Charter....................... A-1
</Table>
(BELO LOGO)
BELO CORP.
P. O. BOX 655237
DALLAS, TEXAS 75265-5237
WWW.BELO.COM
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PROXY STATEMENT
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FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 2003
This proxy statement contains information related to the annual meeting of
shareholders of Belo Corp. to be held on TUESDAY, MAY 13, 2003, BEGINNING AT
10:30 A.M., DALLAS, TEXAS TIME, at the Dallas Museum of Art Auditorium, 1717
North Harwood Street, 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 4, 2003.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the annual meeting, shareholders will elect seven directors and act upon any
other matters properly brought before the meeting. Management will report on
Belo's performance in 2002 and respond to questions and comments from
shareholders.
WHO CAN ATTEND THE ANNUAL MEETING?
Shareholders and guests of Belo may attend the annual meeting. However, only
shareholders who owned Belo shares at the close of business on March 20, 2003,
the record date, or their duly appointed proxies, are entitled to vote at the
meeting.
WHO MAY VOTE AT THE MEETING?
If you owned Belo shares at the close of business on March 20, 2003, 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 record date will be entitled to vote at the
meeting. At the close of business on the record date, a total of 96,265,032
shares of Series A common stock and 16,656,180 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, in person or by proxy, at the meeting in order
to constitute a quorum.
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 only be voted 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 the
election of the seven director nominees 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 12, 2003 and votes cast
using the telephone or Internet must be cast prior to 5:00 p.m. (Eastern
Standard Time), on May 12, 2003.
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 on March 20, 2003. 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:
+ filing a written notice of revocation with the Secretary of Belo
Corp. at any time prior to the annual meeting;
+ delivering a duly executed written proxy bearing a later date by
the voting deadline set forth on the proxy card;
+ submitting a new proxy by telephone or the Internet by the voting
deadline set forth on the proxy card; or
+ voting by ballot at the meeting.
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.
2
HOW DO I VOTE MY SHARES HELD IN THE BELO SAVINGS PLAN?
Only the plan trustees, Fidelity Management Trust Company and Wells Fargo Bank
Texas, 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 11, 2003. 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. 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 11, 2003, 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 the election of the seven director nominees
listed in this proxy statement. 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?
+ ELECTION 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. A properly executed proxy
marked "withheld" with respect to the election of one or more directors will not
be voted for the director or directors indicated, although it will be counted
for purposes of determining whether we have a quorum.
+ OTHER 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 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 Belo's Board of Directors. In
addition to the use of the mail, 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.
3
STOCK OWNERSHIP
The following tables set forth information as of December 31, 2002, 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 21, 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 December 31, 2002, there were 96,076,672 Series A
shares, 16,681,619 Series B shares and 112,758,291 combined Series A and Series
B shares issued and outstanding.
Under the rules of the Securities and Exchange Commission, 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 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 16.4% of
the outstanding shares of Series A and Series B common stock, have combined
voting power of 52.1%.
STOCK OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
<Table>
<Caption>
SHARES OF COMMON STOCK BENEFICIALLY OWNED
AND PERCENTAGE OF OUTSTANDING SHARES AS OF DECEMBER 31, 2002(1)(2)(3)
-----------------------------------------------------------------------
COMBINED
SERIES A SERIES B SERIES A AND SERIES B
--------------------- ---------------------- ----------------------
NAME NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
---- ---------- -------- ----------- -------- ----------- --------
Robert W. Decherd*+............. 1,477,957 1.5% 7,251,007 39.9% 8,728,964 7.6%
Dunia A. Shive+................. 11,607 ** 291,300 1.7% 302,907 **
John L. (Jack) Sander+.......... 3,563 ** 445,000 2.6% 448,563 **
James M. Moroney III+........... 18,393 ** 2,507,124 14.7% 2,525,517 2.2%
Guy H. Kerr+.................... 2,734 ** 123,000 ** 125,734 **
Michael J. McCarthy++........... 9,076 ** 463,700 2.7% 472,776 **
John W. Bassett, Jr.*........... 162,682 ** 764,772 4.6% 927,454 **
Henry P. Becton, Jr.*o.......... 12,168 ** 63,464 ** 75,632 **
Louis E. Caldera*............... -- ** 7,710 ** 7,710 **
France A. Cordova, Ph.D.o....... -- ** -- ** -- **
Judith L. Craven, M.D.,
M.P.H.*....................... 22,800 ** 49,907 ** 72,707 **
Roger A. Enrico*o............... 42,000 ** 79,824 ** 121,824 **
Stephen Hamblett*............... 469,958 ** 152,845 ** 622,803 **
Dealey D. Herndon*.............. 1,349,394 1.4% 2,701,155 16.1% 4,050,549 3.6%
Laurence E. Hirsch*............. 10,000 ** 50,475 ** 60,475 **
Arturo Madrid, Ph.D.*o.......... 26,100 ** 49,907 ** 76,007 **
Wayne R. Sanderso............... 3,000(4) ** -- ** 3,000(4) **
William T. Solomon*o............ 30,000 ** 90,157 ** 120,157 **
Lloyd D. Ward*o................. -- ** 15,420 ** 15,420 **
J. McDonald Williams*........... 16,000 ** 47,929 ** 63,929 **
All directors and executive
officers as a group (21
persons)........................ 3,688,247 3.8% 15,544,696 74.3% 19,232,943 16.4%
</Table>
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* Director
o Nominee
+ Executive Officer
++ Retired Executive Officer
** Less than one percent
4
(1) + Series B shares are convertible at any time on a share-for-share basis
into Series A shares but not vice versa. For purposes of determining the
number of Series A shares beneficially owned by the persons listed, the
person may be deemed to be the beneficial owner of the Series A shares
into which the Series B shares owned are convertible. The numbers listed
in the Series A column, however, do not reflect the Series A shares that
may be deemed to be beneficially owned by the person listed because of
this convertibility feature. If the Series A total included shares into
which Series B shares held are convertible, the persons listed would be
deemed to be the beneficial owners of the following percentages of the
Series A shares: Robert Decherd, 8.4%; Dealey Herndon, 4.1%; Jim Moroney,
2.6%; and all directors and executive officers as a group, 17.2%. All
other persons listed would be deemed to own less than 1% of the Series A
shares. These percentages are calculated by taking the person's combined
Series A and Series B as reflected on the table above and dividing that
number by the sum of (a) the Series A shares issued and outstanding, plus
(b) the total of Series B shares owned by the person as reflected in the
table above, plus (c) the person's exercisable Series A stock options
listed in footnote (2) to the table.
+ The family relationships among the directors and executive officers are
as follows: Robert Decherd and Dealey Herndon are brother and sister and
Jim Moroney is their second cousin.
+ The following shares are included in the individual's holdings because
the individual has either sole or shared investment or voting power with
respect to such shares.
Robert Decherd -- 43,980 Series A shares and 132,000 Series B shares held
in trust for which Robert serves as trustee and 111,224 Series B shares
held by a charitable foundation established by Robert and his wife for
which he serves as chairman and a director. Robert disclaims beneficial
ownership of these shares. Robert's holdings also include 23,159 Series B
shares owned by him and his wife as to which he shares voting and
dispositive power.
Jack Sander -- 1,000 Series A shares owned by Jack and his wife as to
which he shares voting and dispositive power.
Jim Moroney -- 2,000,000 Series B shares held by Moroney Management,
Limited, a family limited partnership of which he is the managing general
partner, and 52,100 Series B shares held in a family trust as to which he
has voting authority. Jim's holdings also include 480 Series B shares
owned by Jim and his wife as to which he shares voting and dispositive
power.
Guy Kerr -- 800 shares held for the benefit of his minor children as to
which he has sole voting and dispositive power. Guy disclaims beneficial
ownership of these shares.
John Bassett -- 4,480 Series A shares and 61,030 Series B shares owned by
members of John's family, as to which he shares dispositive power, and
55,000 Series A shares and 262,073 Series B shares held in trusts for the
benefit of his adult children, for which John serves as trustee. John
disclaims beneficial ownership of these shares.
Steve Hamblett -- 80,238 Series A shares held by a charitable foundation
for which Steve serves as a director and foundation manager. Steve
disclaims beneficial ownership of these shares. Steve's holdings also
include 3,036 Series A shares owned by him and his wife as to which he
shares voting and dispositive power.
Dealey Herndon -- 20,000 Series A shares held by a charitable foundation
she established and for which she serves as a director. Dealey disclaims
beneficial ownership of these shares.
