<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
{ X } ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1993
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-8598
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-0135890
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
P. O. BOX 655237
DALLAS, TEXAS 75265-5237
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 977-6606
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
SERIES A COMMON STOCK, $1.67 PAR VALUE NEW YORK STOCK EXCHANGE
PREFERRED SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act:
SERIES B COMMON STOCK, $1.67 PAR VALUE
(Title of Class)
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. { }
The aggregate market value of the registrant's voting stock held by
nonaffiliates on February 28, 1994 based on the closing price for the
registrant's Series A Common Stock on such date as reported on the New York
Stock Exchange, was approximately $823,474,630.*
Shares of Common Stock outstanding at February 28, 1994: 20,264,186 shares.
(Consisting of 14,531,341 shares of Series A Common Stock and 5,732,845 shares
of Series B Common Stock.)
* For purposes of this calculation the market value of a share of Series B
Common Stock was assumed to be the same as the share of Series A Common
Stock into which it is convertible.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's Proxy Statement sent to shareholders in regard
to the Annual Meeting of Shareholders to be held May 4, 1994 are incorporated
by reference into Part III (Items 10, 11, 12 and 13).
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A. H. BELO CORPORATION
FORM 10-K
TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C>
PART I
Item 1. Business 1
Item 2. Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters 7
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 8
Item 8. Financial Statements and Supplementary Data (see Index to Financial Statements
and Schedules below) 13
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 13
PART III
Item 10. Directors and Executive Officers of the Registrant 13
Item 11. Executive Compensation 13
Item 12. Security Ownership of Certain Beneficial Owners and Management 13
Item 13. Certain Relationships and Related Transactions 13
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 13
Signatures 19
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Report of Independent Auditors 21
Consolidated Statements of Earnings for the years ended December 31, 1993, 1992 and 1991 22
Consolidated Balance Sheets as of December 31, 1993 and 1992 23
Consolidated Statements of Shareholders' Equity for the years ended December 31, 1993, 1992
and 1991 25
Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1992 and 1991 26
Notes to Consolidated Financial Statements 27
Management's Responsibility for Financial Statements 38
Financial Statement Schedules:
Schedule V - Property, Plant and Equipment for the years ended December 31, 1993, 1992
and 1991 39
Schedule VI - Accumulated Depreciation of Property, Plant and Equipment for the
years ended December 31, 1993, 1992 and 1991 40
Schedule VIII - Valuation and Qualifying Accounts for the years ended December 31, 1993,
1992 and 1991 41
Schedule X - Supplementary Earnings Statement Information for the years ended
December 31, 1993, 1992 and 1991 42
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(i)
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PART I
ITEM 1. BUSINESS
A. H. Belo Corporation (the "Company" or "Belo") owns and operates
newspapers and network-affiliated television stations in five U.S. cities.
The Company traces its roots to The Galveston Daily News, which began
publishing in 1842. Incorporated in Texas in 1926, the Company was reorganized
as a Delaware corporation in 1987. (References herein to "Company" or "Belo"
mean A. H. Belo Corporation and its wholly-owned subsidiaries unless the
context otherwise specifies.)
The Company's principal newspaper is The Dallas Morning News. In addition,
the Company publishes eight community newspapers for certain suburbs in the
Dallas-Fort Worth metropolitan area. The Company also owns and operates
network-affiliated VHF television broadcast stations in Dallas-Fort Worth and
Houston, Texas; Sacramento-Stockton-Modesto, California;
Norfolk-Portsmouth-Newport News-Hampton, Virginia and Tulsa, Oklahoma.
Note 11 to the Consolidated Financial Statements, included on page 35 of
this document, contains information about the Company's industry segments for
the years ended December 31, 1993, 1992 and 1991.
NEWSPAPER PUBLISHING
The Company's wholly-owned subsidiary, The Dallas Morning News, Inc.,
publishes the Company's principal newspaper, The Dallas Morning News, each
morning, including Sunday. Published continuously since 1885, The Dallas
Morning News provides coverage of local, state, national and international
news. The Morning News is distributed throughout the Southwest, though its
circulation is concentrated primarily in the twelve counties surrounding Dallas
and Fort Worth: Collin, Dallas, Denton, Ellis, Henderson, Hood, Hunt, Johnson,
Kaufman, Parker, Rockwall and Tarrant counties.
The Dallas Morning News strives to serve the public interest by maintaining
a strong and independent voice in matters of public concern. It is the policy
of the Company to allocate such resources as may be necessary to maintain
excellence in news reporting and editorial comment in The Dallas Morning News.
The Dallas Morning News serves a large readership in its primary market.
Average paid circulation for the six months ended September 30, 1993, according
to the unaudited Publisher's Statement of the Audit Bureau of Circulations, an
independent agency, was 527,387 daily and 814,404 on Sunday, an increase of 2.5
percent and .6 percent, respectively, over the six months ended September 30,
1992, which were 514,342 daily and 809,188 on Sunday.
In December 1991, the Company's principal competitor, the Dallas Times
Herald (owned by Times Herald Printing Company), ceased operations and sold
substantially all of its assets to the Company for $55.7 million. The primary
daily newspaper competing with The Dallas Morning News in its marketing area is
the Fort Worth Star-Telegram, owned by Capital Cities/ABC, Inc.. The Dallas
Morning News also competes for advertising with television and radio stations
(including a television station owned and operated by the Company), magazines,
direct mail, cable television, billboards and other newspapers (including the
other newspapers owned and operated by the Company).
The basic material used in publishing The Dallas Morning News is newsprint.
The average unit price of newsprint consumed during 1993 was higher than that
of the prior year due to a market-wide increase in newsprint prices. At
present, newsprint is purchased from eight suppliers. During 1993, the
Company's three largest providers of newsprint provided approximately 65
percent of the annual requirements, but the Company is not dependent on any one
of these suppliers. Management believes its sources of newsprint, along with
alternate sources that are available, are adequate for its current needs.
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In January 1994, the Company restructured the operations of its
wholly-owned subsidiary, Dallas-Fort Worth Suburban Newspapers, Inc.. As part
of the restructuring, Dallas-Fort Worth Suburban Newspapers, Inc., was split
into two wholly-owned subsidiaries, DFW Suburban Newspapers, Inc., and DFW
Printing Company, Inc.. DFW Suburban Newspapers, Inc. will continue to publish
its six paid circulation newspapers for suburban communities in the Dallas-Fort
Worth metropolitan area. These publications are delivered one to two days a
week. In addition, two free newspapers are published once a week. Each of the
Company's community publications has its own sales, circulation, news and
editorial personnel, and several of the publications currently maintain
separate offices. All administrative functions, however, are centralized and
all of the newspapers are printed at a plant in Arlington, Texas. This plant
is owned and operated by DFW Printing Company, Inc., which in addition to
printing the suburban newspapers, conducts the Company's commercial printing
operations.
TELEVISION BROADCASTING
The following table lists relevant information about the Company's
television broadcasting stations:
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<CAPTION>
STATION, NUMBER OF
CHANNEL, DMA TELEVISION
MARKET AND NATIONAL EXPIRATION BROADCAST
NETWORK TV HOMES MARKET DATE OF STATIONS IN
AFFILIATION IN DMA (1) RANK (1) FCC LICENSE (2) MARKET (3)
- -------------- ------------ ---------- ---------------- ----------
<S> <C> <C> <C> <C>
WFAA-TV, Ch. 8 1,816,700 8th August 1, 1993 6 VHF
Dallas-Fort Worth, TX 9 UHF
(ABC)
KHOU-TV, Ch. 11 1,510,580 10th August 1, 1998 4 VHF
Houston, TX 8 UHF
(CBS)
KXTV, Ch. 10 1,099,950 19th December 1, 1993 4 VHF
Sacramento- 6 UHF
Stockton-Modesto, CA
(CBS)
WVEC-TV, Ch. 13 612,880 39th October 1, 1996 3 VHF
Norfolk-Portsmouth- 3 UHF
Newport News-Hampton, VA
(ABC)
KOTV, Ch. 6 456,430 59th June 1, 1993 5 VHF
Tulsa, OK 5 UHF
(CBS)
</TABLE>
_____________________________
(1) Designated Market Area ("DMA") is an exclusive geographic area
consisting of all counties in which the local stations receive a preponderance
of total viewing hours. DMA data, which is published by the A. C. Nielsen
Company ("Nielsen"), is a significant factor in determining television
advertising rates. All the information shown above is as of November 1993.
(2) Applications for renewal of the licenses for certain stations are
pending before the Federal Communications Commission, and the stations'
licenses are by statute continued in effect pending action thereon.
(3) The number of television broadcasting stations is as of November 1993
and is based on information published by Nielsen. In each of these markets,
one of the VHF stations indicated is a non-commercial public broadcasting
television station, except for Dallas-Fort Worth, where there are two VHF
stations that are non-commercial public broadcasting stations, and
Norfolk-Portsmouth-Newport News-Hampton, where there are no VHF non-commercial
public broadcasting stations. In addition, there is one UHF non-commercial
public broadcasting station in Norfolk- Portsmouth-Newport News-Hampton and one
in Tulsa.
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Affiliation with a television network can have a significant influence
on the revenues of a television station because the audience share drawn by a
network's programming can affect the rates at which a station can sell
advertising time. The Federal Communications Commission ("FCC") regulates
certain provisions of television station's network affiliation contracts. The
television networks compete for affiliations with licensed television stations
through program commitments and local marketing support. From time to time,
local television stations also solicit network affiliations on the basis of
their ability to provide a network better access to a particular market.
Generally, rates for national and local spot advertising sold by the
Company are determined by each station, which receives all of the revenues, net
of agency commissions, for that advertising. Rates are influenced both by the
demand for advertising time and the popularity of the station's programming.
Most advertising during network programs is sold by the networks, which pay
their affiliated stations negotiated fees for broadcasting such programs and
advertising.
The Company's television broadcast properties compete for advertising
revenues directly with other media such as newspapers (including those owned
and operated by the Company), billboard advertising, magazines, direct mail
advertising, radio, other television stations, cable television systems, and
indirectly, with motion picture theaters and other news and entertainment
media. The success of broadcast operations depends on a number of factors,
including the general strength of the national and local economy, the ability
to provide attractive programming, audience ratings, relative cost efficiency
in reaching audiences as compared to other advertising media, technical
capabilities and governmental regulations and policies.
Each of the three major television networks is represented in each
television market in which the Company has a television broadcast station.
Each of the markets is served by at least two other commercial VHF television
stations and at least two commercial UHF television stations. Competition for
advertising sales and local viewers within each market is intense, particularly
among the network-affiliated commercial VHF television stations. In the
Dallas-Fort Worth market, the other commercial VHF stations are owned by Argyle
Television Holdings, Inc., LIN Broadcasting Corporation and Gaylord
Entertainment Company. In Houston, the other commercial VHF stations are
owned by Capital Cities/ABC, Inc. and H & C Communications, Inc. (sale pending
to The Washington Post Company). In the Sacramento-Stockton-Modesto market,
Kelly Broadcasting Company and Continental Broadcasting Ltd. also own
commercial VHF stations. The Norfolk-Portsmouth-Newport News- Hampton market
is served by two other commercial VHF stations, one owned by LIN Broadcasting
Corporation and the other by Narragansett Capital Associates, L. P.. In the
Tulsa market, the two other commercial VHF stations are owned by Scripps Howard
Inc. and Perpetual Corporations Communications (Allbritton Communications
Company). Fox-affiliated stations also compete in each of Belo's markets for
advertising sales and local viewers. The Fox-affiliated stations in Belo's
broadcast markets are all commercial UHF television stations and are owned by
the following companies: Fox Television Stations, Inc., in Dallas-Fort Worth;
The Fox Network in Houston; Renaissance Communications in
Sacramento-Stockton-Modesto; WTVZ, Inc. in Norfolk-Portsmouth-Newport
News-Hampton; and Clear Channel Television in Tulsa.
REGULATION OF TELEVISION BROADCASTING
The Company's television broadcasting operations are subject to the
jurisdiction of the FCC under the Communications Act of 1934, as amended (the
"Act"). Among other things, the Act empowers the FCC to assign frequency
bands; determine stations' frequencies, location and power; issue, renew,
revoke and modify station licenses; regulate equipment used by stations; impose
penalties for violation of the Act or of FCC regulations; impose fees for
processing applications and other administrative functions; and adopt
regulations to carry out the Act's provisions. The Act also prohibits the
assignment of a broadcast license or the transfer of control of a broadcast
licensee without prior FCC approval. Under the Act, the FCC also regulates
certain aspects of the operation of cable television systems and other
electronic media that compete with broadcast stations.
The Act would prohibit the Company's subsidiaries from continuing as
broadcast licensees if record ownership or power to vote more than one-fourth
of the Company's stock were to be held by aliens or foreign governments or
their representatives, or if an officer or more than one-fourth of the
Company's directors were aliens.
Under the Act, television broadcast licenses may be granted for
maximum periods of five years and are renewable upon proper application for
additional five-year terms. Renewal applications are granted without hearing
if there are no competing applications or issues raised by petitioners to deny
such applications that would cause the
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FCC to order a hearing. A full comparative hearing is required if competing
applications are filed. A federal court of appeals has affirmed an FCC
decision that recognizes an incumbent licensee's "renewal expectancy" based on
substantial service to its community. The precise parameters of licensees'
renewal expectancies in comparative proceedings are ambiguous at the present
time. This ambiguity may lead to new FCC rules or policies as the result of
pending FCC rulemaking proceedings, or Congressional legislation reforming the
comparative renewal process.
Applications for renewal of broadcast licenses for three of the
Company's stations are pending before the FCC. The stations' licenses are by
statute continued pending action thereon. The current license expiration dates
for each of the Company's television broadcast stations are set forth in the
table under "Business-Television Broadcasting."
FCC rules limit the total number of television broadcast stations that
may be under common ownership, operation and control, or in which a single
person or entity may hold office or have more than a specified percentage of
voting power. FCC rules also place certain limits on common ownership,
operation and control of, or cognizable interests or voting power in, (a)
broadcast stations serving the same area, (b) broadcast stations and daily
newspapers serving the same area and (c) television broadcast stations and
cable systems serving the same area. The Company's ownership of The Dallas
Morning News and WFAA-TV, which are both located in the Dallas-Fort Worth area
and serve the same market area, predate the adoption of the FCC's rules
regarding cross-ownership, and the Company's ownership of The Dallas Morning
News and WFAA has been "grandfathered" by the FCC.
These FCC rules affect the number, type and location of newspaper,
broadcast and cable television properties that the Company might acquire in the
future. For example, under current rules, the Company could not acquire any
daily newspaper, broadcast or cable television properties in a market in which
it now owns or has an interest deemed attributable under Commission rules in a
television station, except that the Commission's rules provide that waivers of
their restrictions could be granted to permit the Company's acquisition of
radio stations in the Dallas, Houston and Sacramento markets. Under current
FCC regulations, and in light of the Company's current investments, the Company
could acquire outright two more television stations (not including "satellite"
television stations which rebroadcast all or most of a parent station's
programming) in other markets without disposing of any stations (provided the
number of television households in the sum of all Company-owned stations' Area
of Dominant Influence ("ADI") did not exceed 25 percent of the total television
households in the nation, counting only 50 percent of ADI households for UHF
stations). The FCC has instituted rulemaking proceedings looking toward
possible relaxation of certain of these rules regulating television station
ownership. The Company recently announced that it has reached an agreement in
principle to purchase WWL-TV in New Orleans, Louisiana. See Note 12 of Notes
to Consolidated Financial Statements on page 36. If the purchase is
consummated, the Company could acquire outright one more television station
under the parameters described above.
The FCC has significantly reduced its past regulation of broadcast
stations, including elimination of formal ascertainment requirements and
guidelines concerning amounts of certain types of programming and commercial
matter that may be broadcast. There are, however, FCC rules and policies, and
rules and policies of other federal agencies, that regulate matters such as
network-affiliate relations, cable systems' carriage of syndicated and network
television programming on distant stations, political advertising practices,
obscene and indecent programming, equal employment opportunity, application
procedures and other areas affecting the business or operations of broadcast
stations. The FCC has modified its rules which restrict network participation
in program production and syndication, an action which is the subject of
pending review proceedings. The Supreme Court has refused to review a lower
court decision that upheld FCC action invalidating most aspects of the Fairness
Doctrine, which had required broadcasters to present contrasting views on
controversial issues of public importance. The FCC may, however, continue to
regulate other aspects of fairness obligations in connection with certain types
of broadcasts. The FCC has adopted rules to implement the Children's
Television Act of 1990, which, among other provisions, limits the permissible
amount of commercial matter in children's television programs and requires each
television station to present educational and informational children's
programming.
The FCC has adopted various regulations to implement certain
provisions of the Cable Television Consumer Protection and Competition Act of
1992 ("1992 Cable Act") which, among other matters, includes provisions
respecting the carriage of television stations' signals by cable television
systems and requiring mid-license term review of television stations' equal
employment opportunity practices. Certain provisions of the 1992 Cable Act,
including the provisions respecting cable systems' carriage of local television
stations, are the subject of pending judicial review proceedings. The FCC has
also modified its rules to enable local telephone companies to provide a "video
dialtone" service that would be similar to the ordinary telephone dialtone and
would provide access for
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consumers to a wide variety of services including video programming. This
decision is the subject of pending judicial review proceedings.
Proposals for additional or revised regulations and requirements are
pending before and are being considered by Congress and federal regulatory
agencies from time to time. The FCC is at present considering modification or
elimination of rules respecting territorial exclusivity in non-network program
arrangements; rules relating to telephone company ownership of cable television
systems; and policies with respect to high definition television. The Company
cannot predict the effect of existing and proposed federal regulations and
policies on its broadcast business.
The foregoing does not purport to be a complete summary of all the
provisions of the Act or the regulations and policies of the FCC thereunder.
Also, various of the foregoing matters are now, or may become, the subject of
court litigation, and the Company cannot predict the outcome of any such
litigation or the impact on its broadcast business.
EMPLOYEE RELATIONS
As of December 31, 1993, the Company had 2,863 full-time employees.
There are 37 full-time and 17 part-time composing room employees of The Dallas
Morning News represented by a union. The union contract covering these
employees expires on June 19, 1994.
There are 28 full-time and one part-time television broadcasting
employees of WFAA-TV represented by a union under a contract that expires on
September 11, 1994.
ITEM 2. PROPERTIES
The Company's corporate offices and certain departments of The Dallas
Morning News are located in downtown Dallas in a portion of a 17-story office
building owned by the Company.
The Company owns and operates a newspaper printing facility in Plano,
Texas (the "North Plant"), in which eight high-speed offset presses are housed
to print The Dallas Morning News. Expansion of these facilities to accommodate
increased circulation and provide greater publishing flexibility was completed
during 1993.
The remainder of The Dallas Morning News' operations are housed in a
Company-owned five-story building in downtown Dallas. This facility is
equipped with computerized input and photocomposition facilities and other
equipment that is used in the production of both news and advertising copy.
DFW Suburban Newspapers, Inc. and DFW Printing Company, Inc.
operations are located at a Company-owned plant in Arlington, Texas. This
facility is pledged as security for certain industrial revenue bonds issued in
1985.
The studios and offices of WFAA-TV occupy Company-owned facilities in
downtown Dallas. The Company also owns 50 percent of the outstanding capital
stock of Hill Tower, Inc. ("Hill Tower"), owner of a 1,500-foot transmitting
tower and antennas located in Cedar Hill, Texas. The remaining 50 percent of
Hill Tower is owned by the CBS television affiliate in Dallas, a subsidiary of
Argyle Television Holdings, Inc.. This equipment is used by both WFAA and the
CBS television affiliate.
KHOU-TV operates from Company-owned facilities located in Houston.
The station's transmitter is located near DeWalt, Texas and includes a
2,000-foot tower. The facility is wholly-owned by the Company.
KXTV operates from Company-owned facilities located in Sacramento,
California. The station's 2,000-foot tower and transmitter system are located
in Sacramento County, California. The tower and transmitter building are owned
by a joint venture between the Company and a subsidiary of Anchor Media, Ltd.,
which owns and operates the ABC television affiliate in Stockton. KXTV leases
the transmitter site from the joint venture.
WVEC-TV operates from Company-owned facilities in Hampton and Norfolk,
Virginia. The Company-owned transmitting facilities include a 980-foot tower
and antenna in Driver, Virginia. WVEC also leases additional building space
adjacent to the Company-owned facilities, which houses the marketing and
business departments.
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KOTV operates from Company-owned facilities located in Tulsa,
Oklahoma. The station's transmitting system is located near Tulsa. The
transmitter site and 1,839-foot tower are owned by a joint venture between the
Company and Scripps Howard Inc., owner and operator of the NBC television
affiliate in Tulsa. The balance of KOTV's transmitting equipment is owned by
the station.
All of the foregoing subsidiaries have additional leasehold interests
that are used in their respective operations.
The Company also owns certain land and a building located near
downtown Dallas that were acquired from the Dallas Times Herald in December
1991. Sale of this property is expected to be completed in 1994.
The Company believes its properties are in good condition and well
maintained, and that such properties are adequate for present operations.
ITEM 3. LEGAL PROCEEDINGS
There are legal proceedings pending against the Company, including a
number of actions for alleged libel. In the opinion of management,
liabilities, if any, arising from these actions are either covered by insurance
or would not have a material adverse effect on the operations or financial
position of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this Form 10-K.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's authorized common equity consists of 150 million shares of
Common Stock, par value $1.67 per share. Currently, 50 million shares are
designated as Series A Common Stock and 15 million shares are designated as
Series B Common Stock. The Series A and Series B shares are identical in all
respects except that Series B shares are entitled to ten votes per share on all
matters submitted to a vote of shareholders, while the Series A shares are
entitled to one vote per share; transferability of the Series B shares is
limited to family members and affiliated entities of the holder; and Series B
shares are convertible at any time on a one-for-one basis into Series A shares.
Shares of the Company's Series A Common Stock are traded on the New York Stock
Exchange (NYSE symbol: BLC).
The following table lists the high and low closing prices and last sale
prices for Series A Common Stock as reported by the New York Stock Exchange for
the last two years.
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DIVIDEND
HIGH LOW CLOSE PAID
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<S> <C> <C> <C> <C>
1993
Fourth Quarter 53 44 1/4 53 .14
Third Quarter 49 5/8 45 1/4 46 3/8 .14
Second Quarter 48 3/4 39 3/4 46 3/4 .14
First Quarter 42 5/8 38 3/4 40 1/4 .14
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1992
Fourth Quarter 46 39 1/4 42 .14
Third Quarter 46 3/4 41 1/4 42 3/4 .14
Second Quarter 44 1/4 34 3/8 44 .13
First Quarter 38 1/2 30 3/4 35 .13
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</TABLE>
On February 28, 1994, the closing price for the Company's Series A Common
Stock, as reported on the New York Stock Exchange, was $52 1/4 and the
approximate number of shareholders of record of the Series A Common Stock at
the close of business on such date was 720. There is no established public
trading market for shares of Series B Common Stock, and such shares are subject
to significant restrictions on transfer. Series B shares, however, are
convertible at any time into Series A shares on a one-for-one basis. On
February 28, 1994, there were approximately 589 holders of record of shares of
Series B Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Dollars in thousands, except per share amounts 1993 1992 1991 1990 1989
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Newspaper publishing revenues $335,642 $314,701 $249,737 $246,493 $237,921
Broadcasting revenues 209,193 201,241 181,848 192,567 179,187
- ---------------------------------------------------------------------------------------------------------------
Net operating revenues $544,835 $515,942 $431,585 $439,060 $417,108
Net earnings (A) $ 51,077 $ 37,170 $ 12,392 $ 29,591 $ 23,394
Per share amounts:
Net earnings per common and
common equivalent share $ 2.53 $ 1.90 $ .65 $ 1.55 $ 1.16
Cash dividends declared $ .56 $ .54 $ .52 $ .48 $ .44
- ---------------------------------------------------------------------------------------------------------------
Total assets (B) $796,156 $758,527 $746,384 $694,255 $701,250
Long-term debt $277,400 $302,151 $337,100 $280,054 $291,011
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Net earnings for 1993 includes an increase of $6,599,000 (33 cents per
share) representing the cumulative effect of adopting Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes", effective January
1, 1993.
(B) In December 1991, the Company purchased substantially all of the
operating assets of the Dallas Times Herald newspaper for $55,673,000. Also
see accompanying Management's Discussion and Analysis of Financial Condition
and Results of Operations and Notes to Consolidated Financial Statements.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During 1993, net cash provided by operations was $84,818,000, compared to
$78,336,000 in 1992. Cash from operations continues to be Belo's primary
source of liquidity. The $6,482,000 increase in net cash provided by
operations from 1992 to 1993 resulted primarily from increased earnings and
lower payments for taxes. In 1993, cash provided by operations was sufficient
to fund capital expenditures and dividends on common stock and to make
unscheduled repayments of long-term debt. An additional $17,242,000 was
generated through the exercise of stock options in 1993, which was also used to
pay down debt.
At December 31, 1993, Belo had access to a $450,000,000 variable rate revolving
credit agreement on which borrowings at that time were $250,000,000. Belo also
uses short-term unsecured notes from time to time as a source of financing
temporary cash requirements, when rates are favorable. At December 31, 1993,
Belo had $21,000,000 of such short-term notes outstanding. On January 15,
1993, Belo retired its 9.45% Notes due in 1993 in the amount of $100,000,000 by
borrowing under its revolving credit agreement and in December 1993, another
$100,000,000 in 8 5/8% debt was redeemed, also with proceeds from the revolving
credit agreement.
During 1993, Belo entered into agreements that cap at 6 percent the interest on
$75,000,000 of variable rate borrowings. These agreements expire in 1996.
Capital expenditures in 1993 were $60,169,000 (excluding $1,961,000 of
capitalized interest) compared to $26,750,000 (excluding $395,000 of
capitalized interest) in 1992. Nearly 45 percent of these expenditures were
for the expansion of The Dallas Morning News' North Plant production facility.
The expansion project was substantially completed in the third quarter of 1993
and provides increased press capacity and greater publishing flexibility.
Other significant capital additions for 1993 include the replacement of the
news department computer system of The Dallas Morning News, expansion and
renovation of certain Belo broadcast station facilities and completion of a new
transmitter at the Virginia station. In addition, Belo purchased the building
in which its corporate offices and several departments of The Dallas Morning
News are located. The Company expects to finance future capital expenditures
using net cash generated from operations and, when necessary, bank borrowings.
Required future payments for capital expenditures in 1994 are $9,992,000 and
total capital expenditures in 1994 are expected to be approximately
$50,000,000.
Dividends of $11,128,000 were paid in 1993 compared to $10,381,000 in 1992.
These 1993 dividends represent a total of 56 cents per share of outstanding
Series A and Series B Common Stock. Dividends of 54 cents per share were paid
in 1992.
On December 31, 1993, Belo's ratio of long-term debt to total capitalization
was 44.5 percent, compared to 51.8 percent at the end of 1992. The improvement
in 1993 is primarily due to earnings in excess of dividend payments, funds
generated through the exercise of stock options, and a $25,000,000 reduction in
long-term debt.
In December 1993, the Board of Directors authorized purchases of up to
1,000,000 shares of the Company's Series A Common Stock from time to time. The
Company has the authority to purchase approximately 357,000 shares remaining
from a previous Board authorization. In addition, the Company has in place a
repurchase program authorizing the purchase of up to $2,500,000 of Company
stock annually.
Belo believes that its present financial condition and credit relationships
will enable it to adequately meet its current obligations and provide for
future growth.
8
<PAGE> 11
RESULTS OF OPERATIONS
Belo recorded 1993 net earnings of $51,077,000 or $2.53 per share, compared to
$37,170,000 ($1.90 per share) in 1992 and $12,392,000 (65 cents per share) in
1991. Earnings in 1993 were affected by certain nonrecurring items, including
a $6,599,000 increase (33 cents per share) representing the cumulative effect
of adopting Statement of Financial Accounting Standards ("SFAS") No. 109 in
January 1993. This increase was partially offset in the third quarter when
Belo recorded a $2,249,000 (11 cents per share) adjustment to deferred taxes
following an increase in the federal income tax rate from 34 percent to 35
percent. Also included in 1993 earnings is a fourth quarter restructuring
charge of $5,822,000 (19 cents per share), related primarily to the write-off
of goodwill and a reduction in the carrying value of production assets
associated with the newspaper operations of Dallas-Fort Worth Suburban
Newspapers, Inc. ("DFWSN"), a wholly-owned subsidiary of Belo. The production
assets adjusted include building and improvements and publishing equipment.
The restructuring decision was made in an effort to streamline operations and
reduce costs of DFWSN's newspaper publishing and commercial printing
operations. The restructuring was substantially completed in January 1994. In
the fourth quarter, Belo reversed certain music license fee accruals totaling
$3,349,000 (10 cents per share). This action was in response to an agreement
between the All Industry Television Music License Committee and the American
Society of Composers, Authors and Publishers, defining the formula used to
compute licensing fees for the use of certain music in television broadcasts
from 1984 to 1994. The formula was approved by a New York Federal District
Court Magistrate in the fourth quarter. Net earnings for 1993 excluding the
above special items were $2.40 per share.
In 1992, net earnings of $37,170,000 or $1.90 cents per share, included a
$4,019,000 (16 cents per share) increase in earnings before taxes from a
property damage settlement with the United States Navy. Excluding this
one-time gain, 1992 earnings were $1.74 per share.
Net earnings in 1991 were hampered by an overall weak economy, especially in
Texas, where Belo's three largest subsidiaries operate. Earnings for 1991 were
also affected by several items, including a favorable Internal Revenue Service
("IRS") settlement which increased net earnings by $6,787,000. Offsetting this
amount, however, were a number of unusual one-time charges, including a
$4,000,000 unfavorable judgment in a lawsuit against one of Belo's broadcast
subsidiaries; a $4,000,000 reserve for a note receivable related to a previous
asset sale; a $1,500,000 settlement of an antitrust lawsuit; a $1,384,000
provision for post-retirement benefits; a $1,259,000 write-down of certain
broadcast film contract rights; and $1,241,000 in early retirement charges.
The net effect on 1991 earnings of these unusual items was a decrease of 7
cents per share. Excluding these items, earnings for 1991 were 72 cents per
share.
Interest expense in 1993 was 37.8 percent less than 1992 interest expense. The
most significant contributing factor to the current year savings was lower
interest rates. In January 1993, Belo replaced $100,000,000 of 9.45 percent
notes with proceeds from the revolving credit agreement, which had an average
interest rate of 3.7 percent during 1993. A similar financing of debt took
place in December 1993, when $100,000,000 of 8 5/8 percent notes were redeemed
using proceeds from the revolving credit agreement. Also contributing to the
decrease in 1993 interest expense was Belo's lower average debt outstanding and
the capitalization of $1,961,000 of interest in 1993 versus 1992 capitalized
interest of $395,000. Interest expense in 1992 was relatively unchanged when
compared to 1991 interest expense.
Other income and expense in 1993 includes a $986,000 gain on the sale of two
parcels of non-operating real estate and several smaller, individually
insignificant items. As noted earlier, 1992's other income and expense
included a gain of $4,019,000 before taxes, related to a property damage
settlement with the United States Navy. Other income and expense for 1991
included the $4,000,000 reserve for a note receivable and $1,500,000 for the
settlement of an antitrust lawsuit.
The Company's effective tax rate in 1993 was 41.1 percent, which compares to
39.6 percent in 1992 and 33.4 percent in 1991. The effective rate in 1993 was
affected by an increase in the federal income tax rate, which resulted in an
increase in current tax expense and a $2,249,000 increase in deferred tax
expense to adjust deferred taxes to the 35 percent rate. The 1993 rate was
favorably impacted by the reversal of certain tax accruals as a result of new
tax legislation regarding amortization of intangibles. The effective rate in
1991 was favorably impacted by reversals of tax accruals related to IRS
settlements.
9
<PAGE> 12
NEWSPAPER PUBLISHING
In 1993, newspaper publishing revenues represented 61.6 percent of consolidated
revenues, compared to 61 percent in 1992 and 57.9 percent in 1991. The
composition of revenues in each of these three years was essentially the same,
with advertising accounting for approximately 87 percent, circulation 11
percent and other publishing revenues, primarily commercial printing, 2
percent.
Newspaper advertising volume for The Dallas Morning News, Belo's principal
newspaper, is measured in column inches. Volume for the last three years was
comprised as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Full-run ROP inches:
Classified 2,068.8 1,997.6 1,888.3
Retail 1,661.5 1,640.6 1,623.7
General 262.1 279.9 270.4
----------------------------------------------------------------------------------------------------
Total 3,992.4 3,918.1 3,782.4
----------------------------------------------------------------------------------------------------
</TABLE>
Total publishing revenues in 1993 were $335,642,000, up 6.7 percent from
revenues of $314,701,000 earned in 1992. Classified advertising revenues were
nearly 11 percent better than last year due to both linage and rate increases.
The increase in linage was primarily attributable to automotive and employment
advertising. Retail and general advertising revenues also improved in 1993
relative to 1992, primarily due to increased rates. Circulation revenues
increased 5.9 percent in 1993 primarily from a January 1, 1993 increase in the
price of a Sunday single-copy and the weekend subscription rate.
Revenues in 1992 of $314,701,000 improved 26 percent over 1991 revenues of
$249,737,000. Higher advertising volumes, combined with rate increases,
generated the 1992 advertising revenue improvement. Average circulation
increased by approximately 25 percent daily and 30 percent Sunday after the
December 1991 closure of the Dallas Times Herald. Based primarily on this
increased circulation, the Company announced a 15 percent rate increase across
substantially all advertising categories, effective on January 15, 1992.
Additional rate increases ranging from 6.5 percent to 11.5 percent were
announced in the third quarter of 1992. The Company also experienced volume
gains in all advertising categories, with the most significant increases in
general and classified advertising.
The Company believes that its advertising rates continue to compare favorably
with competing media and have not negatively affected advertising volumes.
Future demand for advertising in the Dallas-Fort Worth area will continue to
depend on general economic conditions of the Southwest region and the United
States as a whole. Management further believes that increased circulation from
the conversion of former Dallas Times Herald readers was substantially realized
in 1992. Thus, the ability of the Company to generate continued growth in
circulation and advertising revenues will likely depend on the ability of its
newspapers to compete successfully in the highly competitive Dallas-Fort Worth
media market, where numerous news and advertising alternatives are available.
In addition, various market and demographic factors, such as circulation and
readership trends, retail sales activity, inflation and population growth will
also affect future revenues.
Earnings from newspaper publishing operations in 1993 were $44,293,000 after a
$5,822,000 restructuring charge related to DFWSN. Excluding the restructuring
charge, earnings were $50,115,000, an increase of 16.6 percent from 1992.
While total publishing revenues increased 6.7 percent, operating expenses
(excluding the charge) increased only 5.1 percent, resulting in an operating
margin of 14.9 percent versus 13.7 percent in 1992. Salaries, wages and
employee benefits rose primarily as a result of merit increases and an increase
in the number of full-time employees. Newsprint expense was up due to both
increased consumption associated with the linage increase and a higher average
cost per ton. Contributing to the increase in linage was the publishing of
special sports sections in connection with the Dallas Cowboys' appearance in
the Super Bowl. The volume variance accounted for approximately 60 percent of
the overall increase in newsprint expense. In addition, expansion of delivery
routes resulted in increased distribution expenses. Depreciation expense was
higher in 1993 than in 1992 following the completion of The Dallas Morning News
North Plant expansion project. Partially offsetting these increases were
savings in outside services, bad debt expense and property taxes.
10
<PAGE> 13
Earnings from publishing operations increased to $42,974,000 in 1992 from
$21,417,000 in 1991, resulting in operating margins of 13.7 percent and 8.6
percent, respectively. Revenue increases outpaced higher operating costs,
resulting in operating margin improvement. The 1992 increase in salaries,
wages and employee benefits was from merit increases, more employees, higher
benefit costs and incentive bonuses. Newsprint consumed, and consequently
newsprint costs, were higher in 1992 compared to 1991 due to the increase in
circulation mentioned before. However, a significant decline in the average
price of newsprint in 1992 helped to mitigate the volume variance.
Amortization of intangibles was included in 1992 earnings from newspaper
publishing operations for the first time following the December 1991 purchase
of an intangible asset from the Dallas Times Herald.
BROADCASTING
Belo's five television broadcast subsidiaries contributed 38.4 percent of total
1993 revenues compared to 39 percent in 1992 and 42.1 percent in 1991.
Broadcast revenues for 1993 of $209,193,000 increased 4 percent over 1992
revenues of $201,241,000. In 1992, revenues improved 10.7 percent from the
$181,848,000 of the previous year. Broadcast revenues for the last three years
were derived as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
1993 1992 1991
--------------------------------------------------------------------------------
<S> <C> <C> <C>
National advertising 48% 47% 48%
Local advertising 42% 41% 41%
Other revenue 10% 12% 11%
--------------------------------------------------------------------------------
</TABLE>
The broadcast revenue mix has been relatively stable over the last three years,
with a slight variation in 1992 other revenue due to higher political
advertising.
Local and national advertising revenues in 1993 increased 6.2 percent and 6.6
percent, respectively, compared to 1992 revenues. Stations in Houston,
Virginia and Tulsa combined for an overall revenue gain of $9,266,000 while
Dallas station revenues were relatively flat and the California station
experienced a slight revenue decline. In 1993, all of Belo's broadcast
stations with the exception of the Dallas station experienced an increase in
local advertising revenues. National advertising revenues increased at all but
Belo's California station. Contributing factors to the 1993 improvements
include strong ratings performances, healthier local economies and competitive
pricing strategies. The industry categories contributing the most to
advertising revenues were restaurants, automobiles, department stores and
health care. Partially offsetting these revenue gains, however, were a
significant decrease in political advertising compared to 1992, a weaker
California economy and the effect of competitive forces.
The favorable revenue performance in 1992 compared to 1991 was due to improved
demand for both local and national advertising, combined with a higher than
expected volume of political advertising for national, state and local
elections. Political revenues in 1992 were $4,780,000 higher than in 1991,
accounting for 25 percent of the overall year-to-year increase. National and
local advertising increased by 9.8 percent and 9 percent, respectively, in 1992
from 1991. National advertising revenues were higher in 1992, due, in part, to
broadcast of the Super Bowl and Winter Olympics by Belo's three CBS-affiliated
stations.
Broadcast earnings from operations for 1993 were $63,240,000, including a
$3,349,000 increase related to the reversal of certain music license fee
accruals. Excluding the music license fee adjustment, earnings from broadcast
operations were $59,891,000 compared to $56,461,000 in 1992, an increase of 6.1
percent. In addition to the overall 4 percent increase in revenues, operating
costs increased only 3.3 percent, excluding the music license fee adjustment.
Contributing to the increase in 1993 expenses were higher salaries, wages and
employee benefits due to merit increases, higher benefit costs and an increase
in the number of employees in the broadcast division. Communications and
travel expenses were higher in 1993 than in 1992 due to coverage of significant
news stories, including the Dallas Cowboys' trip to the 1993 Super Bowl, the
Presidential Inauguration, and the Branch Davidian story in Waco, Texas.
These increases were partially offset by savings in 1993 programming expense.
Earnings from broadcast operations were $56,461,000 in 1992, compared with
$41,553,000 in 1991. The 1991 broadcast earnings were reduced by several
one-time charges, including a $4,000,000 charge for an unfavorable judgment in
an employment-related lawsuit, a $1,259,000 write-down of certain broadcast
film contract rights and a $788,000 charge for early retirement costs.
Excluding these items, comparable earnings increased by $8,861,000 in 1992 from
1991. The increase in broadcast earnings resulted from the $19,393,000
increase in revenues, partially offset by increases in salary and benefit costs
due to merit increases, health care expenses and incentive compensation.
11
<PAGE> 14
In recent years, the television broadcast industry has been affected by
increased competition for viewing audiences. Belo continues to compete
aggressively for advertisers and viewing audiences in markets that offer many
alternative media outlets. Future earnings growth will likely depend on the
ability to offer competitive audience delivery to advertisers and on general
economic conditions.
OTHER MATTERS
On February 23, 1994, Belo announced an agreement in principle to purchase the
assets of WWL-TV, the CBS affiliate in New Orleans, Louisiana for $110,000,000.
Belo intends to borrow funds from its revolving credit agreement to complete
the transaction. The transaction, which is subject to the signing of a
definitive agreement, as well as customary closing conditions, including
approval by appropriate government agencies, will be accounted for as a
purchase. The Company expects that a definitive agreement will be entered into
by early spring and that the transaction will be completed during the third
quarter of 1994.
At the end of 1993, Belo adjusted the discount rate used in computing the
accumulated pension benefit obligation from 9 percent to 7.5 percent and
changed the expected rate of return on plan assets from 11 percent to 10.25
percent. The effect of these changes is expected to increase 1994 pension
costs by approximately $2,000,000.
In 1993, the Financial Accounting Standards Board released SFAS No. 112,
"Employers' Accounting for Postemployment Benefits." The requirements of the
standard, which relate primarily to workers' compensation, disability,
severance pay and other benefits provided after employment but before
retirement, do not differ significantly from existing accounting practices
employed by the Company. Therefore, planned adoption of the standard in
January 1994 is not expected to significantly affect the Company's net
earnings.
In the Cable Television Consumer Protection and Competition Act of 1992,
Congress gave commercial broadcast stations new rights with respect to cable
television systems located in the television markets they serve. Under this
new law, each commercial broadcast station has the right, at its election,
either to demand that their signal be carried on local cable television systems
or, alternatively, to require these cable systems to obtain the station's
consent in order to retransmit the broadcast station's signal. The Company's
broadcast stations have elected the retransmission consent right with respect
to most local cable systems. The Company's broadcast stations have completed
agreements granting retransmission consent in exchange for various forms of
consideration with substantially all of the cable systems in the television
markets in which such stations are located. While some of these agreements are
short-term, expiring within the next few months, the Company anticipates that
it will be able to replace these with longer-term agreements before their
expiration.
The net effect of inflation on Belo's operations and net income has not been
material in the last few years because of a relatively low rate of inflation
during this period and because of efforts to lessen the effect of rising costs
through a strategy of improved productivity, cost control and, when warranted,
increased prices.
12
<PAGE> 15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report of
independent auditors and financial statement schedules, are included on pages
21 through 42 of this document. Financial statement schedules other than those
included have been omitted because the required information is contained in the
consolidated financial statements or related notes, or such information is not
applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth under the headings "Outstanding Capital
Stock and Stock Ownership of Directors and Principal Shareholders," "Executive
Officers of the Company" and "Election of Directors" contained in the
definitive Proxy Statement for the Company's Annual Meeting of Shareholders to
be held on May 4, 1994, is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under the heading "Executive Compensation
and Other Matters" and "Election of Directors" contained in the definitive
Proxy Statement for the Company's Annual Meeting of Shareholders to be held on
May 4, 1994, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth under the heading "Outstanding Capital Stock
and Stock Ownership of Directors and Principal Shareholders" in the definitive
Proxy Statement for the Company's Annual Meeting of Shareholders to be held on
May 4, 1994, is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the headings "Executive Compensation
and Other Matters" and "Election of Directors" contained in the definitive
Proxy Statement for the Company's Annual Meeting of Shareholders to be held on
May 4, 1994, is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) The financial statements listed in the Index to Financial
Statements and Schedules included in the Table of Contents are
filed as part of this report.
(2) The schedules listed in the Index to Financial Statements and
Schedules included in the Table of Contents are filed as part
of this report.
