EXHIBIT 10.1
EXECUTION COPY
September 13, 2006
VIA HAND DELIVERY
PERSONAL AND CONFIDENTIAL
Gordon A. Paris
[address]
Re: Termination of Employment from Sun-Times Media Group, Inc.
Dear Gordon:
     This letter agreement (this “Agreement”) sets forth certain terms and
conditions in connection with your termination of employment from Sun-Times
Media Group, Inc. (“Sun-Times”) and its subsidiaries and affiliates, effective
as of December 29, 2006 (the “Effective Date”). Upon the Effective Date, the
Amended and Restated Employment Agreement, dated as of March 2, 2006, between
you and Hollinger International Inc. (the “Employment Agreement”) shall
terminate and be of no further force and effect, except as otherwise
specifically provided herein. In consideration of the mutual covenants set forth
below and other valuable consideration, including Sun-Times’s agreement to
provide you with certain payments and benefits to which you are not otherwise
entitled, the receipt and sufficiency of which Sun-Times (together with its
parent corporations, affiliates, past and present officers, directors,
stockholders, agents, employees, publications, legal representatives,
successors, and assigns, hereinafter collectively referred to as, the “Company”)
and you hereby acknowledge, Sun-Times and you hereby agree as follows:
     1. Termination of Employment.
     You have agreed to resign as of the Effective Date from employment with
Sun-Times and its subsidiaries and affiliates to facilitate the relocation of
the position of Chief Executive Officer of Sun-Times to Chicago, Illinois. As of
the Effective Date, you will no longer be an employee of Sun-Times or any of its
subsidiaries or affiliates. You shall continue to perform your regular duties
and responsibilities through the Effective Date. Except as otherwise agreed by
Sun-Times, following the Effective Date you shall relinquish all titles,
positions and authorities that you held during your employment, with respect to
Sun-Times and each and every subsidiary or affiliate of Sun-Times with which you
have held positions as an officer and/or director, provided that you shall
continue following the Effective Date as a member of the board of directors of
Sun-Times (the “Board”) and the Chairman of the Special Committee of the Board
until your termination or resignation from those positions in accordance with
the Articles of Incorporation and By-laws of Sun-Times. You agree to execute any
and all documents necessary to effect your resignation from all such positions.
It is understood that there are some indirect subsidiaries of Sun-Times with
respect to which it may be difficult to effect a change in membership of the
board of directors by the Effective Date. In such circumstances, you agree to
remain as a member of the board of directors and to cooperate with Sun-Times and
each such subsidiary until such time as Sun-Times determines it appropriate for
you to resign from such position.
     2.  Separation Benefits.
     You have the right to receive a lump sum payment for any accrued, unused
vacation time, reduced by all applicable withholding taxes, regardless of
whether you sign this Agreement. In

 

