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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 sec. 240.14a-11(c) or sec. 240.14a-12
A. H. Belo Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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[LOGO]
400 SOUTH RECORD STREET
DALLAS, TEXAS 75202
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 14, 1997
------------------------
To the Shareholders of A. H. BELO CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of A. H. Belo Corporation (the "Company"), a Delaware corporation,
will be held in the Dallas Museum of Art Auditorium, 1717 North Harwood Street,
Dallas, Texas, on Wednesday, May 14, 1997, at 10:00 a.m., Dallas, Texas time,
for the following purposes:
1. To elect five Class II directors to hold office for a term of three
years or until their respective successors are elected and qualified;
2. To approve the proposed amendments to the Company's 1995 Executive
Compensation Plan; and
3. To transact such other business as properly may come before the
Annual Meeting or any adjournment thereof.
The close of business on March 21, 1997 has been fixed by the Board of
Directors of the Company as the record date for the Annual Meeting. Only
shareholders of record on that date will be entitled to notice of and to vote at
the Annual Meeting or any adjournment thereof, notwithstanding transfer of any
stock on the books of the Company after such record date. The stock transfer
books will not be closed.
A Proxy Statement, form of Proxy, and copy of the Annual Report on the
Company's operations during the fiscal year ended December 31, 1996 accompany
this notice.
It is important that your shares be represented at the Annual Meeting. If
you do not expect to attend in person, please sign and date the form of Proxy
and return it in the enclosed envelope. Shareholders who do plan to attend may
vote at the Annual Meeting. The form of Proxy is enclosed as a separate,
single-card insert within the mailing envelope in which this Proxy Statement is
contained. Shareholders who attend the Annual Meeting may revoke their proxies
and vote in person if they desire.
By Order of the Board of Directors
MICHAEL J. McCARTHY
Secretary
April 9, 1997
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[LOGO]
400 SOUTH RECORD STREET
DALLAS, TEXAS 75202
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 14, 1997
SOLICITATION OF PROXIES
This Proxy Statement is furnished to shareholders of A. H. Belo
Corporation, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors to be voted at the Annual
Meeting of Shareholders of the Company (the "Annual Meeting") to be held in the
Dallas Museum of Art Auditorium, 1717 North Harwood Street, Dallas, Texas, on
Wednesday, May 14, 1997, at 10:00 a.m., Dallas, Texas time, or at any
adjournment thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. References herein to the "Company" include its
subsidiaries, unless the context otherwise requires.
This Proxy Statement and form of Proxy are being mailed to shareholders on
or about April 9, 1997. If the enclosed form of Proxy is executed and returned,
it may nevertheless be revoked by the shareholder at any time by filing with the
Secretary of the Company a written revocation or a duly executed proxy bearing a
later date. A shareholder who attends the Annual Meeting in person may revoke
his or her proxy at that time and vote in person if so desired. All proxies duly
signed, dated, and returned will be voted as specified therein, but unless
otherwise specified, will be deemed to grant authority to vote:
(1) FOR the election of the five nominees listed under "Election of
Directors" as nominees of the Company for election as Class II directors,
for a three-year term;
(2) FOR the approval of the proposed amendments to the Company's 1995
Executive Compensation Plan; and
(3) At the discretion of the persons named in the enclosed form of
Proxy, on any other matter that may properly come before the Annual Meeting
or any adjournment thereof.
The enclosed Proxy is solicited by and on behalf of the Board of Directors
of the Company. The Company is unaware of any additional matters not set forth
in the Notice of Annual Meeting of Shareholders that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the Annual Meeting and presented for a vote of the shareholders (see
"Shareholder Proposals" herein), the persons named in the Proxy will vote in
accordance with their best judgment upon such matters, unless otherwise
restricted by law.
The cost of solicitation of proxies will be borne by the Company. The
Company has engaged Morrow & Co., Inc. to solicit proxies from beneficial owners
of shares standing in the name of brokers and other nominees. The Company has
agreed to pay Morrow & Co., Inc. a fee of $5,500 and the amount of its expenses
for such service. In addition to the use of the mails, proxies may also be
solicited by personal interview, facsimile transmission, and telephone by
directors, officers, employees, and agents of the Company. The Company will also
supply brokers, nominees, or other custodians with the numbers of Proxy forms,
Proxy Statements, and Annual Reports they may require for forwarding to
beneficial owners, and the Company will reimburse such persons for their expense
in so doing.
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OUTSTANDING CAPITAL STOCK AND STOCK OWNERSHIP OF
DIRECTORS, CERTAIN EXECUTIVE OFFICERS
AND PRINCIPAL SHAREHOLDERS
The record date for the determination of the shareholders entitled to
notice of and to vote at the Annual Meeting has been established by the Board of
Directors as the close of business on March 21, 1997. As of the record date, the
Company had issued and outstanding and entitled to vote at the Annual Meeting
52,524,561 shares of Series A Common Stock, par value $1.67 per share ("Series A
shares"), and 9,178,715 shares of Series B Common Stock, par value $1.67 per
share ("Series B shares"). (The Series A shares and Series B shares together are
referred to herein as the "Common Stock." For a description of the voting rights
of the Series A shares and Series B shares, see "Quorum and Voting" herein.)
The following table sets forth information as of December 31, 1996,
regarding the beneficial ownership of the Company's Common Stock by each person
known by management of the Company to own more than five percent of the
outstanding shares of Common Stock of the Company, by each of the Company's
executive officers, directors and nominees, and by all of its directors and
executive officers as a group.
SHARES OF COMMON STOCK BENEFICIALLY OWNED
AND PERCENTAGE OF OUTSTANDING SHARES AS OF
DECEMBER 31, 1996(2)
-------------------------------------------
NAME AND ADDRESS OF PERCENT OF
INDIVIDUAL OR GROUP SERIES A SERIES B CLASS(3)
------------------- ---------- ---------- -----------
Robert W. Decherd(1)**+................................ 827,146(4) 2,190,457(5) 8.3%
A. H. Belo Corporation
P.O. Box 655237
Dallas, Texas 75265
Ward L. Huey, Jr.*+.................................... 214,738(6) 23,600(7) ***
A. H. Belo Corporation
P.O. Box 655237
Dallas, Texas 75265
Burl Osborne*+......................................... 144,416(8) 19,718(9) ***
A. H. Belo Corporation
P.O. Box 655237
Dallas, Texas 75265
Michael J. McCarthy+................................... 56,509(10) 7,716(11) ***
A. H. Belo Corporation
P.O. Box 655237
Dallas, Texas 75265
Michael D. Perry+...................................... 47,539(12) 7,716(11) ***
A. H. Belo Corporation
P.O. Box 655237
Dallas, Texas 75265
John W. Bassett, Jr.*.................................. 28,700(13) 13,200(14) ***
400 N. Pennsylvania Avenue
Roswell, New Mexico 88201
Judith L. Craven, M.D., M.P.H.*........................ 23,900(15) -0- ***
2200 North Loop West
Houston, Texas 77018
Roger Enrico**......................................... 9,000(16) -0- ***
700 Anderson Hill Road
Purchase, New York 10577
Dealey D. Herndon(1)*.................................. 1,061,326(17) 1,305,624(18) 6.5%
322 Congress Avenue
Austin, Texas 78701
Lester A. Levy*........................................ 27,500(19) 12,000(20) ***
2727 Chemsearch Boulevard
Irving, Texas 75062
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SHARES OF COMMON STOCK BENEFICIALLY OWNED
AND PERCENTAGE OF OUTSTANDING SHARES AS OF
DECEMBER 31, 1996(2)
-------------------------------------------
NAME AND ADDRESS OF PERCENT OF
INDIVIDUAL OR GROUP SERIES A SERIES B CLASS(3)
------------------- ---------- ---------- -----------
Arturo Madrid, Ph.D.**................................. 23,700(21) -0- ***
Trinity University
715 Stadium Drive
San Antonio, Texas 78212
James M. Moroney, Jr.(1)*.............................. 519,735(22) 1,164,922(23) 4.6%
A. H. Belo Corporation
P.O. Box 655237
Dallas, Texas 75265
Hugh G. Robinson*...................................... 9,200(24) -0- ***
8150 N. Central Expressway
Suite 550
Dallas, Texas 75206
William T. Solomon**................................... 25,500(25) 30,000(20) ***
3535 Travis
Suite 300
Dallas, Texas 75204
Thomas B. Walker, Jr.**................................ 31,500(26) 16,000(20) ***
100 Crescent Court
Suite 1000
Dallas, Texas 75201
J. McDonald Williams*.................................. 31,500(25) 16,000(20) ***
3500 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
All directors and executive officers as a group (17
persons)............................................. 3,107,508(27) 4,808,666(28) 21.8%(29)
- ---------------
* Director
** Director and Nominee
*** Less than one percent
+ Executive Officer
++ Shareholder
(1) The family relationships among the directors, executive officers, and
principal shareholders are as follows: James M. Moroney, Jr. is a cousin of
Robert W. Decherd and Dealey D. Herndon; and Robert W. Decherd and Dealey
D. Herndon are brother and sister.
(2) Series B shares are convertible at any time on a share-for-share basis into
Series A shares. For purposes of determining the number of Series A shares
beneficially owned by the individuals and entities listed, the individual
or entity 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 these Series A shares that may
be so deemed to be beneficially owned by the individual or entity listed.
If the Series A shares into which Series B shares held are convertible were
included in the Series A shares total, and if the percent of Series A
shares so held were calculated pursuant to Rule 13d-3(d)(1) of the
Securities Exchange Act of 1934, the individuals and entities listed would
be deemed to be the beneficial owners of the following percentages of the
Series A shares: Mr. Decherd -- 10.3%; Mrs. Herndon -- 8.3%; Mr.
Moroney -- 6.0%; and all directors and executive officers as a
group -- 24.4%. All other individuals listed would be deemed to own less
than 1% of the Series A shares. See footnote (3).
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(3) "Percent of Class" is calculated by taking the total number of Series A
shares and Series B shares beneficially owned by the individual or entity
listed and dividing that number by the sum of the total number of Series A
shares and Series B shares outstanding and the total number of Series A and
Series B shares subject to options held by the individual that were
exercisable on or before sixty days following December 31, 1996.
(4) Includes 31,395 Series A shares subject to presently exercisable options
and 29,009 Series A restricted shares issued under the Company's 1986 Long
Term Incentive Plan. Does not include 600 Series A shares owned by Mr.
Decherd's wife, 2,320 Series A shares owned by Mr. Decherd's son, 43,690
Series A shares held in trusts for which Mr. Decherd serves as trustee,
72,524 Series A shares held in trusts for the benefit of Mr. Decherd's
children, 211,750 Series A shares held in a grantor retained annuity trust,
and 31,876 Series A shares held by the Decherd Foundation for which Mr.
Decherd is a co-trustee, as to all of which shares Mr. Decherd disclaims
beneficial ownership.
(5) Includes 28,300 Series B shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan and 3,299 Series B
shares subject to presently exercisable options issued under the Company's
1995 Executive Compensation Plan. Does not include 600 Series B shares
owned by Mr. Decherd's wife, 2,320 Series B shares owned by Mr. Decherd's
son, 73,090 Series B shares held in trusts for which Mr. Decherd serves as
trustee, and 65,104 Series B shares held in trusts for the benefit of Mr.
Decherd's children, as to all of which shares Mr. Decherd disclaims
beneficial ownership.
(6) Includes 126,655 Series A shares subject to presently exercisable options
and 55,139 Series A restricted shares issued under the Company's 1986 Long
Term Incentive Plan.
(7) Includes 23,600 Series B shares subject to presently exercisable options
issued under the Company's 1995 Executive Compensation Plan.
(8) Includes 86,143 Series A shares subject to presently exercisable options
and 48,746 Series A restricted shares issued under the Company's 1986 Long
Term Incentive Plan.
(9) Includes 19,600 Series B shares subject to presently exercisable options
issued under the Company's 1995 Executive Compensation Plan.
(10) Includes 36,596 Series A shares subject to presently exercisable options
and 8,106 Series A restricted shares issued under the Company's 1986 Long
Term Incentive Plan.
(11) Includes 7,600 Series B shares subject to presently exercisable options
issued under the Company's 1995 Executive Compensation Plan.
(12) Includes 35,445 Series A shares subject to presently exercisable options
and 7,932 Series A restricted shares issued under the Company's 1986 Long
Term Incentive Plan.
(13) Includes 25,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan. Does not include
122,376 Series A shares owned by the estate of Mr. Bassett's late wife.
Also does not include 19,300 Series A shares owned by Mr. Bassett's adult
children, as to which Mr. Bassett shares dispositive power, and 35,200
Series A shares held in trusts for the benefit of Mr. Bassett's children
for which Mr. Bassett serves as trustee, as to all of which shares Mr.
Bassett disclaims beneficial ownership.
(14) Includes 10,000 Series B shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan. Does not include
159,160 Series B shares owned by the estate of Mr. Bassett's late wife.
Also does not include 34,730 Series B shares owned by Mr. Bassett's adult
children, as to which Mr. Bassett shares dispositive power, and 66,682
Series B shares held in trusts for the benefit of Mr. Bassett's children
for which Mr. Bassett serves as trustee, as to all of which shares Mr.
Bassett disclaims beneficial ownership.
(15) Includes 22,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan.
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(16) Includes 8,000 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan.
(17) Includes 15,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan. Does not include
48,670 Series A shares owned by Mrs. Herndon's husband, 23,650 Series A
shares held in trust for the benefit of one of Mrs. Herndon's sons, and
49,228 Series A shares held in trusts for which Mrs. Herndon serves as
trustee, as to all of which shares Mrs. Herndon disclaims beneficial
ownership.
(18) Does not include 7,090 Series B shares held in trust for the benefit of one
of Mrs. Herndon's sons, and 49,228 Series B shares held in trusts for which
Mrs. Herndon serves as trustee, as to all of which shares Mrs. Herndon
disclaims beneficial ownership.
(19) Includes 15,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan. Does not include
4,000 Series A shares owned by Mr. Levy's wife, 1,200 Series A shares owned
by Mr. Levy's stepson and 1,200 Series A shares held in trusts for which
Mr. Levy serves as co-trustee and Mr. Levy's son is beneficiary, as to all
of which shares Mr. Levy disclaims beneficial ownership.
(20) Includes 10,000 Series B shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan.
(21) Includes 23,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan.
(22) Includes 25,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan. Does not include
21,000 Series A shares owned by Mr. Moroney's wife and 575 Series A shares
held by a charitable trust of which Mr. Moroney serves as a trustee, as to
all of which shares Mr. Moroney disclaims beneficial ownership.
(23) Includes 1,000,000 Series B shares held by a family limited partnership of
which Mr. Moroney is the managing general partner and 10,000 Series B
shares subject to presently exercisable options issued under the Company's
1986 Long Term Incentive Plan. Does not include 21,000 Series B shares
owned by Mr. Moroney's wife, as to which shares Mr. Moroney disclaims
beneficial ownership.
(24) Includes 7,000 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan.