(3) Exhibits
Certain of the exhibits to this report are hereby incorporated
by reference, as specified:
13
<PAGE> 16
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report on Form
10-K dated March 19, 1992 (the "1991 Form 10-K"))
3.2 Certificate of Correction to Certificate of Incorporation dated
May 13, 1987 (incorporated by reference to Exhibit 3.2 to the
Company's Annual Report on Form 10-K dated March 18, 1993 (the
"1992 Form 10-K"))
3.3 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated April 16, 1987
(incorporated by reference to Exhibit 3.3 to the 1991 Form 10-K)
3.4 Certificate of Amendment of Certificate of Incorporation of the
Company dated May 4, 1988 (incorporated by reference to Exhibit
3.4 to the 1992 Form 10-K)
3.5 Amended Certificate of Designation of Series A Junior
Participating Preferred Stock of the Company dated May 4, 1988
(incorporated by reference to Exhibit 3.5 to the 1992 Form 10-K)
3.6 Certificate of Designation of Series B Common Stock of the
Company dated May 4, 1988 (incorporated by reference to Exhibit
3.6 to the 1992 Form 10-K)
3.7 Bylaws of the Company, effective December 16, 1992 (incorporated
by reference to Exhibit 3.7 to the 1992 Form 10-K)
4.1 Certain rights of the holders of the Company's Common Stock are
set forth in Exhibits 3.1-3.6 above
4.2 Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (incorporated by reference to
Exhibit 4.2 to the 1992 Form 10-K)
4.3 Specimen Form of Certificate representing shares of the
Company's Series B Common Stock (incorporated by reference to
Exhibit 4.3 to the Company's Annual Report on Form 10-K dated
March 20, 1989)
4.4 Form of Rights Agreement, dated March 10, 1986 between the
Company and RepublicBank Dallas, National Association as Rights
Agent, which includes as Exhibit B thereto the Form of Right
Certificate (incorporated by reference to Exhibit 4.8 to the
1991 Form 10-K)
4.5 Supplement No. 1 to Rights Agreement (incorporated by reference
to Exhibit 4.9 to the 1991 Form 10-K)
4.6 Supplement No. 2 to Rights Agreement (incorporated by reference
to Exhibit 4.9 to the 1992 Form 10-K)
4.7 Supplement No. 3 to Rights Agreement (incorporated by reference
to Exhibit 4.10 to the 1992 Form 10-K)
4.8 Supplement No. 4 to Rights Agreement dated December 12, 1988
substituting Manufacturers Hanover Trust Company as Rights Agent
4.9 Supplement No. 5 to Rights Agreement (incorporated by reference
to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 1993)
10.1 Contracts relating to television broadcasting:
(1) Contract for Affiliation between KOTV in Tulsa,
Oklahoma and CBS, with Network Affiliation Consent
(incorporated by reference to Exhibit 10.1(1) to the
1991 Form 10-K)
(2) Contract for Affiliation between KHOU-TV in Houston,
Texas and CBS, with Network Affiliation Consent
(incorporated by reference to Exhibit 10.1(2) to the
1991 Form 10-K)
14
<PAGE> 17
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(3) Letter Amendment, dated June 11, 1993, to Contract
for Affiliation between KHOU-TV in Houston, Texas and
CBS
(4) Contract for Affiliation between KXTV in Sacramento,
California and CBS (incorporated by reference to
Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended March 31,
1993 (the "First Quarter 1993 Form 10-Q"))
(5) Contract for Affiliation between WFAA-TV in Dallas,
Texas and ABC, with Network Affiliation Consent
(incorporated by reference to Exhibit 10.1(4) to the
Company's Annual Report on Form 10-K dated March 28,
1991 (the "1990 Form 10-K"))
(6) Rider One to Contract for Affiliation between WFAA-TV
in Dallas, Texas and ABC (incorporated by reference
to Exhibit 10.1 to the First Quarter 1993 Form 10-Q)
(7) Contract for Affiliation between WVEC-TV in
Hampton-Norfolk, Virginia and ABC, with Network
Affiliation Consent (incorporated by reference to
Exhibit 10.1(5) to the 1991 Form 10-K)
10.2 Contracts relating to newspaper publication:
(1) Founding agreement dated July 28, 1987 between the
Company and Newsprint South, Inc. for newsprint
supply (incorporated by reference to Exhibit 10.2(2)
to the 1990 Form 10-K)
(2) Amendment to the founding agreement dated June 30,
1990 between the Company and Newsprint South, Inc.
for newsprint supply (incorporated by reference to
Exhibit 10.2(3) to the 1990 Form 10-K)
10.3 (1) Management Security Plan (incorporated by reference
to Exhibit 10.4(1) to the 1991 Form 10-K)
(2) Stock Option Plan (incorporated by reference to
Exhibit 10.4(2) to the 1991 Form 10-K)
(3) Amendment to Stock Option Plan by the Compensation
Committee of the Board of Directors (incorporated by
reference to Exhibit 10.4(3) to the 1991 Form 10-K)
(4) Amendments to Stock Option Plan (incorporated by
reference to Exhibit 10.4(4) to the 1991 Form 10-K)
(5) Amendment to Stock Option Plan dated December 19,
1986 (incorporated by reference to Exhibit 10.4(5) to
the 1991 Form 10-K)
(6) Amendment to Stock Option Plan dated February 22, 1989
(7) 1986 Long-Term Incentive Plan (incorporated by
reference to Exhibit 10.4(7) to the 1991 Form 10-K)
(8) Amendment No. 1 to 1986 Long-Term Incentive Plan
dated October 22, 1986 (incorporated by reference to
Exhibit 10.4(8) to the 1991 Form 10-K)
(9) Amendment No. 2 to 1986 Long-Term Incentive Plan
effective January 1, 1987 (incorporated by reference
to Exhibit 10.3(9) to the 1992 Form 10-K)
(10) Amendment No. 3 to 1986 Long-Term Incentive Plan
dated May 4, 1988
15
<PAGE> 18
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(11) Amendment No. 4 to 1986 Long-Term Incentive Plan dated May
13, 1988
(12) Amendment No. 5 to 1986 Long-Term Incentive Plan dated
February 22, 1989
(13) Amendment No. 6 to 1986 Long-Term Incentive Plan dated May
6, 1992 (incorporated by reference to Exhibit 10.3(13) to
the 1992 Form 10-K)
(14) The A. H. Belo Corporation Employee Savings and Investment
Plan (incorporated by reference to Exhibit 10.4(13) to the
Company's Annual Report on Form 10-K dated March 27, 1990
(the "1989 Form 10-K"))
(15) First Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan, dated January 29, 1992
(incorporated by reference to Exhibit 10.3(15) to the 1992
Form 10-K)
(16) Second Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan, dated October 22, 1992
(incorporated by reference to Exhibit 10.3(16) to the 1992
Form 10-K)
(17) Third Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan (incorporated by reference to
Exhibit 10.2 to the First Quarter 1993 Form 10-Q)
(18) Fourth Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan (incorporated by reference to
Exhibit 4.14 to Post-Effective Amendment No. 1 to Form S-8
(Registration No. 33-30994))
(19) Fifth Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan
(20) The G. B. Dealey Retirement Pension Plan (as amended and
restated effective January 1, 1988)
(21) First Amendment to the G. B. Dealey Retirement Pension Plan
(22) Second Amendment to the G. B. Dealey Retirement Pension Plan
(23) Third Amendment to the G. B. Dealey Retirement Pension Plan
(24) Fourth Amendment to the G. B. Dealey Retirement Pension Plan
(25) Fifth Amendment to the G. B. Dealey Retirement Pension Plan
(26) Master Trust Agreement, effective as of July 1, 1992,
between A. H. Belo Corporation and Mellon Bank, N. A.
(27) A. H. Belo Corporation Supplemental Executive Retirement
Plan
(28) Trust Agreement dated February 28, 1994, between the
Company and Mellon Bank, N. A.
(29) Summary of A. H. Belo Corporation Executive Compensation
Program (incorporated by reference to Exhibit 10.3(18) to
the 1992 Form 10-K)
(30) Employment and Consultation Agreement between A. H. Belo
Corporation and James P. Sheehan (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1993)
10.4 (1) Credit Agreement dated October 27, 1988, between the
Company and The First National Bank of Chicago as Managing
Agent (incorporated by reference to Exhibit 10.4(1) to the
1992 Form 10-K)
16
<PAGE> 19
EXHIBIT
NUMBER DESCRIPTION
------- -----------
(2) Amendment No. 1 to 1988 Credit Agreement between the
Company and The First National Bank of Chicago as
Managing Agent dated November 8, 1989 (incorporated
by reference to Exhibit 10.5(4) to the 1990 Form
10-K)
(3) Amendment No. 2 to 1988 Credit Agreement between the
Company and The First National Bank of Chicago as
Managing Agent dated April 24, 1991 (incorporated by
reference to Exhibit 10.5(5) to the 1991 Form 10-K)
(4) Amendment Agreement dated May 14, 1992, between the
Company and The First National Bank of Chicago as
Managing Agent (incorporated by reference to Exhibit
10.4(4) to the 1992 Form 10-K)
(5) Amendment Agreement dated November 6, 1992, between
the Company and The First National Bank of Chicago as
Managing Agent (incorporated by reference to Exhibit
10.4(5) to the 1992 Form 10-K)
(6) Loan Agreement dated October 1, 1985, between City of
Arlington Industrial Development Corporation and
Dallas-Fort Worth Suburban Newspapers, Inc.
(incorporated by reference to Exhibit 10.5(2) to the
1991 Form 10-K)
(7) Letter of Credit and Reimbursement Agreement dated as
of June 2, 1987, between Dallas-Fort Worth Suburban
Newspapers, Inc. and The Sanwa Bank, Limited, Dallas
Agency covering $6,400,000 City of Arlington
Industrial Development Corporation Industrial
Development Revenue Bonds (incorporated by reference
to Exhibit 10.5(3) to the 1991 Form 10-K)
(8) Amendment and Waiver Agreement dated as of December
30, 1992, by and between the Company and The Sanwa
Bank, Limited, Dallas Agency (incorporated by
reference to Exhibit 10.4(8) to the 1992 Form 10-K)
10.5 Joint Venture Agreement dated August 1, 1989, between the
Company and Universal Press Syndicate (incorporated by
reference to Exhibit 10.6 to the 1989 Form 10-K)
21 Subsidiaries of the Company
23 Consent of Ernst & Young
Executive Compensation Plans and Arrangements:
Management Security Plan--1991 Form 10-K, Exhibit 10.4(1)
Stock Option Plan--1991 Form 10-K, Exhibit 10.4(2)
Amendment to Stock Option Plan by the Compensation Committee of the Board of
Directors--1991 Form 10-K, Exhibit 10.4(3)
Amendments to Stock Option Plan--1991 Form 10-K, Exhibit 10.4(4)
Amendment to Stock Option Plan dated December 19, 1986--1991 Form 10-K,
Exhibit 10.4(5)
Amendment to Stock Option Plan dated February 22, 1989--filed herewith as
Exhibit 10.3(6)
1986 Long-Term Incentive Plan--1991 Form 10-K, Exhibit 10.4(7)
17
<PAGE> 20
Amendment No. 1 to 1986 Long-Term Incentive Plan dated October 22, 1986--
1991 Form 10-K, Exhibit 10.4(8)
Amendment No. 2 to 1986 Long-Term Incentive Plan effective January 1, 1987--
1992 Form 10-K, Exhibit 10.3(9)
Amendment No. 3 to 1986 Long-Term Incentive Plan dated May 4, 1988--filed
herewith as Exhibit 10.3(10)
Amendment No. 4 to 1986 Long-Term Incentive Plan dated May 13, 1988--filed
herewith as Exhibit 10.3(11)
Amendment No. 5 to 1986 Long-Term Incentive Plan dated February 22, 1989
--filed herewith as Exhibit 10.3(12)
Amendment No. 6 to 1986 Long-Term Incentive Plan dated May 6, 1992--1992
Form 10-K Exhibit 10.3(13)
The A. H. Belo Corporation Employee Savings and Investment Plan--1989 Form
10-K, Exhibit 10.4(13)
First Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan, dated January 29, 1992--1992 Form 10-K, Exhibit 10.3(15)
Second Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan, dated October 22, 1992--1992 Form 10-K, Exhibit 10.3(16)
Third Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan--First Quarter 1993 Form 10-Q, Exhibit 10.2
Fourth Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan--Post-Effective Amendment No. 1 to Form S-8, Exhibit 4.14
Fifth Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan--filed herewith as Exhibit 10.3(19)
The G. B. Dealey Retirement Pension Plan (as amended and restated effective
January 1, 1988)--filed herewith as Exhibit 10.3(20)
First Amendment to the G. B. Dealey Retirement Pension Plan--filed herewith
as Exhibit 10.3(21)
Second Amendment to the G. B. Dealey Retirement Pension Plan--filed
herewith as Exhibit 10.3(22)
Third Amendment to the G. B. Dealey Retirement Pension Plan--filed herewith
as Exhibit 10.3(23)
Fourth Amendment to the G. B. Dealey Retirement Pension Plan--filed
herewith as Exhibit 10.3(24)
Fifth Amendment to the G. B. Dealey Retirement Pension Plan--filed herewith
as Exhibit 10.3(25)
A. H. Belo Corporation Supplemental Executive Retirement Plan--filed
herewith as Exhibit 10.3(27)
Summary of A. H. Belo Corporation Executive Compensation Program--1992 Form
10-K, Exhibit 10.3(18)
Employment and Consultation Agreement between A. H. Belo Corporation and
James P. Sheehan--Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1993, Exhibit 10.1
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
18
<PAGE> 21
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
A. H. BELO CORPORATION
By: /s/ Robert W. Decherd
Robert W. Decherd
Chairman of the Board, President
& Chief Executive Officer
Dated: March 18, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/Robert W. Decherd Chairman of the Board, President March 18, 1994
Robert W. Decherd & Chief Executive Officer
/S/Ward L. Huey, Jr. Vice Chairman of the March 18, 1994
Ward L. Huey, Jr. Board and President of the
Company's Broadcast Division
/S/Burl Osborne Director, Publisher March 18, 1994
Burl Osborne and Editor of The Dallas
Morning News, Inc.
/S/John W. Bassett, Jr. Director March 18, 1994
John W. Bassett, Jr.
/S/Judith L. Craven, M.D., M.P.H. Director March 18, 1994
Judith L. Craven, M.D., M.P.H.
/S/Joe M. Dealey Director and Former March 18, 1994
Joe M. Dealey Chairman of the Board
/S/Dealey D. Herndon Director March 18, 1994
Dealey D. Herndon
/S/Lester A. Levy Director March 18, 1994
Lester A. Levy
/S/Arturo Madrid, Ph.D. Director March 18, 1994
Arturo Madrid, Ph.D.
</TABLE>
19
<PAGE> 22
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/James M. Moroney, Jr. Director and Former March 18, 1994
James M. Moroney, Jr. Chairman of the Board
/S/Reece A. Overcash, Jr. Director March 18, 1994
Reece A. Overcash, Jr.
/S/Hugh G. Robinson Director March 18, 1994
Hugh G. Robinson
/S/William H. Seay Director March 18, 1994
William H. Seay
/S/William T. Solomon Director March 18, 1994
William T. Solomon
/S/Thomas B. Walker, Jr. Director March 18, 1994
Thomas B. Walker, Jr.
/S/J. McDonald Williams Director March 18, 1994
J. McDonald Williams
/S/Michael D. Perry Senior Vice President and March 18, 1994
Michael D. Perry Chief Financial Officer
/S/Dunia A. Shive Controller March 18, 1994
Dunia A. Shive
</TABLE>
20
<PAGE> 23
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
A. H. Belo Corporation
We have audited the accompanying consolidated balance sheets of A. H. Belo
Corporation and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of earnings, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1993. Our audit also
included the financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of A. H. Belo
Corporation and subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and cash flows for each of the three
years in the period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
As discussed in Note 5 to the consolidated financial statements, effective
January 1, 1993, the Company changed its method of accounting for income taxes.
/s/ERNST & YOUNG
Dallas, Texas
January 26, 1994,
except for Note 12, as to which the date is February 23, 1994.
21
<PAGE> 24
CONSOLIDATED STATEMENTS OF EARNINGS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Years ended December 31,
- -----------------------------------------------------------------------------------------------------------------------------
In thousands, except per share amounts 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET OPERATING REVENUES
Newspaper publishing $ 335,642 $314,701 $249,737
Broadcasting 209,193 201,241 181,848
- -----------------------------------------------------------------------------------------------------------------------------
Total net operating revenues 544,835 515,942 431,585
- -----------------------------------------------------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits (Note 6) 161,170 149,139 125,515
Newsprint, ink and other supplies 105,395 97,498 86,427
Other production, distribution and operating costs (Note 8) 145,310 151,640 137,722
Depreciation 25,281 23,547 22,965
Amortization 12,383 12,492 11,099
Restructuring charge (Note 2) 5,822 - -
- -----------------------------------------------------------------------------------------------------------------------------
Total operating costs and expenses 455,361 434,316 383,728
- -----------------------------------------------------------------------------------------------------------------------------
Earnings from operations 89,474 81,626 47,857
- -----------------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND EXPENSE
Interest expense (Note 4) (15,015) (24,159) (23,882)
Other, net 1,119 4,106 (5,370)
- -----------------------------------------------------------------------------------------------------------------------------
Total other income and expense (13,896) (20,053) (29,252)
- -----------------------------------------------------------------------------------------------------------------------------
EARNINGS
Earnings before income taxes and cumulative
effect of change in accounting 75,578 61,573 18,605
Income taxes (Note 5) 31,100 24,403 6,213
- -----------------------------------------------------------------------------------------------------------------------------
Earnings before cumulative effect of change in accounting 44,478 37,170 12,392
Cumulative effect of change in accounting for
income taxes (Note 5) 6,599 - -
- -----------------------------------------------------------------------------------------------------------------------------
Net earnings $ 51,077 $ 37,170 $ 12,392
- -----------------------------------------------------------------------------------------------------------------------------
EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings before cumulative effect of change in accounting $ 2.20 $ 1.90 $ .65
Cumulative effect of change in accounting $ .33 $ - $ -
Net earnings $ 2.53 $ 1.90 $ .65
- -----------------------------------------------------------------------------------------------------------------------------
Weighted average common and common equivalent
shares outstanding 20,204 19,567 19,110
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
22
<PAGE> 25
CONSOLIDATED BALANCE SHEETS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
ASSETS December 31,
- ------------------------------------------------------------------------------------------------------------------------
In thousands 1993 1992
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and temporary cash investments $ 8,943 $ 2,683
Accounts receivable (net of allowance of
$3,684 and $3,475 in 1993 and 1992, respectively) 80,023 75,021
Inventories 11,734 8,569
Deferred income taxes (Note 5) 6,053 7,377
Other current assets 10,632 8,778
- ------------------------------------------------------------------------------------------------------------------------
Total current assets 117,385 102,428
- ------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost:
Land 15,065 14,575
Buildings 116,466 89,350
Newspaper publishing equipment 183,211 139,632
Broadcast equipment 93,276 87,426
Other 35,610 34,667
Advance payments on plant and equipment
expenditures (Note 8) 8,679 42,136
- ------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 452,307 407,786
Less accumulated depreciation 182,295 170,409
- ------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 270,012 237,377
- ------------------------------------------------------------------------------------------------------------------------
Intangible assets, net:
Excess cost over values assigned to tangible
assets of purchased subsidiaries 333,880 346,648
Other intangibles 20,221 21,743
- ------------------------------------------------------------------------------------------------------------------------
Total intangible assets, net 354,101 368,391
- ------------------------------------------------------------------------------------------------------------------------
Other assets, at cost (Note 6) 54,658 50,331
- ------------------------------------------------------------------------------------------------------------------------
Total assets $ 796,156 $758,527
========================================================================================================================
</TABLE>
23
<PAGE> 26
CONSOLIDATED BALANCE SHEETS (CONTINUED)
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY December 31,
- -------------------------------------------------------------------------------------------------------------------
In thousands, except share data 1993 1992
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 16,555 $ 18,296
Accrued compensation and benefits 20,092 17,626
Other accrued expenses 12,895 18,087
Accrued interest payable 2,219 5,881
Advance subscription payments 6,913 6,508
Income taxes payable (Note 5) 1,057 3,318
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 59,731 69,716
- -------------------------------------------------------------------------------------------------------------------
Long-term debt (Note 4) 277,400 302,151
Deferred income taxes (Note 5) 107,308 101,707
Other liabilities (Note 6) 5,618 3,711
Commitments and contingent liabilities (Note 8)
Shareholders' equity (Notes 7 and 9):
Preferred stock, $1.00 par value. Authorized
5,000,000 shares; none issued.
Common stock, $1.67 par value. Authorized
150,000,000 shares;
Series A: Issued 14,467,182 and 13,433,969 shares
in 1993 and 1992, respectively; 24,161 22,435
Series B: Issued 5,743,099 and 6,157,489 shares
in 1993 and 1992, respectively. 9,591 10,283
Additional paid-in capital 116,451 94,005
Retained earnings 201,246 161,297
- -------------------------------------------------------------------------------------------------------------------
Total 351,449 288,020
Less deferred compensation - restricted shares 5,350 6,778
- -------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 346,099 281,242
- -------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 796,156 $ 758,527
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
24
<PAGE> 27
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Dollars in thousands, except share and per share amounts Three years ended December 31, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK TREASURY STOCK
Additional
Shares Shares Paid-in Retained Shares
Series A Series B Amount Capital Earnings Series A Amount
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JAN. 1, 1991 14,314,857 6,781,517 $35,231 $77,773 $215,663 (2,369,644) $(97,433)
Exercise of stock options 52,215 96,350 247 3,119
Shares received upon cancellation
of restricted shares (22,869) (720)
Shares received upon
exercise of options (69,752) (2,136)
Restricted shares awarded 72,160 122 2,019
Amortization of restricted
shares
Tax benefit from long-term
incentive plan 440
Purchase of treasury stock (11,600) (355)
Retirement of treasury stock (2,473,865) (4,132) (12,725) (83,787) 2,473,865 100,644
Net earnings 12,392
Cash dividends declared
($.52 per share) (9,760)
Conversion of Series B
to Series A 210,242 (210,242)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1991 12,175,609 6,667,625 $31,468 $70,626 $134,508 - -
Exercise of stock options 513,696 183,698 1,165 16,100
Restricted shares awarded 50,830 85 2,871
Amortization of restricted
shares
Tax benefit from long-term
incentive plan 4,408
Net earnings 37,170
Cash dividends declared
($.54 per share) (10,381)
Conversion of Series B
to Series A 693,834 (693,834)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1992 13,433,969 6,157,489 $32,718 $94,005 $161,297 - -
Exercise of stock options 505,295 87,326 990 16,252
Restricted shares awarded 37,192 62 2,576
Amortization of restricted
shares
Forfeiture of restricted
shares (10,990) (18) (450)
Tax benefit from long-term
incentive plan 4,068
Net earnings 51,077
Cash dividends declared
($.56 per share) (11,128)
Conversion of Series B
to Series A 501,716 (501,716)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1993 14,467,182 5,743,099 $33,752 $116,451 $201,246 - -
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Deferred
Compensation
Restricted
Shares Total
- -------------------------------------------------------------
<S> <C> <C>
BALANCE AT JAN. 1, 1991 $(7,013) $224,221
Exercise of stock options 3,366
Shares received upon cancellation
of restricted shares 720 -
Shares received upon
exercise of options (2,136)
Restricted shares awarded (2,141) -
Amortization of restricted
shares 1,889 1,889
Tax benefit from long-term
incentive plan 440
Purchase of treasury stock (355)
Retirement of treasury stock -
Net earnings 12,392
Cash dividends declared
($.52 per share) (9,760)
Conversion of Series B
to Series A -
- -------------------------------------------------------------
BALANCE AT DEC. 31, 1991 $(6,545) $230,057
Exercise of stock options 17,265
Restricted shares awarded (2,956) -
Amortization of restricted
shares 2,723 2,723
Tax benefit from long-term
incentive plan 4,408
Net earnings 37,170
Cash dividends declared
($.54 per share) (10,381)
Conversion of Series B
to Series A -
- -------------------------------------------------------------
BALANCE AT DEC. 31, 1992 $(6,778) $281,242
Exercise of stock options 17,242
Restricted shares awarded (2,638) -
Amortization of restricted
shares 3,781 3,781
Forfeiture of restricted
shares 285 (183)
Tax benefit from long-term
incentive plan 4,068
Net earnings 51,077
Cash dividends declared
($.56 per share) (11,128)
Conversion of Series B
to Series A -
- -------------------------------------------------------------
BALANCE AT DEC. 31, 1993 $(5,350) $346,099
- -------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
25
<PAGE> 28
CONSOLIDATED STATEMENTS OF CASH FLOWS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
CASH PROVIDED (USED) Years ended December 31,
- -------------------------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS
Net earnings $ 51,077 $ 37,170 $12,392
Adjustments to reconcile net earnings to net cash
provided by operations:
Depreciation and amortization 37,664 36,039 34,064
Deferred income taxes 10,969 6,511 (23,270)
Non-cash adjustments and allowances 209 1,617 6,134
Cumulative effect of change in accounting (Note 5) (6,599) - -
Restructuring charge (Note 2) 5,822 - -
Other, net 1,262 2,492 (5,474)
Net change in current assets and liabilities:
Accounts receivable (5,211) (3,021) (4,495)
Inventories and other current assets (6,685) (1,335) 620
Accounts payable (1,338) 2,318 (3,256)
Accrued compensation and benefits 2,466 4,424 (2,819)
Other accrued liabilities (5,518) 279 5,957
Accrued interest payable (3,662) (2,938) 3,579
Income taxes payable 4,362 (5,220) 10,032
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by operations 84,818 78,336 33,464
- -------------------------------------------------------------------------------------------------------------------
INVESTMENTS
Capital expenditures (62,130) (27,145) (19,741)
Acquisition of Dallas Times Herald assets (Note 3) - - (55,673)
Acquisition of other assets - (22,624) (8,898)
Asset dispositions 2,458 848 824
- -------------------------------------------------------------------------------------------------------------------
Net cash used for investments (59,672) (48,921) (83,488)
- -------------------------------------------------------------------------------------------------------------------
FINANCING
Repayment of long-term debt (200,000) - -
Net proceeds from (payments on) revolving debt 175,000 (35,000) 57,000
Payments of dividends on stock (11,128) (10,381) (9,760)
Payments to repurchase stock - - (355)
Net proceeds from exercise of stock options 17,242 17,265 1,230
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by (used for) financing (18,886) (28,116) 48,115
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and
temporary cash investments 6,260 1,299 (1,909)
- -------------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of year 2,683 1,384 3,293
Cash and temporary cash investments at end of year $ 8,943 $ 2,683 $ 1,384
- -------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES (NOTE 10)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
26
<PAGE> 29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) PRINCIPLES OF CONSOLIDATION The consolidated financial statements
include the accounts of A. H. Belo Corporation (the "Company" or
"Belo") and its wholly-owned subsidiaries after the elimination of all
significant intercompany accounts and transactions.
Certain amounts for the prior years have been reclassified to conform
to the current year presentation.
B) STATEMENT OF CASH FLOWS For the purpose of the Consolidated
Statements of Cash Flows, the Company considers all highly liquid debt
instruments purchased with a remaining maturity of three months or
less to be temporary cash investments. Such temporary cash
investments are carried at cost which approximates fair value.
C) INVENTORIES Inventories, consisting primarily of newsprint, ink and
other supplies used in printing newspapers, are stated at the lower of
average cost or market value.
D) PROPERTY, PLANT AND EQUIPMENT Depreciation of property, plant and
equipment is provided principally on a straight-line basis over the
estimated useful lives of the assets as follows:
<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES
<S> <C>
Buildings and improvements 5-20 years
Newspaper publishing equipment 5-20 years
Broadcast equipment 7-15 years
Other 3-10 years
</TABLE>
E) INTANGIBLE ASSETS, NET Intangible assets, net includes primarily the
excess cost applicable to subsidiaries acquired since 1984 which is
being amortized on a straight-line basis over 40 years. The carrying
value of intangible assets is periodically reviewed to determine if
impairment exists. In 1993, the Company determined that excess cost
associated with its suburban newspaper operations was not recoverable
(see Note 2).
Also included in Intangible assets, net is the intangible asset
acquired in 1991 (see Note 3) which is being amortized on a straight-
line basis over its currently estimated useful life of 18 years.
Accumulated amortization of intangible assets was $112,775,000 and
$100,392,000 at December 31, 1993 and 1992, respectively.
F) EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Earnings per common
and common equivalent share are based on the weighted average number
of shares outstanding during the period, including common equivalent
shares representing dilutive stock options.
27
<PAGE> 30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 2: RESTRUCTURING CHARGE
The Consolidated Statement of Earnings for 1993 includes a $5,822,000
charge related to Dallas-Fort Worth Suburban Newspapers, Inc. ("DFWSN"), that
consists primarily of the write-off of goodwill and a reduction in the carrying
value of production assets to their fair value. The production assets adjusted
include building and improvements and publishing equipment. The charge was
recognized in conjunction with the decision to restructure DFWSN upon the
determination that the carrying value of these assets was not recoverable.
Fair value of production assets was determined principally by market value.
The restructuring was substantially completed in January 1994.
NOTE 3: ACQUISITION
In December 1991, the Company acquired substantially all of the
operating assets of the Dallas Times Herald newspaper for $55,673,000, after
the newspaper's owner, Times Herald Printing Company, ceased publication of the
newspaper. The majority of the assets acquired consisted of newspaper presses
and other operating equipment, land, buildings and intangible assets.
Following the Company's purchase price allocation, $28,717,000 was included in
property, plant and equipment and $23,135,000 was included in intangible
assets, net.
NOTE 4: LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
In thousands 1993 1992
----------------------------------------------------------------------------------
<S> <C> <C>
Revolving credit agreement $250,000 $ 30,000
Short-term unsecured notes classified
as long-term debt 21,000 66,000
9.45% Unsecured Notes due 1993 - 100,000
8 5/8% Unsecured Notes due 1996 - 99,751
Other 6,400 6,400
----------------------------------------------------------------------------------
$277,400 $302,151
==============================
</TABLE>
At the end of 1993, the Company had access to $450,000,000 in
revolving credit on which the borrowings were $250,000,000 and $30,000,000 at
December 31, 1993 and 1992, respectively. Average interest rates were 3.7
percent and 4.2 percent in 1993 and 1992, respectively. Loans under the
revolving credit agreement bear interest at a rate based, at the option of the
Company, on the participating bank's prime rate, certificate of deposit rate or
LIBOR. The agreement also provides for commitment fees ranging from 1/8 to 1/4
percent per annum depending on the amount of unused commitment. Each January 1
and July 1, until expiration of the commitment on July 1, 1998, the commitment
is reduced. Available credit as of January 1, 1994 is $418,750,000. No
mandatory repayment of amounts outstanding at December 31, 1993, including
short-term borrowings classified as long-term, would be required to be made
until January 1, 1996.
The revolving credit agreement contains certain covenants, including
the maintenance of cash flow in relation to both the Company's leverage and its
fixed charges, and a limitation on repurchases of the Company's stock. The
Company is in compliance with these covenants at December 31, 1993.
During 1993, the Company continued to use various short-term unsecured
notes as an additional source of financing. At both December 31, 1993 and
1992, the average interest rate on this debt was 3.7 percent. Due to the
Company's intent to renew the short-term notes and its continued ability to
refinance this debt on a long-term basis through its revolving credit
agreement, $21,000,000 and $66,000,000 of short-term notes outstanding at
December 31, 1993 and 1992, respectively, have been classified as long-term.
28
<PAGE> 31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
The 9.45% Unsecured Notes matured on January 15, 1993 and were
redeemed using proceeds from the revolving credit agreement. On December 16,
1993, the Company exercised an option to redeem its 8 5/8% Unsecured Notes due
in 1996 at par plus accrued interest, also using proceeds from the revolving
credit agreement.
In 1993, 1992 and 1991, the Company incurred interest costs of
$16,976,000, $24,554,000 and $24,254,000, respectively, of which $1,961,000,
$395,000 and $372,000, respectively, were capitalized as components of
construction cost.
At December 31, 1993, the Company had outstanding letters of credit of
$7,509,000 issued in the ordinary course of business.
During 1993, the Company entered into agreements that cap at 6 percent
the interest on $75,000,000 of variable rate borrowings. These agreements
expire in 1996.
Because substantially all of the Company's debt is due under the
variable rate revolving credit agreement, no significant differences exist
between the carrying value and fair value.
NOTE 5: INCOME TAXES
Effective January 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes" changing to the liability method of accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and
liabilities, and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. As permitted by SFAS
No. 109, prior years' financial statements have not been restated to reflect
the change. The cumulative effect of adopting SFAS No. 109 as of January 1,
1993 is to increase net earnings by $6,599,000 or 33 cents per share.
Subsequent to the adoption of SFAS No. 109, the federal income tax
rate was increased from 34 percent to 35 percent, retroactive to January 1,
1993. The Company's deferred taxes were adjusted to reflect the new tax rate,
resulting in an increase in deferred tax expense of $2,249,000. Deferred tax
expense also reflects a decrease of $1,000,000 for the reversal of certain tax
accruals as a result of new tax legislation regarding the amortization of
intangibles.
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current
Federal $17,385 $15,585 $ 27,477
State 2,746 2,307 2,006
----------------------------------------------------------------------------------------------------
Total current 20,131 17,892 29,483
----------------------------------------------------------------------------------------------------
Deferred 10,969 6,511 (23,270)
----------------------------------------------------------------------------------------------------
Total $31,100 $24,403 $ 6,213
----------------------------------------------------------------------------------------------------
Effective tax rate 41.1% 39.6% 33.4%
----------------------------------------------------------------------------------------------------
</TABLE>
29
<PAGE> 32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
Income tax provisions for the years ended December 31, 1993, 1992 and
1991 differ from amounts computed by applying the applicable U.S. federal
income tax rate as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed expected income tax expense $26,452 $20,935 $ 6,326
Amortization of excess cost 2,235 2,235 2,226
Effect of 1% rate increase on deferred taxes 2,249 - -
Reduction for change in law regarding
amortization of acquired intangible asset (1,000) - -
State income taxes 2,601 2,001 1,324
Undistributed earnings in equity affiliate - (670) -
IRS tax settlement - - (3,783)
Other (1,437) (98) 120
----------------------------------------------------------------------------------------------------
$31,100 $24,403 $ 6,213
----------------------------------------------------------------------------------------------------
</TABLE>
During 1992, the Company and one of its equity affiliates settled a
claim against the United States Navy which resulted in an increase in equity in
earnings of an equity affiliate of $1,901,000, on which no taxes were provided
by the Company because such undistributed earnings are expected to remain
invested in that affiliate.
During December 1991, the Company reached a settlement with the
Internal Revenue Service ("IRS") resolving all pending audit issues in
connection with an IRS examination of the Company's tax returns for 1984
through 1988. The principal issue in the examination was the deductibility of
the amortization of value of network affiliation agreements and FCC licenses of
four of the Company's television stations acquired in 1984. The settlement
resulted in a $6,787,000 increase in net earnings from the reversal of excess
income taxes and interest accruals in connection with the IRS examination.
Significant components of the Company's deferred tax liabilities and
assets as of December 31, 1993, are as follows:
<TABLE>
<CAPTION>
In thousands
-------------------------------------------------------------------------
<S> <C>
Deferred tax liabilities:
Excess tax depreciation and amortization $102,297
Deferred gain on sale of assets 5,425
Expenses deductible for tax purposes in a year
different than the year accrued 4,610
Other 4,829
-------------------------------------------------------------------------
Total deferred tax liabilities $117,161
-------------------------------------------------------------------------
Deferred tax assets:
State taxes $ 4,448
Deferred compensation 3,048
Expenses deductible for tax purposes in a year
different than the year accrued 4,950
Other 3,460
-------------------------------------------------------------------------
Total deferred tax assets $ 15,906
-------------------------------------------------------------------------
Net deferred tax liability $101,255
-------------------------------------------------------------------------
</TABLE>
30
<PAGE> 33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
The sources of deferred income taxes and the tax effect of each for
years prior to the adoption of SFAS No. 109 are as follows:
<TABLE>
<CAPTION>
In thousands 1992 1991
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Excess tax depreciation and amortization $3,220 $(19,037)
Interest expense 337 2,800
Alternative Minimum Tax 3,965 (3,068)
Other expenses deductible for tax purposes
in a year different than the year accrued (3,034) (1,782)
Other, net 2,023 (2,183)
-------------------------------------------------------------------------------------------------
$6,511 $(23,270)
-------------------------------------------------------------------------------------------------
</TABLE>
NOTE 6: EMPLOYEE RETIREMENT PLANS
The Company sponsors a noncontributory defined benefit pension plan
covering substantially all employees. The benefits are based on years of
service and the average of the employee's five years of highest annual
compensation earned during the most recently completed ten years of employment.
The funding policy is to contribute annually to the plan an amount at
least equal to the minimum required contribution for a qualified retirement
plan, but not in excess of the maximum tax deductible contribution.
The following table sets forth the plan's funded status and prepaid
pension costs (included in other assets on the Consolidated Balance Sheets) at
December 31, 1993 and 1992:
<TABLE>
<CAPTION>
In thousands 1993 1992
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation $(65,824) $(51,553)
Accumulated benefit obligation $(66,225) $(51,896)
Projected benefit obligation for service
rendered to date $(83,236) $(60,697)
Plan assets at fair value, invested primarily
in equity securities 74,754 65,186
--------------------------------------------------------------------------------------------------
Plan assets (less than) in excess of projected benefit
obligation (8,482) 4,489
Unrecognized net loss 25,031 9,886
Unrecognized net transition asset being recognized
over 12.3 years (5,302) (6,535)
Unrecognized prior service cost 915 1,060
--------------------------------------------------------------------------------------------------
Prepaid pension cost $ 12,162 $ 8,900
--------------------------------------------------------------------------------------------------
</TABLE>
The increase in unrecognized net loss is the result of the change in
the discount rate from 9 percent to 7.5 percent.
31
<PAGE> 34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
The net periodic pension cost (benefit) includes the following
components:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned during the period $ 2,284 $ 1,858 $ 1,449
Interest cost on projected benefit obligation 5,782 5,109 4,381
Actual return on plan assets (9,294) (3,447) (8,021)
Net amortization and deferral 1,784 (4,563) 407
----------------------------------------------------------------------------------------------------
Net periodic pension cost (benefit) $ 556 $(1,043) $(1,784)
----------------------------------------------------------------------------------------------------
</TABLE>
Assumptions used in the accounting for the defined benefit plan are:
<TABLE>
<CAPTION>
1993 1992 1991
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate in determining benefit obligation 7.50% 9.00% 9.00%
Discount rate in determining net periodic pension
cost (benefit) 9.00% 9.00% 9.50%
Expected long-term rate of return on assets 10.25% 11.00% 10.00%
Rate of increase in future compensation 5.00% 5.00% 6.00%
----------------------------------------------------------------------------------------------------
</TABLE>
The Company sponsors a defined contribution plan that covers
substantially all of its employees. Subject to certain dollar limits,
employees may contribute a percentage of their salaries to this plan, and the
Company will match a portion of the employee's contributions. The Company's
contributions totaled $1,895,000, $1,135,000 and $799,000 in 1993, 1992 and
1991, respectively. Contributions were higher in 1993 following a change in
the Company's matching percentage from 35 percent to 50 percent.
The Company also sponsors unfunded non-qualified retirement and death
benefit plans for key employees. The Company had recorded a liability for
these plans of $3,994,000 and $2,174,000 at December 31, 1993 and 1992,
respectively, most of which is classified as long-term in other liabilities on
the Consolidated Balance Sheets. Expense recognized in 1993, 1992 and 1991 was
$1,412,000, $908,000 and $405,000, respectively.
NOTE 7: LONG-TERM INCENTIVE PLAN
The Company's current long-term incentive plan has been in place since
1986. There are, however, stock options awarded under a prior plan, which
will remain outstanding until they are exercised, canceled or expire. The
following table presents the status of the stock options awarded under the
prior plan. At December 31, 1993, all of these options were exercisable.
<TABLE>
<CAPTION>
PRIOR STOCK OPTION PLAN
----------------------------------------------------------------------------------------------------
SHARES SHARES OPTION PRICE
SERIES A SERIES B PER SHARE
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Options outstanding at January 1, 1991 236,964 237,874 $ 9-26
Exercised (32,275) (66,915) 9-26
----------------------------------------------------------------------------------------------------
Options outstanding at December 31, 1991 204,689 170,959 $ 9-26
Exercised (181,899) (117,819) 9-26
----------------------------------------------------------------------------------------------------
Options outstanding at December 31, 1992 22,790 53,140 $ 20-26
Exercised (20,925) (50,195) 20-26
----------------------------------------------------------------------------------------------------
Options outstanding at December 31, 1993 1,865 2,945 $ 22-26
----------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE> 35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
Awards under the 1986 long-term incentive plan may be granted to
employees in the form of incentive stock options, non-qualified stock options,
restricted shares or performance units, the values of which are based on the
long-term performance of the Company. In addition, options may be accompanied
by stock appreciation rights and limited stock appreciation rights. Rights and
limited rights may also be issued without accompanying options. The plan was
amended in 1988 to provide for a one-time grant of non-qualified options to
purchase 2,500 shares of Series A Common Stock to non-employee directors and to
eliminate the previous limit on the number of restricted shares that may be
issued. The plan was also amended in 1992 to provide for automatic annual
grants through 1997 of non-qualified options to non-employee directors serving
after the 1992 Annual Meeting of Shareholders and an additional one-time grant
of options to purchase 10,000 shares of Series A Common Stock to those
directors subsequently elected. The amendment also increased the number of
shares for which awards could be made under the plan.
The maximum aggregate number of shares of common stock that may be
granted in relation to options, restricted shares and rights, and limited
rights issued without accompanying options is 3,600,000 less the number of
performance units granted under the plan. The maximum number of performance
units that may be granted under the plan is 3,600,000 less the number of
options, restricted shares and rights, and limited rights issued without
accompanying options granted.
Grants made under the 1986 long-term incentive plan during 1993, 1992
and 1991 are summarized below:
1986 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
NON-QUALIFIED STOCK OPTIONS RESTRICTED SHARES
OPTION
SHARES SHARES PRICE SHARES SHARES PRICE
SERIES A SERIES B PER SHARE SERIES A SERIES B PER SHARE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at Jan. 1, 1991 1,163,104 187,850 $24-37 296,170 50,000 $24-38
Granted 502,720 - 29-30 72,160 - 29-32
Exercised (19,940) (29,435) 24-26 - - -
Vested - - - (32,988) (29,750) 24-38
Canceled (17,800) - 24-37 (22,869) - 32
- -------------------------------------------------------------------------------------------------------------------
Outstanding at Dec. 31, 1991 1,628,084 158,415 $24-37 312,473 20,250 $24-38
Granted 314,580 - 40 50,830 - 40-42
Exercised (331,797) (65,879) 24-37 - - -
Vested - - - (71,488) (20,250) 24-42
Canceled (15,140) (240) 25-37 - - -
- -------------------------------------------------------------------------------------------------------------------
Outstanding at Dec. 31, 1992 1,595,727 92,296 $24-40 291,815 - $29-42
Granted 317,955 - 40-49 37,192 - 49-53
Exercised (484,370) (37,131) 24-40 - - 29-53
Vested - - - (106,225) - -
Canceled (61,285) - 29-40 (10,990) - 29-49
- -------------------------------------------------------------------------------------------------------------------
Outstanding at Dec. 31, 1993 1,368,027 55,165 $24-49 211,792 - $29-53
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The non-qualified options granted under the Company's long-term
incentive plan become exercisable in cumulative installments over a period of
three years. On December 31, 1993, of the 1,423,192 options outstanding,
821,659 were exercisable. Performance units and shares of Series A Common Stock
reserved for grants under the plan were 613,874 and 896,746 at December 31,
1993 and 1992, respectively.
A provision for the restricted shares is made ratably over the
restriction period. Expense recognized under the plan for restricted shares
was $3,598,000, $2,723,000 and $1,889,000 in 1993, 1992 and 1991, respectively.
33
<PAGE> 36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 8: COMMITMENTS AND CONTINGENT LIABILITIES
The Company is involved in certain claims and litigation related to
its operations. In the opinion of Management, liabilities, if any, arising
from these claims and litigation are either covered by insurance or would not
have a material adverse effect on the consolidated financial statements of the
Company. In 1991, the Company recorded a $4,000,000 accrual for a judgment
resulting from an unfavorable verdict in an employment-related lawsuit.
Commitments for the purchase of first-run broadcast film contract
rights totaled approximately $60,635,000 at December 31, 1993.
Advance payments on plant and equipment expenditures at December 31,
1993 primarily relate to renovations of existing facilities owned by certain
Belo broadcasting stations. Required future payments for capital expenditures
are $9,992,000 and $882,000 in 1994 and 1995, respectively.
In December 1993, the Company purchased the building in which it had
been leasing office space. The building had been constructed by a partnership
in which the Company was a limited partner prior to 1992. Lease expense for
the building in 1991 was $2,807,000. Total lease expense for property and
equipment, including the office space through November 1993, was $5,447,000,
$6,130,000 and $5,780,000 in 1993, 1992 and 1991, respectively.
Future minimum rental payments for operating lease agreements are as
follows:
<TABLE>
<CAPTION>
In thousands
---------------------------------------------
<S> <C>
1994 $2,018
1995 989
1996 315
1997 81
1998 67
1999 and beyond 31
---------------------------------------------
$3,501
---------------------------------------------
</TABLE>
NOTE 9: COMMON AND PREFERRED STOCK
The Company has two series of common stock authorized, issued and
outstanding, Series A and Series B. The shares are identical except that
Series B shares are entitled to ten votes per share on all matters submitted to
a vote of shareholders, while the Series A shares are entitled to one vote per
share. Transferability of the Series B shares is limited to family members and
affiliated entities of the holder. Series B shares are convertible at any time
on a one-for-one basis into Series A shares.
Each outstanding share of common stock is accompanied by one preferred
share purchase right which entitles shareholders to purchase 1/100th of a share
of Series A Junior Participating Preferred Stock. The rights will not be
exercisable until a party either acquires beneficial ownership of 30 percent of
the Company's common stock or makes a tender offer for at least 30 percent of
its common stock. The rights expire in 1996. If the Company is acquired in a
merger or business combination, each right has an initial exercise price of
$175 (subject to adjustment) and can be used to purchase the common stock of
the surviving company having a market value of twice the exercise price of each
right. The number of shares of Series A Junior Participating Preferred Stock
reserved for possible conversion of these rights is equivalent to one
one-hundredth of the number of shares of common stock issued and outstanding
plus the number of shares reserved for grant under the 1986 Long-Term Incentive
Plan and Stock Option Plan.
34
<PAGE> 37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 10: SUPPLEMENTAL CASH FLOW INFORMATION
Net cash provided by operations reflects cash payments for interest
and income taxes as follows:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
---------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest paid, net of amounts
capitalized $18,677 $27,097 $29,192
Income taxes paid, net of refunds $15,679 $23,112 $20,338
---------------------------------------------------------------------------------
</TABLE>
NOTE 11: INDUSTRY SEGMENT INFORMATION
The Company operates in two industries: newspaper publishing and
television broadcasting. Operations in the newspaper publishing industry
involve the sale of advertising space in published issues, the sale of
newspapers to distributors and individual subscribers and commercial printing.
Operations in the broadcast industry involve the sale of air time for
advertising and the broadcast of entertainment, news and other programming for
both local markets and syndication. Net operating revenues by industry segment
include sales to unaffiliated customers and intersegment revenues, which before
their elimination, are accounted for on the same basis as revenues from
unaffiliated customers.
Selected segment data is as follows:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET OPERATING REVENUES
Newspaper publishing $335,651 $314,718 $249,755
Broadcasting 209,457 201,241 181,847
Intersegment revenues (273) (17) (17)
-----------------------------------------------------------------------------------------------------
$544,835 $515,942 $431,585
-----------------------------------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
Newspaper publishing $ 44,293(A) $ 42,974 $ 21,417
Broadcasting 63,240(B) 56,461 41,553 (C)
Corporate expenses (18,059) (17,809) (15,113)(D)
-----------------------------------------------------------------------------------------------------
$ 89,474 $ 81,626 $ 47,857
-----------------------------------------------------------------------------------------------------
IDENTIFIABLE ASSETS
Newspaper publishing $263,855 $245,589 $246,772
Broadcasting 446,175 444,237 456,008
Other 86,126 68,701 43,604
-----------------------------------------------------------------------------------------------------
$796,156 $758,527 $746,384
-----------------------------------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Newspaper publishing $ 17,374 $ 16,247 $ 14,640
Broadcasting 20,039 19,460 19,057
Other 251 332 367
------------------------------------------------------------------------------------------------------
$ 37,664 $ 36,039 $ 34,064
-----------------------------------------------------------------------------------------------------
CAPITAL EXPENDITURES
Newspaper publishing $ 36,765 $ 17,381 $ 6,224
Broadcasting 16,996 9,666 13,309
Other 8,369 98 208
-----------------------------------------------------------------------------------------------------
$ 62,130 $ 27,145 $ 19,741
-----------------------------------------------------------------------------------------------------
</TABLE>
(A) Included in Newspaper publishing earnings from operations in 1993 is a
$5,822,000 restructuring charge consisting primarily of the write-off of
goodwill and a reduction in the carrying value of production assets related to
the restructuring of DFWSN (see Note 2).
