Robert W. Decherd

Chairman of the Board

Chief Executive Officer

 

April 3, 2007

 

Dear Fellow Shareholder:

 

We invite you to attend our annual meeting of shareholders that will be held on May 8, 2007 in The Pavilion of the Belo Mansion, at 2101 Ross Avenue, Dallas, Texas. At the meeting, you will hear a report on Belo’s operations and have a chance to meet your directors and executive officers. This package includes the formal notice, proxy statement, and proxy card for the meeting, together with our 2006 annual report.

 

The proxy statement tells you more about the agenda and voting procedures for the meeting. It also describes how the Board operates and provides information about our directors, including those nominated for election at this year’s meeting.

 

For those shareholders with access to the Internet, we encourage you to vote your shares over the Internet. Detailed instructions on how to vote over the Internet or by telephone are set out on the proxy card. Also, we encourage you to elect to receive future annual reports, proxy statements, and other materials over the Internet, by following the instructions in the proxy statement. This electronic means of communication is quick and convenient and could save the Company a substantial amount of money in printing and postage costs.

 

Whether or not you attend the meeting, we encourage you to vote your shares as soon as possible prior to the meeting either by returning your proxy card or by voting using the Internet or telephone voting procedures outlined in the enclosed materials. Even if you own only a few shares, it is important that your shares be represented at the meeting.

 

We hope to see you on May 8th.

 

Sincerely,

 

 

Belo Corp.  P. O. Box 655237 Dallas, Texas 75265-5237 Tel. 214.977.6606 Fax 214.977.6603

www.belo.com Deliveries: 400 South Record Street Dallas, Texas 75202-4841

 

Belo Corp.

P. O. Box 655237

Dallas, Texas 75265-5237

www.belo.com

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 8, 2007

 

 

To Belo Shareholders:

 

Please join us for the 2007 annual meeting of shareholders of Belo Corp.. The meeting will be held in The Pavilion of the Belo Mansion, at 2101 Ross Avenue, Dallas, Texas, on Tuesday, May 8, 2007, at 11:00 a.m., Dallas, Texas time. Refreshments will be served prior to the meeting, starting at 10:00 a.m..

 

At the meeting, the holders of Belo Series A common stock and Belo Series B common stock will act on the following matters:

 

 

All holders of record of shares of Belo Series A common stock and Belo Series B common stock at the close of business on March 16, 2007 are entitled to vote at the meeting or at any postponement or adjournment of the meeting.

 

By Order of the Board of Directors

 

GUY H. KERR

Secretary

 

April 3, 2007

 

TABLE OF CONTENTS

 

 

Belo Corp.

P. O. Box 655237

Dallas, Texas 75265-5237

www.belo.com

 

 

PROXY STATEMENT

 

 

For the Annual Meeting of Shareholders

To Be Held On May 8, 2007

 

This proxy statement contains information related to the annual meeting of shareholders of Belo Corp. to be held on Tuesday, May 8, 2007, beginning at 11:00 a.m., Dallas, Texas time, at The Pavilion of the Belo Mansion, 2101 Ross Avenue, Dallas, Texas, and any postponement or adjournment of the meeting.

 

This proxy statement and related proxy card will be distributed to shareholders beginning on or about April 3, 2007.

 

What is the purpose of the annual meeting?

 

At the annual meeting, shareholders will act on matters outlined in the accompanying notice, including the election of four directors, the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, voting upon a shareholder proposal relating to repeal of the classified Board of Directors, and any other matters properly brought before the meeting. Management will report on Belo’s performance in 2006 and respond to questions and comments from shareholders.

 

Who can attend the annual meeting?

 

Shareholders and guests of Belo may attend the annual meeting.

 

Who may vote at the meeting?

 

Only shareholders who owned Belo shares at the close of business on March 16, 2007, the record date, or their duly appointed proxies, are entitled to vote at the meeting. If you owned Belo shares at the close of business on March 16, 2007, you are entitled to vote all of the shares that you held on that date at the meeting, or any postponement or adjournment of the meeting. Our common stock is divided into two series: Series A common stock and Series B common stock. Holders of either series of common stock as of the close of business on the record date will be entitled to vote at the meeting. At the close of business on the record date, a total of 87,772,587 shares of Series A common stock and 14,426,021 shares of Series B common stock were outstanding and entitled to vote.

 

What are the voting rights of the holders of Series A common stock and Series B common stock?

 

Holders of Series A and Series B common stock vote together as a single class on all matters to be acted upon at the annual meeting. Each outstanding share of Series A common stock will be entitled to one vote on each matter. Each outstanding share of Series B common stock will be entitled to 10 votes on each matter.

 

What constitutes a quorum to conduct business at the meeting?

 

In order to carry on the business of the meeting, we must have a quorum present in person or by proxy. Both a majority of the voting power of the outstanding shares eligible to vote and at least one-third of the outstanding shares entitled to vote must be present at the meeting, in person or by proxy, in order to constitute a quorum.

 

Abstentions and broker non-votes are counted as present at the meeting for purposes of determining whether we have a quorum. A broker non-vote occurs when a broker or other nominee returns a proxy but does not vote on a

particular proposal because the broker or nominee does not have authority to vote on that particular item and has not received voting instructions from the beneficial owner.

 

How do I cast my vote?

 

You may vote by proxy, which gives the proxy holder the right to vote your shares on your behalf, or you may vote in person at the meeting.

 

You may receive more than one proxy card depending on how you hold your shares. Shares registered in your name and any shares held in your Belo Savings Plan account are covered by separate proxy cards. Shares held in the Belo Savings Plan may be voted only by the plan trustee. Also, if you hold shares indirectly through someone else, such as a broker, you may receive material from that person asking how you want to vote. It is important that you follow the instructions on each proxy card and vote the shares represented by each card separately.

 

How do I vote by proxy?

 

If you vote by proxy, you may vote online via the Internet, by telephone, or by completing and returning your enclosed proxy card in the envelope provided. All proxy cards that are properly completed and submitted will be voted as specified. However, if you sign, date, and return your proxy card but do not check any boxes, the shares represented by that card will be voted FOR all nominees standing for election as directors, FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, AGAINST the shareholder proposal relating to repeal of the classified Board, and, at the discretion of the proxy holders, on any other matter that properly may come before the meeting or any adjournment or postponement of the meeting.