(25) Includes 25,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan.
(26) Includes 25,500 Series A shares subject to presently exercisable options
issued under the Company's 1986 Long Term Incentive Plan. Does not include
10,000 shares owned by Mr. Walker's wife, as to which shares Mr. Walker
disclaims beneficial ownership.
(27) Includes 555,955 Series A shares subject to presently exercisable options.
(28) Includes 151,599 Series B shares subject to presently exercisable options.
(29) Represents approximately 43.1% of the voting power of all outstanding
shares of Common Stock.
Effect of Merger Upon Stock Ownership. As a result of the Company's
acquisition of The Providence Journal Company on February 28, 1997, an
additional 25,395,000 shares of the Company's Series A Common Stock were issued
and distributed to the former stockholders of The Providence Journal Company. If
the additional 25,395,000 Series A shares had been included in the total number
of outstanding Series A shares as of December 31, 1996, the individuals and
entities shown in the table above as holding greater than one percent of the
outstanding Common Stock would be deemed to be the beneficial owners of the
following percentages of outstanding Common Stock: Mr. Decherd -- 4.9%; Mrs.
Herndon -- 3.8%; Mr. Moroney -- 2.7%; and all directors and executive officers
as a group -- 12.8%.
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QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
voting power of the outstanding shares of Common Stock of the Company entitled
to vote is necessary to constitute a quorum at the Annual Meeting; provided,
however, that in no event may a quorum consist of less than one-third of the
outstanding shares of Common Stock entitled to vote. 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. Approval of the proposal to
amend the Company's 1995 Executive Compensation Plan will be decided by a
majority of the voting power represented at the Annual Meeting and entitled to
vote.
A holder of Series A shares will be entitled to one vote per Series A share
as to each matter properly brought before the Annual Meeting, and a holder of
Series B shares will be entitled to 10 votes per Series B share as to each
matter properly brought before the Annual Meeting. The holders of Series A
shares and Series B shares vote together as a single class on all matters except
with respect to (1) any amendments to the Company's Certificate of Incorporation
that alter or change the powers, preferences, or special rights of their
respective series so as to affect them adversely and (2) such other matters as
require class votes under the Delaware General Corporation Law. Cumulative
voting is not permitted in the election of directors. Abstentions and broker
non-votes, if applicable, are each included in the determination of the number
of shares present at the Annual Meeting for purposes of determining a quorum.
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. For matters requiring majority approval, abstentions will have the
effect of negative votes but broker non-votes will have no effect because they
are not treated as shares entitled to vote on such matters.
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PROPOSAL ONE
ELECTION OF DIRECTORS
The bylaws of the Company provide that the Board of Directors is to be
divided into three classes, approximately equal in number, with staggered terms
of three years. Class I currently consists of four directors and Classes II and
III currently consist of five directors each. Four of the five nominees
designated by the Board of Directors for election as Class II directors at the
1997 Annual Meeting will serve a three-year term if elected. The bylaws of the
Company provide that a director who attains age seventy-five shall retire on the
date of the annual meeting of shareholders next following his or her
seventy-fifth birthday. As a result of this provision, Thomas B. Walker, Jr., if
elected, will retire on the date of the 1999 Annual Meeting of Shareholders.
NOMINEES FOR DIRECTORS
Class II Directors (Term expires in 2000)
PHOTO ROBERT W. ROBERT W. DECHERD, age 45, has served as a director of the
DECHERD Company since March 1976. He has been Chairman of the Board
and Chief Executive Officer of the Company since January
1987. Mr. Decherd became President of the Company 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. Mr. Decherd is a
member of the Boards of Directors of CCBG Corporation and
Kimberly-Clark Corporation.
PHOTO ROGER A. ROGER A. ENRICO, age 52, has served as a director of the
ENRICO Company since July 1995. He has been Chief Executive Officer
of PepsiCo Inc. since April 1996 and Chairman of the Board
of PepsiCo Inc. since November 1996. He served as Chairman
and Chief Executive Officer of PepsiCo Worldwide Restaurants
from the end of 1994 and Vice Chairman of PepsiCo Inc. from
1993 until November 1996. Mr. Enrico was Chairman and Chief
Executive Officer of PepsiCo Worldwide Foods from 1992 to
1993 and President and Chief Executive Officer of Frito-Lay,
Inc. from 1991 to 1992. Mr. Enrico is a member of the Boards
of Directors of PepsiCo, Inc., Dayton Hudson Corporation,
The Prudential Insurance Company of America, Inc. and the
United Negro College Fund.
PHOTO ARTURO MA- ARTURO MADRID, PH.D., age 58, has served as a director of
DRID, PH.D. the Company since January 1994. He is the Norene R. and
Frank Murchison Distinguished Professor of the Humanities at
Trinity University in San Antonio, Texas. From 1984 to 1993
he served as the founding President of the Tomas Rivera
Center, a national institute for policy studies on Latino
issues. Previously, Dr. Madrid served as a director of the
Fund for the Improvement of Post-Secondary Education, U.S.
Department of Education and of the Ford Foundation's
Graduate Fellowship Program. In addition, he has held
academic and administrative positions at Dartmouth College,
the University of California, San Diego, and the University
of Minnesota. Dr. Madrid 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.
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PHOTO WILLIAM T. WILLIAM T. SOLOMON, age 54, has served as a director of the
SOLOMON Company since April 1983. He is the Chairman and Chief
Executive Officer of Austin Industries, Inc., a general
construction company, a position he has held since 1987.
Prior to 1987, Mr. Solomon was President and Chief Executive
Officer of Austin Industries, Inc..
PHOTO THOMAS B. THOMAS B. WALKER, JR., age 73, has served as a director of
WALKER, JR. the Company since April 1982. He has been a partner, either
general or limited, in the Goldman Sachs Group, L.P.,
investment bankers, since 1968. Mr. Walker is a member of
the Boards of Directors of NCH Corporation, SYSCO
Corporation and Riviana Foods, Inc..
DIRECTORS CONTINUING IN OFFICE
Class III Directors (Term expires in 1998)
PHOTO JUDITH L. JUDITH L. CRAVEN, M.D., M.P.H., age 51, has served as a
CRAVEN director of the Company since December 1992. Since July
1992, she has served as President of the United Way of the
Texas Gulf Coast. From February 1983 to June 1992, Dr.
Craven served as Dean of the School of Allied Health
Sciences of the University of Texas Health Science Center at
Houston and from September 1987 to June 1992 as Vice
President of Multicultural Affairs for the University of
Texas Health Science Center. Since July 1996, Dr. Craven has
been a member of the Board of Directors of SYSCO
Corporation.
PHOTO DEALEY D. DEALEY D. HERNDON, age 50, has served as a director of the
HERNDON Company since May 1986. Since November 1995, Mrs. Herndon
has been president of Herndon, Stauch & Associates, a
project and construction management firm. Mrs. Herndon is
also currently the Chairman of the Board of Directors of St.
Edward's University. Mrs. Herndon served from 1991 to
September 1995 as the Executive Director of the State
Preservation Board of the State of Texas, and she is a
Trustee of the National Trust for Historic Preservation in
Washington, D.C.. She serves on the Boards of Directors of
the Friends of the Governor's Mansion and Capital Area
United Way in Austin, Texas.
PHOTO WARD L. HUEY, WARD L. HUEY, JR., age 58, has served as a director of the
JR. Company since April 1982. He has been Vice Chairman of the
Board and President, Broadcast Division since January 1987.
He was President and Chief Executive Officer of the
Company's broadcasting subsidiary, Belo Broadcasting
Corporation, from April 1981 through December 31, 1986, at
which time the stock ownership of the broadcasting
subsidiaries changed from Belo Broadcasting Corporation to
the Company.
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PHOTO JAMES M. JAMES M. MORONEY, JR., age 75, has served as a director of
MORONEY, JR. the Company since February 1952. He served as Chairman of
the Board of the Company from April 1984 through December
1986, and from January 1983 through December 1986 he served
as Chief Executive Officer of the Company. Mr. Moroney
currently serves as Chairman of the Board of Trustees of the
University of Dallas.
PHOTO HUGH G. HUGH G. ROBINSON, age 64, has served as a director of the
ROBINSON Company since May 1989. Mr. Robinson is Chairman and Chief
Executive Officer of The Tetra Group, Inc., a construction
management firm. He has held that position since 1989, and
for more than five years prior to such date Mr. Robinson was
President of Cityplace Development Corporation, a real
estate development subsidiary of the Southland Corporation.
Mr. Robinson is a former Chairman and Board member of the
Federal Reserve Bank of Dallas. He is currently a member of
the Boards of Directors of TU Electric Company, Guaranty
Federal Savings Bank, Smith Environmental Services, Inc. and
Circuit City Stores, Inc., and is a Trustee of Columbus
Realty Trust, a real estate investment trust.
CLASS I DIRECTORS (TERM EXPIRES IN 1999)
PHOTO JOHN W. JOHN W. BASSETT, JR., age 59, has served as a director of
BASSETT, JR. the Company since March 1979. He is a practicing attorney
and is a partner in the law firm of Bassett & Copple, LLP in
Roswell, New Mexico. Prior to forming Bassett & Copple, LLP
in October 1995, Mr. Bassett was a stockholder in the law
firm of Atwood, Malone, Mann & Turner, P.A., Roswell, New
Mexico, for more than ten years.
PHOTO LESTER A. LEVY LESTER A. LEVY, age 74, has served as a director of the
Company since April 1985. He has been Chairman of the Board
of Directors of NCH Corporation, a chemical products
company, since 1965 and has been with NCH Corporation since
1946.
PHOTO BURL OSBORNE BURL OSBORNE, age 59, has served as a director of the
Company since January 1987. He has been President,
Publishing Division of the Company since November 1995.
Since January 1991, Mr. Osborne has been Publisher of The
Dallas Morning News, Inc., a subsidiary of the Company. Mr.
Osborne was President of The Dallas Morning News, Inc. from
1985 through December 1990 and Editor of The Dallas Morning
News, Inc. from 1985 through January 1997.
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PHOTO J. MCDONALD J. MCDONALD WILLIAMS, age 55, has served as a director of
WILLIAMS the Company since April 1985. Mr. Williams is Chairman of
the Trammell Crow Company, a real estate services firm. From
1991 until July 1994, Mr. Williams was President and Chief
Executive Officer of Trammell Crow Company and from 1977 to
December 1990, he was managing partner of Trammell Crow
Company. Mr. Williams is a member of the Board of Directors
of Mitchell Energy & Development Corp..
APPOINTMENT OF DIRECTORS IN CONNECTION WITH MERGER
There are currently four vacancies on the Board of Directors. In connection
with its acquisition of The Providence Journal Company ("Providence Journal") on
February 28, 1997 (the "Merger"), the Company agreed to fill these vacancies
with individuals who were serving as directors of Providence Journal immediately
prior to the Merger. At its regular meeting in February 1997, the Board of
Directors chose the following individuals to fill the existing four vacancies in
the following classes: Stephen Hamblett (Class III), Henry P. Becton, Jr. (Class
II), Fanchon M. Burnham (Class I) and Peter B. Freeman (Class III). These
appointments will be effective as of the regular meeting of the Board of
Directors on May 14, 1997. The Company also agreed in connection with the Merger
that James M. Moroney, Jr., who will attain the age of seventy-five in 1997,
will continue to serve on the Board of Directors until the year 2000, if willing
and able to do so.
Appointed Directors (Effective as of the May 14, 1997 Meeting of the Board)
Stephen Hamblett, 62, will serve as a Class III director until the
Company's Annual Meeting of Shareholders in May 1998. Since February 1997, he
has been Chairman of the Board, Chief Executive Officer and Publisher of The
Providence Journal Company, a wholly-owned subsidiary of the Company. From 1987
to 1997, he was Chairman, Chief Executive Officer and Publisher of the
pre-merger Providence Journal Company. Mr. Hamblett is currently a member of the
boards of directors of the Associated Press, the Newspaper Association of
America and the Inter American Press Association.
Henry P. Becton, Jr., 53, will serve as a Class II director until the
Company's Annual Meeting of Shareholders in May 2000. He served as a director of
The Providence Journal Company from 1992 to 1997. Since 1984, Mr. Becton has
been President and General Manager of WGBH Education Foundation. He is a member
of the board of directors of Becton Dickinson and Company and is a trustee or
director of the following investment companies managed by Scudder, Stevens &
Clark: Scudder Cash Investment Trust; Scudder California Tax Free Trust; Scudder
Municipal Trust; Scudder State Tax Free Trust; Scudder Investment Trust; and
Scudder Portfolio Trust.
Fanchon M. Burnham, 52, will serve as a Class I director until the
Company's Annual Meeting of Shareholders in May 1999. She served as a director
of The Providence Journal Company from 1992 to 1997. Since 1985, Mrs. Burnham
has been a partner in the accounting/consulting firm of F. M. Burnham and
Associates in Washington, D.C..
Peter B. Freeman, 64, will serve as a Class III director until the
Company's Annual Meeting of Shareholders in May 1998. He served as a director of
The Providence Journal Company from 1981 to 1997. During the past five years Mr.
Freeman has been self-employed as a corporate director and trustee, including
serving as a director of Blackstone Valley Electric Company, AMICA Mutual
Insurance Company and AMICA Life Insurance Company; a trustee of Eastern
Utilities Associates; as well as a trustee or director of the following
investment companies managed by Scudder, Stevens & Clark: Scudder Fund, Inc.;
Scudder Institutional Fund, Inc.; Scudder Cash Investment Trust; Scudder
California Tax Free Trust; Scudder Municipal Trust; Scudder State Tax Free
Trust; Scudder Tax Free Money Fund; Scudder Tax Free Trust; Scudder Funds Trust;
and Scudder Variable Life Investment Fund.
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MEETINGS AND COMMITTEES OF BOARD OF DIRECTORS
The Board of Directors held a total of thirteen meetings in 1996. Each
director attended at least seventy-five percent of the aggregate of the total
number of meetings held by the Board of Directors and the total number of
meetings held by all committees of the Board on which he or she served. The
Board of Directors has an Audit Committee, a Compensation Committee, and a
Directors Planning Committee, all of the members of each of which are
non-employee directors.
Audit Committee. The Audit Committee consists of Judith L. Craven, Roger A.
Enrico, Dealey D. Herndon, Arturo Madrid and Hugh G. Robinson. Mr. Robinson
serves as Chairman of the Audit Committee. Henry P. Becton, Jr. and Fanchon M.
Burnham will join the Audit Committee following their appointment to the Board
of Directors, effective as of the May 14, 1997 meeting of the Board. The Audit
Committee consults with the Company's independent auditors and with personnel
from the internal audit and financial staffs with respect to corporate
accounting, reporting, and internal control practices. The Audit Committee met
two times during 1996.
Compensation Committee. The Compensation Committee consists of John W.