5
(2) The number of shares shown in the table above includes shares held in the
Belo Savings Plan at December 31, 2002 and shares that could be purchased by
exercise of options available at December 31, 2002 or within 60 days
thereafter under Belo's stock plans, as follows:
<Table>
<Caption>
SHARES HELD IN EXERCISABLE
BELO SAVINGS PLAN* STOCK OPTIONS
------------------- --------------------
NAME SERIES A SERIES B SERIES A SERIES B
---- -------- -------- -------- ---------
Robert W. Decherd...................... 4,285 -- -- 1,482,949
Dunia A. Shive......................... 2,445 -- 6,180 291,300
John L. (Jack) Sander.................. 2,563 -- -- 445,000
James M. Moroney III................... 3,719 -- -- 386,500
Guy H. Kerr............................ 534 -- -- 123,000
Michael J. McCarthy.................... 5,088 -- -- 463,700
John W. Bassett, Jr. .................. -- -- 30,000 49,907
Henry P. Becton, Jr. .................. -- -- -- 63,464
Louis E. Caldera....................... -- -- -- 7,710
Judith L. Craven, M.D., M.P.H.......... -- -- 20,000 49,907
Roger A. Enrico........................ -- -- 40,000 79,824
Stephen Hamblett....................... -- -- -- 152,845
Dealey D. Herndon...................... -- -- 30,000 49,907
Laurence E. Hirsch..................... -- -- -- 50,475
Arturo Madrid, Ph.D.................... -- -- 25,000 49,907
William T. Solomon..................... -- -- 30,000 50,157
Lloyd D. Ward.......................... -- -- -- 15,420
J. McDonald Williams................... -- -- 10,000 41,929
All directors and executive officers as
a group (21 persons)................... 23,177 0 204,180 4,243,901
</Table>
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* In connection with amendments to the Belo Savings Plan intended to
give employees greater flexibility in managing their retirement
savings plan, effective May 2002 the stock component of Belo's
matching contributions is made in Series A shares, instead of Series B
shares, and the majority of the plan participants, including the
executive officers named above, converted Series B shares then held in
their accounts into an equal number of Series A shares.
(3) Pursuant to SEC rules, the percentages above are calculated by taking the
number of shares indicated as beneficially owned by the listed person and
dividing that number by the sum of (a) the number of issued and outstanding
shares in each series or the combined series, as applicable, plus (b) the
number of shares of each series or the combined series, as applicable, that
the person may purchase through the exercise of stock options as indicated
in footnote (2) to the table.
(4) As of March 3, 2003.
6
STOCK OWNERSHIP OF OTHER PRINCIPAL SHAREHOLDERS (GREATER THAN 5%)
<Table>
<Caption>
SHARES OF COMMON STOCK BENEFICIALLY OWNED
AND PERCENTAGE OF OUTSTANDING SHARES AS OF DECEMBER 31, 2002(1)(2)
-----------------------------------------------------------------------
COMBINED
SERIES A SERIES B SERIES A AND SERIES B
----------------------- --------------------- ---------------------
NAME AND ADDRESS NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
---------------- ---------- -------- ---------- -------- ---------- --------
Private Capital Management....... 6,433,008(3) 6.7% -- -- 6,433,008 5.7%
8889 Pelican Bay Boulevard
Naples, Florida 34108
FMR Corp......................... 6,106,483(4) 6.4% -- -- 6,106,483 5.4%
82 Devonshire Street
Boston, Massachusetts 02109
FleetBoston Financial
Corporation.................... 4,806,217(5) 5.0% -- -- 4,806,217 4.3%
100 Federal Street
Boston, Massachusetts 02110
James M. Moroney, Jr.(6)......... 211,982 ** 1,119,393 6.7% 1,331,375 1.2%
P.O. Box 655237
Dallas, Texas 75265-5237
</Table>
- ---------------
** Less than one percent
(1) Series B shares are convertible at any time on a share-for-share basis into
Series A shares but not vice versa. For purposes of determining the number
of Series A shares beneficially owned by the persons listed, the person may
be deemed to be the beneficial owner of the Series A shares into which the
Series B shares owned are convertible. The numbers listed in the Series A
column, however, do not reflect the Series A shares that may be deemed to be
beneficially owned by the person listed because of this convertibility
feature.
(2) Pursuant to SEC rules, the percentages above are calculated by taking the
number of shares indicated as beneficially owned by the listed person or
group and dividing that number by the sum of (a) the number of issued and
outstanding shares in each series or the combined series, as applicable,
plus (b) the number of shares of each series or the combined series, as
applicable, that the person or group may purchase through the exercise of
stock options as indicated in the notes to the table.
(3) Based upon information contained in its report on Schedule 13G filed with
the SEC on February 19, 2003, Private Capital Management shares voting and
dispositive power with respect to these shares.
(4) Based upon information contained in its report on Schedule 13G filed with
the SEC on February 13, 2003, FMR Corp. has sole power to vote or to direct
the vote with respect to 1,396,473 Series A shares and has sole power to
dispose of or to direct the disposition of 6,106,483 Series A shares.
(5) Based upon information contained in its report on Schedule 13G/A filed with
the SEC on February 14, 2003, the reported Series A shares are held
indirectly by FleetBoston Financial Corporation through its subsidiary,
Fleet National Bank. FleetBoston Financial Corporation has sole voting power
with respect to 3,470,670 Series A shares, shares voting power with respect
to 13,450 Series A shares, and has sole dispositive power with respect to
968,920 Series A shares and shares dispositive power with respect to
3,801,347 Series A shares.
(6) James M. Moroney, Jr., a former director and chief executive officer of
Belo, is Jim Moroney's father and is a cousin of Robert Decherd and Dealey
Herndon. Jim Moroney, Jr.'s holdings include 18,349 Series B shares that
could be purchased by exercise of options available at December 31, 2002 or
within 60 days thereafter under Belo's stock plans. If the Series A total
included shares into which Series B shares held are convertible, he would be
deemed to be the beneficial owner of 1.4% of the Series A shares.
7
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Federal securities laws require that Belo's 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
ownership of Belo common stock and any subsequent changes in 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 2002 were made on a timely basis, except for (1) the reporting on
Forms 4 of two transactions which occurred in May 2002 by director John Bassett
individually and as trustee on behalf of his adult childrens' trust and an
exempt transaction which occurred in October 2002 on behalf of his adult
childrens' trust and (2) the reporting on Form 4 of two transactions which
occurred in May 2002 on behalf of executive officer Colleen Brown's minor
children.
8
PROPOSAL: ELECTION OF DIRECTORS
Belo's 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 65th birthday.
In February 2003, the Board nominated France Cordova and Wayne Sanders as new
director candidates. John Bassett, a Class I director, will retire from the
Board on the date of the 2003 annual meeting pursuant to its retirement policy.
As a result of these events, the size of the Board will be increased from 13 to
14. As part of a comprehensive review and evaluation of its corporate governance
practices, the Board also approved an amendment to Belo's bylaws to reduce the
maximum number of directors that may constitute the Board from 18 to 14
directors. See "Corporate Governance" below for additional information.
NOMINEES FOR DIRECTORS
The following candidates are nominated by the Board and, with the exception of
France Cordova and Wayne Sanders, each is an incumbent director. The five
nominees for Class II director will be eligible to serve a three-year term until
the 2006 annual meeting, with the exception of nominee Arturo Madrid who will
not be eligible to serve beyond the 2004 annual meeting in accordance with the
Board's mandatory retirement policy. France Cordova, as a nominee for Class I
director, will be eligible to serve a two-year term until the 2005 annual
meeting, and Wayne Sanders, as a nominee for Class III director, will be
eligible to serve a one-year term until the 2004 annual meeting.
CLASS I DIRECTOR (TERM EXPIRES IN 2005)
<Table>
FRANCE A. CORDOVA, PH.D. New Director Candidate
Age 55
[PHOTO FRANCE A. CoRDOVA, France Cordova has served as chancellor of University of California Riverside since
Ph.D.] July 2002. From August 1996 to July 2002, she was vice chancellor for research and
professor of physics at University of California Santa Barbara. She served as chief
scientist of National Aeronautics and Space Administration (NASA) from 1993 to 1996.
France was professor of astronomy and astrophysics at Pennsylvania State University
from 1989 until 1996 and served as department head from 1989 to 1993. France
currently serves on advisory committees for the National Academy of Sciences' Policy
and Global Affairs Division.
</Table>
9
CLASS II DIRECTORS (TERMS EXPIRE IN 2006, EXCEPT AS NOTED ABOVE FOR ARTURO
MADRID)
<Table>
HENRY P. BECTON, JR. Director since May 1997
Age 59 Audit Committee Chair
Strategy and Planning Committee Member
[PHOTO HENRY P. BECTON, JR.] Henry Becton has been president of WGBH Educational Foundation, a public broadcasting
organization, since 1984 and served as its general manager from 1978 until 1999. He
is a member of the board of directors of Becton Dickinson and Company and is a
trustee or director of 18 Scudder Fund investment companies or trusts advised by
Deutsche Asset Management. Henry served as a director of The Providence Journal
Company from 1992 to 1997. He served as a director of Public Broadcasting Service
from June 1987 until June 1993 and from June 1995 until October 2001.
