Exhibit 10.3

EXECUTION VERSION

EMPLOYEE MATTERS AGREEMENT

by and between

TRIBUNE MEDIA COMPANY

and

TRIBUNE PUBLISHING COMPANY

Dated as of August 4, 2014

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TABLE OF CONTENTS

 

          Page   ARTICLE I.    DEFINITIONS   

Section 1.1.

  

Definitions

     1    ARTICLE II.    EMPLOYEES; ASSUMPTION OF LIABILITIES   

Section 2.1.

  

Employees

     6   

Section 2.2.

  

Assumption and Retention of Liabilities

     7   

Section 2.3.

  

General Terms of Publishing Participation in Benefit Plans

     7   

Section 2.4.

  

Time Off

     9   

Section 2.5.

  

Payroll Taxes and Reporting

     9   

Section 2.6.

  

No Solicitation of Employees

     9    ARTICLE III.    HEALTH AND WELFARE   

Section 3.1.

  

Transition Period

     10   

Section 3.2.

  

Establishment of Publishing Health and Welfare Plans

     10   

Section 3.3.

  

COBRA and HIPAA Compliance

     11   

Section 3.4.

  

Retiree Medical Coverage and Retiree Life Insurance

     11   

Section 3.5.

  

Long-Term Disability

     11   

Section 3.6.

  

Workers’ Compensation Liabilities

     12    ARTICLE IV.    PENSION PLANS   

Section 4.1.

  

Treatment of Defined Benefit Pension Plans

     13    ARTICLE V.    COLLECTIVE BARGAINING AGREEMENTS   

Section 5.1.

  

Continuation of Publishing CBAs

     14    ARTICLE VI.    401(K) PLAN   

Section 6.1.

  

Publishing 401(k) Plan

     14   

 

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TABLE OF CONTENTS

 

          Page   ARTICLE VII.    EQUITY AWARDS   

Section 7.1.

  

General Treatment of Outstanding Equity Awards

     15   

Section 7.2.

  

Tribune Option Adjustments

     15   

Section 7.3.

  

Tribune RSU Adjustments

     16   

Section 7.4.

  

Tax Withholding and Reporting Relating to Equity Awards

     16   

Section 7.5.

  

Miscellaneous Option and RSU Terms

     17   

Section 7.6.

  

Adoption of the Publishing Omnibus Incentive Plan

     17   

Section 7.7.

  

Section 16(b) of the Securities Exchange Act

     17    ARTICLE VIII.    SHORT TERM CASH INCENTIVES, ETC.   

Section 8.1.

  

Publishing Bonus Awards

     17    ARTICLE IX.    GENERAL AND ADMINISTRATIVE   

Section 9.1.

  

Sharing of Information

     18   

Section 9.2.

  

Cooperation

     18   

Section 9.3.

  

Consent of Third Parties

     19   

Section 9.4.

  

No Third Party Beneficiaries

     19   

Section 9.5.

  

Fiduciary Matters

     19   

Section 9.6.

  

Notices

     20   

Section 9.7.

  

Incorporation of Separation Agreement Provisions

     20   

 

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EMPLOYEE MATTERS AGREEMENT

This EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is made as of August 4, 2014,
by and between Tribune Media Company, a Delaware Corporation (“Tribune”), and
Tribune Publishing Company, a Delaware corporation (“Publishing”) (each a
“Party” and together, the “Parties”).

RECITALS

WHEREAS, Tribune and Publishing have entered into that certain Separation and
Distribution Agreement, dated as of August 3, 2014 (the “Separation Agreement”),
that will govern the terms and conditions relating to the separation between
Tribune and Publishing;

WHEREAS, pursuant to the Separation Agreement, the parties thereto agreed to
separate from Tribune the Publishing Business, which will be owned, operated and
conducted, directly or indirectly, by Publishing; and

WHEREAS, in connection with the Distribution, the Parties have agreed to enter
into this Agreement for the purpose of allocating between them current and
former employees and employment related assets, liabilities and responsibilities
with respect to employee compensation and benefits, and other employment matters
related to Tribune and Publishing Entities;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Parties hereby agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1. Definitions

“Affiliate” has the meaning given in the Separation Agreement.

“Agreement” has the meaning given in the preamble.

“Approved Leave of Absence” means an absence from active service (a) due to an
individual’s inability to perform his or her regular duties by reason of illness
or injury and resulting in eligibility to receive benefits pursuant to the terms
of a short-term disability plan in effect prior to the Distribution Effective
Time, or (b) pursuant to an

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approved leave policy with a guaranteed right of restatement. For the avoidance
of doubt, any employee who is not at work on the day of the Distribution
Effective Time due to vacation, sickness or accident that has not qualified the
individual for short-term disability or accident benefits, workers’ compensation
or other temporary absence, but whose employment continues in accordance with
the Tribune Group’s or Publishing Group’s employment policies (such as due to
the use of personal days), shall be considered to be actively at work on the day
of the Effective Time.

“Baltimore Sun Pension Plans” means The Baltimore Sun Company Retirement Plan
for Mailers and The Baltimore Sun Company Employees’ Retirement Plan.

“Benefit Plan” means any plan, policy, program, payroll practice, on-going
arrangement, contract, trust, insurance policy or other agreement or funding
vehicle, whether written or unwritten, providing compensation or benefits to
Publishing Employees, Former Publishing Employees, Tribune Employees or Former
Tribune Employees, as the case may be, in respect to their services for any
member of the Publishing Group or Tribune Group. When immediately preceded by
“Tribune”, Benefit Plan means any Benefit Plan sponsored, maintained or
contributed to by Tribune or any Benefit Plan with respect to which a Tribune
Entity is a party. When immediately preceded by “Publishing”, Benefit Plan means
any Benefit Plan sponsored, maintained or contributed to by Publishing or any
Benefit Plan with respect to which a Publishing Entity is a party.

“COBRA” means the continuation coverage requirements for “group health plans”
under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and as codified in Code Section 4980B and ERISA Sections 601 through
608.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Discontinued Business” means a business previously operated or owned by a
Tribune Entity that was divested, sold, abandoned, shut down or otherwise
disposed of prior to the Distribution Date.