(B) Included in Broadcasting earnings from operations in 1993 is a
$3,349,000 reversal of certain music license fee accruals.
(C) Included in Broadcasting earnings from operations in 1991 is a
$788,000 provision for early retirement costs, a $1,259,000 write-down of
certain broadcast film contract rights and a $4,000,000 accrual for an adverse
judgement in an employment-related lawsuit.
(D) Included in corporate expenses in 1991 is a $1,500,000 settlement of
an antitrust lawsuit as part of the agreement to acquire the Dallas Times
Herald assets (see Note 3).
35
<PAGE> 38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 12: SUBSEQUENT EVENT
On February 23, 1994, the Company announced an agreement in principle
to purchase the assets of a television broadcast station in New Orleans,
Louisiana for $110,000,000. The Company anticipates that the acquisition will
be financed using borrowings from its revolving credit agreement. The
transaction, which is subject to the signing of a definitive agreement, as well
as customary closing conditions, including approval by appropriate government
agencies, will be accounted for as a purchase. The Company expects that a
definitive agreement will be entered into by early spring and that the
transaction will be completed during the third quarter of 1994.
36
<PAGE> 39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
NOTE 13: QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Following is a summary of the Unaudited Quarterly Results of Operations for
1993 and 1992:
<TABLE>
<CAPTION>
In thousands, except per share amounts 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1993
Net operating revenues
Newspaper publishing $ 78,780 $ 84,747 $ 83,309 $ 88,815
Broadcasting 44,122 59,154 49,314 56,867
Intersegment revenues (62) (97) (84) (30)
- -------------------------------------------------------------------------------------------------------------------
$122,840 $ 143,804 $132,539 $ 145,652
- -------------------------------------------------------------------------------------------------------------------
Earnings from operations
Newspaper publishing $ 11,010 $ 13,160 $ 10,887 $ 9,236(D)
Broadcasting 8,283 22,042 12,187 20,728(E)
Corporate expenses (3,737) (4,985) (3,686) (5,651)
- -------------------------------------------------------------------------------------------------------------------
$ 15,556 $ 30,217 $ 19,388 $ 24,313
- -------------------------------------------------------------------------------------------------------------------
Earnings before cumulative effect of
change in accounting $ 7,271 $ 16,143 $ 7,934 $ 13,130
Cumulative effect of change in accounting 6,599(A) - - -
- -------------------------------------------------------------------------------------------------------------------
Net earnings $ 13,870 $ 16,143 $ 7,934(C) $ 13,130
- -------------------------------------------------------------------------------------------------------------------
Earnings per common and common equivalent share:
Before cumulative effect
of change in accounting $ .37 $ .80 $ .39 $ .64
Cumulative effect of change in accounting $ .33 $ - $ - $ -
Net earnings $ .70 $ .80 $ .39 $ .64
- -------------------------------------------------------------------------------------------------------------------
1992
Net operating revenues
Newspaper publishing $ 71,176 $ 80,943 $ 78,916 $ 83,683
Broadcasting 43,533 53,221 48,887 55,600
Intersegment revenues (1) (14) (1) (1)
- -------------------------------------------------------------------------------------------------------------------
$114,708 $ 134,150 $127,802 $ 139,282
- -------------------------------------------------------------------------------------------------------------------
Earnings from operations
Newspaper publishing $ 7,703 $ 14,117 $ 11,157 $ 9,997
Broadcasting 8,780 17,102 12,544 18,035
Corporate expenses (3,697) (4,522) (4,615) (4,975)
- -------------------------------------------------------------------------------------------------------------------
$ 12,786 $ 26,697 $ 19,086 $ 23,057
- -------------------------------------------------------------------------------------------------------------------
Net earnings $ 6,453(B) $ 12,452 $ 7,117 $ 11,148(F)
- -------------------------------------------------------------------------------------------------------------------
Net earnings per common and
common equivalent share $ .33 $ .63 $ .36 $ .56
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Amount represents the cumulative effect of adopting SFAS No. 109,
"Accounting for Income Taxes" (see Note 5).
(B) A settlement of a claim against the United States Navy was reached in
which the Company and one of its equity affiliates were among the plaintiffs.
The Company's portion of the settlement and its equity in earnings of the
affiliate increased earnings before income taxes by $4,019,000 and net earnings
by $3,235,000 or 16 cents per share. The $4,019,000 gain is included in Other,
net on the Consolidated Statements of Earnings. The equity in earnings
amounted to $1,901,000, on which no taxes are provided by the Company because
such undistributed earnings are expected to remain invested in that affiliate.
(C) Belo's income tax provision in the third quarter reflects a $2,249,000
charge representing an adjustment to deferred taxes following an increase in
the federal income tax rate from 34 percent to 35 percent (see Note 5).
(D) Included in Newspaper publishing earnings from operations for the
fourth quarter of 1993 is a $5,822,000 restructuring charge consisting
primarily of the write-off of goodwill and a reduction in the carrying value of
production assets related to the restructuring of DFWSN (see Note 2).
(E) Included in Broadcasting earnings from operations for the fourth
quarter of 1993 is a $3,349,000 reversal of certain music license fee accruals.
(F) Belo's income tax provision in the fourth quarter of 1992 reflects a
$1,101,000 benefit resulting from the favorable resolution of a franchise tax
issue.
37
<PAGE> 40
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The Management of A. H. Belo Corporation is responsible for the preparation of
the Company's consolidated financial statements, as well as for their integrity
and objectivity. Those statements are prepared using generally accepted
accounting principles, they include amounts that are based on our best
estimates and judgments, and we believe they are not misstated due to material
fraud or error. Management has also prepared the other information in the
Annual Report and is responsible for its accuracy and its consistency with the
financial statements.
Management maintains a system of internal control that is designed to provide
reasonable assurance of the integrity and reliability of the financial
statements, the protection of assets from unauthorized use or disposition, and
the prevention and detection of fraudulent financial reporting. That system of
internal control provides for appropriate division of responsibility, and is
documented in written policies and procedures. These policies and procedures
are updated as necessary and communicated to those employees having a
significant role in the financial reporting process. Management continually
monitors the system of internal control for compliance.
Management believes that, as of December 31, 1993, the Company's system of
internal control is adequate to accomplish the objectives described above.
Management recognizes, however, that no system of internal control can ensure
the elimination of all errors and irregularities, and it recognizes that the
cost of the internal controls should not exceed the value of the benefits
derived.
Finally, Management recognizes its responsibility for fostering a strong
ethical climate within the Company according to the highest standards of
personal and professional conduct, and this responsibility is delineated in the
Company's written statement of business conduct. That statement of business
conduct addresses, among other things, the necessity for due diligence and
integrity, avoidance of potential conflicts of interest, compliance with all
applicable laws and regulations, and the confidentiality of proprietary
information.
/S/ Robert W. Decherd
Robert W. Decherd
Chairman of the Board, President & Chief Executive Officer
/S/ Michael D. Perry
Michael D. Perry
Senior Vice President & Chief Financial Officer
38
<PAGE> 41
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
In thousands
- -------------------------------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS BALANCE
BEGINNING ADDITIONS, OTHER AND OTHER AT END
CLASSIFICATION OF PERIOD AT COST ADDITIONS(1) ADJUSTMENTS(2) OF PERIOD
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Land $ 14,575 $ 915 $ - $ (425) $ 15,065
Buildings 89,350 9,670 - 17,446 116,466
Newspaper publishing equipment 139,632 3,061 - 40,518 183,211
Broadcast equipment 87,426 8,948 - (3,098) 93,276
Other 34,667 1,889 - (946) 35,610
Advance payments on plant and
equipment expenditures 42,136 37,647 - (71,104) 8,679
- -------------------------------------------------------------------------------------------------------------------
$407,786 $62,130 $ - $(17,609) $452,307
- -------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1992
Land $ 13,626 $ 949 $ - $ - $ 14,575
Buildings 87,613 1,862 - (125) 89,350
Newspaper publishing equipment 137,860 1,567 2,370 (2,165) 139,632
Broadcast equipment 77,195 12,622 - (2,391) 87,426
Other 33,520 3,699 1,092 (3,644) 34,667
Advance payments on plant and
equipment expenditures 10,435 6,446 25,255 - 42,136
- -------------------------------------------------------------------------------------------------------------------
$360,249 $27,145 $ 28,717 $ (8,325) $407,786
- -------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1991
Land $ 13,434 $ 10 $ - $ 182 $ 13,626
Buildings 85,775 2,244 - (406) 87,613
Newspaper publishing equipment 136,132 2,039 - (311) 137,860
Broadcast equipment 77,358 6,487 - (6,650) 77,195
Other 33,910 3,715 - (4,105) 33,520
Advance payments on plant and
equipment expenditures 5,189 5,246 - - 10,435
- -------------------------------------------------------------------------------------------------------------------
$351,798 $19,741 $ - $(11,290) $360,249
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amounts represent allocation of purchase price for assets acquired
from the Dallas Times Herald in December 1991.
(2) In 1993, retirements and other adjustments includes the
reclassification of advance payments related to completion of the expansion of
The Dallas Morning News' North Plant production facility, and the reduction of
the carrying value of certain assets of DFWSN.
39
<PAGE> 42
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
In thousands
- ------------------------------------------------------------------------------------------------------------------------
BALANCE AT RETIREMENTS BALANCE
BEGINNING AND OTHER AT END
CLASSIFICATION OF PERIOD ADDITIONS ADJUSTMENTS(1) OF PERIOD
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Buildings $ 40,093 $ 4,336 $ (1,815) $ 42,614
Newspaper publishing equipment 50,578 10,238 (3,995) 56,821
Broadcast equipment 56,513 6,476 (3,954) 59,035
Other 23,225 4,231 (3,631) 23,825
- ------------------------------------------------------------------------------------------------------------------------
$ 170,409 $ 25,281 $ (13,395) $182,295
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1992
Buildings $ 35,763 $ 3,946 $ 384 $ 40,093
Newspaper publishing equipment 43,918 9,285 (2,625) 50,578
Broadcast equipment 52,465 6,304 (2,256) 56,513
Other 22,193 4,012 (2,980) 23,225
- ------------------------------------------------------------------------------------------------------------------------
$ 154,339 $ 23,547 $ (7,477) $170,409
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1991
Buildings $ 31,723 $ 4,164 $ (124) $ 35,763
Newspaper publishing equipment 35,552 8,753 (387) 43,918
Broadcast equipment 53,250 6,244 (7,029) 52,465
Other 21,438 3,804 (3,049) 22,193
- ------------------------------------------------------------------------------------------------------------------------
$ 141,963 $ 22,965 $ (10,589) $154,339
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In 1993, retirements and other adjustments includes the reduction of
the carrying value of certain assets of DFWSN.
40
<PAGE> 43
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
In thousands
- ------------------------------------------------------------------------------------------------------------------------
ADDITIONS
BALANCE AT CHARGED CHARGED BALANCE
BEGINNING TO COSTS & TO OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS(1) OF PERIOD
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Deducted from asset accounts:
Allowance for doubtful
accounts $ 3,475 $ 4,617 - $(4,408) $3,684
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1992
Deducted from asset accounts:
Allowance for doubtful
accounts $ 6,952 $ 3,758 - $(7,235) $3,475
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1991
Deducted from asset accounts:
Allowance for doubtful
accounts and note $ 2,877 $ 8,715 - $(4,640) $6,952
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Uncollectible accounts written off, net of recoveries and other
miscellaneous adjustments.
41
<PAGE> 44
SCHEDULE X - SUPPLEMENTARY EARNINGS STATEMENT INFORMATION
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
In thousands Years ended December 31,
- ----------------------------------------------------------------------------------------------------------------------------------
Description 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maintenance and repairs $ 5,986 $ 5,658 $ 4,087
Advertising costs (unaffiliated) $ 9,146 $ 9,357 $ 7,276
</TABLE>
42
<PAGE> 45
<TABLE>
<CAPTION>
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
3.1 Certificate of Incorporation of the Company (incorporated by reference
to Exhibit 3.1 to the Company's Annual Report on Form 10-K dated
March 19, 1992 (the "1991 Form 10-K")) N/A
3.2 Certificate of Correction to Certificate of Incorporation dated
May 13, 1987 (incorporated by reference to Exhibit 3.2 to the Company's
Annual Report on Form 10-K dated March 18, 1993 (the "1992 Form 10-K")) N/A
3.3 Certificate of Designation of Series A Junior Participating Preferred
Stock of the Company dated April 16, 1987 (incorporated by reference to
Exhibit 3.3 to the 1991 Form 10-K) N/A
3.4 Certificate of Amendment of Certificate of Incorporation of the Company
dated May 4, 1988 (incorporated by reference to Exhibit 3.4 to the
1992 Form 10-K) N/A
3.5 Amended Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated May 4, 1988 (incorporated by
reference to Exhibit 3.5 to the 1992 Form 10-K) N/A
3.6 Certificate of Designation of Series B Common Stock of the Company dated
May 4, 1988 (incorporated by reference to Exhibit 3.6 to the
1992 Form 10-K) N/A
3.7 Bylaws of the Company, effective December 16, 1992 (incorporated by
reference to Exhibit 3.7 to the 1992 Form 10-K) N/A
4.1 Certain rights of the holders of the Company's Common Stock are set
forth in Exhibits 3.1-3.6 above N/A
4.2 Specimen Form of Certificate representing shares of the Company's
Series A Common Stock (incorporated by reference to Exhibit 4.2 to
the 1992 Form 10-K) N/A
4.3 Specimen Form of Certificate representing shares of the Company's
Series B Common Stock (incorporated by reference to Exhibit 4.3
to the Company's Annual Report on Form 10-K dated March 20, 1989) N/A
4.4 Form of Rights Agreement, dated March 10, 1986 between the Company
and RepublicBank Dallas, National Association as Rights Agent, which
includes as Exhibit B thereto the Form of Right Certificate
(incorporated by reference to Exhibit 4.8 to the 1991 Form 10-K) N/A
4.5 Supplement No. 1 to Rights Agreement (incorporated by reference to
Exhibit 4.9 to the 1991 Form 10-K) N/A
</TABLE>
E-1
<PAGE> 46
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
4.6 Supplement No. 2 to Rights Agreement (incorporated by reference to
Exhibit 4.9 to the 1992 Form 10-K) N/A
4.7 Supplement No. 3 to Rights Agreement (incorporated by reference to
Exhibit 4.10 to the 1992 Form 10-K) N/A
4.8 Supplement No. 4 to Rights Agreement dated December 12, 1988
substituting Manufacturers Hanover Trust Company as Rights Agent -----
4.9 Supplement No. 5 to Rights Agreement (incorporated by reference to
Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1993) N/A
10.1 Contracts relating to television broadcasting:
(1) Contract for Affiliation between KOTV in Tulsa, Oklahoma and
CBS, with Network Affiliation Consent (incorporated by
reference to Exhibit 10.1(1) to the 1991 Form 10-K) N/A
(2) Contract for Affiliation between KHOU-TV in Houston, Texas and
CBS, with Network Affiliation Consent (incorporated by reference
to Exhibit 10.1(2) to the 1991 Form 10-K) N/A
(3) Letter Amendment, dated June 11, 1993, to Contract for
Affiliation between KHOU-TV in Houston, Texas and CBS ----
(4) Contract for Affiliation between KXTV in Sacramento, California
and CBS (incorporated by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1993 (the "First Quarter 1993 Form 10-Q")) N/A
(5) Contract for Affiliation between WFAA-TV in Dallas, Texas and ABC,
with Network Affiliation Consent (incorporated by reference to
Exhibit 10.1(4) to the Company's Annual Report on Form 10-K dated
March 28, 1991 (the "1990 Form 10-K")) N/A
(6) Rider One to Contract for Affiliation between WFAA-TV in Dallas,
Texas and ABC (incorporated by reference to Exhibit 10.1 to the
First Quarter 1993 Form 10-Q) N/A
(7) Contract for Affiliation between WVEC-TV in Hampton-Norfolk,
Virginia and ABC, with Network Affiliation Consent (incorporated
by reference to Exhibit 10.1(5) to the 1991 Form 10-K) N/A
</TABLE>
E-2
<PAGE> 47
<TABLE>
<CAPTION>
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
10.2 Contracts relating to newspaper publication:
(1) Founding agreement dated July 28, 1987 between the Company and
Newsprint South, Inc. for newsprint supply (incorporated by
reference to Exhibit 10.2(2) to the 1990 Form 10-K) N/A
(2) Amendment to the founding agreement dated June 30, 1990 between
the Company and Newsprint South, Inc. for newsprint supply
(incorporated by reference to Exhibit 10.2(3) to the 1990 Form 10-K) N/A
10.3 (1) Management Security Plan (incorporated by reference to Exhibit 10.4(1)
to the 1991 Form 10-K) N/A
(2) Stock Option Plan (incorporated by reference to Exhibit 10.4(2)
to the 1991 Form 10-K) N/A
(3) Amendment to Stock Option Plan by the Compensation Committee of the
Board of Directors (incorporated by reference to Exhibit 10.4(3)
to the 1991 Form 10-K) N/A
(4) Amendments to Stock Option Plan (incorporated by reference to
Exhibit 10.4(4) to the 1991 Form 10-K) N/A
(5) Amendment to Stock Option Plan dated December 19, 1986 (incorporated
by reference to Exhibit 10.4(5) to the 1991 Form 10-K) N/A
(6) Amendment to Stock Option Plan dated February 22, 1989 ----
(7) 1986 Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.4(7) to the 1991 Form 10-K) N/A
(8) Amendment No. 1 to 1986 Long-Term Incentive Plan dated
October 22, 1986 (incorporated by reference to Exhibit 10.4(8)
to the 1991 Form 10-K) N/A
(9) Amendment No. 2 to 1986 Long-Term Incentive Plan effective
January 1, 1987 (incorporated by reference to Exhibit 10.3(9)
to the 1992 Form 10-K) N/A
(10) Amendment No. 3 to 1986 Long-Term Incentive Plan dated May 4, 1988 ----
</TABLE>
E-3
<PAGE> 48
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
(11) Amendment No. 4 to 1986 Long-Term Incentive Plan dated May 13, 1988 ----
(12) Amendment No. 5 to 1986 Long-Term Incentive Plan dated
February 22, 1989 ----
(13) Amendment No. 6 to 1986 Long-Term Incentive Plan dated May 6, 1992
(incorporated by reference to Exhibit 10.3(13) to the 1992 Form 10-K) N/A
(14) The A. H. Belo Corporation Employee Savings and Investment Plan
(incorporated by reference to Exhibit 10.4(13) to the Company's
Annual Report on Form 10-K dated March 27, 1990 (the "1989 Form 10-K")) N/A
(15) First Amendment to the A. H. Belo Corporation Employee Savings and
Investment Plan, dated January 29, 1992 (incorporated by reference
to Exhibit 10.3(15) to the 1992 Form 10-K) N/A
(16) Second Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan, dated October 22, 1992 (incorporated by
reference to Exhibit 10.3(16) to the 1992 Form 10-K) N/A
(17) Third Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan (incorporated by reference to Exhibit 10.2
to the First Quarter 1993 Form 10-Q) N/A
(18) Fourth Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan (incorporated by reference to Exhibit 4.14
to Post-Effective Amendment No. 1 to Form S-8
(Registration No. 33-30994)) N/A
(19) Fifth Amendment to the A. H. Belo Corporation Employee Savings
and Investment Plan ----
(20) The G. B. Dealey Retirement Pension Plan (as amended and restated
effective January 1, 1988) ----
(21) First Amendment to the G. B. Dealey Retirement Pension Plan ----
(22) Second Amendment to the G. B. Dealey Retirement Pension Plan ----
(23) Third Amendment to the G. B. Dealey Retirement Pension Plan ----
</TABLE>
E-4
<PAGE> 49
<TABLE>
<CAPTION>
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
(24) Fourth Amendment to the G. B. Dealey Retirement Pension Plan ----
(25) Fifth Amendment to the G. B. Dealey Retirement Pension Plan ----
(26) Master Trust Agreement, effective as of July 1, 1992, between
A. H. Belo Corporation and Mellon Bank, N. A. ----
(27) A. H. Belo Corporation Supplemental Executive Retirement Plan ----
(28) Trust Agreement dated February 28, 1994, between the Company
and Mellon Bank, N. A. ----
(29) Summary of A. H. Belo Corporation Executive Compensation Program
(incorporated by reference to Exhibit 10.3(18) to the 1992 Form 10-K) N/A
(30) Employment and Consultation Agreement between A. H. Belo Corporation
and James P. Sheehan (incorporated by reference to Exhibit 10.1
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1993) N/A
10.4 (1) Credit Agreement dated October 27, 1988, between the Company and
The First National Bank of Chicago as Managing Agent (incorporated
by reference to Exhibit 10.4(1) to the 1992 Form 10-K) N/A
(2) Amendment No. 1 to 1988 Credit Agreement between the Company and
The First National Bank of Chicago as Managing Agent dated
November 8, 1989 (incorporated by reference to Exhibit 10.5(4)
to the 1990 Form 10-K) N/A
(3) Amendment No. 2 to 1988 Credit Agreement between the Company and
The First National Bank of Chicago as Managing Agent dated
April 24, 1991 (incorporated by reference to Exhibit 10.5(5)
to the 1991 Form 10-K) N/A
(4) Amendment Agreement dated May 14, 1992, between the Company and
The First National Bank of Chicago as Managing Agent (incorporated
by reference to Exhibit 10.4(4) to the 1992 Form 10-K) N/A
(5) Amendment Agreement dated November 6, 1992, between the Company
and The First National Bank of Chicago as Managing Agent
(incorporated by reference to Exhibit 10.4(5) to the 1992
Form 10-K) N/A
</TABLE>
E-5
<PAGE> 50
<TABLE>
<CAPTION>
EXHIBIT SEQ.
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
(6) Loan Agreement dated October 1, 1985, between City of Arlington
Industrial Development Corporation and Dallas-Fort Worth Suburban
Newspapers, Inc. (incorporated by reference to Exhibit 10.5(2)
to the 1991 Form 10-K) N/A
(7) Letter of Credit and Reimbursement Agreement dated as of
June 2, 1987, between Dallas-Fort Worth Suburban Newspapers,
Inc. and The Sanwa Bank, Limited, Dallas Agency covering
$6,400,000 City of Arlington Industrial Development Corporation
Industrial Development Revenue Bonds (incorporated by reference
to Exhibit 10.5(3) to the 1991 Form 10-K) N/A
(8) Amendment and Waiver Agreement dated as of December 30, 1992,
by and between the Company and The Sanwa Bank, Limited,
Dallas Agency (incorporated by reference to Exhibit 10.4(8)
to the 1992 Form 10-K) N/A
10.5 Joint Venture Agreement dated August 1, 1989, between the Company and
Universal Press Syndicate (incorporated by reference to Exhibit 10.6
to the 1989 Form 10-K) N/A
21 Subsidiaries of the Company ----
23 Consent of Ernst & Young ----
</TABLE>
E-6
<PAGE> 1
EXHIBIT 4.8
SUPPLEMENT NO. 4 TO RIGHTS AGREEMENT
This Supplement No. 4 to the Rights Agreement (the "Rights Agreement")
dated as of December 12, 1988, as amended by Supplement No. 1 dated April 9,
1987, Supplement No. 2 dated May 6, 1987, and Supplement No. 3 dated May 19,
1988, between A. H. Belo Corporation ("Belo") and First RepublicBank Dallas,
National Association ("FirstRepublic"), is made and entered into by and among
Belo, NCNB Texas National Bank ("NCNB-Texas"), the successor to FirstRepublic
as Rights Agent pursuant to the provisions of Section 19 of the Rights
Agreement, and Manufacturers Hanover Trust Company ("Manufacturers Hanover").
Pursuant to the provisions of Section 21 of the Rights Agreement,
Manufacturers Hanover is hereby appointed Rights Agent under the Rights
Agreement, replacing NCNB-Texas, and is vested with the same powers, rights,
duties, and responsibilities as if it had been originally named as Rights Agent.
Section 30 of the Rights Agreement is hereby amended by adding at the
end of such Section the following:
"except that the rights, duties and obligations of Manufacturers
Hanover Trust Company under this Agreement shall be governed by the
laws of the State of New York."
IN WITNESS WHEREOF, the parties hereto have caused this Supplement No.
4 to be duly executed and attested as of the 12th day of December, 1988.
<PAGE> 2
A. H. BELO CORPORATION
Attest: By: /s/ MICHAEL D. PERRY
----------------------------
By: /s/ VICKY C. TEHERANI Title: SR. VICE PRESIDENT AND
-------------------------------- CHIEF FINANCIAL OFFICER
-------------------------
Title: MANAGER/TREASURY OPERATIONS
-----------------------------
NCNB TEXAS NATIONAL BANK
Attest: By: /s/
---------------------------
By: /s/ Title:
-------------------------------- ------------------------
Title:
-----------------------------
MANUFACTURERS HANOVER TRUST COMPANY
Attest: By: /s/
---------------------------
By: /s/ Title:
-------------------------------- ------------------------
Title:
-----------------------------
<PAGE> 1
EXHIBIT 10.1(3)
KHOU-TV INC.
Houston, Texas
Gentlemen: June 11, 1993
Reference is made to the CBS Television Network Affiliation Agreement ("the
Agreement") between you and us relating to broadcast station KHOU- TV at
Houston, Texas.
You and we agree that the Agreement shall be amended as follows:
1. Paragraph 4 of the Agreement shall be amended to read:
"4. Use of Network Programs.
(a) General.
Broadcaster shall not broadcast any Network Program over
Affiliated Station unless such Network Program has first been offered
by CBS to Broadcaster for broadcasting over Affiliated Station and has
been accepted by Broadcaster in accordance with this Agreement.
Except with the prior written consent of CBS, Broadcaster shall
neither sell any Network Program, in whole or in part, or any time
therein, for sponsorship, nor otherwise use Network Programs except as
specifically authorized in this Agreement. Affiliated Station shall
not broadcast any commercial announcement or announcements during any
interval, within a Network Program, which is designated by CBS to
Affiliated Station as being for the sole purpose of making a station
identification announcement. Broadcaster shall, with respect to each
Network Program broadcast over Affiliated Station, broadcast such
Network Program in its entirety (including but not limited to
commercial announcements, billboards, credits, public service
announcements, promotional announcements and network identification),
without interruption, alteration, compression, deletion or addition of
any kind, from the beginning of the Network Program to the final
system cue at the conclusion of the Network Program. Nothing herein
shall be construed as preventing Broadcaster's deletion of (i) part of
a Network Program in order to broadcast an emergency announcement or
news bulletin; (ii) a promotional announcement for a Network Program
not to be broadcast over Affiliated Stations (provided that Affiliated
Station shall broadcast an alternative promotional announcement for
CBS network
<PAGE> 2
programming in place of the deleted promotional announcement); (iii)
such words, phrases or scenes as Broadcaster, in the reasonable
exercise of its judgment, determines it would not be in the public
interest to broadcast over Affiliated Station; provided, however, that
Broadcaster shall not substitute for any material deleted pursuant to
this clause (iii) any commercial or promotional announcement of any
kind whatsoever; and provided further that Broadcaster shall notify
CBS of every such deletion within 72 hours thereof. Broadcaster shall
not, without CBS's prior written consent, authorize or permit any
Network Program, recording, or other material furnished by CBS to
Broadcaster or Affiliated Station hereunder to be recorded,
duplicated, rebroadcast, retransmitted or otherwise used for any
purpose whatsoever other than broadcasting by Affiliated Station as
provided herein; except that Broadcaster may assert a right to
carriage of Affiliated Station's signal by a cable system pursuant to
the provisions of Section 4 of the Cable Consumer Protection and
Competition Act of 1992 ("the 1992 Cable Act") and may, to the extent
permitted by paragraph 4(b) hereof, grant consent to the
retransmission of such signal by a cable system or other multichannel
video programming distributor, as defined by said Act, pursuant to the
provisions of Section 6 thereof.
(b) Retransmission Consent.
Broadcaster may grant consent to the retransmission of
Affiliated Station's signal by a cable system or other multichannel
video programming distributor pursuant to the provisions of Section 6
of the 1992 Cable Act (hereafter "retransmission consent"), provided
that one of the following conditions applies at the time
retransmission consent is granted:
(i) the cable system or other multichannel program
service on which Affiliated Station's signal is to be
retransmitted serves television homes within Affiliated
Station's television market;
(ii) the majority of television homes served by the cable
system or other multichannel program service on which
Affiliated Station's signal is to be retransmitted are within
a county or community in which Affiliated Station's signal is,
and has been since October 5, 1992, "significantly viewed" as
defined in Section 76.54 of the FCC's rules; or
(iii) the cable system or other multichannel program
service on which Affiliated Station's signal is to be
retransmitted carried such signal on October 5, 1992, and does
not receive such signal by satellite delivery.
Notwithstanding anything to the contrary in the foregoing, in no case
shall retransmission consent be granted to a television receive- only
satellite service, or a direct broadcast satellite service, if
Affiliated Station's signal is to be retransmitted
<PAGE> 3
by such service to television homes outside of Affiliated Station's
television market other than "unserved household(s)," as that term is
defined in Section 119(d) of Title 17, United States Code, as in
effect on October 5, 1992. For purposes of this paragraph, a
station's "television market" shall be defined in the same manner as
set forth in Sections 76.55(e) and 76.59 of the FCC's rules."
2. Paragraph 9 of the Agreement shall be amended to read as follows, and
as so amended is hereby reiterated and reconfirmed:
"9. Non-Duplication of Network Programs.
(a) For purposes of this paragraph, a television station's
"Network Exclusivity Zone" shall mean the zone within thirty-five (35)
miles of the station's reference points, or, in the case of a "small
market television station," as defined in Section 76.92 of the FCC
rules, the zone within 55 miles of said reference points; provided,
however, that in no case shall the "Network Exclusivity Zone" include
an area within the Area of Dominant Influence (ADI), as determined by
Arbitron and published in the then-current edition of its Television
ADI Market Guide, of another CBS Television Network Affiliate. A
station's "reference points" for purposes of this paragraph shall be
as defined in Section 73.658(m) of the FCC rules, and shall be deemed
to include, with respect to a station in a hyphenated market, the
reference points of each name community in that market.
(b) Broadcaster shall be entitled to exercise, within
Affiliated Station's Network Exclusivity Zone, the protection against
duplication of network programming, as provided by Sections 76.92
through 76.97 of the FCC rules, with respect to a Network Program
during the period beginning one (1) day before and ending seven (7)
days after the delivery of such Network Program by CBS to Broadcaster;
provided, however, that such right shall apply only to Network
Programs broadcast in the live time period as offered or on no more
than a one day delay as accepted by CBS; and provided further that
nothing herein shall be deemed to preclude CBS from granting to any
other broadcast television station licensed to any other community
similar network non-duplication rights within that station's Network
Exclusivity Zone, and Broadcaster's aforesaid right of network
non-duplication shall not apply with respect to the transmission of
the programs of another CBS affiliate (current or future) by a
"community unit," as that term is defined by the rules of the FCC,
located (wholly or partially) within the area in which Broadcaster's
Network Exclusivity Zone overlaps the Network Exclusivity Zone of that
other CBS affiliate.
(c) Broadcaster's network non-duplication rights under this
paragraph shall be subject to cancellation by CBS on six (6) months
written notice to Broadcaster. Any such cancellation by CBS shall not
affect any of the other rights and obligations of the parties under
this Agreement."
<PAGE> 4
All other terms of the Agreement remain in full force and effect. Please
signify your agreement to the foregoing by signing in the space indicated below
and returning two copies of the signed amendment.
ACCEPTED AND AGREED: Very truly yours,
KHOU-TV INC. CBS Affiliate Relations
A Division of CBS Inc.
By: /s/ ALLEN HOWARD By: /s/
Date: 12/9/93 Date: June 11, 1993
<PAGE> 1
AMENDMENT TO Exhibit 10.3 (6)
THE A. H. BELO CORPORATION
STOCK OPTION PLAN
WHEREAS, A. H. Belo Corporation (the "Company" ) has heretofore adopted
The A. H. BELO CORPORATION STOCK OPTION PLAN (the "1982 Plan"); and
WHEREAS, pursuant to the provisions of Paragraph 14 of the 1982 Plan, the
Board of Directors of the Company desires herein to amend the 1982 Plan;
NOW, THEREFORE the 1982 Plan is hereby amended as follows:
1. Paragraph 7 (a) is hereby amended and restated in its entirety
as follows:
"If the optionee ceases to be an employee of the Company or a
subsidiary by reason of the fact that he is discharged for cause, as
determined solely and exclusively by the Board, or by reason of his
resignation, all rights of the optionee to exercise an option shall
terminate, lapse and be forfeited at the time of the optionee's
termination of employment; provided however that if any termination of
employment is due to early, normal or disability retirement
(determined pursuant to the G. B. Dealey Retirement Pension Plan as in
effect at that time), the optionee shall have the right to exercise
his option at any time within 3 years after such retirement; provided
further, that in case the optionee shall die within 3 years of such
retirement, the personal representatives, heirs, legatees, or
distributees of the optionee, as appropriate, shall have the right up
to 12 months from such date of death to exercise any such option to
the extent that the option was exercisable prior to death and had not
been so exercised. Notwithstanding the foregoing, in no case may
options be exercised later than the date on which the option
terminates.
2. The following shall be added at the end of the third sentence of
Paragraph 9:
"An Optionee may also make payment at the time of exercise of an
option by delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker approved by
the Company that upon such broker's sale of Shares with respect to
which such option is exercised, it is to deliver promptly to the
Company the amount of sale proceeds necessary to satisfy the option
exercise price and any withholding taxes."
<PAGE> 2
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
in its name and on its behalf by the officer thereunto duly authorized as of
the 22nd day of February, 1989.
A. H. BELO CORPORATION
By: /s/ ROBERT W. DECHERD
---------------------------
Title: Chief Executive Officer
------------------------
ATTEST:
/s/ MICHAEL J. MCCARTHY
- -----------------------
Secretary
<PAGE> 1
EXHIBIT 10.3 (10)
AMMENDMENT NO.3 TO
THE A. H. BELO CORPORATION
1986 LONG TERM INCENTIVE PLAN
WHEREAS, A. H. BELO CORPORATION (the "Company"), has heretofore adopted THE
A. H. BELO CORPORATION 1986 LONG TERM INCENTIVE PLAN (the "Plan"); and
WHEREAS, the Board of Directors of the Company desires herein to amend the
Plan and to submit such amendment for stockholder approval, with the amendment
to be effective on the date of stockholder approval;
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Paragraph 1 of the Plan is hereby amended in its entirety to read as
follows:
"1. Purpose
The A.H. Belo Corporation (the 'Corporation') desires to attract and
retain the best available talent and encourage the highest level of
performance by directors and employees in order to serve the best
interests of the Corporation and its shareholders. By affording
directors and eligible employees the opportunity to acquire
proprietary interests in the Corporation and by providing them
incentives to put forth maximum efforts for the success of the
Corporation's business the A. H. Belo Corporation 1986 Long Term
Incentive Plan (the '1986 Plan') is expected to contribute to the
attainment of those objectives."
2. The fifth sentence of paragraph 2 of the Plan ("No more than 50,000 of
such 600,000 shares (subject to adjustment as described in paragraph 16) shall
be issued in the form of restricted shares.") is hereby deleted from the Plan.
3. The first sentence of the first paragraph of paragraph 4 of the Plan is
hereby amended to read as follows:
"Except for options awarded to nonemployee directors pursuant to the
terms of this paragraph 4, awards shall be granted only to persons who
are regular full-time employees of the Corporation or one or more of
its present or future subsidiaries (as defined below) and either are
officers of, or in the opinion of the Committee hold key positions in
or for, the Corporation or one or more of its subsidiaries."
4. The fourth sentence of the first paragraph of paragraph 4 of the Plan
("A director of the Corporation who is not also a regular full-time employee
shall not be eligible to receive an award.") is hereby deleted from the Plan.
5. Paragraph 4 of the Plan is hereby amended by the addition of the
following paragraphs:
"Each director of the Corporation who is not also regular full-time
employee ('nonemployee director') on the date Amendment No. 3 to the
1986 Plan is approved by the Board of Directors (the 'effective date')
shall be granted an option to purchase 5,000 shares of Common Stock on
the effective date. Each individual who first becomes a nonemployee
director after the effective date shall be granted an option to
purchase 5,000 shares of Common Stock on the date such individual
becomes a nonemployee director. Only non-qualified options may be
granted to nonemployee directors. Options granted to nonemployee
directors shall not be accompanied by rights or limited rights. A
nonemployee director who has been granted an option to purchase Common
Stock pursuant to this paragraph shall not be eligible to receive
another option upon re-election to the Board of Directors. The
exercise price per share of Common Stock of each option granted to a
nonemployee director shall be the Fair Market Value per Share of
Common Stock (as such term is defined in paragraph 5) on the date the
option is
A-1
<PAGE> 2
granted and the other terms and conditions of each such option shall be
determined under paragraphs 6 and 7.
"Unless a different meaning is indicated or required by the context, the
term 'regular full-time employee' or 'employee' as used in the 1986 Plan
shall include a nonemployee director of the Corporation, and the term
'employed' or 'employment' shall include service by a nonemployee
director."
IN WITNESS WHEREOF, the Company has caused this instrument to be executed in
its name and on its behalf by the officers thereunto duly authorized this 4th
day of May, 1988, effective as of May 4, 1988, the date such amendment was
approved by stockholders.
A.H. BELO CORPORATION
By: /s/ ROBERT W. DECHERD
------------------------------
Title: Chairman of the Board and
Chief Executive Officer
---------------------------
ATTEST:
/s/ MICHAEL J. McCARTHY
- -------------------------
Secretary
STATE OF TEXAS }
} SS:
COUNTY OF DALLAS }
This instrument was acknowledged before me on May 4, 1988, by Robert W.
Decherd, Chairman and Chief Executive Officer, of A. H. BELO CORPORATION, a
Delaware corporation, on behalf of said corporation.
/S/ DEAN H. BLYTHE
------------------------------
Notary Public in and for
the State of Texas
My Commission Expires: Print Name of Notary:
3-12-90 Dean H. Blythe
- ------------------------------ ------------------------------
A-2
<PAGE> 1
EXHIBIT 10.3 (11)
AMENDMENT NO. 4 TO
THE A.H. BELO CORPORATION
1986 LONG TERM INCENTIVE PLAN
WHEREAS, A. H. Belo Corporation (the "Company") has heretofore
adopted THE A. H. BELO CORPORATION 1986 LONG TERM INCENTIVE PLAN (the
"1986 Plan"); and
WHEREAS, the Company has amended its Certificate of Incorporation to
permit the issuance of its Common Stock in series and has effected a
distribution of Series B Common Stock; and
WHEREAS, pursuant to the provisions of paragraphs 16 and 18 of the
1986 Plan, the Board of Directors of the Company desires herein to amend the
1986 Plan;
NOW, THEREFORE, the 1986 Plan is hereby amended as follows:
1. Paragraph 2 of the 1986 Plan is hereby amended by substituting
the number "1,200,000" at each place the number "600,000" currently appears.
2. Paragraph 2 of the 1986 Plan is hereby further amended by the
addition of the following paragraphs:
"Provided that shares of Series B Common Stock are issued and
outstanding, (i) each option to purchase shares of Common Stock
granted after the effective date of Amendment No. 4 to the 1986 Plan
shall be an option to purchase shares of Series B Common Stock and
(ii) each award of restricted shares after the effective date of
Amendment No. 4 to the 1986 Plan shall be an award of restricted
shares of Series B Common Stock (each event in clauses (i) and (ii)
subject to adjustment as described in paragraph 16). In the event that
all issued and outstanding shares of Series B Common Stock are
converted into shares of Series A Common Stock, (i) each option to
purchase shares of Series B Common Stock will automatically convert
into an option to purchase a like amount of shares of Series A Common
Stock or Common Stock, as the case may be, and (ii) each restricted
share of Series B Common Stock will automatically convert into a
restricted share of Series A Common Stock or Common Stock, as the case
may be."
"So long as the Common Stock of the Company shall be issued in series,
for purposes of this 1986 Plan the term "Common Stock" shall mean (a)
in the case of shares of Common Stock issued prior to the effective
date of Amendment No. 4 to the 1986 Plan (or after the conversion of
all issued and outstanding shares of Series B Common Stock into shares
of Series A Common Stock) Series A Common Stock or Common
<PAGE> 2
Stock, as the case may be, and (b) in the case of shares of Common Stock
issued after the effective date of Amendment No. 4 to the 1986 Plan
(provided shares of Series B Common Stock remain outstanding) Series B
Common Stock."
3. The last sentence of Paragraph 7(a) of the 1986 Plan is hereby
amended to read as follows:
"A 'Change in Control' is deemed to occur at the time when any group
(within the meaning of Rule 12b-2 promulgated under the Exchange Act),
entity or person (other than the Corporation, any subsidiary, or any
savings, pension or other benefit plan for the benefit of employees of the
Corporation or its subsidiaries) that theretofore beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) less
than 30% of the total number of outstanding shares of common stock
(including common stock and, if issued and outstanding, Series A Common
Stock and Series B Common Stock, hereafter for purposes of this Paragraph
7(a), 'Common Stock'), acquires shares of Common Stock in a transaction or
series of transactions that results in such group, entity or person
directly or indirectly owning beneficially more than 30% of the total
number of outstanding shares of Common Stock."
IN WITNESS WHEREOF, the Company has caused this instrument to be executed in
its name and on its behalf by the officer thereunto duly authorized as of this
13th day of May, 1988.
A.H. BELO CORPORATION
By: /s/ ROBERT W. DECHERD
-------------------------------
Title: Chairman of the Board
and Chief Executive Officer
----------------------------
ATTEST:
/s/ MICHAEL J. MCCARTHY
- -----------------------
Secretary
<PAGE> 3
STATE OF TEXAS }
}
COUNTY OF DALLAS }
This instrument acknowledged before me on May 13, 1988 by Robert W.
Decherd, Chairman of the Board of A. H. Belo Corporation, a Delaware
corporation, on behalf of said corporation.
/s/ DEAN H. BLYTHE
----------------------------
Notary Public in and for the
State of Texas
My Commission Expires: Print Name of Notary:
3-12-90 Dean H. Blythe
- ---------------------- ---------------------
<PAGE> 1
Exhibit 10.3 (12)
AMENDMENT NO. 5 TO
THE A. H. BELO CORPORATION
1986 LONG TERM INCENTIVE PLAN
WHEREAS, A. H. Belo Corporation (the "Company") has heretofore adopted
The A. H. BELO CORPORATION 1986 LONG TERM INCENTIVE PLAN (the "1986 Plan"); and
WHEREAS, pursuant to the provisions of Paragraph 18 of the 1986 Plan,
the Board of Directors of the Company desires herein to amend the 1986 Plan;
NOW, THEREFORE the 1986 Plan is hereby amended as follows:
1. Subject to the approval of the holders of a majority of the voting
power of shares present in person or by proxy at the 1989 Annual Meeting of
Shareholders of the Company to be held on May 3 1989, or any adjournment
thereof, Paragraph 2 of the 1986 Plan is hereby amended by substituting the
number "2,400,000" at each place the number "1,200,000" currently appears.
2. The first additional paragraph added to Paragraph 2 of the 1986 Plan
by Amendment No. 4 to the 1986 Plan is hereby amended and restated in its
entirety to read as follows:
"Provided that shares of Series B Common Stock are issued and
outstanding, (i) each option to purchase shares of Common Stock granted
after May 13, 1988 shall be an option to purchase shares of Series B
Common Stock and (ii) each award of restricted shares after May 13, 1988
shall be an award of restricted shares of Series B Common Stock (each
event in clauses (i) and (ii) subject to adjustment as described in
Paragraph 16). Notwithstanding the foregoing, in the event such a grant
or award with respect to Series B Common Stock would cause the Series A
Common Stock to be excluded from trading on the New York Stock Exchange,
the American Stock Exchange, or other national securities exchanges, or
to be excluded from quotation on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or any other national
quotation system then in use, in the discretion of the Committee such
grants of options to purchase shares and awards of restricted shares
after May 13, 1988 shall be with respect to Series A Common Stock. In
the event that all issued and outstanding shares of Series B Common
Stock are converted into shares of Series A Common Stock, (i) each
option to purchase shares of Series B Common Stock will automatically
convert into an option to purchase a like amount of shares of Series A
Common Stock or Common Stock, as the case may be, and (ii) each
restricted
<PAGE> 2
share of Series B Common Stock will automatically convert into a
restricted share of Series A Common Stock or Common Stock, as the
case may be."
3. As an adjustment for the distribution of shares of Series B Common
Stock on May 19, 1988, the additional paragraphs added to Paragraph 4 by
Amendment No. 3 to the 1986 Plan are hereby amended by substituting the number
"10,000" at each place the number "5,000" currently appears.
4. The following shall be added at the end of Paragraph 7
(c):
"An option holder may also make payment at the time of exercise of an
option by delivering to the Corporation a properly executed exercise
notice together with irrevocable instructions to a broker approved by
the Corporation that upon such broker's sale of shares with respect to
which such option is exercised, it is to deliver promptly to the
Corporation the amount of sale proceeds necessary to satisfy the
option exercise price and any required withholding taxes."
5. Paragraph 14(a) is hereby amended and restated in its entirety as
follows:
"In the event that the employment of an employee to whom an option,
right or limited right has been granted under the 1986 Plan shall be
terminated (except as set forth in paragraph 15 ), such option, right
or limited right may, subject to the provisions of the 1986 Plan, be
exercised (to the extent that the employee was entitled to do so at
the termination of his employment) at any time within 3 months after
such termination, or, in the case of an employee whose termination
results from retirement from active employment at or after the
earliest permissible retirement date (the "Early Retirement Age" )
specified in the G. B. Dealey Retirement Pension Plan, or any
successor qualified retirement plan of the Corporation, one of its
subsidiaries or a parent covering such employee (the "Pension Plan"),
within 3 years after such termination, but in no case later than the
date on which the option, right or limited right terminates; provided,
however, that any option, right or limited right held by an employee
whose employment is terminated for cause (as determined by the Board
of Directors of the Corporation in its sole discretion) or an employee
who leaves the employe of the Corporation voluntarily (other than
after an Acceleration Date) shall, to the extent not theretofore
exercised, forthwith terminate."
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
in its name and on its behalf by the officer thereunto duly authorized as of
the 22nd day of February, 1989.
