Document:

exv10w2x1y

Exhibit
10.2(1)

A. H. BELO SAVINGS PLAN

Effective February 5, 2008

 

 

A. H. BELO SAVINGS PLAN

     A. H. Belo Corporation, a Delaware corporation, adopts the A. H. Belo Savings Plan, effective
as of February 5, 2008. The Plan is a profit sharing plan with a cash or deferred arrangement
intended to qualify under Code section 401(a) and to meet the requirements of Code section 401(k),
including the alternative methods of meeting the nondiscrimination requirements set forth in Code
section 401(k)(13) and Code section 401(m)(12).

     Effective as of February 5, 2008, the account balances of each Participant under the Belo
Savings Plan were transferred to the Plan in anticipation of the distribution on February 8, 2008,
by Belo Corp. to its shareholders of all of the issued and outstanding common stock of A. H. Belo
Corporation.

     Words and phrases with initial capital letters used throughout the Plan are defined in Article
1.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE 1
	 	DEFINITIONS	 	 	1	 
	ARTICLE 2
	 	PARTICIPATION	 	 	7	 
	ARTICLE 3
	 	CONTRIBUTIONS	 	 	10	 
	ARTICLE 4
	 	INVESTMENT OF CONTRIBUTIONS	 	 	14	 
	ARTICLE 5
	 	ALLOCATIONS TO PARTICIPANTS’ ACCOUNTS	 	 	16	 
	ARTICLE 6
	 	VESTING	 	 	18	 
	ARTICLE 7
	 	DISTRIBUTIONS TO PARTICIPANTS	 	 	20	 
	ARTICLE 8
	 	DISTRIBUTIONS TO BENEFICIARIES	 	 	26	 
	ARTICLE 9
	 	PROVISIONS REGARDING THE A. H. BELO STOCK FUND AND THE	 	 	 	 
	 
	 	BELO STOCK FUND	 	 	27	 
	ARTICLE 10
	 	ADMINISTRATION OF THE PLAN AND TRUST AGREEMENT	 	 	28	 
	ARTICLE 11
	 	LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS TO	 	 	 	 
	 
	 	PARTICIPANTS' ACCOUNTS	 	 	32	 
	ARTICLE 12
	 	RESTRICTIONS ON DISTRIBUTIONS TO PARTICIPANTS AND	 	 	 	 
	 
	 	BENEFICIARIES	 	 	36	 
	ARTICLE 13
	 	TOP-HEAVY PROVISIONS	 	 	41	 
	ARTICLE 14
	 	PARTICIPATION BY CONTROLLED GROUP MEMBERS	 	 	45	 
	ARTICLE 15
	 	AMENDMENT OF THE PLAN	 	 	46	 
	ARTICLE 16
	 	TERMINATION, PARTIAL TERMINATION AND COMPLETE	 	 	 	 
	 
	 	DISCONTINUANCE OF CONTRIBUTIONS	 	 	47	 
	ARTICLE 17
	 	MISCELLANEOUS	 	 	48	 

(i)

 

ARTICLE 1

DEFINITIONS

     1.1 Account means the records, including subaccounts, maintained by the Committee in the
manner provided in Article 5 to determine the interest of each Participant in the assets of the
Plan and may refer to any or all of the Participant’s Deferral Contribution Account, Matching
Contribution Account, Profit Sharing Account and Rollover Account.

     1.2 A. H. Belo Stock Fund means the investment fund established under Section 4.1, the assets
of which consist exclusively of shares of Series A common stock, par value $.01 per share, of the
Company.

     1.3 Alternate Payee means any spouse, former spouse, child or other dependent of a Participant
who is recognized by a domestic relations order within the meaning of Code section 414(p) as having
the right to receive all or a portion of the Participant’s Account.

     1.4 Belo Corp. means Belo Corp., a Delaware corporation.

     1.5 Belo Savings Plan means the 401(k) plan sponsored by Belo Corp. on the effective date of
the Plan.

     1.6 Belo Stock Fund means the investment fund established under Section 4.1, the assets of
which consist exclusively of shares of Belo Corp.’s Series A Common Stock, par value $1.67 per
share.

     1.7 Beneficiary means the one or more persons or entities entitled to receive distribution of
a Participant’s interest in the Plan in the event of his death as provided in Article 8.

     1.8 Board of Directors or Board means the Board of Directors of the Company.

     1.9 Code means the Internal Revenue Code of 1986, as amended from time to time.

     1.10 Committee or Administrative Committee means the Committee appointed under Article 10.

     1.11 Company means A. H. Belo Corporation, a Delaware corporation.

     1.12 Company Stock means the Series A Common Stock, par value $.01 per share, of the Company.

     1.13 Compensation means the base pay, overtime pay, shift differential pay, premium pay,
bonuses and commissions paid to an Employee by the Participating Employers for services performed
for the Participating Employers, excluding (i) any awards (other than annual incentive compensation
awards), whether paid in cash, Company Stock or any other medium, under the Belo 2004 Executive
Compensation Plan or any other long term incentive compensation plan; (ii) any payment made after
the later of (A) 2 1/2 months after the Employee’s termination of

 

 

employment or (B) the end of the Plan Year that includes the Employee’s date of termination of
employment; (iii) any payment made in connection with or after the Employee’s termination of
employment that would not have been made if the Employee had continued in employment, such as
severance pay or any other amount that would not qualify as compensation under Section
1.415(c)-2(e)(3) of the Treasury Regulations; and (iv) any other form of remuneration. In
addition, Compensation includes any contributions made by the Participating Employers on behalf of
an Employee pursuant to a deferral election under any employee benefit plan containing a cash or
deferred arrangement under Code section 401(k) and 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. The annual Compensation of an Employee taken into account for any purpose will
not exceed $230,000 for any Plan Year beginning after December 31, 2007, as adjusted for
cost-of-living increases in accordance with Code section 401(a)(17). The annual Compensation of an
Employee who is covered by a collective bargaining agreement will also be subject to any applicable
limit on the amount of such Compensation that may be taken into account for purposes of the Plan.

     1.14 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.

     1.15 Controlled Group Member means each corporation or unincorporated trade or business that
is or was a member of the Controlled Group, but only during such period as it is or was such a
member.

     1.16 Deferral Contribution means the amount of a Participant’s Compensation that he elects to
have contributed to the Plan by the Participating Employers rather than paid to him directly in
cash.

     1.17 Deferral Contribution Account means the Account established for each Participant, the
balance of which is attributable to (i) the Participant’s Deferral Contributions and earnings and
losses of the Trust Fund with respect to such contributions and (ii) the balance of the
Participant’s deferral contribution account under the Belo Savings Plan transferred to the Plan.

     1.18 Distribution means the distribution by Belo Corp. to its shareholders of all of the
outstanding shares of Series A Common Stock and Series B Common Stock of the Company.

     1.19 Distribution Date means the date on which Belo Corp. effects the Distribution.

     1.20 Effective Date means February 5, 2008.

     1.21 Employee means any individual who is: (i) employed by any Controlled Group Member if
their relationship is, for federal income tax purposes, that of employer and employee, or (ii) “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).

2

 

     For purposes of this Section 1.21, a “leased employee” means any person who, pursuant to an
agreement between a Controlled Group Member and any other person (“leasing organization”) has
performed services for the Controlled Group Member on a substantially full-time basis for a period
of at least one year and such services are performed under the primary direction or control of the
Controlled Group Member. Contributions or benefits provided a leased employee by the leasing
organization which are attributable to services performed for a Controlled Group Member will be
treated as provided by the Controlled Group Member. A leased employee will not be considered an
Employee of a Controlled Group Member, however, if (a) leased employees do not constitute more than
20 percent of the Controlled Group Member’s nonhighly compensated work force (within the meaning of
Code section 414(n)(5)(C)(ii)), and (b) such leased employee is covered by a money purchase plan
maintained by the leasing organization that provides (i) a nonintegrated employer contribution rate
of at least 10 percent of Compensation, (ii) immediate participation and (iii) full and immediate
vesting.

     1.22 ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to
time.

     1.23 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.

          (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 Section 1.23(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 Section
1.23(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).

3

 

          (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 Section
1.23(a) or Section 1.23(b), as the case may be, and this Section 1.23(c), and Hours of Service
credited under this Section 1.23(c) with respect to periods described in Section 1.23(b) will be
subject to the limitations and provisions under Section 1.23(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 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 Section 1.23(d) by reason of any pregnancy, birth or placement will not exceed 501 Hours of
Service. Such Hours of Service will be credited (i) only in the one-year computation period
(determined under Section 1.38) in which the absence from work begins, if the Employee would be
prevented from incurring a One Year Break in Service in such period solely because the period of
absence is treated as Hours of Service pursuant to this Section 1.23(d), or (ii) in any other case,
in the immediately following one-year computation period. Hours of Service will not be credited to
an Employee under this Section 1.23(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 Section 1.23(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
Section 1.23(d), Hours of Service will be credited to eligibility and vesting computation periods
in accordance with the provisions of 29 C.F.R. § 2530.200b-2, which provisions are incorporated in
this Plan by reference.

     1.24 Investment Committee means the A. H. Belo Benefits Investment Committee.

     1.25 Matching Contribution Account means the Account established for each Participant, the
balance of which is attributable to (i) Participating Employer matching contributions made pursuant
to Article 3 and earnings and losses of the Trust Fund with respect

4

 

to such contributions and (ii) the balance of the Participant’s matching contribution account
under the Belo Savings Plan transferred to the Plan.

     1.26 One Year Break in Service means a period of at least 12 consecutive months in which an
Employee is absent from service. A One Year Break in Service will begin on the Employee’s
termination date (as defined in Section 1.38) and will end on the day on which the Employee again
performs an Hour of Service for a Controlled Group Member.

          If an 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 his absence, his period of absence, solely for purposes of
preventing a One Year Break in Service, will commence on the second anniversary of the first day of
his absence from work. The period of absence from work between the first and second anniversaries
of the first date of his absence from work will not be taken into account in determining whether
the Employee has completed a Year of 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.

     1.27 Participant means an Employee or former Employee who has met the applicable eligibility
requirements of Article 2 and who has not yet received a distribution of the entire amount of his
vested interest in the Plan. In addition, the term “Participant” will include (i) any other
Employee of a Participating Employer who makes a Rollover Contribution, provided, however, that
such Employee will not be eligible for Participating Employer matching or profit sharing
contributions until he has met the applicable eligibility requirements of Article 2; and (ii) a
participant in the Belo Savings Plan on February 5, 2008, whose account balances were transferred
to the Plan on such date.

     1.28 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.

     1.29 Plan means the A. H. Belo Savings Plan set forth herein, as amended from time to time.

     1.30 Plan Year means the period with respect to which the records of the Plan are maintained,
which will be the 12-month period beginning on January 1 and ending on December 31. The initial
Plan Year is the short Plan Year beginning on the Effective Date and ending on December 31, 2008.

     1.31 Profit Sharing Account means the Account established for each Participant, the balance of
which is attributable to (i) Participating Employer profit sharing contributions made pursuant to
Article 3 and earnings and losses of the Trust Fund with respect to such contributions

5

 

and (ii) the balance of the Participant’s profit sharing account under the Belo Savings Plan
transferred to the Plan.

     1.32 Qualified Plan means an employee benefit plan that is intended to qualify under Code
section 401(a).

     1.33 Rollover Account means the Account established for each Participant, the balance of which
is attributable to (i) the Participant’s rollover contributions made pursuant to Article 3 and
earnings and losses of the Trust Fund with respect to such contributions and (ii) the balance of
the Participant’s rollover account under the Belo Savings Plan transferred to the Plan.

     1.34 Trust Agreement means the agreement or agreements executed by the Company and the Trustee
which establishes 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.

     1.35 Trust Fund means the assets of the Plan held by the Trustee pursuant to the Trust
Agreement.

     1.36 Trustee means the one or more individuals or organizations who have entered into the
Trust Agreement as Trustee, and any duly appointed successor.

     1.37 Valuation Date means the date with respect to which the Trustee determines the fair
market value of the assets comprising the Trust Fund or any portion thereof. The assets of the
Trust Fund will be valued as of the close of business on each day on which the New York Stock
Exchange is open for trading.

     1.38 Year of Service means each period of 365 days (determined by aggregating periods of
service that are not consecutive) 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 earlier of (i) the date on which the Employee quits, retires, is discharged or dies or (ii) 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 earlier of such dates is hereafter referred to as the Employee’s “termination date”).
An Employee’s period of service for purposes of determining a Year of Service will include each
period in which the Employee is absent from service for less than 12 months (measured from the
Employee’s termination date) 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.

          In addition, an Employee’s Years of Service will include the service credited to the Employee
under the Belo Savings Plan, provided the Employee was employed by Belo Corp. or a subsidiary of
Belo Corp. immediately prior to the Distribution Date and either (i) was employed by a Controlled
Group Member on the Distribution Date or (ii) transfers employment directly from Belo Corp. or a
subsidiary of Belo Corp. to employment with a Controlled Group Member without any intervening
employment by an employer unrelated to Belo Corp. or the Company.

6

 

ARTICLE 2

PARTICIPATION

     2.1 Eligibility to Participate.

          (a) Deferral Contributions. Each Employee will become a Participant and may authorize
Deferral Contributions to the Plan as of the first payroll period beginning on or after the later
of the Effective Date or the date on which the Employee first completes an Hour of Service, or as
soon as administratively practicable thereafter, if he is then employed by a Participating
Employer. An Employee who becomes a Participant will not be eligible for Participating Employer
matching contributions or profit sharing contributions until he satisfies the eligibility
requirements of Section 2.1(b).

          (b) Matching and Profit Sharing Contributions. Each Employee will become a Participant with
respect to Participating Employer matching contributions and profit sharing contributions as of the
first payroll period beginning on or after the later of the Effective Date or the date he has
completed a Year of Service, or as soon as administratively practicable thereafter, 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) 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
represented by a bargaining representative but is not covered by a collective bargaining agreement,
unless the Company and the bargaining representative agree in writing that the Employee will be
eligible to participate in the Plan; (iii) 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)); (iv)
he is a leased employee required to be treated as an Employee under Code section 414(n) or
otherwise performs services under an arrangement with an employment agency, leasing organization or
any other person or entity that provides personnel to one or more Controlled Group Members; (v) he
is classified by a Participating Employer as an independent contractor whose compensation for
services is reported on a form other than Form W-2 or any successor form for reporting wages paid
to employees; (vi) 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 (vii) he is then on an
approved leave of absence without pay or in the service of the armed forces of the United States.
An individual described in clause (iv) or (v) of this Section 2.2(a) who is subsequently determined
to be a common law employee of a Participating Employer will not be eligible to participate in the
Plan during any period prior to the date on which such determination is actually and finally made.

          (b) Exclusion after Participation. A Participant who becomes ineligible under Section 2.2(a)
may not elect to have Deferral Contributions made or continued to the Plan

7

 

and will not be eligible to receive an allocation of Participating Employer matching or profit
sharing contributions.

          (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 Section 2.2(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 Section 2.2(c)
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. If an Employee terminates employment before satisfying the
eligibility requirements set forth in Section 2.1(b) with respect to Participating Employer
matching contributions and profit sharing contributions and is reemployed by a Controlled Group
Member before an absence from employment of 12 months, he will become a Participant with respect to
such matching and profit sharing contributions on the later of the date initially determined under
Section 2.1(b) 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 an absence
of 12 months or more, he will be treated as a new Employee and will be eligible for Participating
Employer matching contributions and profit sharing contributions upon satisfying the eligibility
requirements set forth in Section 2.1(b) after his reemployment. If an Employee terminates
employment after satisfying the eligibility requirements set forth in Section 2.1(b) with respect
to Participating Employer matching contributions and profit sharing contributions, he will become a
Participant with respect to such matching and profit sharing contributions on the date he is
credited with one or more Hours of Service by a Participating Employer.

     2.4 Veterans’ Reemployment Rights. The provisions of this Section 2.4 will apply to any
Employee who is reemployed by a Controlled Group Member following a period of Qualified Military
Service.

          (a) Service Credit. An Employee who returns to employment with a Controlled Group Member
following a period of Qualified Military Service (as hereinafter defined) will not be treated as
having incurred any One Year Breaks in Service because of his period of Qualified Military Service.
In addition, each period of Qualified Military Service will, upon reemployment with a Controlled
Group Member, be deemed to be employment with such Controlled Group Member for purposes of the
Plan.

