Document:

exv10w34

 

Exhibit 10.34

			
	
	 	

January 5, 2007

Mr. John J. Martin

654 Garland Avenue

Winnetka, IL 60093

Dear John:

On behalf of the Sun-Times News Group (STNG), I am pleased to offer you the position of Vice
President, Advertising Sales. We believe our challenging environment will provide you with
significant opportunities to realize your professional objectives. We are confident that your
professional talent would be a great asset to our Company, and more specifically, we would be
pleased to have you as a member of the senior management team.

This letter outlines and confirms the compensation and benefits arrangements of your offer and
employment with STNG. We also outline some general employment understanding.

Position

Your position will be Vice President, Advertising Sales. Major responsibilities include all
aspects of ad sales, as well as sales support functions. You will report to John Cruickshank,
Chief Operating Officer.

Employment Date

To be determined but no later than February 1, 2007.

Base Salary

Your base salary will be at the annual rate of $275,000.

Senior Executive Incentive Plan

You will be eligible to participate in STNG’s senior executive incentive plan with an annual bonus
potential of 75% of base pay, making your total targeted annual compensation $481,250. For the
first year of your employment, 2007, you are guaranteed the bonus in addition to your base pay. In
future years, the receipt of any incentive or bonus is based on targets set by management for
individual and Company performance. The targets are subject to change due to business
circumstances. Incentives are generally paid based on current year performance in the first
quarter of the following year.

 

 

Sign-on Bonus

We will pay you a $25,000 gross cash sign-on bonus. This cash award will be subject to federal,
state, local (if applicable) and FICA withholding. This will be paid in quarterly installments,
concluding December 31, 2007.

In addition, we will pay you a $25,000 cash award when you sign STNG’s non-compete agreement
that will memorialize your agreement to refrain from competing with the Company or any of its
affiliates or subsidiaries by accepting employment with or otherwise providing services for the
Tribune Company or any of its affiliates in any market served by any Sun-Times News Group
publication during your employment and for a period of 12 months after termination thereof.
This cash award will be subject to federal, state, local (if applicable) and FICA withholding.
This will be paid immediately after the start of your employment.

Long Term Incentive Plan (LTIP)

You will be eligible for a target long-term incentive equal to 40% of your base pay and expressed
in stock units distributed according to the LTIP plan.

Benefits

You will be eligible to participate in our various employee benefit programs based on a basis
equivalent to that enjoyed by other employees of the Company of similar seniority. Standard
major benefits include medical, dental, vision, short-term disability, long-term disability,
life insurance and profit sharing. At the executive level, you would be eligible for the
Executive Supplemental Life Insurance and Executive Long-Term Disability Insurance plans.
Benefits will be explained during Employee Orientation.

During your employment with STNG, we will provide you with an automobile and you will receive a
Company paid parking benefit due to the location and nature of your job.

You will be entitled to four (4) weeks’ vacation per calendar year, including this year 2007. In
addition, you will be eligible for all Company holidays as designated by management each year.

You will receive a Company paid membership to the East Bank Club, 500 North Kingsbury Street in
Chicago, Illinois.

Contingencies

This conditional offer of employment is contingent upon the following conditions and may be
withdrawn by STNG due to your inability to satisfy any one or more of these conditions. STNG or
its vendor, SpencerStuart will direct the reference evaluation process and may use outside
investigative or medical firms.

Physical Exam and Drug Test: You are required to complete a physical examination and drug
screen before this offer and your acceptance becomes final

	 	 	 
	John Martin — Offer of Employment

	 	Page 2

 

 

Past Employment History: This will include an in-depth employment check, civil and
criminal litigation checks, professional licensing authorities/securities regulatory
checks, forensic article screen, and credit review. We have attached a document outlining
the particulars of the in-depth background check that will be conducted.

Reference Evaluation: We will conduct a check of your business references.