A. H. BELO CORPORATION
By: /s/ ROBERT W. DECHERD
---------------------------
Title: Chief Executive Officer
------------------------
ATTEST:
/s/ MICHAEL J. MCCARTHY
- --------------------------
Secretary
<PAGE> 1
EXHIBIT 10.3(19)
FIFTH AMENDMENT
TO THE
A. H. BELO CORPORATION EMPLOYEE
SAVINGS AND INVESTMENT PLAN
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the following amendments to the
A. H. Belo Corporation Employee Savings and Investment Plan (the "Plan").
1. Section 3.2 of the Plan is amended by redesignating subsection
(d) as subsection (e), and by adding the following new subsection (d):
"(d) Participants Ineligible for Matching Contributions.
Notwithstanding the foregoing provisions of this Section, no matching
contributions will be made with respect to any Employee who is
employed by DFW Suburban Newspapers, Inc."
2. Section 4.2 of the Plan is amended by adding the following
sentence at the end thereof:
"Notwithstanding the foregoing, no Participating Employer matching
contributions will be allocated to the Matching Contribution Account
of any Participant who is ineligible for matching contributions
pursuant to Section 3.2(d), and any Deferral Contributions made on
behalf of such ineligible Participant will be disregarded for purposes
of allocating matching contributions to other Participants."
The foregoing amendments are effective with respect to contributions
made to the Plan for payroll periods beginning on and after April 1, 1994.
Executed at Dallas, Texas, this 1st day of March, 1994.
A. H. BELO CORPORATION
By /s/ ROBERT W. DECHERD
<PAGE> 1
EXHIBIT 10.3(20)
THE G. B. DEALEY RETIREMENT PENSION PLAN
(As Amended and Restated Effective January 1, 1988)
<PAGE> 2
THE G. B. DEALEY RETIREMENT PENSION PLAN
A. H. Belo Corporation, a Delaware corporation, amends and completely
restates The G. B. Dealey Retirement Pension Plan effective as of January 1,
1988. The Plan is a defined benefit pension plan intended to qualify under
Code section 401(a), and the trust previously established pursuant to the Plan
is an employees' trust intended to constitute a tax-exempt organization under
Code section 501(a).
The provisions of the Plan as amended and restated herein will apply
to each Employee who completes an Hour of Service after December 31, 1987;
provided, however, that an Employee's benefit which is protected from being
decreased or eliminated in any respect under Code section 411(d)(6), and the
Employee's vested interest in such benefit, will not be less under the terms of
the Plan set forth below than under the terms of the Plan as in effect on
December 31, 1987.
Words and phrases with initial capital letters used throughout the Plan
are defined in Article 1.
-i-
<PAGE> 3
TABLE OF CONTENTS
Page
----
Article 1 Definitions . . . . . . . . . . . . . . . . . . . . 1
Article 2 Participation . . . . . . . . . . . . . . . . . . . . 10
Article 3 Contributions . . . . . . . . . . . . . . . . . . . . 12
Article 4 Vesting . . . . . . . . . . . . . . . . . . . . . . . 13
Article 5 Retirement Benefits . . . . . . . . . . . . . . . . . 15
Article 6 Special Provisions Affecting
Certain Participants . . . . . . . . . . . . . . . . 19
Article 7 Forms of Retirement Benefits . . . . . . . . . . . . 25
Article 8 Death Benefits . . . . . . . . . . . . . . . . . . . 29
Article 9 Administration of the Plan and
Trust Agreement . . . . . . . . . . . . . . . . . . . 32
Article 10 Limitations on Benefits . . . . . . . . . . . . . . . 37
Article 11 Restrictions on Distributions to
Participants and Beneficiaries . . . . . . . . . . . 45
Article 12 Top-Heavy Provisions . . . . . . . . . . . . . . . . 48
Article 13 Adoption of the Plan by the
Controlled Group Members . . . . . . . . . . . . . . 54
Article 14 Amendment of the Plan . . . . . . . . . . . . . . . . 55
Article 15 Termination and Partial Termination . . . . . . . . . 56
Article 16 Miscellaneous . . . . . . . . . . . . . . . . . . . . 61
Appendix A Participating Employers . . . . . . . . . . . . . . . A-1
Appendix B Actuarial Factors for Determining
Certain Early Retirement Benefits . . . . . . . . . . B-1
-ii-
<PAGE> 4
ARTICLE 1
DEFINITIONS
1.1 "Accrued Benefit" means a Participant's Normal Retirement
Benefit which he has earned as of any date using the greater of the
Participant's years of Credited Service or the years of Credited Service the
Participant would earn if he remained an Employee until attaining age 65,
multiplied by a fraction (not to exceed 1.0) the numerator of which is the
Participant's years of Credited Service and the denominator of which is the
years of Credited Service the Participant would earn if he remained an Employee
until age 65.
1.2 "Actuarial Equivalent" or "Actuarially Equivalent" means a
form of benefit under which the aggregate payments expected to be received
under one form of benefit are equal in value to the aggregate payments expected
to be received under a different form of benefit using the interest rate and
mortality factors set forth below.
(a) Interest rate. The interest rate used for purposes
of computing optional forms of benefit payments (other than a single sum
payment), and for purposes of computing any adjustments for benefits commencing
on a date other than a Participant's Normal Retirement Date when such
adjustment is not otherwise provided for in the Plan, for benefits that become
payable before January 1, 1989, will be based on the interest rate used by the
Pension Benefit Guaranty Corporation in the valuation of immediate annuities.
As of January 1, 1983, and as of the beginning of each third calendar year
before January 1, 1989, thereafter, the interest rate will be the average of
the Pension Benefit Guaranty Corporation immediate annuity rates in effect on
the first day of each month for the five-year period prior to such January 1,
rounded to the nearest 0.5%, provided that no change will be made unless it
increases or decreases the previous interest rate by at least one percentage
point.
The interest rate used for purposes of computing optional
forms of benefit payments (other than a single sum payment), and for purposes
of computing any adjustments for benefits commencing on a date other than a
Participant's Normal Retirement Date when such adjustment is not otherwise
provided for in the Plan, for benefits that become payable after December 31,
1988, will be the Pension Benefit Guaranty Corporation immediate annuity rate
in effect on the first day of the Plan Year; provided, however, that the amount
<PAGE> 5
of the Participant's Accrued Benefit determined using such interest rate will
not be less than the amount of the Participant's Accrued Benefit as of December
31, 1988, using the interest rate determined under the preceding paragraph.
(b) Mortality. The mortality assumption used for
purposes of computing optional forms of benefit payments, and for purposes of
computing any adjustments for benefits commencing on a date other than a
Participant's Normal Retirement Date when such adjustment is not otherwise
provided for in the Plan, will be a unisex rate that is 50% male, 50% female,
taken from the 1971 Group Annuity Mortality Table, Projected by Scale D to
1975.
Notwithstanding the foregoing, in calculating the present
value of a Participant's benefit for purposes of the immediate distribution of
a small benefit under Section 7.1(e), actuarial equivalence will be determined
by using the Applicable Interest Rate.
The foregoing actuarial assumptions may be changed from time
to time by amendment to the Plan. No Participant or Beneficiary will be deemed
to have any right, vested or nonvested, to have his benefit computed under
previously adopted actuarial assumptions, except to the extent required by Code
section 411(d)(6) to prevent the reduction of a Participant's Accrued Benefit.
1.3 "Applicable Interest Rate" means the interest rate or rates
that would be used by the Pension Benefit Guaranty Corporation, as of the first
day of the Plan Year in which a distribution is made, for purposes of
determining the present value of the Participant's benefit under the Plan if
the Plan had terminated on the first day of such Plan Year with insufficient
assets to provide benefits guaranteed by the Pension Benefit Guaranty
Corporation on that date.
1.4 "Beneficiary" means the one or more persons or entities
entitled to receive distribution of a benefit under the Plan in the event of a
Participant's death.
1.5 "Benefit Commencement Date" means the date upon which payment
of a Participant's benefit commences.
1.6 "Board of Directors" or "Board" means the Board of Directors
of the Company.
1.7 "Break in Service Year" means a Period of Absence of at least
twelve consecutive months. A Break in Service Year
-2-
<PAGE> 6
will commence on the first day of an Employee's Period of Severance and will end
on the day on which the Employee again performs an Hour of Service for a
Controlled Group Member.
If any Employee who is absent from work with a Controlled
Group Member because of (i) the Employee's pregnancy, (ii) the birth of the
Employee's child, (iii) the placement of a child with the Employee in
connection with the Employee's adoption of the child, or (iv) caring for such
child immediately following such birth or placement, will be absent for such
reason beyond the first anniversary of the first date of absence, his Period of
Absence, solely for purposes of preventing a Break in Service Year, will
commence on the second anniversary of the first day of absence from work. The
period of absence from work between the first and second anniversaries of the
first date of absence from work will not be counted as a Period of Absence or a
period of Credited Service. The provisions of this paragraph will not apply to
an Employee unless the Employee furnishes to the Committee such timely
information that the Committee may reasonably require to establish (i) that the
absence from work is for one of the reasons specified in this paragraph and
(ii) the number of days for which there was such an absence.
1.8 "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
1.9 "Committee" or "Administrative Committee" means the committee
appointed under Article 9.
1.10 "Company" means A. H. Belo Corporation, a Delaware
corporation. The term "Company" will also include any successor employer, if
the successor employer expressly agrees in writing as of the effective date of
succession to continue the Plan and become a party to the Trust Agreement.
1.11 "Compensation" means the earnings paid to an Employee by the
Participating Employers which are subject to reporting on Internal Revenue
Service Form W-2, excluding, however, (i) amounts includible in the Employee's
income under Code section 83 with respect to restricted stock, (ii) amounts
includible in the Employee's income by reason of the grant or exercise of a
stock option, (iii) any other amounts includible in the Employee's income by
reason of an award under the Company's 1986 Long Term Incentive Plan, as
amended from time to time, (iv) moving expense reimbursements and (v) except as
provided in the next sentence, contributions to or amounts paid to the Employee
from this Plan or any other Qualified Plan. In addition, Compensation includes
any contributions made by the
-3-
<PAGE> 7
Participating Employers on behalf of an Employee pursuant to a deferral
election under an employee benefit plan containing a cash or deferred
arrangement under Code section 401(k) or any amounts that would have been
received as cash but for an election to receive benefits under a cafeteria plan
meeting the requirements of Code section 125. Effective as of the first Plan
Year beginning after December 31, 1988, the annual Compensation of an Employee
taken into account for any purpose for any Plan Year will not exceed $200,000,
as adjusted by the Secretary of the Treasury.
1.12 "Controlled Group" means the Company and all other
corporations, trades and businesses, the employees of which, together with
employees of the Company, are required by the first sentence of subsection (b),
by subsection (c), by subsection (m) or by subsection (o) of Code section 414
to be treated as if they were employed by a single employer.
1.13 "Controlled Group Member" means each corporation or
unincorporated trade or business that is or was a member of a Controlled Group,
but only during such period as it is or was such a member.
1.14 "Credited Service" means the period of time beginning on the
date an Employee is first credited with an Hour of Service (or is again
credited with an Hour of Service following his reemployment) and ending on the
Employee's Termination Date. An Employee's Credited Service will also include
each Period of Absence of less than 12 months and any periods during which he
is in the service of the armed forces of the United States and his reemployment
rights are guaranteed by law, provided he returns to employment with a
Controlled Group Member within the time such rights are guaranteed. A "year of
Credited Service" means each period of 365 days in an Employee's period of
Credited Service, determined by aggregating periods of Credited Service that
are not consecutive. If an Employee's aggregate Credited Service exceeds his
whole years of Credited Service, he will receive credit for a fractional year
of Credited Service determined by dividing the number of days of Credited
Service that exceed his whole years of Credited Service by 365. For purposes
of determining the amount of an Employee's Accrued Benefit (but not for
purposes of determining his vested interest in his Accrued Benefit), Credited
Service earned by the Employee (i) while employed by a Controlled Group Member
that was not a Participating Employer will be taken into account unless the
Employee was eligible to participate in another Qualified Plan by reason of
such employment and (ii) during any period prior to January 1, 1982, during
which the Employee was eligible to participate in the Plan but elected not to
participate will be disregarded.
-4-
<PAGE> 8
1.15 "Disability" or "Disabled" means disability for purposes of an
Employee's eligibility to receive disability benefits under the Company's
long-term disability plan. An Employee who for any reason is not eligible to
receive disability benefits under the Company's long-term disability plan will
not be Disabled for purposes of the Plan.
1.16 "Early Retirement Age" means the earlier of (i) the date on
which a Participant has attained age 55 and has completed at least (A) for
Participants who terminate employment before January 1, 1989, and who do not
complete an Hour of Service thereafter, ten years of Credited Service and (B)
for all other Participants, five years of Credited Service and (ii) the date on
which a Participant has attained age 62.
1.17 "Effective Date" means January 1, 1988.
1.18 "Employee" means any person who (i) is employed by a
Controlled Group Member if the relationship between a Controlled Group Member
and such person would, for federal income tax purposes, constitute the legal
relationship of employer and employee, or (ii) is a "leased employee" of a
Controlled Group Member within the meaning of Code section 414(n)(2) but only
for purposes of the requirements of Code section 414(n)(3).
1.19 "Enrolled Actuary" means the enrolled actuary as defined by
Section 103(a)(4)(A) of ERISA, engaged by the Committee or the Company as the
Plan's enrolled actuary.
1.20 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.21 "Final Monthly Compensation" means the average monthly
compensation of a Participant during the ten full calendar years of employment
with a Controlled Group Member immediately preceding his termination of
employment or during all of his full calendar years of employment, if less than
ten full calendar years.
1.22 "Hour of Service" means each hour credited in accordance with
the following rules:
(a) Credit for Services Performed. An Employee will be
credited with one Hour of Service for each hour for which he is paid, or
entitled to payment, by one or more Controlled Group Members for the
performance of duties.
-5-
<PAGE> 9
(b) Credit for Periods in Which No Services Are
Performed. An Employee will be credited with one Hour of Service for each hour
for which he is paid, or entitled to payment, by one or more Controlled Group
Members on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated); except
that (i) no more than 501 Hours of Service will be credited under this
subsection (b) to an Employee on account of any single continuous period during
which he performs no duties (whether or not such period occurs in a single Plan
Year), (ii) an hour for which an Employee is directly or indirectly paid, or
entitled to payment, on account of a period during which no duties are
performed will not be credited to the Employee if the payment is made or due
under a plan maintained solely for the purpose of complying with applicable
workers' compensation or unemployment compensation or disability insurance
laws, and (iii) Hours of Service will not be credited for a payment which
solely reimburses an Employee for medical or medically related expenses
incurred by the Employee. For purposes of this subsection (b), an Employee
will be credited with Hours of Service on the basis of his regularly scheduled
working hours per week (or per day if he is paid on a daily basis) or, in the
case of an Employee without a regular work schedule, on the basis of 40 Hours
of Service per week (or 8 Hours of Service per day if he is paid on a daily
basis) for each week (or day) during the period of time during which no duties
are performed; except that an Employee will not be credited with a greater
number of Hours of Service for a period during which no duties are performed
than the number of hours for which he is regularly scheduled for the
performance of duties during the period or, in the case of an Employee without
a regular work schedule, on the basis of 40 Hours of Service per week (or 8
Hours of Service per day if he is paid on a daily basis).
(c) Credit for Back Pay. An Employee will be credited
with one Hour of Service for each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by one or more
Controlled Group Members; except that an hour will not be credited under both
subsection (a) or (b), as the case may be, and this subsection (c), and Hours
of Service credited under this subsection (c) with respect to periods described
in subsection (b) will be subject to the limitations and provisions under
subsection (b).
(d) Credit for Certain Absences. If an Employee is
absent from work on or after the Effective Date for any period by reason of the
pregnancy of the Employee, by reason of the birth of a child of the Employee,
by reason of the
-6-
<PAGE> 10
placement of a child with the Employee, or for purposes of caring for a child
for a period beginning immediately following the birth or placement of that
child, the Employee will be credited with Hours of Service (solely for the
purpose of determining whether he has a One Year Break in Service under the
Plan) equal to (i) the number of Hours of Service which otherwise would
normally have been credited to him but for his absence, or (ii) if the number
of Hours of Service under clause (i) is not determinable, 8 Hours of Service
per normal workday of the absence, provided, however, that the total number of
Hours of Service credited to an Employee under this subsection (d) by reason of
any pregnancy, birth or placement will not exceed 501 Hours of Service. Hours
of Service will not be credited to an Employee under this subsection (d) unless
the Employee furnishes to the Committee such timely information as the
Committee may reasonably require to establish that the Employee's absence from
work is for a reason specified in this subsection (d) and the number of days
for which there was such an absence.
(e) Manner of Counting Hours. No hour will be counted
more than once or be counted as more than one Hour of Service even though the
Employee may receive more than straight-time pay for it. With respect to
Employees whose compensation is not determined on the basis of certain amounts
for each hour worked during a given period and for whom hours are not required
to be counted and recorded by any federal law (other than ERISA), Hours of
Service will be credited on the basis of 10 Hours of Service daily, 45 Hours of
Service weekly, 95 Hours of Service semi-monthly, or 190 Hours of Service
monthly, if the Employee's compensation is determined on a daily, weekly,
semi-monthly or monthly basis, respectively, for each period in which the
Employee would be credited with at least one Hour of Service under this
section. Except as otherwise provided in subsection (d), Hours of Service will
be credited to Eligibility Computation Periods and Plan Years in accordance
with the provisions of 29 C.F.R. Section 2530.200b-2, which provisions are
incorporated in this Plan by reference.
1.23 "Normal Retirement Benefit" means the retirement benefit
payable as of the Normal Retirement Date to a Participant who terminates
employment at age 65, determined in accordance with Section 5.1.
1.24 "Normal Retirement Date" means the first day of the month
coincident with or immediately following a Participant's attainment of age 65.
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1.25 "Participant" means an Employee or former Employee who has met
the applicable participation requirements of Article 2 (or the participation
requirements of the Plan as in effect on December 31, 1987) and who has not yet
received a distribution of the entire amount of his vested benefit under the
Plan.
1.26 "Participating Employer" means each Controlled Group Member
set forth on Appendix A and any other Controlled Group Member or organizational
unit of the Company or a Controlled Group Member which is designated as a
Participating Employer under the Plan by the Board of Directors.
1.27 "Period of Absence" means the period of time beginning on an
Employee's Termination Date and ending on the date he again performs an Hour of
Service.
1.28 "Plan" means the defined benefit pension plan set forth
herein, as amended from time to time.
1.29 "Plan Year" means the period with respect to which the records
of the Plan are maintained, which is the 12-month period beginning on January 1
and ending on December 31, and includes such periods prior to the Effective
Date.
1.30 "Primary Social Security Benefit" means the amount of monthly
benefits which an Employee would be entitled to receive as his "primary
insurance amount" determined on the assumption that (i) he has made or will
make appropriate application for such benefits, (ii) no event occurs to delay
or forfeit any part of such benefits, and (iii) if he terminates employment
before age 65, he will continue to receive until age 65 remuneration (which
would be treated as taxable wages for purposes of the Social Security Act) at
the same rate as at the time of his termination of employment. In the case of
an Employee who, from the later of January 1, 1951 or the date on which he
attained 22 years of age, was continuously employed by one or more Controlled
Group Members, his Primary Social Security Benefit will be computed as if,
prior to the date of his termination of employment, he received no wages other
than those paid by the Controlled Group Members. As used in this Section 1.30,
the term "primary insurance amount" will have the same meaning as under the
Social Security Act as amended and in effect on an Employee's termination of
employment.
1.31 "Qualified Joint and Survivor Annuity" means a monthly annuity
for the life of a Participant and, after his death, a monthly survivor annuity
for the life of the
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Participant's spouse which will be equal to 50% of the amount of the monthly
annuity payable during the joint lives of the Participant and his spouse, which
will be the Actuarial Equivalent of the normal form of benefit provided to an
unmarried Participant.
1.32 "Qualified Plan" means an employee benefit plan that is
qualified under Code section 401(a).
1.33 "Qualified Preretirement Survivor Annuity" means a monthly
annuity for the life of the surviving spouse of a deceased Participant that is
the Actuarial Equivalent of the Participant's Accrued Benefit determined as of
the date of his death.
1.34 "Termination Date" means the earlier of the date on which an
Employee quits, retires, is discharged or dies, or the first anniversary of the
date on which the Employee is absent from service with a Controlled Group
Member for any other reason, such as vacation, holiday, sickness, disability,
leave of absence or layoff. The phrases "terminates employment" and
"termination of employment" when used with respect to an Employee will refer to
an event that causes the date on which the event occurs to constitute the
Employee's Termination Date.
1.35 "Trust Agreement" means the agreement or agreements executed
by the Company and the Trustee which establish a trust fund to provide for the
investment, reinvestment, administration and distribution of contributions made
under the Plan and the earnings thereon, as amended from time to time.
1.36 "Trust Fund" means the assets of the Plan held by the Trustee
pursuant to the Trust Agreement.
1.37 "Trustee" means the one or more individuals or organizations
who have entered into the Trust Agreement as Trustee(s), and any duly appointed
successor.
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ARTICLE 2
PARTICIPATION
2.1 Eligibility to Participate. Each Employee who was a
Participant on December 31, 1987, will continue to participate in the Plan on
the Effective Date. Each Employee who was not a Participant as of the
Effective Date will become a Participant on the January 1 or July 1 next
following the date on which he has both attained age 21 and completed a year of
Credited Service, if he is then employed by a Participating Employer.
2.2 Exclusions from Participation.
(a) Ineligible Employees. An Employee who is otherwise
eligible to participate in the Plan will not become or continue as an active
Participant if (i) except as otherwise provided in this subsection (a), he is
covered by a collective bargaining agreement that does not expressly provide
for participation in the Plan, provided that the representative of the
Employees with whom the collective bargaining agreement is executed has had an
opportunity to bargain concerning retirement benefits for those Employees; (ii)
he is a nonresident alien who receives no earned income (within the meaning of
Code section 911(d)(2)) from a Participating Employer which constitutes income
from sources within the United States (within the meaning of Code section
861(a)(3)); (iii) he is a leased employee required to be treated as an Employee
under Code section 414(n); (iv) he is employed by a Controlled Group Member or
an organizational unit thereof that has not been designated as a Participating
Employer by the Board; or (v) he is then on an approved leave of absence
without pay or in the service of the armed forces of the United States. The
exclusion provided in clause (i) of this subsection (a) will not apply to an
Employee of The Dallas Morning News Company who is or becomes a member of the
bargaining unit represented by the Dallas Typographical Union, Local No. 103,
or to an Employee of WFAA Television, Inc. who is or becomes a member of the
bargaining unit represented by the International Brotherhood of Electrical
Workers.
(b) Exclusion after Participation. A Participant who
becomes ineligible under subsection (a) will continue to earn Credited Service
for purposes of determining his vested interest in his Accrued Benefit, but
during the period of ineligibility the Participant's Credited Service will not
be taken into account for purposes of determining the amount of his Accrued
Benefit.
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(c) Participation after Exclusion. An Employee or
Participant who is excluded from active participation will be eligible to
participate in the Plan on the first day he is no longer described in
subsection (a) and is credited with one or more Hours of Service by a
Participating Employer, provided that he has otherwise met the requirements of
Section 2.1. This subsection will apply to an Employee who returns from an
approved leave of absence or from military leave and who would otherwise be
treated as a new Employee under Section 2.3 only if he returns to employment
with a Controlled Group Member immediately following the expiration of the
leave of absence or, in the case of an Employee on military leave, during the
period in which reemployment rights are guaranteed by law.
2.3 Reemployment Provisions. All Credited Service is taken into
account in determining eligibility to participate, except as otherwise provided
in this Section.
(a) Termination of Employment before Participation. If
an Employee terminates employment before becoming a Participant and is
reemployed by a Controlled Group Member before incurring five consecutive Break
in Service Years, he will become a Participant on the later of the date
initially determined under Section 2.1, or the date he is credited with one or
more Hours of Service by a Participating Employer after reemployment; but if he
is reemployed by a Controlled Group Member after incurring five consecutive
Break in Service Years, he will be treated as a new Employee for purposes of
the Plan and his Credited Service completed before his reemployment will be
disregarded in determining when he will become a Participant.
(b) Termination of Employment after Participation. A
Participant who has a vested and nonforfeitable right to all or a portion of
his Accrued Benefit at the time of his termination of employment will again
become an active Participant immediately upon his reemployment by a
Participating Employer. If any other Participant terminates employment and is
reemployed by a Controlled Group Member before incurring a number of
consecutive Break in Service Years equal to the greater of five or his years of
Credited Service, he will again become an active Participant on the date he is
credited with one or more Hours of Service by a Participating Employer; but if
he is reemployed by a Controlled Group Member after incurring a number of
consecutive Break in Service Years equal to the greater of five or his years of
Credited Service, he will be treated as a new Employee and his Credited Service
completed before his reemployment will be disregarded for purposes of
determining when he will again become a Participant.
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ARTICLE 3
CONTRIBUTIONS
3.1 Employer Contributions. Each Participating Employer will pay
to the Trustee as a contribution for a Plan Year the amount, if any, determined
by the Enrolled Actuary to be necessary to provide the benefits under Article 5
and, if applicable, Article 12, subject, however, to the Company's right to
amend or terminate the Plan.
3.2 Time of Payment. The contributions for a Plan Year to be made
by each Participating Employer pursuant to this Article 3 will be paid to the
Trustee not later than the date permitted under Section 412 of the Code and
regulations thereunder for purposes of determining credits to the funding
standard account for such Plan Year, unless a waiver of the minimum funding
standard for such Plan Year has been obtained by the Participating Employers
from the Internal Revenue Service.
3.3 Participant Contributions Prohibited. A Participant may not
make contributions to the Plan.
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ARTICLE 4
VESTING
4.1 Determination of Vested Interest.
(a) Years of Credited Service. A Participant who
terminates employment before January 1, 1989, and is not thereafter credited
with an Hour of Service by a Controlled Group Member will earn a 100% vested
and nonforfeitable interest in his Accrued Benefit upon his completion of ten
years of Credited Service. The interest of each other Participant in his
Accrued Benefit will become 100% vested and nonforfeitable upon his completion
of five years of Credited Service. Prior to becoming 100% vested, a
Participant will have no vested interest in his Accrued Benefit.
(b) Accelerated Vesting. A Participant's interest in his
Accrued Benefit will become 100% vested and nonforfeitable without regard to
his years of Credited Service (i) on his attainment of Early Retirement Age
while he is an Employee, (ii) on his death while he is an Employee, or (iii) in
the event of a Change in Control (as defined in Section 5.7(b)) while he is an
Employee.
4.2 Unclaimed Distribution. If the Committee cannot locate a
person entitled to receive a benefit under the Plan within a reasonable period
(as determined by the Committee in its discretion), the amount of the benefit
will be treated as a forfeiture during the Plan Year in which the period ends.
If, before final distributions are made from the Trust Fund following
termination of the Plan, a person who was entitled to a benefit which has been
forfeited under this Section makes a claim to the Committee or the Trustee for
his benefit, the amount of his benefit that was previously forfeited will be
restored and paid to him in accordance with the terms of the Plan.
4.3 Reemployment Provisions. If a Participant who has a vested
and nonforfeitable interest in his Accrued Benefit terminates employment and
again becomes an Employee, his years of Credited Service completed before his
reemployment will be included in determining his vested and nonforfeitable
interest after he again becomes an Employee. If any other Employee or
Participant terminates employment and again becomes an Employee before
incurring a number of consecutive Break in Service Years equal to the greater
of five or his years of Credited Service, his years of Credited Service
completed before his reemployment
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<PAGE> 17
will be included in determining his vested and nonforfeitable interest after he
again becomes an Employee; but if he is reemployed after incurring a number of
consecutive Break in Service Years equal to the greater of five or his years of
Credited Service, his years of Credited Service completed before his
reemployment will be disregarded for purposes of determining his vested and
nonforfeitable interest after he again becomes an Employee.
4.4 Application of Forfeited Benefits. The amount of a
Participant's benefit that is forfeited pursuant to this Article will not be
applied to increase the benefits of Participants at any time but will be
applied to reduce Participating Employer contributions to the Plan.
4.5 Special Provisions Applicable to Certain Participants.
Article 6 contains special vesting provisions applicable to certain
Participants.
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ARTICLE 5
RETIREMENT BENEFITS
5.1 Normal Retirement Benefit. A Participant who terminates
employment at age 65 will receive a monthly retirement benefit beginning on his
Normal Retirement Date in an amount equal to the difference between (i) 1.75%
of the Participant's Final Monthly Compensation multiplied by his years of
Credited Service and (ii) 1.50% of his Primary Social Security Benefit
multiplied by his years of Credited Service up to 40 such years; provided,
however, that a Participant who was an Employee on January 1, 1978, and who was
an active Participant in the Plan on December 31, 1977, will receive a minimum
monthly benefit beginning on his Normal Retirement Date equal to 1% of his
Final Monthly Compensation multiplied by his years of Credited Service.
5.2 Early Retirement Benefit. A Participant who terminates
employment for any reason other than death or total and permanent disability at
or after his Early Retirement Age and before age 65 will be entitled to receive
a monthly retirement benefit beginning on his Normal Retirement Date in an
amount equal to his Accrued Benefit determined as of the date he terminated
employment. If the Participant elects to receive his early retirement benefit
as of the first day of any month before his Normal Retirement Date, his Accrued
Benefit will be reduced by 1/180th for each of the first 60 months and by
1/360th for each of the next 60 months by which his Benefit Commencement Date
is earlier than his Normal Retirement Date.
5.3 Late Retirement Benefit. A Participant who remains or again
becomes an Employee after attaining age 65 will receive a monthly retirement
benefit beginning on the first day of the month immediately following his
termination of employment. The amount of the Participant's late retirement
benefit will be determined under the benefit formula set forth in Section 5.1
by taking into account the Participant's Compensation and years of Credited
Service after age 65 and will be reduced (but not below zero) to the extent
permitted under Code section 411(b)(1)(H) and the regulations thereunder by the
Actuarial Equivalent of any in-service distributions made to the Participant
under the Plan after age 65 and by the amount of any adjustments made under the
Plan as in effect on December 31, 1987, to the Participant's retirement benefit
attributable to the delay in the payment of benefits after attainment of age 65
and prior to January 1, 1989. In no event, however, will the Participant's
late retirement benefit
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be less than his Accrued Benefit determined at age 65. For purposes of this
Section, a Participant who attains age 65 will be considered to have terminated
employment on the first day of any month he is not employed in Section
203(a)(3)(B) service within the meaning of the Department of Labor regulations
(29 C.F.R. Section 2530.203-3(c)).
5.4 Deferred Vested Benefit. A Participant who has a vested
interest in his Accrued Benefit and who terminates employment before attaining
age 55 for any reason other than death or total and permanent disability will
be entitled to receive a monthly retirement benefit beginning on his Normal
Retirement Date in an amount equal to his Accrued Benefit determined as of the
date he terminated employment. If the Participant elects to begin receiving
his retirement benefit as of the first day of any month after attaining age 55
and before his Normal Retirement Date, his Accrued Benefit will be reduced by
the factors set forth in Section 5.2 for each month that his Benefit
Commencement Date is earlier than his Normal Retirement Date.
Article 6 contains special provisions relating to the payment
of deferred vested benefits for certain Participants.
5.5 Disability Benefit. A Participant who has a Disability prior
to attaining age 65 will continue to accrue a benefit during the entire period
of his Disability only if he returns to permanent, full-time employment with a
Participating Employer immediately following the termination of his Disability.
For purposes of determining the amount of the benefit accrued during
Disability, the Participant's Compensation will be deemed to be his annualized
rate of Compensation as of the date of his Disability, and the Participant will
earn Credited Service during the period in which he receives Disability
benefits.
A Participant who becomes totally and permanently disabled (as
hereafter defined) before attaining age 65 and is not eligible for benefits
under the Company's long-term disability plan will be fully vested in his
Accrued Benefit without regard to his years of Credited Service and will be
entitled to receive a monthly benefit beginning on the first day of the month
immediately following the date of his disability in an amount equal to his
Accrued Benefit determined as of such date. The amount of such disability
benefit will not be actuarially reduced to reflect the fact that it is being
paid prior to the Participant's Normal Retirement Date. A Participant will be
totally and permanently disabled for
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purposes of this paragraph only if he is eligible to receive disability
benefits under the Social Security Act. A Participant who is eligible to
receive a monthly benefit under this paragraph will continue to receive such
benefit only if he submits evidence to the Committee, in such form and at such
times as the Committee may reasonably request, that he continues to qualify for
disability benefits under the Social Security Act.
5.6 Reemployment Provisions.
(a) Determination of Credited Service. If a Participant
terminates employment and again becomes an Employee, his years of Credited
Service completed before his reemployment will be taken into account for
purposes of determining the amount of his Accrued Benefit only to the extent
such years of Credited Service are included under Section 4.3 in determining
his vested and nonforfeitable interest in his Accrued Benefit after he again
becomes an Employee.
(b) Adjustment to Accrued Benefit. If a Participant
receives a benefit payment after terminating employment and again becomes an
Employee, the amount of his Accrued Benefit that becomes payable upon his
subsequent termination of employment will be reduced by the Actuarial
Equivalent of the payments previously made to him.
5.7 Benefits Payable Following a Change in Control.
(a) Increase in Benefits. Upon a Change in Control (as
defined in subsection (b) below), provided the Board has not adopted a
resolution prior thereto causing this Section to become inoperative, (i) the
Accrued Benefits of all Participants who are Employees on the date a Change in
Control occurs will be fully vested and nonforfeitable and (ii) the excess (if
any) (hereinafter, the "Excess") of Plan assets over the present value of
accrued benefits (as determined in accordance with Section 4044 of ERISA) will
be applied to provide such Participants with an additional vested benefit
equivalent to the benefit such Participants would have received under the
regulations of the Pension Benefit Guaranty Corporation providing for the
allocation of residual assets of plans that do not provide for a reversion (29
C.F.R. Section 2618.32(a)), with the provisions of such regulations applied
solely to Participants who are Employees on the date a Change in Control
occurs, if the Plan had terminated on the date of Change in Control, so that,
immediately after such increase, the Excess over the present value of vested
accrued benefits is
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zero. If, however, the allocation method provided under this subsection (a) is
not acceptable to the Internal Revenue Service or the Pension Benefit Guaranty
Corporation, the Excess will be allocated on a pro rata basis according to the
product of the Final Monthly Compensation of each Participant multiplied by the
Participant's years of Credited Service; and if that method of allocation is
still not acceptable to the Internal Revenue Service or the Pension Benefit
Guaranty Corporation, the Excess will be allocated on any reasonable basis
acceptable to the Internal Revenue Service and the Pension Benefit Guaranty
Corporation.
(b) Change in Control Defined. For purposes of this
Section, the term "Change in Control" means (i) an event or series of events by
which any group (within the meaning of Rule 12b-2 promulgated under the
Securities Exchange Act of 1934), 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 its subsidiaries) that theretofore beneficially
owned (within the meaning of Rule 13d-3 promulgated under such Act) less than
30% of the total number of outstanding shares of common stock of the Company
(including common stock and, if issued and outstanding, Series A Common Stock
and Series B Common Stock, hereafter "Common Stock"), acquires shares of Common
Stock in a transaction or series of transactions that results in such group or
person directly or indirectly owning beneficially more than 30% of the total
number of outstanding shares of Common Stock, (ii) approval by the Company's
shareholders (or, if such approval is not required, consummation) of a merger
in which the Company does not survive as an independent, publicly-owned
company, a consolidation, or a sale, exchange or other disposition of all or
substantially all the Company's assets, or (iii) a change in the composition of
the Board of Directors during any period of two consecutive years such that the
individuals who at the beginning of such period were members of the Board of
Directors 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.
5.8 Special Benefit Provisions. Article 6 sets forth special
provisions affecting the calculation of benefits for certain Participants.
5.9 Limitation on Benefits. Article 10 sets forth certain rules
under Code section 415 that limit the amount of a Participant's retirement
benefits under the Plan.
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ARTICLE 6
SPECIAL PROVISIONS AFFECTING
CERTAIN PARTICIPANTS
6.1 Priority Over Other Provisions. The provisions set forth in
this Article will supersede any conflicting provisions of Articles 4, 5 and 8.
The provisions of Sections 6.2 through 6.8 apply to any
Employee who (i) immediately prior to January 30, 1984, was employed by a D&B
Affiliate (as defined below), (ii) effective January 30, 1984, became employed
by a Controlled Group Member that was a Participating Employer on such date,
and (iii) prior to March 30, 1984, did not return to employment with The Dun &
Bradstreet Corporation or any of its affiliates.
The remaining Sections of this Article apply to certain former
Employees who ceased to be active Participants as a result of the sale or other
disposition of a business by a Controlled Group Member.
6.2 Definitions Used in this Article. The following words and
phrases, when used with initial capital letters, will have the meanings set
forth below.
(a) "Accrued Social Security Benefit" means the amount of
monthly benefit which an Employee would be entitled to receive as his primary
insurance amount at age 65 under the Social Security Act in effect at the
earlier of the Employee's Normal Retirement Date or termination of employment
assuming (i) that he has made or will make appropriate application for such
benefits, (ii) that no event occurs to delay or forfeit any part of such
benefit, (iii) that wages cease upon the earlier of Normal Retirement Date or
termination of employment, and (iv) that the Employee had no wages prior to his
date of employment with The Dun & Bradstreet Corporation, or prior to the later
of his date of employment with a D&B Affiliate and either April 1, 1980, in the
case of employment with WVEC Television, Inc., or January 1, 1972, in the case
of employment with any other D&B Affiliate.
(b) "Average Final Compensation" means the average of the
Employee's monthly Compensation (excluding, however, amounts received prior to
January 1, 1984, as severance pay, payments dependent upon any contingency
after the period of Credited Service and any other special
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<PAGE> 23
remuneration) during the five consecutive calendar years in the last ten
calendar years of his Credited Service (or during the total number of calendar
years of Credited Service if fewer than five) producing the highest average
monthly Compensation. For purposes of determining an Employee's Compensation
for periods prior to January 30, 1984, (i) service with a nonparticipating
affiliated company under the D&B Plan will be deemed Credited Service and (ii)
in the event an Employee completed at least 1,000 but less than 1,800 hours of
service in any prior calendar year, his earnings will be annualized for such
prior year. Compensation for periods after December 31, 1983, will be
determined under Section 1.11.
(c) "Belo Factor" means the factor determined in
accordance with the table set forth in Part II of Appendix B.
(d) "Belo Service" means an Employee's total Credited
Service taken into account for purposes of determining his Accrued Benefit less
his D&B Service. An Employee's total Credited Service for this purpose will be
determined by aggregating (i) his years of Credited Service under the D&B Plan
as of December 30, 1983, (ii) for the period January 1, 1984, through December
31, 1984, the greater of his Credited Service under the D&B Plan through
January 30, 1984, and his Credited Service determined under Section 1.14 during
such entire period, provided that no Credited Service will be granted for the
period January 1, 1984 to January 30, 1984, unless the Employee was a
participant in the D&B Plan, and (iii) his Credited Service determined under
Section 1.14 beginning on January 1, 1985. Notwithstanding the foregoing, an
Employee's Credited Service under (i) above will not include any period of
service prior to April 1, 1980, with respect to an Employee who immediately
prior to January 30, 1984, was employed by WVEC Television, Inc., or prior to
January 1, 1972, with respect to any other Employee.
(e) "D&B Affiliate" means the following Delaware
corporations: (i) Great Western Broadcasting Corporation, (ii) Gulf Television
Corporation, (iii) KOTV, Inc. and (iv) WVEC Television, Inc.
(f) "D&B Factor" means the factor determined in
accordance with the applicable table set forth in Part I of Appendix B.
(g) "D&B Plan" means the Master Retirement Plan of The
Dun & Bradstreet Corporation as in effect immediately prior to January 30,
1984.
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<PAGE> 24
(h) "D&B Service" means the years of service credited to
an Employee under the D&B Plan as of January 30, 1984, for benefit accrual
purposes.
(i) "Final Monthly Compensation" means the amount
determined under Section 1.21, subject to the following adjustments: (i)
Compensation received during the period prior to January 1, 1984, will exclude
severance pay, payments dependent upon any contingency after the period of
Credited Service and any other special remuneration; and (ii) if during any
calendar year prior to January 1, 1984, an Employee completed at least 1,000
but less than 1,800 hours of service, Compensation for such calendar year will
be annualized.
6.3 Vesting Credit. An Employee's Credited Service for purposes
of determining his vested interest in his Accrued Benefit under Article 4 will
be determined by aggregating (i) his years of service for vesting purposes
under the D&B Plan as of December 31, 1983, (ii) for the period from January 1,
1984, through December 31, 1984, the greater of his service for vesting
purposes under the D&B Plan through January 30, 1984, and his Credited Service
determined under Section 1.14 during such entire period and (iii) his Credited
Service determined under Section 1.14 for the period beginning on January 1,
1985.
6.4 Normal Retirement Benefit. An Employee's Normal Retirement
Benefit will be equal to the sum of the benefits described in subsections (a)
and (b) below.
(a) D&B Benefit. The benefit under this subsection will
be (i) 1.7% of the Employee's Average Final Compensation multiplied by his
years of D&B Service, but in no event more than 25 such years, plus (ii) 1.0%
of his Average Final Compensation multiplied by his years of D&B Service in
excess of 25 years, minus (iii) 1.7% of his Accrued Social Security Benefit
multiplied by his years of D&B Service, but in no event more than 25 years,
minus (iv) 0.5% of his Accrued Social Security Benefit multiplied by his years
of D&B Service in excess of 25 years; provided, however, that the total offset
in clauses (iii) and (iv) will not exceed 50% of his Primary Social Security
Benefit.
(b) Belo Benefit. The benefit under this subsection will
be (i) 1.75% of the Employee's Final Monthly Compensation multiplied by his
years of Belo Service, minus the lesser of (ii) 1.5% of his Primary Social
Security Benefit multiplied by the years of Belo Service he would have accrued
if he had remained an Employee to his Normal Retirement Date
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<PAGE> 25
not in excess of 40 such years, multiplied by a fraction, the numerator of
which is his years of Belo Service and the denominator of which is the years of
Belo Service he would have accrued if he had remained an Employee to his Normal
Retirement Date, or (iii) 60% of his Primary Social Security Benefit multiplied
by a fraction, the numerator of which is the sum of his years of D&B Service
and his years of Belo Service and the denominator of which is the sum of the
numerator plus his years of Credited Service determined as if he had remained
an Employee to his Normal Retirement Date, less 1.7% of his Accrued Social
Security Benefit multiplied by his years of D&B Service not in excess of 25
such years, less 0.5% of his Accrued Social Security Benefit multiplied by his
years of D&B Service in excess of 25 years, but with no more than 15 years of
such additional D&B Service to be taken into account.
(c) Minimum D&B Benefit. In no event will the benefit
determined under subsection (a) be less than the sum of (i) any prior benefits
maintained or frozen for the Employee under the D&B Plan and (ii) $100.00
multiplied by his years of D&B Service and divided by 12.
(d) Limitation on D&B Benefit. An Employee will not be
entitled to any benefit computed under subsection (a) if he is entitled to
receive from the D&B Plan benefits accrued for periods of employment prior to
January 30, 1984.
6.5 Early Retirement Benefit. The monthly retirement benefit for
an Employee who had attained age 55 and completed at least ten years of service
for vesting purposes under the D&B Plan as of January 30, 1984, and who elects
to receive his retirement benefit before his Normal Retirement Date will be the
sum of the benefits described in subsections (a) and (b) below.
(a) D&B Benefit. The early retirement benefit under this
subsection will be the greater of the benefit described in Section 6.4(a)
multiplied by the D&B Factor or the benefit described in Section 6.4(c)
multiplied by the D&B Factor. The early retirement benefit under this
subsection will be subject to the same limitation described in Section 6.4(d).
(b) Belo Benefit. The early retirement benefit under
this subsection will be the benefit described in Section 6.4(b)(i) multiplied
by the Belo Factor minus the lesser of the offset described in Section
6.4(b)(ii) multiplied by the Belo Factor or the offset described in Section
6.4(b)(iii) multiplied by the D&B Factor.
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6.6 Late Retirement Benefit. If an Employee had attained age 65
on or before January 30, 1984, his late retirement benefit determined under
Section 5.3 will be determined by taking into account the actuarial present
value of the Employee's retirement benefit determined under Section 6.4(a) at
January 30, 1984, (calculated by using the interest and mortality assumptions
used under the Plan for purposes of determining actuarial equivalence) and the
interest credited to such benefit under the Plan as in effect on December 31,
1987 for periods before January 1, 1989.
6.7 Death Benefits. For purposes of the death benefit payable
under Section 8.1 to an Employee who had attained age 55 and had completed at
least ten years of service for vesting purposes under the D&B Plan as of
January 30, 1984, Actuarial Equivalence will be determined by applying the
factors set forth on Appendix B.
6.8 Reemployment Provisions. If an Employee terminated employment
and was rehired prior to January 30, 1984, and as a result of such termination
his prior service was disregarded under the D&B Plan, such prior service will
be reinstated if the Employee either completes five consecutive years of
Credited Service following his reemployment or remains an Employee until he
attains age 65.
6.9 Former Employees at KFDM-TV. The Accrued Benefit (determined
under the terms of the Plan in effect on December 31, 1987) of each Employee of
Belo Broadcasting Corporation who was employed at KFDM-TV at Beaumont, Texas,
on January 4, 1984, and who was an active Participant in the Plan on that date
is 100% vested and nonforfeitable. Benefit payments will be made to each such
Participant in accordance with the terms of the Plan no earlier than the date
on which such Participant is both no longer employed by Federated Newspapers,
Inc. and no longer employed at KFDM-TV.
6.10 Former Employees at KRQX (AM) and KZEW (FM). The Accrued
Benefit (determined under the terms of the Plan in effect on December 31, 1987)
of each Employee of Dallas Radio, Inc. who was employed at KRQX (AM) or KZEW
(FM) on December 31, 1986, and who was an active Participant in the Plan on
that date is 100% vested and nonforfeitable. Benefit payments will be made to
each such Participant in accordance with the terms of the Plan no earlier than
the date on which such Participant is both no longer employed by Anchor Media,
Ltd. and no longer employed at KRQX (AM) or KZEW (FM).
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6.11 Former Employees at KOA (AM) and KOAQ (FM). The Accrued
Benefit (determined under the terms of the Plan in effect on December 31, 1987)
of each Employee of Belo Radio, Inc. who was employed at KOA (AM) or KOAQ (FM)
on August 12, 1987, and who was an active Participant in the Plan on that date
is 100% vested and nonforfeitable. Benefit payments will be made to each such
Participant in accordance with the terms of the Plan no earlier than the date
on which such Participant is both no longer employed by Jacor Communications,
Inc. and no longer employed at KOA (AM) or KOAQ (FM).