ROGER A. ENRICO Director since July 1995
Age 58 Nominating and Corporate Governance Committee Chair
Audit Committee Member
[PHOTO ROGER A. ENRICO] Roger Enrico is the former chairman and chief executive officer of PepsiCo, Inc.. He
was chief executive officer of PepsiCo from April 1996 until May 2001, chairman of
the board from November 1996 to May 2001, and vice chairman from May 2001 until April
2002. Roger joined PepsiCo in 1971 and held numerous other senior positions,
including chairman and chief executive officer of PepsiCo Worldwide Restaurants from
1994 to 1997. Roger is a member of the boards of directors of PepsiCo, Target
Corporation, Electronic Data Systems Corporation, The National Geographic Society,
The Dallas Center for the Performing Arts, The Eisenhower Fellowships and The
National Center for Public Policy and Higher Education.
ARTURO MADRID, PH.D. Director since January 1994
Age 64 Audit Committee Member
Compensation Committee Member
[PHOTO ARTURO MADRID, PH.D.] Arturo Madrid is the Norine R. and T. Frank Murchison Distinguished Professor of the
Humanities at Trinity University in San Antonio, Texas, a position he has held since
1993. From 1984 to 1993, he served as the founding president of the Tomas Rivera
Center, a national institute for policy studies on Latino issues. He has also held
academic and administrative positions at Dartmouth College, the University of
California, San Diego, the University of Minnesota, and the U.S. Department of
Education. Arturo is a member of the Council for Foreign Relations and a fellow of
the National Academy for Public Administration. In 1996, he was awarded the Charles
Frankel Prize by the National Endowment for the Humanities.
</Table>
10
<Table>
WILLIAM T. SOLOMON Director since April 1983
Age 60 Nominating and Corporate Governance
Committee Member
[PHOTO WILLIAM T. SOLOMON] Bill Solomon is chairman of the board of Austin Industries, Inc., a general
construction company, a position he has held since 1987. Bill was chairman and chief
executive officer from 1987 to March 2001 and, prior to 1987, was president and chief
executive officer of Austin Industries. He also serves on the boards of the
Hoblitzelle Foundation and the Southwestern Medical Foundation.
LLOYD D. WARD Director since July 2001
Age 54 Compensation Committee Member
[PHOTO LLOYD D. WARD] Lloyd Ward is the former chief executive officer and secretary general of the United
States Olympic Committee, positions he held from October 2001 until March 2003. He
served as chairman and chief executive officer of iMotors from January 2001 until May
2001. Lloyd was chairman and chief executive officer of Maytag Corporation from
August 1999 to November 2000, president and chief operating officer of Maytag from
1998 to August 1999, and executive vice president of Maytag from 1996 to 1998. Lloyd
served in various senior management positions with PepsiCo, Inc. from 1988 through
1996. Lloyd is a member of the board of directors of General Motors Corp..
</Table>
CLASS III DIRECTOR (TERM EXPIRES IN 2004)
<Table>
WAYNE R. SANDERS New Director Candidate
Age 55
[PHOTO WAYNE R. SANDERS] Wayne Sanders is the former chairman and chief executive officer of Kimberly-Clark
Corporation. He served as president and chief executive officer of Kimberly-Clark
from 1991 until September 2002 and as chairman of the board from 1992 until February
2003. From 1987 to 1991, Wayne held numerous senior positions with Kimberly-Clark. He
also serves on the boards of directors of Texas Instruments Incorporated and Adolph
Coors Company and its principal subsidiary, Coors Brewing Company. Wayne is the
chairman of the board of Marquette University and serves as national trustee and
governor of the Boys and Girls Clubs of America.
</Table>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
11
DIRECTORS CONTINUING IN OFFICE
Information regarding our directors continuing in office is provided below.
CLASS III DIRECTORS (TERMS EXPIRE IN 2004)
<Table>
LOUIS E. CALDERA Director since July 2001
Age 47 Audit Committee Member
[PHOTO LOUIS E. CALDERA] Louis Caldera has served as vice chancellor for university advancement at The
California State University since June 2001. Louis was Secretary of the Army in the
Clinton Administration from July 1998 until January 2001. He previously served as
managing director and chief operating officer for the Corporation for National and
Community Service, a federal grantmaking agency, from September 1997 to June 1998. He
served in the California Legislature from 1992 to 1997 representing the 46th Assembly
District (Los Angeles). Louis also serves on the boards of directors of IndyMac
Bancorp, Inc. and Iomega Corporation.
JUDITH L. CRAVEN, M.D., M.P.H. Director since December 1992
Age 57 Compensation Committee Member
Nominating and Corporate Governance Committee Member
[PHOTO JUDITH L. CRAVEN, From July 1992 until her retirement in October 1998, Judy Craven served as president
M.D., M.P.H.] of the United Way of the Texas Gulf Coast. From 1983 to 1992, she was dean of the
School of Allied Health Sciences of the University of Texas Health Science Center at
Houston, and from 1987 to 1992 was vice president of multicultural affairs for the
University of Texas Health Science Center. Judy is a member of the board of regents
of The University of Texas System and serves on the boards of directors of SYSCO
Corporation, Luby's, Inc., SunAmerica Mutual Funds, and Variable Annuity Life
Insurance Company of America.
STEPHEN HAMBLETT Director since May 1997
Age 68 Strategy and Planning Committee Member
[PHOTO STEPHEN HAMBLETT] Steve Hamblett served as chairman of the board of The Providence Journal Company from
February 1997, when The Providence Journal Company became a wholly-owned subsidiary
of Belo, until his retirement in December 2000. From February 1997 until April 1999,
Steve was chief executive officer and publisher of The Providence Journal Company.
From 1987 to 1997, he was chairman, chief executive officer, and publisher of the
pre-merger Providence Journal Company. Steve is currently a member of the boards of
the Inter-American Press Association, the Smithsonian National Board, the Rhode
Island School of Design and the Rhode Island Heritage Harbor Museum. In connection
with the acquisition of The Providence Journal Company, Belo agreed that Steve is
eligible to serve as a Belo director until age 70.
</Table>
12
<Table>
DEALEY D. HERNDON Director since May 1986
Age 56 Strategy and Planning Committee Member
[PHOTO DEALEY D. HERNDON] Dealey Herndon has been president of Herndon, Stauch & Associates, a project and
construction management firm, since September 1995. From January 2001 to October
2001, she also served as director of appointments for Texas Governor Rick Perry. From
1991 to September 1995, she was the executive director of the State Preservation
Board of the State of Texas and managed the Texas Capitol Restoration in that
capacity. Dealey is a trustee of the National Trust for Historic Preservation in
Washington, D.C. and serves as president of the Texas State History Museum
Foundation.
</Table>
CLASS I DIRECTORS (TERMS EXPIRE IN 2005)
<Table>
ROBERT W. DECHERD Director since March 1976
Age 51
[PHOTO ROBERT W. DECHERD] Robert Decherd has been Belo's chairman and chief executive officer since January
1987. Robert became president of Belo in January 1994, and previously served as
president from January 1985 through December 1986. From January 1984 through December
1986, he served as chief operating officer. Robert is a member of the board of
directors of Kimberly-Clark Corporation. He also serves on the Advisory Council for
Harvard University's Center for Ethics and the Professions, and is a member of the
Media Security and Reliability Council which is part of President Bush's Homeland
Security initiative.
LAURENCE E. HIRSCH Director since May 1997
Age 57 Compensation Committee Member
Strategy and Planning Committee Member
[PHOTO LAURENCE E. HIRSCH] Larry Hirsch has been chief executive officer of Centex Corporation, one of the
nation's largest homebuilders, since July 1988. He has served as a director of Centex
since 1985 and has been its chairman of the board since July 1991. He has also served
as a director of its affiliate, Centex Construction Products, Inc., since January
1994 and was named chairman of its board in July 1999. Larry is a member of the board
of directors of Luminex Corporation and is an advisory director of Heidelberger
Zement AG. Larry also serves as a trustee of the University of Pennsylvania.
</Table>
13
<Table>
J. MCDONALD WILLIAMS Director since April 1985
Age 61 Strategy and Planning Committee Chair
[PHOTO J. McDONALD WILLIAMS] Don Williams served as chairman of Trammell Crow Company, a real estate services
firm, from August 1994 until May 2002, when he was named chairman emeritus. From 1991
until July 1994, Don was president and chief executive officer of Trammell Crow, and
from 1977 to December 1990, he was managing partner of Trammell Crow. He also serves
on the boards of directors of the Dallas Citizens Council, Children's Health Services
of Texas, Abilene Christian University, the Hoblitzelle Foundation, Southern
Methodist University Perkins School of Theology and the Dallas Foundation.