INS: Prior to your employment, we will need documents, which show you are legally entitled
to work in the United States. This verification is required by the Immigration and
Naturalization Service and Federal Law.

Restrictive or Conflict of Interest Information

This offer is made based on your representation that you are not subject to any restrictive
covenants with any present and/or former employers. It is important that you are able to properly
safeguard confidential information that you may have acquired from your previous employer(s) and
that this obligation will not impede your ability to perform your position responsibilities with
STNG.

Severance Provisions

We have enclosed a copy of the Key Employee Severance Program.

Confidentiality

You agree to keep specifies of this letter confidential except that you may review it with your
financial advisor, attorney or immediate family. You are free to discuss the contents of this
letter with SpencerStuart and me or my designees.

You understand and agree that in the course of your employment, you will receive and become aware
of information, projects, practices, customer contracts and potential customers, which are
sensitive and confidential in nature. You agree to keep all such information strictly
confidential, and further agree that you will not communicate, disclose, divulge or otherwise use,
directly or indirectly, such confidential and/or sensitive information during and after your
employment with STNG. Confidentially is defined in the STNG Employee Handbook.

Acceptance of Contingent Employment Offer

By accepting this contingent offer of employment, you agree this letter contains the entire
understanding between STNG and yourself with respect to your employment and supersedes all previous
written or oral negotiations, commitments and agreements with respect to an offer of employment.

You understand that this letter is not an employment contract. By signing this letter, you
indicate your understanding that STNG is an “at will” employer. This means that you will be free
to terminate your employment at any time, for any reason, and STNG is free to do the same.

	 	 	 
	John Martin — Offer of Employment

	 	Page 3

 

 

You have read and acknowledge understanding of the “Employee Conduct Policy” and “Code of Business
Conduct and Ethics” by signing and returning the attached documents.

This letter, and its interpretation and application, will be governed and controlled by the laws of
the State of Illinois.

Please acknowledge your acceptance of this offer by signing and returning a copy to me within five
business days of receipt.

John, we look forward to your joining our senior management team. Your contributions will play a
key role in STNG’s overall success. If you have any questions, please contact me at (312)
321-2524.

Sincerely,

/s/ John Cruickshank

John Cruickshank

Chief Operating Officer

Enclosures:

Self-addressed stamped envelope

Key Employee Severance Program

Employee Conduct Policy

Code of Business Conduct and Ethics

Acceptance of Employment:

	 	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	     /s/ John J. Martin
	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

	 	 	 
	John Martin — Offer of Employment

	 	Page 4exv10w35

 

Exhibit 10.35

SUN-TIMES MEDIA GROUP, INC.

KEY EMPLOYEE SEVERANCE PROGRAM

PARTICIPATION AGREEMENT

          THIS AGREEMENT is entered into on January 22, 2007 by and between John J. Martin, an
individual residing in the State of Illinois (“Participant”) and Sun-Times Media Group, Inc., a
corporation incorporated under the laws of the State of Delaware (“STMG”).

RECITALS

Participant is an employee of Chicago Sun-Times, Inc. (the “Company”), a subsidiary of STMG.
Participant has been selected to participate in the STMG Key Employee Severance Program (“KESP”) by
the Compensation Committee of the STMG Board of Directors, by the full Board, or by the Chief
Executive Officer of STMG. The KESP has been designed to govern the benefits to be enjoyed by
Participant upon the termination of Participant’s employment by the Company under certain
circumstances defined more particularly herein. A condition of participation in the KESP is the
execution by Participant of a participation agreement in a form prescribed by STMG.