Bassett, Jr., Lester A. Levy and J. McDonald Williams. Mr. Williams serves as
Chairman of the Compensation Committee. Judith L. Craven has been appointed to
the Compensation Committee, effective May 15, 1997. The Compensation Committee
makes recommendations to the Board of Directors for salary and bonus levels for
executive officers and total compensation for senior executive officers, and
administers the Company's 1995 Executive Compensation Plan, G. B. Dealey
Retirement Pension Plan, Employee Savings and Investment (401(k)) Plan,
Supplemental Executive Retirement Plan, and Management Security Plan. The
Compensation Committee met four times during 1996.
Directors Planning Committee. The Directors Planning Committee consists of
Dealey D. Herndon, Lester A. Levy, James M. Moroney, Jr., Hugh G. Robinson,
Thomas B. Walker, Jr., J. McDonald Williams and William T. Solomon. Mr. Solomon
serves as Chairman of the Directors Planning Committee. The Directors Planning
Committee reviews the long-range financial and strategic planning efforts of the
Company and reviews possible nominees for positions on the Board of Directors.
The Directors Planning Committee met once in 1996.
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PROPOSAL TWO
APPROVAL OF AMENDMENTS
TO THE A. H. BELO CORPORATION
1995 EXECUTIVE COMPENSATION PLAN
The A. H. Belo Corporation 1995 Executive Compensation Plan (the "1995
Plan") became effective as of January 1, 1995 following adoption by the
Company's Board of Directors and approval by the shareholders of the Company at
the 1995 Annual Meeting of Shareholders. Set forth below are amendments to the
1995 Plan, which were adopted by the Compensation Committee of the Board of
Directors (the "Committee"), subject to shareholder approval. The following
amendments, which do not extend the term of the 1995 Plan, have been ratified by
the Board of Directors and recommended by the Board for approval by the
Company's shareholders at the 1997 Annual Meeting.
AMENDMENTS TO THE 1995 PLAN
Number of Shares. The initial number of shares reserved for issuance under
the 1995 Plan was 2,000,000 shares of either Series A or Series B Common Stock.
As a result of the Company's two-for-one stock split in June 1995, the total
number of shares that may be granted under the plan was increased to 4,000,000.
The Committee has amended the 1995 Plan, subject to shareholder approval, to
increase this number to 5,000,000 shares to prepare for anticipated increases in
the number of participants in the 1995 Plan over the next few years as a result
of the recent acquisition of Providence Journal.
Section 16 Amendments. On May 31, 1996, the Securities and Exchange
Commission issued new rules under Section 16 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including Rule 16b-3 governing issuances
under employee benefit plans. The 1995 Plan currently includes provisions
necessary for compliance with the requirements of old Rule 16b-3. In light of
the new Section 16 changes, the Committee has amended the 1995 Plan, subject to
shareholder approval, (i) to eliminate the prohibition against transferability
of stock options granted to directors other than by will or the laws of descent
and distribution, (ii) to update the qualifications of Committee members to
comply with changes in Section 16 and with Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and (iii) to eliminate other
requirements made obsolete by new Section 16, including limitations on the
amendment of the terms of directors' stock options and the requirement that
options granted to directors be administered in compliance with old Rule 16b-3.
Limitations on Awards. The amount of any Executive Compensation Plan Bonus
(as defined below) paid to a participant under the current plan is restricted to
the lesser of 100% of a participant's base salary or $1,000,000. In December
1995, the Committee increased the target bonus percentages for certain
participants in the Company's Executive Compensation Plan and increased the
maximum bonus opportunity for all participants to insure competitive
compensation levels while maximizing incentives to enhance shareholder value.
See "Compensation Committee Report on Executive Compensation -- Executive
Compensation Plan -- Annual Bonus Opportunity" on page 27. These potential bonus
increases make it possible that the Chief Executive Officer or another senior
corporate officer could earn a bonus which exceeds the limitations imposed by
the 1995 Plan in years when the Company's financial performance has been highly
successful. As a result, the Committee amended the plan, subject to shareholder
approval, to eliminate the current formula of the lesser of 100% of a
participant's base salary or $1,000,000 and replace it with a single limit of
$1,500,000. Similarly, the Committee has also amended the 1995 Plan, subject to
shareholder approval, to increase the maximum number of options that may be
awarded to a participant during any calendar year from 200,000 options to
500,000 options to provide greater flexibility in maintaining competitive
compensation levels while aligning the interests of executives and key employees
with those of shareholders.
Exercisability Period for Options Following Termination. The Committee has
amended the 1995 Plan, subject to shareholder approval, to extend the
exercisability of stock options and appreciation rights from one year following
the death, disability or retirement of a participant at or after age 65 to the
full remaining term of the option or appreciation right (ten years from the date
of grant) upon death, disability or retirement at or after early retirement age
under the Company's pension plan (currently age 62 or age 55 with five years of
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employment with the Company). The Committee believes that this amendment will
provide participants and their families with greater financial flexibility under
these circumstances.
Miscellaneous. The Committee has also amended the 1995 Plan, subject to
shareholder approval, to make certain other less significant changes, including:
(i) eliminating references to the Company's 1986 Long Term Incentive Plan, which
has now expired; (ii) adding a requirement that the Committee must adjust
numbers in the 1995 Plan to appropriately reflect stock splits or similar events
(the current provision allows for, but does not require, such adjustments); and
(iii) expressly authorizing the Board of Directors to terminate the 1995 Plan at
any time (which authority was implicit in its ability to amend the plan),
provided that any termination will not adversely affect outstanding awards under
the plan.
GENERAL
The following summary of certain material features of the 1995 Plan, which
includes the amendments described above, is qualified in its entirety by
reference to the full text of the 1995 Executive Compensation Plan (As Restated
to Incorporate Amendments through May 14, 1997), which is set forth in the
attached Exhibit A.
The goal of the 1995 Plan is to provide appropriate incentives that will
allow the Company to attract and retain the best available talent and to
encourage the directors and executives to put forth their maximum efforts for
the success of the Company's business, thereby serving the best interests of the
Company and its shareholders.
All executive officers and other key employees of the Company and its
subsidiaries ("Participants") are eligible to participate in the 1995 Plan.
Currently, 127 employees participate in the 1995 Plan in addition to eleven
non-employee directors and the five senior executives named in the Summary
Compensation Table on page 20. Four new directors who are former directors of
The Providence Journal Company will become eligible to participate in the 1995
Plan, effective at the meeting of the Board on May 14, 1997. See "Proposal
One -- Election of Directors -- Appointment of Directors in Connection with
Merger" on page 10.
The 1995 Plan is a flexible plan that provides the Committee with broad
discretion to fashion the terms of the awards to provide eligible Participants
with stock-based incentives and performance-based bonus opportunities, payable
in cash or stock as the Committee deems appropriate. The 1995 Plan permits the
issuance of awards in a variety of forms, including: (1) non-qualified and
incentive stock options (collectively, "Stock Options"), (2) appreciation
rights, (3) restricted stock, (4) performance units, and (5) bonuses ("Executive
Compensation Plan Bonuses") which become payable annually upon achievement of
specified Management Objectives (hereinafter defined).
The 1995 Plan provides for the grant of up to 5,000,000 shares of Common
Stock. Shares of Common Stock issued or transferred pursuant to the 1995 Plan
will be shares of Series A Common Stock or Series B Common Stock, as determined
by the Committee in its discretion.
ADMINISTRATION OF THE 1995 PLAN
Unless the administration of the 1995 Plan has been expressly assumed by
the Board pursuant to a resolution of the Board, the 1995 Plan will be
administered by the Committee, which at all times will consist of two or more
directors appointed by the Board, all of whom will qualify as "non-employee
directors" as defined in Rule 16b-3 and as "outside directors" as defined in
regulations adopted under Section 162(m) of the Code, as such terms are amended
from time to time. Except as described herein, the Committee has the full
authority and discretion to administer the 1995 Plan and to take any action that
is necessary or advisable in connection with the administration of the 1995
Plan, including without limitation the authority and discretion to interpret and
construe any provision of the 1995 Plan or of any agreement, notification or
document evidencing the grant of an award.
If a Participant's employment terminates before the end of a performance
period or before a Stock Option or appreciation right is fully exercisable, and
such termination is caused by reason of a Participant's death, disability or
retirement at or after age 62 or age 55 with 5 years of employment with the
Company, each
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Stock Option or appreciation right held by such Participant will remain
exercisable until the Stock Option or appreciation right expires by its terms.
In the event of a Participant's termination of employment for other reasons, the
Committee will have the sole discretion to determine, under the circumstances,
the extent to which a Stock Option or appreciation right held by the Participant
may be exercised following such termination of employment.
AWARDS UNDER THE 1995 PLAN
Stock Options for Participants. The Committee in its discretion shall
determine the number of shares of Common Stock subject to Stock Options to be
granted to each Participant. The Committee may grant non-qualified stock
options, incentive stock options or a combination thereof to the Participants.
Stock Options granted under the 1995 Plan will provide for the purchase of
Common Stock at prices not less than 100% of the fair market value thereof on
the date the Stock Option is granted. No Stock Option granted shall be
exercisable more than ten years from the date of grant.
Stock Options granted under the 1995 Plan will be exercisable at such times
and subject to such restrictions and conditions as the Committee shall approve.
Each grant will specify that the exercise price is payable (1) in cash, (2) in
shares of Common Stock already owned by the Participant, (3) with the consent of
the Committee, by withholding a number of shares otherwise issuable to a
Participant having a fair market value equal to the exercise price, or (4) in a
combination of such methods of payment.
Each grant will also specify the required periods of continuous service by
the Participant with the Company or any subsidiary and/or the Management
Objectives to be achieved before the Stock Options or installments thereof will
become exercisable, and any grant may provide for the earlier exercise of the
Stock Options in the event of a Change in Control or other similar transaction
or event. "Change in Control" means the first to occur of the events described
in (1) through (4) below, unless the Board has adopted a resolution prior to or
promptly following the occurrence of any such event stipulating, conditionally,
temporarily or otherwise, that any such event will not result in a Change in
Control of the Company: (1) the commencement of, or first public announcement of
the intention of any person or group (within the meaning of Section 3(b) of and
Rule 13d-5(b) promulgated under the Exchange Act) to commence a tender offer or
exchange offer (other than an offer by the Company or any subsidiary) for all,
or any part of, the Common Stock; (2) the public announcement by the Company or
by any group (as defined in clause (1) above), entity or person (other than the
Company, any subsidiary, or any savings, pension or other benefit plan for the
benefit of employees of the Company or any subsidiary) which, through a
transaction or series of transactions has acquired, directly or indirectly,
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 30% of the total number of shares of Common Stock
that such group, entity or person has become such a beneficial owner; (3) the
approval by the Company's shareholders (or, if such approval is not required,
the consummation) of a merger in which the Company does not survive as an
independent publicly owned corporation, a consolidation, or a sale, exchange, or
other disposition of all or substantially all the Company's assets; or (4) a
change in the composition of the Board during any period of two consecutive
years such that individuals who at the beginning of such period were members of
the Board cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the Company's shareholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period.
Stock Options for Non-employee Directors. Each individual who first becomes
a non-employee director on or after the date of the 1996 Annual Meeting will be
granted an option to purchase 20,000 shares of Common Stock on the date of
election to the Board. Each non-employee director will also be granted an
additional option to purchase 5,000 shares of Common Stock on the date of each
annual meeting of shareholders following the annual meeting of the individual's
initial election to the Board, provided that such individual continues to be a
non-employee director at the close of business of each such annual meeting.
Options granted to non-employee directors will provide for the purchase of
Common Stock at prices not less than 100% of the fair market value thereof on
the date the option is granted. Each grant will specify that the option may not
be exercised until the first anniversary of the date of grant and will be fully
exercisable
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thereafter, without regard to whether the non-employee director continues to be
a member of the Board on such first anniversary, until the option expires by its
terms. Each grant will also specify that the option price is payable by the same
methods as described above for Participants.
Appreciation Rights. The Committee may from time to time authorize grants
to any Participant of appreciation rights upon such terms and conditions as it
may determine. Appreciation rights may be granted in tandem with Stock Options
or separate and apart from a grant of Stock Options. An appreciation right will
be a right of the Participant to receive from the Company upon exercise an
amount which will be determined by the Committee at the date of grant and will
be expressed as a percentage of the Spread (not exceeding 100%) at the time of
exercise. "Spread" means the excess of the fair market value of the Common Stock
on the date the Appreciation Right is exercised over (1) the option price in the
related Stock Option or (2) if there is no tandem Stock Option, the grant price
provided for in the appreciation right multiplied by the number of shares of
Common Stock in respect of which the appreciation right is exercised.
Each grant of an appreciation right made in tandem with Stock Options will
specify the option price and any grant not made in tandem with Stock Options
will specify the grant price, which in either case will not be less than 100% of
fair market value of the Common Stock on the date of grant.
Any grant may specify that the amount payable upon exercise of an
appreciation right may be paid by the Company in cash, shares of Common Stock or
any combination thereof, as determined by the Committee in its sole discretion.
Any grant may also specify that the amount payable on exercise of an
appreciation right may not exceed a maximum amount specified by the Committee at
the date of grant.
Each grant will specify the required periods of continuous service by the
Participant with the Company or any subsidiary and/or the Management Objectives
to be achieved before the appreciation rights or installments thereof will
become exercisable, and will provide that no appreciation right may be exercised
except at a time when the Spread is positive and, with respect to any grant made
in tandem with Stock Options, when the related Stock Option is also exercisable.
The Committee may also grant limited stock appreciation rights, which would
become exercisable in the event of a Change in Control or other similar
transaction or event.
Restricted Stock. The Committee may from time to time authorize grants or
sales to any Participant of restricted stock upon such terms and conditions as
it may determine in accordance with the provisions of the 1995 Plan. Each grant
or sale will constitute an immediate transfer of the ownership of shares of
Common Stock to the Participant in consideration of the performance of services,
entitling such Participant to voting and other ownership rights, but subject to
the restrictions hereinafter referred to. Each grant or sale may limit the
Participant's dividend rights during the period in which the shares of
restricted stock are subject to any such restrictions. Each such grant or sale
may be made without additional consideration or in consideration of a payment by
such Participant that is less than the fair market value of the Common Stock.
Each grant or sale will specify the Management Objectives, if any, that are
to be achieved in order for the ownership restrictions to lapse. Each such grant
or sale will establish restrictions, such as required periods of continuous
service, or other restrictions, including restrictions that constitute a
"substantial risk of forfeiture" within the meaning of Section 83 of the Code
and the regulations of the Internal Revenue Service thereunder. Any grant or
sale may provide for the earlier termination of any such restrictions in the
event of a Change in Control or other similar transaction or event.
Each such grant or sale will provide that during the period for which such
restriction or restrictions are to continue, the transferability of the
restricted stock will be prohibited or restricted in a manner and to the extent
prescribed by the Committee at the date of grant (which restrictions may
include, without limitation, rights of repurchase or first refusal of the
Company or provisions subjecting the restricted stock to continuing restrictions
in the hands of any transferee).
Performance Units. The Committee may from time to time authorize grants to
any Participant of performance units, which will become payable upon achievement
of specified Management Objectives, upon such terms and conditions as it may
determine in accordance with the provisions of the 1995 Plan.