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ARTICLE 7
FORMS OF RETIREMENT BENEFITS
7.1 Forms of Retirement Benefit.
(a) Unmarried Participant. The normal form of payment of
retirement benefits for a Participant who is not married on his Benefit
Commencement Date will be a ten-year certain and continuous annuity, consisting
of equal monthly payments during the Participant's lifetime beginning on his
Benefit Commencement Date, and if the Participant dies before he has received
120 monthly payments, monthly payments in the same amount will be continued to
his Beneficiary until the Participant and his Beneficiary have received a total
of 120 monthly payments. In the event that an unmarried Participant has a
former spouse who pursuant to Section 7.2(b) is treated as a spouse or
surviving spouse, the Participant will be deemed to be a married Participant
hereunder to the extent required by Section 7.2(b).
(b) Married Participant. The normal form of payment of
benefits for a Participant who is married on his Benefit Commencement Date will
be a Qualified Joint and Survivor Annuity, unless an optional form of benefit
is elected pursuant to a Qualified Election as defined in Section 7.2(a) within
the 90-day period prior to his Benefit Commencement Date.
(c) Optional Forms of Retirement Benefit. The optional
forms of retirement benefit under the Plan, each of which will be the Actuarial
Equivalent of the ten-year certain and continuous annuity described in
subsection (a) above, will be (i) a straight-life annuity, consisting of equal
monthly payments beginning on a Participant's Benefit Commencement Date and
ending with the monthly payment due immediately prior to his death; (ii) a
contingent annuitant annuity, consisting of equal monthly payments beginning on
the Participant's Benefit Commencement Date and, following his death, continued
monthly payments to his Beneficiary in an amount equal to not less than 50% nor
more than 100% (as the Participant will elect) of the monthly benefit payments
made to the Participant, provided, however, that if the Beneficiary dies after
the Benefit Commencement Date, the amount of monthly benefit payments to the
Participant will not be increased and will cease with the monthly benefit
payment due immediately prior to his death; and (iii) for a married
Participant, a ten-year certain and continuous annuity, described in subsection
(a).
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(d) Election of Optional Form. Subject to Section 7.2, a
Participant may elect in writing, on a form provided by the Committee, to have
his monthly retirement benefit paid in one of the optional forms. An election
will be effective only if the Participant is alive on his Benefit Commencement
Date. The period for making the election will be for at least 90 days
following the furnishing of all applicable information to the Participant by
the Committee and ending not earlier than 90 days before the Participant's
Benefit Commencement Date.
(e) Exception for Small Benefits. If the present value
of a Participant's vested Accrued Benefit does not exceed $3,500 and payment of
benefits has not commenced, the Committee will distribute the benefit as an
immediate single-sum payment notwithstanding any other provision of the Plan.
For purposes of determining whether the present value of a Participant's vested
Accrued Benefit exceeds $3,500, the present value of such benefit will be
calculated by using the Applicable Interest Rate.
7.2 Special Annuity Provisions.
(a) Qualified Election. For purposes of Section 7.1(b),
"Qualified Election" means a waiver of a Qualified Joint and Survivor Annuity
which meets the requirements of this subsection. The waiver must be in writing
and must be consented to by the Participant's spouse. The spouse's consent to
a waiver must be witnessed by a notary public. If, however, the Participant
establishes to the satisfaction of the Committee that such written consent may
not be obtained because there is no spouse or the spouse cannot be located, the
Participant's waiver will be deemed a Qualified Election. Any consent required
under the Plan will be valid only with respect to the spouse who signs the
consent, or in the event of a deemed Qualified Election, the designated spouse.
A revocation of a prior waiver may be made by a Participant without the consent
of the spouse at any time before the Participant's Benefit Commencement Date.
However, a Participant whose spouse has consented to a Qualified Election may
not change the optional form of benefits or elect an optional form following
his revocation of the Qualified Election without spousal consent unless the
Qualified Election expressly permits the Participant to elect optional forms of
benefit without any further consent of the spouse. Notwithstanding the
foregoing or any other provision of the Plan to the contrary, a Participant may
elect to receive his retirement benefit in the form of a contingent annuitant
annuity under Section 7.1(c) without the consent of his spouse, provided his
spouse is
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designated as the Beneficiary under such optional form of benefit.
(b) Certain Spouses. A former spouse will be treated as
the spouse or surviving spouse of a Participant to the extent provided under a
qualified domestic relations order as described in Code section 414(p).
(c) Information Requirements. In the case of a
Participant whose normal form of benefit is a Qualified Joint and Survivor
Annuity, the Committee will provide the Participant within a reasonable period
prior to the commencement of benefits a written explanation of (i) the terms
and conditions of a Qualified Joint and Survivor Annuity, (ii) the
Participant's right to make and the effect of an election to waive the
Qualified Joint and Survivor Annuity form of benefit, (iii) the rights of a
Participant's spouse, and (iv) the right to make, and the effect of, a
revocation of a previous election to waive the Qualified Joint and Survivor
Annuity.
7.3 Information Regarding Beneficiaries. A Participant entitled
to receive benefits in the form of a Qualified Joint and Survivor Annuity or
any other option providing benefits or contingent benefits to his spouse or
other Beneficiary will certify to the Committee such information as it may
reasonably request respecting his spouse or Beneficiary, including (but not
limited to) information as to name, address, age, sex, and date of marriage.
The Committee will be entitled to rely upon any certification of a
Participant's marital status and will not be obligated to make inquiry into the
legal effect of any actual or purported marriage, marital dissolution, or
common-law relationship.
7.4 Consent to Certain Distributions. Notwithstanding any other
provision of the Plan, if the present value of a Participant's vested accrued
benefit exceeds $3,500, the Committee will not permit benefit payments to be
made to him before he attains age 65 unless the Participant and his spouse
consent (in the manner described in Section 7.2(a)) to the commencement of such
payments or the Participant consents to such payments and payments are made in
the form of a Qualified Joint and Survivor Annuity.
7.5 Suspension of Benefits.
(a) General Rule. If a Participant who is receiving
periodic retirement benefits from the Plan again becomes an Employee of a
Participating Employer, his retirement benefits will be suspended for each
calendar month during which
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the Employee is employed in Section 203(a)(3)(B) Service (as hereafter
defined). In addition, if a Participant's Normal Retirement Date occurs in a
Plan Year beginning after December 31, 1988, and the Participant remains an
Employee of a Participating Employer after his Normal Retirement Date, his
retirement benefits will also be suspended for each calendar month during which
he is employed in Section 203(a)(3)(B) Service.
(b) Resumption of Payment. If benefit payments have been
suspended, payments will resume no later than the first day of the third
calendar month after the calendar month in which the Employee ceases to be
employed in Section 203(a)(3)(B) Service. The initial payment upon resumption
will include the payment scheduled to occur in the calendar month when payments
resume and any amounts withheld during the period between the cessation of
Section 203(a)(3)(B) Service and the resumption of payments.
(c) Notification. No payment will be withheld by the
Plan pursuant to this Section unless the Committee notifies the Employee by
personal delivery or first class mail during the first calendar month or
payroll period in which the Plan withholds payments that his benefits are
suspended. Such notification will contain a description of the specific
reasons why benefit payments are being suspended, a description of the Plan
provision relating to the suspension of payments, a copy of such provisions,
and a statement to the effect that applicable Department of Labor Regulations
may be found in Section 2530.203-3 of the Code of Federal Regulations. In
addition, the notice will inform the Employee of the Plan's procedures for
affording a review of the suspension benefits. Requests for such reviews may
be considered in accordance with the claims procedure set forth in Section
9.10.
(d) Top-Heavy Plan Minimum Benefit. This Section does
not apply to the Minimum Benefit to which the Participant is entitled under the
top-heavy provisions of Article 12.
(e) Section 203(a)(3)(B) Service. The definition of
"Section 203(a)(3)(B) Service" is set forth in the Department of Labor
Regulations (29 C.F.R. Section 2530.203-3(c)(1)).
7.6 Restrictions on Distributions. Article 11 sets forth certain
rules under various provisions of the Code relating to restrictions on
distributions to Participants.
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ARTICLE 8
DEATH BENEFITS
8.1 Death Benefit Payable Before Benefit Commencement Date. The
Beneficiary of a Participant who has a vested interest in his Accrued Benefit
and who dies prior to his Benefit Commencement Date will receive a death
benefit in the amount of the Participant's Accrued Benefit determined as of the
date of his death.
8.2 Form of Death Benefit.
(a) Surviving Spouse. If the Participant's Beneficiary
is his surviving spouse, the death benefit will be paid in the form of a
Qualified Preretirement Survivor Annuity.
(b) Other Beneficiaries. If the Participant's
Beneficiary is a person other than his surviving spouse, the death benefit will
be paid in the form of a ten-year certain and continuous annuity as described
in Section 7.1(c).
8.3 Commencement of Death Benefit. The Beneficiary will begin to
receive payments as of the first day of the month immediately following the
Participant's death unless the Beneficiary elects to have payments commence on
the first day of any subsequent month prior to the Participant's Normal
Retirement Date. All death benefit payments will be made or will begin as soon
as administratively feasible and will be equal to the Actuarially Equivalent
present value of the Participant's Accrued Benefit payable at his Normal
Retirement Date.
8.4 Designation of Beneficiary. The Beneficiary of a Participant
who is married on the date of his death will be the Participant's spouse unless
the Participant has designated a different Beneficiary pursuant to a Qualified
Designation described in Section 8.5. A Participant will designate a
Beneficiary in writing and will submit his written designation to the
Committee. If a Participant has not designated a Beneficiary or is not
survived by a designated Beneficiary, the death benefit under the Plan will be
payable, to his surviving spouse, if any, otherwise equally among his surviving
children, if any, and if the Participant is not survived by a spouse or
children, to his estate.
8.5 Qualified Designation. For purposes of Section 8.4, a
"Qualified Designation" means a Participant's
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designation of any Beneficiary other than his spouse which meets the
requirements of this Section. Such designation must be in writing and will be
effective only if it is made on or after the first day of the Plan Year in
which the Participant attains age 35 and it is consented to by the
Participant's spouse. The spouse's consent will be witnessed by a notary
public and will acknowledge the effect on the spouse of the Participant's
election of another Beneficiary. Notwithstanding this consent requirement, if
the Participant establishes to the satisfaction of a Plan representative that
such written consent may not be obtained because there is no spouse or the
spouse cannot be located, a Beneficiary designation will be deemed to be a
Qualified Designation. Any consent necessary under this provision will be
valid only with respect to the spouse who signs the consent, or in the event of
a deemed Qualified Designation, the designated spouse. A revocation of a prior
beneficiary designation under this Section may be made by a Participant without
the consent of the spouse at any time before the commencement of benefits.
However, a Participant whose spouse has consented to a Qualified Designation
may not change the Beneficiary or designate a Beneficiary other than his spouse
following his revocation of a Qualified Designation without spousal consent
unless the Qualified Designation expressly permits the Participant to change
Beneficiaries without any further consent of the spouse.
8.6 Certain Spouses. A former spouse will be treated as the
spouse or surviving spouse of a Participant to the extent provided under a
qualified domestic relations order as described in Code section 414(p).
8.7 Minimum Death Benefit. The value of a death benefit payable
to a Beneficiary under Section 8.1 will not be less than the value of the death
benefit that would have been paid had the Participant died on December 31,
1976, computed on the basis of the factors and assumptions which were used to
value the Plan's liabilities on December 31, 1976. In addition, the value of a
death benefit payable under Section 8.1 will not be less than the value of the
same death benefit that would have been paid had the Participant died on
December 31, 1982, computed on the basis of the actuarial assumptions which
were used under the Plan on December 31, 1982.
8.8 Cost of Coverage. The Participant's benefit under the Plan
will not be reduced by the cost of providing the death benefits described in
this Article 8.
8.9 Death Benefits Payable After Benefit Commencement Date. If a
Participant dies after his Benefit Commencement
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Date, the death benefit, if any, payable to his Beneficiary will be determined
by the form of the Participant's retirement benefit under Article 7.
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ARTICLE 9
ADMINISTRATION OF THE PLAN AND TRUST AGREEMENT
9.1 Appointment of Committee Members. The Board will appoint an
Administrative Committee consisting of at least three or more members, to hold
office at the pleasure of the Board. Members of the Committee are not required
to be Employees or Participants. Any member may resign by giving notice, in
writing, filed with the Board.
9.2 Officers and Employees of the Committee. The Committee will
choose from its members a Chairman and a Secretary. The Secretary will keep a
record of the Committee's proceedings and all dates, records and documents
pertaining to the Committee's administration of the Plan. The Committee may
employ and suitably compensate such persons or organizations to render advice
with respect to the duties of the Committee under the Plan as the Committee
determines to be necessary or desirable.
9.3 Action of the Committee. Action of the Committee may be taken
with or without a meeting of Committee members, provided that action will be
taken only upon the vote or other affirmative expression of a majority of the
Committee's members qualified to vote with respect to such action. The
Chairman or the Secretary of the Committee may execute any certificate or other
written direction on behalf of the Committee. In the event the Committee
members qualified to vote on any question are unable to determine such question
by a majority vote or other affirmative expression of a majority of the
Committee members qualified to vote on such question, such question will be
determined by the Board. A member of the Committee who is a Participant may
not vote on any question relating specifically to himself unless he is the sole
member of the Committee.
9.4 Expenses and Compensation. The expenses of the Committee
properly incurred in the performance of its duties under the Plan will be paid
from the Trust Fund, unless the Participating Employers in their discretion pay
such expenses. The members of the Committee will not be compensated for their
services as Committee members.
9.5 General Powers and Duties of the Committee. The Committee
will have the full power and responsibility to administer the Plan and the
Trust Agreement and to construe and apply their provisions. For purposes of
ERISA, the Committee will be the named fiduciary with respect to the operation
and
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administration of the Plan and the Trust Agreement. In addition, the Committee
will have the powers and duties granted by the terms of the Trust Agreement.
The Committee, and all other persons with discretionary control respecting the
operation, administration, control, and/or management of the Plan, the Trust
Agreement, and/or the Trust Fund, will perform their duties under the Plan and
the Trust Agreement solely in the interests of Participants and their
Beneficiaries.
9.6 Specific Powers and Duties of the Committee. The Committee
will administer the Plan and have all powers necessary to accomplish that
purpose, including the following: (i) resolving all questions relating to the
eligibility of Employees to become Participants, (ii) determining the amount of
benefits payable to Participants or their Beneficiaries, and determining the
time and manner in which such benefits are to be paid, (iii) authorizing and
directing all disbursements by the Trustee from the Trust Fund, (iv) engaging
any administrative, legal, medical, accounting, clerical, or other services it
deems appropriate in administering the Plan or the Trust Agreement, (v)
construing and interpreting the Plan and the Trust Agreement and adopting rules
for administration of the Plan and the Trust Agreement which are not
inconsistent with the terms of such documents, (vi) compiling and maintaining
all records it determines to be necessary, appropriate or convenient in
connection with the administration of the Plan and the Trust Agreement, (vii)
determining the disposition of assets in the Trust Fund in the event the Plan
is terminated, and (viii) reviewing the performance of the Trustee with respect
to the Trustee's administrative duties, responsibilities and obligations under
the Plan and the Trust Agreement, reporting to the Board regarding such
administrative performance of the Trustee, and recommending to the Board, if
necessary, the removal of the Trustee and the appointment of a successor
Trustee.
9.7 Allocation of Fiduciary Responsibility. The Committee from
time to time may allocate to one or more of its members and may delegate to any
other persons or organizations any of its rights, powers, duties and
responsibilities with respect to the operation and administration of the Plan
and the Trust Agreement that are permitted to be delegated under ERISA. Any
such allocation or delegation will be made in writing, will be reviewed
periodically by the Committee, and will be terminable upon such notice as the
Committee in its discretion deems reasonable and proper under the
circumstances. Whenever a person or organization has the power and authority
under the Plan or the Trust Agreement to delegate discretionary authority
respecting the administration of the
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Plan or the Trust Fund to another person or organization, the delegating
party's responsibility with respect to such delegation is limited to the
selection of the person to whom authority is delegated and the periodic review
of such person's performance and compliance with applicable law and
regulations. Any breach of fiduciary responsibility by the person to whom
authority has been delegated which is not proximately caused by the delegating
party's failure to properly select or supervise, and in which breach the
delegating party does not otherwise participate, will not be considered a
breach by the delegating party.
9.8 Information to be Submitted to the Committee. To enable the
Committee to perform its functions, the Participating Employers will supply
full and timely information to the Committee on all matters relating to
Employees and Participants as the Committee may require and will maintain such
other records required by the Committee to determine the benefits due to
Participants or their Beneficiaries under the Plan.
9.9 Notices, Statements and Reports. The Company will be the
"administrator" of the Plan as defined in ERISA section 3(16)(A) for purposes
of the reporting and disclosure requirements imposed by ERISA and the Code.
The Committee will assist the Company, as requested, in complying with such
reporting and disclosure requirements.
9.10 Claims Procedure.
(a) Filing Claim for Benefits. If a Participant or
Beneficiary does not receive the benefits which he believes he is entitled to
receive under the Plan, he may file a claim for benefits with the Committee.
All claims will be made in writing and will be signed by the claimant. If the
claimant does not furnish sufficient information to determine the validity of
the claim, the Committee will indicate to the claimant any additional
information which is required.
(b) Notification by the Committee. Each claim will be
approved or disapproved by the Committee within 90 days following the receipt
of the information necessary to process the claim. In the event the Committee
denies a claim for benefits in whole or in part, the Committee will notify the
claimant in writing of the denial of the claim. Such notice by the Committee
will also set forth, in a manner calculated to be understood by the claimant,
the specific reason for such denial, the specific Plan provisions on which the
denial is based, a description of any additional material or information
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necessary to perfect the claim with an explanation of why such material or
information is necessary, and an explanation of the Plan's claim review
procedure as set forth in subsection (c). If no action is taken by the
Committee on a claim within 90 days, the claim will be deemed to be denied for
purposes of the review procedure.
(c) Review Procedure. A claimant may appeal a denial of
his claim by requesting a review of the decision by the Committee or a person
designated by the Committee, which person will be a named fiduciary under ERISA
section 402(a)(2) for purposes of this Section. An appeal must be submitted in
writing within six months after the denial and must (i) request a review of the
claim for benefits under the Plan, (ii) set forth all of the grounds upon which
the claimant's request for review is based and any facts in support thereof,
and (iii) set forth any issues or comments which the claimant deems pertinent
to the appeal. The Committee or the named fiduciary designated by the
Committee will make a full and fair review of each appeal and any written
materials submitted in connection with the appeal. The Committee or the named
fiduciary designated by the Committee will act upon each appeal within 60 days
after receipt thereof unless special circumstances require an extension of the
time for processing, in which case a decision will be rendered as soon as
possible but not later than 120 days after the appeal is received. The
claimant will be given the opportunity to review pertinent documents or
materials upon submission of a written request to the Committee or named
fiduciary, provided the Committee or named fiduciary finds the requested
documents or materials are pertinent to the appeal. On the basis of its
review, the Committee or named fiduciary will make an independent determination
of the claimant's eligibility for benefits under the Plan. The decision of the
Committee or named fiduciary on any claim for benefits will be final and
conclusive upon all parties thereto. In the event the Committee or named
fiduciary denies an appeal in whole or in part, it will give written notice of
the decision to the claimant, which notice will set forth in a manner
calculated to be understood by the claimant the specific reasons for such
denial and which will make specific reference to the pertinent Plan provisions
on which the decision was based.
9.11 Service of Process. The Committee may from time to time
designate an agent of the Plan for the service of legal process. The Committee
will cause such agent to be identified in materials it distributes or causes to
be distributed when such identification is required under applicable law. In
the absence of such a designation, the Company will be the agent of the Plan
for the service of legal process.
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9.12 Review of Benefit Statement. If a Participant or Beneficiary
believes a statement he receives regarding his interest in the Plan is
incorrect, such Participant or Beneficiary may submit a written request for
correction or verification of such statement to the Committee, and the
Committee will respond in writing to such request in the same manner as a claim
for benefits.
9.13 Payment to Minors or Persons Under Legal Disability. If any
benefit becomes payable to a minor or to a person under a legal disability,
payment of such benefit will be made only to the conservator or the guardian of
the estate of such person appointed by a court of competent jurisdiction or
such other person or in such other manner as the Committee determines is
necessary to ensure that the payment will legally discharge the Plan's
obligation to such person.
9.14 Uniform Application of Rules and Policies. The Committee in
exercising its discretion granted under any of the provisions of the Plan or
the Trust Agreement will do so only in accordance with rules and policies
established by it which will be uniformly applicable to all Participants and
Beneficiaries.
9.15 Funding Policy. The Plan is to be funded through
Participating Employer contributions and earnings on such contributions; and
benefits will be paid to Participants and Beneficiaries as provided in the
Plan. The Committee will determine from time to time investment policies that
are consistent with the objectives of the Plan.
9.16 The Trust Fund. The Trust Fund will be held by the Trustee
for the exclusive benefit of Participants and Beneficiaries. The assets held
in the Trust Fund will be invested and reinvested in accordance with the terms
of the Trust Agreement, which is hereby incorporated into and made a part of
the Plan. All benefits will be paid solely out of the Trust Fund, and no
Participating Employer will be otherwise liable for benefits payable under the
Plan.
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ARTICLE 10
LIMITATIONS ON BENEFITS
10.1 Priority Over Other Provisions. The provisions set forth in
this Article will supersede any conflicting provisions of Articles 5, 6, 7 and
8.
10.2 Definitions Used in this Article. The following words and
phrases, when used with initial capital letters, will have the meanings set
forth below.
(a) "Annual Addition" means, with respect to a
Participant in a Limitation Year, the sum of the following amounts with respect
to all Qualified Plans and Welfare Benefit Funds maintained by a Controlled
Group Member:
(i) The amount of any employer-provided
contribution with respect to the Limitation Year which is allocated to the
Participant's account;
(ii) The amount of any forfeitures for the
Limitation Year allocated to the Participant's account;
(iii) The amount of a Participant's voluntary
nondeductible contributions for the Limitation Year, provided that the Annual
Addition for any Limitation Year beginning before January 1, 1987 will not be
recomputed to treat all voluntary nondeductible contributions as an Annual
Addition;
(iv) The amount allocated, after March 31,
1984, to an individual medical account as defined in Code section 415(1)(1),
which is part of a Defined Benefit Plan maintained by a Controlled Group
Member; and
(v) The amount derived from contributions
paid or accrued after December 31, 1985, in taxable years ending after such
date, which are attributable to post-retirement medical benefits allocated to
the separate account of a key employee (as defined in Code section 419A(d)(3)),
under a Welfare Benefit Fund maintained by a Controlled Group Member.
(b) "Annual Benefit" means a benefit which is payable
annually in the form of a straight life annuity with no ancillary benefits and
which otherwise satisfies the requirements of Code section 415(b)(2) and the
regulations thereunder.
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(c) "Defined Benefit Dollar Limitation" means for any
Plan Year $90,000, adjusted for years beginning after December 31, 1987, to the
amount determined by the Commissioner of Internal Revenue, pursuant to the
authority of Code section 415(d)(1)(A) and regulations thereunder, which is
made effective as of the first day of the Plan Year.
(d) "Defined Benefit Fraction" means a fraction, the
numerator of which is the Projected Annual Benefit of a Participant under all
Defined Benefit Plans maintained by a Controlled Group Member determined as of
the close of the Limitation Year and the denominator of which is the lesser of
(i) 140% of the Participant's average Includable Compensation that may be taken
into account for the Limitation Year under Code section 415(b)(1)(B), or (ii)
125% of the Defined Benefit Dollar Limitation, determined as of the close of
the Limitation Year. If the Participant was a participant in a Defined Benefit
Plan maintained by a Controlled Group Member in existence on July 1, 1982, or
on May 6, 1986, the denominator of the Defined Benefit Fraction will not be
less than 125% of the greater of the Participant's accrued Projected Annual
Benefit under such plan as of the end of the last Limitation Year beginning
before January 1, 1983, or his accrued Projected Annual Benefit of the end of
the last Limitation Year beginning January 1, 1987. The preceding sentence
applies only if the Defined Benefit Plan satisfied the requirements of Code
section 415 as in effect at the end of such Limitation Year.
(e) "Defined Benefit Plan" means a Qualified Plan other
than a Defined Contribution Plan.
(f) "Defined Contribution Dollar Limitation" means, for
any Limitation Year, $30,000 or, if greater, 25% of the Defined Benefit Dollar
Limitation in effect for the Limitation Year. If a short Limitation Year is
created because of a Plan amendment changing the Limitation Year to a different
12-consecutive month period, the Defined Contribution Dollar Limitation for the
short Limitation Year will not exceed the amount determined in the preceding
sentence multiplied by a fraction, the numerator of which is the number of
months in the short Limitation Year, and the denominator of which is 12.
(g) "Defined Contribution Fraction" means a fraction, the
numerator of which is the sum of the Annual Additions to the Employee's Defined
Contribution Plan accounts for the applicable Limitation Year and each prior
Limitation Year, and the denominator of which is the sum of the lesser of the
following products for each Limitation Year in which the Employee was an
Employee (regardless of whether a Defined
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Contribution Plan was in existence for such Plan Year): (i) the Defined
Contribution Dollar Limitation effective for the Limitation Year, multiplied by
125%, or (ii) 35% of the Participant's Includable Compensation for such
Limitation Year.
(h) "Defined Contribution Plan" means a Qualified Plan
which provides individual participant accounts for employer contributions,
forfeitures and gains or losses thereon, in accordance with Code section
414(i).
(i) "High Three Years" means with respect to a
Participant the three consecutive Plan Years of his employment with a
Controlled Group Member (or, if he does not have three consecutive Plan Years
of such employment, his greatest actual number of consecutive Plan Years of
such employment) during which he had the greatest aggregate Includable
Compensation.
(j) "Includable Compensation" means an Employee's total
wages from Participating Employers or other Controlled Group Members as
determined for purposes of Internal Revenue Service Form W-2, excluding,
however: (i) moving expense reimbursements that are deductible by the Employee
under Code section 217, (ii) Controlled Group Member contributions to a
simplified employee pension plan to the extent such contributions are
deductible by the Employee and Controlled Group Member contributions to any
other plan of deferred compensation that, before the application of Section
10.3, are not includable in the Employee's gross income, (iii) distributions to
the Employee from any plan of deferred compensation other than an unfunded,
nonqualified plan of deferred compensation, (iv) amounts realized from the
exercise of a nonqualified stock option, (v) amounts realized under Code
section 83 with respect to restricted property that becomes freely transferable
or is no longer subject to a substantial risk of forfeiture, (vi) amounts
realized from the disposition of stock acquired under a qualified stock option
within the meaning of Code section 422, and (vii) any other amounts which
receive special tax benefits within the meaning of Section 1.415-2(d)(2) of the
Treasury Regulations.
(k) "Limitation Year" means the 12-consecutive month
period used by a Qualified Plan for purposes of computing the limitations on
benefits and annual additions under Code section 415. The Limitation Year for
this Plan is the Plan Year. If the Limitation Year is amended to a different
12-consecutive month period, the new Limitation Year will begin on a date
within the Limitation Year in which the amendment is made.
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(l) "Projected Annual Benefit" means the Participant's
projected annual benefit under a Defined Benefit Plan maintained by a
Controlled Group Member determined in accordance with Code section 415(e) and
the regulations thereunder.
(m) "Social Security Retirement Age" means the age used
as the retirement age under section 216(1) of the Social Security Act, except
that such section will be applied without regard to the age increase factor and
as if the early retirement age under section 216(1) of such Act were 62.
(n) "Welfare Benefit Fund" means an organization
described in paragraph (7), (9), (17) or (20) of Code section 501(c), a trust,
corporation or other organization not exempt from federal income tax, or to the
extent provided in Treasury Regulations, any account held for an employer by
any person, which is part of a plan of any employer through which the employer
provides benefits to employees or their beneficiaries, other than a benefit to
which Code sections 83(h), 404 (determined without regard to section 404(b)(2))
or 404A applies, or to which an election under Code section 463 applies.
10.3 Code Section 415 Limitations.
(a) General Limitation. Except as otherwise provided in
this Section, a Participant's Accrued Benefit, when expressed as an Annual
Benefit, will not at any time during a Limitation Year exceed the lesser of (i)
the Defined Benefit Dollar Limitation applicable to that Plan Year, or (ii)
100% of the Participant's average annual Includable Compensation for his High
Three Years. If a Participant's Accrued Benefit in any Limitation Year would
produce an Annual Benefit in excess of this limitation, the rate of accrual
will be reduced so that the Annual Benefit will equal the maximum permitted
amount. If the Participant is, or has ever been, covered under more than one
Defined Benefit Plan maintained by a Controlled Group Member, the sum of the
Participant's Annual Benefits from all such Defined Benefit Plans may not
exceed the limitation provided in this subsection, and the rate of accrual
under this Plan will be reduced, if necessary, to meet this limitation.
(b) Adjustment for Benefit Commencement Date before
Social Security Retirement Age. If a Participant's Benefit Commencement Date
is prior to the date on which he attains Social Security Retirement Age, the
Defined Benefit Dollar Limitation will, with respect to that Participant, be
decreased so that it is the actuarial equivalent of an annual benefit of
$90,000 (adjusted in the manner described in Code
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section 415(d)(1)(A)) commencing at Social Security Retirement Age. The
adjustment provided for in the preceding sentence will be made in a manner
prescribed by the Secretary of the Treasury that is consistent with the
reduction under the Social Security Act of old-age insurance benefits
commencing before normal retirement age.
(c) Adjustment for Benefit Commencement Date after Social
Security Retirement Age. If a Participant's Benefit Commencement Date is after
the date on which he attains Social Security Retirement Age, the Defined
Benefit Dollar Limitation will, with respect to that Participant, be increased
so that it is the actuarial equivalent of an annual benefit of $90,000
(adjusted in the manner described in Code section 415(d)(1)(A)) commencing at
Social Security Retirement Age.
(d) Adjustment for Less Than Ten Years of Participation.
If a Participant has less than ten years of participation in the Plan, the
Defined Benefit Dollar Limitation applicable to the Participant's Accrued
Benefit will be adjusted by multiplying such limitation by a fraction, the
numerator of which is the number of the Participant's years of participation
(or portion thereof), and the denominator of which is ten. For purposes of
this subsection, the term "year of participation" will have such meaning as is
set forth in regulations published by the Secretary of the Treasury under Code
section 415(b).
(e) Expression of Accrued Benefit as an Annual Benefit.
If a Participant's Accrued Benefit is payable in any form other than an Annual
Benefit, the limitation set forth in subsection (a) will be applied by
adjusting the actual form of that Participant's benefit distribution to an
Annual Benefit, commencing at the same Benefit Commencement Date as the actual
form of his benefit distribution, which is the Actuarial Equivalent of such
actual form. In making the foregoing adjustment, the following values will not
be taken into account: (i) the value of a Qualified Joint and Survivor Annuity,
(ii) the value of ancillary benefits that are not directly related to
retirement benefits (including, but not limited to, preretirement disability
and death benefits and post-retirement medical benefits), and (iii) the value
of benefits provided by the Plan which reflect post-retirement cost of living
increases to the extent that such increases are in accordance with Code section
415(d) and Treasury Regulation section 1.415-5.
(f) Limitation on Certain Assumptions. For purposes of
the adjustments described in subsections (b) and
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(e), the interest rate assumption will not be less than the greater of 5% or
the Applicable Interest Rate. For purposes of the adjustment described in
subsection (c), the interest rate assumption will not be greater than the
lesser of 5% or the Applicable Interest Rate. For purposes of the adjustments
described in subsections (c) and (e), no adjustments under Code section
415(d)(1) will be taken into account prior to the year for which such
adjustment first takes effect.
(g) Permissible Minimum Benefit. Notwithstanding the
provisions of subsection (a), but subject to the provisions of subsection (h),
a Participant's Accrued Benefit will be deemed not to exceed the limitations of
this Section if (i) the benefits actually paid to him under this Plan and all
other Defined Benefit Plans maintained by a Controlled Group Member do not
exceed $10,000 in any Plan Year, regardless of the Benefit Commencement Date or
the form in which such benefits are paid, and (ii) he has not at any time
participated in a Defined Contribution Plan maintained by a Controlled Group
Member. For purposes of clause (ii), a Participant will not be deemed to be
participating in a separate Defined Contribution Plan maintained by a
Controlled Group Member solely by reason of his making Participant
contributions to the Plan.
(h) Reduction For Less Than Ten Years of Service. If a
Participant has less than ten years of service at his Benefit Commencement
Date, the limitation set forth in subsection (a) with respect to a
Participant's average Includable Compensation for his High Three Years and the
limitation set forth in subsection (g) will be reduced by multiplying such
limitations by a fraction, the numerator of which is his years of service (or
portion thereof), and the denominator of which is ten.
(i) Transition Rules for Prior Participation. In the
case of an individual who was a participant in one or more Defined Benefit
Plans maintained by a Controlled Group Member before July 1, 1982, the
application of the limitations of this Section will not cause the maximum
permissible benefit for such individual under all such Defined Benefit Plans to
be less than the individual's accrued benefit under all such Defined Benefit
Plans as of the end of the Limitation Year beginning in 1982 determined without
regard to any amendments to such Plans adopted after July 1, 1982, including
optional benefit forms. The preceding sentence applies only if all such
Defined Benefit Plans met the requirements of Code section 415, as in effect on
July 1, 1982, for all Limitation Years beginning before January 1, 1983.
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In the case of an individual who was a participant in
one or more Defined Benefit Plans maintained by a Controlled Group Member
before May 6, 1986, the application of the limitations of this Section will not
cause the maximum permissible benefit for such individual under all such
Defined Benefit Plans to be less than the individual's accrued benefit under
all such Defined Benefit Plans as of the end of the Limitation Year beginning
in 1986 determined without regard to any amendments to such Plans adopted after
May 5, 1986, including optional benefit forms. The preceding sentence applies
only if all such Defined Benefit Plans met the requirements of Code section
415, as in effect on May 6, 1986, for all Limitation Years beginning before
January 1, 1987.
(j) Aggregate Benefit Limitation. If a Controlled Group
Member maintains, or at any time maintained, one or more Defined Contribution
Plans (or, after December 31, 1985, a Welfare Benefit Fund) covering any
Participant in this Plan, the sum of the Defined Benefit Fraction and the
Defined Contribution Fraction for any Limitation Year will equal no more than
one (1.0). The current Annual Addition under the Defined Contribution Plan(s)
will be reduced first, and then the rate of accrual under this Plan will be
reduced, if necessary to meet this limitation.
If the Participant was a participant in one or more
Defined Contribution Plans maintained by a Controlled Group Member which were
in existence on July 1, 1982, the numerator of the Defined Contribution
Fraction will be adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (i) the excess of the sum of the
fractions over 1.0, times (ii) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the end of the
last Limitation Year beginning before January 1, 1983. This adjustment will
also be made if at the end of the last Limitation Year beginning before January
1, 1984, the sum of the fractions exceeds 1.0 because of benefit accruals or
annual additions that were made before the limitations of this Section became
effective to any Qualified Plans of a Controlled Group Member in existence on
July 1, 1982.
If the Participant was a participant in one or more
Defined Contribution Plans that satisfied the requirements of Code section 415
as of the last Limitation Year beginning before January 1, 1987, an amount will
be subtracted from the numerator of the Defined Contribution Fraction (not
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exceeding such numerator) as prescribed by the Secretary of the Treasury so
that the sum of the Defined Benefit Fraction and the Defined Contribution
Fraction does not exceed 1.0 for such Limitation Year.
For purposes of this subsection, a master or
prototype plan is a Qualified Plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
(k) Aggregation of Plans. For purposes of this Section,
all Defined Benefit Plans ever maintained by a Controlled Group Member will be
treated as one Defined Benefit Plan, and all Defined Contribution Plans ever
maintained by a Controlled Group Member will be treated as one Defined
Contribution Plan (whether or not any such Qualified Plan was terminated).
(l) Limitation on Certain Adjustments. In no event will
the adjustments of subsections (d) and (h) reduce the limitations provided
under Code sections 415(b)(1) and 415(b)(4) to an amount less than one-tenth of
the applicable limitations as determined without such adjustments.
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ARTICLE 11
RESTRICTIONS ON DISTRIBUTIONS TO
PARTICIPANTS AND BENEFICIARIES
11.1 Priority over Other Distribution Provisions. The provisions
set forth in this Article will supersede any conflicting provisions of Article
7 or Article 8.
11.2 Restrictions on Commencement of Distributions. The provisions
of this Section will apply to restrict the Committee's ability to delay the
commencement of distributions. Unless a Participant elects otherwise in
writing, distribution of the Participant's vested interest in his Account will
begin no later than the 60th day after the close of the Plan Year in which
occurs the latest of (i) the date on which the Participant attains age 65, (ii)
the tenth anniversary of the Plan Year in which the Participant began
participation in the Plan, or (iii) the Participant's termination of
employment.
11.3 Restrictions on Delay of Distributions. The following
provisions will apply to limit a Participant's ability to delay the
distribution of benefits. Distribution of a Participant's entire vested and
nonforfeitable interest will be made or commence not later than April 1
following (i) the calendar year in which he attains age 70-1/2, or (ii) in
which his employment with the Controlled Group terminates, if later, except
that a distribution to a Participant who is a 5-percent owner (as such term is
defined in Code section 416(i)(1)(B)(i)) at any time during the five-plan-year
period ending in the calendar year in which he attains age 70-1/2, will be made
pursuant to clause (i), or (iii) in which he becomes a 5-percent owner, if he
becomes a 5-percent owner during any Plan Year subsequent to that which ended
in the calendar year in which he attained age 70-1/2 and his employment with
the Controlled Group has not yet terminated. Clauses (ii) and (iii) of the
preceding sentence will only apply to employees who attain age 70-1/2 before
January 1, 1988.
11.4 Restrictions on Period of Distributions. Unless the form of
distribution is a single sum payment, distributions will be made in
nonincreasing dollar payments each year over one of the following periods: (i)
the life of the Participant, (ii) the joint lives of the Participant and his
Beneficiary, (iii) a period certain not exceeding the life expectancy of the
Participant, (iv) a period certain not exceeding the joint life expectancy of
the Participant and his Beneficiary, or (v) a combination of the foregoing.
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11.5 Minimum Amounts to be Distributed. If the Participant's
entire interest in the Plan is to be distributed in a form other than a single
lump sum payment, then the amount to be distributed each year must be at least
an amount equal to the quotient obtained by dividing the Participant's entire
interest by the life expectancy of the Participant or joint and last survivor
expectancy of the Participant and designated Beneficiary. Life expectancy and
joint and last survivor expectancy will be computed by the use of the return
multiples contained in Section 1.72-9 of the Treasury Regulations. For
purposes of this computation, the life expectancy of the Participant (and the
Participant's spouse, if the spouse is the designated Beneficiary) may be
recalculated no more frequently than annually. The life expectancy of a
Beneficiary other than a spouse may not be recalculated. If the Participant's
spouse is not the designated Beneficiary, then the method of distribution
selected must assure that at least 50% of the present value of the amount
available for distribution is paid within the life expectancy of the
Participant.
11.6 Restrictions in the Event of Death. Upon the death of a
Participant, the following distribution provisions will apply to limit the
Beneficiary's ability to delay distributions. If the Participant dies after
distribution of his benefit has begun, the remaining portion of his benefit
will continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death; but if he dies before
distribution of his benefit commences, his entire benefit will be distributed
no later than five years after his death, unless an individual who is a
designated Beneficiary elects to receive distributions in substantially equal
installments over the Beneficiary's life or life expectancy beginning no later
than one year after the Participant's death or unless the Participant made an
election to the contrary prior to January 1, 1984, under section 242(b)(2) of
the Tax Equity and Fiscal Responsibility Act of 1982. If the designated
Beneficiary is the Participant's surviving spouse, the date distributions are
required to begin will not be earlier than the date on which the Participant
would have attained age 70-1/2, and, if the spouse dies before payments begin,
subsequent distributions will be made as if the spouse had been the
Participant. Any amount paid to a child of the Participant will be treated as
if it had been paid to the surviving spouse if the amount becomes payable to
the surviving spouse when the child reaches the age of majority.
11.7 Compliance with Regulations. Distributions under the Plan to
Participants or Beneficiaries will be made in accordance with Treasury
Regulations issued under Code section 401(a)(9).
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11.8 Delayed Payments. If the amount of a distribution required to
begin on a date determined under the applicable provisions of the Plan cannot
be ascertained by such date, or if it is not possible to make such payment on
such date because the Committee has been unable to locate a Participant or
Beneficiary after making reasonable efforts to do so, a payment retroactive to
such date may be made no later than 60 days after the earliest date on which
the amount of such payment can be ascertained or the date on which the
Participant or Beneficiary is located (whichever is applicable).
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ARTICLE 12
TOP-HEAVY PROVISIONS
12.1 Priority over Other Plan Provisions. If the Plan is or
becomes a Top-Heavy Plan in any Plan Year, the provisions of this Article will
supersede any conflicting provisions of the Plan. However, the provisions of
this Article will not operate to increase the rights or benefits of
Participants under the Plan except to the extent required by Code section 416
and other provisions of law applicable to Top-Heavy Plans.
12.2 Definitions Used in this Article. The following words and
phrases, when used with initial capital letters, will have the meanings set
forth below.
(a) "Defined Benefit Dollar Limitation" means the
limitation described in Section 10.2(c).
(b) "Defined Benefit Plan" means the Qualified Plan
described in Section 10.2(e).
(c) "Defined Contribution Dollar Limitation" means the
limitation described in Section 10.2(f).
(d) "Defined Contribution Plan" means the Qualified Plan
described in Section 10.2(h).
(e) "Determination Date" means for the first Plan Year of
the Plan the last day of the Plan Year and for any subsequent Plan Year the
last day of the preceding Plan Year.
(f) "Determination Period" means the Plan Year containing
the Determination Date and the four preceding Plan Years.
(g) "Includable Compensation" means the compensation
described in Section 10.2(j).
(h) "Key Employee" means any Employee or former Employee
(and the Beneficiary of a deceased Employee) who at any time during the
Determination Period was (i) an officer of a Controlled Group Member, if such
individual's Includable Compensation exceeds 1.5 times the Defined Contribution
Dollar Limitation, (ii) an owner (or considered an owner under Code section
318) of one of the ten largest interests in a Controlled Group Member, if such
individual's Includable Compensation exceeds the Defined Contribution Dollar
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Limitation, (iii) a 5% owner of a Controlled Group Member, or (iv) a 1% owner
of a Controlled Group Member who has annual Includable Compensation of more
than $150,000. The determination of who is a Key Employee will be made in
accordance with Code section 416(i) and the regulations thereunder.
(i) "Minimum Benefit" means the benefit described in the
first sentence of Section 12.4(a).
(j) "Permissive Aggregation Group" means the Required
Aggregation Group of Qualified Plans plus any other Qualified Plan or Qualified
Plans of a Controlled Group Member which, when considered as a group with the
Required Aggregation Group, would continue to satisfy the requirements of Code
sections 401(a)(4) and 410 (including simplified employee pension plans).
(k) "Present Value" means present value based only on the
interest and mortality rates specified in a Defined Benefit Plan.
(l) "Required Aggregation Group" means the group of plans
consisting of (i) each Qualified Plan (including simplified employee pension
plans) of a Controlled Group Member in which at least one Key Employee
participates, and (ii) any other Qualified Plan (including simplified employee
pension plans) of a Controlled Group Member which enables a Qualified Plan to
meet the requirements of Code sections 401(a)(4) or 410.
(m) "Top-Heavy Plan" means the Plan for any Plan Year in
which any of the following conditions exists: (i) if the Top-Heavy Ratio for
the Plan exceeds 60% and the Plan is not a part of any Required Aggregation
Group or Permissive Aggregation Group of Qualified Plans; (ii) if the Plan is a
part of a Required Aggregation Group but not part of a Permissive Aggregation
Group of Qualified Plans and the Top-Heavy Ratio for the Required Aggregation
Group exceeds 60%; or (iii) if the Plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of Qualified Plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%.
(n) "Top-Heavy Ratio" means a fraction, the numerator of
which is the sum of the Present Value of accrued benefits and the account
balances (as required by Code section 416)) of all Key Employees with respect
to such Qualified Plans as of the Determination Date (including any part of any
accrued benefit or account balance distributed during the five-year
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period ending on the Determination Date), and the denominator of which is the
sum of the Present Value of the accrued benefits and the account balances
(including any part of any accrued benefit or account balance distributed in
the five-year period ending on the Determination Date) of all Employees with
respect to such Qualified Plans as of the Determination Date. The value of
account balances and the Present Value of accrued benefits will be determined
as of the most recent Top-Heavy Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date, except as provided in
Code section 416 for the first and second Plan Years of a Defined Benefit Plan.
The account balances and accrued benefits of a participant who is not a Key
Employee but who was a Key Employee in a prior year will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, transfers and contributions unpaid as of the Determination Date are
taken into account will be made in accordance with Code section 416. Employee
contributions described in Code section 219(e)(2) will not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating plans,
the value of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same calendar year.
The accrued benefit of any Employee other than a Key Employee will be
determined under the method, if any, that uniformly applies for accrual
purposes under all Qualified Plans maintained by all Controlled Group Members
and included in a Required Aggregation Group or a Permissive Aggregation Group
or, if there is no such method, as if the benefit accrued not more rapidly than
the slowest accrual rate permitted under the fractional accrual rate of Code
section 411(b)(1)(C). Notwithstanding the foregoing, the account balances and
accrued benefits of any Employee who has not performed services for an employer
maintaining any of the aggregated plans during the five-year period ending on
the Determination Date will not be taken into account for purposes of this
subsection.
(o) "Top-Heavy Valuation Date" means the last day of each
Plan Year.
12.3 Compensation Taken Into Account. For any Plan Year in which
the Plan is a Top-Heavy Plan, the amount of each Participant's Includable
Compensation taken into account for purposes of determining allocations under
the Plan will not exceed the first $200,000 (or such larger amount as may be
prescribed by the Secretary of the Treasury or his delegate) of such
Participant's Includable Compensation for such Plan Year.
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12.4 Minimum Benefit.
