exv10w2



 





EXHIBIT 10.2




EXECUTION COPY




September 13, 2006




VIA HAND DELIVERY

PERSONAL AND CONFIDENTIAL




James R. Van Horn

[address]




Re: Termination of Employment from Sun-Times Media Group, Inc. 




Dear Jim:




     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 January 1, 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 positions of Vice President,
General Counsel and Secretary 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. 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
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 Eight Hundred Seventy-Five Thousand Dollars ($875,000.00), 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, on the Effective Date, (i) all unvested cash Incentive
Awards (within the meaning of the Hollinger International Inc. 2006 Long-Term Incentive Plan
(“LTIP”)) shall become immediately vested and payable (if applicable) as and to the extent provided
in the LTIP, and (ii)(A) all unvested equity-based awards under the LTIP or otherwise that would
have vested under the original vesting schedule for such awards at any time during 2007 shall
become immediately fully vested and payable (if applicable) and (B) all other unvested equity-based
awards under the LTIP or otherwise shall immediately terminate.



     (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) Outplacement Services. Subject to the last sentence of this Paragraph 2,
Sun-Times shall provide outplacement services to you for twelve months following the Effective Date
through Kensington International or another nationally recognized outplacement services firm
selected by the Company, at the highest executive-level outplacement product offered by Kensington
International or such other firm, provided that the costs of such outplacement services shall not
exceed 10% of your base salary in effect as of the Effective Date. The Company agrees to use its
reasonable efforts to facilitate the provision of such services at a location within New Jersey
within a reasonable distance from your primary residence.



     (e) 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 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.



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     Notwithstanding the foregoing, payments under Paragraphs 2(a) (or the corresponding Change in
Control Benefit, as applicable) and 2(e) 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 2(c) (or the corresponding Change in Control Benefits, as applicable) and
2(d) 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.



     3. Consulting; Cooperation.



     (a) During the six-month period following the Effective Date, you agree to provide to
Sun-Times and its subsidiaries and affiliates, on an as-needed basis, consulting services
including, but not limited to, assisting your successor in the assumption of your prior
responsibilities, making introductions as needed for a successful transition, and providing such
additional reasonable assistance to ensure a smooth transition of responsibilities. As
consideration for your agreement to provide such consulting services, Sun-Times shall pay you an
additional cash lump sum payment in the amount of $200,000 at the same time the cash severance
payment in Paragraph 2(a) is paid to you.



     (b) 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).



     (c) Sun-Times agrees to reimburse you for all reasonable out-of-pocket expenses associated
with the provision of such consulting services and 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 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,



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customers, suppliers, employees, lenders, competitors, or other business associates.




     (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 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 by the Effective Date, 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 agree that for a period of one (1) year following the Effective Date, you will not,
directly or indirectly, on behalf of yourself or any third party, induce or attempt to induce any
employee of Sun-Times or its subsidiaries or affiliates to leave the employ of Sun-Times or its
subsidiaries or affiliates or hire or attempt to hire any employees of Sun-Times or its
subsidiaries or affiliates. You acknowledge that this non-solicitation agreement constitutes a
material inducement to Sun-Times to enter into this Agreement, and any violation of this provision
by you will constitute a material breach of this Agreement.



     (c) 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.



     (d) 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.



     (e) Notwithstanding anything to the contrary in this Agreement, the parties acknowledge and
agree that the provisions of Sections 7D, 16 and 17 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.



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     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
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



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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 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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     Jim, 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:




	 	 	 	 	 	 	 
	 	 	 
	James R. Van Horn	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 






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