 

If you want to vote using the Internet or telephone, please follow the instructions on each proxy card and have the proxy card available when you call in or access the voting site. In order to be included in the final tabulation of proxies, completed proxy cards must be received and votes cast using the Internet or telephone must be cast by the date and time noted on the card.

 

If your shares are held indirectly, your broker or nominee may not offer voting using the Internet or telephone. Please be certain to check your proxy card or contact your broker or nominee to determine available voting arrangements.

 

How do I vote in person?

 

You may vote in person by completing a ballot at the annual meeting. If you plan to vote in person but hold shares through a broker or other nominee, you must provide a legal proxy from the broker or nominee evidencing your authority to vote shares the broker held for your account at the close of business on March 16, 2007. You must contact your brokerage firm directly in advance of the annual meeting to obtain a legal proxy.

 

Blank ballots will be available at the registration table at the meeting. Completed ballots may be deposited at the registration table and a call for completed ballots will be made during the course of the meeting prior to the close of the polls.

 

Can I change my vote or revoke my proxy?

 

Yes. You may revoke your proxy (including an Internet or telephone vote) by:

 

 

If your shares are held through a broker or nominee, contact that broker or nominee if you wish to change your voting instructions.

 

Attendance at the meeting does not by itself revoke a previously granted proxy.

 

How do I vote my shares held in the Belo Savings Plan?

 

Only the plan trustee, Fidelity Management Trust Company, can vote the shares held by the Belo Savings Plan. If you participate in the Belo Savings Plan and had full shares of Belo common stock credited to your account as of the record date, you will receive a separate voting instruction card for the purpose of instructing the plan trustee how to vote your plan shares. You may instruct the trustee using the Internet or the telephone or by signing and returning your card in the envelope provided. You will not be able to vote these shares in person at the annual meeting.

 

Because of the time required to tabulate voting instructions from Belo Savings Plan participants before the annual meeting, the trustee must receive your voting instructions by May 6, 2007. If you sign, date, and return a card but do not check any boxes on the card, the trustee will vote your shares FOR all nominees standing for election as directors, FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, and AGAINST the shareholder proposal relating to repeal of the classified Board. In addition, at its discretion, the trustee of the Belo Savings Plan will be authorized to vote on any other matter that properly may come before the meeting or any adjournment or postponement of the meeting. If the trustee does not receive instructions from you by that date, the trustee will vote your shares in the same proportion as the shares in the Belo Savings Plan for which voting instructions have been received. You may revoke or modify previously given voting instructions by May 6, 2007, by filing with the trustee either a written notice of revocation or a properly completed and signed voting instruction card by that date.

 

What vote does the Board recommend?

 

The Board recommends a vote FOR all nominees standing for election as directors, FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, and AGAINST the shareholder proposal relating to repeal of the classified Board. With respect to any other matter that properly comes before the meeting, the proxy holders will vote in their own discretion.

 

What number of votes is required to approve each matter?

 

Ø  Election of directors — The affirmative vote of a plurality of the voting power represented at the annual meeting and entitled to vote is required for the election of directors. This means that the nominees receiving the highest number of votes cast for the number of positions to be filled are elected. You do not have the right to cumulate votes in the election of directors. In other words, you cannot multiply the number of shares you own by the number of directorships being voted on and then cast the total for only one candidate or among any number of candidates as you see fit. Broker non-votes have no effect on the outcome of the election. Votes that are instructed to be withheld with respect to the election of one or more directors will not be voted for the director or directors indicated, although they will be counted for purposes of determining whether a quorum is present.

 

Additionally, if an incumbent director does not receive the affirmative vote of at least a majority of the votes cast with respect to that director’s election at the annual meeting (which for this purpose includes votes cast “for” the director’s election and votes to withhold authority with respect to the director’s election), then that director is required to promptly tender his or her resignation and the Board will act on such resignation as provided in the Company’s Corporate Governance Guidelines, the applicable portion of which is attached to this proxy statement as Appendix A. All nominees standing for election at the 2007 annual meeting of shareholders are incumbent directors.

 

Ø  Ratification of appointment of independent registered public accounting firm  — The affirmative vote of a majority of the voting power represented at the annual meeting and entitled to vote is required to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the Company for 2007.

 

Ø  Shareholder proposal — The affirmative vote of a majority of the voting power represented at the annual meeting and entitled to vote is required to approve the shareholder proposal that the Board of Directors take the necessary steps to repeal the classified Board. The proposal, if approved by the shareholders, would not eliminate the classified Board. Instead, the proposal would be an advisory recommendation to the Board.

 

Ø  Other matters — Unless otherwise required by law or the Company’s Certificate of Incorporation, the affirmative vote of a majority of the voting power represented at the annual meeting and entitled to vote is required for other matters that may properly come before the meeting.

 

For matters requiring majority approval, abstentions have the effect of negative votes, meaning that abstentions will be counted in the denominator, but not the numerator, in determining whether a matter has received sufficient votes to be approved. Broker non-votes are not treated as shares entitled to vote on matters requiring majority approval and are excluded from the calculation. Therefore, broker non-votes have no effect on the outcome of the vote with respect to these matters.

 

Your proxy is being solicited on behalf of Belo’s Board of Directors. In addition to use of the mails, the solicitation may also be made by use of facsimile, the Internet or other electronic means, or by telephone or personal contact by directors, officers, employees, and agents of Belo. Belo pays the costs of this proxy solicitation.

 

We have hired Morrow & Co., Inc. to assist in soliciting proxies from beneficial owners of shares held in the names of brokers and other nominees, and have agreed to pay Morrow & Co., Inc. a fee of $7,500 plus its related costs and expenses. We also supply brokers, nominees and other custodians with proxy forms, proxy statements and annual reports for the purpose of sending proxy materials to beneficial owners. We reimburse brokers, nominees and other custodians for their reasonable expenses.

 

The following tables set forth information as of March 16, 2007, regarding the beneficial ownership of Belo common stock by our directors, nominees for election as director, the executive officers named in the Summary Compensation Table in the 2007 proxy statement, all directors and executive officers as a group, and by each person known to Belo to own more than 5% of the outstanding shares of Series A or Series B common stock. At the close of business on March 16, 2007, there were 87,772,587 Series A shares, 14,426,021 Series B shares, and 102,198,608 combined Series A and Series B shares issued and outstanding.