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addition, in consideration of your full cooperation with Sun-Times and its
subsidiaries and affiliates as described in Paragraph 3, and your agreement to
the terms of the waivers and releases (as described in Paragraph 6), and to the
other obligations set forth in this Agreement, Sun-Times shall provide you with
the following:
     (a) Cash Severance Payment. You shall receive a cash lump sum payment in an
amount equal to Two Million Seven Hundred Thousand Dollars ($2,700,000.00),
determined in accordance with Paragraph 7B of the Employment Agreement as the
amount of one year’s base salary and target bonus, plus a bonus for 2006 at
target level. Such lump sum payment shall be payable within 10 business days
following the Effective Date, subject to the last sentence of this Paragraph 2.
      (b) Treatment of Outstanding Cash Incentive Awards and Equity-Based
Awards. Subject to the last sentence of this Paragraph 2, for purposes of the
Cash Incentive Award (within the meaning of the Hollinger International Inc.
2006 Long-Term Incentive Plan (“LTIP”)) granted under the LTIP on December 9,
2005, including for the avoidance of doubt, the terms of Section 6(c)(x) of the
LTIP (providing 6-month protection relating to certain awards following a Change
in Control (as defined in the LTIP)), your employment shall not be deemed
terminated until the later of (i) the Effective Date and (ii) the date on which
you cease to be a member of the Board. On the date of such deemed termination of
employment, such Cash Incentive Award shall become immediately vested and
payable (if applicable) as and to the extent provided in the LTIP (if such Cash
Incentive Award has not already been settled as a result of the prior expiration
of the scheduled performance period), except that such Cash Incentive Award
shall not be subject to proration as provided in the LTIP. Subject to the last
sentence of this Paragraph 2, all equity-based awards (excluding the Cash
Incentive Award referred to in the previous sentence) previously granted to you
under the LTIP or otherwise shall become immediately fully vested and payable
(if applicable) as of the Effective Date, and Sun-Times shall cause the
underlying shares to be distributed to you on December 29, 2006.
     (c) Health and Welfare Benefits Continuation. If you so elect, Sun-Times
will continue to provide you, at Sun-Times’s expense, subject to the last
sentence of this Paragraph 2, with health and welfare benefits in which you were
enrolled as of the Effective Date (including group medical, dental, vision, life
insurance and disability insurance, individual supplemental life insurance and,
if applicable, any individual supplemental disability insurance in effect) at a
level consistent with that provided to employees of Sun-Times (or to you, in the
case of the individual supplemental life and disability insurance coverages)
until December 31, 2007. With respect to any such health and welfare benefits
subject to COBRA (as defined in Paragraph 5), Sun-Times may satisfy its
obligations under this Paragraph 2(c) by providing you such coverages under
COBRA and paying 100% of the cost of your COBRA premiums.
     (d) 401(k) Plan. Subject to the last sentence of this Paragraph 2,
Sun-Times will make an additional cash payment to you in an amount equal to the
portion of your account balance under, or any company matching contributions to,
the 401(k) plan of Sun-Times and its subsidiaries in which you participate on
the Effective Date, in each case that you will forfeit or not otherwise receive
solely by reason of your employment termination date being December 29, 2006
instead of December 31, 2006 (including any company matching contribution that
you would have otherwise been entitled to receive for 2006 and the portion of
your account balance that would have vested had you remained employed through
December 31, 2006). Such payment shall be payable at the time the company
matching contribution would be made by Sun-Times and its subsidiaries under the
401(k) plan to other 401(k) plan participants, but in no event later than
March 15, 2007.
     Notwithstanding the foregoing, subject to the last sentence of this
Paragraph 2, in the event a Change in Control (as defined in the Employment
Agreement) occurs on or prior to December 31, 2006, then you shall be entitled
to receive the payments and benefits set forth in Paragraph 7C of the