“Discontinued Business Employee” means any person whose last employment with a
Tribune Entity or Publishing Entity was primarily related to the business and
operations of a Discontinued Business.

“Distribution” has the meaning given in the Separation Agreement.

“Distribution Date” has the meaning given in the Separation Agreement.

“Distribution Effective Time” has the meaning given in the Separation Agreement.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and regulations promulgated thereunder.

“Former Publishing Employee” means any former employee of a Publishing Entity or
Tribune Entity whose last employment with such entities was with a Publishing
Entity, including any former employee on benefit continuation as of the
Distribution Date. For the avoidance of doubt, “Former Publishing Employees”
shall not include any Discontinued Business Employee.

“Former Tribune Employee” means any former employee of a Publishing Entity or
Tribune Entity whose last employment with such entities was with a Tribune
Entity and all Discontinued Business Employees.

“Governmental Authority” has the meaning given in the Separation Agreement.

“H&W Transition End Date” means December 31, 2014 or, if applicable, such other
date provided in the Transition Services Agreement for the termination of
coverage provided to any Publishing Employees after the Distribution Effective
Time under a Tribune Welfare Plan.

“HIPAA” means the health insurance portability and accountability requirements
for “group health plans” under the Health Insurance Portability and
Accountability Act of 1996, as amended.

“Law” has the meaning given in the Separation Agreement.

“Liability” has the meaning given in the Separation Agreement.

“Multiemployer Plan” means a multiemployer plan within the meaning of section
4001(a)(3) of ERISA.

“Option” (x) when immediately preceded by “Tribune” means an option to purchase
shares of Tribune Common Stock pursuant to the Tribune Equity Incentive Plan and
(y) when immediately preceded by “Publishing” means an option to purchase shares
of Publishing Common Stock following the Distribution Effective Time pursuant to
the Publishing Omnibus Incentive Plan.

“Party” has the meaning given in the preamble.

“Publishing” has the meaning given in the preamble.

“Publishing 401(k) Plan” means a qualified defined contribution plan containing
a cash or deferred arrangement sponsored by a Publishing Entity in which
eligible Publishing Employees may elect to participate, effective upon the
Distribution Effective Time.

 

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“Publishing Business” has the meaning given in the Separation Agreement.

“Publishing CBA” means any and all collective bargaining agreements in effect as
of the date hereof governing the wages, hours, terms and conditions of
employment of any Publishing Employee, including, but not limited to, MOAs,
MOUs, letters of agreement and letters of understanding, and any extensions or
replacements thereof and all collective bargaining practices of a Publishing
Entity to the extent such collective bargaining practices are binding on a
Publishing Entity.

“Publishing Common Stock” means the common stock, par value $0.01 per share, of
Publishing.

“Publishing Employee” means any individual (x) who immediately prior to the
Distribution Effective Time, is either actively employed by, or then on an
Approved Leave of Absence from, a Publishing Entity or (y) designated as a
Publishing Employee as of the Distribution Effective Time by Tribune and
Publishing in writing. “Publishing Employee” shall also include the
beneficiaries and dependents of an individual described in the first sentence of
this definition.

“Publishing Entity” means a member of the Publishing Group. For the avoidance of
doubt, for purposes of this Agreement, any entity that primarily relates to a
Discontinued Business shall not be treated as a Publishing Entity.

“Publishing Omnibus Incentive Plan” means the Tribune Publishing Company 2014
Omnibus Incentive Plan, as amended from time to time.

“Publishing Group” has the meaning given in the Separation Agreement.

“Publishing Ratio” means the quotient obtained by dividing the Tribune
Unaffected Stock Value by the Publishing Post-Distribution Stock Value.

“Publishing Post-Distribution Stock Value” means the closing per share price of
Publishing Common Stock on the when-issued market on the Distribution Date (or,
if the Distribution Date is not a trading day, on the first trading day
following the Distribution Date).

“Publishing Welfare Plan” has the meaning given in Section 3.2.

“Represented Employee” means any Publishing Employee whose wages, hours, terms
and conditions of employment are governed by a Publishing CBA.

“RSU” (x) when immediately preceded by “Tribune” means units issued under the
Tribune Equity Incentive Plan representing a general unsecured promise by
Tribune to pay the value of shares of Tribune Common Stock in cash or shares of
Tribune Common Stock and (y) when immediately preceded by “Publishing” means
units issued

 

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under the Publishing Omnibus Incentive Plan representing a general unsecured
promise by Publishing to pay the value of shares of Publishing Common Stock in
cash or shares of Publishing Common Stock. For the avoidance of doubt, “RSUs”
includes performance-vesting RSUs.

“Subsidiary” has the meaning given in the Separation Agreement.

“Transition Services Agreement” has the meaning given in the Separation
Agreement.

“Tribune” has the meaning given in the preamble.

“Tribune 401(k) Plan” has the meaning given in Section 6.1.

“Tribune Committee” means the Compensation Committee of the Tribune Board of
Directors.

“Tribune Common Stock” means class A common stock and class B common stock, each
having a par value of $0.001 per share, of Tribune.

“Tribune Employee” means any individual who, immediately prior to the
Distribution Effective Time, is either actively employed by, or then on an
Approved Leave of Absence from, any Tribune Entity, but excluding any Publishing
Employees.

“Tribune Entity” means a member of the Tribune Group.

“Tribune Equity Incentive Plan” means the Tribune Company 2013 Equity Incentive
Plan, as amended from time to time.

“Tribune Group” means Tribune and its Subsidiaries (other than any Publishing
Entity).

“Tribune Post-Distribution Stock Value” means the closing per share price of
Tribune Common Stock on the regular-way market on the Distribution Date (or, if
the Distribution Date is not a trading day, on the first trading day following
the Distribution Date).

“Tribune Ratio” means the quotient obtained by dividing the Tribune Unaffected
Stock Value by the Tribune Post-Distribution Stock Value.

“Tribune Short-Term Incentive Plans” means any of the annual or short term
incentive plans of Tribune, all as in effect as of the time applicable to the
applicable provisions of this Agreement.