</Table>
CORPORATE GOVERNANCE
INTRODUCTION
Our Board undertook a comprehensive review and evaluation of its corporate
governance practices in light of the Sarbanes-Oxley Act of 2002, new SEC
regulations implementing this legislation, and new corporate governance listing
standards proposed by the New York Stock Exchange. In response to emerging
requirements, the Board at its February 2003 meeting formalized its corporate
governance guidelines, approved a revised code of business conduct and ethics
applicable to Belo's directors, management and other Belo employees, and
approved an updated charter for each Board committee. The revised Audit
Committee charter is attached to this proxy statement as Appendix A. Belo's
corporate governance documents, which are posted on our Web site at
www.belo.com, codify a number of Belo's existing corporate governance practices
and policies and address several new matters. The Board will review and
periodically update these documents as it deems necessary and appropriate.
MEETINGS AND COMMITTEES OF THE BOARD
The Board held five regularly-scheduled meetings in 2002. 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. The Board has the following committees, each of which is composed
entirely of non-employee directors:
Audit Committee. The Audit Committee consists of Henry Becton (chair),
Louis Caldera, Roger Enrico and Arturo Madrid, each of whom is an
independent director under the listing standards of the New York Stock
Exchange. The Audit Committee consults with our independent auditors and
with personnel from Belo's internal audit and financial staffs with respect
to corporate accounting, reporting, and internal control practices. The
Audit Committee is responsible for the appointment, compensation and
oversight of the independent auditors. The Audit Committee met five times
during 2002.
Compensation Committee. The Compensation Committee consists of John
Bassett (chair), Judy Craven, Larry Hirsch, Arturo Madrid and Lloyd Ward,
each of whom is an independent director under the listing standards of the
New York Stock Exchange. The Compensation Committee makes recommendations
to the Board for base salaries of executive officers and compensation
packages for directors, approves bonus levels and stock option awards for
executive officers, and administers, among other plans, the Company's 1995
Executive Compensation Plan, 2000 Executive Compensation Plan, The G. B.
Dealey Retirement Pension Plan, Belo Savings Plan, and Supplemental
Executive Retirement Plan ("SERP"). The Compensation Committee evaluates
the performance of the chief executive officer and sets his compensation
level based on this evaluation. The Compensation Committee met five times
during 2002.
Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee, formerly the Nominating Committee, consists
of Roger Enrico (chair), Judy Craven and Bill Solomon, each of whom is an
independent director under the listing standards of the New York Stock
Exchange. The responsibilities of the Nominating and Corporate Governance
Committee include the identification and recommendation of director
candidates and the review of qualifications of directors
14
for continued service on the Board. The Nominating and Corporate Governance
Committee will consider nominations submitted by shareholders in accordance
with the advance notice provisions of our bylaws. The Nominating and
Corporate Governance Committee also has responsibility for shaping Belo's
corporate governance practices, including the development and periodic
review of the corporate governance guidelines and the Board committee
charters and for senior executive succession planning. The Nominating and
Corporate Governance Committee met two times in 2002.
Strategy and Planning Committee. The Strategy and Planning Committee,
formerly the Directors Planning Committee, consists of Don Williams
(chair), Henry Becton, Steve Hamblett, Dealey Herndon and Larry Hirsch. The
Strategy and Planning Committee reviews Belo's long-range financial and
strategic planning initiatives. The Strategy and Planning Committee met
once in 2002.
COMPENSATION OF DIRECTORS
During 2002, non-management directors received an annual compensation package
valued at $114,000. This amount reflects a 5% reduction in annual compensation
approved by the Board at its meeting in November 2001 to demonstrate its support
of cost reduction programs implemented by management in October 2001. Effective
May 2003, non-management directors will receive an annual compensation package
valued at $120,000 (restored to the pre-2002 level). One-half of the Board's
annual compensation is paid in the form of stock options to purchase Belo's
common stock (relying generally on the Black-Scholes option pricing model on the
date of grant), with exercise prices equal to the closing price of Series A
shares on the date of grant. Directors elect in advance to receive all or a
portion of the remaining amount of their annual compensation in additional stock
options for common stock or in cash. During 2002, directors who served as
committee chairs received an additional $7,125 in cash, which amount will
increase to $10,000 per year effective May 2003. 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 a Belo employee during 2002, 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
Belo's financial reporting processes. Our management team has the primary
responsibility for Belo's financial statements and these reporting processes.
Ernst & Young, LLP, our independent auditors, are responsible for performing an
audit of Belo's consolidated financial statements in accordance with generally
accepted auditing standards, and, based on their audit, for expressing an
opinion on Belo's consolidated financial statements.
In this context, the Audit Committee has reviewed and discussed with management
and Ernst & Young Belo's audited consolidated financial statements. The Audit
Committee has discussed with Ernst & Young various matters, including their
judgments as to the quality of Belo's 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 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. The Audit Committee has also considered whether Ernst & Young's
provision of non-audit services to Belo is compatible with their independence.
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 Belo's annual report on Form
10-K for the fiscal year ended December 31, 2002, for filing with the SEC.
Respectfully submitted,
AUDIT COMMITTEE
Henry P. Becton, Jr., Chair
Louis E. Caldera
Roger A. Enrico
Arturo Madrid, Ph.D.
15
INDEPENDENT AUDITORS
Ernst & Young, LLP served as our independent auditors for the fiscal year ended
December 31, 2002, and will serve in such capacity for the current fiscal year.
Representatives of Ernst & Young 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 fees that Ernst & Young billed us for the audit
of our financial statements for the fiscal year ended December 31, 2002 and
review of our financial statements for the quarterly periods within that fiscal
year, and all other fees Ernst & Young has billed us for services rendered
during the fiscal year ended December 31, 2002:
<Table>
Audit Fees.................................................. $475,000
Financial Information Systems Design and Implementation
Fees...................................................... --
All Other Fees (consists of $62,384 of audit related fees
and $299,332 of other fees principally for employee
benefit plan audits and assistance with tax returns and
other tax matters)........................................ $361,716
</Table>
16
EXECUTIVE OFFICERS
Belo's executive officers are as follows:
<Table>
<Caption>
NAME OFFICE CURRENTLY HELD OFFICE HELD SINCE
---- --------------------- -----------------
Robert W. Decherd.................... Chairman of the Board, President and Chief
Executive Officer 1987(1)
Dunia A. Shive....................... Executive Vice President/Chief Financial
Officer 2000(2)
John L. (Jack) Sander................ Executive Vice President/Media Operations 2000(3)
James M. Moroney III................. Publisher and Chief Executive Officer, The
Dallas Morning News 2001(4)
Guy H. Kerr.......................... Senior Vice President/General Counsel and
Secretary 2000(5)
Colleen B. Brown..................... Senior Vice President 2000(6)
Marian Spitzberg..................... Senior Vice President/Human Resources 2000(7)
Dennis A. Williamson................. Senior Corporate Vice President 2002(8)
</Table>
- ---------------
(1) Member of the Board of Directors. (See "Proposal: Election of Directors"
above for additional information.)
(2) Dunia Shive, age 42, has been executive vice president/chief financial
officer since December 2000 and served as senior vice president/chief
financial officer from July 1998 until December 2000. She served as senior
vice president/corporate operations from July 1997 through June 1998. From
January 1996 until July 1997, Dunia was vice president/finance. She joined
Belo in May 1993.
(3) Jack Sander, age 61, has been executive vice president/media operations
since January 2001 and president of the Television Group since July 1998. He
was executive vice president of the Television Group from 1997 until 1998.
Jack was general manager at WAGA-TV in Atlanta, Georgia from 1988 until
1997. He joined Belo in January 1997.
(4) Jim Moroney, age 46, has been publisher and chief executive officer of The
Dallas Morning News since June 2001. He served as president of Belo
Interactive, Inc. from its formation in May 1999 until June 2001 and as
executive vice president of Belo from July 1998 through December 1999. Jim
served as president of the Television Group from January 1997 until July
1998 and as executive vice president of the Television Group from January
1995 until January 1997. Jim joined Belo in November 1978.
(5) Guy Kerr, age 50, has been senior vice president/general counsel and
secretary since June 2000. From 1985 until June 2000, Guy was a partner in
the law firm of Locke Liddell & Sapp LLP and its predecessors, in Dallas,
Texas. In that capacity, Guy worked on most of Belo's major corporate
business transactions.
(6) Colleen Brown, age 44, has been senior vice president since November 2002.
She served as senior vice president/business development from October 2000
until November 2002. From July 1998 to October 2000, Colleen was president
of the broadcast group of Lee Enterprises, Inc. and from 1980 to 1998 she
served in various management roles with Gannett Co., Inc., including
president and general manager of its Phoenix, Arizona television operations
from 1995 until July 1998.
(7) Marian Spitzberg, age 54, has been senior vice president/human resources
since February 2000. She served as vice president/deputy general counsel
from January 1997 until February 2000 and as secretary from July 1998 until
February 2000. In addition, Marian served as vice president/assistant
general counsel from January 1995 until January 1997. Marian joined Belo in
March 1992.