(a) Calculation of Minimum Benefit. Notwithstanding any
other provision in this Plan, for any Plan Year in which this Plan is a
Top-Heavy Plan, the Accrued Benefit of each Participant who is not a Key
Employee provided solely by Participating Employer contributions and expressed
as a life annuity commencing at age 65 will be not less than 2% of his average
compensation multiplied by years of service credited during Plan Years that the
Plan is a Top-Heavy Plan, not in excess of ten such years (the "Minimum
Benefit"). Average compensation for this purpose will be the Participant's
average Includable Compensation for the five consecutive years of service (or
all years of service, if less than five) for which the Participant had the
highest Includable Compensation excluding Includable Compensation after the
close of the last Plan Year in which the Plan is a Top-Heavy Plan. The Minimum
Benefit is determined without regard to any Social Security contribution. The
Minimum Benefit applies even though under other Plan provisions the Participant
would not otherwise be entitled to receive a benefit, or would have received a
lesser benefit for the Plan Year because (i) the non-Key Employee fails to make
mandatory contributions to the Plan, (ii) the non-Key Employee's Compensation
is less than a stated amount, (iii) the non-Key Employee is not employed on the
last day of the Plan Year, or (iv) the Plan is integrated with Social Security.
All accruals of employer-derived benefits, whether or not attributable to Plan
Years in which the Plan is a Top-Heavy Plan, may be used in computing whether
the Minimum Benefit requirement is satisfied.
(b) Minimum Benefit or Allocation in Other Plan(s). If a
Controlled Group Member maintains one or more Defined Contribution Plans
covering Employees who are Participants in this Plan, the minimum benefit or
allocation requirement applicable to Top-Heavy Plans will be met in this Plan.
(c) Form of Benefit. If the form of benefit provided
under the Plan is other than a single life annuity, the Participant must
receive a benefit that is the Actuarial Equivalent of the Minimum Benefit. If
the benefit commences at a date other than at age 65, the Participant must
receive at least an amount that is the Actuarial Equivalent of the Minimum
Benefit commencing at age 65.
(d) Nonforfeitability. The Participant's Minimum
Benefit, to the extent required to be nonforfeitable under Code section 416(b)
and the special vesting schedule
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provided in this Article, may not be forfeited under Code sections 411(a)(3)(B)
(relating to suspension of benefits on reemployment) or 411(a)(3)(D) (relating
to withdrawal of mandatory contributions).
12.5 Modification of Aggregate Benefit Limit.
(a) Modification. Subject to the provisions of
subsection (b), in any Plan Year in which the Top-Heavy Ratio exceeds 60%, the
aggregate benefit limit described in Article 10 will be modified by
substituting "100%" for "125%" in Sections 10.1(d) and (g).
(b) Exception. The modification of the aggregate benefit
limit described in subsection (a) will not be required if the Top-Heavy Ratio
does not exceed 90% and Employees who are not Key Employees accrue a benefit
for such Plan Year of not less than 3% of their average Includable Compensation
for the five consecutive Plan Years in which they had the highest Includable
Compensation (not to exceed a total such benefit of 30%), expressed as a life
annuity commencing at age 65.
12.6 Minimum Vesting.
(a) Required Vesting. For any Plan Year in which this
Plan is a Top-Heavy Plan, the minimum vesting schedule set forth in subsection
(b) will automatically apply to the Plan to the extent it provides a higher
vested percentage than the regular vesting schedule set forth in Article 4.
The minimum vesting schedule applies to a Participant's entire Accrued Benefit
including benefits accrued in Plan Years before the effective date of Code
section 416 and in Plan Years before the Plan became a Top-Heavy Plan.
Further, no reduction in vested Accrued Benefits may occur in the event the
Plan's status as a Top-Heavy Plan changes for any Plan Year, and any change in
the effective vesting schedule from the schedule set forth in subsection (b) to
the regular schedule set forth in Article 4 will be treated as an amendment
subject to Section 14.1(iii). However, this subsection does not apply to the
Accrued Benefit of any Employee who does not have an Hour of Service after the
Plan has initially become a Top-Heavy Plan, and such Employee's Accrued Benefit
will be determined without regard to this Section.
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(b) Minimum Vesting Schedule.
PERCENTAGE VESTED
YEARS OF SERVICE AND NONFORFEITABLE
---------------- ------------------
Less than 2 0
2 but less than 3 20
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
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ARTICLE 13
ADOPTION OF THE PLAN BY CONTROLLED GROUP MEMBERS
13.1 Adoption Procedure. Any Controlled Group Member may become a
Participating Employer under the Plan provided that (i) the Board approves the
adoption of the Plan by the Controlled Group Member and designates the
Controlled Group Member as a Participating Employer; (ii) the Controlled Group
Member adopts the Plan and Trust Agreement together with all amendments then in
effect by appropriate resolutions of the board of directors of the Controlled
Group Member; and (iii) the Controlled Group Member by appropriate resolutions
of its board of directors agrees to be bound by any other terms and conditions
which may be required by the Board, provided that such terms and conditions are
not inconsistent with the purposes of the Plan.
13.2 Effect of Adoption by Controlled Group Member. A Controlled
Group Member that adopts the Plan pursuant to this Article will be deemed to be
a Participating Employer for all purposes hereunder, unless otherwise specified
in the resolutions of the Board designating the Controlled Group Member as a
Participating Employer. In addition, the Board may provide, in its discretion
and by appropriate resolutions, that the Employees of the Controlled Group
Member will receive credit for their employment with the Controlled Group
Member prior to the date it became a Controlled Group Member for purposes of
determining either or both the eligibility of such Employees to participate in
the Plan, the determination of their Accrued Benefits and the vested and
nonforfeitable interest of such Employees in their Accrued Benefit provided
that such credit will be applied in a uniform and nondiscriminatory manner with
respect to all such Employees.
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ARTICLE 14
AMENDMENT OF THE PLAN
14.1 Right of Company to Amend Plan. The Company reserves the
right to amend the Plan at any time and from time to time to the extent it may
deem advisable or appropriate, provided, however, that (i) no amendment will
increase the duties or liabilities of the Trustee without its written consent;
(ii) no amendment will cause a reversion of Plan assets to the Participating
Employers not otherwise permitted under the Plan; (iii) no amendment (including
a change in the actuarial assumptions used for determining Actuarial
Equivalence) will be effective to the extent that it has the effect of
decreasing a Participant's Accrued Benefit (except to the extent permitted
under Code section 412(c)(8)) or of eliminating or reducing an early retirement
benefit or a retirement-type subsidy or eliminating an optional form of
benefit; and (iv) no amendment will have the effect of reducing the percentage
of the vested and nonforfeitable interest of any Participant in his Accrued
Benefit nor will the vesting provisions of the Plan be amended unless each
Participant with at least three years of Credited Service (including years of
Credited Service, if any, disregarded pursuant to Article 4) is permitted to
elect to continue to have the prior vesting provisions apply to him, within 60
days after the latest of the date on which the amendment is adopted, the date
on which the amendment is effective, or the date on which the Participant is
issued written notice of the amendment.
14.2 Amendment Procedure. Any amendment to the Plan will be made
only pursuant to action of the Board. A copy of the adopted amendment as
executed by the Company will be delivered to the Committee and to the Trustee.
Upon such action by the Board, the Plan will be deemed amended as of the date
specified as the effective date by such Board action or in the instrument of
amendment. The effective date of any amendment may be before, on or after the
date of such Board action.
14.3 Effect on Participating Employers. Unless an amendment
expressly provides otherwise, all Participating Employers will be bound by any
amendment adopted pursuant to this Article 14.
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<PAGE> 59
ARTICLE 15
TERMINATION AND PARTIAL TERMINATION
15.1 Continuance of Plan. The Participating Employers expect to
continue this Plan indefinitely, but they do not assume an individual or
collective contractual obligation to do so, and the right is reserved to the
Company, by action of the Board to terminate the Plan. In addition, subject to
the remaining provisions of this Article, any Participating Employer at any
time may discontinue its participation in the Plan with respect to its
Employees.
15.2 Complete Vesting. If the Plan is terminated, the Accrued
Benefits of all affected Participants at the time of such termination will
become 100% vested and nonforfeitable to the extent funded as of such date
without regard to their years of Credited Service. For purposes of this
Section, a Participant who has terminated employment and is not again an
Employee at the time the Plan is terminated will not be an affected Participant
entitled to full vesting if the Participant had no vested interest in the Plan
attributable to Participating Employer contributions at the time he terminated
employment. In the event of a partial termination of the Plan, the Accrued
Benefits of those Participants who cease to participate on account of the facts
and circumstances which result in the partial termination will become 100%
vested and nonforfeitable to the extent funded as of such date without regard
to their years of Credited Service.
15.3 Allocation of Assets. In the event of the termination or
partial termination of the Plan, the Trust Fund will be allocated among the
Participants and Beneficiaries in the following order (except that in the event
of a partial termination, such allocation will be with respect to the portion
of the Trust Fund as to which such partial termination has occurred): (i)
first, in the case of the benefit of a Participant or Beneficiary who was
receiving payments as of the beginning of the three-year period ending on the
date of the termination or partial termination of the Plan, to each such
benefit, based on the provisions of the Plan (as in effect during the five-year
period ending on such date) under which such benefit would be the least, and in
the case of a Participant's or Beneficiary's benefit (other than a benefit
described above) which would have been paid as of the beginning of such
three-year period if the Participant had retired prior to the beginning of such
three-year period and if his benefits had commenced (in the normal form of
payment) as of the
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beginning of such period, to each such benefit based on the provisions of the
Plan (as in effect during the five-year period ending on such date) under which
such benefit would be the least; (ii) second, to all other benefits under the
Plan subject to guarantee by the Pension Benefit Guaranty Corporation; (iii)
third, to all other nonforfeitable benefits under the Plan not subject to
guarantee by the Pension Benefit Guaranty Corporation; and (iv) fourth, to all
other benefits under the Plan.
15.4 Withdrawal by Participating Employer. A Participating
Employer may withdraw from participation in the Plan only with the approval of
the Board. If any Participating Employer withdraws from the Plan, a copy of
resolutions of the board of directors of the Participating Employer adopting
such action, certified by the secretary of such board of directors and
reflecting approval by the Board, will be delivered to the Committee as soon as
it is administratively feasible to do so, and the Committee will communicate
such action to the Trustee and to the Employees of the Participating Employer.
15.5 Prevention of Discrimination on Early Plan Termination.
(a) Restricted Employees. Notwithstanding any
provisions of the Plan other than Article 12 to the contrary, the benefits
provided by Participating Employer contributions for Participants who are among
the 25 highest paid Employees at the time the Plan is established and whose
anticipated annual benefit exceeds $1,500 will be restricted as provided in
subsection (c) upon the occurrence of any of the conditions described in
subsection (b).
(b) Conditions for Restriction. The restrictions set
forth in this Section will apply under any of the following conditions: (i)
the Plan is terminated within 10 years after its establishment; (ii) the
benefits of such highest paid Employee become payable within 10 years after the
establishment of the Plan; or (iii) if the Plan is not subject to the minimum
funding standards of Code section 412 (without regard to Code section
412(h)(2)), the benefits of such Employee become payable after the Plan has
been in effect for 10 years, and the full current costs of the Plan for the
first 10 years have not been funded.
(c) Effect of Restriction. Participating Employer
contributions which may be used for the benefit of an Employee described in
subsection (a) will not exceed the greater of $10,000, or 20% of the first
$50,000 of the
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Employee's Compensation multiplied by the number of years between the date of
the establishment of the Plan and (i) if the condition described in subsection
(b)(i) applies, the date of the termination of the Plan, (ii) if the condition
described in subsection (b)(ii) applies, the date the benefits become payable,
or (iii) if the condition described in subsection (b)(iii) applies, the date of
the failure to meet the full current costs.
(d) Amendment of Plan. If the Plan is amended so as to
increase the benefit actually payable in event of the subsequent termination of
the Plan, or the subsequent discontinuance of contributions thereunder, then
the provisions of this Section will be applied to the Plan as so amended as if
it were a new plan established on the date of amendment. The original group of
25 Employees (as described in subsection (a)) will continue to have the
limitations in subsection (c) apply as if the Plan had not been amended. The
restrictions relating to the amended Plan will apply to benefits or funds for
each of the 25 highest paid Employees on the effective date of the change,
except that such restrictions need not apply with respect to any Employee in
this group for whom the normal annual pension or annuity provided by
Participating Employer contributions prior to that date and during the ensuing
ten years, based on his rate of Compensation on that date, could not exceed
$1,500.
The Participating Employer contributions which may be used for
the benefit of each Participant in the new group of 25 highest paid Employees
will be limited to the greatest of (i) the Participating Employer contributions
(or funds attributable thereto) which would have been applied to provide the
benefits for the Employee if the previous plan had been continued without
change; (ii) $20,000; or (iii) the sum of the Participating Employer
contributions (or funds attributable thereto) which would have been applied to
provide benefits for the Employee under the previous plan if it had been
terminated the day before the effective date of change, and an amount computed
by multiplying the number of years for which the current costs of the Plan
after that date are met by 20% of the Employee's annual Compensation or
$10,000, whichever is smaller.
(e) Modification of Restriction. Notwithstanding the
above limitations, the following limitations will apply if they would result in
a greater amount of Participating Employer contributions being used for the
benefit of the restricted Employee: (i) in the case of a "substantial owner"
(as defined in Section 4022(b)(5) of
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<PAGE> 62
ERISA), a dollar amount which equals the present value of the benefit
guaranteed for such Employee under Section 4022 of ERISA, or if the Plan has
not terminated, the present value of the benefit that would be guaranteed if
the Plan terminated on the date the benefit commences, determined in accordance
with regulations of the Pension Benefit Guaranty Corporation; and (ii) in the
case of the other restricted Employees, a dollar amount which equals the
present value of the maximum benefit described in Section 4022(b)(3)(B) of
ERISA (determined on the earlier of the date the Plan terminates or the date
benefits commence, and determined in accordance with regulations of the Pension
Benefit Guaranty Corporation) without regard to any other limitations in
Section 4022 of ERISA.
(f) Special Rule for Plan Termination. If, as of the
date the Plan terminates, the value of Plan assets is not less than the present
value of all Accrued Benefits (whether or not nonforfeitable), distributions to
each Participant equal to the present value of that Participant's Accrued
Benefit will not be discriminatory if the formula for computing benefits as of
the date of termination is not discriminatory. For the purpose of this
subsection, all present values and the value of Plan assets will be computed
using assumptions satisfying Section 4044 of ERISA.
(g) Special Rule for Single Sum Payment. Notwithstanding
the otherwise applicable restrictions under this Section, a Participant's
otherwise restricted benefit may be distributed in full upon depositing with an
acceptable depository property having a fair market value equal to 125% of the
amount which would be repayable as a distribution in excess of the permitted
amount had the plan terminated on the date of the single sum payment. If the
market value of the property held by the depository falls below 110% of the
amount which would be repayable if the plan were then to terminate, additional
property necessary to bring the value of the property held by the depository up
to 125% of such amount will be deposited.
(h) Special Rule for Disability or Normal Retirement
Benefits. The provisions of this Section will not restrict the current payment
of full disability or retirement benefits under the Plan for any retired or
disabled restricted Participant if (i) the Participating Employer contributions
which may be used for any such Participant in accordance with the restriction
contained in subsection (a) are applied either to provide level amounts of
annuity in the normal form of benefit provided for under the Plan for such
Participant at retirement (or, if he has already retired, beginning
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immediately), or to provide level amounts of annuity in an optional form of
benefit provided under the Plan if the level amount of annuity under such
optional form of benefit is not greater than the level amount of annuity under
the normal form of benefit provided under the Plan; (ii) the annuity thus
provided is supplemented to the extent necessary to provide the full retirement
benefit in the normal form under the Plan by current payments to such
Participant as such benefits become due; and (iii) such supplemental payments
are made at any time only if the full current costs of the Plan have been met,
or the aggregate of such supplemental payments for all such Participants does
not exceed the aggregate Participating Employer contributions already made
under the Plan in the current Plan Year.
(i) Use of Excess Funding. Excess funding arising from
the application of the limitations of this Section upon the benefits of the
restricted Participants will first be applied in a nondiscriminatory manner to
provide for the Accrued Benefits of nonrestricted Participants. After the
satisfaction of the liabilities for Accrued Benefits of such nonrestricted
Participants, any remaining excess funding will be applied to provide for the
restricted portion of the Accrued Benefits of restricted Participants in a
nondiscriminatory manner.
15.6 Residual Assets. Except as otherwise provided herein, no part
of the Trust Fund will be recoverable by the Participating Employers from the
Trust Fund or from any Participant, Beneficiary, spouse or other person, or be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries and spouses, except that any portion of
the Trust Fund which remains after the satisfaction of all liabilities to such
Participants, Beneficiaries, and spouses determined under the provisions of
Sections 15.3 and 15.5 will, upon termination of the Plan, be distributed to
the Participating Employers as directed by the Board.
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ARTICLE 16
MISCELLANEOUS
16.1 Reversion Prohibited.
(a) General Rule. Except as otherwise provided in this
Section, it will be impossible for any part of the Trust Fund either (i) to be
used for or diverted to purposes other than those which are for the exclusive
benefit of Participants and their Beneficiaries (except for the payment of
taxes and administrative expenses), or (ii) to revert to a Controlled Group
Member.
(b) Disallowed Contributions. Each contribution of the
Participating Employers under the Plan is expressly conditioned upon the
deductibility of the contribution under Code section 404. If all or part of a
Participating Employer's contribution is disallowed as a deduction under Code
section 404, such disallowed amount (reduced by any Trust Fund losses
attributable thereto) may be returned by the Trustee to the Participating
Employer with respect to which the deduction was disallowed (upon the direction
of the Committee) within one year after the disallowance.
(c) Mistaken Contributions. If a contribution is made by
a Participating Employer by reason of a mistake of fact, then so much of the
contribution as was made as a result of the mistake (reduced by any Trust Fund
losses attributable thereto) may be returned by the Trustee to the
Participating Employer (upon direction of the Committee) within one year after
the mistaken contribution was made.
(d) Failure to Qualify. In the event the Internal
Revenue Service determines that the Plan and the Trust Agreement, as amended by
amendments acceptable to the Company, initially fail to constitute a qualified
plan and establish a tax-exempt trust under the Code, then notwithstanding any
other provisions of the Plan or the Trust Agreement, the contributions made by
the Participating Employers prior to the date of such determination will be
returned to the Participating Employers and the Plan and Trust Agreement will
terminate.
16.2 Bonding, Insurance and Indemnity.
(a) Bonding. To the extent required under ERISA, the
Participating Employers will obtain, pay for and
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keep current a bond or bonds with respect to each Committee member and each
Employee who receives, handles, disburses, or otherwise exercises custody or
control of, any of the assets of the Plan.
(b) Insurance. The Participating Employers, in their
discretion, may obtain, pay for and keep current a policy or policies of
insurance, insuring the Committee members, the members of the board of
directors of each Participating Employer and other Employees to whom any
fiduciary responsibility with respect to the administration of the Plan has
been delegated against any and all costs, expenses and liabilities (including
attorneys' fees) incurred by such persons as a result of any act, or omission
to act, in connection with the performance of their duties, responsibilities
and obligations under the Plan and any applicable law.
(c) Indemnity. If the Participating Employers do not
obtain, pay for and keep current the type of insurance policy or policies
referred to in subsection (b), or if such insurance is provided but any of the
parties referred to in subsection (b) incur any costs or expenses which are not
covered under such policies, then the Participating Employers will indemnify
and hold harmless, to the extent permitted by law, such parties against any and
all costs, expenses and liabilities (including attorneys' fees) incurred by
such parties in performing their duties and responsibilities under this Plan,
provided that such party or parties were acting in good faith within what was
reasonably believed to have been the best interests of the Plan and its
Participants.
16.3 Merger, Consolidation or Transfer of Assets. There will be no
merger or consolidation of all or any part of the Plan with, or transfer of the
assets or liabilities of all or any part of the Plan to, any other Qualified
Plan unless each Participant who remains a Participant hereunder and each
Participant who becomes a participant in the other Qualified Plan would receive
a benefit immediately after the merger, consolidation or transfer (determined
as if the other Qualified Plan and the Plan were then terminated) which is
equal to or greater than the benefit they would have been entitled to receive
under the Plan immediately before the merger, consolidation or transfer if the
Plan had then terminated.
16.4 Spendthrift Clause. The rights of any Participant or
Beneficiary to and in any benefits under the Plan will not be subject to
assignment or alienation, and no Participant or Beneficiary will have the power
to assign,
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transfer or dispose of such rights, nor will any such rights to benefits be
subject to attachment, execution, garnishment, sequestration, the laws of
bankruptcy or any other legal or equitable process. This Section will not
apply to a "qualified domestic relations order". A "qualified domestic
relations order" means a judgment, decree or order made pursuant to a state
domestic relations law which satisfies the requirements of Code section 414(p).
16.5 Rights of Participants. Participation in the Plan will not
give any Participant the right to be retained in the employ of a Controlled
Group Member or any right or interest in the Plan or the Trust Fund except as
expressly provided herein.
16.6 Gender, Tense and Headings. Whenever any words are used
herein in the masculine gender, they will be construed as though they were also
used in the feminine gender in all cases where they would so apply. Whenever
any words used herein are in the singular form, they will be construed as
though they were also used in the plural form in all cases where they would so
apply. Headings of Articles, Sections and subsections as used herein are
inserted solely for convenience and reference and constitute no part of the
Plan.
16.7 Governing Law. The Plan will be construed and governed in all
respects in accordance with applicable federal law and, to the extent not
preempted by such federal law, in accordance with the laws of the State of
Texas.
Executed this 30th day of December, 1988.
A. H. BELO CORPORATION
By /s/ MICHAEL J. MCCARTHY
By________________________
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<PAGE> 67
APPENDIX A
PARTICIPATING EMPLOYERS
A. H. Belo Corporation
Dallas-Ft. Worth Suburban Newspapers, Inc.
Great Western Broadcasting Corporation
Gulf Television Corporation
KOTV, Inc.
The Dallas Morning News Company
WFAA Television, Inc.
WVEC Television, Inc.
A-1
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APPENDIX B
ACTUARIAL FACTORS FOR DETERMINING
CERTAIN EARLY RETIREMENT BENEFITS
The following tables set forth factors for determining early retirement
benefits under Section 6.5.
PART I
D&B FACTOR
The D&B Factor will be determined in accordance with Table 1 if an
Employee had attained age 55 and completed at least ten, but less than 35 years
of service for purposes of vesting under the D&B Plan as of January 30, 1984,
and in accordance with Table 2 if he had attained age 55 and completed at least
35 years of service for purposes of vesting under the D&B Plan as of January
30, 1984. If an Employee's Benefit Commencement Date is not a whole number of
years prior to his Normal Retirement Date, an interpolated percentage under the
applicable table will be used.
TABLE 1
Years Prior to Percentage of
Normal Retirement Date Accrued Benefit
---------------------- ---------------
0 100.0%
1 97.0%
2 94.0%
3 91.0%
4 88.0%
5 85.0%
6 80.5%
7 74.5%
8 67.0%
9 58.0%
10 47.5%
B-1
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TABLE 2
Years Prior to Percentage of
Normal Retirement Date Accrued Benefit
---------------------- ---------------
5 or less 100.0%
6 94.7%
7 87.6%
8 78.8%
9 68.2%
10 55.9%
PART II
BELO FACTOR
The Belo Factor will be determined in accordance with the following
table. If an Employee's Benefit Commencement Date is not a whole number of
years prior to his Normal Retirement Date, an interpolated percentage will be
used.
Years Prior to Percentage of
Normal Retirement Date Accrued Benefit
---------------------- ---------------
0 100.0%
1 93.3%
2 86.6%
3 80.0%
4 73.3%
5 66.7%
6 63.3%
7 60.0%
8 56.6%
9 53.3%
10 50.0%
B-2
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<PAGE> 1
EXHIBIT 10.3 (21)
FIRST AMENDMENT TO
THE G. B. DEALEY RETIREMENT PENSION PLAN
(As Amended and Restated Effective January, 1, 1988)
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the following amendments to The
G. B. Dealey Retirement Pension Plan, as amended and restated effective January
1, 1988 (the "Plan").
1. Section 5.2 of the Plan is amended in its entirety to
read as follows:
"5.2 Early Retirement Benefit. A Participant who
terminates employment for any reason other than death or total and
permanent disability at or after his Early Retirement Age and before
age 65 will be entitled to receive a monthly retirement benefit
beginning on his Normal Retirement Date in an amount equal to his
Accrued Benefit determined as of the date he terminated employment.
If the Participant elects to receive his early retirement benefit as
of the first day of any month before his Normal Retirement Date, his
Accrued Benefit will be reduced by 1/180th for each of the first 60
months and by 1/360th for each of the next 60 months by which his
Benefit Commencement Date is earlier than his Normal Retirement Date;
provided, however, that the 60-month period to which the 1/180th
factor applies will be reduced, and the 60-month period to which the
1/360th factor applies will be increased, by the number of months by
which the Participant's Social Security Retirement Age (as defined in
Section 10.2(m)) exceeds age 65."
2. Section 8.1 of the Plan is amended in its entirety to
read as follows:
"8.1 Death Benefits.
(a) Death Benefits Payable before Termination of
Employment. The Beneficiary of a Participant who dies while an
Employee and prior to his Benefit Commencement Date will receive a
death benefit in the amount of the Participant's Accrued Benefit
(whether or not vested) determined as of the date of his death.
(b) Death Benefits Payable after Termination of
Employment. The Beneficiary of a Participant who has a
<PAGE> 2
vested interest in his Accrued Benefit and who dies after terminating
employment and prior to his Benefit Commencement Date will receive a
death benefit in the amount of the Participant's Accrued Benefit
determined as of the date of his death."
3. Section 2 of the Plan is amended in its entirety to
read as follows:
"8.2 Form of Death Benefit.
(a) Surviving Spouse. If the Participant's
Beneficiary is his surviving spouse, the death benefit will be paid in
the form of a Qualified Preretirement Survivor Annuity, subject,
however, to the exception for small benefits set forth in Section
7.1(e).
(b) Other Beneficiaries. If the Participant's
Beneficiary is a person other than his surviving spouse, the death
benefit will be paid in the form of a ten-year certain and continuous
annuity as described in Section 7.1(c), subject, however, to the
exception for small benefits set forth in Section 7.1(e)."
3. Section 8.3 of the Plan is amended in its entirety to
read as follows:
"8.3 Commencement of Death Benefit. Subject to
the exception for small benefits set forth in Section 7.1(e), the
Beneficiary will begin to receive payments as of the Participant's
Normal Retirement Date unless the Beneficiary elects to receive
payments as of the first day of any preceding month following the
Participant's death. All death benefit payments will be made or will
begin as soon as administratively feasible and will be equal to the
Actuarially Equivalent present value of the Participant's Accrued
Benefit determined as of the date of his death."
4. Subsection (d) of Section 16.1 of the Plan (relating
to the reversion of employer contributions on the failure of the Plan to
qualify under Section 401(a) of the Internal Revenue Code) is deleted from the
Plan.
Executed this 12th day of December, 1989.
A. H. BELO CORPORATION
By /s/ MICHAEL MCCARTHY
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<PAGE> 1
EXHIBIT 10.3 (22)
SECOND AMENDMENT
TO
THE G. B. DEALEY RETIREMENT PENSION PLAN
(As Amended and Restated Effective January 1, 1988)
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the following amendments to The
G. B. Dealey Retirement Pension Plan, as amended and restated effective January
1, 1988 (the "Plan").
1. Section 1.11 of the Plan is amended in its entirety
to read as follows:
"1.11 'Compensation' means the wages as defined in
Code section 3401(a) for purposes of income tax withholding at the
source (but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or services performed) that are paid to an Employee by the
Participating Employers, reduced by all of the following items:
reimbursements or other expense allowances, fringe benefits (cash and
noncash), moving expenses, deferred compensation and welfare benefits.
In addition, the Compensation paid to an Employee who is a 'highly
compensated employee' as defined in Code section 414(q) and the
Treasury Regulations thereunder will be further reduced by the
following items: amounts includible in the Employee's income by
reason of the grant or exercise of a stock option, amounts includible
in the Employee's income under Code section 83 with respect to
restricted stock and any other amounts includible in the Employee's
income by reason of an award under the Company's 1986 Long Term
Incentive Plan, as amended from time to time. Compensation includes,
for all Employees, any contributions made by the Participating
Employers on behalf of an Employee pursuant to a deferral election
under an employee benefit plan containing a cash or deferred
arrangement under Code section 401(k) or any amounts that would have
been received as cash but for an election to receive benefits under a
cafeteria plan meeting the requirements of Code section 125.
<PAGE> 2
For years beginning after December 31, 1988, the
annual Compensation of each Employee taken into account under the Plan
for any year will not exceed $200,000. This limitation will be
adjusted by the Secretary of the Treasury at the same time and in the
same manner as under Code section 415(d), except that the dollar
increase in effect on January 1 of any calendar year is effective for
years beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990. If an Employee's
Compensation is determined with respect to a period of time that
contains fewer than 12 calendar months, then the annual compensation
limit is an amount equal to the annual compensation limit for the
calendar year in which the compensation period begins multiplied by
the ratio obtained by dividing the number of full months in the period
by 12.
In determining the Compensation of an Employee for
purposes of the adjusted $200,000 limitation, the rules of Code
section 414(q)(6) will apply, except in applying such rules, the term
'family' will include only the spouse of an Employee and any lineal
descendants of the Employee who have not attained age 19 before the
close of the year. If, as a result of the application of such rules,
the adjusted $200,000 limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the
integration level), the limitation will be prorated among the affected
individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this
limitation.
If Compensation for any prior Plan Year is taken into
account in determining an Employee's benefits for the current year,
the Compensation for such prior year is subject to the applicable
annual compensation limit in effect for that prior Plan Year. For
this purpose, for years beginning before January 1, 1990, the
applicable annual compensation limit is $200,000."
2. Section 1.21 of the Plan is amended in its entirety
to read as follows:
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<PAGE> 3
"1.21 'Final Monthly Compensation' means the average
monthly Compensation paid to a Participant (i) during the five full
consecutive calendar years of employment occurring within the
Participant's last ten years of employment with a Controlled Group
Member that produces the highest average monthly Compensation or (ii)
during all of his full calendar years of employment, if the
Participant has less than five full calendar years of employment."
3. Article 1 of the Plan is amended by the addition of
the following sections:
"1.38 'Covered Compensation' means the average
(without indexing) of the Taxable Wage Bases in effect for each
calendar year during the 35-year period ending with the last day of
the calendar year in which a Participant attains (or will attain)
Social Security Retirement Age (as defined in Section 10.2(m)). No
increase in Covered Compensation will decrease a Participant's accrued
benefit under the Plan. In determining a Participant's Covered
Compensation for a Plan Year, the Taxable Wage Base in effect for the
current Plan Year and any subsequent Plan Year will be assumed to be
the same as the Taxable Wage Base in effect as of the beginning of the
Plan Year for which the determination is being made.
A Participant's Covered Compensation for a Plan Year
before the 35-year period ending with the last day of the calendar
year in which the Participant attains Social Security Retirement Age
is the Taxable Wage Base in effect as of the beginning of the Plan
Year. A Participant's Covered Compensation for a Plan Year after such
35-year period is the Participant's Covered Compensation for the Plan
Year during which the Participant attained Social Security Retirement
Age.
1.39 Super Highly Compensated Employee' means an
Employee described in Code section 414(q)(1)(A) or (B).
1.40 Taxable Wage Base' means the contribution and
benefit base in effect under section
-3-
<PAGE> 4
230 of the Social Security Act at the beginning of the Plan Year."
4. Section 2.2(b) of the Plan is amended in its entirety
to read as follows:
"(b) Exclusion after Participation. A Participant
who becomes ineligible under subsection (a) will continue to earn
Credited Service for purposes of determining his vested interest in
his Accrued Benefit, but during the period of ineligibility the
Participant's Credited Service will not be taken into account for
purposes of determining the amount of his Accrued Benefit unless the
Participant is in the service of the armed forces of the United States
and returns to employment with a Controlled Group Member within the
time his reemployment rights are guaranteed by law."
5. Section 5.1 of the Plan is amended in its entirety to
read as follows:
"5.1 Normal Retirement Benefit.
(a) General Rule. A Participant who
terminates employment at age 65 will receive a monthly retirement
benefit beginning on his Normal Retirement Date in an amount equal to
(i) 1.1% of his Final Monthly Compensation multiplied by his years of
Credited Service plus (ii) 0.35% of his Final Monthly Compensation in
excess of his Covered Compensation multiplied by his years of Credited
Service up to 35 such years.
(b) Minimum Retirement Benefit. The
retirement benefit payable to a Participant will not be less than his
accrued benefit under the Plan as of his Benefit Protection Date (as
hereinafter defined), determined under the terms of the Plan in effect
on December 31, 1988 (including early payment factors and other
actuarial assumptions) as though the Participant had terminated
employment on his Benefit Protection Date. For purposes of this
Section, "Benefit Protection Date" means (i) December 31, 1988 if the
Participant is a Super Highly Compensated Employee during the 1989
Plan Year, (ii) December 31, 1989 if the Participant is a Super Highly
Compensated Employee
-4-
<PAGE> 5
during the 1990 Plan Year but was not a Super Highly Compensated
Employee during the 1989 Plan Year, (iii) December 31, 1990 if the
Participant is a Super Highly Compensated Employee during the 1991
Plan Year but was not a Super Highly Compensated Employee during the
1989 or the 1990 Plan Year, and (iv) [date of adoption] if the
Participant is not a Super Highly Compensated Employee during any of
the 1989, 1990 and 1991 Plan Years.
(c) Prior Benefit Formula. The normal
retirement benefit formula in effect under the Plan on December 31,
1988, for purposes of determining a Participant's minimum retirement
benefit under subsection (b) above is set forth on Appendix C to the
Plan."
6. The first paragraph of Section 6.1 of the Plan is
amended in its entirety to read as follows:
"The provisions of Sections 6.2 through 6.8 will
apply solely to determine the accrued benefit of certain Participants
as of their Benefit Protection Date (as defined in Section 5.1(b)) and
will supersede any conflicting provisions of Articles 4, 5 and 8 of
the Plan as in effect on December 31, 1988."
7. Section 9.6 of the Plan is amended in its entirety to
read as follows:
"9.6 Specific Powers and Duties of the Committee.
The Committee will administer the Plan and the Trust Agreement and
will have the authority and discretion to (i) resolve all questions
relating to the eligibility of Employees to become Participants; (ii)
determine the amount of benefits payable to Participants or their
Beneficiaries, and determine the time and manner in which such
benefits are to be paid; (iii) authorize and direct all disbursements
by the Trustee from the Trust Fund; (iv) engage any administrative,
legal, accounting, clerical, or other
-5-
<PAGE> 6
services it deems appropriate in administering the Plan or the Trust
Agreement; (v) construe and interpret the Plan and the Trust
Agreement, supply omissions from, correct deficiencies in, and resolve
ambiguities in the language of the Plan and the Trust Agreement, and
adopt rules for the administration of the Plan and the Trust Agreement
which are not inconsistent with the terms of such documents; (vi)
compile and maintain all records it determines to be necessary,
appropriate or convenient in connection with the administration of
benefit payments; (vii) determine the disposition of assets in the
Trust Fund in the event the Plan is terminated; (viii) review the
performance of the Trustee with respect to the Trustee's
administrative duties, responsibilities and obligations under the Plan
and the Trust Agreement, report to the Board regarding such
administrative performance of the Trustee, and recommend to the Board,
if necessary, the removal of the Trustee and the appointment of a
successor Trustee; and (ix) resolve all questions of fact relating to
any matter for which it has administrative responsibility."
8. Section 9.13 of the Plan is amended in its entirety
to read as follows:
"9.13 Payment to Minors or Other Persons Under Legal
Disability. If any benefit becomes payable to a minor, payment of
such benefit will be made only to the guardian of the person or the
estate of the minor, provided the guardian acknowledges in writing, in
a form acceptable to the Committee, receipt of the payment on behalf
of the minor. If any benefit becomes payable to any other person
under a legal disability, payment of such benefit will be made only to
the conservator or the guardian of the estate of such person appointed
by a court of competent jurisdiction. Any payment made in accordance
with the provisions of this Section on behalf of a minor or other
person under a legal disability will fully discharge the Plan's
obligation to such person."
-6-
<PAGE> 7
9. Section 9.15 of the Plan is amended in its entirety
to read as follows:
"9.15 Funding Policy. The Plan is to be funded
through Participating Employer contributions and earnings on such
contributions; and benefits will be paid to Participants and
Beneficiaries as provided in the Plan. The Investment Committee
appointed by the Board pursuant to the Trust Agreement will determine
from time to time investment policies that are consistent with the
objectives of the Plan; provided, however, that if the Board has not
appointed an Investment Committee or if any committee appointed by the
Board is no longer acting as the Investment Committee under the Trust
Agreement, such investment policies will be determined by the
Committee."
10. Section 12.2(h) of the Plan is amended in its
entirety to read as follows:
"(h) 'Key Employee' means any Employee or former
Employee (and the Beneficiary of a deceased Employee) who at any time
during the Determination Period was (i) an officer of a Controlled
Group Member, if such individual's Includable Compensation (modified
as described below) exceeds 50% of the Defined Benefit Dollar
Limitation, (ii) an owner (or considered an owner under Code section
318) of one of the ten largest interests in a Controlled Group Member,
if such individual's Includable Compensation exceeds the Defined
Contribution Dollar Limitation, (iii) a 5-percent owner of a
Controlled Group Member, or (iv) a 1-percent owner of a Controlled
Group Member who has annual Includable Compensation of more than
$150,000. The determination of who is a Key Employee will be made in
accordance with Code section 416(i) and the Treasury Regulations
thereunder. For purposes of this subsection only, Includable
Compensation will include salary reduction contributions pursuant to a
cash or deferred arrangement under Code section 401(k) or a cafeteria
plan meeting the requirements of Code section 125."
-7-
<PAGE> 8
11. Section 16.4 of the Plan ("Spendthrift Clause") is
amended by the addition of the following sentence:
"Notwithstanding the foregoing, if the terms of the
'qualified domestic relations order' permit, the amounts payable to
the alternate payee under such order will be paid at such time or
times specified in the order before the earliest retirement date
specified in section 414(p)(4)(B) of the Code and will be paid in the
form of a lump sum without regard to any restriction on lump sum
payments contained in the Plan."
12. The Plan is amended by the addition of the following
appendix:
"APPENDIX C
NORMAL RETIREMENT BENEFIT FORMULA
IN EFFECT ON DECEMBER 31, 1988
A Participant's minimum retirement benefit under Section
5.1(b) will be determined under the formula set forth below,
determined as if the Participant terminated employment on his Benefit
Protection Date.
A Participant who terminates employment at age 65 will receive
a monthly retirement benefit beginning on his Normal Retirement Date
in an amount equal to the difference between (i) 1.75% of the
Participant's Final Monthly Compensation multiplied by his years of
Credited Service and (ii) 1.50% of his Primary Social Security Benefit
multiplied by his years of Credited Service up to 40 such years;
provided, however, that a Participant who was an Employee on January
1, 1978, and who was an active Participant in the Plan on December 31,
1977, will receive a minimum monthly benefit beginning on his Normal
Retirement Date equal to 1% of his Final Monthly Compensation
multiplied by his years of Credited Service."
-8-
<PAGE> 9
The foregoing amendments will be effective as of January 1,
1989, and will apply only to Participants who complete an Hour of Service after
December 31, 1988; provided, however, that if section 1140 of the Tax Reform
Act of 1986, as amended, would require any provision of the Plan, as amended,
to be effective as of an earlier date, such provision will be effective as of
such earlier date.
Executed at Dallas, Texas, this 16th day of June, 1992.
A. H. BELO CORPORATION
By /s/ MICHAEL MCCARTHY
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<PAGE> 1
EXHIBIT 10.3(23)
THIRD AMENDMENT
TO
THE G. B. DEALEY RETIREMENT PENSION PLAN
(As Amended and Restated Effective January 1, 1988)
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the following amendments to The
G. B. Dealey Retirement Pension Plan, as amended and restated effective January
1, 1988 (the "Plan").
1. There is added to Article 5 of the Plan ("Retirement
Benefits") new Sections 5.10 and 5.11, which shall read as follows:
5.10 Early Retirement Benefit for Certain Employees of
WFAA Television, Inc.
(a) Eligibility. The provisions of this
Section will apply only to each Participant who (i) is an Employee of
WFAA Television, Inc. on November 15, 1991, (ii) will have attained at
least age 55 and will have completed at least five years of Credited
Service as of December 31, 1991, (iii) elects in writing during the
period beginning on November 15, 1991, and ending on December 31,
1991, on a form and in the manner prescribed by the Committee to
receive the early retirement benefit described in subsection (b) below
and (iv) retires from employment with WFAA Television, Inc. on or
before December 31, 1991, and does not again become employed by any
other Controlled Group Member. A Participant who satisfies the
foregoing eligibility requirements is referred to in this Section as a
"Qualified Participant."
(b) Early Retirement Benefit. The retirement
benefit of a Qualified Participant will be determined pursuant to the
provisions of Sections 5.1 and 5.2, subject, however, to the following
modifications: (i) the Qualified Participant will be credited with
five additional years of Credited Service for purposes of the normal
retirement benefit formula; (ii) the Qualified Participant will be
credited with five additional years of age for purposes of determining
his Covered Compensation under the normal retirement benefit formula;
(iii) the Qualified Participant's Final Monthly Compensation will be
equal to the greater of the Final Monthly Compensation determined
under Section 1.21 or the Final
<PAGE> 2
Monthly Compensation that would result from including in clause (i) of
Section 1.21 the Compensation the Qualified Participant would have
earned for the five calendar years after 1991 if his Compensation for
such years were equal to his Compensation for 1991 compounded annually
at the rate of 5%; and (iv) the early retirement reduction factors
under Section 5.2 will be applied by adding five additional years to
the Qualified Participant's age.
5.11 Postretirement Cost-of-Living Adjustments. The
monthly retirement benefit payable to each Participant who retired
under the Plan at or after age 55 and prior to January 1, 1989, and
the monthly retirement benefit (if any) payable to the Beneficiary of
a Participant who retired at or after age 55 and prior to January 1,
1989, and who died before March 1, 1992, will be increased by a
one-time cost-of-living adjustment determined with reference to the
Participant's date of retirement in accordance with the table set
forth below. The cost-of-living adjustment will be paid beginning
with the monthly retirement benefit payable during March, 1992.
Date of Retirement Amount of Adjustment
------------------ --------------------
Before January 1, 1981 12%
On or after January 1, 1981
and before January 1, 1986 8%
On or after January 1, 1986
and before January 1, 1989 4%
If a retired Participant who qualifies for the cost-of-living
adjustment under this Section dies on or after March 1, 1992, any
survivor benefit payable with respect to such Participant will be
based on the Participant's benefit as increased by the cost-of-living
adjustment.
2. The provisions of Section 5.10 will be effective as
of December 31, 1991, and the provisions of Section 5.11 will be effective as
of March 1, 1992.
Executed at Dallas, Texas, this 19th day of February, 1992.
A. H. BELO CORPORATION
By /s/ MICHAEL MCCARTHY
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<PAGE> 1
EXHIBIT 10.3(24)
FOURTH AMENDMENT
TO
THE G. B. DEALEY RETIREMENT PENSION PLAN
(As Amended and Restated Effective January 1, 1988)
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the amendments to the G. B.
Dealey Retirement Pension Plan (the "Plan") set forth below with reference to
the following facts:
A. The Omnibus Budget Reconciliation Act of 1993 has
amended the Internal Revenue Code to reduce to $150,000 the maximum amount of
compensation that can be taken into account for Plan purposes effective for
years beginning after 1993.
B. The definition of Final Monthly Compensation is being
amended to conform the provisions of the Plan document to the manner in which
the Plan has been administered.
NOW, THEREFORE, the Plan is amended as follows:
1. The first two sentences of the second paragraph of
Section 1.11 of the Plan ("Compensation") are amended in their entirety to read
as follows:
For years beginning after December 31, 1988, and before
January 1, 1994, the annual Compensation of each Employee taken into
account under the Plan for any year will not exceed $200,000, and for
years beginning after December 31, 1993, the annual Compensation of
each Employee taken into account under the Plan for any year will not
exceed $150,000, as such limitations are adjusted by the Secretary of
the Treasury, with the first such adjustment effective on January 1,
1990.
2. The phrase "adjusted $200,000 limitation" that
appears in the third paragraph of Section 1.11 of the Plan is
<PAGE> 2
amended in each place that it appears to read "adjusted $200,000 or $150,000
limitation, as applicable,".
3. Section 1.11 of the Plan is further amended by the
addition of the following paragraph:
Notwithstanding the foregoing provisions of this Section, the
application of the $150,000 limitation on Compensation for Plan years
after 1993 will not cause a Participant's Accrued Benefit to be less
than his Accrued Benefit at December 31, 1993, plus his Accrued
Benefit determined solely with respect to his years of Credited
Service after 1993.
4. Section 1.21 of the Plan is amended in its entirety
to read as follows:
1.21 "Final Monthly Compensation" means the average
monthly Compensation paid to a Participant (i) during the five
consecutive calendar years of employment occurring within the
Participant's last ten years of employment with a Controlled Group
Member that produces the highest average monthly Compensation or (ii)
during all of his calendar years of employment, if the Participant has
less than five calendar years of employment. In determining a
Participant's Final Monthly Compensation, (a) the calendar year in
which the Participant terminates employment will be disregarded unless
his termination of employment occurs on December 31 of the calendar
year or unless such calendar year is the only year of employment, (b)
calendar years in which no Compensation was paid to the Participant
for services performed as an Employee in those years will be
disregarded, and calendar years occurring before and after such years
of no Compensation will be considered as consecutive calendar years
and (c) if a Participant receives Compensation in any calendar year
for services performed as an Employee for less than 12 full months,
his Compensation for such year will be his annualized Compensation
determined by dividing his Compensation for such year by the number of
full and partial months of service during such year and multiplying
the result by 12.
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<PAGE> 3
Executed at Dallas, Texas, this 15th day of December, 1993.
