News Corporation

Exhibit 10.2

News Corporation

July 28, 2005

David F. DeVoe

Senior Executive Vice President and Chief Financial Officer

News Corporation

1211 Avenue of the Americas

New York, NY 10036

Dear Dave:

The purpose of this letter is to advise you that, pursuant to Article V of the News Corporation 2005 Long-Term Incentive Plan, the Compensation Committee (the “Committee”) of the Board of Directors of News Corporation determined on July 28, 2005, that the Annual Bonus Guidelines set forth as Exhibit A to this letter (the “Guidelines”) will be used to calculate your annual bonus as provided pursuant to Section 4 of that certain Employment Agreement, dated as of November 12, 2004, by and between News America Incorporated and yourself (the “Employment Agreement”), for the fiscal year ending June 30, 2006. The Guidelines shall remain in effect for the term of the Employment Agreement, subject to your continued employment. The Committee has also determined that the Guidelines will be used to calculate your bonus for the fiscal year ending June 30, 2005. The award of your bonus will be made upon certification by the Committee that the performance goals upon which your bonus is based have been attained.

Exhibit A

Annual Bonus Guidelines of David F. DeVoe

(i) David F. DeVoe (the “Executive”) shall be eligible for an annual bonus (“Bonus”) for each fiscal year (currently July 1 to June 30) (each a “Fiscal Year”) of News Corporation (“News Corp”) ending during the term of that certain employment agreement, dated as of November 12, 2004, by and between News America Incorporated and the Executive (the “Employment Agreement”) in accordance with these Annual Bonus Guidelines (the “Guidelines”) and subject to the Executive’s continued employment by News Corp. Any Bonus earned by the Executive pursuant to these Guidelines shall be paid in the manner hereinafter provided no later than two and one-half months after the end of the period to which such Bonus relates or ten days after the earnings for the Fiscal Year are announced, whichever occurs first. Payment of the Bonus for each Fiscal Year shall in all circumstances be contingent upon certification by the Compensation Committee of the Board of Directors (the “Compensation Committee”) of News Corp of the EPS Percentage Comparison (as defined below) for such Fiscal Year, and any deferral of a Bonus shall be made in a manner that complies with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

(ii) The Bonus payable for each of the bonus periods ending on June 30, 2005, June 30, 2006, June 30, 2007, June 30, 2008 and June 30, 2009, respectively, shall be the amount calculated pursuant to subsection (iii) below by (A) determining the EPS Percentage Comparison for the Fiscal Year then ended and (B) determining the Required Amount for such EPS Percentage Comparison.

(iii) “EPS Percentage Comparison” shall mean the amount of percentage change (calculated to 1/100^th of a percent) in Earnings Per Share (as calculated below) of News Corp, determined as follows:

(A) Net Income for each Fiscal Year shall be determined in accordance with United States generally accepted accounting principles and will be such amount reported as Net Income in News Corp’s audited consolidated financial statements (the “Financial Statements”);

(B) Adjusted Net Income (which is to be used as the basis for the EPS Percentage Comparison computation) shall be determined by adjusting Net Income by eliminating the effect on Net Income of the following items, which will apply equally to income and losses from “Associated Entities” (as that term is used in the Financial Statements) included in Net Income (the “Adjustments”) - (i) non-cash intangible asset impairment charges and writedowns on investments to realizable values; (ii) gains or losses on the sale or other disposition of businesses or investments; (iii) items classified as Extraordinary Items (or a similar classification); (iv) the impact of changes in accounting in the Fiscal Year of such change (with the intent being to measure Adjusted Net Income in each Fiscal Year on the same bases of accounting); (v) costs of material business restructurings, reorganizations and relocations (includes severances, shut down, asset writeoffs – whether immediately recognized or the incremental impact of accelerated charges over the restructuring period); and (vi) gains and losses from capital and debt issuances and retirements;

(C) Earnings Per Share shall be calculated by dividing Adjusted Net Income by the number of shares of stock (or stock equivalents) of the combined classes of News Corp utilized in the Financial Statements for the respective Fiscal Year in determining diluted earnings per share (e.g., such number of shares for the 2004 Fiscal Year is set forth in Note 23 to the financial statements included in News Corp’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 12, 2004), after adjusting for new share issuances and the effect of corporate reorganizations such as stock splits; and

(D) In such determination, Earnings Per Share for the Fiscal Year then ended (“Current Year”) shall be divided by Earnings Per Share for the prior Fiscal Year (“Prior Year”) to determine the EPS Percentage Comparison. If Prior Year Earnings Per Share is a negative number, the difference between Earnings Per Share for the Current Year and Prior Year shall be divided by Prior Year Earnings Per Share (expressed as a positive number) to determine the EPS Percentage Comparison. For example: (A) if Prior Year Earnings Per Share is ($2.00) and Current Year Earnings Per Share is ($2.50), the EPS Percentage Comparison shall be negative 25% (negative change of $.50 divided by absolute value of $2.00 = negative 25%); (B) if Prior Year Earnings Per Share is ($2.00) and Current Year Earnings Per Share is $1.00, the EPS Percentage Comparison shall be 150% (positive change of $3.00 divided by absolute value of $2.00 = 150%); and (C) if Prior Year Earnings Per Share is $2.00 and Current Year Earnings Per Share is $1.80, the EPS Percentage Comparison is negative 10% (negative change of $.20 divided by absolute value of $2.00 = negative 10%).