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Each grant will specify the time and manner of payment of performance units
which have become payable, which payment may be made in (1) cash, (2) shares of
Common Stock having a fair market value equal to the aggregate value of the
performance units which have become payable, or (3) any combination thereof, as
determined by the Committee in its sole discretion at the time of payment.
Each grant of a performance unit may also contain such terms and
provisions, consistent with the 1995 Plan, as the Committee may approve,
including provisions relating to a Change in Control or other similar
transaction or event.
Executive Compensation Plan Bonuses. The Committee may from time to time
authorize payment of annual incentive compensation in the form of an Executive
Compensation Plan Bonus to a Participant, which will become payable upon
achievement of specified Management Objectives during a 12-month performance
period. Executive Compensation Plan Bonuses will be payable upon such terms and
conditions as the Committee may determine in accordance with the provisions of
the 1995 Plan.
The Committee will specify the time and manner of payment of an Executive
Compensation Plan Bonus which becomes payable, which payment may be made in
cash, shares of Common Stock or any combination thereof, as determined by the
Committee in its sole discretion. As soon as practicable after the beginning of
a performance period, the Committee will notify each Participant of the terms of
the Executive Compensation Plan Bonus program for that performance period.
The Committee has broad discretion in its establishment of performance
criteria for Participants under the 1995 Plan. Executive Compensation Plan
Bonuses are currently determined by the Company's financial performance (or the
performance of a subsidiary, in certain cases) in meeting certain Management
Objectives. Currently, these Management Objectives consist of target levels of
earnings per share in the case of the Company, and of operating cash flow in the
case of subsidiaries. If financial performance is at or below threshold levels,
Participants will earn no bonuses. Financial performance at the target level
earns Participants 100% of their bonus amounts, performance at the maximum level
earns Participants 175% of their bonus amounts, and performance in between the
threshold and maximum levels earns a pro rata amount reflecting the performance
level achieved. As a result of the Company's financial performance in 1996,
Participants in the 1995 Plan whose bonuses were determined by the Company's
consolidated financial performance earned up to 175% of their target bonus
amounts, except for Mr. Decherd, whose bonus amount was capped at 167% by the
current maximum bonus limitation imposed by the 1995 Plan. See "Compensation
Committee Report on Executive Compensation -- CEO Compensation."
LIMITATION ON AWARDS
Awards under the 1995 Plan will be subject to the following limitations:
(a) No more than 5,000,000 shares reserved for issuance under the 1995
Plan will be issued under Stock Options.
(b) Of the aggregate 5,000,000 shares reserved for issuance under the
1995 Plan, no more than 1,200,000 shares will be issued or transferred as
restricted stock.
(c) The maximum aggregate number of shares that may be subject to
Stock Options, appreciation rights and restricted stock granted to a
Participant during any calendar year will not exceed 500,000 shares. This
limitation will apply to the grant of appreciation rights whether the
Spread on exercise is paid in cash or shares of Common Stock.
(d) The maximum aggregate cash value of payments to any Participant
for any performance period pursuant to an award of performance units will
not exceed $3,000,000.
(e) The maximum Executive Compensation Plan Bonus paid to any
Participant during any calendar year will not exceed $1,500,000.
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TRANSFERABILITY; AMENDMENTS; TERMINATION
Except as otherwise provided in the agreement evidencing a Participant's
award, (1) no Stock Option, appreciation right, performance unit that has not
become payable or Executive Compensation Plan Bonus that has not become payable
will be transferable by the Participant other than by will or the laws of
descent and distribution and (2) no Stock Option or appreciation right granted
to a Participant will be exercisable during the Participant's lifetime by any
person other than the Participant or the Participant's guardian or legal
representative.
The 1995 Plan may be amended from time to time by the Committee or the
Board but may not be amended without further approval by the shareholders of the
Company if such amendment would result in the 1995 Plan failing to satisfy any
applicable requirements of the New York Stock Exchange, Rule 16b-3 of the
Exchange Act or Section 162(m) of the Code. The Board may terminate the 1995
Plan at any time; provided, that no such termination will adversely affect any
outstanding awards under the Plan.
BENEFITS UNDER THE 1995 PLAN
The benefits that will be paid in the future under the 1995 Plan are
currently not determinable. No awards have been granted under the 1995 Plan that
are contingent upon shareholder approval of the amendments to the 1995 Plan. A
presentation of the benefits awarded to the Company's executives under the 1995
Plan for the 1996 fiscal year may be found in "Executive Compensation and Other
Matters -- Summary Compensation Table" and "-- Option/SAR Grants in Last Fiscal
Year" on pages 20 through 22.
As a group, the five executives named in the Summary Compensation Table on
page 20 were awarded 628,100 options for Series B shares, which includes a
one-time special grant of options to the five executives of an aggregate of
400,000 options for Series B shares (see "Compensation Committee Report on
Executive Compensation -- Special Grant of Options" on page 28), at a grant date
total present value of $8,746,336. All other employee participants in the 1995
Plan as a group were awarded 544,750 options for Series B shares at a total
present value of $7,585,684. Non-employee directors as a group were awarded
55,000 options for Series B shares at a grant date total present value of
$842,564. Each non-employee director of the Company received 5,000 options for
Series B shares. (See "Proposal One -- Election of Directors -- Nominees for
Directors" and "-- Directors Continuing in Office" on pages 7 through 10 for a
listing of the non-employee directors.)
FEDERAL INCOME TAX CONSEQUENCES
The following summary of the federal income tax consequences of the 1995
Plan is not comprehensive and is based on current income tax laws, regulations
and rulings.
Incentive Stock Options. An optionee does not recognize income on the grant
of an incentive stock option. Subject to the effect of the alternative minimum
tax, discussed below, if an optionee exercises an incentive stock option in
accordance with the terms of the option and does not dispose of the shares
acquired within two years from the date of the grant of the option nor within
one year from the date of exercise, the optionee will not recognize any income
by reason of the exercise and the Company will be allowed no deduction by reason
of the grant or exercise. The optionee's basis in the shares acquired upon
exercise will be the amount paid upon exercise; provided, that the optionee
holds the shares as a capital asset at the time of sale or other disposition of
the shares, his or her gain or loss, if any, recognized on the sale or other
disposition will be capital gain or loss. The amount of his or her gain or loss
will be the difference between the amount realized on the disposition of the
shares and his or her basis in the shares.
If an optionee disposes of the shares within two years from the date of
grant of the option or within one year from the date of exercise (an "Early
Disposition"), the optionee generally will recognize ordinary income at the time
of such Early Disposition which will equal the excess, if any, of the lesser of
(1) the amount realized on the Early Disposition, or (2) the fair market value
of the shares on the date of exercise, over the optionee's basis in the shares.
The Company will be entitled to a deduction in an amount equal to such income.
The excess, if any, of the amount realized on the Early Disposition of such
shares over the fair market
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value of the shares on the date of exercise will be long-term or short-term
capital gain, depending upon the holding period of the shares, provided the
optionee holds the shares as a capital asset at the time of Early Disposition.
The excess of the fair market value of the shares at the time the incentive
stock option is exercised over the exercise price for the shares is an item of
"tax preference" for alternative minimum tax purposes.
Non-Qualified Stock Options. Non-qualified stock options do not qualify for
the special tax treatment accorded to incentive stock options under the Code.
Although an optionee does not recognize income at the time of the grant of the
option, he or she recognizes ordinary income upon the exercise of a
non-qualified option in an amount equal to the difference between the fair
market value of the stock on the date of exercise of the option and the amount
of the exercise price.
As a result of the optionee's exercise of a non-qualified stock option, the
Company will be entitled to deduct as compensation an amount equal to the amount
included in the optionee's gross income. The Company's deduction will be taken
in the Company's taxable year in which the option is exercised.
The excess of the fair market value of the stock on the date of exercise of
a non-qualified stock option over the exercise price is not an item of tax
preference for alternative minimum tax purposes.
The Stock Options for non-employee directors under the 1995 Plan will be
non-qualified stock options.
Appreciation Rights. Recipients of appreciation rights do not recognize
income upon the grant of such an award. When a participant elects to receive
payment under an appreciation right, he or she recognizes ordinary income in an
amount equal to the cash and/or fair market value of shares received, and the
Company is entitled to a deduction equal to such amount.
Restricted Stock; Performance Units. Grantees of restricted stock and
performance units do not recognize income at the time of the grant of such stock
or units. However, when shares of restricted stock become free from any
restrictions or when performance units are paid, grantees recognize ordinary
income in an amount equal to the fair market value of the stock on the date all
restrictions are satisfied. Alternatively, the grantee of restricted stock may
elect to recognize income upon the grant of the stock and not at the time the
restrictions lapse.
Change in Control. If there is an acceleration of the vesting of benefits
and/or an acceleration of the exercisability of Stock Options upon a Change in
Control, all or a portion of the accelerated benefits may constitute "excess
parachute payments" under Section 280G of the Code. The employee receiving an
excess parachute payment incurs an excise tax of 20% of the amount of the
payment in excess of the employee's average annual compensation over the five
calendar years preceding the year of the Change in Control, and the Company is
not entitled to a deduction for a similar amount.
Limitation on Deduction. For taxable years beginning after 1993, Section
162(m) of the Code provides that no deduction will be allowed for certain
remuneration with respect to a covered employee to the extent such remuneration
exceeds $1 million. An employee is a covered employee if his or her compensation
is required to be reported in the Summary Compensation Table of a company's
proxy statement and he or she is employed as of the last day of the taxable
year. Code Section 162(m) does not apply to compensation payable solely on
account of the attainment of one or more performance goals if (1) the goals are
determined by a committee of two or more outside directors, (2) the material
terms under which the remuneration will be paid, including the goals, are
disclosed to shareholders and approved by a majority of the shareholders, and
(3), except in the case of appreciation rights and eligible options, the
Committee certifies that the goals have been met. Compensation arising from
appreciation rights and Stock Options where the exercise price is no less than
the fair market value on the date of grant constitute compensation on account of
attainment of a performance goal as long as the shareholders approve the 1995
Plan, including the maximum number of shares per participant over a specific
time period.
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VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares of Common Stock entitled
to vote on this proposal and represented in person or by proxy is required for
approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE PROPOSED
AMENDMENTS TO THE 1995 PLAN.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
NAME OFFICE CURRENTLY HELD OFFICE HELD SINCE
---- --------------------- -----------------
Robert W. Decherd....................... Chairman of the Board, President and 1987(1)
Chief Executive Officer
Ward L. Huey, Jr........................ Vice Chairman of the Board 1987(1)
President, Broadcast Division
Burl Osborne............................ President, Publishing Division 1991(1)
Publisher, The Dallas Morning News
Michael J. McCarthy..................... Senior Vice President/ 1987(2)
General Counsel and Secretary
Michael D. Perry........................ Senior Vice President/ 1987(3)
Chief Financial Officer
- ---------------
(1) Member of the Board of Directors. (See "Election of Directors" above for
additional information.)
(2) Mr. McCarthy, age 52, has been Senior Vice President of the Company since
January 1987 and has been Secretary and General Counsel since October 1985.
He served as Vice President of the Company from 1985 to 1987. From 1973 to
September 1985, Mr. McCarthy was an associate and then partner in the law
firm of Dow, Lohnes & Albertson in Washington, D.C..
(3) Mr. Perry, age 50, has been Senior Vice President and Chief Financial
Officer of the Company since November 1987. From January 1989 through
December 1991, Mr. Perry was also Treasurer. He served as Vice President,
Controller of the Company from January 1984 to November 1987.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following information summarizes annual and long-term compensation for
services in all capacities to the Company for the fiscal years ended December
31, 1996, 1995, and 1994 of the Chief Executive Officer and the other four most
highly compensated executive officers of the Company:
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SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------------------- -------------------
SECURITIES
OTHER RESTRICTED UNDERLYING
NAME AND ANNUAL STOCK OPTIONS/ ALL OTHER
PRINCIPAL COMPENSATION AWARD(S) SARS COMPENSATION
POSITION YEAR SALARY($)(1) BONUS($) ($)(2) ($)(3)(4) (#) ($)(5)
--------- ---- ------------- --------- ------------ ---------- ---------- ------------
Robert W. Decherd 1996 $625,000 $600,000 -- -- 200,000 $ 75,540
Chairman of the Board, 1995 $559,700 $146,294 -- -- 79,000 $ 75,540
President and Chief 1994 $556,200 $400,275 -- $465,003 26,225 $ 75,540
Executive Officer
Ward L. Huey, Jr. 1996 $525,000 $481,250 -- -- 160,500 $122,374
Vice Chairman of the Board 1995 $444,000 $103,175 -- -- 59,000 $122,529
President, Broadcast Division 1994 $441,200 $353,278 -- $323,239 18,225 $121,779
Burl Osborne 1996 $485,000 $402,500 -- -- 149,600 $152,650
President, Publishing Division 1995 $427,000 $ 93,489 -- -- 49,000 $153,059
Publisher, The Dallas Morning News 1994 $423,984 $255,946 -- $301,462 16,995 $152,309
Michael J. McCarthy 1996 $290,000 $215,688 -- -- 59,000 $ 45,625
Senior Vice President/ 1995 $247,000 $ 50,684 -- -- 19,000 $ 45,991
General Counsel and 1994 $246,700 $129,518 -- $125,538 7,090 $ 44,491
Secretary
Michael D. Perry 1996 $280,000 $208,250 -- -- 59,000 $ 37,503
Senior Vice President/ 1995 $244,000 $ 50,069 -- -- 19,000 $ 37,853
Chief Financial Officer 1994 $243,700 $127,943 -- $122,976 6,925 $ 36,353
- ---------------
(1) These amounts include annual director fees of $25,000 for each of Mr.
Decherd, Mr. Huey, and Mr. Osborne.
(2) The total value of executive perquisites and benefits did not exceed the
lesser of (1) $50,000 or (2) 10% of the total annual salary and bonuses for
any executive listed above.
(3) The unrealized value of the Company's restricted Series A shares reflected
in this column is based upon the date of grant closing market price of
unrestricted Series A shares. No restricted Series B shares are currently
outstanding. As of December 31, 1996, the total number and value of the
Company's Series A shares subject to restrictions held by the executive
officers listed in the Summary Compensation Table above were as follows:
RESTRICTED
SERIES A
SHARES (#) VALUE ($)
------------------- ----------
Robert W. Decherd....................... 29,009 $1,011,689
Ward L. Huey, Jr........................ 55,139 $1,922,973
Burl Osborne............................ 48,746 $1,700,017
Michael J. McCarthy..................... 8,106 $ 282,697
Michael D. Perry........................ 7,932 $ 276,629
(4) Dividends are paid on the restricted shares denoted in this column. Except
as described below, one-half of the restricted shares awarded are subject to
possible forfeiture in equal increments over a four-year period unless the
Company meets specified annual performance goals. Such restricted shares are
subject to a restriction on disposition until approximately six weeks
following the fourth anniversary of the date of grant. As a result of the
Company's financial performance in 1996, no performance-oriented restricted
shares were forfeited by the named executive officers. In December 1990,
Messrs. Huey and Osborne received special one-time grants of Series A
restricted shares in the amounts of 35,000 shares and 30,000 shares,
respectively, as adjusted for the Company's two-for-one stock split in June
1995. These shares are subject to a restriction on disposition until the
seventh year anniversary of the date of grant. No restricted shares were
awarded in 1996.