 

Under the rules of the Securities and Exchange Commission (the “SEC”), the beneficial ownership of a person or group includes not only shares held directly or indirectly by the person or group but also shares the person or group has the right to acquire within 60 days of the record date (to and including May 15, 2007) pursuant to exercisable options and convertible securities. The information below, including the percentage calculations, is based on beneficial ownership of shares rather than direct ownership of issued and outstanding shares.

 

Unless otherwise indicated, each person listed below has sole voting power and sole dispositive power with respect to the shares of common stock indicated in the table as beneficially owned by such person. Series A common stock has one vote per share and Series B common stock has 10 votes per share. Consequently, the voting power of Series B holders is greater than the number of shares beneficially owned. For example, the shares of Belo common stock beneficially owned by all directors and executive officers as a group, representing 17.2% of the outstanding shares of Series A and Series B common stock, have combined voting power of 60.0%.

 

 

 

 

 

 

 

 

 

 

The following table provides information regarding Series A and Series B common stock authorized for issuance under Belo’s equity compensation plans as of December 31, 2006:

 

 

 

 

Federal securities laws require that Belo’s executive officers and directors, and persons who own more than ten percent of a registered class of Belo common stock, file reports with the SEC within specified time periods disclosing their beneficial ownership of Belo common stock and any subsequent changes in beneficial ownership of Belo common stock. These reporting persons are also required to furnish us with copies of these reports. Based on information provided to us by these reporting persons, we believe that all filings required to be made by the reporting persons during 2006 were timely filed.

 

Belo’s bylaws provide that the Board of Directors is comprised of nine to 14 directors, divided into three classes, approximately equal in number, with staggered terms of three years so that the term of one class expires at each annual meeting. The bylaws further provide that a director will retire on the date of the annual meeting of shareholders next following his or her 68th birthday. As announced in July 2006, Roger Enrico, age 62, a Class II director, will retire from the Board on the date of the 2007 annual meeting. As a result of this event, the size of the board will decrease from 13 to 12.

 

The following candidates are nominated by the Board and each is an incumbent director. The independence of each director is addressed under “Corporate Governance — Director Independence”; see page 18. Class III directors will be eligible to serve a three-year term until the 2010 annual meeting.

 

Class III Directors (Current terms expire at the 2007 annual meeting)

 

 

The Board of Directors recommends a vote FOR Proposal One for the election of each of the nominees.

 

Information regarding our directors continuing in office is provided below.

 

Class I Directors (Terms expire at the 2008 annual meeting)

 

Class II Directors (Terms expire at the 2009 annual meeting)

 

 

Ernst & Young LLP served as our independent auditors for the fiscal year ended December 31, 2006. The Audit Committee has appointed Ernst & Young LLP to serve in such capacity for 2007, and, as a matter of good corporate governance, has determined to submit the appointment of Ernst & Young LLP for ratification by the shareholders. If the shareholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will consider the appointment of other independent registered public accounting firms.

 

Representatives of Ernst & Young LLP will be present at the annual meeting. They will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions presented at the annual meeting.

 

The table below sets forth the Ernst & Young LLP fees related to the audits of our financial statements for the fiscal years ended December 31, 2006 and December 31, 2005 and the reviews of our financial statements for the quarterly periods within those fiscal years, and all other fees Ernst & Young LLP has billed us for services rendered during the fiscal years ended December 31, 2006 and December 31, 2005:

 

 

The Audit Committee has adopted a policy and procedures that set forth the manner in which the Audit Committee will review and approve all services to be provided by Ernst & Young LLP before the firm is retained to provide such services. The policy requires Audit Committee pre-approval of the terms and fees of the annual audit services engagement, as well as any changes in terms and fees resulting from changes in audit scope or other items. The Audit Committee also pre-approves, on an annual basis, other audit services, and audit-related and tax services set forth in the policy, subject to estimated fee levels pre-approved by the committee. Any other services to be provided by the independent auditors must be separately pre-approved by the Audit Committee. In addition, if the fees for any pre-approved services are expected to exceed by 5% or more the estimated fee levels previously approved by the Audit Committee, the services must be separately pre-approved by the committee. As a general guideline, annual fees paid to the independent auditors for services other than audit, audit-related, and tax services should not exceed one half the dollar amount of fees to be paid for these three categories of services collectively. The Audit Committee has delegated to the committee chairman and other committee members the authority to pre-approve services in amounts up to $500,000 per engagement. Services pre-approved pursuant to delegated authority must be reported to the full committee at its next scheduled meeting. The Chief Financial Officer reports periodically to the Audit Committee on the status of pre-approved services, including projected fees. All of the services reflected in the above table were approved by the Audit Committee.

 

Vote Required for Approval

 

The affirmative vote of a majority of the voting power represented at the annual meeting and entitled to vote on this proposal is required for approval.

 

The Board of Directors recommends a vote FOR Proposal Two for the ratification of the appointment of Ernst & Young LLP as Belo’s independent registered public accounting firm.

 

William C. Thompson, Jr., Comptroller, City of New York, on behalf of the Boards of Trustees of the New York City Pension Funds, 1 Centre Street, Room 736, New York, New York 10007-2341, together owning as of November 20, 2006 approximately 258,979 shares of the Company’s common stock, has notified the Company that the boards of trustees of the New York City Employees’ Retirement System, the New York City Teachers’ Retirement System, the New York City Police Pension Fund, the New York City Fire Department Pension, and the New York City Board of Education Retirement System, intend to present the following proposal for consideration at the meeting. Belo’s Board of Directors opposes such shareholder proposal for the reasons set forth below.

 

“BE IT RESOLVED, that the stockholders of Belo Corporation request that the Board of Directors take the necessary steps to declassify the Board of Directors and establish annual elections of directors, whereby directors would be elected annually and not by classes. This policy would take effect immediately, and be applicable to the re-election of any incumbent director whose term, under the current classified system, subsequently expires.”

 

“SUPPORTING STATEMENT: We believe that the ability to elect directors is the single most important use of the shareholder franchise. Accordingly, directors should be accountable to shareholders on an annual basis. The election of directors by classes, for three-year terms, in our opinion, minimizes accountability and precludes the full exercise of the rights of shareholders to approve or disapprove annually the performance of a director or directors.”

 

“In addition, since only one-third of the Board of Directors is elected annually, we believe that classified boards could frustrate, to the detriment of long-term shareholder interest, the efforts of a bidder to acquire control or a challenger to engage successfully in a proxy contest.”