          (b) Compensation. An Employee described in Section 2.4(a) will be treated for Plan purposes
as having received compensation from the Controlled Group Member during each period of Qualified
Military Service equal to (i) the compensation the Employee would have received during such period
of Qualified Military Service if he were not in Qualified Military Service, based on the rate of
pay the Employee would have received from the Controlled Group Member but for his absence during
the period of Qualified Military Service or (ii) if the compensation the Employee would have
received during his period of Qualified

8

 

Military Service is not reasonably certain, the Employee’s average compensation from the
employer during the 12-month period immediately preceding the Qualified Military Service, or if
shorter, during the period of employment immediately preceding the Qualified Military Service.

          (c) Qualified Military Service. For purposes of the Plan, the term “Qualified Military
Service” means service in the uniformed services (within the meaning of the Uniformed Services
Employment and Reemployment Rights Act (“USERRA”), provided the Employee is entitled under USERRA
to reemployment rights with a Controlled Group Member and the Employee returns to employment with
the Controlled Group Member within the period in which such reemployment rights are guaranteed.

          (d) Make-Up Contributions. Pursuant to procedures adopted from time to time by the Committee,
an Employee described in Section 2.4(a) may elect additional Deferral Contributions and will
receive an allocation of additional Participating Employer matching contributions and, if
applicable, profit sharing contributions, for the period of his Qualified Military Service. Such
additional Deferral Contributions and Participating Employer matching contributions may be made
during the period that begins on the date of the Employee’s reemployment and extends for the lesser
of five years or the duration of the Employee’s Qualified Military Service multiplied by three. An
Employee’s Deferral Contributions and allocation of Participating Employer matching contributions
made pursuant to this Section 2.4 will be subject to the limitations of the Plan and the Code
applicable to the years of the Employee’s period of Qualified Military Service, except that the
average deferral percentage and average contribution percentage limitations described in Code
section 401(k) and Code section 401(m), respectively, will not be recalculated for such years and,
if applicable, will be determined for the Plan Years in which the make-up Deferral Contributions
and Participating Employer matching contributions are made without regard to such make-up Deferral
Contributions and Participating Employer matching contributions.

          (e) Loan Repayments. An Employee may elect to suspend the repayment of a Plan loan during a
period of Qualified Military Service as permitted under Code section 414(u)(4) or may elect to
continue loan repayments during such period.

9

 

ARTICLE 3

CONTRIBUTIONS

     3.1 Elective Deferral Contributions.

          (a) Amount of Deferral Contributions. A Participant may elect, in accordance with procedures
established by the Committee from time to time, (i) to have Deferral Contributions made to the Plan
by the Participating Employers for any payroll period in an amount up to 100% of the Participant’s
Compensation for the payroll period or (ii) to have no Deferral Contributions made to the Plan by
the Participating Employers. Any such election will be effective as soon as administratively
practicable. Notwithstanding the foregoing, the Committee may reduce the amount of Deferral
Contributions elected by a Participant in order to permit a Participating Employer to withhold from
the Participant’s Compensation (i) all taxes and other amounts the Participating Employer is
required to withhold under applicable law and (ii) any other amounts the Participant has elected to
be withheld from his Compensation for any purpose, including without limitation, amounts to be
withheld as contributions to Company-sponsored welfare benefit plans.

          (b) Modification and Suspension of Deferral Contributions. A Participant may increase or
decrease the amount of his Deferral Contributions and may suspend his Deferral Contributions at any
time during the Plan Year. A Participant who suspends his Deferral Contributions may again
authorize Deferral Contributions to the Plan and such authorization will be effective as soon as
administratively practicable. If a Participant receives a distribution on account of hardship
pursuant to Section 7.3, such Participant’s Deferral Contributions will automatically be suspended
for a six-month period following the date on which such Participant receives the hardship
distribution.

          (c) Catch-Up Deferral Contributions. A Participant who has attained age 50 before the close
of a Plan Year will be eligible to make catch-up Deferral Contributions in accordance with, and
subject to the limitations of, Code section 414(v). Such catch-up Deferral Contributions will not
be taken into account for purposes of the provisions of the Plan implementing the required
limitations of Code sections 402(g) and 415.

     3.2 Automatic Deferral Contributions.

          (a) Certain Terms Defined. For purposes of this Section 3.2, the following terms have the
meanings set forth below.

          (i) Automatic Adjustment Date means April 1 of each Plan Year beginning after December
31, 2008.

          (ii) Automatic Enrollment Date means the enrollment date that is determined by the
Committee and communicated to the Participant, which enrollment date will be approximately
60 days after the Participant’s date of hire by a Participating Employer.

10

 

          (iii) Non-Electing Participant means a Participant who has not made an affirmative
election pursuant to Section 3.1 either to have Deferral Contributions made to the Plan by
the Participating Employers or to have no Deferral Contributions made to the Plan by the
Participating Employers.

          (b) Amount of Automatic Deferral Contributions.

          (i) Each Non-Electing Participant will be deemed to have elected to have Deferral
Contributions made to the Plan by the Participating Employers in an amount equal to 3% of
Compensation effective as of the earliest practicable payroll period that begins after the
Participant’s Automatic Enrollment Date. The Deferral Contributions of each Non-Electing
Participant who has been an Employee for at least six months as of an Automatic Adjustment
Date will be increased by 1% of Compensation effective as of the first payroll period
beginning after such Automatic Adjustment Date until the Participant’s Deferral
Contributions to the Plan are in an amount equal to 6% of Compensation. Thereafter, no
further adjustments to the Participant’s rate of Deferral Contributions will be made in the
absence of an affirmative election by the Participant.

          (ii) If a Participant receives a distribution on account of hardship pursuant to
Section 7.3, such Participant’s Deferral Contributions will automatically be suspended for a
six-month period following the date on which such Participant receives the hardship
distribution. Upon resumption of the Participant’s Deferral Contributions, the Deferral
Contributions will be increased as provided in Section 3.2(b)(i) as of the next Automatic
Adjustment Date.

          (iii) A Participant will cease to be a Non-Electing Participant for purposes of the
Deferral Contributions described in Section 3.2(b)(i) when he makes an affirmative election
pursuant to Section 3.1.

          (iv) A Participant who terminates employment before completing 60 days of employment
and prior to making an affirmative election pursuant to Section 3.1 will be subject to the
provisions of this Section 3.2 upon his rehire by a Participating Employer. Any other
Participant who terminates employment and is rehired by a Participating Employer may
participate in the Plan only by making a deferral election pursuant to Section 3.1.

          (c) No Refund of Automatic Deferral Contributions. If a Participant makes an affirmative
election pursuant to Section 3.1 at any time after his Automatic Enrollment Date or any Automatic
Adjustment Date, the terms of the affirmative election will cancel the automatic Deferral
Contributions for the Participant under this Section 3.2 as soon as administratively practicable.
However, the Deferral Contributions made to the Plan and allocated to his Account prior to his
affirmative election becoming effective will not be distributed to the Participant until he is
entitled to a distribution under the provisions of Article 7.

          (d) Notice to Participants. The Committee will provide to each Participant a written notice
of the Participant’s rights and obligations under this Section 3.2 and containing

11

 

such other information as may be necessary to comply with the notice requirements of Code
section 401(k)(13).

     3.3 Limitations on Deferral Contributions. The sum of a Participant’s Deferral Contributions
and his elective deferrals (within the meaning of Code section 402(g)(3)) under any other plans,
contracts or arrangements of any Controlled Group Member will not exceed the dollar limitation
contained in Code section 402(g) (as such amount is adjusted for cost-of-living increases in the
manner described in Code section 415(d)) for any taxable year of the Participant. A Participant’s
Deferral Contributions will also be subject to the deferral percentage limitation set forth in
Section 11.4. In the event a Participant’s Deferral Contributions and other elective deferrals
(whether or not under a plan, contract or arrangement of a Controlled Group Member) for any taxable
year exceed the foregoing dollar limitation, the excess allocated by the Participant to Deferral
Contributions (adjusted for Trust Fund earnings and losses in the manner described in Section 11.4)
may, in the discretion of the Committee, be distributed to the Participant no later than April 15
following the close of such taxable year. The amount of Deferral Contributions distributed to a
Participant for a Plan Year pursuant to this Section will be reduced by any excess Deferral
Contributions previously distributed to him pursuant to Section 11.4 for the same Plan Year.

     3.4 Participating Employer Matching Contributions. The provisions of this Section 3.4 will
apply to only those Participants who have satisfied the eligibility requirements of Section 2.1(b).
The Participating Employers will pay to the Trustee as a matching contribution for each payroll
period an amount equal to (i) 100% of each Participant’s Deferral Contributions for the payroll
period to the extent that such Deferral Contributions do not exceed 1% of the Participant’s
Compensation for the payroll period and (ii) 70% of each Participant’s Deferral Contributions for
the payroll period to the extent that such Deferral Contributions exceed 1% of the Participant’s
Compensation but do not exceed 6% of the Participant’s Compensation for the payroll period. For
purposes of this Section 3.4, Deferral Contributions include catch-up Deferral Contributions
described in Section 3.1(c).

     3.5 Profit Sharing Contributions. The Participating Employers will pay to the Trustee as a
profit sharing contribution for each payroll period an amount equal to 2% of the Compensation for
the payroll period of each Participant who is eligible to receive a matching contribution under
Section 3.4 and who is employed by a Participating Employer on the last day of the payroll period.
Each Participating Employer may, in the discretion of its board of directors, make an additional,
discretionary profit sharing contribution to the Plan for any payroll period or for any Plan Year
in such amount as is determined by the Participating Employer and is approved by the Compensation
Committee of the Board of Directors of the Company.

     3.6 Collectively Bargained Employees. Notwithstanding the provisions of Section 3.4 and
Section 3.5, the Participating Employers will not make a matching contribution or a profit sharing
contribution for any Employee who is covered by collective bargaining agreement unless and until
the terms of such collective bargaining agreement, as amended or renewed from time to time, permit
employer matching and profit sharing contributions to be made. In no event will the matching
contribution or profit sharing contribution made for such an Employee exceed the amount of matching
contributions or profit sharing contributions permitted under such collective bargaining agreement.

12

 

     3.7 Time of Payment. Deferral Contributions will be paid to the Trustee as soon as
practicable following the close of each payroll period. Participating Employer matching
contributions will be paid to the Trustee as soon as practicable following the close of each
calendar month during the Plan Year, and discretionary profit sharing contributions may be paid to
the Trustee on any date or dates selected by the Participating Employers, but in no event later
than the time prescribed by law (including extensions) for filing the Participating Employer’s
federal income tax return for its tax year ending with or within the Plan Year.

     3.8 Rollover and Transfer Contributions. Unless otherwise directed to do so by the Committee,
the Trustee is authorized to accept (i) any part of the cash or other assets distributed to a
Participant from a Qualified Plan, a qualified annuity plan described in Code section 403(a), an
annuity contract described in Code section 403(b), an eligible plan under Code section 457(b) which
is maintained by a state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state, or from an individual retirement account or annuity
described in Code sections 408(a) or (b) that is eligible to be rolled over and would otherwise be
includible in gross income and (ii) a direct transfer of assets to the Plan on behalf of a
Participant from the trustee or other funding agent of a Qualified Plan. Any amounts contributed
to the Plan pursuant to this Section 3.8 will be allocated to the Participant’s Rollover Account;
provided, however, that in the case of a direct transfer of assets from the trustee of another
Qualified Plan sponsored by a Controlled Group Member, the Committee will maintain such records as
may be necessary to determine the portions of the transferred amount which represent employer
profit sharing, matching and salary deferral contributions made by the former employer and earnings
and losses attributable thereto and will allocate such amounts to the Participant’s Profit Sharing
Account, Matching Contribution Account and Deferral Contribution Account, respectively.

13

 

ARTICLE 4

INVESTMENT OF CONTRIBUTIONS.

     4.1 Investment Funds.

          (a) Establishment of Investment Funds. The investment funds established under the Plan for
the investment of Plan assets will be (i) the A. H. Belo Stock Fund, (ii) the Belo Stock Fund and
(iii) such investment funds as may be established by the Trustee under the Trust Agreement at the
direction of the Investment Committee.

          (b) A. H. Belo Stock Fund. Effective as of the Distribution Date, no further purchases of
Company Stock may be made in the A. H. Belo Stock Fund, and no Plan fiduciary, including without
limitation the Investment Committee and the Administrative Committee, is authorized to permit any
such purchases. The Company intends that the A. H. Belo Stock Fund will be a permanent fund,
frozen to new investment as of the Distribution Date, notwithstanding any other applicable
fiduciary standard relating to (i) the diversification of Trust Fund assets, (ii) the speculative
character of Trust Fund investments, (iii) the lack or inadequacy of income provided by Trust Fund
assets, or (iv) the fluctuation in the fair market value of Trust Fund assets, unless the
Investment Committee determines, using an abuse of discretion standard, that there is a serious
question concerning the short-term viability of the Company as a going concern. Subject to the
foregoing statement of the Company’s intent, the Investment Committee will evaluate the prudence of
maintaining the A. H. Belo Stock Fund not on the basis of the risk associated with the A. H. Belo
Stock Fund standing alone but in light of the availability of other investment options under the
Plan and the ability of Participants to construct a diversified portfolio of investments consistent
with their individual desired level of risk and return.

          (c) Belo Stock Fund. Effective as of the Distribution Date, no further purchases of common
stock of Belo Corp. may be made in the Belo Stock Fund, and no Plan fiduciary, including without
limitation the Investment Committee and the Administrative Committee, is authorized to permit any
such purchases. The Company intends that, in light of the historical relationship between the
Company and Belo Corp., the Belo Stock Fund will be a permanent fund, frozen to new investment as
of the Distribution Date, notwithstanding any other applicable fiduciary standard relating to (i)
the diversification of Trust Fund assets, (ii) the speculative character of Trust Fund investments,
(iii) the lack or inadequacy of income provided by Trust Fund assets, or (iv) the fluctuation in
the fair market value of Trust Fund assets, unless the Investment Committee determines, using an
abuse of discretion standard, that there is a serious question concerning the short-term viability
of Belo Corp. as a going concern. Subject to the foregoing statement of the Company’s intent, the
Investment Committee will evaluate the prudence of maintaining the Belo Stock Fund not on the basis
of the risk associated with the Belo Stock Fund standing alone but in light of the availability of
other investment options under the Plan and the ability of Participants to construct a diversified
portfolio of investments consistent with their individual desired level of risk and return.

     4.2 Participant Investment Directions. The Plan is designed to satisfy the requirements of
ERISA section 404(c) and the regulations under that section. All amounts allocated to each
Participant’s Account will be invested by the Trustee at the direction of the

14

 

Participant or, where applicable, the Participant’s Beneficiary, in one or more of the
investment funds described in Section 4.1. The Committee from time to time will establish rules
and procedures regarding Participant and Beneficiary investment directions, including without
limitation rules and procedures with respect to the manner in which such directions may be
furnished, the frequency with which such directions may be changed during the Plan Year, the
minimum portion of a Participant’s or Beneficiary’s Account that may be invested in any one
investment fund, the frequency with which transactions in any investment fund may be executed
(daily, weekly or at some other interval), and the manner in which Participants and Beneficiaries
may provide for periodic automatic rebalancing of their Accounts among available investment funds.

     4.3 Default Investment Fund. Until the Investment Committee designates a different default
investment fund, the Account of a Participant who fails to provide explicit investment directions
will be invested in the Fidelity Freedom Fund® that has a target retirement date closest to the
year of the Participant’s retirement, based on the Participant’s current age and the assumption
that the Participant will retire at age 65; provided, however, that the Fidelity Freedom Fund® for
any Participant’s whose age is not known by the Committee will be the Fidelity Freedom Income
Fund®. The Administrative Committee will advise Participants and Beneficiaries that their failure
to provide explicit investment directions will operate as an implicit direction to the Trustee to
invest their Accounts in such default investment option.

     4.4 Investment of Dividends on Company Stock and Belo Corp. Stock. Dividends paid on Company
Stock and on common stock of Belo Corp. allocated to a Participant’s Account will be invested
proportionately in the investment funds selected by the Participant or Beneficiary in his most
recent investment direction to the Trustee or, in the absence of an explicit investment direction,
in the default investment fund.

     4.5 Suspension of Investment Directions. The Committee may temporarily suspend Participant
investment directions in connection with any event or transaction in which the Committee determines
such suspension is necessary or appropriate, including without limitation a merger of the Plan with
another plan, a transfer of assets from the Plan to another plan or from another plan to the Plan,
a change in administrative services provided to the Plan or a change in the investment options to
be offered to Participants. Such temporary suspension will apply to those Participants designated
by the Committee for such periods of time as the Committee determines in its discretion. The
Committee will give Participants affected by any suspension in investment directions such advance
notice of the suspension as the Committee determines to be reasonable under the circumstances.