A. H. BELO CORPORATION
By /s/ ROBERT W. DECHERD
------------------------------
Robert W. Decherd
Chairman of the Board, President
and Chief Executive Officer
-3-
<PAGE> 1
EXHIBIT 10.3 (25)
FIFTH AMENDMENT
TO
THE G. B. DEALEY RETIREMENT PENSION PLAN
(As Amended and Restated Effective January 1, 1988)
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the following amendments to the
G. B. Dealey Retirement Pension Plan (the "Plan").
1. Notwithstanding any other provision of the Plan, no benefits
will accrue under the Plan after March 31, 1994, with respect to any
Participant or Employee who is employed by DFW Suburban Newspapers, Inc.
2. The first sentence of Section 2.2(a) of the Plan is amended by
deleting the word "or" immediately preceding clause (v) and by adding the
following new clause at the end thereof:
"; or (vi) he is employed by DFW Suburban Newspapers, Inc."
3. Section 2.2(b) of the Plan is amended in its entirety to read
as follows:
"(b) Exclusion after Participation. A Participant who becomes
ineligible under subsection (a) will continue to earn Credited Service
for purposes of determining his vested interest in his Accrued
Benefit, but during the period of ineligibility the Participant's
Credited Service and Compensation will not be taken into account for
purposes of determining the amount of his Accrued Benefit."
4. Section 4.1 of the Plan is amended by adding the following new
subsection (c):
"(c) Full Vesting for Certain Participants. A Participant's
interest in his Accrued Benefit as of March 31, 1994 will become 100%
vested and nonforfeitable without regard to his years of Credited
Service if he is
<PAGE> 2
employed by DFW Suburban Newspapers, Inc. on such date. In addition,
any Participant who terminated employment with DFW Suburban
Newspapers, Inc., or who was classified as a newspaper employee and
terminated employment with Dallas-Ft. Worth Suburban Newspapers, Inc.,
on or after January 1, 1994 and before March 31, 1994 will have a 100%
vested and nonforfeitable interest in his Accrued Benefit as of the
date of his termination without regard to years of Credited Service.
The foregoing amendments are effective on and after April 1, 1994.
Executed at Dallas, Texas, this 1st day of March, 1994.
A. H. BELO CORPORATION
By /s/ ROBERT W. DECHERD
-2-
<PAGE> 1
EXHIBIT 10.3(26)
MASTER TRUST AGREEMENT
<PAGE> 2
MASTER TRUST AGREEMENT
THIS MASTER TRUST AGREEMENT, made and entered into on this 22nd day of
December, 1992, effective as of July 1, 1992, between A.H. BELO CORPORATION
(hereinafter referred to as the "Corporation") and MELLON BANK, N.A.
(hereinafter referred to as the "Master Trustee"),
WITNESSETH:
WHEREAS, the Corporation and certain of its subsidiaries and
affiliates (hereinafter referred to singularly as a "Company" and collectively
as the "Companies") have adopted employee benefit plans and may in the future
adopt additional employee benefit plans meeting the requirements of section
401(a) of the Internal Revenue Code of 1986, as amended, and validly existing
regulations thereunder (hereinafter referred to in their entirety as the
"Code"), for the benefit of the employees therein described; and
WHEREAS, the Corporation and the Master Trustee wish to establish a
master trust, pursuant to which assets will be held to provide for the funding
of and payment of benefits under such plans; and
WHEREAS, the Corporation wishes to provide for the diversification of
management of the assets of the master trust by providing for the appointment
of various investment managers to manage separate portions of such assets; and
<PAGE> 3
WHEREAS, the Companies adopting this Agreement and the Master Trustee
wish to amend those trust agreements referred to in Exhibit A hereto so that
this Agreement shall be deemed to supersede all such trust agreements and so
that all the separate trusts established by those trust agreements shall be
deemed consolidated into a single master trust, and further wish to adopt this
Agreement and the master trust created hereby as the trust agreement and trust
for those plans referred to in Exhibit B (in each case with separate accounting
for the interests of each plan having assets in the master trust, as more
completely described herein);
NOW, THEREFORE, this Agreement shall be the superseding trust
agreement to all trust agreements adopted by the Corporation, as referred to in
Exhibit A to this Agreement, and the trusts established under such agreements
shall be consolidated into a master trust created hereby; and further, that
this Agreement and master trust shall also be the trust agreement and trust for
those plans referred to in Exhibit B to this Agreement and such additional
employee benefit plans as may be designated by the Corporation or authorized
pursuant to Section 21 hereof (such plans are hereinafter referred to
individually as the "Plan" and collectively as the "Plans"), provided that this
Agreement shall be adopted only with respect to employee benefit plans intended
to meet the requirements of section 401(a) of the Code:
- 2 -
<PAGE> 4
SECTION 1
General
1.1 Compliance With Law. The Trust hereinafter established is intended to
comply with the Employee Retirement Income Security Act of 1974, as amended
(hereinafter referred to as the "Act") and to be a "qualified trust" as such
term is used in sections 401 and 501 of the Code.
1.2 Definition of Terms. The terms used herein shall have the meaning
ascribed to them by the Act unless the context clearly indicates an intended
different meaning.
SECTION 2
Establishment of Trust
2.1 Establishment of Trust. The Corporation hereby establishes with the
Master Trustee a trust consisting of such sums of money and such property
acceptable to the Master Trustee as shall from time to time be paid or
delivered to the Master Trustee.
2.2 Contributions to the Trust. The Master Trustee shall have no duty to
determine or collect contributions under any Plan and shall be solely
accountable for monies or properties actually received by it. The respective
Companies shall have the sole duty and responsibility for the determination of
the accuracy or sufficiency of the contributions to be made under any of their
Plans, the transmittal of the same to the Master Trustee and compliance with
any statute, regulation or rule applicable to contributions.
2.3 Prior Administration. The Master Trustee shall not have any duty to
inquire into the administration of the Plans or actions taken under any of the
Plans by any prior trustee.
2.4 The Fund. All monies and properties which become subject to this
Agreement, all investments and reinvestments made therewith and proceeds
thereof and all earnings and profits thereon, less the payments which at the
time of reference shall have been made by the Master Trustee as authorized
herein and any losses thereto, are referred to herein as the "Fund".
2.5 Fund to be Held in Trust. The Fund shall be held by the Master Trustee
in trust and dealt with in accordance with the provisions of this Agreement and
the Act.
2.6 Fund to be Held for Benefit of Plan Participants. Except as may be
provided by law for the purpose of returning any of the Companies'
contributions or in case any Plan of which this Trust forms a part provides for
the return of company
- 3 -
<PAGE> 5
contributions in the event such Plan fails to initially qualify under the
applicable provisions of the Code, at no time prior to the satisfaction of all
liabilities for benefits under any Plan shall any part of the Fund be used for
or diverted to purposes other than for the exclusive benefit of participants,
former participants, or their beneficiaries under the Plans and for the payment
of the reasonable expenses of the Plans.
2.7 Commingling. The Master Trustee may commingle the assets attributable
to the Plans for which contributions are made under this Agreement if this
Agreement is applicable to more than one Plan, and may commingle the Fund with
funds of other trusts of similar nature created by the Companies for the
exclusive benefit of their employees. Where commingling is effected with other
trusts maintained by the Companies, the combined trust, to the extent that
assets are attributable to contributions made under this Agreement, shall be
the Fund referred to herein. The Master Trustee shall maintain such records as
are necessary in order to maintain a separation of the Fund from the funds of
the other trusts maintained by the Companies and to separate the assets
attributable to each of the Plans for which contributions are made under this
Agreement. The Companies shall be responsible for causing sufficient records to
be maintained to insure that benefits and liabilities payable with respect to
each Plan shall be paid from the assets allocable to each such Plan. Should
separation be required, either of the Fund from other trusts maintained by the
Companies or of any Plan for which contributions are made under this Agreement
from the Fund, the Master Trustee shall make such separation in accordance with
generally accepted accounting principles and, where applicable, upon the
certification of an Enrolled Actuary.
SECTION 3
Administration of the Plan
3.1 Administrator. The Plans shall be administered by the person or
persons, board, committee or other entity designated by the terms of the Plans
to administer the Plans or, in the absence of such designation, the Plans shall
be administered by the respective Companies (hereinafter referred to as the
"Administrator") and each of such Administrators shall have the sole fiduciary
duty as to such plan administration and the Master Trustee shall not be
responsible in any respect for such administration.
3.2 Notice of Identity. The Corporation will furnish the Master Trustee
from time to time with certified copies of resolutions of its Board of
Directors evidencing the appointment, identity and termination of office of any
persons acting as or constituting the members of any entity acting as
Administrator with respect to any right, power or duty
- 4 -
<PAGE> 6
specified in this Agreement. The Corporation will notify the Trustee from time
to time in writing as to the rights, powers and duties of each such person or
entity and, in the absence of any of the above notices, the Master Trustee
shall rely solely upon the Corporation.
3.3 Master Trustee's Right to Act. The Master Trustee shall be entitled
to deal with any person or entity identified by the Corporation as an
Administrator until notified otherwise by the Corporation, in writing.
3.4 Indemnity. The Corporation shall fully indemnify and save harmless
the Master Trustee from liability and expense incident to any act or failure to
act by reason of the Master Trustee's reliance upon or compliance with
instructions issued by the Administrator or the Corporation.
SECTION 4
Disbursement from the Fund
4.1 Disbursements by Master Trustee. The Master Trustee shall make such
payments out of the Fund as each Administrator may from time to time in writing
direct. In the discretion of each Administrator, such payments may be made
directly to the person specified by that Administrator or deposited in a
checking account maintained by that Administrator for the purpose of making
payments to the person, or persons entitled to such payments under the Plans,
or to an account maintained by some other entity which that Administrator may
designate to make payments.
4.2 Monies Held by Administrator or Other Entity. To the extent monies are
held in accounts designated by an Administrator or by some other entity, such
Administrator or other entity shall hold such monies in trust in such a manner
that the same shall be secure from the claims of all creditors of the
Companies, that Administrator, any participant or beneficiary covered by the
Plans.
4.3 Direction to the Master Trustee. Any direction given to the Master
Trustee in accordance with this Section need not specify the specific
application of the payment to be made, but shall specify that the payment is
for the purposes of the Plans or the payment of Plans' expenses.
SECTION 5
Allocation of Investment Responsibilities
5.1 The Named Fiduciary. (a) The Magemement Committee of the Corporation
shall have the power to manage and control the assets of all Plans to the
extent of its authority set forth
- 5 -
<PAGE> 7
herein (hereinafter referred to as the "Named Fiduciary"). The Corporation will
appoint the Named Fiduciary and will furnish the Master Trustee from time to
time with certified copies of resolutions of its Board of Directors evidencing
the appointment, identity and termination of office of any persons acting as or
constituting the members of the Named Fiduciary. In addition to its other
powers set forth herein, the Named Fiduciary shall have the power and
responsibility to appoint and remove one or more investment managers to manage
such portions of the Fund as the Named Fiduciary shall designate to the Master
Trustee (such investment managers are hereinafter referred to singularly as an
"Investment Manager" and collectively as the "Investment Managers"). Each such
Investment Manager shall be: (1) registered as an investment adviser under the
Investment Advisers Act of 1940; (2) a bank, as defined in that Act; or (3) an
insurance company qualified to perform investment services under the laws of
more than one State and shall accept its appointment and acknowledge in writing
to the Master Trustee and Named Fiduciary that it is a fiduciary with respect
to the Plans' assets under its management.
(b) In addition to its other powers and responsibilities set forth herein,
the Named Fiduciary shall have the power:
(i) to manage and control the assets of the Plans;
(ii) to deliver written investment policies, objectives and
guidelines to the Master Trustee and to Investment Managers
from time to time; and
(iii) to designate a person to inspect and audit the accounts, books
and records of the Master Trustee relating to all investments,
receipts, disbursements and other transactions under the
Master Trust Agreement.
5.2 Investment by the Named Fiduciary. (a) To the extent that the Named
Fiduciary exercises the power to manage and control Plans' assets held as part
of the Fund, the Master Trustee, as to those assets, shall be released and
relieved of all investment duties, responsibilities and liabilities normally or
statutorily incident to a trustee and thereafter shall act in the capacity of
custodian of such assets. The Master Trustee shall separate into a separate
account those assets as to which the Named Fiduciary has discretion and
control. The Master Trustee shall take no action with respect to the duties or
powers to be exercised by the Named Fiduciary under Section 6 or Section 7
without receipt of written directions from the Named Fiduciary. Unless
specifically prohibited in writing, the Master Trustee, as custodian, may hold
the assets of such separate account in the name of a nominee or nominees.
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(b) Should the Named Fiduciary at any time elect to place security
transactions directly with a broker or dealer, the Master Trustee shall not
recognize such transaction unless and until it has received instructions or
confirmation of such fact from the Named Fiduciary. Should the Named Fiduciary
direct the Master Trustee to utilize the services of any person with regard to
the assets under its management or control, such instructions shall be in
writing and shall specifically set forth the actions to be taken by the Master
Trustee as to such services.
(c) In the event that the Named Fiduciary places security transactions
directly or directs the utilization of a service, the Named Fiduciary shall be
solely responsible for the acts of such persons. The sole duty of the Master
Trustee as to such transactions shall be incident to its duties as custodian.
5.3 Investment Managers. (a) It is contemplated that the Named Fiduciary
will from time to time appoint one or more Investment Managers to manage
specified portions of the Fund. Upon the appointment of each Investment
Manager, the Named Fiduciary shall so notify the Master Trustee and instruct
the Master Trustee in writing to separate into a separate account those assets
as to which each Investment Manager has discretion and control. The Investment
Manager shall designate in writing the person or persons who are to represent
any such Investment Manager in dealings with the Master Trustee. Upon the
separation of the assets in accordance with the instructions of the Named
Fiduciary, the Master Trustee shall thereupon be relieved and released of all
investment duties, responsibilities and liabilities normally and statutorily
incident to a trustee as to such separate account, and, as to such separate
account, the Master Trustee shall act as custodian. Except as otherwise
provided by the Named Fiduciary in writing from time to time, the Master
Trustee shall take no action with respect to the duties or powers allocated to
an Investment Manager in Section 6 or Section 7 without receipt of written
directions of the Investment Manager. Unless specifically prohibited in
writing, the Master Trustee, as custodian, may hold the assets of such separate
account in the name of a nominee or nominees.
(b) Should an Investment Manager at any time elect to place security
transactions directly with a broker or dealer, the Master Trustee shall not
recognize such transaction unless and until it has received instructions or
confirmation of such fact from the Investment Manager. Should the Investment
Manager direct the Master Trustee to utilize the services of any person with
regard to the assets under its management or control, such instructions shall
be in writing and shall specifically set forth the actions to be taken by the
Master Trustee as to such services.
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(c) In the event that an Investment Manager places security transactions
directly or directs the utilization of a service, the Investment Manager shall
be solely responsible for the acts of such persons. The sole duty of the Master
Trustee as to such transactions shall be incident to its duties as custodian.
5.4 Transfer of Assets to Investment Managers. (a) Upon receipt of written
directions by the Named Fiduciary, the Master Trustee shall (i) transfer and
deliver such part of the assets of the Fund as may be specified in such writing
to any Investment Manager so appointed, and (ii) accept the transfer back to it
of any such assets at any time held by an Investment Manager, provided that the
Named Fiduciary may only direct such transfers as are in conformity with the
provisions of the Plans, this Agreement, and Act, and sections 401(a) and
501(a) of the Code. Any such written direction shall constitute a certification
to the Master Trustee by the Named Fiduciary that the transfer so directed is
one which the Named Fiduciary is authorized to direct and is in conformity with
the aforesaid provisions.
(b) If any assets are so transferred to the custody of an Investment
Manager, such Investment Manager shall undertake and be responsible for all the
custodial duties therefor, and such assets shall remain for all purposes a part
of the Fund and the Trust, and as such, subject to all the terms and provisions
of this Agreement. Any Investment Manager receiving such assets may invest any
part or all of such assets in units of any collective, common or pooled trust
fund operated or maintained by a bank or trust company, including the
Investment Manager or any affiliate of the Investment Manager, exclusively for
the commingling and collective investment of monies or other assets held under
or as part of a plan which is established in conformity with and qualifies
under section 401(a) of the Code. Notwithstanding the provisions of this
Agreement which place restrictions upon the actions of the Master Trustee, or
the Investment Manager, to the extent monies or other assets are utilized to
acquire units of any collective trust, the terms of the collective trust
indenture shall solely govern the investment duties, responsibilities and
powers of the trustee of such collective trust, and to the extent required by
law, such terms, responsibilities and powers shall be incorporated herein by
reference and shall be part of this Agreement. For the purposes of valuation of
any interest under the Plans of which this trust forms a part, the value of the
interest maintained by the Fund in such collective trust shall be the fair
market value of the collective fund units held determined in accordance with
generally recognized valuation procedures.
(c) The Master Trustee shall have no duty or responsibility as to the
safekeeping of such assets or as to the investment and reinvestment of the
same, except that the Master Trustee shall
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require such statements and reports from such Investment Manager as may be
necessary to enable the Master Trustee and the individual, committee, or
committees individually or collectively responsible for benefit administration
and identified to the Trustee by the Corporation ("Administrative Committee")
to carry out their recordkeeping and reporting duties under this Agreement. The
Master Trustee shall enter into and execute such agreements, receipts and
releases as shall be required to carry out the directions of the Named
Fiduciary with respect to the transfer of any assets of the Fund to or from an
Investment Manager in accordance with this Section 5.3.
5.5 The Master Trustee. To the extent that assets of the Fund have not
been allocated under Section 5.2 to the investment control of an Investment
Manager, and subject to investment policies, objectives and guidelines
communicated to the Master Trustee by the Named Fiduciary as contemplated by
Section 5.1, the Master Trustee shall from time to time invest and reinvest the
Fund and keep it invested in accordance with such policies, objectives and
guidelines.
SECTION 6
Investment of the Fund
6.1 Standard of Care. The Master Trustee, each Investment Manager and the
Named Fiduciary shall discharge their respective investment duties as provided
under Sections 5 and 6 hereof with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character with like aims and by diversifying the
investments held hereunder consistent with investment policies, objectives and
guidelines so as to minimize the risk of large losses, unless under the
circumstances it would be clearly not prudent to diversify.
6.2 Waiver of Investment Restrictions. Such investment and reinvestment
shall not be restricted to securities or property of the character authorized
for investments by trustees or investment managers under any statute or other
laws of any state, district or territory.
6.3 Grant of Investment Powers. In addition to any power granted to
trustees or investment managers under any statute or other laws, such laws and
statutes if necessary being incorporated herein by reference, the Master
Trustee's, each Investment Manager's and the Named Fiduciary's investment
powers may, unless restricted in writing by the Named Fiduciary, include, but
shall not be limited to, investment in the following:
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(a) domestic or foreign common and preferred stocks and options thereon,
as well as warrants, rights and preferred stocks convertible into common stock,
regardless of where or how traded;
(b) corporate bonds and debentures and any such securities which are
convertible into common stock, domestic or foreign;
(c) bonds or other obligations of the United States of America or any
foreign nation, and any agencies thereof, or any bonds or other obligations
which are directly or indirectly guaranteed by the United States or any foreign
nation, or any agency thereof;
(d) obligations of the states and of municipalities or of any agencies
thereof;
(e) notes of any nature, of foreign or domestic issuers;
(f) mortgages and real estate, wherever situate and whether developed or
undeveloped, including sales and leasebacks, interests or participations in
real estate investment trusts or corporations organized under Section 501(c)(2)
or 501(c)(25) of the Code and non-income producing properties. Notwithstanding
any other provision of this Agreement, including, without limitation, any
specific or general power granted to the Master Trustee, the Master Trustee
shall have no responsibility or discretion with respect to the ownership,
management, administration, operation or control of any real estate properties,
mortgages, leases or other interests now or hereafter held in the Fund,
including without limitation responsibility for or in connection with any of
the following conditions which now exist or may hereafter be found to exist in,
under, about or in connection with any real estate held in the Fund or any
interest in any trust, partnership or corporation: (i) any violation of any
applicable environmental or health or safety law, ordinance, regulation or
ruling; or (ii) the presence, use, generation, storage, release, threatened
release, or containment, treatment or disposal of any petroleum, including
crude oil or any fraction thereof, hazardous substances, pollutants or
contaminants as defined in the Comprehensive Environmental Response
Compensation and Liability Act, as amended (CERCLA) or hazardous, toxic or
dangerous substances or materials as any of these terms may be defined under
any federal or state law in the broadest sense from time to time.
Notwithstanding anything to the contrary herein or elsewhere set forth, to the
extent permitted by law, the Master Trustee shall be indemnified by the
Corporation, to the extent not paid by the Fund, from and against any and all
claims, demands, suits, liabilities, losses, damages, costs and expenses
(including reasonable attorneys' fees and expenses) arising from or in
connection with any matter relating to conditions in subsections (i) or (ii).
This paragraph shall
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<PAGE> 12
survive the sale or other disposition of any real estate investment of the Fund
and/or the merger or termination of this Master Trust or appointment of a
successor master trustee;
(g) savings accounts, certificates of deposit and other types of time
deposits, bearing a reasonable rate of interest based upon the duration,
amount, type and geographical area, with any financial institution or
quasi-financial institution or any department of the same, either domestic or
foreign, under the supervision of the United States or any State, including any
such financial institution owned, operated or maintained by the Master Trustee
in its corporate or Association capacity (including any department or division
of the same) or a corporation or association affiliated with the same;
(h) leaseholds of any duration;
(i) mineral and other natural resources, including, but not limited to,
oil, gas, timber and coal, and any participation therein in any form, including
but not limited to, royalties, ownership, drilling and exploration;
(j) any collective or common trust fund or composite security owned,
operated and maintained by the Master Trustee, including, but not limited to,
demand notes, short-term notes and cash equivalent funds;
(k) any collective, common or pooled trust fund operated or maintained
exclusively for the commingling and collective investment of monies or other
assets including any such fund operated or maintained by the Master Trustee.
Notwithstanding the provisions of this Agreement which place restrictions upon
the actions of the Master Trustee or an Investment Manager, to the extent
monies or other assets are utilized to acquire units of any collective trust,
the terms of the collective trust indenture shall solely govern the investment
duties, responsibilities and powers of the trustee of such collective trust
and, to the extent required by law, such terms, responsibilities and powers
shall be incorporated herein by reference and shall be part of this Agreement.
For purposes of valuation, the value of the interest maintained by the Fund in
such collective trust shall be the fair market value of the collective fund
units held, determined in accordance with generally recognized valuation
procedures. The Corporation expressly understands and agrees that any such
collective fund may provide for the lending of its securities by the collective
fund trustee and that such collective fund's trustee will receive compensation
from such collective fund for the lending of securities that is separate from
any compensation of the Master Trustee hereunder, or any compensation of the
collective fund trustee for the management of such collective fund;
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<PAGE> 13
(l) open-end and closed-end investment companies, regardless of the
purposes for which such fund or funds were created, and any partnership,
limited or unlimited, joint venture and other forms of joint enterprise created
for any lawful purpose;
(m) individual or group insurance policies and contracts including, but
not limited to, life insurance, annuity (fixed or variable) and investment
policies and contracts, but only if directed by an Administrator or the Named
Fiduciary, as appropriate, to purchase or retain such policies and contracts;
6.4 Maintenance of Cash Balances. The Master Trustee shall keep such
portion of the Fund in cash or cash balances as may be specified from time to
time in a written request from an Administrator or as required by the Named
Fiduciary to meet contemplated payments from the Fund. The Master Trustee shall
invest such cash balances and any other portions of the Fund which may be in
cash or cash balances in accordance with such investment policies, objectives
and guidelines as may be communicated to the Master Trustee from time to time
by the Named Fiduciary pursuant to Section 5.1. The Master Trustee shall not be
liable for interest on any reasonable cash balances so maintained.
SECTION 7
Powers of the Master Trustee,
Investment Managers and the Named Fiduciary
7.1 General Powers. The Master Trustee shall have and exercise the
following powers and authority in the administration of the Fund only on the
direction of an Investment Manager and the Named Fiduciary where such powers
and authority relate to a separate account established for an Investment
Manager or the Named Fiduciary, and in its sole discretion where such powers
and authority relate to investments made by the Master Trustee in accordance
with Section 5.4:
(a) to purchase, receive or subscribe for any securities or other property
and to retain in trust such securities or other property;
(b) to sell, exchange, convey, transfer, lend, or otherwise dispose of any
property held in the Fund and to make any sale by private contract or public
auction; and no person dealing with the Master Trustee shall be bound to see to
the application of the purchase money or to inquire into the validity,
expediency or propriety of any such sale or other disposition;
(c) to vote in person or by proxy any stocks, bonds or other securities
held in the Fund;
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<PAGE> 14
(d) to exercise any rights appurtenant to any such stocks, bonds or other
securities for the conversion thereof into other stocks, bonds or securities,
or to exercise rights or options to subscribe for or purchase additional
stocks, bonds or other securities, and to make any and all necessary payments
with respect to any such conversion or exercise, as well as to write options
with respect to such stocks and to enter into any transactions in other forms
of options with respect to any options which the Fund has outstanding at any
time;
(e) to join in, dissent from or oppose the reorganization,
recapitalization, consolidation, sale or merger of corporations or properties
of which the Fund may hold stocks, bonds or other securities or in which it may
be interested, upon such terms and conditions as deemed wise, to pay any
expenses, assessments or subscriptions in connection therewith, and to accept
any securities or property, whether or not trustees would be authorized to
invest in such securities or property, which may be issued upon any such
reorganization, recapitalization, consolidation, sale or merger and thereafter
to hold the same, without any duty to sell;
(f) to manage, administer, operate or lease for any number of years,
regardless of any restrictions on leases made by fiduciaries, develop, improve,
repair, alter, demolish, mortgage, pledge, grant options with respect to, or
otherwise deal with any real property or interest therein at any time held by
it, all upon such terms and conditions as may be deemed advisable, to renew or
extend or participate in the renewal or extension of any mortgage upon such
terms as may be deemed advisable, and to agree to a reduction in the rate of
interest on any mortgage or any other modification or change in the terms of
any mortgage or of any guarantee pertaining thereto in any manner and to any
extent that may be deemed advisable for the protection of the Fund or the
preservation of the value of the investment; to waive any default, whether in
the performance of any guarantee, or to enforce any default in such manner and
to such extent as may be deemed advisable; to exercise and enforce any and all
rights of foreclosure, to bid on the property in foreclosure, to take a deed in
lieu of foreclosure, with or without paying a consideration therefor, and in
connection therewith to release the obligation on the bonds or notes secured by
such mortgage and to exercise and enforce in any action, suit or proceeding at
law or in equity any right or remedy in respect to any such mortgage or
guarantee;
(g) to explore for and to develop mineral interests and other natural
resources and to acquire land, either by lease or purchase, for such purpose,
and to enter into any type of contract or agreement incident thereto, and to
sell any product produced by reason of or resulting from such development or
exploration to any person or persons on such terms and
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<PAGE> 15
conditions as the Master Trustee, Investment Manager or Named Fiduciary deems
advisable, and to enter into agreements and contracts for transportation of the
same;
(h) to insure, according to customary standards, any property held in the
Fund for any amount and to pay any premiums required for such coverage;
(i) to purchase or otherwise acquire and make payment therefor from the
Fund any bond or other form of guarantee or surety required by any authority
having jurisdiction over this Trust and its operation, or believed by the
Master Trustee, Investment Manager or Named Fiduciary to be in the best
interests of the Fund, except the Master Trustee, Investment Manager or Named
Fiduciary may not obtain any insurance whose premium obligation extends to the
Fund which would protect the Master Trustee, Investment Manager or Named
Fiduciary against its liability for breach of fiduciary duty;
(j) to enter into any type of contract with any insurance company or
companies, either for the purposes of investment or otherwise; provided that no
insurance company dealing with the Master Trustee shall be considered to be a
party to this Agreement and shall only be bound by and held accountable to the
extent of its contract with the Master Trustee. Except as otherwise provided by
any contract, the insurance company need only look to the Master Trustee with
regard to any instructions issued and shall make disbursements or payments to
any person, including the Master Trustee, as shall be directed by the Master
Trustee. Where applicable, the Master Trustee shall be the sole owner of any
and all insurance policies or contracts issued. Such contracts or policies,
unless otherwise determined, shall be held as an asset of the Fund for
safekeeping or custodian purposes only;
(k) to lend the assets of the Fund upon such terms and conditions as are
deemed appropriate in the sole discretion of the Master Trustee and,
specifically, to loan any securities to brokers, dealers or banks upon such
terms, and secured in such manner, as may be determined by the Master Trustee,
to permit the loaned securities to be transferred into the name of the borrower
or others and to permit the borrower to exercise such rights of ownership over
the loaned securities as may be required under the terms of any such loan;
provided, that, with respect to the lending of securities pursuant to this
paragraph, the Master Trustee's powers shall subsume the role of custodian (the
expressed intent hereunder being that the Corporation, in such case, be deemed
a financial institution, within the meaning of section 101(21) of the
Bankruptcy Code); and provided, further, that any loans made from the Fund
shall be made in conformity with such laws or regulations governing such
lending activities which may have been promulgated by any appropriate
regulatory body at the time of such loan;
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<PAGE> 16
(l) to purchase, enter, sell, hold, and generally deal in any manner in
and with contracts for the immediate or future delivery of financial
instruments of any issuer or of any other property; to grant, purchase, sell,
exercise, permit to expire, permit to be held in escrow, and otherwise to
acquire, dispose of, hold and generally deal in any manner with and in all
forms of options in any combination.
7.2 Specific Powers of the Master Trustee. The Master Trustee shall have
the following powers and authority, to be exercised in its sole discretion with
respect to the Fund:
(a) to appoint agents, custodians, depositories or counsel, domestic or
foreign, as to part or all of the Fund and functions incident thereto where, in
the sole discretion of the Master Trustee, such delegation is necessary in
order to facilitate the operations of the Fund and such delegation is not
inconsistent with the purposes of the Fund or in contravention of any
applicable law. To the extent that the appointment of any such person or
entity may be deemed to be the appointment of a fiduciary, the Master Trustee
may exercise the powers granted hereby to appoint as such a fiduciary any
person or entity, including but not limited to, the Named Fiduciary or any
Company, notwithstanding the fact that such person or entity is then considered
a fiduciary, a party in interest or a disqualified person. Upon such
delegation, the Master Trustee may require such reports, bonds or written
agreements as it deems necessary to properly monitor the actions of its
delegate.
(b) to cause any investment, either in whole or in part, in the Fund to be
registered in, or transferred into, the Master Trustee's name or the names of a
nominee or nominees, including but not limited to that of the Master Trustee, a
clearing corporation, or a depository, or in book entry form, or to retain any
such investment unregistered or in a form permitting transfer by delivery,
provided that the books and records of the Master Trustee shall at all times
show that such investments are a part of the Fund; and to cause any such
investment, or the evidence thereof, to be held by the Master Trustee, in a
depository, in a clearing corporation, in book entry form, or by any other
entity or in any other manner permitted by law;
(c) to make, execute and deliver, as trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in writing
necessary or desirable for the accomplishment of any of the foregoing powers;
(d) to defend against or participate in any legal actions involving the
Fund or the Master Trustee in its capacity stated herein, in the manner and to
the extent it deems advisable, the costs of any such defense or participation
to be borne by the
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<PAGE> 17
Fund, unless paid by the Corporation in accordance with Section 10; provided
however, the Master Trustee shall notify the Named Fiduciary and the
Corporation of all such actions and the Corporation may, in its sole
discretion, determine against the incurrence of any such legal fees and
expenses which may be incurred beyond those necessary to protect the Fund
against default or immediate loss and may participate in the selection of and
instructions to legal counsel;
(e) to form corporations and to create trusts, to hold title to any
security or other property, to enter into agreements creating partnerships or
joint ventures for any purpose or purposes determined by the Master Trustee to
be in the best interests of the Fund;
(f) to establish and maintain such separate accounts in accordance with
the instructions of an Administrator or the Named Fiduciary as an Administrator
or the Named Fiduciary deems necessary for the proper administration of the
Plans, or as determined to be necessary by the Master Trustee. Such accounts
shall be subject to the general terms of this Agreement, unless the Master
Trustee is notified of a contrary intent by an Administrator or the Named
Fiduciary in writing;
(g) to generally take all action, whether or not expressly authorized,
which the Master Trustee may deem necessary or desirable for the protection of
the Fund.
7.3 Maintenance of Indicia of Ownership. The Master Trustee shall not
maintain indicia of ownership of any asset of the Fund held by it outside the
jurisdiction of the District Courts of the United States unless such holding is
approved through ruling or regulation promulgated under the Act by the
Secretary of Labor.
7.4 Third Party Transactions. In addition, and not by way of limitation,
the Master Trustee shall have any and all powers and duties concerning the
investment, retention or sale of property held in trust as if it were absolute
owner of the property, and no restrictions with regard to the property so held
shall be implied, warranted or sustained by reason of this Agreement; provided,
however, at no time shall the exercise of such powers and duties establish any
evidence which would permit a third party to assert a right, title or interest
superior to that of the Plans in the property held in the Fund.
SECTION 8
Discretionary Powers
8.1 Master Trustee Granted Discretion. The Master Trustee is hereby
granted any and all discretionary powers not explicitly or implicitly conferred
by this Agreement which it may deem
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<PAGE> 18
necessary or proper for the protection of the property held hereunder.
SECTION 9
Prohibited Transactions
9.1 Transactions which are Prohibited. Notwithstanding any provision of
this Agreement, either appearing before or after this Section, the Master
Trustee shall not engage in or cause the Trust to engage in any transaction if
it knows or should know, that such transaction constitutes a direct or indirect
prohibited transaction, as defined in section 406 of the Act or section 4975 of
the Code.
9.2 Provision of Ancillary Services by Master Trustee. Notwithstanding the
foregoing, the Master Trustee may, in addition to the services rendered in
conjunction with its duties and responsibilities as Master Trustee under the
terms of this Agreement, provide such ancillary services as meet the following
standards:
(a) there have been adopted by the Master Trustee internal safeguards
which assure that such ancillary services are consistent with sound banking and
financial practices as determined by the appropriate banking authority;
(b) the ancillary services are provided in accordance with guidelines
which are intended to meet the standards established by the appropriate banking
authority;
(c) the compensation received by the Master Trustee for such services is
reasonable and established in an arm's-length manner.
SECTION 10
Expenses, Compensation and Taxes
10.1 Compensation and Expenses of the Master Trustee. The Master Trustee
shall be entitled to such reasonable compensation for services rendered by it
in accordance with the schedule of compensation as agreed upon by the
Corporation and the Master Trustee from time to time, together with all
reasonable expenses incurred by the Master Trustee as a result of the execution
of its duties hereunder, including, but not limited to, legal and accounting
expenses, expenses incurred as a result of disbursements and payments made by
the Master Trustee, and reasonable compensation for agents, counsel or other
services rendered to the Master Trustee by third parties and expenses incident
thereto.
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10.2 Payment from the Fund. All compensation, expenses, taxes and
assessments in respect of the Fund, to the extent that they are not paid by the
Corporation, shall constitute a charge upon the Fund and be paid by the Master
Trustee from the Fund upon written notice from the Corporation.
10.3 Payment of Taxes. The Master Trustee shall notify the Corporation upon
receipt of notice with regard to any proposed tax deficiencies or any tax
assessments which it receives on any income or property in the Fund and, unless
notified to the contrary by the Corporation within thirty (30) days, shall pay
any such assessments. If the Corporation notifies the Master Trustee within
said period that, in its opinion or the opinion of counsel, such assessments
are invalid or that they should be contested, then the Master Trustee shall
take whatever action is indicated in the notice received from the Corporation
or counsel, including contesting the assessment or litigating any claims.
SECTION 11
Accounts, Books and Records of the Fund
11.1 Recordkeeping Duty of Master Trustee. The Master Trustee shall keep
accurate and detailed accounts of all investments, receipts and disbursements
and other transactions hereunder, and all accounts, books and records relating
thereto shall be open at all reasonable times to inspection and audit by any
person designated by the Corporation.
11.2 Periodic Reports. In addition, within one hundred twenty (120) days
following the close of each fiscal year of the Fund, or following the close of
such other period as may be agreed upon between the Master Trustee and the
Corporation, and within one hundred twenty (120) days, or such other agreed
upon period, unless such period be waived, after the removal or resignation of
the Master Trustee as provided for in this Agreement, the Master Trustee shall
file with the Administrator, Named Fiduciary and/or the Corporation a certified
written report setting forth all investments, receipts and disbursements, and
other transactions effected during the fiscal year or other annual period or
during the period from the close of the preceding fiscal year or other
preceding period to the date of such removal or resignation, including a
description of all securities and investment purchases and sales with the cost
or net proceeds of such purchases or sales and showing all cash, securities and
other property held at the close of such fiscal year or other period, valued
currently, and such other information as may be required of the Master Trustee
under any applicable law.
11.3 Additional Accounting. Except as provided below, neither the
Administrator, Named Fiduciary nor the Corporation shall
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<PAGE> 20
have the right to demand or be entitled to any further accounting different
from the normal accounting rendered by the Master Trustee. Further, no
participant, beneficiary or any other person shall have the right to demand or
be entitled to any accounting by the Master Trustee, other than those to which
they may be entitled under the law. The Administrator, Named Fiduciary or the
Corporation shall have the right to inspect the Master Trustee's books and
records relating to the Fund during normal business hours or to designate an
accountant to make such inspection, study, and/or audit with all expenses
related thereto to be paid by the Corporation.
11.4 Judicial Determination of Accounts. Nothing contained herein will be
construed or interpreted to deny the Master Trustee or the Corporation the
right to have the Master Trustee's account judicially determined.
11.5 Limitation of Actions. Notwithstanding any other provision of the
Plans or this Agreement, the Master Trustee shall not be subject to any
liability for any act or omission, regardless of its nature, unless an action
has been commenced against the Master Trustee with respect to such act or
omission within the period set forth in Section 413 of the Act.
11.6 Filings by Administrators. For the purposes of this Section, the
Master Trustee shall conclusively presume that the Administrators have made
all Federal filings as of the date required. Should the Master Trustee incur
any liability by reason of an Administrator's failure to timely file, the
Corporation shall fully reimburse the Master Trustee for any and all
obligations, including penalties, interest or expenses, so incurred by the
Master Trustee.
11.7 Determination of Fair Market Value. The Master Trustee shall determine
the fair market value of the Fund monthly and annually based upon generally
accepted accounting principles applicable to trusts of a same or similar nature
to the one created herein.
11.8 Retention of Records. All records and accounts maintained by the
Master Trustee with respect to the Fund shall be preserved for such period as
may be required under any applicable law. Upon the expiration of any such
required retention period, the Master Trustee shall have the right to destroy
such records and accounts after first notifying the Corporation in writing of
its intention and transferring to the Corporation any records and accounts
requested. The Master Trustee shall have the right to preserve all records and
accounts in original form, or on microfilm, magnetic tape, or any other similar
process.
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SECTION 12
Fiduciary Duties of Master Trustee
12.1 Acknowledgment of Fiduciary Duty. The Master Trustee acknowledges that
it assumes the fiduciary duties established by this Agreement.
12.2 Judicial Determination. The Master Trustee shall not, however, be
liable for any loss to or diminution of the Fund except to the extent that any
such loss or diminution results from act or inaction on the part of the Master
Trustee which judicially determined to be a breach of its fiduciary duties.
SECTION 13
Resignation and Removal
13.1 Power to Resign or Remove. The Master Trustee may be removed with
respect to all, or a part of, the Fund by the Corporation, upon written notice
to the Master Trustee to that effect. The Master Trustee may resign as Master
Trustee hereunder, upon written notice to that effect delivered to the
Corporation.
13.2 Notice. Such removal or resignation shall become effective as of the
last day of the month which coincides with or next follows the expiration of
sixty (60) days from the date of the delivery of such written notice, unless an
earlier or later date is agreed upon in writing by the Corporation and the
Master Trustee.
13.3 Successor Appointment. In the event of such removal or resignation, a
successor master trustee, or a separate trustee or trustees, shall be appointed
by the Corporation to become master trustee, or a separate trustee or trustees,
as of the time such removal or resignation becomes effective. Such successor
master trustee, or separate trustee or trustees, shall accept such appointment
by an instrument in writing delivered to the Corporation and the Master Trustee
and upon becoming successor master trustee, or separate trustee or trustees,
shall be vested with all the rights, powers, duties, privileges and immunities
as successor master trustee, or separate trustee or trustees, hereunder as if
originally designated as master trustee, or separate trustee or trustees, in
this Agreement.
13.4 Transfer of Fund to Successor. Upon such appointment and acceptance,
the retiring Master Trustee shall endorse, transfer, assign, convey and deliver
to the successor Master Trustee, or separate trustee or trustees, all of the
funds, securities and other property then held by it in the Fund, except such
amount as may be reasonable and necessary to cover
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<PAGE> 22
its compensation and expenses as may be agreed to by the Corporation in
connection with the settlement of its accounts and the delivery of the Fund to
the successor master trustee, or separate trustee or trustees, and the balance
remaining of any amount so reserved shall be transferred and paid over to the
successor master trustee, or separate trustee or trustees, promptly upon
settlement of its accounts, subject to the right of the retiring Master Trustee
to retain any property deemed unsuitable by it for transfer until such time as
transfer can be made.
13.5 Retention of Nontransferable Assets. If the retiring Master Trustee
holds any property unsuitable for transfer, it shall retain such property, and
as to such property alone it shall be a co-trustee with the successor master
trustee, or separate trustee or trustees, its duties and obligations being
solely limited to any such property, and it shall not have fiduciary duties of
any nature as to assets transferred. Should the successor master trustee, or
separate trustee or trustees, accept fiduciary responsibility as to such
property, the Master Trustee shall retain only custodian duties as to such
property.
13.6 Accounting. In the event of the removal or resignation of the Master
Trustee hereunder, the Master Trustee shall file with the Corporation a
statement and report of its accounts and proceedings covering the period from
its last annual statement and report, and its liability and accountability to
anyone with respect to the propriety of its acts and transactions shown in such
written statement and report shall be governed by the terms of this Agreement.
SECTION 14
Actions by the Corporation,
Administrators or Named Fiduciary
14.1 Action by Corporation. Any action by the Corporation pursuant to this
Agreement shall be evidenced or empowered in writing to the Master Trustee, and
the Master Trustee shall be entitled to rely on such writing.
14.2 Action by Administrators or Named Fiduciary. Any action by any person
or entity duly empowered to act on behalf of an Administrator or the Named
Fiduciary with respect to any rights, powers or duties specified in this
Agreement shall be in writing, signed by such person or by the person
designated by an Administrator or the Named Fiduciary and the Master Trustee
shall act and shall be fully protected in acting in accordance with such
writing.
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<PAGE> 23
SECTION 15
Amendment or Termination
15.1 Amendment or Termination. The Corporation shall have the right at any
time and from time to time by appropriate action:
(a) to modify or amend in whole or in part any or all of the provisions of
this Agreement upon sixty (60) days' prior notice in writing to the Master
Trustee, unless the Master Trustee agrees to waive such notice; provided,
however, that no modification or amendment which affects the rights, duties or
responsibilities of the Master Trustee may be made without the Master Trustee's
consent, or
(b) to terminate this Agreement upon sixty (60) days' prior notice in
writing delivered to the Master Trustee;
provided, further, that no termination, modification or amendment shall permit
any part of the corpus or income of the Fund to be used for or diverted to
purposes other than for the exclusive benefit of such participants, former
participants and their beneficiaries, except for the return of Company
contributions which are allowed by law and permitted under a Plan.
15.2 PBGC Approval. Should this Trust form a part of a Plan subject to the
jurisdiction of the Pension Benefit Guaranty Corporation as provided in the
Act, and should the Corporation notify the Master Trustee of the termination of
a Plan, the Master Trustee shall take no action as to the termination of this
Trust with respect to such Plan, until it has received notice from the Named
Fiduciary or the Corporation that such termination has been approved by the
Pension Benefit Guaranty Corporation. Thereafter and in the event that this
Trust does not form a part of a Plan subject to the jurisdiction of the
Pension Benefit Guaranty Corporation, the Master Trustee shall distribute all
cash, securities and other property then constituting the Fund, less any
amounts constituting charges and expenses payable from the Fund, on the date or
dates specified by the Administrator of such Plan to such persons and in such
manner as the Administrator shall direct. In making such distributions, the
Master Trustee shall be entitled to assume that such distributions are in full
compliance with and are not in violation of any applicable law regulating the
termination of retirement plans such as the Plan and the Master Trustee may
require the Corporation or the Administrator to furnish it with evidence that
such distributions do not violate any such applicable law. The Corporation
assumes all liability of any kind whatsoever arising from any distribution made
by the Master Trustee at the direction of the Administrator as a result of the
termination of this Agreement and shall indemnify and save the Master Trustee
harmless from any attempt to impose
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<PAGE> 24
any liability on the Master Trustee with respect to any such distribution.
15.3 Retention of Nontransferable Property. The Master Trustee reserves the
right to retain such property as is not, in the sole discretion of the Master
Trustee, suitable for distribution at the time of termination of this Agreement
and shall hold such property as custodian for those persons or other entities
entitled to such property until such time as the Master Trustee is able to make
distribution. The Master Trustee's duties and obligations with respect to any
property held in accordance with the above shall be purely custodial in nature
and the Master Trustee shall only be obligated to see to the safekeeping of
such property and make a reasonable effort to prevent deterioration or waste of
such property prior to its distribution. Upon complete distribution of all
property constituting the Fund, this Agreement shall be deemed terminated.
15.4 Termination in the Absence of Directions from the Administrator. In
the event no direction is provided by the Named Fiduciary with respect to the
distribution of a Plan's portion of the Fund upon termination of this
Agreement, the Master Trustee shall obtain a copy of the Plan and make such
distributions as are specified by the Plan after notice to the Corporation. In
the event the Plan is silent as to the distributions to be made upon
termination of the Plan or the terms of the Plan are inconsistent with the then
applicable law or the Master Trustee cannot obtain a copy of the most recent
Plan, the Master Trustee shall distribute the Fund to participants and their
beneficiaries under the Plan in an equitable manner that will not adversely
affect the qualified status of the Plan under section 401(a) of the Code or any
other statute of similar import and that will comply with any applicable
provisions of the Act regulating the allocation of assets upon termination of
plans such as the Plan. The Master Trustee, in such case, reserves the right
to seek a judicial and administrative determination as to the proper method of
distribution of the Fund upon termination of this Agreement.
15.5 Termination on Corporate Dissolution. If a Company ceases to exist as
a result of liquidation, dissolution or acquisition in some manner, the Fund
shall be distributed as provided above upon termination of a Plan unless a
successor company elects to continue the Plan and this Agreement.