 

“We urge your support for the proposal to repeal the classified board and establish that all directors be elected annually.”

 

The Board of Directors unanimously recommends a vote AGAINST the proposal for the following reasons:

 

The Board and the Nominating and Corporate Governance Committee have given this proposal careful consideration and believe that it should not be implemented. Under the Company’s bylaws, the Board of Directors consists of three classes of directors with three-year staggered terms. One-third of the directors are elected each year. This classified structure has been in place since 1983 and has been and continues to be an integral part of the Company’s overall governance.

 

The Board and the Nominating and Corporate Governance Committee each review the Company’s selected corporate governance practices annually and have each concluded that the Company’s classified board structure continues to be in the best interests of the Company and its shareholders.

 

The Board and the Nominating and Corporate Governance Committee believe that a classified board is more advantageous to, and better serves the interests of, the Company and its shareholders than a board elected annually for the following reasons:

 

 

 

For these reasons, the Board of Directors recommends a vote AGAINST this shareholder proposal.

 

Introduction

 

Our Board periodically reviews and evaluates Belo’s corporate governance policies and practices in light of the Sarbanes-Oxley Act of 2002, SEC regulations implementing this legislation, corporate governance listing standards adopted by the New York Stock Exchange (“NYSE”), and evolving best practices. The Board has formalized its corporate governance guidelines, approved a code of business conduct and ethics applicable to Belo’s directors, management and other Belo employees, and adopted a charter for each Board committee. The Nominating and Corporate Governance Committee reviews Belo’s corporate governance guidelines and Board committee charters annually and recommends changes to the Board as appropriate. Our corporate governance documents are posted on our Web site at www.belo.com under “About Belo — Corporate Governance,” and are available in print, without charge, upon written or oral request to Belo Corp., Attention: Guy H. Kerr, Secretary, P.O. Box 655237, Dallas, Texas 75265-5237, (214) 977-6606. Belo’s corporate governance documents codify our existing corporate governance practices and policies.

 

To assist it in making determinations of a director’s independence, the Board has adopted independence standards, which are set forth in Belo’s corporate governance guidelines, the applicable portion of which is attached to this proxy statement as Appendix B. These standards incorporate the director independence criteria included in the NYSE listing standards, as well as additional, more stringent criteria established by the Board. The Board has determined that the following directors are independent under these standards: Henry Becton, Louis Caldera, France Córdova, Judy Craven, Roger Enrico, Larry Hirsch, Wayne Sanders, Bill Solomon, Anne Szostak, Lloyd Ward, and Don Williams. In assessing director independence, the Board considered in particular with respect to Bill Solomon, that he is the non-executive chairman of the board of Austin Industries, Inc., the parent company of an entity with which Belo entered into a construction contract in 2005. The Belo Board concluded, based on all the facts and circumstances, that this relationship (which is discussed in more detail under “Certain Relationships” below) is not a material relationship with Belo and does not affect Bill’s independence as a director. In determining the independence of Anne Szostak, the Board considered that her husband, Michael Szostak, is a sportswriter and columnist for The Providence Journal, a newspaper published by The Providence Journal Company, a subsidiary of Belo Corp.. The Board concluded, based on all the facts and circumstances, that this relationship is not a material relationship with Belo and does not affect Anne’s independence as a director. Each of the Audit, Compensation, and Nominating and Corporate Governance Committees is composed entirely of independent directors. In accordance with SEC requirements, NYSE listing standards and the independence standards set forth in Belo’s corporate governance guidelines, all members of the Audit Committee meet additional independence standards applicable to audit committee members.

 

The Board held five regularly-scheduled meetings in 2006. Each director attended at least 75% of the aggregate of (1) the total number of meetings held by the Board and (2) the total number of meetings held by all committees on which he or she served. Directors are expected to attend annual meetings of shareholders, and all of the current directors attended the 2006 Annual Meeting of Shareholders.

 

The Board convenes executive sessions of non-management directors without Company management at each regularly-scheduled meeting. In addition, the independent directors meet in executive session at least annually. The lead director is responsible for presiding at the executive sessions. The Board has designated Don Williams, the chairman of the Executive Committee, as the lead director. Board committee chairs preside at executive sessions of their respective committees.

 

The Board has the following committees:

 

Audit Committee.  The Audit Committee consists of Henry Becton (chairman), Louis Caldera, and Wayne Sanders. The Audit Committee is responsible for the appointment, compensation and oversight of the independent auditors. The Audit Committee also represents the Board in overseeing Belo’s financial reporting processes, and, as part of this responsibility, consults with our independent auditors and with personnel from Belo’s internal audit and financial staffs with respect to corporate accounting, reporting, and internal control practices. The Audit Committee met six times during 2006.

 

The Board has determined that each member of the Audit Committee meets both the SEC and the NYSE standards for independence. In addition, the Board has determined that at least two members of the Audit Committee, Henry Becton, chairman of the Audit Committee, and Wayne Sanders, meet the NYSE standard of having accounting or related financial management expertise and the SEC criteria of an “audit committee financial expert.”

 

Compensation Committee.  The Compensation Committee consists of Judy Craven (chair), Larry Hirsch, and Lloyd Ward, each of whom is an independent director under NYSE listing standards. The Compensation Committee evaluates the performance of the chief executive officer and sets his compensation level based on this evaluation. The Compensation Committee makes recommendations to the non-management members of the Board for base salaries of other executive officers and compensation for non-management directors, approves bonus levels and stock option awards for executive officers, and administers, among other plans, the Company’s 1995 Executive Compensation Plan, 2000 Executive Compensation Plan, 2004 Executive Compensation Plan (collectively, “Executive Compensation Plans”), The G. B. Dealey Retirement Pension Plan, Belo Savings Plan, and Belo Supplemental Executive Retirement Plan (“SERP”).

 

To assist the committee and management in assessing and determining appropriate, competitive compensation for our executive officers, the committee annually engages an outside compensation consultant. For 2006, Hewitt Associates LLC was retained for this purpose. The scope of Hewitt’s engagement was to provide ongoing recommendations regarding executive compensation consistent with Belo’s business needs, its pay philosophy, market trends and the latest legal and regulatory considerations; to provide market data as background to annual decisions regarding CEO and senior management base salary, bonus and long-term incentive amounts; to advise the committee as to best practices for working effectively with management while representing shareholders’ interests; and to provide other services as the committee may request. For additional information regarding the operation of the Compensation Committee, including the role of consultants and management in the process of determining the amount and form of executive compensation, see the Company’s Compensation Discussion and Analysis (CD&A) below. The Compensation Committee met six times during 2006.