(8) Dennis Williamson, age 55, has been senior corporate vice president since
November 2002. He served as senior vice president of the Television Group
from January 2000 to November 2002. From February 1997 to January 2000,
Dennis was president/general manager of KING-TV in Seattle, Washington and
from 1992 to 1997 served as president/general manager of KGW-TV in Portland,
Oregon. Dennis joined Belo in February 1997 in conjunction with the
Company's acquisition of The Providence Journal Company.
17
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE COMPENSATION COMMITTEE
The Compensation Committee is composed entirely of independent directors. The
Board of Directors has delegated to the committee the authority to review,
consider and determine the compensation of Belo's senior executive officers
listed in the summary compensation table on page 21. We administer Belo's
Executive Compensation Plan, under which we make recommendations to the Board
regarding salary levels for the senior executives and make the final
determination regarding bonuses and awards of stock options and other
stock-based compensation under Belo's 1995 and 2000 stock plans. Compensation
levels for 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 Executive Compensation Plan (ECP) was implemented January 1, 1989. The ECP's
key elements are an annual base salary, an annual target bonus opportunity, and
long-term incentive awards issued under the stock plans. Officers of Belo and
its subsidiaries, including the chief executive officer and the other senior
executives, are automatically eligible to participate in the ECP. The committee
selects additional participants according to their ability to affect
significantly Belo's profitability.
The goals of the ECP are: (1) to establish a competitive compensation program to
attract, retain and motivate employees in those positions that most directly
affect Belo's overall performance, and (2) to encourage coordinated and
sustained effort toward maximizing Belo's value to its shareholders. Bonus
payments to participants other than the senior executives are principally
dependent upon the achievement of Belo or subsidiary financial performance
targets. In some cases, portions of the bonus are also dependent upon the
financial performance of related Internet Web sites and other Belo subsidiaries
in a geographic cluster. As described below, bonus payments to participants are
generally determined by the committee with reference to the achievement of
financial performance targets and additional considerations.
Long-term incentive awards (stock options or other stock-based awards) are
granted in late November or early December of each year. At the same time, base
salary levels and bonus opportunities are established for the following year.
SEC rules require the reporting of compensation on a calendar year basis.
Consequently, the compensation packages presented in this report and in the
summary compensation table on page 21 include base salary and bonus
opportunities awarded with respect to 2002, which were established by the
committee in December 2001, and option awards granted in December 2002.
We work closely with the chief executive officer and the senior vice
president/human resources in formulating our recommendations. We have determined
that the appropriate level for each element of a participant's compensation is
generally near the median indicated by comparative compensation data. We believe
that this target percentile, when adjusted according to individual performance
and other factors applicable to certain elements of compensation, gives us the
ability to attract and retain outstanding executives. For comparative purposes,
we use a special cut survey of peer media companies in determining base salaries
and bonus opportunities and a broader survey of companies in determining
long-term incentive awards. The surveys are conducted by Towers Perrin, a
nationally recognized compensation consultant. The companies included in both
the general compensation survey and the special cut survey vary somewhat from
those included in the group of public peer companies indicated in the
performance graph on page 26 because some companies included in the peer group
do not participate in the compensation survey and some companies that
participate in the compensation survey are not public companies.
Base Salary. The 2002 base salaries of Robert Decherd, Dunia Shive, Jack
Sander, Jim Moroney and Mike McCarthy reflect a 5% reduction in the salaries of
the Management Committee members in October 2001 and a salary freeze implemented
in October 2001 as part of a series of cost reductions to align Belo's expense
structure with expected revenue generation and maintain strong levels of cash
generation. The salary freeze
18
was lifted for the senior executives on January 1, 2003 and merit increases for
2003 were based on reduced base salaries. The 5% pay reduction was not
automatically restored.
Annual Performance Bonus Opportunity. Generally, each ECP participant has an
opportunity to earn an annual bonus based primarily upon the financial
performance of the participant's organizational entity. With respect to
participants other than the senior executives, the committee uses a percent of
the base salary of each participant to establish his or her bonus opportunity
range, based on survey comparisons. From 80 to 100% of a participant's bonus is
determined by the financial performance of his or her organizational entity. In
the case of participants who are employees of subsidiaries located in the Texas,
Southwest, Northwest and Mid-Atlantic geographic clusters, 10% of their bonuses
is based on the aggregate financial performance of those clusters and an
additional 10% is based on the performance of the participant's related Internet
Web site. We review minimum, target and maximum levels of financial performance
for each organizational entity annually, based on business plans developed by
Belo's senior management, and we determine bonus amounts for participants
shortly after the end of each calendar year.
If minimum performance levels are not achieved, participants earn no bonuses.
Performance at the target level earns participants 100% of their bonus amounts,
and performance at the maximum level earns participants 200% of their bonus
amounts. If performance falls between the minimum level and the target level,
participants receive a prorated amount up to the target bonus amount. If
performance falls between the target and maximum performance levels,
participants receive 100% of their bonus amounts, plus an additional pro rata
amount reflecting performance in excess of the target level. The committee
believes that linking bonus opportunity directly to financial performance with
an opportunity to earn 200% of target bonus at maximum gives participants an
incentive to achieve shareholder objectives. To recognize the efforts of
employees during 2002 and in light of the year-long salary freeze, the Board of
Directors approved a one-time, special bonus award at year end 2002 to those
employees of Belo companies who participated in the salary freeze, but whose
bonuses through the ECP or Belo's other established bonus programs would have
been less than 1.5% of his or her base salary. The special award ensured these
employees a bonus equal to 1.5% of his or her base salary.
As permitted by the ECP and in compliance with the performance-based
compensation exemption under Internal Revenue Code Section 162(m), we
established a specific annual performance target for each senior executive for
2002. The performance target was defined as a specific percentage of
consolidated net income. We have the discretion to reduce (but not to increase)
a senior executive's bonus from the amount that would otherwise be payable under
the target formula. For 2002, we reduced the bonus amounts payable to all senior
executives under the formula to the amounts that would have been paid to the
senior executives under the method described above for calculating bonuses for
other participants in the ECP.
Long-Term Awards. The long-term incentive component of the ECP, represented
primarily by stock option grants, is designed to encourage the retention of key
executives, and the ultimate value of the long-term awards is determined by the
market price of Belo common stock. We generally strive to set long-term
incentive levels for participants that place them near the median of the survey
we used. In determining long-term incentive awards for participants, we consider
the face value of the awards, expressed as a multiple of the participant's base
salary. In addition, we may adjust the awards upwards or downwards, depending on
the participant's level of responsibility and his or her past and potential
contribution toward Belo's performance. For 2002, we also adjusted the number of
stock options awarded to each participant downward on a pro rata basis to insure
that a sufficient number of authorized options remain for awards through the
2004 annual meeting when shareholder approval will be sought for an additional
authorization of shares to be awarded under the ECP.
A total of 527,000 options for Belo's Series B shares were granted to the senior
executives in 2002 under the stock plans. We established an exercise price for
these options equal to the market price of Series A shares on the date of grant.
(See the "Option/SAR Grants in 2002" table on page 22.) 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).
19
While the value realizable from exercisable options depends on the market price
of Belo's common stock at any particular point in 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 2002
and 2002 Year-End Option/SAR Values" table on page 23 for the amounts realized
by the senior executives from option exercises in 2002 and the estimated
unrealized value of unexercised options held by them as of December 31, 2002.)
CEO COMPENSATION
Robert Decherd is a participant in the ECP. Robert's base salary for 2002
reflected a reduction of 5% implemented in October 2001. As part of a series of
cost reduction measures, Robert's base salary remained frozen until January
2003. We reduced Robert's bonus payable under the performance target established
for him to the amount Robert would have received if his bonus had been based on
Belo's consolidated financial performance under the method described above for
calculating bonuses for ECP participants other than the senior executives. In
December 2002, we awarded Robert stock options for 200,000 Series B shares; this
amount was determined using the same methodology used in determining all stock
option awards for 2002.
ONE MILLION DOLLAR LIMIT ON THE DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Internal Revenue Code places a $1 million limit on the deductibility of
certain compensation paid to the chief executive officer and the other senior
executives for tax years beginning on or after January 1, 1994. Some
compensation, including performance-based compensation meeting specified
requirements, is exempt from the limit. Neither of Belo's stock plans prohibit
Belo from granting awards that are not subject to the deduction limit
established by Section 162(m) of the Internal Revenue Code. We intend to grant
awards that are not subject to the deduction limit to the extent that the
structure of such awards is consistent with corporate performance objectives.
Respectfully submitted,
COMPENSATION COMMITTEE
John W. Bassett, Jr., Chair
Judith L. Craven, M.D., M.P.H.
Laurence E. Hirsch
Arturo Madrid, Ph.D.
Lloyd D. Ward
20
SUMMARY COMPENSATION TABLE
The following information summarizes annual and long-term compensation awarded
to, earned by or paid to Belo's chief executive officer and the four other most
highly paid executive officers (the "senior executives") for services in all
capacities to Belo for the fiscal years ended December 31, 2002, 2001, and 2000.