15

 

ARTICLE 5

ALLOCATIONS TO PARTICIPANTS’ ACCOUNTS

     5.1 Establishment of Accounts. The Committee will establish a Deferral Contribution Account
for each Participant, and to the extent applicable, a Matching Contribution Account, a Profit
Sharing Account and a Rollover Account. The Committee may also establish one or more subaccounts
of a Participant’s Account, if the Committee determines that subaccounts are necessary or desirable
in administering the Plan.

     5.2 Allocation of Contributions.

          (a) Deferral Contributions. Each Deferral Contribution made by a Participating Employer on
behalf of a Participant will be allocated by the Committee to the Participant’s Deferral
Contribution Account.

          (b) Matching Contributions. Each Participating Employer matching contribution made with
respect to a payroll period on behalf of Participants who are eligible to receive a matching
contribution under Section 3.4 will be allocated by the Committee to each such Participant’s
Matching Contribution Account.

          (c) Profit Sharing Contributions. Each profit sharing contribution made by a Participating
Employer for a payroll period will be allocated only to the Profit Sharing Accounts of Participants
who are employed by the Participating Employer on the last day of the payroll period and are
eligible to receive profit sharing contributions pursuant to Section 3.5. For purposes of this
allocation, an Employee will be a Participant in the Plan on the last day of a payroll period if
the Employee is eligible to make Deferral Contributions as of the last day of the payroll period,
without regard to whether the Participant has elected to make Deferral Contributions. The amount
of a Participating Employer’s profit sharing contribution to be allocated to the Profit Sharing
Account of each such eligible Participant for a payroll period will bear the same ratio to the
Participating Employer’s total profit sharing contribution for the payroll period as the
Participant’s Compensation for the payroll period bears to the total Compensation of all such
Participants eligible to receive an allocation of the Participating Employer’s profit sharing
contribution for the payroll period.

     5.3 Limitation on Allocations. Article 11 sets forth certain rules under Code section 415
that limit the amount of contributions and forfeitures that may be allocated to a Participant’s
Account for a Plan Year.

     5.4 Allocation of Trust Fund Income and Loss.

          (a) Accounting Records. The Committee, through its accounting records, will clearly segregate
each Account and subaccount and will maintain a separate and distinct record of all income and
losses of the Trust Fund attributable to each Account or subaccount. Income or loss of the Trust
Fund will include any unrealized increase or decrease in the fair market value of the assets of the
Trust Fund.

16

 

          (b) Method of Allocation. The share of net income or net loss of the Trust Fund to be
credited to, or deducted from, each Account will be the allocable portion of the net income or net
loss of the investment fund in which such Account, or any subaccount of such Account, is invested
as of each Valuation Date, as determined by the Committee in a uniform and nondiscriminatory
manner.

     5.5 Valuation of Trust Fund. The fair market value of the total net assets comprising the
Trust Fund will be determined by the Trustee as of each Valuation Date.

     5.6 No Guarantee. The Participating Employers, the Committee and the Trustee do not guarantee
the Participants or their Beneficiaries against loss or depreciation or fluctuation of the value of
the assets of the Trust Fund.

     5.7 Benefit Statements. The Committee will furnish each Participant and each Beneficiary of a
deceased Participant with a quarterly benefit statement. No statement will be provided to a
Participant or Beneficiary after the Participant’s entire vested and nonforfeitable interest in his
Account has been distributed.

17

 

ARTICLE 6

VESTING

     6.1 Determination of Vested Interest.

    
      (a) Deferral Contributions. Except as provided
in Section 6.3, the interest of each
Participant in his Deferral Contribution Account and his Rollover Account will be 100% vested and
nonforfeitable at all times.

          (b) Matching and Profit Sharing Contributions. The Matching Contribution Account and Profit
Sharing Account of each Participant not described in Section 6.1(a) will become vested and
nonforfeitable in accordance with the following schedule, subject to Section 6.3:

	 	 	 
	 	 	Percent Vested
	Years of Service	 	and Nonforfeitable
	Less than 2
	 	0
	2 or more
	 	100

          (c) Accelerated Vesting. Except as provided in Section 6.3, a Participant’s interest in his
Matching Contribution Account and his Profit Sharing Account will become 100% vested and
nonforfeitable without regard to his Years of Service upon the earliest to occur of (i) his
attainment of age 55 if he is then an Employee, (ii) his death while he is an Employee, or (iii)
his becoming totally and permanently disabled (as hereinafter defined) while he is an Employee. A
person will be totally and permanently disabled for purposes of this paragraph only if he is
eligible to receive disability benefits under the Social Security Act.

     6.2 Forfeiture of Nonvested Amounts. If a Participant terminates employment and receives a
distribution of his entire vested interest in the Plan, the Participant’s nonvested interest will
be forfeited immediately. If the Participant again becomes an Employee before incurring five or
more consecutive One Year Breaks in Service, the forfeited amounts will be reinstated to his
Account, unadjusted for earnings or losses since the date of forfeiture. If the Participant
becomes an Employee after incurring five or more consecutive One Year Breaks in Service, the
forfeited amounts will not be reinstated. If, however, a Participant terminates employment and
does not receive a distribution of his entire vested interest in the Plan, the Participant’s
nonvested interest will be forfeited when the Participant incurs five consecutive One Year Breaks
in Service.

     6.3 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 6.4 makes a claim to the Committee or the Trustee for his benefit, he will be
entitled

18

 

to receive, as soon as administratively feasible, a benefit in an amount equal to the
value of the forfeited benefit on the date of forfeiture. This benefit will be reinstated from
forfeitures arising during such Plan Year or, if forfeitures are insufficient, from Participating
Employer contributions made to the Plan for this purpose.

     6.4 Application of Forfeited Amounts. The amount of a Participant’s Account which is
forfeited pursuant to this Article will be applied to one of the following Plan purposes as
determined by the Committee in its discretion: to pay the expenses of administering the Plan, to
reinstate any forfeitures that must be reinstated in accordance with this Article, to reduce
Participating Employer profit sharing contributions pursuant to Section 3.5 or to reduce
Participating Employer matching contributions pursuant to Section 3.4.

     6.5 Reemployment Provisions. If a Participant terminates employment and again becomes an
Employee, his Years of Service completed before his reemployment will be included in determining
his vested and nonforfeitable interest after he again becomes an Employee.

19

 

ARTICLE 7

DISTRIBUTIONS TO PARTICIPANTS

     7.1 Basic Rules Governing Distributions.

          (a) Timing of Distributions. Except as set forth in Sections 7.1(c), 7.2 and 7.3,
distribution of a Participant’s vested Account balance will be made as soon as practicable after
the Valuation Date coinciding with or immediately following the Participant’s termination of
employment, or if earlier, the date on which the Participant becomes eligible to receive benefits
under the Social Security Act on account of total and permanent disability. If a loan is
outstanding from the Trust Fund to the Participant on the date his vested Account balances become
distributable, the amount distributed to the Participant will be reduced by any security interest
in his Account held by the Plan by reason of the loan.

          (b) Form of Distributions. Distributions made before age 701/2 will be in the form of a single
lump sum payment. Distributions that are delayed until a Participant reaches age 701/2 will be in
the form of a single lump sum payment or as otherwise provided under the minimum required
distribution provisions of Article 12. The cash value of the whole and fractional shares of
Company Stock and common stock of Belo Corp. allocated to a Participant’s Account will be
distributed to the Participant in cash unless the Participant elects to receive distribution of the
whole shares allocated to his Account in the form of shares. In addition, at the election of a
Participant who makes a rollover distribution of all or any part of his Account to a Fidelity
Investments® individual retirement account, distribution may also be made in fund shares of
marketable securities (as defined in Code section 731(c)(2)). For this purpose, the term “fund
share” means a share, unit or other evidence of ownership in an investment fund established under
the Trust Agreement.

          (c) Participant’s Consent to Certain Payments. If the amount of a Participant’s vested
Account balance exceeds $1,000, the Committee will not distribute the Participant’s vested Account
balance to him prior to the date distributions are required to begin under Article 12 following
his attainment of age 701/2, unless he elects to receive a distribution at any earlier date following
termination of employment. For purposes of the preceding sentence, the value of a Participant’s
vested Account balances will include that portion that is attributable to his Rollover Account. A
distribution may be made less than 30 days after the Participant has been furnished an explanation
of his distribution options provided that (i) the Committee clearly informs the Participant that he
has the right to consider whether to accept a distribution and whether to consent to a particular
form of distribution for at least 30 days after he has been provided the relevant information, (ii)
the Participant affirmatively elects to waive the 30-day notice period and receive a distribution,
and (iii) with respect to a distribution to which Code section 417 applies, the Participant is
permitted to revoke the election and make a new election at any time prior to the later of the date
of distribution or the expiration of the seven-day period after the explanation of distribution
options is provided to the Participant.

20

 

     7.2 Withdrawals.

          (a) After Age 591/2. A Participant who has not terminated employment may request a distribution
from his Account if he has reached age 591/2. A Participant who is a director, officer or principal
stockholder of the Company within the meaning of Section 16 of the Securities Exchange Act of 1934
may exercise the foregoing withdrawal right only in accordance with rules and procedures
established from time to time by the Committee. All other Participants may exercise their
withdrawal rights at any time or times during the Plan Year.

          (b) Former Journal Broadcasting Employees. A Participant who, on December 31, 1997, was a
participant in the Journal Broadcasting 401(k) Plan may withdraw, in accordance with rules and
procedures established from time to time by the Committee, all or any portion of his Rollover
Account attributable to his after-tax contributions and rollover contributions that were
transferred to the Plan from the Journal Broadcasting 401(k) Plan effective January 1, 1998.

     7.3 Hardship Distributions.

          (a) General Rule.

          (i) A Participant who has not terminated employment may request a distribution from his
Deferral Contribution Account or his Rollover Account in the event of his hardship;
provided, however that a Participant who was a participant in the Denton Publishing Company
Retirement Plan on December 31, 1999, may request such a distribution only with respect to
his Deferral Contributions made after December 31, 1999, or his Rollover Account. A
distribution will be on account of hardship only if the distribution is necessary to satisfy
an immediate and heavy financial need of the Participant, as defined below, and satisfies
all other requirements of this Section 7.3. Pursuant to Section 3.1(b) or Section
3.2(b), whichever applies, a Participant’s Deferral Contributions will automatically be
suspended for a six-month period after the date on which such Participant receives a
distribution on account of hardship.

          (ii) Alternate Payees are not eligible for a hardship distribution from the Plan.

          (b) Deemed Financial Need. For purposes of this Section 7.3, a distribution is made on
account of an immediate and heavy financial need of the Participant only if the distribution is for
(i) the payment of expenses for (or necessary to obtain) medical care that would be deductible
under Code section 213(d) (determined without regard to whether the expenses exceed 7.5% of
adjusted gross income); (ii) costs directly related to the purchase of a principal residence for
the Participant (excluding mortgage payments); (iii) the payment of tuition, related educational
fees and room and board expenses for the next 12 months of post-secondary education for the
Participant, his spouse, children or dependents (as defined in Code section 152 and, for taxable
years beginning on or after January 1, 2005, without regard to Code sections 152(b)(1), 152(b)(2)
or 152(d)(1)(B)); (iv) payments necessary to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant’s principal residence; (v)
the payment of burial or funeral expenses of the Participant’s deceased

21

 

parent, spouse, children or dependents (as defined in Code section 152 and, for taxable years
beginning on or after January 1, 2005, without regard to Code section 152(d)(1)(B)); or (vi)
expenses for the repair of damage to the Participant’s principal residence that would qualify for
the casualty deduction under Code section 165 (determined without regard to whether the loss
exceeds 10% of adjusted gross income).

          (c) Reasonable Reliance Test. A distribution will be considered necessary to satisfy an
immediate and heavy financial need of the Participant only if all three of the following
requirements are satisfied: (i) the distribution is not in excess of the amount required to
relieve the immediate and heavy financial need of the Participant (taking into account the taxable
nature of the distribution); (ii) the Participant represents in writing, on forms provided by the
Committee, that the need cannot be relieved in whole or in part through reimbursement or
compensation by insurance or otherwise, by reasonable liquidation of the Participant’s assets, to
the extent such liquidation would not itself cause an immediate and heavy financial need, by
cessation of Deferral Contributions under the Plan, or by distributions other than hardship
distributions or nontaxable (at the time of the loan) loans from the Plan and any other plans
maintained by any Controlled Group Member or any other entity by which the Participant is employed,
or relieved in whole by borrowing from commercial sources on reasonable commercial terms; and (iii)
the Committee determines that it can reasonably rely on the Participant’s written representation.

     7.4 Distribution Procedures. Distributions pursuant to Sections 7.2 and 7.3 will be made as
soon as practicable following the Committee’s approval of the Participant’s written request for
withdrawal and will be made in the form described in Section 7.1(b). Distributions pursuant to
Sections 7.2(a) and 7.3 will be made pro rata from each contribution source in the Participant’s
Account, provided, however, that in the case of a hardship distribution under Section 7.3, the
cumulative amount distributed to a Participant from his Deferral Contribution Account will not
exceed the amount of his Deferral Contributions that have not been previously withdrawn (but not
the income allocable to his Deferral Contributions). No distribution under Section 7.2 or Section
7.3 will be made in an amount that is greater than the excess of the Participant’s vested interest
in the Account from which the distributions are made over the aggregate amount of outstanding
loans, plus accrued interest, secured by such Account. For purposes of determining the amount
available for distribution, a Participant’s Account will be valued as of the Valuation Date
immediately preceding the date on which the Participant requests a distribution.

     7.5 Loans to Participants.

          (a) General Provisions.

          (i) A Participant may, subject to the provisions of this Section 7.5 and the loan
procedures adopted by the Committee from time to time, borrow from the balance of his
Deferral Contribution and Rollover Accounts, provided, however, that no loan may be made
from a Participant’s Profit Sharing and Matching Contribution Accounts. All such loans will
be subject to the requirements of this Section 7.5 and such other rules as the Committee
may from time to time prescribe, including without limitation any rules restricting the
purposes for which loans will be approved. The

22

 

Committee will have complete discretion as to approval of a loan hereunder and as to
the terms thereof, provided that its decisions will be made on a uniform and
nondiscriminatory basis and in accordance with this Section 7.5. If the Committee approves
a loan, the Committee will direct the Trustee to make the loan and will advise the
Participant and the Trustee of the terms and conditions of the loan. Nothing in this
Section 7.5 will require the Committee to make loans available to Participants.

          (ii) Alternate Payees may not borrow any amount from the Plan.

          (b) Terms and Conditions. Loans to Participants will be made according to the following terms
and conditions and such additional terms and conditions as the Committee may from time to time
establish: (i) no loan will be for a term of longer than five years; (ii) all loans will be in
default on the first date that a required loan repayment is not made and the entire unpaid balance
of the loan will be treated as a deemed distribution to the Participant unless all past due
payments are made before the expiration of any grace period established under the loan procedures;
(iii) all loans will bear a reasonable rate of interest established under the loan procedures; (iv)
all loans will be made only upon receipt of adequate security (the security for a loan will be the
Participant’s interest in the separate investment fund established under Section 7.5(f) for that
loan) in an amount that does not exceed 50% of the Participant’s vested interest under the Plan);
(v) except as otherwise provided by the loan procedures, payments of principal and interest will be
made through payroll deductions sufficient to provide for substantially level amortization of
principal and interest with payments not less frequently than quarterly, which will be irrevocably
authorized by the Participant in writing on a form provided by the Committee at the time the loan
is made; (vi) the amount of any indebtedness (including accrued and unpaid interest) under any loan
will be deducted from a Participant’s interest in the Trust Fund if and only if such indebtedness
or any installment thereof is not paid when due (including amounts due by acceleration) unless the
Committee determines that there is adequate security for such loan other than the Participant’s
interest in the Trust Fund; (vii) no more than two outstanding loans will be permitted with respect
to a Participant at any time; (viii) no home loans will be permitted; and (ix) all loans will be
evidenced by a note containing such additional terms and conditions as the Committee will
determine. Notwithstanding anything in the foregoing to the contrary, no amount of any
indebtedness will be deducted pursuant to clause (vi) of this Section 7.5(b) from a
Participant’s Account prior to the time that such Account are otherwise distributable.