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(5) Amounts in this column consist of the following dollar values of premiums
for life insurance purchased on behalf of the named individuals under the
Company's Management Security Plan, amounts contributed by the Company to
the Company's Employee Savings and Investment Plan (a non-discriminatory
retirement plan established pursuant to Section 401(k) of the Code), and
amounts contributed to the Company's Supplemental Executive Retirement Plan
(the "SERP") for 1996:
EMPLOYEE
MANAGEMENT SAVINGS AND
SECURITY INVESTMENT SERP
PLAN PLAN CONTRIBUTION
($) ($) ($)
---------- ----------- ------------
Robert W. Decherd....................................... $15,724 $4,500 $ 55,316
Ward L. Huey, Jr........................................ $19,861 $4,345 $ 98,168
Burl Osborne............................................ $20,087 $4,091 $128,472
Michael J. McCarthy..................................... $ 9,465 $4,134 $ 32,026
Michael D. Perry........................................ $ 6,546 $4,150 $ 26,807
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Since 1989 the Company has made annual grants of stock options to executive
officers and other key employees under its Executive Compensation Plan. The
stock options described below were awarded under the Company's 1995 Plan. During
1996, all options granted were for Series B shares and no limited stock
appreciation rights were granted. The following table provides additional
information regarding options granted during 1996 to the named executive
officers:
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES OR BASE PRESENT
GRANTED IN FISCAL PRICE EXPIRATION VALUE
NAME (#)(1) YEAR ($/SH) DATE ($)(2)
---- ---------- ---------- -------- ---------- ----------
Robert W. Decherd....................... 200,000 17.05% $35.50 12/18/06 $2,785,014
Ward L. Huey, Jr........................ 160,500 13.68% $35.50 12/18/06 $2,234,974
Burl Osborne............................ 149,600 12.76% $35.50 12/18/06 $2,083,190
Michael J. McCarthy..................... 59,000 5.03% $35.50 12/18/06 $ 821,579
Michael D. Perry........................ 59,000 5.03% $35.50 12/18/06 $ 821,579
- ---------------
(1) Includes a special one-time grant of options by the Board of Directors in
the following amounts: Robert W. Decherd -- 120,000; Ward L. Huey,
Jr. -- 100,000; Burl Osborne -- 100,000; Michael J. McCarthy -- 40,000; and
Michael D. Perry -- 40,000. All such options were granted for Series B
shares on December 18, 1996 under the 1995 Plan. The options awarded under
the special grant of options will become exercisable in increments of 40%
after five years and 30% after years six and seven. See "Compensation
Committee Report on Executive Compensation -- Special Grant of Options" on
page 28. All other 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 1995 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). The 1995 Plan provides for the payment
of the exercise price of an option with shares of Common Stock which have
been held for at least six months or with the approval of the Compensation
Committee if the stock has been held for less than six months. In addition,
the 1995 Plan permits an optionee under certain circumstances to cause the
Company to withhold shares issued upon the exercise of an option granted
under the plan in payment of the taxes due upon the exercise of such option.
(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 Securities and Exchange Commission 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 it is not intended to estimate,
and has no direct correlation to, the value of stock options that an
individual will actually realize. The actual value of the
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24
stock options that an executive officer 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 third quarter of
1996) -- .1864; risk free rate of return -- 6.30%; dividend yield -- 1.275%;
time of exercise -- 10 years; and discount for risk of forfeiture -- 3%.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
The following table shows information concerning the exercise of stock
options during 1996 by the named executive officers and the estimated value of
unexercised options held by such individuals at year-end:
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
SHARES ACQUIRED (#)(3) ($)(4)
ON EXERCISE VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------------- ------------- -------------
Robert W. Decherd...................... 243,440(1) $4,380,013(2) 62,994/ $ 297,210/
263,136 $ 134,755
Ward L. Huey, Jr....................... 0 0 150,255/ $1,604,452/
206,835 $ 93,955
Burl Osborne........................... 0 0 105,743/ $ 972,279/
189,197 $ 87,163
Michael J. McCarthy.................... 0 0 44,196/ $ 410,243/
74,654 $ 36,255
Michael D. Perry....................... 0 0 43,045/ $ 396,347/
74,555 $ 35,444
- ---------------
(1) All of the shares of the Company's Common Stock that were acquired and held
by Mr. Decherd upon the exercise of stock options were Series A shares.
(2) Based on the closing price of the Company's Series A shares on the NYSE on
October 21, 1997, less the exercise price of the options.
(3) Of the exercisable options, the following numbers of shares underlying
options are Series B shares for each executive: Mr. Decherd -- 31,599
shares; Mr. Huey -- 23,600 shares; Mr. Osborne -- 19,600 shares; Mr.
McCarthy -- 7,600 shares; and Mr. Perry -- 7,600 shares. Of the
unexercisable options, the following numbers of shares underlying options
are Series B shares for each executive: Mr. Decherd -- 247,401 shares; Mr.
Huey -- 195,900 shares; Mr. Osborne -- 179,000 shares; Mr.
McCarthy -- 70,400 shares; and Mr. Perry -- 70,400 shares. The remaining
options, both exercisable and unexercisable, are for Series A shares.
(4) Based on the closing price of $34.875 of the Company's Series A shares on
the NYSE -- Composite Transactions on December 31, 1996.
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25
COMPENSATION PURSUANT TO CERTAIN RETIREMENT PLANS
Pension Plan. The Company maintains a non-contributory pension plan
available to substantially all of its employees who have completed one year of
service and have reached 21 years of age. The following table reflects the
expected annual benefits, computed on a 10-year certain and life annuity basis,
payable under the plan to a fully vested executive officer of the Company upon
retirement at age 65 after the credited years of service and at the annual
remuneration levels set forth in the table.
AVERAGE ANNUAL YEARS OF SERVICE(1)(2)
COMPENSATION DURING --------------------------------------------------------------------------
FINAL FIVE YEARS 10 15 20 25 30 35 40
- ------------------------- -------- -------- -------- -------- -------- -------- --------
$150,000............... $ 20,724 $ 31,087 $ 41,449 $ 51,811 $ 62,173 $ 72,535 $ 80,785
$250,000............... $ 35,224 $ 52,837 $ 70,449 $ 88,061 $105,673 $114,467 $114,467
$350,000............... $ 49,724 $ 74,587 $ 99,449 $114,467 $114,467 $114,467 $114,467
$450,000............... $ 64,224 $ 96,337 $114,467 $114,467 $114,467 $114,467 $114,467
$550,000............... $ 78,724 $114,467 $114,467 $114,467 $114,467 $114,467 $114,467
$650,000............... $ 93,224 $114,467 $114,467 $114,467 $114,467 $114,467 $114,467
$750,000............... $107,724 $114,467 $114,467 $114,467 $114,467 $114,467 $114,467
$850,000 or above...... $114,467 $114,467 $114,467 $114,467 $114,467 $114,467 $114,467
- ---------------
(1) Benefits listed in the table above are not subject to reduction for Social
Security amounts.
(2) The table above does not reflect all of the limitations on accrued benefits
imposed by Section 415 of the Code, which currently limits such benefits to
$120,000. Prior to January 1, 1983, actual benefits were accrued subject to
a maximum limitation of $136,425. The table also does not reflect the
limitations imposed by Section 401(a)(17) of the Code on annual compensation
to be taken into account in determining pension benefits, which in 1996 was
limited to $150,000.
The Company's 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 plan includes regular pay plus
overtime, bonuses, commissions and any contribution made by the Company 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 Company matching contributions to the Employee Savings and
Investment Plan. A participant's interest in the plan becomes fully vested upon
completion of five years of credited service, or upon attainment of age 62,
whichever first occurs. Retirement benefits under the 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. The
plan also provides for the payment of death benefits. As of December 31, 1996,
the five executive officers named in the Summary Compensation Table above have
credited years of service under the plan as follows: Mr. Decherd -- 23 years;
Mr. Huey -- 36 years; Mr. Osborne -- 16 years; Mr. McCarthy -- 11 years; and Mr.
Perry -- 17 years. The covered compensation of such persons under the pension
plan is substantially the same as the annual compensation indicated in the
Summary Compensation Table on page 20, except that such covered compensation was
capped at $150,000 for all participants in 1996.
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 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 Section 2618.32(a), as in effect prior to July
1, 1996, if the 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 Company's 1995 Plan. A "Change in Control" is generally defined
in the 1995 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 the Company's assets, or
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26
certain changes in the composition of the Board of Directors of the Company
during any period of two consecutive years.
Management Security Plan. The Management Security Plan was instituted as of
January 1, 1980 to provide retirement and death benefits at a reduced cost
through group rates to a select group of management and highly compensated
employees, including the five executive officers listed in the Summary
Compensation Table above, who contribute materially to the growth, development,
and success of the Company. The Management Security Plan, other than the amounts
of benefits awarded thereunder, is administered by a committee that serves at
the discretion of the Board of Directors, the members of which committee may be
participants in the plan. The Management Security Plan is currently administered
by the Compensation Committee, none of whose members is a participant in the
plan. The Management Security Plan provides for a death benefit equal to 50% of
the participant's salary at the date the participant elected to participate in
the plan payable for 10 years thereafter or until the participant would have
reached age 65 (whichever is longer), plus an additional payment equal to the
participant's full salary for the first year after death. If the participant
survives to year 65, then such amounts will be paid out over 10 years after
retirement. Under the terms of the plan, additional insurance is purchased upon
a participant entering into the plan and upon each salary increase for any plan
participant. However, in 1988 the Company determined to freeze the level of
benefits under the Management Security Plan and no additional participants have
been added to the plan since such time. The estimated annual benefits under the
Management Security Plan payable upon retirement at age 65 to each of the
executive officers named in the Summary Compensation Table are as follows: Mr.
Decherd -- $384,589; Mr. Huey -- $120,007; Mr. Osborne -- $74,227; Mr.
McCarthy -- $104,250; and Mr. Perry -- $86,635. Amounts contributed to the
Management Security Plan by the Company on behalf of the five executive officers
named in the Summary Compensation Table for 1996 are set forth in footnote (5)
to the Summary Compensation Table on page 20 above.
Supplemental Executive Retirement Plan. The Supplemental Executive
Retirement Plan (the "SERP") was adopted by the Compensation Committee in
December 1992 for senior corporate officers and other key executives selected by
the Compensation Committee. This group includes the four senior executives named
in the Summary Compensation Table on page 20 (the "Senior Executives") and the
Chief Executive Officer. The SERP's purpose is to help offset the Code limits on
the Company's qualified retirement plans. The SERP's specific objective, when
combined with the Company's Pension Plan, Employee Savings and Investment Plan,
and Management Security Plan, is to provide a benefit at age 65 of 60% of final
average pay (the average of the total salary and bonus during the last five
completed calendar years of employment) to the senior corporate officers and a
benefit of 55% of final average pay to all other participants. However, since
the SERP is a defined contribution plan, the actual benefit to be received by
any participant will be dependent on the participant's account balance at the
time of retirement. As the contributions to the SERP are based on a
participant's salary and bonus, the actual amount of the contributions made on
behalf of a participant will vary based on a number of factors, of which Company
performance is a primary factor. (See "Executive Compensation Plan" under
"Compensation Committee Report on Executive Compensation" on pages 26-27 for a
discussion of Company performance and its effect on the amount of salary and
bonus paid to executives.) The payment of benefits under the SERP will be
subject to the same terms and conditions described above for the payment of
benefits under the Company's Pension Plan. (See the description of the Company's
Pension Plan on pages 23-24 above. See also footnote (5) to the Summary
Compensation Table on page 20 above for the amounts contributed to the SERP by
the Company on behalf of the Senior Executives and the Chief Executive Officer
for 1996.) The Company has established a trust to hold the contributions to the
SERP, which contributions will be subject to the claims of the Company's
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 the Company.
COMPENSATION OF DIRECTORS
In 1996, directors received an annual retainer of $25,000 for serving on
the Company's Board of Directors, and non-employee directors also received
$1,250 for each meeting of the Board of Directors attended. Directors who are
committee chairmen (all of whom are non-employee directors) received $2,500
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27
for each committee meeting chaired. Non-employee directors received $1,250 for
each committee meeting attended.
Since May 1988, non-employee directors of the Company have automatically
received upon their first election to the Board a one-time grant of options to
purchase 20,000 shares of the Company's Common Stock (as adjusted). Thereafter,
on each annual meeting date, each non-employee director automatically receives
additional non-qualified options to purchase 5,000 shares of Common Stock. In
December 1995, the Compensation Committee authorized the use of Series B shares
for both purposes.
CERTAIN TRANSACTIONS
In October 1994, the Company entered into a construction contract with a
subsidiary of Austin Industries, Inc. relating to the renovation of certain
office facilities. The contract provides for total payments of approximately
$15.3 million, of which approximately $6.8 million was paid during the year
ended December 31, 1996. In September 1996, the Company entered into an
agreement with a subsidiary of Austin Industries, Inc. relating to certain
renovations of The Dallas Morning News, Inc.'s Plano distribution center. The
agreement provided for total payments of approximately $1.6 million, of which
approximately $160,000 was paid during the year ended December 31, 1996. William
T. Solomon, a director of the Company, is Chairman and Chief Executive Officer
of Austin Industries, Inc..
In May 1996, the Company entered into underwriting agreements with Goldman,
Sachs & Co. and Goldman Sachs International relating to the Company's public
offering of 5,750,000 shares of its Series A Common Stock. Under the terms of
the agreements, total payments were approximately $9.4 million, all of which was
paid during the year ended December 31, 1996. Thomas B. Walker, Jr., a director
of the Company, is a limited partner in the Goldman Sachs Group, L.P., an
affiliate of Goldman, Sachs & Co. and Goldman Sachs International.
The Company believes that all of the above-described contracts were on
terms as favorable as would have been received from third parties.
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28
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is composed entirely of
independent outside directors. The Board of Directors has delegated to the
Committee the authority to review, consider and determine the compensation of
the Company's executive officers. The Committee follows the guidelines of the
Company's Executive Compensation Plan (the "ECP"), under which the Committee
makes recommendations to the Board of Directors regarding salary levels for
executive officers and makes the final determination regarding bonuses and
awards of stock options and other stock-based compensation to such persons under
the 1995 Executive Compensation Plan (the "1995 Plan"), which was approved by
the Company's shareholders at the 1995 Annual Meeting.
In February 1997, the Committee adopted various amendments to the 1995
Plan, certain of which are subject to shareholder approval at the 1997 Annual
Meeting of Shareholders. See "Proposal Two -- Approval of Amendments to the A.