THEREFORE, it is hereby agreed as follows:

     1. Termination.

	 	a.	 	Nothing in this Agreement shall limit or restrict the ability of the
Company to terminate the employment of Participant, and no contract of employment
is intended or created hereby or by Participant’s participation in the Program.
The employment of Participant may be terminated in any of the following ways: (i)
as a result of death or permanent disability of the Participant; (ii) by the
Company for Cause (as defined herein), (iii) by the Participant other than for
Good Reason (as defined herein), (iv) by the Company other than for Cause or as a
result of death or permanent disability (a “Company Termination”), or (v) by the
Participant for Good Reason (hereinafter defined) (a “Good Reason Termination”).
The payments and benefits provided for in this Agreement shall be made to
Participant only in the event of a Company Termination or a Good Reason
Termination.
	 
	 	b.	 	In the event of a Company Termination or a Good Reason Termination,
the terminating party shall be required to provide the other party with not less
than fourteen (14) calendar days’ advance written notice of termination. The
Company shall have the right, in its sole discretion, to
require the Participant to remain employed by the Company for a period of 

 

 

	 	 	 	up to
thirty (30) days following notice of termination by either party, as a condition to
Participant’s receipt of the payments and benefits provided hereunder.

     2. Payments and Benefits Upon Termination: In the event of a Company Termination or
a Good Reason Termination, the Participant shall receive the following:

	 	a.	 	A lump sum payment (payable within ten (10) days of termination) for
any accrued, unused vacation time, reduced by all applicable tax withholding
requirements.
	 
	 	b.	 	A lump sum payment (payable within ten (10) days of termination)
equal to the (A) higher of (i) fifty percent (50%), or (ii) the percentage derived
by taking the period of January 1 through December 31 and calculating the number
of days the Participant is employed by the Company during the current calendar
year (to the termination date) on a percentage basis, multiplied by (B) the higher
of (x) twenty-five percent (25%) of Participant’s base salary, or (y) the most
recent annual bonus paid to Participant within the twelve month period preceding
the date of termination; and
	 
	 	c.	 	An amount equal to the Participant’s base salary in effect on the
date of termination, payable in twenty-six (26) bi-weekly installments in the same
manner that the Participant’s payroll is currently handled, less all appropriate
withholding amounts and deductions; and
	 
	 	d.	 	Continuation of all then-current benefit programs in which the
Participant is entitled to participate on the date of Participant’s termination of
employment, subject only to Participant’s continued premium contributions at the
same level as on the date of termination. In the event that Participant is
precluded by the terms of such programs or by law from participation following
termination of employment, the Company shall provide an equivalent benefit in the
manner it deems appropriate.

     3. Definitions. As used in this Agreement, the following terms shall have the
meanings ascribed below:

	 	a.	 	“Cause” shall mean (i) Participant engaging in intentional and
willful misconduct, including a breach of the Participant’s duty of loyalty to the
Company, to the detriment of the Company, or (ii) Participant being convicted of,
or plea of nolo contendere to, a crime involving fraud, dishonesty, inappropriate
moral standards, or violence.
	 
	 	b.	 	“Good Reason” shall mean the occurrence of both a Change of Control
and the Participant experiencing (i) a material reduction in title, authority or
responsibilities, (ii) Participant being required to relocate more than
fifty (50) road miles from the office where Participant currently works, or

2

 

	 	 	 	(iii) the failure of the Company to obtain an explicit undertaking from any successor to
honor the terms of this Severance Program. For a Good Reason Termination to be
valid, the affected Participant must give notice to the Company of the reasons
giving rise to the Good Reason and provide the Company ten (10) days to cure said
Good Reason. In addition, the Company must be notified of a Good Reason
Termination within six (6) months of the effective date of the action giving rise
to the cause of the Good Reason.
	 
	 	c.	 	A “Change in Control” will be deemed to occur upon:

	 	1.	 	the acquisition after the date of this Agreement
by any “person” (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)
(excluding for this purpose, (i) STMG or any subsidiary of STMG or (ii)
any employee benefit plan of STMG or of any subsidiary of STMG or any
person or entity organized, appointed or established by STMG for or
pursuant to the terms of any such plan which acquires after the date of
this Agreement beneficial ownership of voting securities of STMG) of
ownership of securities of STMG whereby such person becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly of securities of STMG representing more than
fifty percent (50%) of the combined voting power of STMG’s then
outstanding securities; provided, however, that no Change in Control
will be deemed to have occurred as a result of a change in ownership
percentage resulting solely from an acquisition of securities by STMG;
or
	 