 

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“Tribune Unaffected Stock Value” means the sum of (x) the closing per share
price of Tribune Common Stock on the ex-distribution market and (y) one quarter
( 1⁄4) of the closing per share price of Publishing Common Stock on the
when-issued market, in each case on the last trading day prior to the
Distribution Date.

“Tribune Welfare Plan” has the meaning given in Section 3.1.

ARTICLE II.

EMPLOYEES; ASSUMPTION OF LIABILITIES

Section 2.1. Employees.

(a) Employment of Publishing Employees. As of the Distribution Effective Time,
all employees actively engaged on a regular basis in the Publishing Business are
Publishing Employees. All Publishing Employees shall continue to be employees of
their respective Publishing Entity immediately after the Distribution Effective
Time.

(b) No Termination of Employment, Etc. Except as otherwise expressly provided
herein or as otherwise required by applicable Law, no provision of this
Agreement or the Separation Agreement shall be construed to create any right, or
accelerate any entitlement, to any compensation or benefit whatsoever on the
part of any Publishing Employee. Without limiting the foregoing, a Publishing
Employee shall not be deemed to have terminated employment or become entitled to
severance pay or benefits in connection with or in anticipation of the
Distribution. The Publishing Group shall be solely responsible for all
Liabilities in respect of all costs arising out of payments and benefits
relating to the termination or alleged termination of any Publishing Employee or
Former Publishing Employee’s employment that occurs prior to, as a result of, in
connection with or following the Distribution, including any amounts required to
be paid (including any payroll or other taxes), and the costs of providing
benefits, under any applicable severance, separation, redundancy, termination or
similar Plan.

(c) No Right to Continued Employment. Nothing contained in this Agreement shall
confer any right to continued employment on any Tribune Employee or Publishing
Employee. Except as specifically provided otherwise herein, this Agreement shall
not limit the ability of Tribune or Publishing to change the position,
compensation or benefits of any of its employees for performance-related,
business or any other reason or require any such entity continue the employment
of any such employee for any particular period of time.

 

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Section 2.2. Assumption and Retention of Liabilities.

(a) Liabilities Generally. Except as expressly provided herein or in the
Transition Services Agreement or required by applicable Law, following the
Distribution Effective Time:

(i) the Publishing Group shall be solely responsible for all Liabilities arising
or that have arisen with respect to the employment of Publishing Employees or
Former Publishing Employees, whether arising prior to, on, or following the
Distribution Effective Time, including, without limitation, Liabilities arising
or that have arisen from the participation of Publishing Employees or Former
Publishing Employees in Tribune Benefit Plans prior to the Distribution
Effective Time; and

(ii) the Tribune Group shall be solely responsible for all Liabilities arising
or that have arisen with respect to the employment of Tribune Employees or
Former Tribune Employees, whether arising prior to, on, or following the
Distribution Effective Time.

(b) Limited Transfer of Plan Assets and Liabilities. Except as otherwise
expressly provided in this Agreement or required by applicable Law, nothing
herein shall require or result in (x) the transfer by any Tribune Entity, or
assumption by any Publishing Entity, of any assets or Liabilities of a Tribune
Entity or a Tribune Benefit Plan or (y) the transfer by any Publishing Entity,
or assumption by any Tribune Entity, of any assets or Liabilities of a
Publishing Entity or a Publishing Benefit Plan.

Section 2.3. General Terms of Publishing Participation in Benefit Plans.

(a) Publishing Participation in Tribune Benefit Plans. Except as expressly
provided in this Agreement and the Transition Services Agreement or required by
applicable Law, effective as of the Distribution Effective Time, Publishing
Employees, Former Publishing Employees and Publishing Entities shall cease to
participate or be eligible to participate in Tribune Benefit Plans, and Tribune
and Publishing shall take all necessary action to effectuate such cessation as
participants. To the extent that, following the Distribution Effective Time, a
Publishing Entity is a participating employer in a Tribune Benefit Plan pursuant
to the Transition Services Agreement or a Publishing Employee or Former
Publishing Employee is a participant in a Tribune Benefit Plan, (x) Tribune
shall, or shall cause its Subsidiaries to, continue to administer, or cause to
be administered, in accordance with their terms and applicable Law, the Tribune
Benefit Plan, and shall have the sole and absolute discretion and authority to
interpret the Tribune Benefit Plan, as set forth therein, and discretion and
authority to engage other entities to provide services to the Tribune Benefit
Plan and to delegate its administrative responsibilities over the Tribune
Benefit Plan to others and (y) such Publishing Entity shall perform, with
respect to its participation (or the participation of Publishing

 

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Employees or Former Publishing Employees) in the Tribune Benefit Plans, the
duties of a participating employer as set forth in each such applicable Benefit
Plan or any procedures adopted pursuant thereto, including, without limitation,
cooperating fully with auditors, benefit personnel and benefit vendors;
preserving the confidentiality of all financial arrangements and participant
information and to the extent requested by the claims administrators of the
applicable Tribune Benefit Plan, assisting in the administration of claims.

(b) Terms of Participation by Publishing Employees in Publishing Benefit Plans.
Tribune and Publishing shall agree on methods and procedures, including, without
limitation, amending the respective Benefit Plan documents, to prevent
Publishing Employees from receiving duplicative benefits from the Tribune
Benefit Plans and the Publishing Benefit Plans. With respect to Publishing
Employees, each Publishing Benefit Plan that succeeds to a Tribune Benefit Plan
in which Publishing Employees participated immediately prior to the Distribution
Effective Time shall provide that all service, all compensation and all other
benefit-affecting determinations that, as of the Distribution Effective Time,
were recognized under such Tribune Benefit Plan shall, as of immediately after
the Distribution Effective Time or any subsequent effective date for such
Publishing Benefit Plan, receive full recognition, credit and validity and be
taken into account under such Publishing Benefit Plan to the same extent as if
such items occurred under such Publishing Benefit Plan, except to the extent
that duplication of benefits would result. The Publishing Group shall be solely
responsible for all Publishing Benefit Plans that are in effect immediately
after the Distribution Effective Time, and continue to maintain, administer and
contribute to such Publishing Benefit Plans in accordance with their terms.