          (c) Maximum Amount of Loans. The amount of any loan made pursuant to this Section 7.5, when
added to the outstanding balance of all other loans to the Participant from all qualified employer
plans (as defined in Code section 72(p)(4)) of the Controlled Group, will not exceed the lesser of
(i) one-half of the aggregate nonforfeitable interest in his account balance(s) under all such
plans, or (ii) $50,000 reduced by the excess, if any, of (A) the highest outstanding balance of all
other loans from qualified employer plans of the Controlled Group to the Participant during the
1-year period ending on the date on which such loan was made, over (B) the outstanding balance of
all loans from qualified employer plans of the Controlled Group to the Participant on the date on
which such loan was made.

23

 

          (d) Minimum Loan. The minimum loan permitted under this Section 7.5 is $1,000. If such
minimum amount exceeds the limitations of Section 7.5(c), no loan will be made.

          (e) Source of Loans. All loans will be made from available sources in such order as the
Committee may determine from time to time.

          (f) Investment of Loan Payments. All loans will be treated as a separate investment fund of
the borrowing Participant. All payments with respect to a loan will be credited to the borrowing
Participant’s Account and will be invested in the investment funds under the Trust Agreement in
accordance with the Participant’s latest investment directions pursuant to Section 4.2.

          (g) Grandfathered Loans. Loans that are transferred to the Plan from another Qualified Plan
will be administered in accordance with their terms, notwithstanding the fact that the terms of
such loans do not satisfy the foregoing provisions of this Section 7.5.

     7.6 Reemployment of Participant. If a Participant who terminated employment again becomes an
Employee before receiving a distribution of his Account balance, no distribution from the Trust
Fund will be made while he is an Employee, and amounts distributable to him on account of his prior
termination will be held in the Trust Fund until he is again entitled to a distribution under the
Plan.

     7.7 Valuation of Accounts. A Participant’s distributable Account balances will be valued as
of the Valuation Date immediately preceding the date the Account is to be distributed, except that
there will be added to the value of his Account the fair market value of any amounts allocated to
his Account under Article 5 after that Valuation Date.

     7.8 Direct Rollovers.

          (a) Rollover Election. Notwithstanding any other provision of the Plan, a Distributee (as
hereinafter defined) may elect, at any time and in the manner prescribed by the Committee, to have
any portion of an Eligible Rollover Distribution (as hereinafter defined) paid directly to an
Eligible Retirement Plan (as hereinafter defined) specified by the Distributee, except to the
extent that the total Eligible Rollover Distributions with respect to the Distributee in any Plan
Year are reasonably expected to total less than $200.

          (b) Eligible Rollover Distribution. An Eligible Rollover Distribution is any distribution of
all or any portion of the balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include (i) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made for the life or life
expectancy of the Distributee or the joint lives or life expectancies of the Distributee and the
Distributee’s designated beneficiary, or for a specified period of ten years or more, (ii) any
distribution to the extent such distribution is required by Code section 401(a)(9), (iii) any
distribution that qualifies as a hardship distribution under Section 7.3, and (iv) the portion of
any distribution that is not includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities). Notwithstanding the
foregoing, a portion of a distribution will not fail to be an Eligible Rollover Distribution merely
because the

24

 

portion consists of after-tax employee contributions which are not includible in gross
income. However, such portion may be transferred only to an individual retirement account or
annuity described in Code sections 408(a) or (b), or to a qualified defined contribution plan
described in
Code sections 401(a) or 403(a) that agrees to separately account for amounts so transferred,
including separately accounting for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible.

          (c) Eligible Retirement Plan. An Eligible Retirement Plan is an individual retirement account
described in Code section 408(a), an individual retirement annuity described in Code section
408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code
section 401(a) that is a defined contribution plan within the meaning of Code section 414(i), that
accepts the Distributee’s Eligible Rollover Distribution. An Eligible Retirement Plan includes an
annuity contract described in Code section 403(b) and an eligible plan under Code section 457(b)
which is maintained by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to separately account for amounts
transferred into such plan from the Plan. The definition of Eligible Retirement Plan also applies
in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the
Alternate Payee.

          (d) Distributee. A Distributee includes a Participant, the Participant’s Spouse, or a
Participant’s former spouse who is an Alternate Payee. A Distributee also includes a Participant’s
nonspouse Beneficiary who is a designated beneficiary within the meaning of Code section
401(a)(9)(E), but only with respect to an Eligible Rollover Distribution paid to an Eligible
Retirement Plan that is either an individual retirement account described in Code section 408(a) or
an individual retirement annuity described in Code section 408(b), and such individual retirement
account or individual retirement annuity is treated as an inherited individual retirement account
or individual retirement annuity pursuant to Code section 402(c)(11).

     7.9 Restrictions on Distributions. Article 12 sets forth certain rules under various
provisions of the Code relating to restrictions on distributions to Participants.

25

 

ARTICLE 8

DISTRIBUTIONS TO BENEFICIARIES

     8.1 Designation of Beneficiary. Each Participant will have the right to designate a
Beneficiary or Beneficiaries to receive his vested Account balance upon his death. The designation
will be made in accordance with procedures prescribed by the Committee from time to time and will
be effective upon receipt by the Committee. A Participant will have the right to change or revoke
any designation by filing a new designation or notice of revocation with the Committee, but the
revised designation or revocation will be effective only upon receipt by the Committee.

     8.2 Consent of Spouse Required. A Participant who is married may not designate a Beneficiary
other than, or in addition to, his spouse unless his spouse consents to the designation by means of
a written instrument that is signed by the spouse, contains an acknowledgment by the spouse of the
effect of the consent, and is witnessed by a member of the Committee (other than the Participant)
or by a notary public. The designation will be effective only with respect to the consenting
spouse, whose consent will be irrevocable. A Beneficiary designation to which a spouse has
consented may not be changed by the Participant without spousal consent (other than to designate
the spouse as Beneficiary), unless the spouse’s consent expressly permits Beneficiary designations
by the Participant without any further consent of the spouse.

     8.3 Failure to Designate Beneficiary. In the event a Participant has not designated a
Beneficiary, or in the event no Beneficiary survives a Participant, the distribution of the
Participant’s vested Account balance upon his death will be made (i) to the Participant’s spouse,
if living, (ii) if his spouse is not then living, to his then living issue by right of
representation, (iii) if neither his spouse nor his issue are then living, to his then living
parents, and (iv) if none of the above are then living, to his estate.

     8.4 Distributions to Beneficiaries. Distribution of a Participant’s vested Account balance to
the Participant’s Beneficiary will be made as soon as practicable after the earlier of the
Beneficiary’s request for a distribution or the required distribution date set forth in Article
12. The Participant’s vested Account balance will be distributed to the Beneficiary in a single
lump sum payment or as otherwise provided under the minimum required distribution provisions of
Article 12. The Participant’s Account balances will be valued as of the Valuation Date coinciding
with or immediately preceding the date the Account is to be distributed to his Beneficiary, except
that there will be added to the value of the Participant’s Account the fair market value of any
amounts allocated to his Account under Article 5 after that Valuation Date. If a loan is
outstanding from the Trust Fund to the Participant on the date of his death, the amount distributed
to his Beneficiary will be reduced by any security interest in the Participant’s Account held by
the Plan by reason of the loan.

     8.5 Restrictions on Distributions. Article 12 sets forth certain rules under various
provisions of the Code relating to restrictions on distributions to Beneficiaries.

26

 

ARTICLE 9

PROVISIONS REGARDING THE A. H. BELO STOCK FUND

AND THE BELO STOCK FUND

     9.1 Participant Voting Instructions. Before each annual or special meeting of shareholders
of the Company or the shareholders of Belo Corp., the Committee will cause to be sent to each
Participant and Beneficiary whose Account is invested in the Belo Stock Fund or the A. H. Belo
Stock Fund, as applicable, on the record date of such meeting a copy of the proxy solicitation
material for the meeting, together with a form requesting confidential instructions to the Trustee
on how to vote the shares of Company Stock or the shares of common stock of Belo Corp. allocated to
his Account. Upon receipt of such instructions, the Trustee will vote the shares allocated to such
Participant’s or Beneficiary’s Account as instructed by the Participant or Beneficiary. The
Trustee will vote shares for which it does not receive timely instructions from Participants or
Beneficiaries proportionately in the same manner as it votes shares for which it receives timely
instructions from Participants and Beneficiaries.

     9.2 Tender Offers. In the event of a tender offer for shares of Company Stock or common stock
of Belo Corp. subject to Section 14(d)(1) of the Securities Exchange Act of 1934 or subject to Rule
13e-4 promulgated under that Act (as those provisions may from time to time be amended or replaced
by successor provisions of federal securities laws), the Committee will advise each Participant and
Beneficiary whose Account is invested in the Belo Stock Fund or the A. H. Belo Stock Fund, as
applicable, in writing of the terms of the tender offer as soon as practicable after its
commencement and will furnish each Participant and Beneficiary with a form by which he may instruct
the Trustee confidentially to tender shares allocated to his Account. The Trustee will tender
those shares it has been properly instructed to tender, and will not tender those shares which it
has been properly instructed not to tender or for which it has not received timely instructions
from the Participant or Beneficiary. The number of shares to which a Participant’s or
Beneficiary’s instructions apply will be the total number of shares allocated to his Account as of
the latest date for which the Committee has records. The Committee will advise the Trustee of the
commencement date of any tender offer and, until receipt of that advice, the Trustee will not be
obligated to take any action under this Section 9.2. Funds received in exchange for tendered
stock will be credited to the Account of the Participant or Beneficiary whose stock was tendered
and will be invested proportionately in the investment funds selected by the Participant or
Beneficiary in his most recent investment direction to the Trustee.

     9.3 Confidentiality. The Committee will be responsible for establishing procedures designed
to maintain the confidentiality of Participant and Beneficiary information relating to the
purchase, holding and sale of Company Stock or common stock of Belo Corp. and the exercise of
voting, tender and similar rights with respect to such stock, except to the extent such information
is necessary to comply with federal laws or state laws that are not preempted by ERISA.

27

 

ARTICLE 10

ADMINISTRATION OF THE PLAN AND TRUST AGREEMENT

     10.1 Appointment of Committee Members. The Board of Directors or the Compensation Committee
of the Board of Directors will appoint the Chairman of an Administrative Committee, which will
consist of three or more members. The Chairman will appoint the remaining members of the
Administrative Committee, who will hold office at the pleasure of the Chairman. 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 or the Chairman.

     10.2 Officers and Employees of the Committee. The Committee will choose a Secretary, who may
be a member of the Committee. 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.

     10.3 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 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.

     10.4 Expenses and Compensation. The expenses of administering the Plan, including without
limitation the expenses of the Committee properly incurred in the performance of its duties under
the Plan, will be paid from the Trust Fund, and all such expenses paid by the Participating
Employers on behalf of the Plan will be reimbursed from the Trust Fund unless the Participating
Employers in their discretion elect not to submit such expenses for reimbursement. Notwithstanding
the foregoing, the members of the Committee will not be compensated by the Plan for their services
as Committee members.

     10.5 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 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.

28

 

     10.6 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 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.

     10.7 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 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.

     10.8 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.

     10.9 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.

29

 

     10.10 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 must be made in writing and 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,
or within 180 days if the Committee determines that special circumstances require an extension of
the 90-day period and the claimant is notified of the extension within the original 90-day period.
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 adverse determination. Such notice by the Committee will
also set forth, in a manner calculated to be understood by the claimant, the specific reason or
reasons for the adverse determination, reference to the specific Plan provisions on which the
determination 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 and applicable time limits as set forth in Section
10.10(c).

          (c) Review Procedure. A claimant may appeal an adverse benefit determination 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 10.10. An appeal
must be submitted in writing within 60 days after receiving notification of the adverse
determination 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 claimant will be given the opportunity to submit written comments, documents,
records and other information relating to the claim for benefits, and will be provided, upon
written request and free of charge, reasonable access to and copies of, all documents, records and
other information relevant to the claim for benefits, provided the Committee or the named fiduciary
designated by the Committee finds the requested documents or materials are relevant 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 materials submitted by the claimant relating to the claim, without regard to
whether the information was submitted or considered in the initial determination. On the basis of
its review, the Committee or the named fiduciary designated by the Committee will make an
independent determination of the claimant’s eligibility for benefits and 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. In the event of such special circumstances, the Committee
or the named fiduciary designated by the Committee will notify the claimant within the initial
60-day period of the special circumstances that preclude a decision in the 60-day period. 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 determination to the claimant. Such notice will set
forth, in a manner calculated to be

30

 

understood by the claimant, the specific reason or reasons for the adverse determination,
reference to the specific Plan provisions on which the determination is based, a statement that the
claimant is entitled to receive, upon request and free of charge, access to and copies of all
documents, records and other information relevant to the claim, and a statement of the claimant’s
rights to bring an action under ERISA section 502(a), if applicable.

     10.11 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.

     10.12 Correction of Participants’ Accounts. If an error or omission is discovered in the
Account of a Participant, or in the amount distributed to a Participant, the Committee will make
such equitable adjustments in the records of the Plan as may be necessary or appropriate to correct
such error or omission as of the Plan Year in which such error or omission is discovered. Further,
a Participating Employer may, in its discretion, make a special contribution to the Plan which will
be allocated by the Committee only to the Account of one or more Participants to correct such error
or omission.

     10.13 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 10.13 on behalf of a minor or other
person under a legal disability will fully discharge the Plan’s obligation to such person.

     10.14 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.

     10.15 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.

     10.16 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.

31

 

ARTICLE 11

LIMITATIONS ON CONTRIBUTIONS AND

ALLOCATIONS TO PARTICIPANTS’ ACCOUNTS

     11.1 Priority over Other Contribution and Allocation Provisions. The provisions set forth in
this Article will supersede any conflicting provisions of Article 3 or Article 5.

     11.2 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 the sum of the following amounts with respect to all Qualified Plans
and Welfare Benefit Funds maintained by the Controlled Group Members:

          (i) the amount of Controlled Group Member contributions with respect to the Limitation
Year allocated to a Participant’s account;

          (ii) the amount of any forfeitures for the Limitation Year allocated to a Participant’s
account;

          (iii) the amount of a Participant’s voluntary nondeductible contributions for the
Limitation Year, provided, however, that the Annual Addition for any Limitation Year
beginning before January 1, 1987, will not be recomputed to treat all of the Participant’s
nondeductible voluntary contributions as part of the Annual Addition;

          (iv) the amount allocated after March 31, 1984, to an individual medical benefit
account (as defined in Code section 415(l)(2)) which is part of a Defined Benefit Plan or an
annuity plan; and

          (v) the amount derived from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date that 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.

          A Participant’s Annual Addition will not include any nonvested amounts restored to his
account following his reemployment before incurring five consecutive One Year Breaks in
Service, and a corrective allocation pursuant to Section 10.12 will be considered an Annual
Addition for the Limitation Year to which it relates.

          (b) Average Deferral Percentage means the average of the Deferral Percentages of each
Participant in a group of Participants.

          (c) Deferral Percentage means the ratio (expressed as a percentage) determined by dividing the
Deferral Contributions made to the Plan on behalf of a Participant who is eligible to make Deferral
Contributions for all or any portion of a Plan Year by the Participant’s Compensation for the Plan
Year.

32

 

          (d) Defined Benefit Plan means a Qualified Plan other than a Defined Contribution Plan.

          (e) Defined Contribution Dollar Limitation means, for any Limitation Year, $46,000, as
adjusted for increases in the cost-of-living under Code section 415(d). 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.

          (f) Defined Contribution Plan means a Qualified Plan described in Code section 414(i).

          (g) Highly Compensated Employee means an Employee who during the current or preceding Plan
Year was a 5-percent owner of a Controlled Group Member, or who for the preceding Plan Year had
Includable Compensation in excess of $100,000 (as adjusted pursuant to Code Section 415(d)).

          (h) Includable Compensation means an Employee’s 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 a Participant by the Participating Employers. In addition,
Compensation includes any contributions made by the Participating Employers on behalf of an
Employee pursuant to a deferral election under any employee benefit plan containing a cash or
deferred arrangement under Code section 401(k), 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 and any elective amounts that are not includible in the gross income of the Employee by
reason of Code section 132(f)(4). The annual Includable Compensation of an Employee taken into
account for any purpose will not exceed $230,000 for any Plan Year beginning after December 31,
2007, as adjusted for cost-of-living increases in accordance with Code section 401(a)(17).

          (i) 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.

          (j) Maximum Annual Addition means with respect to a Participant for any Limitation Year an
amount equal to the lesser of (i) the Defined Contribution Dollar Limitation or (ii) 100% of the
Participant’s Includable Compensation.

          (k) Nonhighly Compensated Employee means an Employee who is not a Highly Compensated Employee.