 

Nominating and Corporate Governance Committee.  The Nominating and Corporate Governance Committee consists of Roger Enrico (chairman), France Córdova, and Bill Solomon, each of whom is an independent director under the NYSE listing standards. The responsibilities of the Nominating and Corporate Governance Committee include the identification and recommendation of director candidates and the review of qualifications of directors for continued service on the Board. The Nominating and Corporate Governance Committee also has responsibility for shaping Belo’s corporate governance practices, including the development and review of the corporate governance guidelines and the Board committee charters. The Nominating and Corporate Governance Committee met twice in 2006.

 

In evaluating director nominees, the Nominating and Corporate Governance Committee considers a variety of criteria, including an individual’s character and integrity; business, professional and personal background; skills; current employment; community service; and ability to commit sufficient time and attention to the activities of the Board. The committee considers these criteria in the context of the perceived needs of the Board as a whole and seeks to achieve a diversity of backgrounds and perspectives on the Board.

 

The Nominating and Corporate Governance Committee employs a variety of methods for identifying and evaluating director nominees. The committee reviews the size and composition of the Board as part of the

annual Board evaluation process and makes recommendations to the Board as appropriate. If vacancies on the Board are anticipated, or otherwise arise, the Nominating and Governance Committee considers various potential candidates for director. Candidates may come to the committee’s attention through current Board members, shareholders or other persons.

 

The policy of the Nominating and Corporate Governance Committee, as set forth in Belo’s corporate governance guidelines, is to consider shareholders’ recommendations for nominees when shareholders supply the information required for director nominations under the advance notice provisions of Belo’s bylaws. The committee evaluates shareholder-recommended nominees based on the same criteria it uses to evaluate nominees from other sources.

 

After the Nominating and Corporate Governance Committee identifies a potential candidate, there is generally a mutual exploration process, during which Belo seeks to learn more about a candidate’s qualifications, background, and level of interest in Belo, and the candidate has the opportunity to learn more about Belo. A candidate may meet with members of the Nominating and Corporate Governance Committee, other directors, and senior management. Based on information gathered during the course of this process, the Nominating and Corporate Governance Committee makes its recommendation to the Board. If the Board approves the recommendation, the candidate is nominated for election by Belo’s shareholders.

 

Executive Committee.  The Executive Committee consists of Don Williams (chairman), Henry Becton, Judy Craven, Roger Enrico, Dealey Herndon, and Anne Szostak. The Executive Committee reviews Belo’s long-range financial and strategic planning initiatives and has responsibility for senior executive succession planning. The committee met twice in 2006.

 

As described more fully in our written charter, which is posted on our Web site at www.belo.com under “About Belo — Corporate Governance,” the Audit Committee represents the Board in its oversight of Belo’s financial reporting processes. In this context, the Audit Committee has reviewed and discussed with management and Ernst & Young LLP, our independent auditors, Belo’s audited consolidated financial statements and the audit of the effectiveness of Belo’s internal control over financial reporting. The Audit Committee has discussed with Ernst & Young LLP various matters, including their judgments as to the quality of Belo’s accounting principles and other matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T. In addition, the Audit Committee has received from Ernst & Young LLP the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as adopted by the PCAOB in Rule 3600T, and discussed with them their independence from Belo and our management team.

 

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the audited consolidated financial statements be included in Belo’s annual report on Form 10-K for the fiscal year ended December 31, 2006, for filing with the SEC.

 

Respectfully submitted,

 

Audit Committee

Henry P. Becton, Jr., Chairman

Louis E. Caldera

Wayne R. Sanders

 

The Company has a process for shareholders and other interested parties to communicate with the Board. These parties may communicate with the Board by writing c/o the corporate Secretary, P.O. Box 655237, Dallas, Texas 75265-5237. Communications intended for a specific director or directors (such as the lead director or non-management directors) should be addressed to his, her or their attention c/o the corporate Secretary at this address. Communications received from shareholders are forwarded directly to Board members as part of the materials mailed in advance of the next scheduled Board meeting following receipt of the communications, although the Board has authorized management, in its discretion, to forward communications on a more expedited basis if circumstances warrant or to exclude a communication if it is illegal, unduly hostile or threatening, or similarly inappropriate. Advertisements, solicitations for periodical or other subscriptions, and other similar communications generally are not forwarded to the directors.

 

Belo’s executive officers are as follows:

 

 

 

 

The Compensation Committee (the “Committee”) of the Board of Directors oversees the Company’s overall compensation structure, policies and programs, and has responsibility for establishing, implementing and continually monitoring adherence to the Company’s compensation philosophy. The primary management liaisons to the Committee are the Company’s chief executive officer, Robert Decherd, and its senior vice president/Human Resources, Marian Spitzberg.

 

The Company has adopted compensation policies to achieve the following objectives:

 

 

To assist the Committee and management in assessing and determining appropriate, competitive compensation for our executive officers, the Committee annually engages an outside compensation consultant. Hewitt Associates LLC was retained for this purpose in 2006.

 

Surveys and Benchmarking.  The Company used several different compensation surveys to prepare 2006 compensation recommendations for consideration by the Committee. For base salary and total target cash compensation, the Company referenced the Towers Perrin Media Industry CDB Executive Compensation Database, referred to as the Towers Perrin Media Survey. The Towers Perrin Media Survey consisted of compensation survey information from 106 companies with media operations that include newspapers, television stations, television networks, magazines, radio stations, information publishing, and Internet/online services commonly classified as media. The median annual revenue for all participants in the Towers Perrin Media Survey was $373 million.

 

Belo identified 20 companies within the Towers Perrin Media Survey that share with the Company similar characteristics in terms of focus on media operations (i.e., newspaper, television stations, and Internet operations). Survey data from this group of peer companies, referred to as the Towers Perrin Peer Group, provides the Company with supplemental information for both base salary and total target cash compensation for the executive officers. The companies included in the Towers Perrin Peer Group, the median annual revenue of which is $5 billion, were:

 

 

Long-term incentive compensation recommendations are developed by the Company with reference to the Towers Perrin CDB Executive Compensation Database for General Industry participants, referred to as the Towers Perrin General Survey. The Company uses for comparison purposes a subset of 113 of the 350 companies that participate

in the Towers Perrin General Survey. The median annual revenue for this subset of companies was $1.9 billion. The Company believes that the larger sample pool of similarly-sized companies in the subset provides a better source of long-term incentive data than would be available by limiting such information strictly to the Towers Perrin Peer Group. Representative industries included in the Towers Perrin General Survey include aerospace/defense; automotive and transportation; chemicals; computers, hardware, software and services; consumer products; electronics and scientific equipment; food and beverage; metals and mining; oil and gas; pharmaceuticals; and telecommunications.