(c) Power to Amend, Etc. Nothing in this Agreement shall amend or shall be
construed to amend any Benefit Plan described in or contemplated by this
Agreement. In addition, except as expressly provided in this Agreement, nothing
in this Agreement shall preclude any Tribune Entity or Publishing Entity, at any
time after the Distribution Effective Time, from amending, merging, modifying,
terminating, eliminating, reducing, or otherwise altering in any respect any
Benefit Plan, any benefit under any Benefit Plan, or any trust, insurance policy
or funding vehicle related to any Publishing Benefit Plan.

(d) Beneficiary Designations and Elections. Except with respect to any
Publishing 401(k) Plan, all beneficiary designations and elections made by
Publishing Employees or Former Publishing Employees under a Publishing or
Tribune Benefit Plan in effect on the Distribution Effective Time, to the extent
applicable, shall be transferred to and be in full force and effect under such
Benefit Plan or a corresponding successor Tribune or Publishing Benefit Plan in
which the Publishing Employees and Former Publishing Employees participate after
the Distribution Effective Time until the earliest of (1) unless otherwise
determined by the plan administrator, the end of the H&W Transition Period, and
(2) the date on which beneficiary designations and elections are replaced or
revoked by the Publishing Employees or Former Publishing Employees who made the
beneficiary designations and elections.

 

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(e) Compensation and Benefits of Represented Employees. Notwithstanding anything
else contained in this Agreement to the contrary and subject to Section 5.1,
following the Distribution Effective Time, the compensation, benefits, hours and
terms and conditions of employment of Publishing Employees who are Represented
Employees shall continue to be determined in accordance with the applicable
Publishing CBAs.

Section 2.4. Time Off. As of the Distribution Effective Time, Publishing or its
Subsidiaries shall credit (or shall continue to credit) each Publishing Employee
with the amount of accrued but unused vacation time, paid time off and other
time off benefits as such Publishing Employee had with the Tribune Group and
Publishing Group immediately prior to the Distribution Effective Time. (For the
avoidance of doubt, the Distribution shall not entitle any Publishing Employee
to a payment in respect of accrued but unused vacation time, paid time off, or
other time off benefits.) Following the Distribution Effective Time, Publishing
Employees shall be subject to vacation and paid time off policies of the
Publishing Entity employing the Publishing Employee.

Section 2.5. Payroll Taxes and Reporting. Except as provided in the Transition
Services Agreement, each of Tribune and Publishing shall, and shall cause each
of its Subsidiaries to satisfy its obligations for payroll tax obligations and
for the proper reporting to the appropriate Governmental Authorities of
compensation earned by its current and former employees after the Effective
Distribution Time, including compensation related to the exercise of Options and
the vesting and/or settlement of RSUs. In connection with the foregoing, the
Parties agree to follow the “Alternative Procedure” set forth in Section 5 of
Revenue Procedure 2004-53.

Section 2.6. No Solicitation of Employees.

(a) Publishing Employees. Except as otherwise mutually agreed upon between the
Parties, for the period commencing on the date hereof and ending twelve
(12) months from the Distribution Effective Time, in respect of Publishing
Employees, neither Tribune nor any member of the Tribune Group shall, directly
or indirectly, induce or attempt to induce any Publishing Employee to leave the
employ of the Publishing Group or violate the terms of their contracts or any
employment arrangements with any member of the Publishing Group; provided,
however, that neither Tribune nor any member of the Tribune Group shall be
deemed to be in violation of this Section 2.6(a) solely by reason of a general
job posting internal to members of the Tribune Group and Publishing Group made
prior to the Distribution Date or a general solicitation to the public or
general advertising.

(b) Tribune Employees. Except as otherwise mutually agreed upon between the
Parties, for the period commencing on the date hereof and ending twelve
(12) months

 

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from the Distribution Effective Time, in respect of Tribune Employees, neither
Publishing nor any member of the Publishing Group shall, directly or indirectly,
induce or attempt to induce any Tribune Employee to leave the employ of the
Tribune Group or violate the terms of their contracts or any employment
arrangements with any member of the Tribune Group; provided, however, that
neither Publishing nor any member of the Publishing Group shall be deemed to be
in violation of this Section 2.6(b) solely by reason of a general job posting
internal to members of the Tribune Group and Publishing Group made prior to the
Distribution Date or a general solicitation to the public or general
advertising.

ARTICLE III.

HEALTH AND WELFARE

Section 3.1. Transition Period. Tribune maintains health and welfare Benefit
Plans for the benefit of eligible Publishing Employees (the “Tribune Welfare
Plans”). To the extent provided in the Transition Services Agreement and subject
to applicable Law, Tribune will cause the Tribune Welfare Plans that are in
effect on and after the Distribution Date to provide coverage to Publishing
Employees from and after the Distribution Date until the H&W Transition End Date
on substantially the same basis as immediately prior to the Distribution Date
and in accordance with the terms of the Tribune Welfare Plans (except to the
extent that changes are made to the coverage applicable to similarly situated
Tribune Employees), and, to the extent necessary, the Publishing Group will be
added as participating employers in the Tribune Welfare Plans for the benefit of
eligible Publishing Employees.

Section 3.2. Establishment of Publishing Health and Welfare Plans. Effective as
of the first day immediately following the H&W Transition End Date (it being
understood that separate dates may apply to different benefits) and subject to
applicable Law, Publishing shall adopt, or shall cause to be adopted for the
benefit of Publishing Employees, health and welfare Benefit Plans (“Publishing
Welfare Plans”). The Publishing Group shall be responsible for all Liabilities
relating to, arising out of or resulting from health and welfare coverage
(including COBRA continuation coverage) or claims incurred by or on behalf of
Publishing Employees, Former Publishing Employees or their covered dependents
under the Publishing Welfare Plans. Publishing shall cause the Publishing
Welfare Plans to (i) waive all limitations as to preexisting conditions,
exclusions, service conditions and waiting period limitations, and any evidence
of insurability requirements applicable to any Publishing Employees eligible to
participate in such Publishing Welfare Plans other than such limitations,
exclusions, and conditions that were in effect with respect to such Publishing
Employees as of the Distribution Date under the corresponding Tribune Welfare
Plan and (ii) honor any deductibles, out-of-pocket maximums and co-payments
incurred by Publishing Employees under the corresponding Tribune Welfare Plan in
satisfying the applicable deductibles, out-of-pocket expenses or co-payments
under such Tribune Welfare Plan for the calendar year in which the Distribution
Date occurs.