Information is also provided with respect to Mike McCarthy, who retired as an
executive officer in October 2002.
<Table>
<Caption>
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
-------------------------------------- UNDERLYING
OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND COMPENSATION SARS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) (#) ($)(2)
------------------ ---- --------- ---------- ------------ ------------ ------------
Robert W. Decherd 2002 $855,000 $1,282,500 -- 200,000 $253,170
Chairman of the Board, 2001 $888,750 -- -- 410,000 $252,180
President and CEO 2000 $863,200 $ 635,900 -- 410,000 $517,272
Dunia A. Shive 2002 $427,500 $ 384,800 -- 76,000 $ 58,154
Executive Vice President/ 2001 $444,375 -- -- 109,000 $ 56,954
Chief Financial Officer 2000 $387,000 $ 251,400(3) -- 100,000 $ 53,214
John L. (Jack) Sander 2002 $532,000 $ 585,200 -- 122,000 $337,872
Executive Vice President/ 2001 $553,000 -- -- 160,000 $355,025
Media Operations 2000 $512,480 $ 366,600 -- 160,000 $306,628
James M. Moroney III 2002 $413,300 $ 69,500 -- 76,000 $ 61,126
Publisher and CEO, 2001 $429,575 $ 11,200 -- 104,000 $ 60,686
The Dallas Morning News 2000 $418,200 $ 209,100 -- 100,000 $ 60,686
Guy H. Kerr 2002 $395,000 $ 296,300 -- 53,000 $ 37,512
Senior Vice President/ 2001 $370,000 -- -- 80,000 $ 36,133
General Counsel and
Secretary 2000 $193,538(4) $ 139,900(3) -- 130,000(4) --
Michael J. McCarthy(5) 2002 $374,100 $ 355,400 -- 0 $124,134
Senior Executive Vice
President 2001 $518,438 -- -- 130,000 $173,139
2000 $471,600 $ 253,900 -- 110,000 $513,225
</Table>
- ---------------
(1) The total value of executive perquisites and benefits did not exceed the
lesser of (i) $50,000 or (ii) 10% of the total annual salary and bonuses for
any senior executive.
(2) Amounts in this column for 2002 comprise the following amounts contributed
by Belo to (i) the Belo Savings Plan; and (ii) the SERP:
<Table>
<Caption>
BELO SAVINGS PLAN SERP
CONTRIBUTION CONTRIBUTION
NAME ($) ($)
---- ----------------- ------------
Robert W. Decherd................................ $ 6,600 $246,570
Dunia A. Shive................................... $12,250 $ 45,904
John L. (Jack) Sander............................ $13,000 $324,872
James M. Moroney III............................. $ 6,050 $ 55,076
Guy H. Kerr...................................... $ 6,050 $ 31,462
Michael J. McCarthy.............................. $ 6,050 $118,084
</Table>
21
Beginning in 2000, the Belo Savings Plan contribution for Jack Sander and
Dunia Shive includes an enhanced 401(k) benefit, which was elected by each
in lieu of continuing participation in Belo's pension plan. Included in the
SERP contribution amounts for 2000 for Robert Decherd and Mike McCarthy are
payments representing the accumulated benefit under a previous plan, which
rolled into the SERP effective January 1, 2000.
(3) The amounts for 2000 for Dunia Shive and Guy Kerr include one-time special
bonuses of $65,000 and $55,000, respectively.
(4) As noted on page 17, Guy Kerr began his employment with Belo in June 2000.
In addition, Guy was granted stock options for 55,000 Series B shares in
June 2000 coincident with his date of hire.
(5) In March 2002, we entered into a retirement agreement with Mike McCarthy
pursuant to which Mike has agreed to provide Belo consulting services from
October 2002 until the earlier of (1) the time Mike ceases to provide
consulting services or (2) October 1, 2007. Under the terms of his
retirement agreement, we will pay Mike an annual retainer during the time he
provides consulting services. The retainer for the period from October 1,
2002 to September 30, 2003 is $200,000. The annual retainer for subsequent
years during his retention period decreases by $25,000 each year. Pursuant
to the terms of the applicable stock option plans, options to purchase a
total of 271,150 Series B shares, which had been previously awarded to Mike
but which had not yet vested, became fully exercisable upon his retirement.
OPTIONS/SAR GRANTS IN 2002
The stock options described below were awarded under the 2000 Belo Executive
Compensation Plan. During 2002, all options granted were for Series B shares,
and no stock appreciation rights were granted. The following table provides
additional information regarding stock options granted during 2002 to the senior
executives:
<Table>
<Caption>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/SARS EXERCISE GRANT DATE
OPTIONS/SARS GRANTED TO OR BASE PRESENT
GRANTED EMPLOYEES IN PRICE EXPIRATION VALUE
NAME (#)(1) FISCAL YEAR ($/SH) DATE ($)(2)
---- ------------ ------------ -------- ---------- ----------
Robert W. Decherd................ 200,000 10.79% $21.59 12/06/2012 $1,240,240
Dunia A. Shive................... 76,000 4.10% $21.59 12/06/2012 $ 471,291
John L. (Jack) Sander............ 122,000 6.58% $21.59 12/06/2012 $ 756,546
James M. Moroney III............. 76,000 4.10% $21.59 12/06/2012 $ 471,291
Guy H. Kerr...................... 53,000 2.86% $21.59 12/06/2012 $ 328,664
Michael J. McCarthy.............. -- -- -- -- --
</Table>
- ---------------
(1) All stock options shown above become exercisable in increments of 40% after
one year and 30% after years two and three. Upon the occurrence of a change
in control (as defined in the plan), all of the options become immediately
exercisable, unless the Board of Directors has adopted resolutions making
the acceleration provisions inoperative (or does so promptly following such
occurrence).
(2) These values are determined using the Black-Scholes option pricing model.
The Black-Scholes option pricing model is one of the methods permitted by
the SEC for estimating the present value of options. The Black-Scholes
option pricing model is based on assumptions as to certain variables as
described below, and is not intended to estimate, and has no direct
correlation to, the value that an individual will actually realize upon
exercise of stock options. The actual value of the stock options that a
senior executive may realize, if any, will depend on the excess of the
market price on the date of exercise over the exercise price. The values
listed above were based on the following assumptions: volatility (measured
as the annualized standard deviation of the sample, as determined from the
past 20 quarters, ending with the fourth quarter of 2002) -- .2093; risk
free rate of return -- 3.820%; dividend yield -- 1.407%; time of
exercise -- 10 years; and discount for risk of forfeiture -- 3%.
22
AGGREGATED OPTION/SAR EXERCISES IN 2002 AND 2002 YEAR-END OPTION/SAR VALUES
The following table shows information concerning the exercise of stock options
during 2002 by the senior executives and the estimated value of unexercised
options held by these individuals at year-end:
<Table>
<Caption>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
(#)(1) ($)(2)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- ----------- ------------- -------------
Robert W. Decherd........................ -- -- 1,482,949/ $4,195,791/
653,001 $1,596,207
Dunia A. Shive........................... 7,880 $ 74,249 297,480/ $ 947,842/
180,400 $ 377,331
John L. (Jack) Sander.................... -- -- 445,000/ $1,289,085/
266,000 $ 522,600
James M. Moroney III..................... 33,276 $ 372,680 386,500/ $1,118,852/
168,400 $ 334,881
Guy H. Kerr.............................. -- -- 123,000/ $ 503,638/
140,000 $ 333,788
Michael J. McCarthy...................... 168,780 $1,097,388 463,700/ $1,395,518/
-- --
</Table>
- ---------------
(1) Of the exercisable options, the following numbers of shares underlying
options are for Series B shares for each of the named senior executives:
Robert Decherd -- 1,482,949 shares; Dunia Shive -- 291,300 shares; Jack
Sander -- 445,000 shares; Jim Moroney -- 386,500 shares; Guy Kerr -- 123,000
shares; and, Mike McCarthy -- 463,700 shares. The remaining exercisable
options are for Series A shares. All of the unexercisable options presented
are options for Series B shares.
(2) Based on the closing price of $21.32 of Belo Series A shares on the NYSE on
December 31, 2002, less the exercise price of the options.
RETIREMENT 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, 2001. 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, 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.
23
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.