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Employment Agreement (the “Change in Control Benefits”) (in lieu of the payments
and benefits set forth in Paragraphs 2(a), 2(b) and 2(c) of this Agreement) to
the extent the Change in Control Benefits are greater then the payments and
benefits set forth in Paragraphs 2(a), 2(b) and 2(c) of this Agreement.
     Notwithstanding the foregoing, payments under Paragraphs 2(a) (or the
corresponding Change in Control Benefit, as applicable) and 2(d) shall not be
payable until you execute and deliver a waiver and release of claims in favor of
the Company (that contains provisions substantially identical to the provisions
of Sections 6 , 7, 8(b), 8(c) and 11 of this Agreement, but which is dated as of
the Effective Date) that becomes fully effective and enforceable in accordance
with its terms (i.e., upon the eighth day following the date you have signed
such waiver and release so long as you have not previously revoked such waiver
and release), and your entitlement to the benefits under Paragraphs 2(b) and (c)
(or the corresponding Change in Control Benefits, as applicable) shall be void
ab initio if you do not execute and deliver such waiver and release or revoke
such waiver and release before it becomes fully effective and enforceable in
accordance with its terms (it being understood that in order to receive the
distribution of shares under Paragraph 2(b) (or the corresponding Change in
Control Benefit, as applicable) on December 29, 2006, you shall be required to
provide an additional substantially identical waiver and release as of
December 21, 2006).
     3. Cooperation.
     (a) You further agree that, upon reasonable notice and without the
necessity of the Company obtaining a subpoena or court order, you shall provide
reasonable cooperation in connection with any suit, action or proceeding (or any
appeal from any suit, action or proceeding), and any investigation and/or
defense of any claims asserted against the Company, which relates to events
occurring during your employment with Sun-Times and its subsidiaries and
affiliates (and their predecessors and successors) as to which you may have
relevant information (including but not limited to furnishing relevant
information and materials to the Company or its designee and/or providing
testimony at depositions and at trial).
     (b) Sun-Times agrees to reimburse you for all reasonable out-of-pocket
expenses associated with the provision of such reasonable cooperation, subject
to the provision of detailed invoices for all expenses so incurred. In
requesting your services from time to time and such reasonable cooperation,
Sun-Times shall make reasonable efforts to accommodate your schedule and the
requirements of your employer.
     4. Return of Confidential Information; Nondisparagement; Return of Company
Property.
     (a) Without limiting the provisions of Section 8 of the Employment
Agreement (which shall survive the termination of the Employment Agreement and
continue in effect in accordance with its terms), you agree to return to
Sun-Times and its subsidiaries and affiliates following the date on which you
cease to be a member of the Board any and all confidential and proprietary
information you have acquired regarding Sun-Times and its subsidiaries and
affiliates, including information about their personnel, policies, publications,
business practices, strategic plans, advertisers, customers, suppliers,
distributors, readers, financial forecasts, production data, marketing
techniques, promotional plans, and financial information, and to hold in the
strictest confidence, except as required by applicable law, and not to disclose
any of said information to anyone, and to refrain from making any statements or
representations to any employee of Sun-Times and its subsidiaries and affiliates
or to their customers, suppliers, competitors or the public at large which might
disparage or have a detrimental effect on Sun-Times’s and its subsidiaries’s and
affiliates’s business, operations, public image, reputation or their relations
with advertisers, customers, suppliers, employees, lenders, competitors, or
other business associates.

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     (b) Sun-Times agrees that you shall be entitled to retain any personal
computing equipment provided to you by Sun-Times and its subsidiaries and
affiliates, including any PCs and laptops, subject to the condition that,
following the date on which you cease to be a member of the Board, Sun-Times be
permitted to remove from such equipment all proprietary software and documents.
You may also retain the Blackberry provided to you by Sun-Times and its
subsidiaries and affiliates, subject to the same condition set forth immediately
above. All other property of Sun-Times and its subsidiaries and affiliates which
you have in your possession including, but not limited to, all access cards,
facility keys and credit cards, shall be returned to Sun-Times and its
subsidiaries and affiliates following the date on which you cease to be a member
of the Board, except as otherwise agreed to between you and Sun-Times.
     5. COBRA Generally.
     The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) requires that, in certain cases, terminated employees be allowed to
continue their medical and dental insurance beyond their separation date at
their own expense. An explanation of your rights under COBRA will be sent to you
under separate cover at a future date.
     6. Release.
     (a) You hereby agree to WAIVE any and all rights in connection with, and to
fully RELEASE and forever discharge the Company from, any and all torts,
contracts, claims, suits, actions, causes of action, demands, rights, damages,
costs, expenses, attorneys fees, and compensation in any form whatsoever,
whether now known or unknown, in law or in equity, which you have or ever had
(from the beginning of time through and including the date hereof) against the
Company, including without limitation on account of or in any way arising out
of, relating to or in connection with your employment by or separation of
employment from Sun-Times and its subsidiaries and affiliates (and their
predecessors and successors), and any and all claims for damages or injury to
any entity, person, property or reputation arising therefrom, claims for wages,
employment benefits, tort claims and claims under Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the
Employee Retirement Income Security Act of 1974, the National Labor Relations
Act, the Fair Labor Standards Act, the Rehabilitation Act of 1973, the Family
and Medical Leave Act of 1993, the Americans with Disabilities Act of 1990, the
Illinois Human Rights Act, the Illinois Wage Payment and Collection Act, the
Cook County Human Rights Ordinance, the Chicago Human Rights Ordinance and any
other federal, state or local law, statute, ordinance, guideline, regulation,
order or common-law principle of any state relating to employment, employment
contracts, wrongful discharge or any other matter; provided, however, that the
foregoing waiver and release shall not apply to your rights in respect of any
benefit or claim to which you are entitled under employee pension or welfare
benefit plans and programs of Sun-Times and its subsidiaries and affiliates in
which you are a participant prior to the Effective Date, or to your rights to
enforce this Agreement.
     (b) Release of Age Discrimination Claims. In further consideration of the
promises made by the Company in this Agreement, you specifically WAIVE any and
all rights in connection with, and fully RELEASE and forever discharge the
Company from, any and all torts, contracts, claims, suits, actions, causes of
action, demands, rights, damages, costs, expenses, attorneys fees, and
compensation in any form whatsoever, whether now known or unknown, in law or in
equity, which you have or ever had (from the beginning of time through and
including the date hereof) against the Company, arising under the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Sec. 621, et
seq. (“ADEA”). You further agree that:

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  (i)   your waiver of rights under this release is knowing and voluntary and in
compliance with the Older Workers Benefit Protection Act of 1990;     (ii)   you
understand the terms of this release;     (iii)   the consideration provided in
Paragraph 2 represents consideration over and above that to which you otherwise
would be entitled, that the consideration would not have been provided had you
not signed this release, and that the consideration is in exchange for the
signing of this release;     (iv)   the Company is hereby advising you in
writing to consult with your attorney prior to executing this release;     (v)  
the Company is giving you a period of twenty-one days within which to consider
this release;     (vi)   following your execution of this release you have seven
(7) days in which to revoke this release by written notice. To be effective, the
revocation must be made in writing and delivered to and received by Pamela A.
Davidson, Assistant Corporate Counsel, Sun-Times Media Group, Inc., 350 North
Orleans, 10 South, Chicago, Illinois 60654, no later than 4:00 p.m. on the
seventh day after you execute this release. An attempted revocation not actually
received by Ms. Davidson before the revocation deadline will not be effective;
and     (vii)   this entire Agreement shall be void and of no force and effect
if you choose to so revoke, and if you choose not to so revoke this Agreement
shall then become fully effective and enforceable.

     This Paragraph 6(b) does not waive rights or claims that may arise under
the ADEA after the date you sign this Agreement. In addition, nothing in this
Agreement shall in any way affect your right to the indemnification and expense
advancement to the extent provided by Sun-Times’s bylaws and Restated
Certificate of Incorporation, as amended; provided, however, that the Company
shall not be liable, and shall not provide a defense and indemnification for any
claim wherein you have not satisfied the applicable standard of conduct set
forth in such by-laws and Restated Certificate of Incorporation, or wherein you
have committed any acts of fraud, embezzlement or gross misconduct.
     7. Proceedings; No Admissions.
     (a) You hereby represent and warrant that: (i) you have no pending claims
against the Company with any municipal, state, federal or other governmental or
nongovernmental entity; and (ii) you will not file any claims with respect to
any events occurring on or before the date hereof. You also acknowledge and
agree that by entering into this Agreement you can never make claim or demand
upon or sue the Company for any reason whatsoever relating to anything that has
happened through the date hereof. Notwithstanding the foregoing, this Agreement
shall not prevent you from (A) initiating or causing to be initiated on your
behalf any complaint, charge, claim or proceeding against Sun-Times or its
subsidiaries and affiliates before any local, state or federal agency, court or
other body challenging the validity of the waiver of your claims under the ADEA
contained in this Agreement (but no other portions of the waivers and releases
described in Paragraph 6); or (B) initiating or participating in an
investigation or proceeding conducted by the Equal Employment Opportunity
Commission with respect to the ADEA.
     (b) Both parties acknowledge and agree that this Agreement does not
constitute, is not intended to be, and shall not be construed, interpreted or
treated in any respect as, and shall not be