 

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Section 3.3. COBRA and HIPAA Compliance. Subject to Section 2.2(a)(i), Tribune
shall be responsible for administering compliance with the health care
continuation requirements of COBRA, the certificate of creditable coverage
requirements of HIPAA, and the corresponding provisions of the Tribune Health
and Welfare Plans with respect to Tribune Employees and Former Tribune Employees
and their covered dependents who incur a COBRA qualifying event or loss of
coverage under the Tribune Welfare Plans at any time before, on or after the H&W
Transition End Date. On and after the H&W Transition End Date, Publishing or
another Publishing Entity shall be responsible (and shall assume the
responsibility) for administering compliance with the health care continuation
requirements of COBRA, the certificate of creditable coverage requirements of
HIPAA, and the corresponding provisions of the Publishing Welfare Plans with
respect to Publishing Employees and Former Publishing Employees who incur a
COBRA qualifying event or loss of coverage under the Publishing Welfare Plans.
The Parties agree that the Distribution shall not constitute a COBRA qualifying
event for any purpose of COBRA.

Section 3.4. Retiree Medical Coverage and Retiree Life Insurance. Immediately
following the H&W Transition End Date and subject to applicable Law, (x) Tribune
and the Tribune Welfare Plans shall cease to provide post-employment health
benefits (other than COBRA) and post-employment life insurance benefits to all
Publishing Employees and Former Publishing Employees who received, or were
eligible to receive, such benefits under a Tribune Welfare Plan immediately
prior to the H&W Transition End Date and (y) Publishing shall, or shall cause
another Publishing Entity to, provide such Publishing Employees and Former
Publishing Employees with post-employment health benefits or post-employment
life insurance benefits under a corresponding Publishing Welfare Plan. Following
the H&W Transition End Date, no Publishing Employee or Former Publishing
Employee shall receive, or be eligible to receive, post-employment health
benefits (other than COBRA) or post-employment life insurance benefits under any
Tribune Welfare Plan

Section 3.5. Long-Term Disability.

(a) Disability Events Occurring Prior to the Distribution.

(i) Insured Coverage. Except for self-insured benefits described in
Section 3.5(a)(ii) and subject to applicable Law, following the H&W Transition
End Date, (x) Tribune shall continue to provide insurance coverage short-term
and/or long-term disability benefits (as applicable) under a Tribune Welfare
Plan and medical benefits under a Tribune Welfare Plan during the period of such
coverage of disability benefits to all Publishing Employees and Former
Publishing Employees who received, or were eligible to receive, short-term or
long-term

 

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disability benefits immediately prior to the H&W Transition End Date as a result
of an event that occurred prior to the H&W Transition Date, and (y) Publishing
shall, or shall cause another Publishing Entity to, reimburse Tribune for its
out-of-pocket cost for any such continued short-term disability, long-term
disability and medical benefits, as applicable coverage.

(ii) Self-Insured Coverage. Following the Distribution Effective Time and
subject to applicable Law, Tribune shall continue to provide, and retain the
Liability for providing, coverage for long-term disability benefits (and medical
benefits to the extent applicable) to all Publishing Employees and Former
Publishing Employees who received long-term disability benefits immediately
prior to the H&W Transition End Date under a self-insured Tribune Welfare Plan
and who did not return to work for any Publishing Entity.

(b) Disability Events Occurring After the Distribution. With respect to any
event occurring after the H&W Transition End Date that results in a disability
of a Publishing Employee and subject to applicable Law, (x) Publishing shall, or
shall cause another Publishing Entity to, provide coverage to Publishing
Employees with long-term disability benefits (and medical benefits) under a
Publishing Welfare Plan and (y) no Publishing Employee shall receive, or be
eligible to receive, coverage for long-term disability benefits (or medical
benefits) under any Tribune Welfare Plan.

Section 3.6. Workers’ Compensation Liabilities. Immediately upon the
Distribution Effective Time and subject to applicable Law, (x) Publishing shall
assume full responsibility for all Liabilities for Publishing Employees and
Former Publishing Employees related to any and all workers’ compensation claims
and coverage, whether arising under any Law of any state, territory, or
possession of the U.S. or the District of Columbia and whether arising before or
after the Distribution Effective Time, and the administration of all such
claims, whether made prior to, on or after the Distribution Effective Time and
(y) Tribune shall use commercially reasonable efforts to cause the interests and
rights of Publishing and the Publishing Entities as of the Distribution
Effective Time under all workers’ compensation insurance policies relating to
coverage for such claims and Liabilities to survive the Distribution Effective
Time on the same terms, conditions and limitations in accordance with and
pursuant to the provisions of Article VIII of the Separation Agreement. Without
limiting the foregoing, Publishing shall be responsible for providing all
collateral required by insurance carriers in connection with workers’
compensation claims for which Liability is allocated to the Publishing Group
under this Section 3.6, in accordance with and pursuant to Article V,
Section 5.9 of the Separation Agreement. The Parties shall cooperate with
respect to any notification to appropriate Governmental Authorities of the
Distribution Effective Time and the issuance of new, or the transfer of
existing, workers’ compensation insurance policies and claims handling
contracts.

 

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ARTICLE IV.

PENSION PLANS

Section 4.1. Treatment of Defined Benefit Pension Plans.