	 	2.	 	John F. Bard, Cyrus F. Freidheim, Jr., John M.
O’Brien, Gordon A. Paris, Graham W. Savage, Raymond G. H. Seitz, and
Raymond S. Troubh (collectively, “Incumbent Directors”) and any new
directors whose election by the Board of Directors or nomination by the
Board of Directors for election by STMG’s stockholders was approved by a
vote of a least two-thirds (2/3) of the directors then still in office
who either are Incumbent Directors or whose election or nomination for
election was previously so approved (such new directors being referred
to as “Successor Incumbent Directors”) ceasing for any reason to
constitute at least a majority of the Board of Directors; or
	 
	 	3.	 	the adoption, enactment or effectiveness of any
action (including, without limitation, by resolution or by amendment to
STMG’s charter or bylaws) that materially limits or diminishes the power
or authority of STMG’s board of directors or any committee thereof, if
such action has not been approved by a vote of a least

3

 

	 	 	 	two-thirds (2/3) of the directors then still in office who either are
Incumbent Directors or Successor Incumbent Directors; or
	 
	 	4.	 	the consummation of, or the execution of a
definitive agreement the consummation of which would result in, a
reorganization, merger or consolidation, or sale or other disposition of
all or substantially all of the assets of STMG (a “Business
Combination”), in each case, unless, following such Business
Combination, all or substantially all of the individuals and entities
who were the beneficial owners of outstanding voting securities of STMG
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the entity resulting from such
Business Combination (including, without limitation, an entity which, as
a result of such transaction, owns STMG, or all or substantially all of
STMG’s assets, either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Business Combination, of the outstanding voting securities of
STMG; or
	 
	 	5.	 	the consummation of a complete liquidation or
dissolution of STMG.

     4. Information and Confidentiality. Participant agrees to hold in the strictest
confidence and not to disclose any of the terms hereof to any third person, and to refrain from
making any statements or representations to any employee of the Company or any affiliate or
subsidiary of STMG or to any of their respective customers, suppliers, or competitors, or to the
public at large which might disparage or have a detrimental effect on STMG, the Company, or the
Company’s business, operations, public image, reputation or its relations with advertisers,
customers, suppliers, employees, lenders, competitors, or other business associates; or which
differ from the fact that Participant has separated from the Company. STMG and the Company shall
refrain from making any statements or representations to any third party that may disparage
Participant’s personal or professional reputation or have a detrimental effect on Participant’s
future employment.

     5. Return of Company Property. Upon Participant’s termination, Participant will
certify to the Company that all of the Company property in Participant’s possession has been
returned to the Company, including, but not limited to, all access cards, facility keys, credit
cards, automobiles, cell phones, personal digital assistants (e.g., Blackberry, Palm Pilots),
and/or computers. Any files, correspondence or computer discs Participant may have relative to
Company business or containing Company information must also be returned on the date of
termination.

4

 

     6. Release. For and in consideration of the benefits provided hereunder, upon
termination, Participant will execute and deliver to the Company a full and complete release of
liability of the Company, STMG, and any and all of STMG’s subsidiaries and affiliates in
substantially the form attached hereto as Exhibit A.