 

In addition, during 2006, the Committee’s compensation consultant provided the Company with a supplemental summary of compensation information from a select group of public media companies’ proxy filings, referred to as the Proxy Study, that provided total compensation information for their executive officers. The Company considers the companies in the Proxy Study to be similarly situated peer media companies that have operational characteristics similar to Belo. Company management uses the Proxy Study as a retrospective comparison of the average and 50th percentile compensation levels for similar industry executive officer positions. The companies included in the Proxy Study were:

 

 

Process and Role of Management.  The Company uses each of these referenced surveys to develop recommendations for base salary, short-term cash incentive compensation, and long-term incentive compensation for the Company’s executive officers, including the chief executive officer. These recommendations, which are developed with input from the Committee’s compensation consultant, are presented by Marian Spitzberg, our senior vice president/Human Resources, to our chief executive officer, Robert Decherd. Robert Decherd and Marian Spitzberg adjust these recommendations after taking into account each individual executive officer’s recent performance, as well as his or her experience, level of responsibility and contributions to the Company’s long-term goals during the current year. The final compensation recommendations, together with the compensation histories and the percentile rankings of the executive officers relative to the Towers Perrin Peer Group, are then presented to the Committee, which has full access to its compensation consultant, Robert Decherd, Marian Spitzberg and the Human Resources staff who were involved in the formulation of recommendations. After consideration of the recommendations and adequate opportunity to address specific questions and concerns, the Committee makes final compensation recommendations for the named executive officers, excluding the chief executive officer, to the non-management members of Belo’s Board of Directors for their approval. In its deliberations, the Board considers the compensation objectives and philosophy of the Company in light of the recommendations. Based on its review and analysis, the Board determines the final compensation to be awarded to each named executive officer, with the exception of the chief executive officer. The Committee evaluates and determines the chief executive officer’s compensation after following the same process. In this regard, the Committee reviews and receives the same peer group information, except that market data for chief executive officer compensation is provided to the Committee without any specific compensation recommendation.

 

Timing of Decisions.  The Compensation Committee has three regularly-scheduled meetings each year in or around February, July and December. The Committee may also have special meetings by telephone or in person periodically as necessary to address compensation issues that may arise from time to time. With respect to 2006 compensation for our executive officers, the Committee held the following regular meetings to review, discuss, and set or recommend compensation levels, as follows:

 

 

For the fiscal year ended December 31, 2006, the principal elements of compensation for named executive officers were:

 

 

The Committee administers the 2004 Executive Compensation Plan, as amended, which was approved by the Company’s shareholders. We refer to the Executive Compensation Plan as the ECP. The ECP provides for two elements of compensation: short-term cash incentives (performance bonus), and long-term equity-based compensation. Awards under the ECP are supplemental to an ECP participant’s base salary.

 

Officers of the Company and its subsidiaries, including Belo’s chief executive officer and its other executive officers, are eligible to participate in the ECP. Additional ECP participants are selected based on management’s evaluation of their ability to affect significantly the Company’s profitability.

 

Base Salary.  Base salaries for executive officers are reviewed annually. The Company gathers base salary data from the Towers Perrin Media Survey and the Towers Perrin Peer Group for compensation comparisons. The data provided by these two surveys includes certain statistical factors that make it possible to predict the median (50th percentile pay data) for both base salary and total target cash compensation.

 

The Company uses this survey data, along with the revenues earned by each executive officer’s organization, to prepare estimates of median pay for base salary and total target cash compensation for each executive officer, including the chief executive officer. Recommendations above the median may be made when warranted on account of an individual executive’s outstanding performance, promotion, retention concerns or market conditions. Recommendations below the median may also be made when warranted.

 

As discussed above, the Committee reviews the base salary recommendations and makes final recommendations to the Board, except with respect to the chief executive officer, for which the Committee has final approval. The 2006 base salaries of our executive officers listed in the Summary Compensation Table reflect a general increase in peer group median compensation in 2006 from 2005, as well as the February 2006 promotions of our vice chairman, our president/Media Operations and our executive vice president/Chief Financial Officer.

 

Annual Cash Incentive Opportunity.  Consistent with our objective of motivating and rewarding executives for achievement of the Company’s financial and non-financial performance objectives, each executive officer is eligible to receive annual incentive cash compensation based on financial performance objectives established in the annual financial plan (the Plan), approved by the Board at the beginning of each year. These performance goals are communicated to our executive officers at the beginning of each year. The financial performance objectives vary from year-to-year and reflect the cyclical nature of the Company’s businesses due to fluctuating advertising demand, for example, relating to election years, Olympics and other U.S. sports events, in addition to taking into consideration industry factors that include decreases in newspaper circulation, significant changes in demand for print classified advertising, changes in media usage habits by consumers and advertisers, and other competitive conditions, including recruiting and retaining talent.

 

The Committee establishes an annual performance-based incentive pool for each senior executive, as permitted by the ECP and in compliance with the performance-based compensation exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended, referred to as the Code. This performance pool (3% of Belo’s consolidated net income for Robert Decherd and 1.5% of Belo’s consolidated net income for each of Jack Sander, Dunia Shive, Dennis Williamson and Guy Kerr) provides a maximum for the award of cash and certain equity incentives, described below, and ensures full tax deductibility of the compensation awarded. The Compensation Committee has never awarded the full amount of the incentive pool to any executive officer.

 

Based upon 2006 financial performance, cash bonuses were awarded to senior executives by first considering the amounts that would have been paid to the senior executives under the method described below for calculating bonuses for other ECP participants. The Committee, in its discretion, may adjust the awards that are derived from that formula to take into consideration individual performance and potential, including achievement of non-financial objectives, scope of responsibility and their respective contributions toward Company performance.