(a) Generally. Without limiting the other provisions of this Article IV and
subject to applicable Law, Tribune shall or shall cause a Tribune Benefit Plan
to agree to retain, assume, pay, perform, fulfill and discharge all Liabilities
relating to any benefits accrued by a Publishing Employee or Former Publishing
Employee under any tax-qualified defined benefit pension plan sponsored,
maintained or assumed by the Tribune Group immediately prior to the Distribution
Effective Time (including the Baltimore Sun Pension Plans) (“Tribune Pension
Plans”); provided that Tribune shall not retain or assume any Liabilities
associated with a Multiemployer Plan to which contributions were or are made
under a Publishing CBA. No assets of any such defined benefit plan shall be
transferred to Publishing or any Publishing Benefit Plan in connection with the
Distribution. As sponsor of the Tribune Pension Plans following the Distribution
Effective Time, Tribune will be solely responsible for satisfying the funding
obligations with respect to the Tribune Pension Plans in accordance with
applicable provisions of ERISA and the Code and will retain the sole discretion
to determine the amount and timing of any contributions required to satisfy such
funding obligations. Tribune will also retain the right, in its sole discretion,
to terminate any or all of the Tribune Pension Plans and to provide for the
payment of accrued benefits under such Tribune Pension Plans through insurance
contracts or otherwise. In no event shall any Publishing Employee or Former
Publishing Employee accrue any additional benefits under such Benefit Plan
following the Distribution Date. The Distribution will cause the Publishing
Employees who participate in the Tribune Pension Plan to have a separation from
service for purposes of commencing benefits under certain of the Tribune Pension
Plans, which will cause their accrued benefits in those Tribune Pension Plans to
become fully vested as of the Distribution Date.

(b) Multiemployer Plans. Tribune shall retain all Liabilities relating to the
participation of any Tribune Employee or Former Tribune Employee in any
Multiemployer Plan with respect to which a Tribune Entity is or was a
participating employer. Publishing shall retain all Liabilities relating to the
participation of any Publishing Employee or Former Publishing Employee in any
Multiemployer Plan with respect to which a Publishing Entity is or was a
participating employer.

(c) No Establishment of Mirror Plans by Publishing. Except as to any
Multiemployer Plans that are maintained or contributed to pursuant to a
Publishing CBA, Publishing shall not be required to establish, maintain,
administer or contribute to any defined benefit pension plan or related trust
qualified under section 401(a) and section 501(a) of the Code in connection with
the Distribution.

 

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(d) Assumption of Baltimore Sun Pension Plans by Tribune. As of immediately
prior to the Distribution Effective Time and subject to applicable Law, Tribune
shall assume, and Publishing shall cause the applicable trusts to assign to the
Tribune Company Master Trust for Pension Plans (if not already held by such
trust) all of their rights and obligations under, the Baltimore Sun Pension
Plans and all assets and Liabilities thereunder.

ARTICLE V.

COLLECTIVE BARGAINING AGREEMENTS

Section 5.1. Continuation of Publishing CBAs. At the Distribution Effective
Time, Publishing shall cause the appropriate Publishing Entities to (1) continue
to employ the Represented Employees in accordance with the Publishing CBAs, and
(2) continue to honor the Publishing CBAs, including but not limited to,
(i) continuing to recognize the unions representing those Represented Employees
as their collective bargaining representative in accordance with the Publishing
CBAs and (ii) continuing uninterrupted the compensation of such Represented
Employees in accordance with the Publishing CBAs. Without limiting the
foregoing, following the Distribution Effective Time, Publishing shall cause the
appropriate Publishing Entities to continue in respect of the Represented
Employees the same benefits and compensation as is provided immediately prior to
the Distribution Date, except to the extent that Publishing may make such a
change (A) without violating the terms and conditions of the applicable
Publishing CBA or (B) subject to an amendment to such Publishing CBA or with the
consent of the representative of the Represented Employee, in each case as shall
be required or provided in accordance with such Publishing CBA and applicable
Law. For the avoidance of doubt, all Liabilities under Multiemployer Plans
pursuant to Publishing CBAs shall continue to be Liabilities of the Publishing
Group.

ARTICLE VI.

401(K) PLAN

Section 6.1. Publishing 401(k) Plan. Prior to the Distribution Date, Publishing
has established Publishing 401(k) Plans and a related trust. Following the
Distribution Date and subject to applicable Law, Publishing Employees shall be
eligible to participate in Publishing 401(k) Plans in accordance with their
terms, and the Publishing Group shall be solely responsible for all Liabilities
arising under the Publishing 401(k) Plans. Without limiting the foregoing, the
Publishing Group shall be responsible for taking or causing to be taken all
necessary, reasonable, and appropriate action to establish, maintain, and
administer the Publishing 401(k) Plan so that it qualifies under Section 401(a)
of the Code and the related trust thereunder is exempted from Federal income
taxation under Section 501(a)(1) of the Code. Each Publishing Employee and
Former Publishing Employee who participated in a tax-qualified defined
contribution plan of

 

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Tribune (a “Tribune 401(k) Plan”) immediately prior to the Distribution
Effective Time shall remain a participant in such Tribune 401(k) Plan following
the Distribution Effective Time, and during such time, the account balance for
such Publishing Employee or Former Publishing Employee shall be credited with
applicable earnings and such current or former employee shall have the right to
withdraw any portion of his or her account balance in accordance with the terms
of the Tribune 401(k) Plan.

ARTICLE VII.

EQUITY AWARDS

Section 7.1. General Treatment of Outstanding Equity Awards. Under Section 11 of
the Tribune Equity Incentive Plan, if and to the extent necessary or appropriate
to reflect any extraordinary dividend or other similar transaction affecting
Tribune Common Stock (such as the Distribution to holders of Tribune Common
Stock), the Tribune Committee is authorized to proportionately adjust the
number, class, exercise price (if applicable) or other terms of any outstanding
(whether vested or unvested) Tribune Options and Tribune RSUs. The adjustments
set forth below shall be the sole adjustments made with respect to Tribune
Options and Tribune RSUs in connection with the Distribution. Except as
otherwise provided in this Article VII, Tribune Options and Tribune RSUs that
are converted into Publishing Options or Publishing RSUs, as applicable, shall
be subject to substantially equivalent terms and conditions (including with
respect to vesting) after giving effect to the Distribution as the terms and
conditions applicable to such Tribune Option or Tribune RSU immediately prior to
the Distribution Effective Time. For the avoidance of doubt, the Distribution
does not constitute a “change in control”, “change of control” or similar term
within the meaning of the Tribune Equity Incentive Plan.