<Table>
<Caption>
AVERAGE ANNUAL
COMPENSATION YEARS OF SERVICE(1)
DURING --------------------------------------------------------------------
FINAL FIVE YEARS 10 15 20 25 30 35 40
---------------- ------- ------- ------- ------- ------- ------- --------
$150,000................. $20,211 $30,317 $40,422 $50,528 $60,633 $70,739 $ 78,989
$250,000................. $27,461 $41,192 $54,922 $68,653 $82,383 $96,114 $107,114
$350,000................. $27,461 $41,192 $54,922 $68,653 $82,383 $96,114 $107,114
$450,000................. $27,461 $41,192 $54,922 $68,653 $82,383 $96,114 $107,114
$550,000................. $27,461 $41,192 $54,922 $68,653 $82,383 $96,114 $107,114
$650,000................. $27,461 $41,192 $54,922 $68,653 $82,383 $96,114 $107,114
$750,000................. $27,461 $41,192 $54,922 $68,653 $82,383 $96,114 $107,114
$850,000 or above........ $27,461 $41,192 $54,922 $68,653 $82,383 $96,114 $107,114
</Table>
- ---------------
(1) Benefits listed in the table above are not subject to reduction for Social
Security amounts. The table reflects all of the limitations of accrued
benefits imposed by Section 415 of the Internal Revenue Code, which limits
such benefits to $160,000 in 2002. The table also reflects the limitations
imposed by Section 401(a)(17) of the Internal Revenue Code on annual
compensation to be taken into account in determining pension benefits, which
is limited to $200,000 in 2002.
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
participant's 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, 2002, the named senior executives
have credited years of service under the pension plan as follows: Robert
Decherd -- 29 years; Dunia Shive -- 7 years; Jack Sander -- 3 years; Jim
Moroney -- 24 years; Guy Kerr -- 2 years; and, Mike McCarthy -- 17 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 21, except that such covered compensation was capped at $200,000 for all
participants in 2002.
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 2000 stock plan. A "change in control" is generally defined in
both the 1995 stock plan and the 2000 stock 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 Belo's assets, or certain changes in the
composition of Belo's Board during any period of two consecutive years.
24
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 Internal
Revenue Code limits on our qualified retirement plans. For a target group of
executives, which includes the senior executives with the exception of Guy Kerr,
the specific objective of the SERP, when combined with our pension plan, is to
provide a benefit at age 65 of 60% of final average pay (the average of the
total salary and target bonus during the last five completed calendar years of
employment). However, because the SERP is a defined contribution plan, the
actual benefit to be received by any participant will depend on the
participant's account balance at the time of retirement. In addition, at its
December 1999 meeting, the Compensation Committee amended the SERP effective
January 1, 2000 to restore benefits to additional participants selected by the
Compensation Committee, limited by the annual compensation cap for determining
pension benefits imposed by the Internal Revenue Code. The payment of benefits
under the SERP will be subject to the same terms and conditions described above
for the payment of benefits under our pension plan. (See the description of our
pension plan on pages 23 and 24 above. See also footnote (2) to the summary
compensation table on page 21 above for the amounts contributed to the SERP by
Belo on behalf of the named senior executives for 2002.) 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
On March 15, 2002, we entered into a retirement agreement with Mike McCarthy.
See footnote (5) to the summary compensation table on page 21 for details.
25
STOCK PERFORMANCE
The following graph compares (1) the annual cumulative shareholder return on an
investment of $100 on December 31, 1997 in Belo's 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 & Poor's 500 Stock Index and in a group of peer
companies selected on a line-of-business basis and weighted for market
capitalization. In 2002, our peer group included the following companies: Dow
Jones & Company, Inc.; Gannett Co., Inc.; Granite Broadcasting Corporation;
Hearst-Argyle Television, Inc.; Knight-Ridder, Inc.; Lee Enterprises, Inc.;
McClatchy Newspapers, Inc.; Media General, Inc.; The New York Times Company;
Pulitzer Publishing Company; The E.W. Scripps Company; Tribune Company; The
Washington Post Company; and Young Broadcasting Corporation. Belo is not
included in the calculation of peer group cumulative total shareholder return on
investment.
(PERFORMANCE GRAPH)
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------------------------------
12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
- ---------------------------------------------------------------------------------------------------------------------------------
Belo 100 72 70 59 71 82
S&P 500 100 107 138 119 125 136
Peer Group 100 129 156 141 123 97
</Table>
ANNUAL REPORT AND ADDITIONAL MATERIALS
Our 2002 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, 2002 (INCLUDING EXHIBITS, FINANCIAL STATEMENTS, AND THE SCHEDULES
THERETO) 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 THESE REPORTS AS SOON AS
REASONABLY PRACTICABLE AFTER THE REPORTS ARE ELECTRONICALLY FILED WITH OR
FURNISHED TO THE SEC.
26
SHAREHOLDER PROPOSALS FOR 2004 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 12, 2004 and March 14, 2004 in order to be
considered at the 2004 annual meeting, and must satisfy the other requirements
in our bylaws regarding such proposals or nominations. These bylaw provisions
apply whether or not the proposal or nomination is intended to be included in
the proxy materials for the 2004 annual meeting. 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 2004 annual
meeting may do so by submitting the proposal to us by no later than December 6,
2003 and following the procedures described in SEC Rule 14a-8, in addition to
providing the information required in the advance notice provisions of our
bylaws.
Copies of the bylaws and SEC Rules 14a-4 and 14a-8 may be obtained by contacting
Belo's Secretary at P.O. Box 655237, Dallas, Texas 75265-5237, or by telephone
at (214) 977-6606.
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.
By Order of the Board of Directors
GUY H. KERR
Secretary
Dated: April 4, 2003
27
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") definition of "independence," as determined by the Board. The criteria
used by the Board in assessing "independence" are included in the Company's
Corporate Governance Guidelines, as adopted by the Board and as amended from
time to time. Each member of the Company's Audit Committee must be financially
literate, as determined in the Board's judgment, and 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"), unless the Board
determines in its judgment (i) that the Audit Committee and Board is capable of
carrying out its duties and responsibilities without such an "audit committee
financial expert," (ii) that an "audit committee financial expert" is not
required by applicable law or NYSE rules and (iii) that any required public
disclosures about the non-existence of an "audit committee financial expert" on
the Audit Committee can be timely made.
2. Purposes, Duties, and Responsibilities.
The purposes of the Audit Committee shall be to:
- assist the Board in discharging its oversight responsibility relating to:
(i) the accounting, reporting, and financial practices of the Company and
its subsidiaries, including the integrity of the Company's financial
statements; (ii) the surveillance of administration and financial
controls and the Company's compliance with legal and regulatory
requirements; (iii) the outside auditing firm's qualifications and
independence; and (iv) the performance of the Company's internal audit
function and the Company's outside auditing firm; and
- prepare the report required by the rules of the SEC to be included in the
Company's annual proxy statement.
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:
(i) Appoint, and retain or terminate, when appropriate, the outside
auditing firm, which firm shall report directly to the Audit Committee. In
its capacity as a committee of the Board, the Audit Committee shall be
directly responsible for the appointment, compensation and oversight of the
outside auditing firm.
(ii) Obtain and review, at least annually, a report by the outside
auditing firm describing: the outside auditing firm's internal
quality-control procedures; and any material issues raised by the most
recent internal quality-control review, or peer review, or by any inquiry
or investigation by governmental or professional authorities, within the
preceding five years, respecting one or more independent audits carried out
by the firm, and any steps taken to deal with any such issues.
(iii) Approve in advance all audit engagement fees and terms of all
audit services to be provided by the outside auditing firm. (By approving
the audit engagement, the audit service shall be deemed to have been
pre-approved.)
(iv) Establish policies and procedures for the engagement of the
outside auditing firm to provide permissible non-audit services, which
shall include pre-approval of all permissible non-audit services to be
provided by the outside auditing firm.
(v) Consider, at least annually, the independence of the outside
auditing firm, including whether the outside auditing firm's performance of
permissible non-audit services is compatible with the auditor's
independence, and obtain and review a report by the outside auditing firm
describing any relationships
A-1
between the outside auditing firm and the Company or any other
relationships that may adversely affect the independence of the auditor.
(vi) Review and discuss with the outside auditing firm: (a) the scope
of the audit, the results of the annual audit examination by the auditor,
and any difficulties the auditor encountered in the course of their audit
work, including any restrictions on the scope of the outside auditing
firm's activities or on access to requested information, and any
significant disagreements with management; and (b) any reports of the
outside auditing firm with respect to interim periods.
(vii) Review and discuss with management and the outside auditing firm
the annual audited and quarterly financial statements of the Company,
including: (a) an analysis of the auditor's judgment as to the quality of
the Company's accounting principles, setting forth significant financial
reporting issues and judgments made in connection with the preparation of
the financial statements; (b) the Company's disclosures under "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
including accounting policies that may be regarded as critical; and (c)
major issues regarding the Company's accounting principles and financial
statement presentations, including any significant changes in the Company's
selection or application of accounting principles and financial statement
presentations.
(viii) Recommend to the Board based on the review and discussion
described in paragraphs (vi)-(vii) above, whether the financial statements
should be included in the Annual Report on Form 10-K.
(ix) Review and discuss the adequacy of the Company's internal
controls (with particular emphasis on the scope and performance of the
internal audit function), and review and discuss with the principal
internal auditor of the Company the scope and results of the internal audit
program.