H. Belo Corporation 1995 Executive Compensation Plan" on page 12.
EXECUTIVE COMPENSATION PLAN
The ECP was implemented January 1, 1989, replacing the Company's previously
existing management incentive plans. The key elements of the ECP are an annual
base salary, an annual target bonus opportunity, and long-term incentive awards
issued under the 1995 Plan. The ECP is administered by the Committee, the
members of which are not eligible to participate in the ECP. Officers of the
Company and its subsidiaries, including the Senior Executives and the Chief
Executive Officer, are automatically eligible to participate in the ECP. The
Committee selects additional participants according to their ability to affect
significantly the profitability of the Company. Levels of compensation for
participants other than the Chief Executive Officer and the Senior Executives
are determined in a manner similar to that described below for the Senior
Executives.
The ECP is designed to provide a competitive level of compensation to key
executives, managers and professionals through annual compensation as well as
long-term awards. 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 the Company's overall performance and (2) to
encourage coordinated and sustained effort toward enhancing the Company's
performance and maximizing the Company's value to its shareholders. The receipt
by participants of bonus amounts is entirely dependent upon the achievement of
Company financial performance targets.
Long-term incentive awards (stock options or other stock-based awards) are
granted in December of each year. At the same time, base salary levels and bonus
opportunities are established for the following year. The Committee considers an
ECP participant's annual compensation package to include the long-term incentive
awards granted in December of the prior year, plus base salary and bonus
opportunity as determined for the current fiscal year. However, the rules of the
Securities and Exchange Commission require the reporting of compensation on a
calendar year basis. Consequently, the compensation packages presented herein
include base salary and bonus opportunities earned in 1996, which were
established by the Committee in December 1995, and option awards granted in
December 1996.
The Committee works closely with the Chief Executive Officer and the Chief
Financial Officer in formulating its recommendations. It is the policy of the
Company to strive to establish a level for each element of a participant's
compensation that is approximately equal to the seventy-fifth percentile for
comparable companies. This target percentile was established at a level that the
Committee believes is necessary to attract and retain outstanding executives.
For comparative purposes, the Committee reviews 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
survey is conducted by 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 peer companies
indicated in the Performance Graph on page 30
26
29
because certain 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 base salaries of the Senior Executives for 1996 were set
at levels approximating the target percentile of the special cut survey aimed
for by the Committee.
Annual Performance Bonus Opportunity. Each ECP participant has an
opportunity to earn an annual bonus based entirely upon the financial
performance of the participant's organizational entity. The Committee uses a
percent of the base salary of each ECP participant to establish the
participant's bonus opportunity range, based on survey comparisons. In 1995,
management of the Company, in response to a request by the Committee, worked
with a compensation consultant to evaluate the effectiveness of the Company's
bonus structure as to its competitiveness, given the general objective of the
Company of compensating ECP participants at the seventy-fifth percentile level.
This evaluation found that the Company's level of bonus opportunity offered
under the ECP was generally less than competitive with other companies.
Management reported that when comparing the Company's target bonus levels with
the media industry survey for the current participants in the ECP, most of the
participants fell below the seventy-fifth percentile in target bonus percentage.
Management recommended that the Committee adjust the target bonus percentages to
achieve greater parity with the survey rate. The Committee approved an increase
in the target bonus percentages for approximately half of the ECP participants.
The target bonus percentages for the Chief Executive Officer and Senior
Executives were increased between five to ten percentage points.
The Committee annually reviews minimum, target and maximum levels of
financial performance for each organizational entity, based on business plans
developed by Company management. Each Senior Executive's bonus opportunity is
based on the financial performance of the Company as a whole. Bonus amounts for
ECP participants are determined at the end of each calendar year. If minimum
performance levels have not been 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 175% of their bonus
amounts. Prior to 1996, performance at the maximum level earned ECP participants
150% of their target bonus amounts. Based upon the results of the evaluation of
the bonus opportunity component of the ECP discussed above however, the
Committee determined that other media companies generally have higher maximum
bonus opportunities in the event that financial performance is substantially
above targeted levels. Management recommended that the maximum bonus
opportunities and target bonuses for ECP participants should be increased to
remain competitive with other media companies, but that the target and maximum
performance levels required in order to pay the increased bonuses also should be
substantially raised. In this way, the Company can enhance the motivational
effect of the bonus opportunity to ECP participants while assuring that the
achievement of increased bonuses also generates value to the Company's
shareholders. Based on these recommendations, the Committee approved the
increase in the maximum bonus opportunities to 175% along with a corresponding
increase in the target and maximum performance levels required to earn these
bonuses.
If performance falls between the minimum level and the target level,
participants receive a prorated amount up to the target bonus amount reflecting
performance in excess of the minimum level. 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 the bonus opportunity
directly to financial performance gives ECP participants an incentive to focus
on management objectives. As a result of the Company's financial performance
during 1996, the bonuses of the Senior Executives set forth in the Summary
Compensation Table on page 20 represent approximately 175% of their respective
target bonus amounts.
Long-Term Awards. The long-term incentive component of the ECP is designed
to encourage the retention of key executives, and the ultimate value of
long-term awards is determined by the Company's performance as reflected in the
market price of its stock. The Committee assigns to each ECP participant a
long-term incentive factor, expressed as a percent of base salary. The Committee
strives to set long-term incentive levels for participants that would place them
at approximately the seventy-fifth percentile of the survey considered by the
Committee. In recommending levels of long-term incentive awards for
participants,
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the Committee attempts to estimate the present value of these awards, assuming
that the Company's growth approximates media industry norms, and making use of
the Black-Scholes Option Pricing Model (a method approved by the Securities and
Exchange Commission for estimating the present value of options). The
participant's long-term incentive factor times annual compensation reflects the
estimated present value of the awards.
Stock Options. A total of 428,100 options for the Company's Series B shares
were granted to Senior Executives in 1996 under the 1995 Plan, including the
special grant of options described below. The Committee established an exercise
price for such options equal to the market price of the Series A shares on the
date of grant. (See the Option/SAR Grants in Last Fiscal Year Table on page 21,
which reflects estimated present values of such options, based on the indicated
assumptions.) The Committee has never granted options at exercise prices other
than the market price of the Series A shares on the date of grant and has never
adjusted such prices retroactively (except pursuant to antidilution provisions
upon the Company's distribution by dividend of Series B shares in May 1988 and
pursuant to a two-for-one stock split in the form of a dividend on each
outstanding share of the Company's Common Stock that was paid in June 1995).
While the value realizable from exercisable options is dependent upon the
extent to which the Company's performance is reflected in the market price of
its Common Stock at any particular point in time, the decision as to whether
this value will be realized in any particular year is primarily determined by
each individual executive. Accordingly, in analyzing annual compensation levels,
the Committee does 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 Last Fiscal Year and Fiscal Year-End
Option/SAR Values Table on page 22 for the amounts realized by the Senior
Executives from option exercises in 1996 and the estimated unrealized value of
unexercised options held by such persons as of December 31, 1996. See also
footnote (3) to the Summary Compensation Table on page 20 for information
regarding the estimated unrealized value of unvested restricted shares held by
such persons as of December 31, 1996.)
SPECIAL GRANT OF OPTIONS
In December 1996, the Committee awarded one-time special grants of options
to purchase Series B shares to each of the Senior Executives and the Chief
Executive Officer. These special awards were designed as incentives to align
future efforts by these executives, which efforts will include the integration
of the businesses acquired from Providence Journal, with the creation of
long-term shareholder value. To promote the retention of these executives, the
options have a longer vesting period than those typically awarded under the ECP,
with 40% of the options vesting five years from the date of grant and an
additional 30% vesting in each of the following two years. The number of special
grant options received by each executive is as follows: Mr. Decherd -- 120,000;
Mr. Huey -- 100,000; Mr. Osborne -- 100,000; Mr. McCarthy -- 40,000; and Mr.
Perry -- 40,000.
CEO COMPENSATION
Mr. Decherd is a participant in the ECP. In December 1996, the Committee
awarded Mr. Decherd 80,000 stock options for Series B shares in addition to the
special grant of options described above. This amount corresponds to the target
percentile indicated by the compensation survey considered by the Committee.
The Committee established Mr. Decherd's base salary at a level generally
corresponding to the compensation level aimed for by the Committee. Mr.
Decherd's 1996 bonus amount under the ECP was determined solely in relation to
the consolidated financial performance of the Company and its subsidiaries. As a
result of the Company's performance in 1996, Mr. Decherd would have received
175% of the applicable target bonus amount. However, due to existing limitations
within the 1995 Plan, Mr. Decherd's applicable bonus percentage was limited to
167%.
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ONE MILLION DOLLAR LIMIT ON THE DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Omnibus Budget Reconciliation Act of 1993 placed a one million dollar
limit on the deductibility of certain compensation paid to the Chief Executive
Officer and the Senior Executives for tax years beginning on or after January 1,
1994. Certain compensation, including performance-based compensation meeting
specified requirements, is exempt from the limit. The 1995 Plan permits the
Company to grant awards that are not subject to the deduction limit established
by Section 162(m) of the Code. The Committee intends 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.
Lester A. Levy
J. McDonald Williams, Chairman
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PERFORMANCE GRAPH
The following graph compares the annual cumulative total shareholder return
on an investment of $100 on December 31, 1991 in the Company's Series A shares,
based on the market price of the Series A shares and assuming reinvestment of
dividends, with 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 by the Company on a line-of-business basis and weighted for market
capitalization. The Company's peer group is composed of the following companies:
BHC Communications, Inc.; Central Newspapers, Inc.; Dow Jones & Company, Inc.;
Gannett Company, Inc.; Granite Broadcasting Corporation; Knight-Ridder, Inc.;
Lee Enterprises, Inc.; Lin Television Corporation; McClatchy Newspapers, Inc.;
Media General, Inc.; New World Communications Group, Inc.; The New York Times
Company; Pulitzer Publishing Company; The E. W. Scripps Company; The Times
Mirror Company; Tribune Company; The Washington Post Company; and Young
Broadcasting Corporation. The Company is not included in the calculations of
peer group cumulative total shareholder return on investment.
Measurement Period A.H. Belo
(Fiscal Year Covered) Corporation S&P 500 Peer Group
12/31/91 100 100 100
12/31/92 135 108 113
12/31/93 173 118 133
12/31/94 186 120 126
12/31/95 231 165 159
12/31/96 235 203 198
ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST OF ANY BENEFICIAL SHAREHOLDER OR SHAREHOLDER OF
RECORD, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1996 (INCLUDING THE EXHIBITS, FINANCIAL STATEMENTS, AND THE
SCHEDULES THERETO) REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934, MAY
BE OBTAINED, WITHOUT CHARGE, FROM MICHAEL J. McCARTHY, SECRETARY, 400 SOUTH
RECORD STREET, DALLAS, TEXAS 75202.
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INDEPENDENT AUDITORS
Ernst & Young, independent auditors, served as independent auditors for the
Company for the fiscal year ended December 31, 1996, and will serve in such
capacity for the current fiscal year. Representatives of Ernst & Young will be
present at the Annual Meeting, 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.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the 1998 Annual Meeting of
Shareholders, for inclusion in the Company's Proxy Statement and form of Proxy
relating to that meeting, must be received by the Company at its offices in
Dallas, Texas, addressed to the Secretary of the Company, not later than
December 10, 1997. Such proposals, and any nomination of candidates for election
as directors, must comply with the bylaws of the Company and the requirements of
Regulation 14A of the Securities Exchange Act of 1934.
OTHER MATTERS
At the date of this Proxy Statement, management was not aware that any
matters not referred to in this Proxy Statement would be presented for action at
the Annual Meeting. 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
MICHAEL J. McCARTHY
Secretary
Dated: April 9, 1997
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EXHIBIT A
A. H. BELO CORPORATION
1995 EXECUTIVE COMPENSATION PLAN
(As Restated to Incorporate Amendments
through May 14, 1997)
A. H. Belo Corporation, a Delaware corporation (the "Company"), established
the A. H. Belo Corporation 1995 Executive Compensation Plan (the "Plan"),
effective as of January 1, 1995, and has restated the Plan to incorporate
amendments through May 14, 1997, subject to shareholder approval.
1. Purpose. The purpose of the Plan is to attract and retain the best
available talent and encourage the highest level of performance by directors,
executive officers and selected employees, and to provide them incentives to put
forth maximum efforts for the success of the Company's business, in order to
serve the best interests of the Company and its shareholders.
2. Definitions. The following terms, when used in the Plan with initial
capital letters, will have the following meanings:
(a) "Appreciation Right" means a right granted pursuant to Paragraph
7.
(b) "Award" means an Executive Compensation Plan Bonus, an
Appreciation Right, a Stock Option, a Performance Unit or a grant or sale
of Restricted Stock.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" means the first to occur of the events
described in (i) through (iv) below, unless the Board has adopted a
resolution prior to or promptly following the occurrence of any such event
stipulating, conditionally, temporarily or otherwise, that any such event
will not result in a change in control of the Company:
(i) the commencement of, or first public announcement of the
intention of any person or group (within the meaning of Section 3(b) of
and Rule 13d-5(b) promulgated under the Securities Exchange Act of 1934,
as amended, respectively) to commence, a tender offer or exchange offer
(other than an offer by the Company or any Subsidiary) for all, or any
part of, the Common Stock;
(ii) the public announcement by the Company or by any group (as
defined in clause (i) above), entity or person (other than the Company,
any Subsidiary, or any savings, pension or other benefit plan for the
benefit of employees of the Company or any Subsidiary) which, through a
transaction or series of transactions has acquired, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of
more than 30% of the total number of shares of Common Stock that such
group, entity or person has become such a beneficial owner;
(iii) the approval by the Company's shareholders (or, if such
approval is not required, the consummation) of a merger in which the
Company does not survive as an independent publicly owned corporation, a
consolidation, or a sale, exchange, or other disposition of all or
substantially all the Company's assets; or
(iv) a change in the composition of the Board during any period of
two consecutive years such that individuals who at the beginning of such
period were members of the Board cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such period.
(e) "Code" means the Internal Revenue Code of 1986, as in effect from
time to time.
(f) "Committee" means the Compensation Committee of the Board and, to
the extent the administration of the Plan has been assumed by the Board
pursuant to Paragraph 15, the Board.
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(g) "Common Stock" means the Series A Common Stock, par value $1.67
per share, and the Series B Common Stock, par value $1.67 per share, of the
Company or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Paragraph 12.
Shares of Common Stock issued or transferred pursuant to the Plan will be
shares of Series A Common Stock or Series B Common Stock, as determined by
the Committee in its discretion. Notwithstanding the foregoing, the
Committee will not authorize the issuance or transfer of Series B Common
Stock if the Committee determines that such issuance or transfer would
cause the Series A Common Stock to be excluded from trading in the
principal market in which the Common Stock is then traded.
(h) "Date of Grant" means (i) with respect to Participants, the date
specified by the Committee on which a grant of Stock Options, Appreciation
Rights or Performance Units or a grant or sale of Restricted Stock will
become effective (which date will not be earlier than the date on which the
Committee takes action with respect thereto) and (ii) with respect to
Directors, the date of the applicable annual meeting of shareholders of the
Company as specified in Paragraph 6.