Section 7.2. Tribune Option Adjustments. On or before the date hereof, the
Tribune Committee has approved, and Tribune and Publishing (as applicable) shall
take or cause to be taken all actions necessary to cause, the following
adjustments to be made to Tribune Options outstanding on the Distribution Date
but subject to the consummation of the Distribution:

(i) each Tribune Option (whether vested or unvested) then held by a Tribune
Employee or Former Tribune Employee shall be adjusted by (x) multiplying the
number of shares of Tribune Common Stock underlying such Tribune Option by the
Tribune Ratio, and rounding down the resulting number of shares to the nearest
whole share and (y) dividing the per share exercise price of such Tribune Option
by the Tribune Ratio, and rounding up the resulting per share exercise price to
the nearest whole cent; and

(ii) each Tribune Option (whether vested or unvested) then held by a Publishing
Employee or Former Publishing Employee shall be converted to a

 

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Publishing Option, with (x) the number of shares of Publishing Common Stock
underlying such Publishing Option, rounded down to the nearest whole share, to
be determined by multiplying the number of shares of Tribune Common Stock
underlying the Tribune Option by the Publishing Ratio, and (y) the per share
exercise price of such Publishing Option, rounded up to the nearest whole cent,
to be determined by dividing the per share exercise price of the Tribune Option
by the Publishing Ratio.

Section 7.3. Tribune RSU Adjustments. On or before the date hereof, the Tribune
Committee has approved, and Tribune and Publishing (as applicable) shall take or
cause to be taken all actions necessary to cause, the following adjustments to
be made to Tribune RSUs outstanding on the Distribution Date but subject to the
consummation of the Distribution:

(i) each Tribune RSU (whether vested or unvested) then held by a Tribune
Employee or Former Tribune Employee shall be adjusted by multiplying the number
of shares of Tribune Common Stock underlying such Tribune RSU by the Tribune
Ratio, and rounding down the resulting number of shares to the nearest whole
share; and

(ii) each Tribune RSU (whether vested or unvested) then held by a Publishing
Employee or Former Publishing Employee shall be converted to a Publishing RSU,
with the number of shares of Publishing Common Stock underlying such Publishing
RSU, rounded down to the nearest whole share, to be determined by multiplying
the number of shares of Tribune Common Stock underlying the Tribune RSU by the
Publishing Ratio.

To the extent that any Tribune RSUs outstanding on the Distribution Date are
subject to performance-vesting criteria, the Tribune Committee shall in good
faith make any such adjustments to such performance criteria that it shall deem
necessary or appropriate to take into account the Distribution.

Section 7.4. Tax Withholding and Reporting Relating to Equity Awards. Tribune
and Publishing agree that, unless prohibited by applicable Law, (a) Tribune will
be responsible for all tax withholding and reporting obligations that arise in
connection with the grant, vesting, exercise transfer or other settlement of any
equity incentive award held by Tribune Employees and Former Tribune Employees,
and (b) Publishing will be responsible for all tax withholding and reporting
obligations that arise in connection with the grant, vesting, exercise, transfer
or other settlement of any equity incentive award held by the Publishing
Employees and Former Publishing Employees. Tribune and Publishing agree to enter
into any necessary agreements regarding the subject matter of this Section 7.4
to enable Tribune and Publishing to fulfill their respective obligations
hereunder, including but not limited to compliance with all applicable Laws and
regulations regarding the reporting, withholding or remitting of income.

 

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Section 7.5. Miscellaneous Option and RSU Terms. After the Distribution
Effective Time, Tribune Options and Tribune RSUs adjusted pursuant to this
Article VII shall be settled by Tribune pursuant to the terms of the Tribune
Equity Incentive Plan, and Publishing Options and Publishing RSUs shall be
settled by Publishing pursuant to the terms of the Publishing Omnibus Incentive
Plan. Accordingly, it is intended that, to the extent of the issuance of such
Publishing Options and Publishing RSUs in connection with the adjustment
provisions of this Article VII, the Publishing Omnibus Incentive Plan shall be
considered a successor to the Tribune Equity Incentive Plan and to have assumed
the obligations of the applicable Tribune Equity Incentive Plan to make the
adjustment of the Tribune Options and Tribune RSUs as set forth in this Article
VII. The Distribution Effective Time shall not constitute a termination of
employment for any Publishing Employees for purposes of any Tribune Option or
Tribune RSU.

Section 7.6. Adoption of the Publishing Omnibus Incentive Plan. In connection
with the Distribution, prior to the Distribution Effective Time, Publishing
shall adopt the Publishing Omnibus Incentive Plan for purposes of granting the
Publishing Options and Publishing RSUs provided for in this Article VII and
awarding certain Publishing employees, officers and non-employee directors
equity-based compensation, each on the terms and conditions set forth in the
Publishing Omnibus Incentive Plan and an applicable award agreement.

Section 7.7. Section 16(b) of the Securities Exchange Act. By its approval of
this Agreement and by the Tribune Committee’s approval of the equity adjustments
provided in this Article VII, the respective Boards of Directors of Tribune and
Publishing intend to exempt from the short-swing profit recovery provisions of
Section 16(b) of the Securities Exchange Act of 1934, by reason of the
application of Rule 16b-3 thereunder, all acquisitions and dispositions of
equity incentive awards by directors and officers of Publishing and also intend
expressly to approve, in respect of any equity-based award, the use of any
method for the payment of an exercise price and the satisfaction of any
applicable Tax withholding (specifically including the actual or constructive
tendering of shares in payment of an exercise price and the withholding of
option shares from delivery in satisfaction of applicable Tax withholding
requirements) to the extent such method is permitted under the Publishing
Omnibus Incentive Plan and any award agreement.

ARTICLE VIII.

SHORT TERM CASH INCENTIVES, ETC.

Section 8.1. Publishing Bonus Awards. Publishing shall be responsible for
determining all bonus awards that would otherwise be payable under the Tribune
Short-Term Incentive Plans or any individual retention bonus arrangements to
Publishing Employees for the year in which the Distribution Effective Time
occurs. Publishing shall also determine for Publishing Employees (i) the extent
to which established performance criteria (as interpreted by Publishing, in its
sole discretion, and as reasonably adjusted by

 

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Publishing in good faith to take into account the Distribution) have been met
and (ii) the payment level for each Publishing Employee. Publishing shall assume
all Liabilities with respect to any such bonus awards payable to Publishing
Employees for the year in which the Distribution Effective Time occurs and
thereafter.