(x) Review and discuss the adequacy of the Company's disclosure
controls and procedures.
(xi) Review and discuss generally the types of information to be
disclosed and the type of presentation to be made in the Company's earnings
press releases, as well as financial information and earnings guidance
provided to analysts and ratings agencies.
(xii) Review and discuss the Company's policies with respect to risk
assessment and risk management.
(xiii) Establish procedures for handling complaints regarding
accounting, internal accounting controls and auditing matters, including
procedures for confidential, anonymous submission of legitimate concerns by
employees regarding accounting and auditing matters. Obtain and review, at
least annually, a report on any such complaints and any reported violations
of the Company's Code of Business Conduct and Ethics.
(xiv) Establish policies for the hiring of employees and former
employees of the outside auditing firm.
(xv) Evaluate annually the performance of the Audit Committee and the
appropriateness of the Audit Committee charter.
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.
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: February 7, 2003
A-2
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 13, 2003. The annual meeting
will be held for the purpose of electing seven directors and 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 Texas, 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 as of March 20, 2003.
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 11, 2003, 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.
CONFIDENTIALITY AND INSTRUCTIONS
Your vote is 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 11, 2003. 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 11, 2003. 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 IDENTIFICATION INFORMATION WITH
RESPECT TO YOUR DIRECTLY-HELD SHARES TO VOTE YOUR PLAN SHARES.
If you have questions regarding the information provided to you, you may contact
the trustees at the following numbers between 8:00 a.m. and 5:00 p.m. Central
Time, Monday through Friday:
<Table>
Fidelity Management Trust Company (800) 835-5098
Wells Fargo Bank Texas, N.A. (800) 716-6817 Ext. 16 (Texas Residents Only) or
(800) 568-6245 Ext. 1661
</Table>
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 4, 2003
FIDELITY MANAGEMENT TRUST COMPANY
WELLS FARGO BANK TEXAS, N.A.
as Trustees of the BELO SAVINGS PLAN
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 RETURN YOUR
PROXY CARD IF YOU VOTE
BY TELEPHONE OR INTERNET
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
PROXY
(BELO LOGO)
Annual Meeting of Shareholders - To be held May 13, 2003
THE BOARD OF DIRECTORS OF BELO CORP. SOLICITS THIS PROXY
The undersigned hereby appoints Robert W. Decherd, Dunia A. Shive and Guy H.
Kerr, or any one or more of them, as proxies, each with the power to appoint his
or her 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 20, 2003, at the 2003 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.
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.
SEE REVERSE (CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE) SEE REVERSE
SIDE SIDE
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 Standard Time), May 12, 2003. If you wish to change your
address, please mark the box below and return your proxy by mail.
VOTER CONTROL NUMBER
[ ]
<Table>
<Caption>
VOTE BY TELEPHONE VOTE BY INTERNET
Call toll-free on a touch-tone phone. As with all Internet access, usage or server
There is NO CHARGE for this call. fees must be paid by the user.
1. READ THE ACCOMPANYING PROXY STATEMENT AND HAVE YOUR 1. READ THE ACCOMPANYING PROXY STATEMENT AND HAVE YOUR
PROXY CARD HANDY WHEN YOU CALL. PROXY CARD HANDY WHEN YOU ACCESS THE WEB SITE.
2. CALL TOLL-FREE 1-877-PRX-VOTE (1-877-779-8683). 2. GO TO THE WEB SITE http://www.eproxyvote.com/blc
3. ENTER YOUR VOTER CONTROL NUMBER LISTED ABOVE. 3. ENTER YOUR VOTER CONTROL NUMBER LISTED ABOVE.
4. FOLLOW THE RECORDED INSTRUCTIONS. 4. FOLLOW THE INSTRUCTIONS PROVIDED.
</Table>
IF YOU VOTE OVER THE INTERNET OR BY TELEPHONE, PLEASE DO NOT MAIL YOUR CARD.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
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.
1. Election of the following nominees: (01) France A. Cordova, Ph.D. as a
Class I director (Term expires in 2005); (02) Henry P. Becton, Jr., (03)
Roger A. Enrico, (04) Arturo Madrid, Ph.D., (05) William T. Solomon and
(06) Lloyd D. Ward, as Class II directors (Term expires in 2006); and (07)
Wayne R. Sanders as a Class III director (Term expires in 2004).
WITHHOLD
FOR AUTHORITY
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
[ ]
------------------------------------------
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
2. At the discretion of such proxies on any other matter that properly may
come before the meeting or any adjournment or postponement thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, DATE, AND SIGN AS YOUR NAME APPEARS AT LEFT AND RETURN IN THE
ENVELOPE PROVIDED.
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.
<Table>
Signature: Date: Signature: Date:
------------------------------- -------------- ------------------------------- -------------
</Table>
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 RETURN YOUR
VOTING INSTRUCTION CARD IF YOU VOTE
BY TELEPHONE OR INTERNET
DETACH HERE IF YOU ARE RETURNING YOUR VOTING INSTRUCTION CARD BY MAIL
VOTING INSTRUCTIONS TO TRUSTEES OF BELO SAVINGS PLAN
(BELO LOGO)
Annual Meeting of Shareholders - To be held May 13, 2003
TO PARTICIPANTS IN THE BELO SAVINGS PLAN:
As a participant in the Belo Savings Plan, you may instruct the trustees how to
vote the shares of Belo common stock allocated to your account at the 2003
Annual Meeting of Shareholders, and any adjournment or postponement thereof.
This voting instruction card, when properly completed and returned by you, will
constitute instructions to the trustees to vote the shares of Belo common stock
credited to your Belo Savings Plan account as of March 20, 2003. Your
instructions to the trustees will be held in strict confidence and will be made
available only to the inspectors of the election at the Annual Meeting, none of
whom is an employee of Belo. Please use the other side of this form in giving
your instructions.
If the trustees have not received your voting instructions by May 11, 2003, your
plan shares will be voted by the trustees in the same proportion as those shares
for which voting instruction has been timely received. If you sign, date and
return a voting instruction card but do not check any boxes on the card, the
trustees will vote your Belo Savings Plan shares "FOR" all nominees standing for
election as directors.
FIDELITY MANAGEMENT TRUST COMPANY
WELLS FARGO BANK TEXAS, N.A.,
Trustees of the Belo Savings Plan
SEE REVERSE (CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE) SEE REVERSE
SIDE SIDE
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 Standard Time), May 11, 2003. If you wish to
change your address, please mark the box below and return your card by mail.
VOTER CONTROL NUMBER
[ ]
<Table>
<Caption>
VOTE BY TELEPHONE VOTE BY INTERNET
Call toll-free on a touch-tone phone. As with all Internet access, usage or server
There is NO CHARGE for this call. fees must be paid by the user.
1. READ THE ACCOMPANYING PROXY STATEMENT AND HAVE YOUR 1. READ THE ACCOMPANYING PROXY STATEMENT AND HAVE YOUR
VOTING INSTRUCTION CARD HANDY WHEN YOU CALL. VOTING INSTRUCTION CARD HANDY WHEN YOU ACCESS THE WEB
SITE.
2. CALL TOLL-FREE 1-877-PRX-VOTE (1-877-779-8683). 2. GO TO THE WEB SITE http://www.eproxyvote.com/blc
3. ENTER YOUR VOTER CONTROL NUMBER LISTED ABOVE. 3. ENTER YOUR VOTER CONTROL NUMBER LISTED ABOVE.
4. FOLLOW THE RECORDED INSTRUCTIONS. 4. FOLLOW THE INSTRUCTIONS PROVIDED.
</Table>
IF YOU VOTE OVER THE INTERNET OR BY TELEPHONE, PLEASE DO NOT MAIL YOUR CARD.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
DETACH HERE IF YOU ARE RETURNING YOUR VOTING INSTRUCTION CARD BY MAIL
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
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:
1. Election of the following nominees: (01) France A. Cordova, Ph.D. as a
Class I director (Term expires in 2005); (02) Henry P. Becton, Jr., (03)
Roger A. Enrico, (04) Arturo Madrid, Ph.D., (05) William T. Solomon and
(06) Lloyd D. Ward, as Class II directors (Term expires in 2006); and (07)
Wayne R. Sanders as a Class III director (Term expires in 2004).
WITHHOLD
FOR AUTHORITY
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
[ ]
-------------------------------------------
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
2. At the discretion of the trustees of the Belo Savings Plan on any other
matter that properly may come before the meeting or any adjournment or
postponement thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, DATE, AND SIGN AS YOUR NAME APPEARS AT LEFT AND RETURN IN THE
ENVELOPE PROVIDED.
I hereby authorize Fidelity Management Trust Company and Wells Fargo Bank Texas,
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 2003
Annual Meeting in accordance with instructions given above. Each of the trustees
has appointed EquiServe as agent to tabulate the votes.
<Table>
Signature: Date: Signature: Date:
------------------------------- -------------- ------------------------------- -------------
</Table>