(iv) The “Required Amount” shall equal the following amounts, using straight-line interpolation between low and high Required Amounts for any EPS Percentage Comparison that falls within any applicable EPS Percentage Comparison range:

For example: (A) if the EPS Percentage Comparison is a negative 26%, no Bonus will be payable; (B) if the EPS Percentage Comparison is a negative 14%, the Bonus payable will be $1,760,000; (C) if the EPS Percentage Comparison is a negative 6.2455%, the Bonus payable will be $2,000,000 (i.e., negative 6.2455% rounded to the nearest 1/100^th of a percent is negative 6.25%); (D) if the EPS Percentage Comparison is 1.5313%, the Bonus payable will be $2,306,000 (i.e., 1.5313% rounded to the nearest 1/100^th of a percent is 1.53%); (E) if the EPS Percentage Comparison is 14.9555%, the Bonus payable will be $4,496,000 (i.e., 14.9555% rounded to the nearest 1/100^th of a percent is 14.96%); (F) if the EPS Percentage Comparison is 22.0036%, the Bonus payable will be $5,200,000 (i.e., 22.0036% rounded to the nearest 1/100^th of a percent is 22.00%); and (G) if the EPS Percentage Comparison is 50.6587%, the Bonus payable will be $7,000,000.

(v) Any Bonuses payable to the Executive for the bonus periods ended, and ending June 30, 2005, June 30, 2006, June 30, 2007 and June 30, 2008 shall be payable (1) the first $3 million in cash and (2) any balance payable one-half in cash and one-half in restricted stock units (“Restricted Stock Units”).

(vi) Any Bonus payable to the Executive for the bonus period ending June 30, 2009 shall be paid entirely in cash.

(vii) The number of Restricted Stock Units to be granted to the Executive shall be determined by dividing (A) the amount of the Bonus allocated to the Restricted Stock Units, by (B) the Average Market Price of News Corp’s Class A common stock, par value $.01 per share (the “Stock”). The “Average Market Price” of the Stock shall be the average of the closing price for the Stock on the New York Stock Exchange for the twenty-day trading period ending on the date prior to the date the cash portion of the Bonus is paid (without regard to any deferrals).

(viii) The Restricted Stock Units earned by the Executive shall be paid to the Executive in the following manner:

(A) The Restricted Stock Units shall be paid by (1) delivery of one share of Stock for each Restricted Stock Unit or (2) cash for each Restricted Stock Unit based on the closing price for each share of Stock subject to each Restricted Stock Unit valued on the date preceding each payment date specified in Section (viii)(B) (without regard to any deferrals).

(B) The Restricted Stock Units shall be paid on the following dates, unless the Executive voluntarily defers receipt of any such payment:

(1) Any Restricted Stock Units for the bonus period ended June 30, 2005 shall be paid in three equal installments on July 1, 2006, July 1, 2007 and July 1, 2008;

(2) Any Restricted Stock Units for the bonus period ending June 30, 2006 shall be paid in three equal installments on July 1, 2007, July 1, 2008 and June 30, 2009;

(3) Any Restricted Stock Units for the bonus period ending June 30, 2007 shall be paid in two equal installments on July 1, 2008 and June 30, 2009; and

(4) Any Restricted Stock Units for the bonus period ending June 30, 2008 shall be paid on June 30, 2009.

(C) If on any date while Restricted Stock Units are outstanding under these Guidelines, News Corp shall pay a dividend on the Stock (or the record date for such dividend shall occur), the number of Restricted Stock Units held by the Executive shall, as of such dividend payment date, be increased by a number of Restricted Stock Units equal to (a) the product of (x) the number of Restricted Stock Units held by the Executive as of the related dividend record date, multiplied by (y) the amount of any cash dividend per share of Stock (or, in the case of any dividend payable in whole or in part other than in cash or Stock, the value of such dividend per share of Stock, as determined in good faith by News Corp), divided by (b) the closing price of the Stock on the New York Stock Exchange on the payment date of such dividend (or, if no closing price is reported on such date, the immediately preceding date upon which a closing price is reported). In the case of any dividend declared on the Stock that is payable in the form of Stock, the number of Restricted Stock Units held by the Executive shall be increased by a number equal to the product of (I) the aggregate number of Restricted Stock Units held by the Executive as of the related dividend record date, multiplied by (II) the number of shares of Stock (including any fraction thereof) payable as a dividend on a share of Stock.

(D) In the event of any change in the outstanding Stock by reason of any merger, reorganization, consolidation, recapitalization, separation, spin-off, liquidation, stock dividend, split-up, share combination or other change in the corporate or capital structure affecting Stock, News Corp shall adjust the Restricted Stock Units described herein to reflect such event. The Executive may designate a beneficiary who may possess all rights with respect to the Restricted Stock Units under these Annual Bonus Guidelines in the event of the Executive’s death; otherwise payment will be made to the Executive’s estate.

(E) Payment of the Restricted Stock Units shall be delayed six months if payment is made in connection with the Executive’s separation from service and such delay is necessary to avoid the imposition of the penalty tax under Section 409(A) of the Code.