          (l) 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 an employer through which the employer

33

 

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.

     11.3 Allocation Limitation. The Annual Addition of a Participant for any Limitation Year will
not exceed the Maximum Annual Addition. If the amount allocated or otherwise allocable to a
Participant’s Account would exceed the Maximum Annual Addition, the Committee will take such action
as it deems appropriate under the circumstances to reduce the Participating Employer contributions
and forfeitures which would cause the Participant’s Annual Addition to exceed the Maximum Annual
Addition. The limitations contained in this Article will apply on an aggregate basis to all
Defined Contribution Plans (whether or not any of such plans have terminated) established by the
Controlled Group Members. For this purpose, Controlled Group Members will be determined in
accordance with the 50% control rule of Code section 415(h).

     11.4 Limitation on Deferral Contributions. The limitations of this Section 11.4 will apply
only to Participants who are eligible to make Deferral Contributions in any Plan Year but who are
not eligible to receive an allocation of Participating Employer matching contributions under
Section 3.4 for such Plan Year. The limitations of this Section 11.4 will not apply to a
Participant who is eligible to receive an allocation of Participating Employer matching
contributions under Section 3.4 during any portion of a Plan Year.

          (a) Average Deferral Percentage Test. Notwithstanding any other provision of the Plan, the
Average Deferral Percentage for a Plan Year for Participants who are Highly Compensated Employees,
using the current year testing method, will not exceed the greater of: (i) the Average Deferral
Percentage of Participants who are Nonhighly Compensated Employees multiplied by 1.25; or (ii) the
lesser of (A) the Average Deferral Percentage of Participants who are Nonhighly Compensated
Employees plus two percentage points or (B) the Average Deferral Percentage of Participants who are
Nonhighly Compensated Employees multiplied by 2.0.

          (b) Suspension of Deferral Contributions. If at any time during a Plan Year the Committee
determines, on the basis of estimates made from information then available, that the limitation
described in Section 11.4(a) will not be met for the Plan Year, the Committee in its discretion
may reduce or suspend the Deferral Contributions of one or more Participants who are Highly
Compensated Employees to the extent necessary (i) to enable the Plan to meet such limitation or
(ii) to reduce the amount of excess Deferral Contributions that would otherwise be distributed
pursuant to this Section 11.4.

          (c) Reduction of Excess Deferral Contributions. If the Average Deferral Percentage for
Participants who are Highly Compensated Employees exceeds the limitation described in Section
11.4(a), the excess contributions will be distributed to the Highly Compensated Employees on the
basis of the respective portions of the excess contributions attributable to each such Highly
Compensated Employee. For purposes of this subsection, excess contributions means, for a Plan
Year, the excess of (i) the aggregate amount of Deferral Contributions paid to the Trust on behalf
of Highly Compensated Employees for the Plan Year, over (ii) the maximum amount of Deferral
Contributions permitted for such Plan Year under Section 11.4(a) (determined by reducing Deferral
Contributions made on behalf of Highly

34

 

Compensated Employees in order of the Deferral Percentages beginning with the highest of such
percentages). Such excess contributions will be distributed on the basis of the dollar amount of
Deferral Contributions for each such Participant (as hereinafter provided) until the aggregate
amount of excess contributions has been distributed. The Deferral Contributions of the Highly
Compensated Employee with the highest dollar amount of Deferral Contributions will be reduced first
by the amount required to cause that Participant’s Deferral Contributions to equal the dollar
amount of the Deferral Contributions of the Highly Compensated Employee with the next highest
dollar amount, and this process will be repeated until the total amount of excess Deferral
Contributions has been distributed. Upon distribution of the total excess Deferral Contributions
in this manner, the Plan will be treated as satisfying the limitations of Section 11.4(a).

          All distributions will be increased by Trust Fund earnings and decreased by Trust Fund losses
for the Plan Year and for the period between the end of the Plan Year and the date of distribution
and will be made within two and one-half months following the close of the Plan Year, if
practicable, but in no event later than the last day of the immediately following Plan Year. The
amount of excess Deferral Contributions distributed pursuant to this Section with respect to a
Participant for the Plan Year will be reduced by any Deferral Contributions previously distributed
to the Participant for the same Plan Year pursuant to Section 3.3.

          (d) Determination of Earnings and Losses. The earnings and losses of the Trust Fund for the
Plan Year allocable to the portion of a Participant’s Deferral Contributions that are distributed
pursuant to Section 11.4(c) will be determined by multiplying the Trust Fund earnings or losses
for the Plan Year allocable to the Participant’s Deferral Contribution Account by a fraction, the
numerator of which is the amount of Deferral Contributions to be distributed to the Participant and
the denominator of which is the balance of the Participant’s Deferral Contribution Account on the
last day of the Plan Year, reduced by the earnings and increased by the losses allocable to such
Account for the Plan Year. The earnings and losses of the Trust Fund allocable to the
Participant’s Deferral Contributions that are distributed pursuant to Section 11.4(c) for the
period between the end of the Plan Year and the date of such distribution will be determined in
accordance with regulations prescribed by the Secretary of the Treasury interpreting Code section
401(k).

          (e) Testing Procedures. In applying the limitations set forth in this Section 11.4, the
Committee may, at its option, utilize such testing procedures as may be permitted under Code
sections 401(a)(4), 401(k), 401(m) or 410(b), including without limitation (i) aggregation of the
Plan with one or more other qualified plans maintained by a Controlled Group Member or
disaggregation of the Plan into component plans, (ii) inclusion of qualified matching
contributions, qualified nonelective contributions or elective deferrals made to plans of other
Controlled Group Members, (iii) exclusion of all Employees (other than Highly Compensated
Employees) who have not met the minimum age and service requirements of Code section 410(a)(1)(A),
or (iv) any permissible combination thereof.

35

 

ARTICLE 12

RESTRICTIONS ON DISTRIBUTIONS TO

PARTICIPANTS AND BENEFICIARIES

     12.1 Priority over Other Distribution Provisions. The provisions set forth in this Article
will supersede any conflicting provisions of Article 7 or Article 8.

     12.2 General Restrictions.

          (a) Distributions Prior to a Severance From Employment. Except for distributions permitted
under Article 6 with respect to Participants who attain age 591/2 or suffer a hardship, a
Participant’s interest in the Plan will not be distributed before the Participant’s severance from
employment with all Controlled Group Members, disability or death, unless the Plan is terminated
without the establishment or maintenance by the Participating Employers of another defined
contribution plan (except as permitted by Code section 401(k) and the Treasury Regulations
thereunder).

          (b) Lump Sum Distribution Required. An event described in Section 12.2(a) that would
otherwise permit distribution of a Participant’s interest in the Plan will not be treated as
described in Section 12.2(a) unless the Participant receives a lump sum distribution by reason of
the event. A lump sum distribution for this purpose will be a distribution described in Code
section 402(e)(4)(D) (without regard to clauses (I), (II), (III), and (IV) of clause (i) thereof).

     12.3 Restrictions on Commencement of Distributions. The provisions of this Section 12.3 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 be made 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.

     12.4 Restrictions on Delay of Distributions. The following provisions will apply to limit a
Participant’s ability to delay the distribution of benefits. Unless the Participant’s interest is
distributed in the form of a single sum on or before the required beginning date, distributions
will be made in accordance with this Section 12.4 as of the first distribution calendar year.

          (a) General Rule. Distribution of a Participant’s entire vested and nonforfeitable interest
will be made or commence not later than April 1 following the calendar year (i) in which he attains
age 701/2, 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)) with respect to the Plan Year in which he attains age 701/2 will be made
pursuant to clause (i).

36

 

          (b) Amount of Required Minimum Distributions. During the Participant’s lifetime, the minimum
amount that will be distributed for each distribution calendar year is the lesser of:

          (i) the quotient obtained by dividing the Participant’s Account balance by the
distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the
Treasury Regulations, using the Participant’s age as of the Participant’s birthday in the
distribution calendar year; or

          (ii) if the Participant’s sole designated beneficiary for the distribution calendar
year is the Participant’s spouse, the quotient obtained by dividing the Participant’s
Account balance by the number in the Joint and Last Survivor Table set forth in Section
1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s and spouse’s attained
ages as of the Participant’s and spouse’s birthdays in the distribution calendar year.

          (c) Timing of Distributions. Required minimum distributions will be determined under this
Section 12.4 beginning with the first distribution calendar year and up to and including the
distribution calendar year that includes the Participant’s date of death. The required minimum
distribution for the Participant’s first distribution calendar year will be made on or before the
Participant’s required beginning date. The required minimum distribution for other distribution
calendar years, including the required minimum distribution for the distribution calendar year in
which the Participant’s required beginning date occurs, will be made on or before December 31 of
that distribution calendar year.

     
     (d) Definitions. The following words and phrases,
when used in this Article 12, will have the meanings set forth below.

   
       (i) designated beneficiary means the individual who is designated as the Beneficiary
under Article 8 and is the designated beneficiary under Code section 401(a)(9) and Section
1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

          (ii) distribution calendar year means a calendar year for which a minimum distribution
is required. For distributions beginning before the Participant’s death, the first
distribution calendar year is the calendar year immediately preceding the calendar year
which contains the Participant’s required beginning date. For distributions beginning after
the Participant’s death, the first distribution calendar year is the calendar year in which
distributions are required to begin under Section 12.6.

          (iii) life expectancy means life expectancy as computed by use of the Single Life Table
in Section 1.401(a)(9)-9 of the Treasury Regulations.

          (iv) Participant’s Account balance means the Account balance as of the last valuation
date in the calendar year immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions made and allocated or
forfeitures allocated to the Account balance as of dates in the valuation calendar year
after the valuation date and decreased by distributions made in the valuation calendar year
after the valuation date. The Account balance for the

37

 

valuation calendar year includes any amounts rolled over or transferred to the Plan
either in the valuation calendar year or in the distribution calendar year if distributed or
transferred in the valuation calendar year.

          (v) required beginning date means the date specified in Section 12.4(a).

     12.5 Limitation to Assure Benefits Payable to Beneficiaries are Incidental. In the event that
any payments under the Plan are to be made to someone other than the Participant or jointly to the
Participant and his spouse or other payee, such payments must conform to the “incidental benefit”
rules of Code section 401(a)(9)(G) and the Treasury Regulations thereunder.

     12.6 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.

          (a) Death after Distributions Begin.

          (i) Participant Survived by Designated Beneficiary. If the Participant dies on or
after the date distributions begin and there is a designated beneficiary, the minimum amount
that will be distributed for each distribution calendar year after the year of the
Participant’s death is the quotient obtained by dividing the Participant’s Account balance
by the longer of the remaining life expectancy of the Participant or the remaining life
expectancy of the Participant’s designated beneficiary, determined as follows:

          (A) The Participant’s remaining life expectancy is calculated using the age of
the Participant in the year of death, reduced by one for each subsequent year.

          (B) If the Participant’s surviving spouse is the Participant’s sole designated
beneficiary, the remaining life expectancy of the surviving spouse is calculated for
each distribution calendar year after the year of the Participant’s death using the
surviving spouse’s age as of the spouse’s birthday in that year. For distribution
calendar years after the year of the surviving spouse’s death, the remaining life
expectancy of the surviving spouse is calculated using the age of the surviving
spouse as of the spouse’s birthday in the calendar year of the spouse’s death,
reduced by one for each subsequent calendar year.

          (C) If the Participant’s surviving spouse is not the Participant’s sole
designated beneficiary, the designated beneficiary’s remaining life expectancy is
calculated using the age of the beneficiary in the year following the year of the
Participant’s death, reduced by one for each subsequent year.

          (ii) No Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is no designated beneficiary as of September 30 of the year
after the year of the Participant’s death, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participant’s death is the quotient

38

 

obtained by dividing the Participant’s Account balance by the Participant’s remaining
life expectancy calculated using the age of the Participant in the year of death, reduced by
one for each subsequent year.

          (b) Death before Date Distributions Begin.

          (i) Commencement Date. If the Participant dies before distributions begin, the
Participant’s entire interest will be distributed, or begin to be distributed, no later than
as follows:

          (A) If the Participant’s surviving spouse is the Participant’s sole designated
beneficiary, then distributions to the surviving spouse will begin by December 31 of
the calendar year immediately following the calendar year in which the Participant
died, or by December 31 of the calendar year in which the Participant would have
attained age 701/2, if later.

          (B) If the Participant’s surviving spouse is not the Participant’s sole
designated beneficiary, then distributions to the designated beneficiary will begin
by December 31 of the calendar year immediately following the calendar year in which
the Participant died.

          (C) If there is no designated beneficiary as of September 30 of the year
following the year of the Participant’s death, the Participant’s entire interest
will be distributed by December 31 of the calendar year containing the fifth
anniversary of the Participant’s death.

          (D) If the Participant’s surviving spouse is the Participant’s sole designated
beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Section 12.6(b)(i) (other than
Section 12.6(b)(i)(A)), will apply as if the surviving spouse were the
Participant.

          (ii) Participant Survived by Designated Beneficiary. If the Participant dies before
the date distributions begin and there is a designated beneficiary, the minimum amount that
will be distributed for each distribution calendar year after the year of the Participant’s
death is the quotient obtained by dividing the Participant’s Account balance by the
remaining life expectancy of the Participant’s designated beneficiary, determined as
provided in Section 12.6(a)(i).

          (iii) No Designated Beneficiary. If the Participant dies before the date distributions
begin and there is no designated beneficiary as of September 30 of the year following the
year of the Participant’s death, distribution of the Participant’s entire interest will be
completed by December 31 of the calendar year containing the fifth anniversary of the
Participant’s death.

          (iv) Death of Surviving Spouse. If the Participant dies before the date distributions
begin, the Participant’s surviving spouse is the Participant’s sole designated beneficiary,
and the surviving spouse dies before distributions are required to begin to the

39

 

surviving spouse under Section 12.6(b)(i)(A), this Section 12.6(b) will apply as
if the surviving spouse were the Participant.

          (v) Elections. Participants or beneficiaries may elect on an individual basis whether
the five-year rule or the life expectancy rule described above applies to distributions
after the death of a Participant who has a designated beneficiary. The election must be
made no later than the earlier of September 30 of the calendar year in which distribution
would be required to begin under Section 12.6(b)(i), or by September 30 of the calendar
year which contains the fifth anniversary of the Participant’s (or, if applicable, surviving
spouse’s) death. If neither the Participant nor the beneficiary makes an election under
this Section 12.6(b)(v), distributions will be made in accordance with the foregoing
provisions of this Section 12.6(b).

     12.7 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).

     12.8 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).

40

 

ARTICLE 13

TOP-HEAVY PROVISIONS

     13.1 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.

     13.2 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 Plan means the Qualified Plan described in Section 11.2(b).

          (b) Defined Contribution Dollar Limitation means the limitation described in Section 11.2(e).

          (c) Defined Contribution Plan means the Qualified Plan described in Section 11.2(f).

          (d) 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.

          (e) Determination Period means the Plan Year containing the Determination Date and the four
preceding Plan Years.

          (f) Includable Compensation means the compensation described in Section 11.2(g).

          (g) Key Employee means any Employee or former Employee (and the Beneficiary of a deceased
Employee) who at any time during the Plan Year that includes the Determination Date was an officer
of a Controlled Group Member having Includable Compensation greater than $150,000 (as adjusted
under Code section 416(i)(1) for Plan Years beginning after December 31, 2007), a 5-percent owner
of a Controlled Group Member, or a 1-percent owner of a Controlled Group Member having 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). For purposes of this Section 13.2(g), Includable
Compensation will include the amount of any salary reduction contributions pursuant to a cash or
deferred arrangement meeting the requirements of Code section 401(k) or a cafeteria plan meeting
the requirements of Code section 125.

          (h) Minimum Allocation means the allocation described in the first sentence of Section
13.3(a).

41

 

          (i) 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).

          (j) Present Value means present value based only on the interest and mortality rates specified
in a Defined Benefit Plan.

          (k) 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.

          (l) 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%.

          (m) 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 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. For purposes of determining if the Plan is a
Top-Heavy Plan for any Plan Year beginning after December 31, 2001, “one-year period” will be
substituted for “five-year period” in the preceding sentence, except with respect to distributions
made for a reason other than separation from service, death or disability. The preceding provisions
will also apply to distributions under a terminated plan which, had it not been terminated, would
have been aggregated with the Plan under Code section 416(g)(2)(A)(i). 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

42

 

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 individual who has not performed services for a Controlled
Group Member during the one-year period ending on the Determination Date will not be taken into
account.

          (n) Top-Heavy Valuation Date means the last day of each Plan Year.