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admissible in any proceeding as, an admission of liability, error, violation,
omission or wrongdoing by either party for any purpose whatsoever. Further, both
parties acknowledge and agree that there has been no determination that either
party has violated any federal, state or local law, statute, ordinance,
guideline, regulation, order or common-law principle. You further acknowledge
that no precedent, practice, policy or usage shall be established by this
Agreement or the offer to you of compensation and benefits herein.
     8. Continuing Obligations; Remedies.
     (a) Should you damage the reputation, goodwill or competitive position of
Sun-Times or its subsidiaries or affiliates, or if you cause, directly or
indirectly, any key executive employee of Sun-Times or its subsidiaries or
affiliates to terminate his or her employment with Sun-Times or its subsidiaries
or affiliates (except that you shall be permitted to respond to unsolicited
requests for references), then Sun-Times will be entitled to reimbursement from
you of the full amount of separation pay and other compensation and benefits
that you have received under this Agreement through the date of such action by
you, and Sun-Times will also be entitled to obtain injunctive relief against
your continuing any such action.
     (b) You also understand and agree that in the event you, your heirs,
spouse, family members, executors, or administrators attempt to institute or do
institute any charge, claim, suit or action against the Company in violation of
this Agreement, you shall be obligated, as an express condition of bringing such
action, to tender back to Sun-Times the full amount of separation pay and other
compensation and benefits that you have received under this Agreement; and you
further agree that you will pay all of the Company’s costs, expenses and fees of
defending against such action, including among other things, reasonable
attorney’s fees. This paragraph does not grant you an option to return the money
and institute an action. Instead this paragraph merely creates an additional
term and condition precedent to bringing an action regardless of the fact that
such action is expressly barred by this Agreement, and is without merit.
     (c) Should you breach any other term of this Agreement, including but not
limited to filing any claim which you have agreed to release and waive under
this Agreement or breaching any of the provisions of this Agreement, the Company
will be entitled to recover damages for such breach and also to obtain
injunctive relief against further breach by you. If Sun-Times or you at any time
believe that the other party has breached any term of this Agreement, the party
claiming a breach shall promptly notify the other in writing (if to you, at your
address set forth on page 1 hereof; if to Sun-Times, to the contact person at
the address specified in Paragraph 6(b)(vi)) of the specific basis for that
belief, and the other party will have a period of ten (10) days within which to
cure any breach (if cure is possible) or to otherwise respond to the claim of
breach.
     (d) Notwithstanding anything to the contrary in this Agreement, the parties
acknowledge and agree that the provisions of Sections 7D, 9, 17 and 18 of the
Employment Agreement shall survive the termination of the Employment Agreement
and continue in full force and effect in accordance with their terms.
     9. Arbitration of Disputes; Payment of Expenses.
     Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration proceedings conducted in
accordance with the commercial rules of the American Arbitration Association
(“AAA”) as then in effect. Any arbitration shall be held in Chicago, Illinois.
The arbitrator shall be selected by joint agreement of the Company and you, but
if such agreement is not reached within seven (7) days of the date of the
request for arbitration, the selection shall be made by the AAA in accordance
with its commercial rules. Judgment upon any award rendered by the arbitrator
may be entered in any court having jurisdiction. The costs and