ARTICLE IX.

GENERAL AND ADMINISTRATIVE

Section 9.1. Sharing of Information. Subject to any consents required or any
other restrictions imposed at law, each Party shall each provide to any other
Party and its agents and vendors all information that such other Party may
reasonably request to enable the requesting party to administer efficiently and
accurately each of its Plans and to determine the scope of, and to fulfill, its
obligations under this Agreement. Publishing shall provide Tribune or its
designees, on a timely basis, such information, including dates of termination,
length of service and last known addresses, and other assistance as it or they
shall reasonably request from time to time to administer its on-going
obligations under this Agreement with respect to Publishing Employees and Former
Publishing Employees. Any information shared or exchanged pursuant to this
Agreement shall be kept confidential by the Parties and used only for and to the
extent necessary to establish, maintain and administer the plans, programs and
agreements as contemplated by this Agreement.

Section 9.2. Cooperation.

(a) On-Going Plan Administration. Tribune may from time to time establish
reasonable administrative guidelines or procedures to be followed by Publishing
to facilitate the operation of any Tribune Plan under which there are continuing
obligations to Publishing Employees or Former Publishing Employees following the
Distribution Date.

(b) General Cooperation. Each of the Parties hereto will use its commercially
reasonable efforts to promptly take, or cause to be taken, any and all actions
and to do, or cause to be done, any and all things necessary, proper and
advisable (including, without limitation, any actions required under applicable
Laws and regulations) to fulfill their respective duties obligations
contemplated by this Agreement. The actions described in the immediately
preceding sentence shall include, without limitation, adopting plans or plan
amendments and the payment of compensation due to any Tribune Employee, any
Publishing Employee or any Former Publishing Employee. Each of the Parties
hereto shall cooperate fully on any issue relating to the duties and obligations
contemplated by this Agreement for which the other Party seeks a determination
letter or any other filing, consent, or approval with respect to Governmental
Authorities.

 

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Section 9.3. Consent of Third Parties. If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor) and such consent
is withheld, the Parties shall use their commercially reasonable efforts to
implement the applicable provisions of this Agreement to the full extent
practicable. If any provision of this Agreement cannot be implemented due to the
failure of such third party to consent, the Parties shall negotiate in good
faith to implement the provision in a mutually satisfactory manner. The phrase
“commercially reasonable efforts” as used in this Agreement shall not be
construed to require the incurrence of any non-routine or unreasonable expense
or liability or the waiver of any right.

Section 9.4. No Third Party Beneficiaries.

(a) Nothing in this Agreement shall confer upon any person (nor any beneficiary
thereof) any rights under or with respect to any plan, program or arrangement
described in or contemplated by this Agreement and each person (and any
beneficiary thereof) shall be entitled to look only to the express terms of any
such plan, program or arrangement for his or her rights thereunder. In
particular, but not in limitation of the foregoing, nothing in this Agreement
shall give rise to the creation or amendment of any employee benefit plan,
program or arrangement under ERISA and no person participating in any employee
benefit plan that is covered by this Agreement shall have any claim or right
under such plan or ERISA derived from the terms, conditions or provisions of
this Agreement.

(b) Nothing in this Agreement shall create any right of any Person to object or
to refuse to assent to Tribune’s or Publishing’s assumption of, succession to or
creation of any agreement or plan, program or arrangement relating to
employment, employment separation, severance or employee benefits, nor shall
this Agreement be construed as recognizing that any such rights exist.

Section 9.5. Fiduciary Matters. The Parties acknowledge that actions
contemplated to be taken pursuant to this Agreement may be subject to fiduciary
duties or standards of conduct under ERISA or other applicable Law, and no party
shall be deemed to be in violation of this Agreement if such party fails to
comply with any provisions hereof based upon such party’s good faith
determination, based on the advice of outside legal counsel, that to do so would
violate such a fiduciary duty or standard.

 

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Section 9.6. Notices.

(a) Any notice, demand, claim, or other communication under this Agreement shall
be in writing and shall be deemed given to a Party when (i) delivered to the
appropriate address by hand or by nationally recognized overnight courier
services (costs prepaid); (ii) sent by facsimile with conformation or
transmission; (iii) received or rejected by the addressee, if sent by certified
mail, return receipt requested, in each case to the following addresses and
facsimile numbers and marked to the attention of the person designated below (or
to such other address, facsimile number or person as a party may designate by
notice to the other Parties):

(b) If to Tribune, to:

Tribune Media Company

435 North Michigan Avenue

Chicago, Illinoi 60611

Attn.: General Counsel

Facsimile: (312) 222-4206

Email: elazarus@tribune.com

(c) If to Publishing, to:

Tribune Publishing Company

202 West First Street

Los Angeles, California 90012

Attn.: Julie Xanders

Facsimile: (213) 237-4401

Email: Julie.Xanders@latimes.com

Section 9.7. Incorporation of Separation Agreement Provisions. The following
provisions of the Separation Agreement are hereby incorporated herein by
reference, and unless otherwise expressly specified herein, such provisions
shall apply as if fully set forth herein mutatis mutandis (references in this
Section 9.7 to a “Section” shall mean a section of the Separation Agreement, and
references in the material incorporated herein by reference shall be references
to the Separation Agreement): Sections 14.3, 14.6 through 14.8 and 14.10 through
14.17.

 

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IN WITNESS WHEREOF, each Party has caused its dully authorized officer to
execute this Agreement, as of the date first written above.

 

TRIBUNE MEDIA COMPANY By:  

/s/ Steven Berns

  Name:   Steven Berns   Title:   Executive Vice President and Chief Financial
Officer TRIBUNE PUBLISHING COMPANY By:  

/s/ Steven Berns

  Name:   Steven Berns   Title:   President and Chief Executive Officer

[Signature Page to Employee Matters Agreement]