 

Under the ECP, the Committee establishes a target bonus opportunity expressed as a percentage of base salary based on competitive market information using the Towers Perrin Media Survey. The Committee targets the median, or 50th percentile, of the Towers Perrin Media Survey and the Towers Perrin Peer Group for annual cash incentives. Target bonus opportunities for 2006 for each of the named executive officers were set as a percent of base salary as follows: Robert Decherd, 90%; Jack Sander, 75%; Dunia Shive, 65%; Dennis Williamson, 60%; and Guy Kerr, 50%. Target bonus opportunities for 2007 for each of the named executive officers are shown in the “Grants of Plan-Based Awards in 2006” table in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” column.

 

Actual bonus amounts earned by ECP participants may range from zero to a maximum bonus of 200 percent of the target bonus opportunity established by the Committee, depending on the level of achievement of Plan target. For 2006, the Committee approved financial performance ranges for Belo’s named executive officers based on the Company’s Plan, as shown in the table below. Payout for performance between points is prorated.

 

 

We believe that linking bonus opportunity directly to financial performance, with an opportunity to earn a 200% payout of target bonus amount if maximum performance is achieved, provides participants with significant motivation to achieve the Company’s financial objectives.

 

Actual EPS of $1.26 for the year ended December 31, 2006 was adjusted at the Committee’s discretion. The primary adjustments included the elimination of a one-time gain on the sale of an investment and credit for certain expenses associated with the optimization of technology supporting all of the Company’s operations and the impact of curtailment of The G. B. Dealey Retirement Pension Plan, referred to as the Pension Plan. The adjusted EPS of $1.31, which was approved by the Committee, was then compared to the EPS target of $1.27 and an achievement of 130.8% of target resulted.

 

A proposed cash bonus under the ECP formula was calculated for each executive officer by applying this achievement percentage to each individual’s target bonus opportunity. For example, in 2006, Robert Decherd’s base salary of $925,000 and target bonus percentage of 90% would qualify him for a target bonus payout of $832,500. Based upon actual 2006 financial performance equivalent to 130.8% of the targeted EPS of $1.27, Robert qualified for an annual performance bonus under the ECP formula of $1,088,700.

 

The Committee also assessed the performance of the executive officers against non-financial goals established at the beginning of 2006. Non-financial goals included initiatives to be taken by each individual within his or her area of responsibility to further the Company’s strategic objectives. Accordingly, based on the Company’s financial performance and each individual’s performance in achieving his or her non-financial objectives, our named executive officers earned cash incentive payments in respect of 2006 performance that were paid to the executives in the first quarter of 2007. The incentive payments are quantified below in the “Non-Equity Incentive Plan

Compensation” column of the Summary Compensation Table. Amounts in excess of the ECP formula are reflected in the “Bonus” column of the Summary Compensation Table and reflect a rounding upward of the named executive officer’s cash incentive award. Additionally, Dunia Shive’s amount reflects her recent promotion to president and Chief Operating Officer.

 

Long-Term Equity Incentive Compensation.  The Company awards long-term equity incentive grants, or LTI compensation, to executive officers as part of its overall compensation package. These awards are designed to offer competitive compensation that encourages the retention and motivation of key executives, and rewards them based upon market-driven results. The ECP provides the Committee with discretion to require performance-based standards to be met before awards vest; and in fact, the Committee set performance-based standards in connection with a portion of the 2006 LTI compensation awards. Since the ultimate value of the LTI compensation awards depends upon the performance of Belo common stock, the interests of the executive officers are aligned with the financial interests of Belo’s shareholders.

 

When determining the value of LTI compensation to be granted to executive officers, the Committee strives generally to set LTI compensation levels near the median of the Towers Perrin General Survey. The survey data is presented in terms of a multiple of an ECP participant’s (including an executive officer’s) base salary.

 

The resulting LTI compensation recommendations at the median level for executive officers other than Robert Decherd were then provided to Robert Decherd and Marian Spitzberg for their review and consideration. Based on their review of the information available for each of the executive officers, and after consideration of retention and succession planning issues and the performance and potential of each individual, an LTI compensation recommendation for each executive officer was prepared for the Committee’s review and approval. Market data for our chief executive officer’s long-term compensation was provided to the Committee without any recommended adjustment.

 

After the Committee determined each executive officer’s intended 2006 LTI compensation value, the Committee then also approved the allocation of the LTI compensation award among three types of equity instruments available under the ECP: stock options, time-based RSUs, referred to as TBRSUs, and performance-related RSUs, referred to as PBRSUs. The Company’s LTI equity awards are designed to meet its compensation objectives in three ways. First, stock options encourage and reward strong stock price performance, thus aligning the executive’s interests with those of shareholders. PBRSUs reward the achievement of the Company’s cumulative annual financial performance goals. Finally, TBRSUs encourage executives to remain with the Company and to focus on its long-term success.

 

The Company and Committee determined that for 2006, the Company’s long-term incentive objectives would be better served if awards to executive officers, other than the chief executive officer, consisted approximately of one-half PBRSUs and one-half TBRSUs. The PBRSUs provide performance-related pay, and the TBRSUs assist in retaining key leaders in a challenging business environment, and have a performance element as well. While the mix of equity instruments changed, the methodology for arriving at the overall intended value of each executive officer’s LTI award was unchanged from that described above.

 

The Committee deemed it unnecessary to change the elements of Robert Decherd’s LTI awards in light of his position with the Company as an executive officer, director and shareholder. As a result, Mr. Decherd was awarded stock options for 157,320 shares in December 2006, in addition to PBRSUs and TBRSUs discussed below.

 

Stock Option Awards.  Stock option awards are granted for shares of Belo Series B common stock at an exercise price equal to the closing market price of Belo’s Series A common stock on the date of grant. The option awards vest 40% on the first anniversary of the date of grant, an additional 30% on the second anniversary, and the remaining 30% on the third anniversary of the date of grant. All options expire on the tenth anniversary of the date of grant. The amounts in the Summary Compensation Table, under the column “Option Awards,” include the accounting expense recognized in 2006 by the Company in accordance with FAS 123R for prior year option grants to the named executive officers. See also the “Option Exercises and Stock Vested in 2006” table on page 37 for the amounts realized by the named executive officers from option exercises in 2006.