SECTION 16
Merger or Consolidation
16.1 Merger or Consolidation of Master Trustee. Any corporation, or
national association, into which the Master Trustee may be merged or with which
it may be consolidated, or
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<PAGE> 25
any corporation, or national association, resulting from any merger or
consolidation to which the Master Trustee is a party, or any corporation, or
national association, succeeding to the trust business of the Master Trustee,
shall become the successor of the Master Trustee hereunder, without the
execution or filing of any instrument of the performance of any further act on
the part of the parties hereto.
16.2 Merger or Consolidation of Corporation. Any corporation into which the
Corporation may be merged or with which it may be consolidated, or any
corporation succeeding to all or a substantial part of the business interests
of the Corporation may become the Corporation hereunder by expressly adopting
and agreeing to be bound by the terms and conditions of the Plan and this
Agreement and so notifying the Master Trustee to such effect by submission to
the Master Trustee of an appropriate written document.
16.3 Merger or Consolidation of Plan. In the event that the Named Fiduciary
or the Corporation authorizes and directs that the assets of another plan be
merged or consolidated with or transferred to a Plan participating in this
Trust, the Master Trustee shall take no action with regard to such merger,
consolidation or transfer until it has been notified in writing that each
participant covered under the plan the assets of which are to be merged,
consolidated or transferred will immediately after such merger, consolidation
or transfer be entitled to a benefit either equal to or then greater than the
benefit he would have been entitled to had the Plan been terminated.
SECTION 17
Acceptance of Trust
17.1 Acceptance by Master Trustee. The Master Trustee accepts the Trust
created hereunder and agrees to be bound by all the terms of this Agreement.
SECTION 18
Non-alienation of Trust
18.1 Trust not Subject to Assignment or Alienation. Except as heretofore
provided, no company, participant or beneficiary of the Plans to which the
Trust applies shall have any interest in or right to the assets of this Trust,
and to the full extent of all applicable laws, the assets of this Trust shall
not be subject to any form of attachment, garnishment, sequestration or other
actions of collection afforded creditors of the Companies, participants or
beneficiaries. The Master Trustee shall not recognize any assignment or
alienation of benefits unless, and then only to the extent, written notices are
received from the Administrator for the Plan.
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<PAGE> 26
18.2 Plans' Interest in Trust not Assignable. The equity or interest of any
participating Plan in the Fund shall not be assignable.
SECTION 19
Governing Law
19.1 Governing Law. This Agreement shall be construed and enforced, to the
extent possible, according to the laws of the Commonwealth of Pennsylvania, and
all provisions hereof shall be administered according to the laws of said
Commonwealth and any federal laws, regulations or rules which may from time to
time be applicable. In case of any conflict between the provisions of the
Plans and this Agreement, the provisions of this Agreement shall govern.
SECTION 20
Parties to Court Proceedings
20.1 Only Corporation and Master Trustee Necessary. To the extent permitted
by law, only the Master Trustee and the Corporation shall be necessary parties
in any application to the courts for an interpretation of this Agreement or for
an accounting by the Master Trustee, and no participant under any Plan or other
person having an interest in the Fund shall be entitled to any notice or
service of process. Any final judgment entered in such an action or proceeding
shall, to the extent permitted by law, be conclusive upon all persons claiming
under this Agreement or any Plan.
SECTION 21
Subsidiaries and Affiliates
21.1 Adoption of Master Trust by Subsidiaries and Affiliates. Any Company
which is a subsidiary of the Corporation or which may be affiliated with the
Corporation in any way and which is now or may hereafter be organized under the
laws of the United States of America, or of any State or Territory thereof,
with the approval of the Corporation, by resolution of its own Board of
Directors, may adopt this Agreement, if such subsidiary or affiliate shall have
adopted one or more Plans qualified under section 401(a) of the Code. If any
such subsidiary or affiliate so adopts this Agreement, this Agreement shall
establish the trust for such Plans as are specified by such subsidiary or
affiliate and shall constitute a continuation, amendment and restatement of any
prior trust for any such Plans. Furthermore, the assets of any such Plans may
be commingled with the assets of other Plans held in the Fund pursuant to
Section 2.7 hereof. However, the assets of any Plan so held in the Fund shall
not be subject to any claim
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<PAGE> 27
arising under any other Plan, the assets of which are commingled therewith by
the Master Trustee for investment purposes, and under no circumstances shall
any of the assets of one Plan be available to provide the benefits under
another Plan. A separate trust shall be deemed to have been created with
respect to each Plan of such subsidiary or affiliate.
21.2 Segregation from Further Participation. Any Company may, at any time,
with the consent of the Corporation, segregate a Plan's trust from further
participation in this Agreement. In such event, such subsidiary or affiliate
shall file with the Master Trustee a document evidencing the Company's
segregation of its Plan from the Fund and its continuance of a separate trust
in accordance with the provisions of this Agreement as though such subsidiary
or affiliate were the sole creator thereof. In such event, the Master Trustee
shall deliver to itself as Master Trustee of such separate trust such share of
the Fund as may be determined by the Master Trustee to constitute the
appropriate share of the Fund, as confirmed by the Company, then held in
respect of the participating employees of such subsidiary or affiliate. Such
subsidiary or affiliate may thereafter exercise, in respect of such separate
trust, all of the rights and powers reserved to the Corporation under the
provisions of this Agreement. The equitable share of any Plan participating in
the Fund shall be immediately segregated and withdrawn from the Fund if the
Plan ceases to be qualified under section 401(a) of the Code and the
Corporation shall promptly notify the Master Trustee of any determination by
the Internal Revenue Service that any such Plan has ceased to be so qualified.
21.3 Segregation of Assets Allocable to Specific Employees. An
Administrator may at any time direct the Master Trustee to segregate and
withdraw the equitable share of any such Plan, or that portion of such
equitable share as may be certified to the Master Trustee by the Administrator
as allocable to any specified group or groups of employees or beneficiaries.
Whenever segregation is required, the Master Trustee shall withdraw from the
Fund such assets as it shall in its absolute discretion deem to be equal in
value to the equitable share to be segregated. Such withdrawal from the Fund
shall be in cash or in any property held in such Fund, or in a combination of
both, in the absolute discretion of the Master Trustee. The Master Trustee
shall thereafter hold the assets so withdrawn as a separate trust fund in
accordance with the provisions of this Agreement, which shall be construed in
respect of such assets as if the employer maintaining such Plan (determined
without regard to whether any subsidiaries or affiliates of such employer have
joined in such Plan) has been named as the Corporation hereunder. Such
segregation shall not preclude later readmission to the Fund.
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<PAGE> 28
SECTION 22
Counterparts
22.1 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and said
counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by any one counterpart.
(Rest of page left blank intentionally.)
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<PAGE> 29
IN WITNESS WHEREOF, the parties hereto, each intending to be legally
bound hereby, have hereunto set their hands and seals as of the day and year
first above written.
A.H. BELO CORPORATION
By: /s/ MICHAEL MCCARTHY
Name: Michael McCarthy
Title: Senior Vice President,
General Counsel
MELLON BANK, N.A.
By: /s/ ROBERT T. BORZA
Name: Robert T. Borza
Title: Vice President
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<PAGE> 30
EXHIBIT "A"
G.B. Dealey Pension Trust
- 29 -
<PAGE> 31
EXHIBIT "B"
G.B. Dealey Retirement Pension Plan
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<PAGE> 1
EXHIBIT 10.3(27)
A. H. BELO CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1. Purpose. The purpose of the Supplemental Executive Retirement
Plan is to provide certain executive employees of A. H. Belo Corporation and
its subsidiaries with a targeted level of retirement income upon retirement or
other termination of employment.
2. Definitions. The following definitions are used throughout
the Plan.
(a) "Board of Directors" means the Board of Directors of
the Company.
(b) "Cause" means any intentional act of fraud,
embezzlement, or theft committed by a Participant in the course of the
Participant's employment by the Company or any subsidiary of the Company or any
intentional misconduct engaged in by the Participant which is materially
injurious to the business, reputation or property of the Company or any
subsidiary of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended and in effect from time to time.
(d) "Committee" means the Compensation Committee of the
Board of Directors or any successor committee appointed by the Board of
Directors to administer the Plan.
(e) "Company" means A. H. Belo Corporation, a Delaware
corporation. The term "subsidiary of the Company" means any corporation of
which at least 50% of the total combined voting power of all outstanding shares
of stock is owned directly or indirectly by the Company.
(f) "Effective Date" means January 1, 1992.
(g) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(h) "Final Monthly Compensation" means the final monthly
compensation of a Participant as determined under the provisions of the Pension
Plan but without regard to the limitation on compensation under Section
401(a)(17) of the Code.
(i) "Participant" means an employee who is eligible to
receive benefits under the Plan. The term "Participant" will
<PAGE> 2
include the beneficiary of a deceased Participant, unless the context clearly
requires a different interpretation.
(j) "Pension Plan" means the G. B. Dealey Retirement
Pension Plan, as amended from time to time, which is a defined benefit pension
plan that is sponsored by the Company and is intended to qualify under Section
401(a) of the Code.
(k) "Plan" means the A. H. Belo Corporation Supplemental
Executive Retirement Plan as set forth herein and as amended from time to time.
(l) "Plan Year" means the calendar year.
(m) "Senior Executive Officer" means any employee of the
Company or any subsidiary of the Company who is (i) a member of the Management
Committee of the Company, (ii) the Senior Vice President and Chief Financial
Officer of the Company, (iii) the Senior Vice President and General Counsel of
the Company, or (iv) any other Corporate Senior Vice President.
(n) "Supplemental Retirement Benefit" means the benefit
described in Section 4.
3. Eligibility. Each employee of the Company or any subsidiary
of the Company who, at any time on or after the Effective Date, is a Senior
Executive Officer will be a Participant in the Plan, unless such employee has
waived the right to participation in or benefits under the Plan in any
employment, consulting or other agreement to which the Company or any
subsidiary of the Company is a party. In addition, any other key executive
employee of the Company or any subsidiary of the Company who is designated by
the Committee as eligible to participate in the Plan will be a Participant.
4. Supplemental Retirement Benefit. (a) As soon as practicable
after an employee becomes a Participant, the Committee will determine the
amount of the Participant's projected annual Final Monthly Compensation on the
assumption that the Participant will remain employed by the Company or a
subsidiary of the Company through the last day of the month in which the
Participant attains age 65.
(b) The Committee will also determine the aggregate
projected annual employer-provided retirement benefit to be paid to the
Participant from the Pension Plan, the Company's Employee Savings and
Investment Plan and the Company's Management Security Plan, all payable as a
straight life annuity, on the assumption that the Participant will remain
employed by the Company or a subsidiary of the Company through the last day of
the month in which the Participant attains age 65.
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<PAGE> 3
(c) The targeted benefit under the Plan for each
Participant who is a Senior Executive Officer will be equal to 60%, and the
targeted benefit under the Plan for each other Participant will be equal to
55%, of the amount (if any) by which the projected amount determined under
Section 4(a) for the Participant exceeds the projected amount determined under
Section 4(b) for the Participant, multiplied by a fraction (not to exceed one),
the numerator of which is the number of years of vesting service that the
Participant will have earned under the Pension Plan if the Participant remains
continuously employed by the Company or a subsidiary of the Company until
reaching age 65 and the denominator of which is 15. The targeted benefit will
be calculated as a straight life annuity. The Committee will then determine
the amount the Company would be required to contribute each Plan Year on behalf
of a Participant in order to fully fund the Participant's targeted benefit
under the Plan as of the last day of the month in which the Participant attains
age 65. The Committee will periodically review the projections determined
under Sections 4(a) and (b) and in its discretion may make any changes to the
Company's contributions on behalf of a Participant that are consistent with any
change it makes to such projections.
(d) The Company will establish on its books an account
for each Participant and will credit annually to each Participant's account the
amount of the contribution required to fund the Participant's targeted benefit,
plus earnings on such contributions in an amount equal to the earnings factor
specified by the Committee. Notwithstanding the foregoing, if the Company with
the concurrence of the Committee either invests Company funds in investments
that are designated for the purpose of providing a Participant's Supplemental
Retirement Benefit or establishes a trust described in Section 9(c) for the
purpose of providing Supplemental Retirement Benefits, the actual earnings of
such Company or trust fund investments will be credited to the Participant's
account instead of the earnings produced by the Committee's earnings factor,
even though such actual earnings may be greater or lesser than the earnings
that would be credited using the earnings factor specified by the Committee.
(e) Annual contributions will be credited to the
Participant's account as of a date selected by the Company (but not later than
90 days after the end of the Plan Year for which the contribution is to be
credited) beginning with the Plan Year in which the Participant first becomes
eligible to participate in the Plan and ending with the Plan Year in which the
Participant attains age 65, retires or otherwise terminates employment,
whichever occurs first. For purposes of the foregoing sentence, a Participant
who becomes eligible for benefits under any long term disability plan
maintained by the Company or any subsidiary of the Company will be regarded as
having terminated employment nine months after the onset of the disability that
entitles the
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<PAGE> 4
Participant to benefits. If a Participant first becomes eligible to
participate on a date other than the first day of the Plan Year or attains age
65, retires or otherwise terminates employment on a date other than the last
day of the Plan Year, contributions to be credited for such Plan Year will be
prorated in the manner specified by the Committee. Earnings will continue to
be credited to a Participant's account until the Participant's Supplemental
Retirement Benefit is paid, even though Company contributions cease to be
credited as of an earlier date.
(f) Notwithstanding the targeted benefit set forth in
Section 4(c), each Participant's actual Supplemental Retirement Benefit as of
any time will be the balance of the Participant's account described in Section
4(d).
(g) In determining the amount of a Participant's targeted
benefit under the Plan, the Committee will adopt, with the advice of actuaries
or such other consultants as it may select, such assumptions as in its sole
discretion it determines to be necessary, desirable or appropriate as to
interest rates, mortality, rates of inflation, increases in Participant
compensation, rates of Participant and Company matching contributions to any
retirement plan requiring such contributions and any other matter that the
Committee deems relevant in making the calculations required under the Plan.
The Committee may revise any such assumptions from time to time to the extent
that the Committee deems necessary, desirable or appropriate, and any such
revised assumptions will be taken into account in determining the amount of
future Company contributions required to provide a Participant's Supplement
Retirement Benefit. The Committee's determinations made under Section 4 will
be binding and conclusive on the Company and on each Participant.
5. Vesting. Subject to the rights of general creditors as set
forth in Section 9 and the right of the Company to discontinue the Plan as
provided in Section 12, a Participant will be vested in his Supplemental
Retirement Benefit to the same extent that he has a vested interest in his
employer-provided benefit under the Pension Plan, unless the Participant's
employment with the Company or any subsidiary of the Company is terminated for
Cause. If a Participant is terminated for Cause, the Participant's
Supplemental Retirement Benefit will be forfeited and the Participant will not
be entitled to any benefit under the Plan. In addition, a Participant will be
fully vested in his Supplemental Retirement Benefit if he becomes eligible for
benefits under any long term disability plan maintained by the Company or any
subsidiary of the Company.
6. Commencement of Benefits. Payment of a Participant's vested
interest in his Supplemental Retirement Benefit will be made or will begin on
the first day of the month following the
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<PAGE> 5
later of the month in which the Participant retires or otherwise terminates
employment or the month in which the Participant attains age 60. A Participant
who retires or otherwise terminates employment before reaching age 60 may elect
to receive his Supplemental Retirement Benefit as of the first day of any month
following his retirement or termination of employment (but not earlier than the
first day of the month following attainment of age 55), provided such election
is made, at least six months prior to the date the Supplemental Retirement
Benefit is scheduled to be paid, in accordance with procedures established by
the Committee.
7. Form of Benefits. (a) A Participant's Supplemental
Retirement Benefit will be paid in a single lump sum payment, unless the
Participant elects, at least six months prior to the date his Supplemental
Retirement Benefit is scheduled to be paid under Section 6, in accordance with
procedures established by the Committee to receive his Supplemental Retirement
Benefit in one of the following optional forms, each of which will be
actuarially equivalent to the Participant's account balance as of the date of
benefit commencement: (i) a joint and survivor annuity that pays monthly
benefits for the life of the Participant and on the death of the Participant
pays 50% of such monthly benefit to the spouse to whom the Participant was
married when annuity payments began, if such spouse survives the Participant,
for the life of such spouse; (ii) a single life annuity that pays monthly
benefits for the life of the Participant and pays no further benefits following
the Participant's death; or (iii) an annuity that pays monthly benefits for the
life of the Participant and in the event that the Participant dies before 120
monthly benefit payments have been made, continues to pay monthly payments in
the same amount to the beneficiary designated by the Participant before benefit
payments began, until a total of 120 monthly payments have been made to the
Participant and the Participant's beneficiary.
(b) Any annuity elected by a Participant or by a
beneficiary pursuant to Section 8 will be paid from the Participant's account
established under Section 4, and the Company will not purchase any form of
annuity contract from an insurance company or other third party. In the event
the balance of the Participant's account is insufficient to continue the
monthly payments being made under the form of annuity elected by the
Participant or beneficiary (because the individual receiving the payments
outlives the life expectancy used in determining the amount of the monthly
payments or because of any other reason), the Company will credit such
additional amounts to the Participant's account as may be necessary to provide
to the Participant or beneficiary the remaining payments due under the annuity.
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<PAGE> 6
(c) A Participant or beneficiary who is receiving monthly
annuity payments may elect at any time to receive in a single lump sum payment
an amount equal to 90% of the actuarially equivalent value of the unpaid
portion of the annuity.
(d) In determining the actuarial equivalence of forms of
benefit under Section 7, the Committee will use the actuarial assumptions and
other factors that are used from time to time under the Pension Plan to
determine actuarially equivalent forms of pension benefits.
8. Death Benefits. (a) Upon the death of a Participant who is
receiving a Supplemental Retirement Benefit, the Supplemental Retirement
Benefit will continue to be paid (if at all) in accordance with the form of
payment elected by the Participant under Section 7.
(b) If a Participant who is entitled to receive a
Supplemental Retirement Benefit dies before payment of such benefit begins, the
Supplemental Retirement Benefit will be paid as a death benefit to the
beneficiary designated by the Participant (who may or may not be the
Participant's spouse) in accordance with procedures established by the
Committee or, in the event the Participant has not designated any beneficiary,
to the Participant's surviving spouse, if any, and if none, to the
Participant's estate. The death benefit payable pursuant to this subsection
(b) will be paid on the first day of the month following the later of the month
in which the Participant dies or the month in which the Participant would have
attained age 60. If the Participant dies before reaching age 60, the
beneficiary may elect to receive the benefit as of the first day of any month
following the month in which the Participant died (but not earlier than the
first day of the month following the date the Participant would have attained
age 55). Such election must be made, at least six months prior to the date the
death benefit is scheduled to be paid, in accordance with procedures
established by the Committee. The death benefit will be paid to the
beneficiary in a single lump sum payment unless the beneficiary elects, at
least six months prior to the date the benefit is scheduled to be paid, to
receive the death benefit in any other actuarially equivalent form permitted
under Section 7 except a joint and survivor annuity. Notwithstanding the
foregoing, if the Committee determines that the beneficiary has an immediate
and heavy financial need, the Committee, in its discretion, may waive the
foregoing election periods and may also permit the beneficiary to receive the
death benefit prior to the time the Participant would have attained age 55.
9. Funding of Benefits. (a) The Plan will be unfunded. All
benefits payable to a Participant under the Plan will be paid from the general
assets of the Company or any subsidiary of the
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<PAGE> 7
Company that employed the Participant, and nothing contained in the Plan will
require the Company or any subsidiary of the Company to set aside or hold in
trust any funds for the benefit of a Participant, who will have the status of a
general unsecured creditor with respect to the obligation of the Company to
make payments under the Plan. Any funds of the Company or any subsidiary of
the Company available to pay benefits under the Plan will be subject to the
claims of general creditors of the Company or such subsidiary and may be used
for any purpose by the Company or such subsidiary.
(b) If the Supplemental Retirement Benefit payable to a
Participant is attributable to periods of employment with the Company and/or
one or more subsidiaries of the Company, the Committee may allocate liability
for the payment of the benefit among the Company and one or more subsidiaries
in any manner the Committee, in its sole discretion, determines to be
appropriate.
(c) Notwithstanding the provisions of Section 9(a), the
Company may, at the direction, and in the absolute discretion, of the
Committee, transfer to the trustee of one or more trusts established for the
benefit of one or more Participants assets from which all or a portion of the
benefits provided under the Plan will be satisfied, provided that such assets
held in trust will at all times be subject to the claims of general unsecured
creditors of the Company and the subsidiaries of the Company, and no
Participant will at any time have a prior claim to such assets. To the extent
that Supplemental Retirement Benefits are paid from any such trust, the Company
and each subsidiary of the Company will be relieved of all liability for such
Supplemental Retirement Benefits.
10. Administration of the Plan. (a) The Committee will
administer the Plan and will have the full authority and discretion to
accomplish that purpose, including without limitation, the authority and
discretion to (i) interpret the Plan and correct any defect, supply any
omission or reconcile any inconsistency or ambiguity in the Plan in the manner
and to the extent that the Committee deems desirable to carry the purpose of
the Plan, (ii) resolve all questions relating to the eligibility of employees
to become Participants, (iii) determine the amount of benefits payable to
Participants and authorize and direct the Company with respect to the payment
of benefits under the Plan, (iv) make all other determinations and resolve all
questions of fact necessary or advisable for the administration of the Plan,
and (v) make, amend and rescind such rules as it deems necessary for the proper
administration of the Plan. The Committee will keep a written record of its
action and proceedings regarding the Plan and all dates, records and documents
relating to its administration of the Plan.
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<PAGE> 8
(b) Any action taken or determination made by the
Committee will, except as otherwise provided in Section 11 below, be conclusive
on all parties. No member of the Committee will vote on any matter relating
specifically to such member. In the event that a majority of the members of
the Committee will be specifically affected by any action proposed to be taken
(as opposed to being affected in the same manner as each other Participant in
the Plan), such action will be taken by the Board of Directors.
11. Claims Procedure. (a) If a Participant does not receive the
benefits which he believes he is entitled to receive under the Plan, he may
file a claim for benefits with the Committee. All claims will be made in
writing and will be signed by the claimant. If the claimant does not furnish
sufficient information to determine the validity of the claim, the Committee
will indicate to the claimant any additional information which is required.
(b) Each claim will be approved or disapproved by the
Committee within 90 days following the receipt of the information necessary to
process the claim. In the event the Committee denies a claim for benefits in
whole or in part, the Committee will notify the claimant in writing of the
denial of the claim. Such notice by the Committee will also set forth, in a
manner calculated to be understood by the claimant, the specific reason for
such denial, the specific Plan provisions on which the denial is based, a
description of any additional material or information necessary to perfect the
claim with an explanation of why such material or information is necessary, and
an explanation of the Plan's claim review procedure as set forth below. If no
action is taken by the Committee on a claim within 90 days, the claim will be
deemed to be denied for purposes of the review procedure.
(c) A claimant may appeal a denial of his claim by
requesting a review of the decision by the Committee or a person designated by
the Committee, which person will be a named fiduciary under Section 402(a)(2)
of ERISA for purposes of this Section. An appeal must be submitted in writing
within six months after the denial and must (i) request a review of the claim
for benefits under the Plan, (ii) set forth all of the grounds upon which the
claimant's request for review is based and any facts in support thereof, and
(iii) set forth any issues or comments which the claimant deems pertinent to
the appeal. The Committee or the named fiduciary designated by the Committee
will make a full and fair review of each appeal and any written materials
submitted in connection with the appeal. The Committee or the named fiduciary
designated by the Committee will act upon each appeal within 60 days after
receipt thereof unless special circumstances require an extension of the time
for processing, in which case a decision will be rendered as soon as possible
but
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<PAGE> 9
not later than 120 days after the appeal is received. The claimant will be
given the opportunity to review pertinent documents or materials upon
submission of a written request to the Committee or named fiduciary, provided
the Committee or named fiduciary finds the requested documents or materials are
pertinent to the appeal. On the basis of its review, the Committee or named
fiduciary will make an independent determination of the claimant's eligibility
for benefits under the Plan. The decision of the Committee or named fiduciary
on any claim for benefits will be final and conclusive upon all parties
thereto. In the event the Committee or named fiduciary denies an appeal in
whole or in part, it will give written notice of the decision to the claimant,
which notice will set forth in a manner calculated to be understood by the
claimant the specific reasons for such denial and which will make specific
reference to the pertinent Plan provisions on which the decision was based.
12. Miscellaneous. (a) Nothing in the Plan will confer upon a
Participant the right to continue in the employ of the Company or any
subsidiary of the Company or will limit or restrict the right of the Company or
any subsidiary of the Company to terminate the employment of a Participant at
any time with or without cause.
(b) Except as otherwise provided in the Plan, no right or
benefit under the Plan will be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge such right or benefit will
be void. No such right or benefit will in any manner be liable for or subject
to the debts, liabilities or torts of a Participant.
(c) The Plan may be amended at any time by the Committee
provided such amendment does not have the effect of increasing, directly or
indirectly, the benefit of any Participant. The Plan may also be amended or
terminated by the Board of Directors at any time. Any amendment adopted by the
Committee or the Board may reduce prospectively the earnings factor to be
applied to a Participant's account established under Section 4. However, no
action taken by the Committee or by the Board of Directors to amend or
terminate the Plan will have the effect of decreasing a Participant's account
balance as of the date of such action.
(d) The Plan is intended to provide benefits for
"management or highly compensated" employees within the meaning of Sections
201, 301 and 401 of ERISA, and therefore to be exempt from the provisions of
Parts 2, 3 and 4 of Title I of ERISA. Accordingly, the Plan will terminate and
no further benefits will accrue hereunder in the event it is determined by a
court of competent jurisdiction or by an opinion of counsel that the Plan
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<PAGE> 10
constitutes an employee pension benefit plan within the meaning of Section 3(2)
of ERISA, which is not so exempt. In addition, in the absolute discretion of
the Committee, the benefit of each Participant accrued under such balance of
the Plan on the date of termination will be paid immediately to such
Participant in a single lump sum cash payment.
(e) If any provision in the Plan is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions will nevertheless continue in full force and effect without being
impaired or invalidated in any way.
(F) THE PLAN WILL BE CONSTRUED AND GOVERNED IN ALL
RESPECTS IN ACCORDANCE WITH APPLICABLE FEDERAL LAW AND, TO THE EXTENT NOT
PREEMPTED BY SUCH FEDERAL LAW, IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE.
Executed at Dallas, Texas, this 28th day of February, 1994.
A. H. BELO CORPORATION
By /s/ MICHAEL D. PERRY
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<PAGE> 1
EXHIBIT 10.3(28)
TRUST AGREEMENT
This agreement (the "Trust Agreement") is made this 28th day of
February, 1994, by and between A. H. Belo Corporation, a Delaware corporation
(the "Company"), and Mellon Bank, N.A. (the "Trustee").
WHEREAS, the Company has adopted the nonqualified deferred
compensation plans, as listed in Appendix A (the "Plans");
WHEREAS, the Company has incurred or expects to incur liability under
the terms of the Plans with respect to the individuals participating in the
Plans (individually a "Participant" and collectively the "Participants");
WHEREAS, the Company wishes to establish a trust (the "Trust") and to
contribute to the Trust the assets that shall be held therein, subject to the
claims of the Company's creditors in the event of the Company's insolvency, as
herein defined, until paid to Participants and their beneficiaries in such
manner and at such times as specified in the Plans;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of each Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended; and
WHEREAS, it is the intention of the Company to make contributions to
the Trust as provided herein to provide itself with a source of funds to assist
it in the meeting of its liabilities under the Plans.
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows.
Section 1. Establishment of the Trust.
(a) The Company hereby establishes the Trust with the Trustee,
consisting of such sums of money and other property acceptable to the Trustee
as from time to time shall be paid and delivered to and accepted by the Trustee
from the Company. All such money and other property paid or delivered to and
accepted by the Trustee shall become the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Trust
Agreement.
<PAGE> 2
(b) The Trust hereby established is revocable by the Company; it
shall become irrevocable upon a Change of Control, as defined herein.
(c) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes of the Participants and general creditors
as herein set forth. The Participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust. Any rights created under the Plans and this Trust Agreement shall be
mere unsecured contractual rights of the Participants and their beneficiaries
against the Company. Any assets held by the Trust will be subject to the
claims of the Company's general creditors under federal and state law in the
event of the Company's insolvency, as defined in Section 3(a) herein.
(e) The Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property in trust with
the Trustee to augment the principal to be held, administered and disposed of
by the Trustee as provided in this Trust Agreement, and except for the sum of
money initially paid to the Trustee for the purpose of establishing this Trust,
shall have no obligation to make additional deposits until a Funding Event has
occurred. For purposes of this Trust Agreement, a "Funding Event" shall occur
if (i) any person (other than the Company, any subsidiary of the Company or any
employee benefit plan for the benefit of employees of the Company or any
subsidiary of the Company) takes any action or makes a public announcement
stating an intention to take any action that, if consummated, would constitute
a Change of Control as hereinafter defined or (ii) the Company enters into a
letter of intent, agreement in principal or other agreement the consummation of
which would constitute a Change of Control. Upon the occurrence of a Funding
Event, the Company shall make additional deposits to the Trustee in such
amounts as directed by the Compensation Committee of the Board of Directors
pursuant to resolutions duly adopted by such Committee. Neither the Trustee
nor any Participant or beneficiary shall have any right to compel any such
additional deposits.
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<PAGE> 3
Section 2. Payments to the Participants and Their Beneficiaries.
(a) The Company shall deliver to the Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect of each
Participant (and his or her beneficiaries), that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so payable,
the form in which such amount is to be paid (as provided for or available under
the Plans), and the time of commencement for payment of such amounts. Except
as otherwise provided herein, the Trustee shall make payments to the
Participants and their beneficiaries in accordance with such Payment Schedule.
The Trustee shall make provision for the reporting and withholding of any
federal, state or local taxes that may be required to be withheld with respect
to the payment of benefits pursuant to the terms of this Trust Agreement and
shall pay amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by the Company.
(b) The entitlement of a Participant or his or her beneficiaries
to benefits under the Plans shall be determined by the Company or such party as
it shall designate under the Plans, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plans.
Notwithstanding the foregoing, the Trustee shall rely on the Payment Schedule
described in Section 2(a) in making payments to Participants or beneficiaries
until the Company notifies the Trustee in writing of any amendment or
modification to the Payment Schedule. After the Trust becomes irrevocable, no
amendment or modification to the Payment Schedule that adversely affects any
Participant or beneficiary will be effective without the written consent of
such Participant or beneficiary.
(c) The Company may make payment of benefits directly to the
Participants or their beneficiaries as they become due under the terms of the
Plans. The Company shall notify the Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to Participants or
their beneficiaries. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in accordance
with the terms of the Plans, the Company shall immediately make up the balance
of each such payment as it falls due. The Trustee shall notify the Company
when principal and earnings are not sufficient.
Section 3. Trustee Responsibility Regarding Payments to Trust
Beneficiary When the Company is Insolvent.
(a) The Trustee shall cease payment of benefits to the
Participants and their beneficiaries if the Company is Insolvent.
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<PAGE> 4
The Company shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) the Company is unable to pay its debts as they become due, or
(ii) the Company is subject to a pending proceeding as a debtor under the
United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of the Company under federal and state law as
set forth below.
(1) The Board of Directors and the Chief Executive
Officer of the Company shall have the duty to inform the Trustee in writing of
the Company's Insolvency. If a person claiming to be a creditor of the Company
alleges in writing to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits to the
Participants or their beneficiaries. In all cases, the Trustee shall be
entitled to conclusively rely upon the written certification of the Board of
Directors or the Chief Executive Officer of the Company when determining
whether the Company is insolvent.
(2) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent, the Trustee
shall have no duty to inquire whether the Company is Insolvent. The Trustee
may in all events rely on such evidence concerning the Company's solvency as
may be furnished to the Trustee and that provides the Trustee with a reasonable
basis for making a determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to the
Participants or their beneficiaries and shall hold the assets of the Trust for
the benefit of the Company's general creditors. Nothing in this Trust
Agreement shall in any way diminish any rights of the Participants or their
beneficiaries to pursue their rights as general creditors of the Company with
respect to benefits due under the Plans or otherwise.
(4) The Trustee shall resume the payment of benefits to
the Participants or their beneficiaries in accordance with Section 2 of this
Trust Agreement only after the Trustee has determined that the Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall
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<PAGE> 5
include the aggregate amount of all payments due to the Participants or their
beneficiaries under the terms of the Plans for the period of such
discontinuance, less the aggregate amount of any payments made to the
Participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
Section 4. Payments to the Company.
Before the Trust has become irrevocable, the Company may direct the
Trustee to return to the Company all or any portion of the Trust assets.
Except as provided in Section 3 hereof, after the Trust has become irrevocable,
the Company shall have no right or power to direct the Trustee to return to the
Company or to divert to others any of the Trust assets before all payment of
benefits have been made to the Participants and their beneficiaries pursuant to
the terms of the Plans.
Section 5. Investment and Administrative Authority.
(a) It is contemplated that the Company will from time to appoint
one or more investment managers ("Investment Managers") to manage all or a
specified portion of the Trust assets. Upon the appointment of each Investment
Manager, the Company shall so notify the Trustee and instruct the Trustee in
writing to separate into a separate account those assets as to which each
Investment Manager has discretion and control. The Investment manager shall
designate in writing the person or persons who are to represent any such
Investment Manager in dealings with the Trustee. Upon the separation of the
assets in accordance with the instructions of the Company, the Trustee shall
thereupon be relieved and released of all investment duties, responsibilities
and liabilities normals and statutorily incident to a trustee as to such
separate account, and, as to such separate account, the Trustee shall act as
custodian. Except as otherwise provided by the Company in writing from time to
time, the Trustee shall take no action with respect to the duties or powers
allocated to an Investment Manager without receipt of written directions of the
Investment Manager. Unless specifically prohibited in writing, the Trustee, as
custodian, may hold the assets of such separate account in the name of a
nominee or nominees.
(b) Should an Investment Manager at any time elect to place
security transactions directly with a broker or dealer, the Trustee shall not
recognize such transaction unless and until it has received instructions or
confirmation of such fact from the Investment Manager. Should the Investment
Manager direct the Trustee to utilize the services of any person with regard to
the assets under its management or control, such instructions shall
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<PAGE> 6
specifically set forth the actions to be taken by the Trustee as to such
services.
(c) In the event that an Investment Manager places security
transactions directly or directs the utilization of a service, the Investment
Manager shall be solely responsible for the acts of such persons. The sole
duty of the Trustee as to such transactions shall be incident to its duties as
custodian.
(d) The Trustee shall have the power, exercisable in its
discretion with respect to any portion of the Trust assets not under the
management and control of an Investment Manager, and exercisable in accordance
with the directions of an Investment Manager with respect to the portion of the
Trust assets under the management and control of the Investment Manager:
(1) To invest and reinvest the principal and income of
the Trust and keep it invested, without distinction between principal and
income, in any security (including without limitation life insurance policies)
or Property (as hereinafter defined); provided, however, in no event may the
Trustee invest in securities (including stock or rights to acquire stock) or
obligations issued by the Company, other than a de minimis amount held in
common investment vehicles in which the Trustee invests. All rights associated
with assets of the Trust shall be exercised by the Trustee or the person
designated by the Trustee, or by an Investment Manager, and shall in no event
be exercisable by or rest with the Participants. "Property," as used herein,
shall not include any direct or indirect interest in real estate. For this
purpose, "real estate" includes, but is not limited to, real property,
mortgages, leaseholds, mineral interests, and any form of asset which is
secured by any of the foregoing.
(2) To collect and receive any and all money and other
property due to the Trust and to give full discharge therefore;
(3) To invest and reinvest the principal income of the
Trust in any collective, common or pooled trust fund operated or maintained
exclusively for the commingling and collective investment of monies or other
assets. Notwithstanding the provisions of this Trust Agreement which place
restrictions upon the actions of the Trustee or an Investment Manager, to the
extent monies or other assets are utilized to acquire units of any collective
trust, the terms of the collective trust indenture shall solely govern the
investment duties, responsibilities and powers of the trustee of such
collective trust and, to the extent required by law, such terms,
responsibilities and powers shall be incorporated herein by reference and shall
be part of this Trust Agreement. For purposes of valuation, the value of the
interest maintained by the Trust in such collective trust shall be the fair
market value of the collective fund units held, determined
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<PAGE> 7
in accordance with generally recognized valuation procedures. The Company
expressly understands and agrees that any such collective fund may provide for
the lending of its securities by the collective fund trustee and that such
collective fund's trustee will receive compensation from such collective fund
for the lending of securities that is separate from any compensation of the
Trustee hereunder, or any compensation of the collective fund trustee for the
management of such collective fund.
(4) To purchase, enter, sell, hold, and generally deal in
any manner in and with contracts for the immediate or future delivery of
financial instruments of any issuer or of any other property; to grant,
purchase, sell, exercise, permit to expire, permit to be held in escrow, and
otherwise to acquire, dispose of, hold and generally deal in any manner with
and in all forms of options in any combination.
(5) To settle, compromise or submit to arbitration any
claims, debt or damages due or owing to or from the Trust; to commence or
defend suits or legal proceedings to protect any interest of the Trust; and to
represent the Trust in all suits or legal proceedings in any court or before
any other body or tribunal.
(6) Generally to do all acts, whether or not expressly
authorized, which the Trustee may deem necessary or desirable for the
protection of the Trust.
(e) Notwithstanding the foregoing, the Trustee shall have the
power, exercisable in its discretion with respect to any portion of the Trust
assets not under the management and control of an Investment Manager, to invest
and reinvest the principal income of the Trust in any collective, common or
pooled trust fund operated or maintained exclusively for the commingling and
collective investment of monies or other assets including any such fund
operated or maintained by the Trustee. Notwithstanding the provisions of this
Trust Agreement which place restrictions upon the actions of the Trustee, to
the extent monies or other assets are utilized to acquire units of any
collective trust, the terms of the collective trust indenture shall solely
govern the investment duties, responsibilities and powers of the trustee of
such collective trust and, to the extent required by law, such terms,
responsibilities and powers shall be incorporated herein by reference and shall
be part of this Trust Agreement. For purposes of valuation, the value of the
interest maintained by the Trust in such collective trust shall be the fair
market value of the collective fund units held, determined in accordance with
generally recognized valuation procedures. The Company expressly understands
and agrees that any such collective fund may provide for the lending of its
securities by the collective fund trustee and that such collective fund's
trustee will receive compensation
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<PAGE> 8
from such collective fund for the lending of securities that is separate from
any compensation of the Trustee hereunder, or any compensation of the
collective fund trustee for the management of such collective fund.
Section 6. Disposition of Income.
During the term of this Trust, all income received by the Trust, net
of expenses and taxes, shall be accumulated and reinvested.
Section 7. Accounting by the Trustee.
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing
between the Company and the Trustee. Within 90 days following the close of
each calendar year and within 90 days after the removal or resignation of the
Trustee, the Trustee shall deliver to the Company a written account of its
administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash securities and other property held in the Trust at the end of such year or
as of the date of such removal or resignation, as the case may be.
Section 8. Responsibility of the Trustee.
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company which is contemplated by,
and in conformity with, the terms of the Plans (as certified to the Trustee by
the Company) or this Trust and is given in writing by the Company. In the
event of a dispute between the Company and a party, the Trustee may apply to a
court of competent jurisdiction to resolve the dispute. The Company agrees to
indemnify the Trustee against the Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses) arising out of or
relating to any
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<PAGE> 9
action or inaction taken by the Trustee in reliance upon direction, request or
approval given by the Company.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, the Trustee may obtain payment from
the Trust.
(c) The Trustee may consult with legal counsel (who may also be
counsel for the Company generally) with respect to any of its duties or
obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers
conferred on the Trustee by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, the Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor the Trustee, or to loan
to any person the proceeds of any borrowing against such policy.
(f) However, notwithstanding the provisions of Section 8(e) above,
the Trustee may loan to the Company the proceeds of any borrowing against an
insurance policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall not have any power
that could give this Trust the objective of carrying on a business and dividing
the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure
and Administrative Regulations promulgated pursuant to the Internal Revenue
Code.
Section 9. Compensation and Expenses of the Trustee.
The Company shall pay all administrative and the Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the Trust.
The Trustee shall be entitled to the fees listed on Schedule A attached hereto
as reasonable
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<PAGE> 10
compensation for the services rendered under this Trust Agreement.
Section 10. Resignation and Removal of the Trustee.
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective 60 days after receipt of such notice unless
the Company and the Trustee agree otherwise.
(b) Subject to Section 10(c), the Trustee may be removed by the
Company on 60 days notice or upon shorter notice accepted by the Trustee.
(c) Upon a Change of Control, as defined herein, the Trustee may
not be removed by the Company for one year.
(d) If the Trustee resigns within one year of a Change of Control,
as defined herein, the Trustee shall select a successor the Trustee in
accordance with the provisions of Section 11(b) hereof prior to the effective
date of the Trustee resignation or removal.
(e) Upon resignation or removal of the Trustee and appointment of
a successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 180 days after
receipt of notice of resignation, removal or transfer, unless the Company
extends the time limit.
(f) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of this section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses
of the Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
Section 11. Appointment of Successor.
(a) If the Trustee resigns or is removed in accordance with
Section 10(a) or (b) hereof, the Company may appoint any third party, such as a
bank trust department or other party that may be granted corporate trustee
powers under state law, as a successor to replace the Trustee upon resignation
or removal. The appointment shall be effective when accepted in writing by the
new Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall
execute any instrument necessary or
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<PAGE> 11
reasonably requested by the Company or the successor Trustee to evidence the
transfer.
(b) If the Trustee resigns or is removed pursuant to the
provisions of Section 10(d) hereof and selects a successor Trustee, the Trustee
may appoint any third party such as a bank trust department or other party that
may be granted corporate trustee powers under state law. The appointment of a
successor Trustee shall be effective when accepted in writing by the new
Trustee. The new Trustee shall have all the rights and powers of the former
Trustee, including ownership rights in Trust assets. The former Trustee shall
execute any instrument necessary or reasonably requested by the successor
Trustee to evidence the transfer.
(c) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust assets, subject
to Sections 7 and 8 hereof. The successor Trustee shall not be responsible for
and the Company shall indemnify and defend the successor Trustee from any claim
or liability resulting from any action or inaction of any prior Trustee or from
any other past event, or any condition existing at the time it becomes
successor Trustee.
Section 12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no
such amendment shall conflict with the terms of the Plan (as certified to the
Trustee by the Company) or shall make the Trust revocable after it has become
irrevocable in accordance with Section 1(b).
(b) The Trust shall not terminate until the date on which the
Participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plans unless sooner revoked in accordance with
Section 1(b) hereof. Upon termination of the Trust any assets remaining in the
Trust shall be returned to the Company.
(c) Upon written approval of all of the Participants or
beneficiaries entitled to payment of benefits pursuant to the terms of the
Plans, the Company may terminate this Trust prior to the time all benefit
payments under the Plans have been made. All assets in the Trust at
termination shall be returned to the Company.
(d) Notwithstanding any other provision in this Trust Agreement,
this Trust Agreement may not be amended within one year of the occurrence of a
Change of Control.
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<PAGE> 12
Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Notwithstanding anything to the contrary contained elsewhere
in this Trust Agreement, any reference to the Plan or Plan provisions which
require knowledge or interpretation of the Plan shall impose a duty upon the
Company to communicate such knowledge or interpretation to the Trustee. The
Trustee shall have no obligation to know or interpret any portion of the Plan
and shall in no way be liable for any proper action taken contrary to the Plan.
(c) Benefits payable to Participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(d) This Trust Agreement shall be governed by and construed in
accordance with the laws of Pennsylvania.
(e) For purposes of this Trust, "Change of Control" shall mean the
occurrence of an event which (i) gives rise to an "Acceleration Date" under,
and within the meaning of, the Company's 1986 Long Term Incentive Plan, as
amended from time to time (the "LTIP"), and (ii) results in the immediate
exercisability of options issued pursuant to the LTIP. The Trustee shall be
entitled to rely on a written certificate signed by the Company's Chief
Executive Officer confirming the existence of a Change of Control.
Section 14. Effective Date.
The effective date of this Trust Agreement shall be the date first
written above.
A.H. BELO CORPORATION
By: /s/ MICHAEL D. PERRY
Date: February 28, 1994 Title: Senior Vice President & CFO
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<PAGE> 13
MELLON BANK, N.A.
By: /s/
Date: March 2, 1994 Title: Vice President
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<PAGE> 14
APPENDIX A
Nonqualified Deferred Compensation Plans
A. H. Belo Corporation
Supplemental Executive Retirement Plan
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
STATE OF
NAME OF CORPORATION INCORPORATION
- ------------------- -------------
<S> <C>
NEWSPAPER PUBLISHING:
The Dallas Morning News, Inc. d.b.a. The Dallas Morning News Delaware
DFW Printing Company, Inc. Delaware
DFW Suburban Newspapers, Inc. d.b.a. Arlington News Delaware
Garland News
Grand Prairie News
Irving News
Las Colinas Business News
Metrocrest News
Mid-Cities News
Richardson News
TELEVISION BROADCASTING:
Great Western Broadcasting Corp. d.b.a. KXTV, Channel 10 Delaware
KHOU-TV, Inc. d.b.a. KHOU, Channel 11 Delaware
KOTV, Inc. d.b.a. KOTV, Channel 6 Delaware
WFAA-TV, Inc. d.b.a. WFAA, Channel 8 Delaware
WVEC Television, Inc. d.b.a. WVEC, Channel 13 Delaware
Blue Ridge Tower Corporation Texas
Hill Tower, Inc. Texas
Transtower, Inc. California
</TABLE>
Except as noted below, all of the subsidiaries are wholly-owned subsidiaries of
the Company. The Company through wholly-owned subsidiaries owns 50% of the
outstanding common stock of Hill Tower, Inc.; 50% of the outstanding common
stock of Blue Ridge Tower Corporation; and 33 1/3 percent of the outstanding
common stock of Transtower, Inc.
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-30994 and Form S-8 No. 33-32526) pertaining to the Employee
Savings and Investment Plan and Long-Term Incentive Plan of A. H. Belo
Corporation of our report dated January 26, 1994, except for Note 12 as to
which the date is February 23, 1994, with respect to the consolidated
financial statements and schedules of A. H. Belo Corporation included in this
Annual Report (Form 10-K) for the year ended December 31, 1993.
ERNST & YOUNG
Dallas, Texas
March 24, 1994