     13.3 Minimum Allocation.

          (a) Calculation of Minimum Allocation. For any Plan Year in which the Plan is a Top-Heavy
Plan, each Participant who is not a Key Employee will receive an allocation of Participating
Employer contributions and forfeitures of not less than the lesser of 3% of his Includable
Compensation for such Plan Year or the percentage of Includable Compensation that equals the
largest percentage of Participating Employer contributions (including Deferral Contributions) and
forfeitures allocated to a Key Employee. The Minimum Allocation is determined without regard to
any Social Security contribution. Deferral Contributions made on behalf of Participants who are
not Key Employees will not be treated as Participating Employer contributions for purposes of the
Minimum Allocation. Matching Contributions will be treated as Participant Employer contributions
for such Plan Year for purposes of the Minimum Allocation. The Minimum Allocation applies even
though under other Plan provisions the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the Plan Year because (i) the non-Key
Employee fails to make mandatory contributions to the Plan, (ii) the non-Key Employee’s Includable
Compensation is less than a stated amount, or (iii) the non-Key Employee fails to complete 1,000
Hours of Service in the Plan Year.

          (b) Limitation on Minimum Allocation. No Minimum Allocation will be provided pursuant to
Section 13.3(a) to a Participant who is not employed by a Controlled Group Member on the last day
of the Plan Year.

          (c) Minimum Allocation When Participant is Covered by Another Qualified Plan. If a Controlled
Group Member maintains one or more other Defined Contribution Plans covering Employees who are
Participants in this Plan, the Minimum Allocation will be provided under this Plan, unless such
other Defined Contribution Plans make explicit reference to this Plan and provide that the Minimum
Allocation will not be provided under this Plan, in which case the provisions of Section 13.3(a)
will not apply to any Participant covered under such other Defined Contribution Plans. If a
Controlled Group Member maintains one or more Defined Benefit Plans covering Employees who are
Participants in this Plan, and such Defined Benefit Plans provide that Employees who are
participants therein will accrue the minimum benefit applicable to top-heavy Defined Benefit Plans
notwithstanding their participation in this Plan, then the provisions of Section 13.3(a) will not
apply to any Participant

43

 

covered under such Defined Benefit Plans. If a Controlled Group Member maintains one or more
Defined Benefit Plans covering Employees who are Participants in this Plan, and the provisions of
the preceding sentence do not apply, then each Participant who is not a Key Employee and who is
covered by such Defined Benefit Plans will receive a Minimum Allocation determined by applying the
provisions of Section 13.3(a) with the substitution of “5%” in each place that “3%” occurs
therein.

          (d) Nonforfeitability. The Participant’s Minimum Allocation, to the extent required to be
nonforfeitable under Code section 416(b) and the special vesting schedule provided in this Article,
may not be forfeited under Code section 411(a)(3)(B) (relating to suspension of benefits on
reemployment) or 411(a)(3)(D) (relating to withdrawal of mandatory contributions).

     13.4 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 Section 13.4(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 6.
The minimum vesting schedule applies to all Account balances including amounts attributable to Plan
Years before the effective date of Code section 416 and amounts attributable to Plan Years before
the Plan became a Top-Heavy Plan. Further, no reduction in vested Account balances 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 Section 13.4(b) to the regular schedule
set forth in Article 6 will be treated as an amendment subject to Section 15.1(a)(iii). However,
this Section 13.4(a) does not apply to the Account balances 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 Account
balances will be determined without regard to this Section.

          (b) Minimum Vesting Schedule.

	 	 	 
	 	 	Percentage Vested
	Years of Service	 	and Nonforfeitable
	 
	Less than 2
	 	0
	2 or more
	 	100

44

 

ARTICLE 14

PARTICIPATION BY CONTROLLED GROUP MEMBERS

     14.1 Approval by the Company. Any Controlled Group Member whose participation in the Plan is
approved by the Company will become a Participating Employer. By participating in the Plan, the
Participating Employer will be subject to all of the provisions of the Plan, the Trust Agreement
and any related Plan documents.

     14.2 Effect of Participation by Controlled Group Member. A Controlled Group Member that
participates in the Plan pursuant will be deemed to be a Participating Employer for all purposes of
the Plan, unless otherwise specified by the Company. In addition, the Company may provide, in its
discretion, 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 and the vested and nonforfeitable interest of such Employees in their Account balances
provided that such credit will be applied in a uniform and nondiscriminatory manner with respect to
all such Employees.

45

 

ARTICLE 15

AMENDMENT OF THE PLAN

     15.1 Right to Amend the Plan.

          (a) In General. The Company reserves to the Compensation Committee of the Board of Directors
the right to amend the Plan at any time and from time to time to the extent it may deem advisable
or appropriate, provided 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 will have the
effect of reducing the percentage of the vested and nonforfeitable interest of any Participant in
his Account nor will the vesting provisions of the Plan be amended unless each Participant with at
least three Years of Service (including Years of Service disregarded pursuant to the reemployment
provisions (if any) of Article 6) 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; and (iv) no amendment will be effective to the extent that
it has the effect of decreasing a Participant’s Account balance or eliminating an optional form of
distribution as it applies to an existing Account balance.

          (b) Authority of the Board. The Company also reserves to the Board of Directors the right to
amend the Plan at any time and from time to time to the extent it may deem advisable or
appropriate, subject to the limitations on amendments set forth in Section 15.1(a).

     15.2 Amendment Procedure. Any amendment to the Plan will be made only pursuant to action of
the Board or of the Compensation Committee of the Board. A certified copy of the resolutions
adopting any amendment and a copy of the executed amendment will be delivered to the Trustee, the
Committee and the Company. Upon such action by the Board or the Compensation Committee of the
Board, the Plan will be deemed amended as of the date specified as the effective date by such
action or in the instrument of amendment. The effective date of any amendment may be before, on or
after the date of such action, except as otherwise set forth in Section 15.1.

     15.3 Effect on Participating Employers. Unless an amendment expressly provides otherwise, all
Participating Employers will be bound by any amendment to the Plan.

46

 

ARTICLE 16

TERMINATION, PARTIAL TERMINATION AND

COMPLETE DISCONTINUANCE OF CONTRIBUTIONS

     16.1 Continuance of Plan. The Participating Employers expect to continue the 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 or to
completely discontinue contributions thereto at any time. In addition, subject to remaining
provisions of this Article, any Participating Employer at any time may discontinue its
participation in the Plan with respect to its Employees.

     16.2 Complete Vesting. If the Plan is terminated, or if there is a complete discontinuance of
contributions to the Plan by the Participating Employers, the amounts allocated or to be allocated
to the Accounts of all affected Participants will become 100% vested and nonforfeitable without
regard to their Years of Service. For purposes of this Section 16.2, a Participant who has
terminated employment and is not again an Employee at the time the Plan is terminated or there is a
complete discontinuance of Participating Employer contributions will not be an affected Participant
entitled to full vesting if the Participant had no vested interest in his Account balance
attributable to Participating Employer contributions at his termination of employment. In the
event of a partial termination of the Plan, the amounts allocable to the Accounts 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 without regard to their Years of
Service.

     16.3 Disposition of the Trust Fund. If the Plan is terminated, or if there is a complete
discontinuance of contributions to the Plan, the Committee will instruct the Trustee either (i) to
continue to administer the Plan and pay benefits in accordance with the Plan until the Trust Fund
has been depleted, or (ii) to distribute the assets remaining in the Trust Fund, unless
distribution is prohibited by Section 12.2. If the Trust Fund is to be distributed, the Committee
will make, after deducting estimated expenses for termination of the Trust Fund and distribution of
its assets, the allocations required under the Plan as though the date of completion of the Trust
Fund termination were a Valuation Date. The Trustee will distribute to each Participant the amount
credited to his Account as of the date of completion of the Trust Fund termination.

     16.4 Withdrawal by a Participating Employer. A Participating Employer may withdraw from
participation in the Plan or completely discontinue contributions to the Plan only with the
approval of the Board. If any Participating Employer withdraws from the Plan or completely
discontinues contributions to the Plan, a copy of the 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.

47

 

ARTICLE 17

MISCELLANEOUS

     17.1 Reversion Prohibited.

          (a) General Rule. Except as otherwise provided in this Section 17.1, 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) Failure to Qualify. In the event the Commissioner of Internal Revenue determines that the
Plan is not initially qualified under the Code, contributions made by the Participating Employers
may be returned to the Participating Employers within one year after the date of such
determination, provided the Company has applied for a determination letter as to the qualified
status of the Plan by the time prescribed for filing the Company’s federal income tax return for
the Company’s taxable year in which the Plan is adopted or such later date as the Secretary of the
Treasury may prescribe.

          (c) 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 (excluding any Trust Fund earnings but 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.

          (d) 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
(excluding any Trust Fund earnings but 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.

     17.2 Bonding, Insurance and Indemnity.

          (a) Bonding. To the extent required under ERISA, the Participating Employers will obtain, pay
for and 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

48

 

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 Section 17.2(b), or if such insurance is
provided but any of the parties referred to in Section 17.2(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.

     17.3 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.

     17.4 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, 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 17.4 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).
Payment to an Alternate Payee will be made in an immediate lump sum payment, if the order so
provides.

     17.5 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.

     17.6 Electronic Media. Notwithstanding any provision of the Plan to the contrary, including
any provision which requires the use of a written instrument, to the extent permitted by applicable
law, the Committee may establish procedures for the use of electronic media in communications and
transactions between the Plan or the Committee and Participants and Beneficiaries. Electronic
media may include, but are not limited to, electronic mail, the Internet, intranet systems and
automated telephonic response systems.

     17.7 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

49

 

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.

     17.8 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, including without limitation, the Texas statute of
limitations, but without giving effect to the principles of conflicts of laws of such State.

     Executed
at Dallas, Texas, this 1 day of February, 2008.

	 	 	 	 	 
	 	A. H. BELO CORPORATION
	 	 	 
	 	By	/s/
Alison K. Engel
	 	 	Name: Alison K. Engel	 
	 	 	Title: Senior Vice President/Chief
Financial Officer	 	 

50

 

	 	 	 	 	 

APPENDIX A

PARTICIPATING EMPLOYERS

AS OF FEBRUARY 5, 2008

A. H. Belo Corporation

Al Dia, Inc.

Belo Interactive, Inc.

The Dallas Morning News, Inc.

Denton Publishing Company

DFW Printing Company, Inc.

Press-Enterprise Company

The Providence Journal Company

Rhode Island Monthly Communications, Inc.

TDMN New Products, Inc.

51exv10w2x2y

Exhibit
10.2(2)

A. H. BELO

2008 INCENTIVE COMPENSATION PLAN

 

 

A. H. BELO

2008 INCENTIVE COMPENSATION PLAN

	 	 	 	 	 	 	 
	SECTION	 	PAGE
	 
	 	 	 	 	 	 
	1.

	 	Purpose
	 	 	1	 
	2.

	 	Term
	 	 	1	 
	3.

	 	Definitions
	 	 	1	 
	4.

	 	Shares Available Under Plan
	 	 	6	 
	5.

	 	Limitations on Awards
	 	 	6	 
	6.

	 	Stock Options
	 	 	7	 
	7.

	 	Appreciation Rights
	 	 	8	 
	8.

	 	Restricted Shares
	 	 	10	 
	9.

	 	Restricted Stock Units
	 	 	11	 
	10.

	 	Performance Shares and Performance Units
	 	 	11	 
	11.

	 	Incentive Compensation Plan Bonuses
	 	 	12	 
	12.

	 	Awards for Directors
	 	 	13	 
	13.

	 	Transferability
	 	 	15	 
	14.

	 	Adjustments
	 	 	15	 
	15.

	 	Fractional Shares
	 	 	15	 
	16.

	 	Withholding Taxes
	 	 	15	 
	17.

	 	Administration of the Plan
	 	 	15	 
	18.

	 	Amendments and Other Matters
	 	 	16	 
	19.

	 	Governing Law
	 	 	17	 

 

 

A. H. BELO

2008 INCENTIVE COMPENSATION PLAN

     A. H. Belo Corporation, a Delaware corporation (“A. H. Belo”), establishes the A. H. Belo 2008
Incentive Compensation Plan (the “Plan”), effective as of the date on which Belo Corp. distributes
to its shareholders all of the common stock of A. H. Belo (the “Distribution Date”).

     1. Purpose. The purpose of the Plan is to attract and retain the best available talent and
encourage the highest level of performance by directors, executive officers and selected employees,
and to provide them incentives to put forth maximum efforts for the success of A. H. Belo’s
business, in order to serve the best interests of A. H. Belo and its shareholders.

     2. Term. The Plan will expire on the tenth anniversary of the Distribution Date.

     3. Definitions. The following terms, when used in the Plan with initial capital letters, will
have the following meanings:

     (a) Appreciation Right means a right granted pursuant to Section 7.

     (b) Award means the award of an Incentive Compensation Plan Bonus; the grant of
Appreciation Rights, Stock Options, Performance Shares or Performance Units; or the grant or
sale of Restricted Shares or Restricted Stock Units.

     (c) Board means the Board of Directors of A. H. Belo.

     (d) Change in Control means the occurrence of any of the following:

     (i) individuals who, as of the effective date of the Plan, were members of the
Board (the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director
after the effective date of the Plan whose election, or nomination for election, by
A. H. Belo’s shareholders was approved by a vote of at least a majority of the
Incumbent Directors will be considered as though such individual were an Incumbent
Director, other than any such individual whose assumption of office after the
effective date of the Plan occurs as a result of an actual or threatened proxy
contest with respect to election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a “person” (as
such term is used in Section 13(d) of the Exchange Act) (each, a “Person”), other
than the Board;

     (ii) the consummation of (A) a merger, consolidation or similar form of
corporate transaction involving A. H. Belo (each of the events referred to in this
clause (A) being hereinafter referred to as a “Reorganization”) or (B) a sale or
other disposition of all or substantially all the assets of A. H. Belo (a “Sale”),
unless, immediately following such Reorganization or Sale, (1) all or substantially
all the individuals and entities who were the “beneficial owners” (as such term is

 

 

defined in Rule 13d-3 under the Exchange Act (or a successor rule thereto)) of
shares of A. H. Belo’s common stock or other securities eligible to vote for the
election of the Board outstanding immediately prior to the consummation of such
Reorganization or Sale (such securities, the “Company Voting Securities”)
beneficially own, directly or indirectly, more than 60% of the combined voting power
of the then outstanding voting securities of the corporation or other entity
resulting from such Reorganization or Sale (including a corporation or other entity
that, as a result of such transaction, owns A. H. Belo or all or substantially all
of A. H. Belo’s assets either directly or through one or more subsidiaries) (the
“Continuing Entity”) in substantially the same proportions as their ownership,
immediately prior to the consummation of such Reorganization or Sale, of the
outstanding Company Voting Securities (excluding any outstanding voting securities
of the Continuing Entity that such beneficial owners hold immediately following the
consummation of the Reorganization or Sale as a result of their ownership prior to
such consummation of voting securities of any corporation or other entity involved
in or forming part of such Reorganization or Sale other than A. H. Belo or a
Subsidiary), (2) no Person (excluding any employee benefit plan (or related trust)
sponsored or maintained by the Continuing Entity or any corporation or other entity
controlled by the Continuing Entity) beneficially owns, directly or indirectly, 30%
or more of the combined voting power of the then outstanding voting securities of
the Continuing Entity and (3) at least a majority of the members of the board of
directors or other governing body of the Continuing Entity were Incumbent Directors
at the time of the execution of the definitive agreement providing for such
Reorganization or Sale or, in the absence of such an agreement, at the time at which
approval of the Board was obtained for such Reorganization or Sale;

     (iii) the shareholders of A. H. Belo approve a plan of complete liquidation or
dissolution of A. H. Belo; or

     (iv) any Person, corporation or other entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) becomes the beneficial owner,
directly or indirectly, of securities of A. H. Belo representing 30% or more of the
combined voting power of the Company Voting Securities; provided, however, that for
purposes of this subparagraph (iv), the following acquisitions will not constitute a
Change in Control: (A) any acquisition directly from A. H. Belo, (B) any
acquisition by A. H. Belo or any Subsidiary, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by A. H. Belo or any
Subsidiary, (D) any acquisition by an underwriter temporarily holding such Company
Voting Securities pursuant to an offering of such securities or (E) any acquisition
pursuant to a Reorganization or Sale that does not constitute a Change in Control
for purposes of Section 3(d)(ii).