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expenses of the arbitrator and all costs and expenses of experts, attorneys,
witnesses and other parties reasonably incurred by the prevailing party shall be
borne by the party that does not prevail in such arbitration or in any court
proceeding relating to enforcement of this Agreement.
     10. Governing Law.
     This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without regard to principles of conflicts
of laws.
     11. Acknowledgments; Revocation of Release.
     You hereby acknowledge (a) that the Company has given you a period of at
least twenty one (21) days in which to review and consider this Agreement;
(b) that the Company has advised, and does hereby in writing advise, you to
consult with an attorney before signing this Agreement; (c) that you have read
this Agreement in its entirety; (d) that you have had at least twenty one
(21) days in which to confer with your own attorney for assistance and advice
concerning this Agreement; (e) that you understand the terms of this Agreement;
(f) that you understand that the terms of this Agreement are legally
enforceable; (g) that you have entered into this Agreement freely, voluntarily,
knowingly and willingly and were in no manner coerced into signing it; (h) that
neither this Agreement nor the discussion and negotiation leading to it are or
were, in any manner, discriminatory; (i) that you were, and hereby are,
encouraged to discuss any questions, problems, or issues concerning this
Agreement with the Company before signing it; (j) that you are waiving rights
and claims you may have in exchange for consideration in addition to things of
value to which you are already entitled; and (k) that after signing this
Agreement you have a period of seven (7) days in which to revoke this Agreement,
however, any such revocation must be in writing and must be addressed to Pamela
A. Davidson, Assistant Corporate Counsel, Sun-Times Media Group, Inc., 350 North
Orleans, 10 South, Chicago, Illinois 60654.
     12. Withholding.
     The Company may deduct and withhold from any amounts payable under this
Agreement such Federal, state, local, non-U.S. or other taxes as are required or
permitted to be withheld pursuant to any applicable law or regulation.
     13. Amendment; No Waiver; Interpretation.
     No provisions of this Agreement may be amended, modified, waived or
discharged except by a written document signed by you and a duly authorized
officer of Sun-Times (other than you). The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party’s rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. No failure or delay by either party in exercising any right or
power hereunder will operate as a waiver thereof, nor will any single or partial
exercise of any such right or power, or any abandonment of any steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. No provision of this Agreement or any
related document will be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or drafted such
provision.
     14. Severability.
     If any term or provision of this Agreement is invalid, illegal or incapable
of being enforced by any applicable law or public policy, all other conditions
and provisions of this Agreement shall nonetheless remain in full force and
effect to the fullest extent permitted by law. You agree that in

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the event that any court of competent jurisdiction shall finally hold that any
provision of this Agreement (whether in whole or in part) is void or constitutes
an unreasonable restriction against you, such provision shall not be rendered
void but shall be deemed to be modified to the minimum extent necessary to make
such provision enforceable for the longest duration and the greatest scope as
such court may determine constitutes a reasonable restriction under the
circumstances.
     15. Entire Agreement.
     This Agreement constitutes the entire agreement and understanding between
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings (whether written or oral), between you and the
Company relating to such subject matter. None of the parties shall be liable or
bound to any other party in any manner by any representations and warranties or
covenants relating to such subject matter except as specifically set forth
herein.
     16. Binding on Successors.
     This Agreement shall be binding on, and shall inure to the benefit of, the
parties to it and their respective heirs, legal representatives, successors and
permitted assigns (including, without limitation, in the event of your death,
your estate and heirs in the case of any payments due to you hereunder).
     17. No Other Benefits.
     You agree that you are not entitled to any other compensation or benefits
in connection with your termination of employment (other than pursuant to the
terms of the employee benefit plans and programs of Sun-Times and its
subsidiaries and affiliates in which you participated prior to the Effective
Date, provided that you explicitly waive any right to receive any severance or
similar benefits under such plans and programs (including without limitation any
benefits under the Key Employee Severance Plan)).
     18. Counterparts.
     This Agreement may be executed in one or more counterparts (including via
facsimile and electronic image scan (pdf)), each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.

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     Gordon, please indicate your understanding and acceptance of this Agreement
by executing both copies below, and retaining one fully executed original for
your files and returning one fully executed original to me.

                  Very truly yours,
 
                    SUN-TIMES MEDIA GROUP, INC
 
           
 
      By:    
 
           
 
      Name:   Cyrus F. Freidheim, Jr.
 
      Title:   Chairman of Compensation Committee

I hereby accept the terms of this
Agreement and agree to abide by the provisions hereof:

                   

 Gordon A. Paris
       
 
           
Date:
           
 
 
 
       

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