(i) "Director" means a member of the Board who is not a regular
full-time employee of the Company or any Subsidiary.
(j) "Executive Compensation Plan Bonus" means the right to receive an
annual incentive compensation payment made pursuant to and subject to the
conditions set forth in Paragraph 10.
(k) "Grant Price" means the price per share of Common Stock at which
an Appreciation Right not granted in tandem with a Stock Option is granted.
(l) "Management Objectives" means the objectives, if any, established
by the Committee for a Performance Period that are to be achieved with
respect to an Award granted to a Participant under the Plan. Management
Objectives may be described in terms of Company-wide objectives or in terms
of objectives that are related to performance of the division, Subsidiary,
department or function within the Company or a Subsidiary in which the
Participant receiving the Award is employed or on which the Participant's
efforts have the most influence. The Management Objectives established by
the Committee for any Performance Period under the Plan will consist of one
or more of the following:
(i) earnings per share and/or growth in earnings per share in
relation to target objectives;
(ii) cash flow and/or growth in cash flow in relation to target
objectives;
(iii) net income and/or growth in net income in relation to target
objectives, excluding the effect of extraordinary items;
(iv) total shareholder return (measured as the total of the
appreciation of and dividends declared on the Common Stock) in relation
to target objectives;
(v) return on invested capital in relation to target objectives;
(vi) return on shareholder equity in relation to target objectives;
and
(vii) return on assets in relation to target objectives.
Management Objectives may be established in absolute terms or relative to
the performance of a specified group of other companies. The Committee may
adjust Management Objectives and any minimum acceptable level of
achievement with respect to any Management Objectives if, in the sole
judgment of the Committee, events or transactions have occurred after the
establishment of the Management Objectives (including without limitation
any change in accounting standards by the Financial Accounting Standards
Board) which are unrelated to performance and result in a distortion of the
Management Objectives or such minimum acceptable level of achievement.
(m) "Market Value per Share" means, at any date, the closing sale
price of the Common Stock on that date (or, if there are no sales on that
date, the last preceding date on which there was a sale) in the principal
market in which the Common Stock is traded.
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(n) "Option Price" means the purchase price per share payable on
exercise of a Stock Option.
(o) "Participant" means a person who is selected by the Committee to
receive benefits under the Plan and who is at that time an executive
officer or other key employee of the Company or any Subsidiary. Except for
Stock Options granted to Directors pursuant to Paragraph 6, a Director will
not receive benefits under the Plan.
(p) "Performance Period" means, with respect to an Award, a period of
time established by the Committee within which the Management Objectives
relating to such Award are to be measured. The Performance Period for an
Executive Compensation Plan Bonus will be a period of 12 months. The
Performance Period for all other Awards will be a period of not less than
three years.
(q) "Performance Unit" means a unit equivalent to $100 (or such other
value as the Committee determines) granted pursuant to Paragraph 9.
(r) "Restricted Stock" means shares of Common Stock granted or sold
pursuant to Paragraph 8 as to which neither the ownership restrictions nor
the restrictions on transfer referred to therein has expired.
(s) "Rule 16b-3" means Rule 16b-3 under the Section 16 of the
Securities Exchange Act of 1934, as amended, as such Rule is in effect from
time to time.
(t) "Spread" means the excess of the Market Value per Share on the
date an Appreciation Right is exercised over (i) the Option Price provided
for in the related Stock Option or (ii) if there is no tandem Stock Option,
the Grant Price provided for in the Appreciation Right, multiplied by the
number of shares of Common Stock in respect of which the Appreciation Right
is exercised.
(u) "Stock Option" means the right to purchase a share of Common Stock
upon exercise of an option granted pursuant to Paragraph 5 or Paragraph 6.
(v) "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company owns or controls, directly or indirectly,
not less than 50% of the total combined voting power or equity interests
represented by all classes of stock issued by such corporation,
partnership, joint venture or other entity.
3. Shares Available Under Plan. Subject to adjustment as provided in
Paragraph 12, the shares of Common Stock which may be issued or transferred and
covered by outstanding Awards granted under the Plan will not exceed in the
aggregate 5,000,000 shares. Such shares may be shares of original issuance or
treasury shares or a combination of the foregoing. Upon exercise of any
Appreciation Rights that are paid in shares of Common Stock, there will be
deemed to have been delivered under the Plan for purposes of this Paragraph 3
only the number of shares of Common Stock paid to the Participant, and the
balance (if any) of the shares of Common Stock covered by the Appreciation
Rights or the related Stock Options will remain available for issuance under the
Plan. Upon exercise of any Appreciation Rights that are paid in cash, the total
number of shares of Common Stock covered by the Appreciation Rights or the
related Stock Options will remain available for issuance under the Plan. Subject
to the provisions of the preceding sentences, any shares of Common Stock which
are subject to Stock Options or Appreciation Rights or are granted or sold as
Restricted Stock that are terminated, unexercised, forfeited or surrendered or
which expire for any reason will again be available for issuance under the Plan.
4. Limitations on Awards. Subject to adjustment as provided in Paragraph
12, awards under the Plan will be subject to the following limitations:
(a) Of the aggregate 5,000,000 shares reserved for issuance under the
Plan, no more than 1,200,000 shares of Common Stock will be issued or
transferred as Restricted Stock.
(b) No more than 5,000,000 shares of Common Stock reserved for
issuance under the Plan will be issued under Stock Options.
(c) The maximum aggregate number of shares of Common Stock that may be
subject to Stock Options, Appreciation Rights and Restricted Stock granted
to a Participant during any calendar year will
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not exceed 500,000 shares. The foregoing limitation will apply to the grant
of Appreciation Rights whether the Spread on exercise is paid in cash or in
shares of Common Stock.
(d) The maximum aggregate cash value of payments to any Participant
for any Performance Period pursuant to an award of Performance Units will
not exceed $3,000,000.
(e) The payment of an Executive Compensation Plan Bonus to any
Participant will not exceed $1,500,000.
5. Stock Options for Participants. The Committee may from time to time
authorize grants to any Participant of options to purchase shares of Common
Stock upon such terms and conditions as it may determine in accordance with the
following provisions:
(a) Each grant will specify the number of shares of Common Stock to
which it pertains.
(b) Each grant will specify the Option Price, which will not be less
than 100% of the Market Value per Share on the Date of Grant.
(c) Each grant will specify that the Option Price will be payable (i)
in cash or by check acceptable to the Company, (ii) by the transfer to the
Company of shares of Common Stock owned by the Participant for at least six
months (or, with the consent of the Committee, for less than six months)
having an aggregate Market Value per Share at the date of exercise equal to
the aggregate Option Price, (iii) with the consent of the Committee, by
authorizing the Company to withhold a number of shares of Common Stock
otherwise issuable to the Participant having an aggregate Market Value per
Share on the date of exercise equal to the aggregate Option Price or (iv)
by a combination of such methods of payment; provided, however, that the
payment methods described in clauses (ii) and (iii) will not be available
at any time that the Company is prohibited from purchasing or acquiring
such shares of Common Stock. Any grant may provide for deferred payment of
the Option Price from the proceeds of sale through a broker of some or all
of the shares to which such exercise relates.
(d) Successive grants may be made to the same Participant whether or
not any Stock Options previously granted to such Participant remain
unexercised.
(e) Each grant will specify the required period or periods of
continuous service by the Participant with the Company or any Subsidiary
and/or the Management Objectives to be achieved before the Stock Options or
installments thereof will become exercisable, and any grant may provide for
the earlier exercise of the Stock Options in the event of a Change in
Control or other similar transaction or event.
(f) Stock Options granted under this Paragraph 5 may be (i) options
which are intended to qualify under particular provisions of the Code, (ii)
options which are not intended to so qualify or (iii) combinations of the
foregoing.
(g) No Stock Option will be exercisable more than ten years from the
Date of Grant.
(h) If a Participant terminates employment by reason of death,
disability or retirement at or after attaining the earliest age that
qualifies as the Participant's Early Retirement Age under the G. B. Dealey
Retirement Pension Plan, as amended from time to time, each outstanding
Stock Option granted to the Participant will remain exercisable until the
term of the Stock Option expires (determined without regard to the
Participant's termination of employment).
(i) Each grant of Stock Options will be evidenced by an agreement
executed on behalf of the Company by the Chief Executive Officer (or
another officer designated by the Committee) and delivered to the
Participant and containing such terms and provisions, consistent with the
Plan, as the Committee may approve.
6. Stock Options for Directors. Each individual who first becomes a
Director on or after the date of the 1996 annual meeting of shareholders of the
Company will be granted an option to purchase 20,000 shares of Common Stock on
the date of election to the Board. Each Director will be granted an additional
option to
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purchase 5,000 shares of Common Stock on the date of each annual meeting of
shareholders following the annual meeting of the individual's initial election
to the Board, provided that such individual continues to be a Director at the
close of business of each such annual meeting. For purposes of this Paragraph 6,
the date of an annual meeting of shareholders of the Company is the date on
which the meeting is convened or, if later, the date of the last adjournment
thereof.
Each Stock Option granted to a Director will contain the following terms
and conditions:
(a) Each grant will specify the number of shares of Common Stock to
which it pertains.
(b) Each grant will specify the Option Price, which will be 100% of
the Market Value per Share on the Date of Grant.
(c) Each grant will specify that the Option Price will be payable (i)
in cash or by check acceptable to the Company, (ii) by the transfer to the
Company of shares of Common Stock owned by the Director for at least six
months having an aggregate Market Value per Share at the date of exercise
equal to the aggregate Option Price, (iii) by authorizing the Company to
withhold a number of shares of Common Stock otherwise issuable to the
Director having an aggregate Market Value per Share on the date of exercise
equal to the aggregate Option Price or (iv) by a combination of such
methods of payment; provided, however, that the payment methods described
in clauses (ii) and (iii) will not be available at any time that the
Company is prohibited from purchasing or acquiring such shares of Common
Stock. Any grant may provide for deferred payment of the Option Price from
the proceeds of sale through a broker of some or all of the shares to which
such exercise relates.
(d) Each grant will specify that the Stock Option may not be exercised
until the first anniversary of the Date of Grant and will be fully
exercisable thereafter, without regard to whether the Director continues to
be a member of the Board on such first anniversary, until the Stock Option
expires by its terms.
(e) Each grant of Stock Options will be evidenced by an agreement
executed on behalf of the Company by the Chief Executive Officer (or
another officer designated by the Committee) and delivered to the Director
and containing such terms and provisions, consistent with the Plan, as the
Committee may approve.
7. Appreciation Rights. The Committee may also from time to time authorize
grants to any Participant of Appreciation Rights upon such terms and conditions
as it may determine in accordance with this Paragraph 7. Appreciation Rights may
be granted in tandem with Stock Options or separate and apart from a grant of
Stock Options. An Appreciation Right will be a right of the Participant to
receive from the Company upon exercise an amount which will be determined by the
Committee at the Date of Grant and will be expressed as a percentage of the
Spread (not exceeding 100%) at the time of exercise. An Appreciation Right
granted in tandem with a Stock Option may be exercised only by surrender of the
related Stock Option. Each grant of an Appreciation Right may utilize any or all
of the authorizations, and will be subject to all of the limitations, contained
in the following provisions:
(a) Each grant will state whether it is made in tandem with Stock
Options and, if not made in tandem with any Stock Options, will specify the
number of shares of Common Stock in respect of which it is made.
(b) Each grant made in tandem with Stock Options will specify the
Option Price and each grant not made in tandem with Stock Options will
specify the Grant Price, which in either case will not be less than 100% of
the Market Value per Share on the Date of Grant.
(c) Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in (i) cash, (ii) shares of
Common Stock having an aggregate Market Value per Share equal to the
percentage of the Spread to be paid to the Participant or (iii) any
combination thereof, as determined by the Committee in its sole discretion
at the time of payment.
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(d) Any grant may specify that the amount payable on exercise of an
Appreciation Right may not exceed a maximum amount specified by the
Committee at the Date of Grant (valuing shares of Common Stock for this
purpose at their Market Value per Share at the date of exercise).
(e) Each grant will specify the required period or periods of
continuous service by the Participant with the Company or any Subsidiary
and/or Management Objectives to be achieved before the Appreciation Rights
or installments thereof will become exercisable, and will provide that no
Appreciation Right may be exercised except at a time when the Spread is
positive and, with respect to any grant made in tandem with Stock Options,
when the related Stock Option is also exercisable. Any grant may provide
for the earlier exercise of the Appreciation Rights in the event of a
Change in Control or other similar transaction or event.
(f) If a Participant terminates employment by reason of death,
disability or retirement at or after attaining the earliest age that
qualifies as the Participant's Early Retirement Age under the G. B. Dealey
Retirement Pension Plan, as amended from time to time, each outstanding
Appreciation Right granted to the Participant will remain exercisable until
the Appreciation Right expires by its terms (determined without regard to
the Participant's termination of employment).
(g) Each grant of an Appreciation Right will be evidenced by an
agreement executed on behalf of the Company by the Chief Executive Officer
(or another officer designated by the Committee) and delivered to and
accepted by the Participant receiving the grant, which agreement will
describe such Appreciation Right, identify any Stock Option granted in
tandem with such Appreciation Right, state that such Appreciation Right is
subject to all the terms and conditions of the Plan and contain such other
terms and provisions, consistent with the Plan, as the Committee may
approve.
8. Restricted Stock. The Committee may also from time to time authorize
grants or sales to any Participant of Restricted Stock upon such terms and
conditions as it may determine in accordance with the following provisions:
(a) Each grant or sale will constitute an immediate transfer of the
ownership of shares of Common Stock to the Participant in consideration of
the performance of services, entitling such Participant to voting and other
ownership rights, but subject to the restrictions hereinafter referred to.
Each grant or sale may limit the Participant's dividend rights during the
period in which the shares of Restricted Stock are subject to any such
restrictions.
(b) Each grant or sale will specify the Management Objectives, if any,
that are to be achieved in order for the ownership restrictions to lapse.
(c) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is
less than the Market Value per Share at the Date of Grant.
(d) Each such grant or sale will provide that the shares of Restricted
Stock covered by such grant or sale will be subject, for a period to be
determined by the Committee at the Date of Grant, to one or more
restrictions, including, without limitation, a restriction that constitutes
a "substantial risk of forfeiture" within the meaning of Section 83 of the
Code and the regulations of the Internal Revenue Service thereunder, and
any grant or sale may provide for the earlier termination of any such
restrictions in the event of a Change in Control or other similar
transaction or event.
(e) Each such grant or sale will provide that during the period for
which such restriction or restrictions are to continue, the transferability
of the Restricted Stock will be prohibited or restricted in a manner and to
the extent prescribed by the Committee at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Stock to
continuing restrictions in the hands of any transferee).
(f) Each grant or sale of Restricted Stock will be evidenced by an
agreement executed on behalf of the Company by the Chief Executive Officer
(or another officer designated by the Committee) and
A-6
40
delivered to and accepted by the Participant and containing such terms and
provisions, consistent with the Plan, as the Committee may approve.