     For purposes of applying the provisions of Section 3(d)(ii)(B)(2) and Section
3(d)(iv) at any time on or after the Effective Date, neither Robert W. Decherd nor any
Person holding voting securities of the Continuing Entity or Company Voting Securities, as
applicable, over which Robert W. Decherd has sole or shared voting power

2

 

will be considered to be the beneficial owner of 30% or more of such voting securities or
Company Voting Securities.

     (e) Code means the Internal Revenue Code of 1986, as in effect from time to time.

     (f) Committee means the Compensation Committee of the Board and, to the extent the
administration of the Plan has been assumed by the Board pursuant to Section 17, the Board.

     (g) Common Stock means the Series A Common Stock, par value $.01 per share, and the
Series B Common Stock, par value $.01 per share, of A. H. Belo or any security into which
such Common Stock may be changed by reason of any transaction or event of the type described
in Section 14. Shares of Common Stock issued or transferred pursuant to the Plan will be
shares of Series A Common Stock or Series B Common Stock, as determined by the Committee in
its discretion. Notwithstanding the foregoing, the Committee will not authorize the
issuance or transfer of Series B Common Stock if the Committee determines that such issuance
or transfer would cause the Series A Common Stock to be excluded from trading in the
principal market in which the Common Stock is then traded.

     (h) Date of Grant means (i) with respect to Participants, the date specified by the
Committee on which an Award will become effective and (ii) with respect to Directors, the
date specified in Section 12.

     (i) Director means a member of the Board who is not a regular full-time employee of A.
H. Belo or any Subsidiary.

     (j) Evidence of Award means an agreement, certificate, resolution or other type or form
of writing or other evidence approved by the Committee which sets forth the terms and
conditions of an Award. An Evidence of Award may be in any electronic medium, may be
limited to a notation on the books and records of A. H. Belo and need not be signed by a
representative of A. H. Belo or a Participant or a Director.

     (k) Exchange Act means the Securities Exchange Act of 1934, as amended.

     (l) Grant Price means the price per share of Common Stock at which an Appreciation
Right not granted in tandem with a Stock Option is granted.

     (m) Incentive Compensation Plan Bonus means an award of annual incentive compensation
made pursuant to and subject to the conditions set forth in Section 11.

     (n) Management Objectives means the measurable performance objectives, if any,
established by the Committee for a Performance Period that are to be achieved with respect
to an Award. Management Objectives may be described in terms of company-wide objectives
(i.e., the performance of A. H. Belo and all of its Subsidiaries) or in terms of objectives
that are related to the performance of the individual Participant

3

 

or of the division, Subsidiary, department, region or function within A. H. Belo or a
Subsidiary in which the Participant receiving the Award is employed or on which the
Participant’s efforts have the most influence. The achievement of the Management Objectives
established by the Committee for any Performance Period will be determined without regard to
the effect on such Management Objectives of any acquisition or disposition by A. H. Belo of
a trade or business, or of substantially all of the assets of a trade or business, during
the Performance Period and without regard to any change in accounting standards by the
Financial Accounting Standards Board or any successor entity and without regard to changes
in applicable tax laws.

     The Management Objectives applicable to any Award to a Participant who is, or is
determined by the Committee to be likely to become, a “covered employee” within the meaning
of Section 162(m) of the Code (or any successor provision) will be limited to specified
levels of, growth in, or performance relative to performance standards set by the
Compensation Committee relating to or peer company performance in, one or more of the
following performance measures (excluding the effect of extraordinary or nonrecurring
items):

	 	(i)	 	earnings per share;
	 
	 	(ii)	 	earnings before interest, taxes, depreciation
and amortization (EBITDA);
	 
	 	(iii)	 	net income;
	 
	 	(iv)	 	net operating profit;
	 
	 	(v)	 	revenue;
	 
	 	(vi)	 	operating margins;
	 
	 	(vii)	 	share price;
	 
	 	(viii)	 	total shareholder return (measured as the total of the appreciation
of and dividends declared on the Common Stock);
	 
	 	(ix)	 	return on invested capital;
	 
	 	(x)	 	return on shareholder equity;
	 
	 	(xi)	 	return on assets;
	 
	 	(xii)	 	working capital targets;
	 
	 	(xiii)	 	cost reduction;
	 
	 	(xiv)	 	debt reduction; and
	 
	 	(xv)	 	industry specific measures of audience or revenue share.

4

 

     If the Committee determines that, as a result of a change in the business, operations,
corporate structure or capital structure of A. H. Belo (other than an acquisition or
disposition described in the first paragraph of this Section 3(n) or the manner in which
A. H. Belo conducts its business, or any other events or circumstances, the Management
Objectives are no longer suitable, the Committee may in its discretion modify such
Management Objectives or the related minimum acceptable level of achievement, in whole or in
part, with respect to a Performance Period as the Committee deems appropriate and equitable,
except where such action would result in the loss of the otherwise available exemption of
the Award under Section 162(m) of the Code. In such case, the Committee will not make any
modification of the Management Objectives or minimum acceptable level of achievement.

     (o) Market Value per Share means, at any date, the closing sale price of the Common
Stock on that date (or, if there are no sales on that date, the last preceding date on which
there was a sale) in the principal market in which the Common Stock is traded.

     (p) Option Price means the purchase price per share payable on exercise of a Stock
Option.

     (q) Participant means a person who is selected by the Committee to receive benefits
under the Plan and who is at that time (i) an executive officer or other key employee of A.
H. Belo or any Subsidiary or (ii) the holder of a stock option or restricted stock units
issued by Belo Corp. to whom A. H. Belo is obligated to issue a Stock Option and/or
Restricted Stock Units pursuant to the terms of that certain Employee Matters Agreement
dated as of the Distribution Date by and between Belo Corp. and A. H. Belo.

     (r) Performance Share means a bookkeeping entry that records the equivalent of one
share of Common Stock awarded pursuant to Section 10.

     (s) Performance Period means, with respect to an Award, a period of time within which
the Management Objectives relating to such Award are to be measured. The Performance Period
for an Incentive Compensation Plan Bonus will be a period of 12 months, and, unless
otherwise expressly provided in the Plan, the Performance Period for all other Awards will
be established by the Committee at the time of the Award.

     (t) Performance Unit means a unit equivalent to $100 (or such other value as the
Committee determines) granted pursuant to Section 10.

     (u) Restricted Shares means shares of Common Stock granted or sold pursuant to Section
8 as to which neither the ownership restrictions nor the restrictions on transfer have
expired.

     (v) Restricted Stock Units means an award pursuant to Section 9 of the right to
receive shares of Common Stock at the end of a specified deferral period, subject to the
satisfaction of certain conditions.

     (w) Rule 16b-3 means Rule 16b-3 under Section 16 of the Exchange Act (or any successor
rule to the same effect), as in effect from time to time.

5

 

     (x) Spread means the excess of the Market Value per Share on the date an Appreciation
Right is exercised over (i) the Option Price provided for in the Stock Option granted in
tandem with the Appreciation Right or (ii) if there is no tandem Stock Option, the Grant
Price provided for in the Appreciation Right, in either case multiplied by the number of
shares of Common Stock in respect of which the Appreciation Right is exercised.

     (y) Stock Option means the right to purchase shares of Common Stock upon exercise of an
option granted pursuant to Section 6.

     (z) Subsidiary means (i) 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 A. H.
Belo, (ii) any partnership of which at least 50% of the profits interest or capital interest
is owned directly or indirectly by A. H. Belo and (iii) any other entity of which at least
50% of the total equity interest is owned directly or indirectly by A. H. Belo.

     4. Shares Available Under Plan. The number of shares of Common Stock that may be issued or
transferred (i) upon the exercise of Appreciation Rights or Stock Options, (ii) as Restricted
Shares and released from all restrictions, (iii) as Restricted Stock Units, (iv) in payment of
Performance Shares, Performance Units or Incentive Compensation Plan Bonuses will not exceed in the
aggregate 8 million shares. Such shares may be shares of original issuance or treasury shares or a
combination of the foregoing. The number of shares of Common Stock available under this Section 4
will be subject to adjustment as provided in Section 14 and will be further adjusted to include
shares that (i) relate to Awards that expire or are forfeited or (ii) are transferred, surrendered
or relinquished to or withheld by A. H. Belo in satisfaction of any Option Price or in satisfaction
of any tax withholding amount. Upon payment in cash of the benefit provided by any Award, any
shares that were covered by that Award will again be available for issue or transfer under the
Plan.

     5. Limitations on Awards. Awards under the Plan will be subject to the following limitations:

     (a) No more than an aggregate of 4 million shares of Common Stock, subject to
adjustment as provided in Section 4, will be issued or transferred as Restricted Shares and
Restricted Stock Units (excluding the award of any Restricted Shares or Restricted Stock
Units to Directors pursuant to Section 12).

     (b) No more than 8 million shares of Common Stock, subject to adjustment only as
provided in Section 14, will be issued pursuant to Stock Options that are intended to
qualify as incentive stock options under Section 422 of the Code.

     (c) The maximum aggregate number of shares of Common Stock that may be subject to Stock
Options, Appreciation Rights, Restricted Stock Units, Performance Shares or Restricted
Shares granted or sold to a Participant during any calendar year will not exceed 800,000
shares, subject to adjustment only as provided in Section 14. The foregoing limitation
will apply without regard to whether the applicable Award is settled in cash or in shares of
Common Stock.

6

 

     (d) The maximum aggregate cash value of payments to any Participant for any Performance
Period pursuant to an award of Performance Units will not exceed $5 million.

     (e) The payment of an Incentive Compensation Plan Bonus to any Participant will not
exceed $5 million.

     6. Stock Options. The Committee may from time to time authorize grants to any Participant
and, subject to Section 12, to any Director of options to purchase shares of Common Stock upon
such terms and conditions as it may determine in accordance with this Section 6. Each grant of
Stock Options may utilize any or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:

     (a) Each grant will specify the number of shares of Common Stock to which it relates.

     (b) Each grant will specify the Option Price, which will not be less than 100% of the
Market Value per Share on the Date of Grant.

     (c) Each grant will specify whether the Option Price will be payable (i) in cash or by
check acceptable to A. H. Belo, (ii) by the actual or constructive transfer to A. H. Belo of
shares of Common Stock owned by the Participant or Director for at least six months (or,
with the consent of the Committee, for less than six months) having an aggregate Market
Value per Share at the date of exercise equal to the aggregate Option Price, (iii) with the
consent of the Committee, by authorizing A. H. Belo to withhold a number of shares of Common
Stock otherwise issuable to the Participant or Director having an aggregate Market Value per
Share on the date of exercise equal to the aggregate Option Price or (iv) by a combination
of such methods of payment; provided, however, that the payment methods described in clauses
(ii) and (iii) will not be available at any time that A. H. Belo is prohibited from
purchasing or acquiring such shares of Common Stock.

     (d) To the extent permitted by law, any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a bank or broker of some or all of the shares
to which such exercise relates.

     (e) Successive grants may be made to the same Participant or Director whether or not
any Stock Options or other Awards previously granted to such Participant or Director remain
unexercised or outstanding.

     (f) Each grant will specify the required period or periods of continuous service by the
Participant or Director with A. H. Belo or any Subsidiary that are necessary before the
Stock Options or installments thereof will become exercisable.

     (g) Any grant may specify the Management Objectives that must be achieved as a
condition to the exercise of the Stock Options.

7

 

     (h) Any grant may provide for the earlier exercise of the Stock Options in the event of
a Change in Control or other similar transaction or event.

     (i) Stock Options may be (i) options which are intended to qualify under particular
provisions of the Code, (ii) options which are not intended to so qualify or (iii)
combinations of the foregoing.

     (j) On or after the Date of Grant, the Committee may provide for the payment to the
Participant or Director of dividend equivalents thereon in cash or Common Stock on a
current, deferred or contingent basis.

     (k) No Stock Option will be exercisable more than ten years from the Date of Grant.

     (l) The Committee will have the right to substitute Appreciation Rights for outstanding
Options granted to one or more Participants or Directors, provided the terms and the
economic benefit of the substituted Appreciation Rights are at least equivalent to the terms
and economic benefit of such Options, as determined by the Committee in its discretion.

     (m) Any grant may provide for the effect on the Stock Options or any shares of Common
Stock issued, or other payment made, with respect to the Stock Options of any conduct of the
Participant determined by the Committee to be injurious, detrimental or prejudicial to any
significant interest of A. H. Belo or any Subsidiary.

     (n) Each grant will be evidenced by an Evidence of Award, which may contain such terms
and provisions, consistent with the Plan, as the Committee may approve, including without
limitation provisions relating to the Participant’s termination of employment or Director’s
termination of service by reason of retirement, death, disability or otherwise.

     7. Appreciation Rights. The Committee may also from time to time authorize grants to any
Participant and, subject to Section 12, to any Director of Appreciation Rights upon such terms and
conditions as it may determine in accordance with this Section 7. Appreciation Rights may be
granted in tandem with Stock Options or separate and apart from a grant of Stock Options. An
Appreciation Right will be a right of the Participant or Director to receive from A. H. Belo upon
exercise an amount which will be determined by the Committee at the Date of Grant and will be
expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise. An
Appreciation Right granted in tandem with a Stock Option may be exercised only by surrender of the
related Stock Option. Each grant of an Appreciation Right may utilize any or all of the
authorizations, and will be subject to all of the requirements, contained in the following
provisions:

     (a) Each grant will state whether it is made in tandem with Stock Options and, if not
made in tandem with any Stock Options, will specify the number of shares of Common Stock in
respect of which it is made.

8

 

     (b) Each grant made in tandem with Stock Options will specify the Option Price and each
grant not made in tandem with Stock Options will specify the Grant Price, which in either
case will not be less than 100% of the Market Value per Share on the Date of Grant.

     (c) Any grant may provide that the amount payable on exercise of an Appreciation Right
may be paid (i) in cash, (ii) in shares of Common Stock having an aggregate Market Value per
Share equal to the Spread or (iii) in a combination thereof, as determined by the Committee
in its discretion.

     (d) Any grant may specify that the amount payable to the Participant or Director on
exercise of an Appreciation Right may not exceed a maximum amount specified by the Committee
at the Date of Grant (valuing shares of Common Stock for this purpose at their Market Value
per Share at the date of exercise).

     (e) Successive grants may be made to the same Participant or Director whether or not
any Appreciation Rights or other Awards previously granted to such Participant or Director
remain unexercised or outstanding.

     (f) Each grant will specify the required period or periods of continuous service by the
Participant or Director with A. H. Belo or any Subsidiary that are necessary before the
Appreciation Rights or installments thereof will become exercisable, and will provide that
no Appreciation Rights may be exercised except at a time when the Spread is positive and,
with respect to any grant made in tandem with Stock Options, when the related Stock Options
are also exercisable.

     (g) Any grant may specify the Management Objectives that must be achieved as a
condition to the exercise of the Appreciation Rights.

     (h) Any grant may provide for the earlier exercise of the Appreciation Rights in the
event of a Change in Control or other similar transaction or event.

     (i) On or after the Date of Grant, the Committee may provide for the payment to the
Participant or Director of dividend equivalents thereon in cash or Common Stock on a
current, deferred or contingent basis.

     (j) No Appreciation Right will be exercisable more than ten years from the Date of
Grant.

     (k) Any grant may provide for the effect on the Appreciation Rights or any shares of
Common Stock issued, or other payment made, with respect to the Appreciation Rights of any
conduct of the Participant determined by the Committee to be injurious, detrimental or
prejudicial to any significant interest of A. H. Belo or any Subsidiary.

     (l) Each grant will be evidenced by an Evidence of Award, which may contain such terms
and provisions, consistent with the Plan, as the Committee may approve, including without
limitation provisions relating to the Participant’s termination

9

 

of employment or Director’s termination of service by reason of retirement, death,
disability or otherwise.

     8. Restricted Shares. The Committee may also from time to time authorize grants or sales to
any Participant and, subject to Section 12, to any Director of Restricted Shares upon such terms
and conditions as it may determine in accordance with this Section 8. Each grant or sale will
constitute an immediate transfer of the ownership of shares of Common Stock to the Participant or
Director in consideration of the performance of services, entitling such Participant or Director to
voting and other ownership rights, but subject to the restrictions set forth in this Section 8.
Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of
the requirements, contained in the following provisions:

     (a) Each grant or sale may be made without additional consideration or in consideration
of a payment by the Participant or Director that is less than the Market Value per Share at
the Date of Grant, except as may otherwise be required by the Delaware General Corporation
Law.

     (b) Each grant or sale may limit the Participant’s or Director’s dividend rights during
the period in which the shares of Restricted Shares are subject to any such restrictions.