 

Time-Based Restricted Stock Unit Awards.  TBRSUs awarded to ECP participants, including executive officers, are based on continued employment with the Company and vest at the end of a three-year period. TBRSU awards

made to executive officers are granted out of a performance incentive pool amount set for each executive, as discussed previously. These awards are generally made in February following the year of grant when the Company’s financial performance for the prior fiscal year can be determined, the incentive pool amount established, and individual non-financial performance goals can be assessed.

 

In February 2006, the Company awarded TBRSUs under the ECP to the named executive officers in respect of 2005 performance, the grant date fair value of which are reported under the column “Grant Date Fair Value of Stock and Option Awards” in the “Grants of Plan-Based Awards in 2006” table. Additionally, the amounts in the Summary Compensation Table, under the column “Stock Awards,” include the accounting expense recognized in 2006 by the Company in accordance with FAS 123R for these TBRSU awards to the named executive officers. In February 2007, the Committee awarded a total of 123,720 TBRSUs to the named executive officers under the ECP based upon 2006 performance. The grant date fair value of these TBRSU awards approximates the grant date fair value of the target PBRSU awards granted on December 13, 2006 to the named executive officers. The PBRSU and TBRSU awards, and stock options awarded to Robert Decherd, were determined by the Committee to represent long-term incentive awards for the named executive officers that approximate the market median.

 

Performance-Related Restricted Stock Units.  PBRSUs may be awarded to ECP participants, including executive officers. These awards are earned based upon the same performance criteria, financial performance achievement levels, and payout levels established annually for short-term cash incentives. Once the actual number of PBRSUs earned is determined after the close of the fiscal year, the PBRSUs vest at a rate of 331/3% per year over a three-year period.

 

In December 2005, the Committee approved 2006 target level grants of PBRSUs for each executive officer, excluding our vice chairman, who retired effective December 31, 2006, and who instead was granted, in recognition of his outstanding contributions to the Company, additional TBRSUs, the vesting of which accelerated upon his retirement. In February 2007, the Company assessed the December 2005 target grant of PBRSUs against actual 2006 financial performance and PBRSUs were paid to executive officers at 130.8% of target. The amounts in the Summary Compensation Table, under the column “Stock Awards,” include the accounting expense recognized in 2006 by the Company in accordance with FAS 123R for PBRSU awards to the named executive officers. Additionally, the grant date fair value of PBRSU awards made in December 2006 in respect of 2007 financial performance is contained in the “Grants of Plan-Based Awards in 2006” table.

 

Retirement Benefits.  Retirement benefits are an important part of a competitive compensation program. The Company maintains the Belo Supplemental Executive Retirement Plan, or SERP, for key executives approved by the Committee, including the named executive officers. The Company’s SERP is an account-balance plan, and does not guarantee a specific benefit amount to participants. The primary purpose of the SERP is to provide to key executives retirement benefits that are intended to restore retirement benefits restricted by IRS limits on qualified plans, such as the Pension Plan and the Belo Savings Plan (401(k) Plan) in which our executive officers also participate. The Company makes annual contributions to the SERP on behalf of each of the executive officers. For additional discussion of the Pension Plan and the SERP, see “Post-Employment Benefits — Pension Plan” and “Non-Qualified Deferred Compensation — Supplemental Executive Retirement Plan” below.

 

The Company does not presently have any employment or parachute-type severance agreements with executive officers. However, compensation and benefits under the Company’s ECP and SERP may be affected by a change in control of the Company. Generally under these plans, a change-in-control event means the first of the following to occur, unless the Board has adopted a resolution stipulating that such event will not constitute a change in control for purposes of the applicable plan:

 

 

 

Following a change in control, ECP bonuses are paid in full at the higher of target or forecasted full-year results in the year of the change in control; stock options held by management, including sales executives and non-employee directors, become fully vested and are immediately exercisable; TBRSUs vest and are payable in full immediately; and PBRSUs vest at the higher of target or forecasted full-year results in the year of the change in control; and all vested units are payable in full immediately. Also, upon a change in control, the trust that holds assets to fund SERP benefits becomes irrevocable, and subject to the prior claims of the Company’s creditors, the assets of the trust may not be recovered by the Company until all SERP benefits have been paid. Because all Pension Plan participants are fully vested in their benefits under that plan, a change in control would have no effect upon participants’ benefits. In addition, the ECP provides for accelerated vesting of equity awards for terminating employees that meet the criteria for early retirement (age 55 or more with three years service). Belo’s named executive officers do not receive tax gross-up payments to compensate them for taxes incurred as a result of payments or benefits received in connection with a change in control or termination of employment.

 

In addition to the change-in-control provisions in these plans, the Company has general severance guidelines that may or may not be followed in any particular instance when an executive officer leaves the Company. These guidelines do not entitle executive officers to any specific severance benefit or amount of benefit in the event of termination of employment with the Company. For additional discussion, see “Termination of Employment and Change-in-Control Arrangements” and the “Potential Payments on Termination or Change-in-Control at December 31, 2006” table, below.

 

In accordance with its written charter adopted by our Board, the Compensation Committee has oversight of the Company’s overall compensation structure, policies and programs. In exercising its oversight responsibility, the Committee has retained an independent compensation consultant to advise the Committee regarding market and general compensation trends.

 

The Committee, after consultation with its compensation consultant, has reviewed and discussed the Compensation Discussion and Analysis with management, which has the responsibility for preparing the Compensation Discussion and Analysis. Based upon this review and discussion, the Committee recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2006.

 

COMPENSATION COMMITTEE

 

Judith L. Craven, M.D., M.P.H., Chair
Laurence E. Hirsch
Lloyd D. Ward

 

The following information summarizes annual and long-term compensation awarded to, earned by or paid to Belo’s principal executive officer, principal financial officer and its three other most highly-paid executive officers (the “named executive officers”) for services in all capacities to Belo for the fiscal year ended December 31, 2006.

 

 

 

 

 

 

 

The following table summarizes cash-based and equity awards that were granted under the ECP during 2006.

 

 

 

 

 

For 2006, the proportion of equity-based compensation in relation to total compensation, excluding changes in pension value and above-market interest from non-qualified deferred compensation plans, for each of the named executive officers was as follows: Robert Decherd 59%; Dennis Williamson 38%; Jack Sander 52%; Dunia Shive 39%; and Guy Kerr 36%. See Compensation Discussion and Analysis on page 24 of this proxy statement for a discussion of all components of total direct compensation and objectives for each element, both cash and equity-based awards.

 

The following table contains information on all equity awards that were outstanding as of December 31, 2006.