9. Performance Units. The Committee may also from time to time authorize
grants to any Participant of Performance Units, which will become payable upon
achievement of specified Management Objectives, upon such terms and conditions
as it may determine in accordance with the following provisions:
(a) Each grant will specify the number of Performance Units to which
it pertains.
(b) Each grant will specify the Management Objectives that are to be
achieved.
(c) Each grant will specify the time and manner of payment of
Performance Units which have become payable, which payment may be made in
(i) cash, (ii) shares of Common Stock having an aggregate Market Value per
Share equal to the aggregate value of the Performance Units which have
become payable or (iii) any combination thereof, as determined by the
Committee in its sole discretion at the time of payment.
(d) Each grant of a Performance Unit will be evidenced by an agreement
executed on behalf of the Company by the Chief Executive Officer (or
another officer designated by the Committee) and delivered to and accepted
by the Participant and containing such terms and provisions, consistent
with the Plan, as the Committee may approve, including provisions relating
to a Change in Control or other similar transaction or event.
10. Executive Compensation Plan Bonuses. The Committee may from time to
time authorize payment of annual incentive compensation in the form of an
Executive Compensation Plan Bonus to a Participant, which will become payable
upon achievement of specified Management Objectives. Executive Compensation Plan
Bonuses will be payable upon such terms and conditions as the Committee may
determine in accordance with the following provisions:
(a) The Committee will specify the Management Objectives that are to
be achieved by the Participant in order for the Participant to receive
payment of the Executive Compensation Plan Bonus.
(b) The Committee will specify the time and manner of payment of an
Executive Compensation Plan Bonus which becomes payable, which payment may
be made in (i) cash, (ii) shares of Common Stock having an aggregate Market
Value per Share equal to the aggregate value of the Executive Compensation
Plan Bonus which has become payable or (iii) any combination thereof, as
determined by the Committee in its sole discretion at the time of payment.
(c) As soon as practicable after the beginning of a Performance
Period, the Committee will notify each Participant of the terms of the
Executive Compensation Plan Bonus program for that Performance Period,
which notification will state that such Executive Compensation Plan Bonus
is subject to all the terms and conditions of the Plan, and contain such
other terms and provisions, consistent with the Plan, as the Committee may
approve.
11. Transferability. Except as otherwise provided in the agreement
evidencing a Participant's Award or an award of Stock Options to a Director
under Paragraph 6, (i) no Stock Option, Appreciation Right, Performance Unit
that has not become payable or Executive Compensation Plan Bonus that has not
become payable will be transferable by the Participant or the Director other
than by will or the laws of descent and distribution and (ii) no Stock Option or
Appreciation Right granted to the Participant or the Director will be
exercisable during the Participant's or Director's lifetime by any person other
than the Participant or Director, or such person's guardian or legal
representative.
12. Adjustments. The Committee will make or provide for such adjustments in
the maximum number of shares specified in Paragraphs 3, 4 and 6 in the numbers
of shares of Common Stock covered by outstanding Stock Options and Appreciation
Rights granted hereunder, in the Option Price or Grant Price applicable to any
such Stock Options and Appreciation Rights, and/or in the kind of shares covered
thereby (including shares of another issuer), as the Committee in its sole
discretion, exercised in good faith, may determine is
A-7
41
equitably required to prevent dilution or enlargement of the rights of
Participants that otherwise would result from any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, merger, consolidation, spin-off, reorganization, partial or
complete liquidation, issuance of rights or warrants to purchase securities or
any other corporate transaction or event having an effect similar to any of the
foregoing.
13. Fractional Shares. The Company will not be required to issue any
fractional share of Common Stock pursuant to the Plan. The Committee may provide
for the elimination of fractions or for the settlement of fractions in cash.
14. Withholding Taxes. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under the Plan, or is
requested by a Participant to withhold additional amounts with respect to such
taxes, and the amounts available to the Company for such withholding are
insufficient, it will be a condition to the receipt of such payment or the
realization of such benefit that the Participant or such other person make
arrangements satisfactory to the Company for payment of the balance of such
taxes required or requested to be withheld. In addition, if permitted by the
Committee, a Participant may elect to have any withholding obligation of the
Company satisfied with shares of Common Stock that would otherwise be
transferred to the Participant in payment of the Participant's Award.
15. Administration of the Plan. (a) Unless the administration of the Plan
has been expressly assumed by the Board pursuant to a resolution of the Board,
the Plan will be administered by the Committee, which at all times will consist
of two or more Directors appointed by the Board, all of whom will qualify as
"non-employee directors" as defined in Rule 16b-3 and as "outside directors" as
defined in regulations adopted under Section 162(m) of the Code, as such terms
may be amended from time to time. A majority of the Committee will constitute a
quorum, and the action of the members of the Committee present at any meeting at
which a quorum is present, or acts unanimously approved in writing, will be the
acts of the Committee.
(b) The Committee has the full authority and discretion to administer
the Plan and to take any action that is necessary or advisable in
connection with the administration of the Plan, including without
limitation the authority and discretion to interpret and construe any
provision of the Plan or of any agreement, notification or document
evidencing the grant of an Award. The interpretation and construction by
the Committee of any such provision and any determination by the Committee
pursuant to any provision of the Plan or of any such agreement,
notification or document will be final and conclusive. No member of the
Committee will be liable for any such action or determination made in good
faith.
16. Amendments, Etc. (a) The Plan may be amended from time to time by the
Committee or the Board but may not be amended without further approval by the
shareholders of the Company if such amendment would result in the Plan no longer
satisfying any applicable requirements of the New York Stock Exchange (or any
other exchange or market system upon which shares of Common Stock are listed or
admitted to trading), Rule 16b-3 or Section 162(m) of the Code.
(b) The Plan may be terminated at any time by action of the Board. The
termination of the Plan will not adversely affect the terms of any
outstanding Award.
(c) The Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or
any Subsidiary, nor will it interfere in any way with any right the Company
or any Subsidiary would otherwise have to terminate such Participant's
employment or other service at any time.
(d) If the Committee determines, with the advice of legal counsel,
that any provision of the Plan would prevent the payment of any Award
intended to qualify as performance-based compensation within the meaning of
Section 162(m) of the Code from so qualifying, such Plan provision will be
invalid and cease to have any effect without affecting the validity or
effectiveness of any other provision of the Plan.
A-8
42
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.
DETACH HERE
A. H. BELO CORPORATION
THIS PROXY IS SOLICITED ON BEHALF ON THE BOARD OF DIRECTORS
OF A. H. BELO CORPORATION
P
The undersigned hereby appoints Robert W. Decherd and Ward L. Huey,
R Jr., or any one or both of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes each of them to represent and to vote
O as designated below all the shares of the Common Stock of A. H. Belo
Corporation held of record by the undersigned on March 21, 1997, at the
X Annual Meeting of Shareholders to be held on May 14, 1997, and any
adjournment or postponement thereof.
Y
THIS PROXY, WHEN PROPERLY EXECUTED, 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 LISTED IN PROPOSAL 1 AND FOR THE
PROPOSAL TO AMEND THE COMPANY'S 1995 EXECUTIVE COMPENSATION PLAN.
Please sign exactly as 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) SIDE
-----------
43
DETACH HERE
Please mark
/ X / votes as in
this example
This Proxy, when properly executed, 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 listed in Proposal 1 and FOR Proposal 2.
1. Election of the following nominees as Class II Directors
(Term expires in 2000).
NOMINEES: Robert W. Decherd, Roger A. Enrico, Arturo Madrid, Ph.D.,
William T. Solomon, Thomas B. Walker, Jr.
/ / FOR / / WITHHOLD AUTHORITY
/ / ________________________________________________________________
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write the nominee's name in the space provided above.
2. Proposal to amend the Company's 1995 Executive Compensation Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. At the discretion of such Proxies, on any other matter that property may
come before the meeting or any adjournment 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.
Please sign exactly as 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.
Signature: _______________________________ Date _______
Signature if Held Jointly _________________ Date_______
44
YOUR PROXY CARD FOR YOUR 401(k)
SHARES IS ATTACHED BELOW.
Please read and follow the instructions
carefully and detach and return your
completed proxy card in the enclosed
postage-paid envelope.
If you own shares of Belo Common Stock outside of
the plan listed below, a Proxy Statement has been
sent to you under separate cover along with
another proxy card relating to those shares.
Please review the Proxy Statement carefully
before returning your proxy cards.
DETACH HERE
A. H. BELO CORPORATION
TO PARTICIPANTS IN THE A. H. BELO CORPORATION
EMPLOYEE SAVINGS AND INVESTMENT PLAN:
P As a participant in the Employee Savings and Investment Plan with full
shares of the Company's Common Stock allocated to your account as of March
R 21, 1997, you may instruct the Trustee how to vote such shares at the
Annual Meeting of Shareholders to be held May 14, 1997.
O
Your instructions to the Trustee will be held in strict confidence and
X will be made available only to the inspectors of election at the Annual
Meeting, none of whom is an employee of the Company. Under the terms of the
Y Plan, you have the right to give voting instructions for all shares
allocated to your account. Please use the other side of this form in giving
your instructions.
Any shares held by the Trustee as to which it has not received voting
instructions by May 9, 1997, will be voted in the same manner,
proportionately, as the shares in the Plan as to which voting instructions
have been received. Any shares held by the Trustee as to which it has been
instructed to sign the Board of Directors proxy, with no additional
instructions to the contrary indicated, will be voted FOR Item 1, the
election of Class II Directors, and FOR Item 2, the amendment of the 1995
Executive Compensation Plan.
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
-----------
SEE REVERSE
(continued and to be signed on the reverse side) SIDE
-----------
45
DETACH HERE
Please mark
/ X / votes as in
this example.
U.S. Trust Company of California, N.A.
You are hereby instructed to sign the Board of Directors proxy.
You are further instructed to direct the proxy holders to vote as follows:
1. Election of the following nominees as Class II Directors
(Term expires in 2000).
NOMINEES: Robert W. Decherd, Roger A. Enrico, Arturo Madrid, Ph.D.,
William T. Solomon, Thomas B. Walker, Jr.
/ / FOR / / WITHHOLD AUTHORITY
/ / ________________________________________________________________
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write the nominee's name in the space provided above.
2. Proposal to amend the Company's 1995 Executive Compensation Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. At the discretion of such Proxies, on any other matter that property may
come before the meeting or any adjournment 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.
I hereby authorize U.S. Trust Company of
California, N.A., as Trustee under the
Employee Savings and Investment Plan, to
vote the shares of Common Stock held for
my account under the Employee Savings and
Investment Plan at the Annual Meeting in
accordance with instructions given above.
U.S. Trust Company of California, N.A.,
has appointed The First National Bank of
Boston as Agent to tally the votes.
Signature: ________________________ Date _____________
46
[U.S. TRUST LOGO]
NOTICE TO PARTICIPANTS
IN THE
A. H. BELO CORPORATION
EMPLOYEE SAVINGS AND INVESTMENT PLAN
Dear Plan Participant:
Enclosed with this notice is a Proxy Statement of A. H. Belo
Corporation (the "Company") describing the Annual Meeting of Shareholders to be
held on May 14, 1997 (the "Annual Meeting"). The Annual Meeting will be for the
purpose of (i) electing Class II Directors and (ii) approving the proposal to
amend the 1995 Executive Compensation Plan (the "Proposal"). The Proxy
Statement has been prepared by the Board of Directors of the Company in
connection with the business to be transacted at the Annual Meeting.
DIRECTIONS TO THE TRUSTEE
Only U.S. Trust Company of California, N.A., as trustee (the
"Trustee") of the A. H. Belo Corporation Employee Savings and Investment Plan
(the "Plan") can vote the shares of the Company stock ("Shares") held by the
Plan. However, under the terms of the Plan, you as a participant are entitled
to instruct the Trustee how to vote these Shares.
Enclosed with this notice is a confidential voting instruction card
provided to you for the purpose of instructing the Trustee how to vote the
Shares concerning the above matters. Your participation in this matter is
important. Please take the time to complete the instruction card and return it
in the enclosed self-addressed and stamped envelope. You may instruct the
Trustee to vote FOR or WITHHOLD AUTHORITY on Item 1, and FOR, AGAINST or
ABSTAIN on Item 2. The Board of Directors has appointed an administrative
committee (the "Committee") as named fiduciary, which will have the discretion
to vote the Shares in the event you do not provide instructions to the Trustee.
The Trustee will vote all Shares of the Plan in accordance with the
instructions set forth on the voting instruction cards that are received by the
Trustee on or before May 9, 1997, unless the Trustee determines 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 Trustee will vote
your Shares FOR Item 1, and FOR Item 2.
CONFIDENTIALITY AND INSTRUCTIONS
Your vote is strictly confidential and will not be revealed, directly
or indirectly, to any director, officer, or other employee of the Company or to
anyone else, except as otherwise required by law. Therefore, feel completely
free to instruct the Trustee to vote your Shares in the manner you think best.
VOTING DEADLINE
47
Because of the time required to tabulate voting instructions from
participants before the Annual Meeting, the Trustee must establish a cut-off
date for receiving your instruction cards. The cut-off date established by the
Trustee is MAY 9, 1997. The Trustee cannot insure that instruction cards
received after the cut-off date will be tabulated. Therefore, it is important
that you act promptly and return your instruction card on or before MAY 9,
1997, in the envelope provided for your convenience. If the Trustee does not
receive timely instructions from you with respect to your Shares, the Trustee
will vote such Shares in the same manner, proportionately, as the shares in the
Plan as to which voting instructions have been received.
FURTHER INFORMATION
IF YOU ARE A DIRECT SHAREHOLDER OF A. H. BELO CORPORATION, YOU WILL
RECEIVE, UNDER SEPARATE COVER, PROXY SOLICITATION MATERIALS, INCLUDING THE
NOTICE OF THE 1997 ANNUAL MEETING AND PROXY STATEMENT. THEREFORE, THE PROXY
STATEMENT IS NOT INCLUDED IN THIS MAILING. INCLUDED WITH THE PROXY
SOLICITATION MATERIALS YOU WILL RECEIVE AS A DIRECT SHAREHOLDER IS A PROXY
CARD, WHICH YOU MUST USE TO VOTE YOUR DIRECTLY-OWNED SHARES. THAT CARD CANNOT
BE USED TO DIRECT THE VOTING OF SHARES HELD BY THE PLAN. YOU MUST USE THE
ENCLOSED VOTING INSTRUCTION CARD TO VOTE YOUR SHARES HELD BY THE PLAN.
If you have questions regarding the information provided to you, you
may contact the Trustee at the following toll-free number between 8:00 a.m. and
5:00 p.m. Pacific Time, Monday through Friday:
(800) 535-3093
Your ability to instruct the Trustee how to vote your Shares held in
the Plan 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 9, 1997
U.S. Trust Company of California, N.A.
as Trustee of
A. H. BELO CORPORATION
EMPLOYEE SAVINGS AND INVESTMENT PLAN