     (c) Each grant or sale will provide that the Restricted Shares will be subject, for a
period to be determined by the Committee at the Date of Grant, to one or more restrictions,
including without limitation a restriction that constitutes a “substantial risk of
forfeiture” within the meaning of Section 83 of the Code and the regulations of the Internal
Revenue Service under such section.

     (d) Any grant or sale may specify the Management Objectives that, if achieved, will
result in the termination or early termination of the restrictions applicable to the shares.

     (e) Any grant or sale may provide for the early termination of any such restrictions in
the event of a Change in Control or other similar transaction or event.

     (f) Each grant or sale will provide that during the period for which such restriction
or restrictions are to continue, the transferability of the Restricted Shares will be
prohibited or restricted in a manner and to the extent prescribed by the Committee at the
Date of Grant (which restrictions may include without limitation rights of repurchase or
first refusal in favor of A. H. Belo or provisions subjecting the Restricted Shares to
continuing restrictions in the hands of any transferee).

     (g) Any grant or sale may provide for the effect on the Restricted Shares or any shares
of Common Stock issued free of restrictions, or other payment made, with respect to the
Restricted Shares of any conduct of the Participant determined by the Committee to be
injurious, detrimental or prejudicial to any significant interest of A. H. Belo or any
Subsidiary.

10

 

     (h) Each grant or sale will be evidenced by an Evidence of Award, which may contain
such terms and provisions, consistent with the Plan, as the Committee may approve, including
without limitation provisions relating to the Participant’s termination of employment or
Director’s termination of service by reason of retirement, death, disability or otherwise.

     9. Restricted Stock Units. The Committee may also from time to time authorize grants or sales
to any Participant and, subject to Section 12, to any Director of Restricted Stock Units upon such
terms and conditions as it may determine in accordance with this Section 9. Each grant or sale
will constitute the agreement by A. H. Belo to issue or transfer shares of Common Stock to the
Participant or Director in the future in consideration of the performance of services, subject to
the fulfillment of such conditions as the Committee may specify. Each such grant or sale may
utilize any or all of the authorizations, and will be subject to all of the requirements, contained
in the following provisions:

     (a) Each grant or sale may be made without additional consideration from the
Participant or Director or in consideration of a payment by the Participant or Director that
is less than the Market Value per Share on the Date of Grant, except as may otherwise be
required by the Delaware General Corporation Law.

     (b) Each grant or sale will provide that the Restricted Stock Units will be subject to
a deferral period, which will be fixed by the Committee on the Date of Grant, and any grant
or sale may provide for the earlier termination of such period in the event of a Change in
Control or other similar transaction or event.

     (c) During the deferral period, the Participant or Director will not have any right to
transfer any rights under the Restricted Stock Units, will not have any rights of ownership
in the Restricted Stock Units and will not have any right to vote the Restricted Stock
Units, but the Committee may on or after the Date of Grant authorize the payment of dividend
equivalents on such shares in cash or Common Stock on a current, deferred or contingent
basis.

     (d) Any grant or sale may provide for the effect on the Restricted Stock Units or any
shares of Common Stock issued free of restrictions, or other payment made, with respect to
the Restricted Stock Units of any conduct of the Participant determined by the Committee to
be injurious, detrimental or prejudicial to any significant interest of A. H. Belo or any
Subsidiary.

     (e) Each grant or sale will be evidenced by an Evidence of Award, which will contain
such terms and provisions as the Committee may determine consistent with the Plan, including
without limitation provisions relating to the Participant’s termination of employment or
Director’s termination of service by reason of retirement, death, disability or otherwise.

     10. Performance Shares and Performance Units. The Committee may also from time to time
authorize grants to any Participant and, subject to Section 12, to any Director of Performance
Shares and Performance Units, which will become payable upon achievement of

11

 

specified Management Objectives, upon such terms and conditions as it may determine in
accordance with this Section 10. Each such grant may utilize any or all of the authorizations,
and will be subject to all of the requirements, contained in the following provisions:

     (a) Each grant will specify the number of Performance Shares or Performance Units to
which it relates.

     (b) The Performance Period with respect to each Performance Share and Performance Unit
will be determined by the Committee at the time of grant.

     (c) Each grant will specify the Management Objectives that, if achieved, will result in
the payment of the Performance Shares or Performance Units.

     (d) Each grant will specify the time and manner of payment of Performance Shares or
Performance Units which have become payable, which payment may be made in (i) cash, (ii)
shares of Common Stock having an aggregate Market Value per Share equal to the aggregate
value of the Performance Shares or Performance Units which have become payable or (iii) any
combination thereof, as determined by the Committee in its discretion at the time of
payment.

     (e) Any grant of Performance Shares may specify that the amount payable with respect
thereto may not exceed a maximum specified by the Committee on the Date of Grant. Any grant
of Performance Units may specify that the amount payable, or the number of shares of Common
Stock issued, with respect to the Performance Units may not exceed maximums specified by the
Committee on the Date of Grant.

     (f) On or after the Date of Grant, the Committee may provide for the payment to the
Participant or Director of dividend equivalents on Performance Shares in cash or Common
Stock on a current, deferred or contingent basis.

     (g) Any grant may provide for the effect on the Performance Shares or Performance Units
or any shares of Common Stock issued, or other payment made, with respect to the Performance
Shares or Performance Units of any conduct of the Participant determined by the Committee to
be injurious, detrimental or prejudicial to any significant interest of A. H. Belo or any
Subsidiary.

     (h) Each grant will be evidenced by an Evidence of Award, which will contain such terms
and provisions as the Committee may determine consistent with the Plan, including without
limitation provisions relating to the payment of the Performance Shares or Performance Units
in the event of a Change in Control or other similar transaction or event and provisions
relating to the Participant’s termination of employment or Director’s termination of service
by reason of retirement, death, disability or otherwise.

     11. Incentive Compensation Plan Bonuses. The Committee may from time to time authorize
payment of annual incentive compensation in the form of an Incentive Compensation Plan Bonus to a
Participant, which will become payable upon achievement of specified

12

 

Management Objectives. Incentive Compensation Plan Bonuses will be payable upon such terms
and conditions as the Committee may determine, subject to the following provisions:

     (a) The Committee will specify the Management Objectives that, if achieved, will result
in the payment of the Incentive Compensation Plan Bonus.

     (b) The amount of the Incentive Compensation Plan Bonus will be determined by the
Committee based on the level of achievement of the specified Management Objectives. The
Incentive Compensation Plan Bonus will be paid to the Participant following the close of the
calendar year in which the Performance Period relating to the Incentive Compensation Plan
Bonus ends, but not later than the 15th day of the third month following the end
of such calendar year, provided the Participant continues to be employed by A. H. Belo or a
Subsidiary on the Incentive Compensation Plan Bonus payment date (unless such employment
condition is waived by A. H. Belo).

     (c) Payment of the Incentive Compensation Plan Bonus may be made in (i) cash, (ii)
shares of Common Stock having an aggregate Market Value per Share equal to the aggregate
value of the Incentive Compensation Plan Bonus which has become payable or (iii) any
combination thereof, as determined by the Committee in its discretion at the time of
payment.

     (d) If a Change in Control occurs during a Performance Period, the Incentive
Compensation Plan Bonus payable to each Participant for the Performance Period will be
determined at the target level of achievement of the Management Objectives, without regard
to actual performance, or, if greater, at the actual level of achievement at the time of the
closing of the Change in Control, in both instances without proration for less than a full
Performance Period. The Incentive Compensation Bonus will be paid not later than 60 days
after the closing of the Change in Control.

     (e) Each grant may be evidenced by an Evidence of Award, which will contain such terms
and provisions as the Committee may determine consistent with the Plan, including without
limitation provisions relating to the Participant’s termination of employment by reason of
retirement, death, disability or otherwise.

     12. Awards for Directors.

     (a) On the date of (i) the 2008 annual meeting of Belo Corp. shareholders and (ii) each
annual meeting of A. H. Belo shareholders occurring after 2008, or such other time as the
Compensation Committee determines and approves, each Director will be granted (i) an Award
that has a fair market value (as hereinafter determined) on the Date of Grant equal to 50%
of the Director’s annual compensation from A. H. Belo and (ii) if the Director so elects, an
Award that has a fair market value on the Date of Grant equal to all or any portion of the
Director’s remaining annual compensation from A. H. Belo. Any such election will be
irrevocable when made and, to the extent the Director’s election will result in a deferral
of compensation subject to Section 409A of the Code, must be made by the Director in writing
no later than the last day of the calendar year immediately preceding the calendar year in
which the date of the annual shareholders

13

 

meeting occurs. The form of the Award will be determined by the Committee in its
discretion; provided, however, that unless the Committee determines and approves otherwise,
Awards made to Directors will be in the form of Stock Options. For purposes of this Section
12, the date of an annual meeting of shareholders of A. H. Belo is the date on which the
meeting is convened.

     (b) An Award granted to a Director pursuant to this Section 12 will constitute payment
of all or a portion of the Director’s annual compensation for services to be performed by
the Director for the 12-month period beginning on the date of the annual meeting of
shareholders on which the Award is granted. If, however, a Director is elected to the Board
as of a date other than the date of an annual meeting of A. H. Belo shareholders, (i) the
Director’s annual compensation will be prorated based on the number of days remaining in the
year in which the Director is elected to the Board (for this purpose the year will begin on
the date of the annual meeting of shareholders immediately preceding the date of the
Director’s election to the Board) and (ii) 50% of the Director’s prorated annual
compensation will be paid in the form of an Award valued on the date of the Director’s
election to the Board, subject to the Director’s election to receive up to 100% of his or
her prorated annual compensation in the form of an Award valued on such date. Any such
election will be irrevocable when made; and to the extent the Director’s election will
result in a deferral of compensation subject to Section 409A of the Code, must be made no
later than 30 days after the date of the Director’s election to the Board and will apply
only to compensation paid for services to be performed by the Director after the date of his
written election. Any portion of a Director’s compensation from A. H. Belo that is not paid
to the Director in the form of an Award will be paid in cash on the date of the annual
meeting of shareholders or the date of the Director’s election to the Board, as applicable.

     (c) For purposes of this Section 12:

     (i) the fair market value of a Stock Option or an Appreciation Right awarded to
a Director will be determined by the Committee using the Black-Scholes Option
Pricing Model; a generally accepted binomial pricing model that takes into account
as of the Date of Grant (A) the Option Price or Grant Price, as applicable, (B) the
expected term of the Stock Option or Appreciation Right, (C) the Market Value per
Share of the Common Stock on the Date of Grant, (D) the volatility of the Common
Stock, (E) the expected dividends on the Common Stock and (F) the risk-free interest
rate for the expected term of the Stock Option or Appreciation Right; or any other
pricing model used by A. H. Belo to value Stock Options for financial reporting
purposes;

     (ii) the fair market value of a Restricted Stock Unit, a Restricted Share or a
Performance Share awarded to a Director will be equal to the Market Value per Share
of the Common Stock on the Date of Grant without regard to any restrictions,
limitations or conditions with respect to such Award; and

     (iii) the fair market value of a Performance Unit awarded to a Director will be
its stated value.

14

 

     13. Transferability. Unless the Committee determines otherwise on or after the Date of Grant,
(i) no Award will be transferable by a Participant or Director other than by will or the laws of
descent and distribution, and (ii) no Stock Option or Appreciation Right granted to a Participant
or Director will be exercisable during the Participant’s or Director’s lifetime by any person other
than the Participant or Director, or such person’s guardian or legal representative.

     14. Adjustments. The Committee will make or provide for such adjustments in (i) the maximum
number of shares of Common Stock specified in Section 4 and Section 5, (ii) the number of shares
of Common Stock covered by outstanding Stock Options, Appreciation Rights, Performance Shares and
Restricted Stock Units granted under the Plan, (iii) the Option Price or Grant Price applicable to
any Stock Options and Appreciation Rights, and (iv) the kind of shares covered by any such Awards
(including shares of another issuer) as is equitably required to prevent dilution or enlargement of
the rights of Participants and Directors that otherwise would result from (x) any stock dividend,
stock split, combination of shares, recapitalization or other change in the capital structure of A.
H. Belo, or (y) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization,
partial or complete liquidation or other distribution of assets, issuance of rights or warrants to
purchase securities, or (z) any other corporate transaction, equity restructuring or other event
having an effect similar to any of the foregoing. In the event of any such transaction or event,
the Committee, in its discretion, may provide in substitution for any or all outstanding Awards
such alternative consideration as it, in good faith, may determine to be equitable in the
circumstances and may require in connection with such substitution the surrender of all Awards so
replaced.

     15. Fractional Shares. A. H. Belo will not be required to issue any fractional share of
Common Stock pursuant to the Plan. The Committee may provide for the elimination of fractions or
for the settlement of fractions in cash.

     16. Withholding Taxes. To the extent that A. H. Belo is required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by a Participant or
other person under the Plan, and the amounts available to A. H. Belo for such withholding are
insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to A. H. Belo for
payment of the balance of such taxes required to be withheld. In addition, if permitted by the
Committee, the Participant or such other person may elect to have any withholding obligation of A.
H. Belo satisfied with shares of Common Stock that would otherwise be transferred to the
Participant or such other person in payment of the Participant’s Award. However, without the
consent of the Committee, shares of Common Stock will not be withheld in excess of the minimum
number of shares required to satisfy A. H. Belo’s withholding obligation.

     17. Administration of the Plan.

     (a) Unless the administration of the Plan has been expressly assumed by the Board
pursuant to a resolution of the Board, the Plan will be administered by the Committee, which
at all times will consist of two or more Directors appointed by the Board, all of whom (i)
will meet all applicable independence requirements of the New York Stock Exchange or the
principal national securities exchange on which the

15

 

Common Stock is traded and (ii) will qualify as “non-employee directors” as defined in
Rule 16b-3 and as “outside directors” as defined in regulations adopted under Section 162(m)
of the Code, as such terms may be amended from time to time. A majority of the Committee
will constitute a quorum, and the action of the members of the Committee present at any
meeting at which a quorum is present, or acts unanimously approved in writing, will be the
acts of the Committee.

     (b) The Committee has the full authority and discretion to administer the Plan and to
take any action that is necessary or advisable in connection with the administration of the
Plan, including without limitation the authority and discretion to interpret and construe
any provision of the Plan or of any agreement, notification or document evidencing an Award.
The interpretation and construction by the Committee of any such provision and any
determination by the Committee pursuant to any provision of the Plan or of any such
agreement, notification or document will be final and conclusive. No member of the
Committee will be liable for any such action or determination made in good faith.

     18. Amendments and Other Matters.

     (a) The Plan may be amended from time to time by the Committee or the Board but may not
be amended without further approval by the shareholders of A. H. Belo if such amendment
would result in the Plan no longer satisfying any applicable requirements of the New York
Stock Exchange (or the principal national securities exchange on which the Common Stock is
traded), Rule 16b-3 or Section 162(m) of the Code.

     (b) Neither the Committee nor the Board will authorize the amendment of any outstanding
Stock Option to reduce the Option Price without the further approval of the shareholders of
A. H. Belo. Furthermore, no Stock Option will be cancelled and replaced with Stock Options
having a lower Option Price without further approval of the shareholders of A. H. Belo.
This Section 18(b) is intended to prohibit the repricing of “underwater” Stock Options and
will not be construed to prohibit the adjustments provided for in Section 14.

     (c) The Committee may also permit Participants and Directors to elect to defer the
issuance of Common Stock or the settlement of Awards in cash under the Plan pursuant to such
rules, procedures or programs as it may establish for purposes of the Plan. The Committee
also may provide that deferred issuances and settlements include the payment or crediting of
dividend equivalents or interest on the deferral amounts.

     (d) The Plan may be terminated at any time by action of the Board. The termination of
the Plan will not adversely affect the terms of any outstanding Award.

     (e) The Plan does not confer upon any Participant any right with respect to continuance
of employment or other service with A. H. Belo or any Subsidiary, nor will it interfere in
any way with any right A. H. Belo or any Subsidiary would otherwise have to terminate such
Participant’s employment or other service at any time.

16

 

     (f) If the Committee determines, with the advice of legal counsel, that any provision
of the Plan would prevent the payment of any Award intended to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code from so qualifying, such Plan
provision will be invalid and cease to have any effect without affecting the validity or
effectiveness of any other provision of the Plan.

     19. Governing Law. The Plan, all Awards and all actions taken under the Plan and the Awards
will be governed in all respects in accordance with the laws of the State of Delaware, including
without limitation, the Delaware statute of limitations, but without giving effect to the
principles of conflicts of laws of such State.

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]