     7. Acknowledgment; No Admission; Confidentiality.

	 	a.	 	Upon termination, Participant will represent and warrant to the
Company that: (a) he or she has no pending claims against the Company, STMG or any
of STMG’s subsidiaries or affiliates with any municipal, state, federal or other
governmental or non-governmental entity; and (b) that Participant will not file
any claims with respect to any events occurring on or before the date of
termination. Participant will also acknowledge and agree that by entering into
this Agreement he or she may never make claim or demand upon or sue the Company,
STMG or any of STMG’s subsidiaries or affiliates for any reason whatsoever
relating to anything that has happened through the date hereof.
	 
	 	b.	 	Both the Company and Participant 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, an admission of liability or wrongdoing
by either party for any purpose whatsoever. Further, each of the Company and
Participant acknowledges and agrees 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.
	 
	 	c.	 	Each of the Company and Participant agrees that the terms of this
Agreement shall be strictly confidential. Participant further agrees that he or
she will not disclose the terms of or the amount paid under this Agreement to any
other person or entity, other than his or her immediate family, attorney,
accountant and tax preparer, unless required by law to do so or expressly
authorized to do so in writing by the Company.

     8. Arbitration of Disputes; Payment of Expenses.

	 	a.	 	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 (the “AAA”) as then in effect. The arbitrator shall be selected by
joint agreement of the Company and Participant, 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

5

 

	 	 	 	borne by the party that does not prevail in such arbitration or in any court
proceeding relating to enforcement of this Agreement.
	 
	 	b.	 	The existence and execution of this Agreement shall not be
considered, and shall not be admissible in any proceeding, as an admission by the
Company of any liability, error, violation or omission. Participant acknowledges
that nothing contained in this Agreement or any other agreement or instrument
delivered by the Company to Participant shall constitute an admission that the
Company is in any way liable to Participant or has in any way violated any law.
Participant further acknowledges that no precedent, practice, policy or usage
shall be established by this Agreement or the Company’s offer of benefits herein.
	 
	 	c.	 	Each party will bear its own expenses incurred in the preparation,
review and approval of this Agreement, including, without limitation, legal,
accounting, tax advisory or other similar fees and expenses.

     9. Non-solicitation. For a period of one (1) year following the Effective Date,
Participant will not, directly or indirectly, on behalf of him/herself or any third party, solicit,
induce or attempt to solicit or induce any employee of any subsidiary or affiliate of STMG
(including the Company) to leave the employ of his or her employer. Participant acknowledges that
this non-solicitation agreement constitutes a material inducement to STMG to enter into this
Agreement, and any violation of this provision by Participant will constitute a material breach of
this Agreement.

     10. Governing Law. This Agreement shall be governed by Illinois law without giving
effect to choice of law principles that would direct the application of the law of another
jurisdiction.

     11. Consideration and Revocation. Participant shall be afforded an opportunity to
consider and revoke his or her agreement to the terms set forth herein as required by applicable
statutes, rules and regulation in effect at the time of termination.

     12. Cooperation. In consideration of the separation benefits provided herein,
Participant agrees that he or she will provide full cooperation with the Company (i) in the
resolution and investigation of all open issues relating to the Company about which the Participant
may have information, including but not limited to pending and future legal matters, internal
investigations and the like, and (ii) in the execution of such further documentation as is deemed
reasonably necessary in the opinion of the Company to effect Participant’s separation or in
connection with issues described in clause (i) of this Section 12.

[the balance of this page is blank]

6

 

     IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above
written.

	 	 	 	 	 
	 	 	SUN-TIMES MEDIA GROUP, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Gregory L. Powell
	 

	 	 	 	 
	 

	 	Name:
	 	Gregory L. Powell
	 

	 	 	 	 
	 

	 	Title:
	 	VP, Human Resources
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	/s/ John J. Martin
	 	 	 
	 	 	John J. Martin

7

 

EXHIBIT A

     You hereby agree (except for any vested or accrued benefits to which you are entitled under
the Company’s employee benefit plans and any rights you may have under COBRA) 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,
which you have (up through and including the date hereof) against the Company on account of or in
any way growing out of your employment by the Company or your separation therefrom, including but
not limited to, 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 Participant 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.

     Release of Age Discrimination Claims. In further consideration of the promises made
by the Company in this Agreement, you specifically release the Company from all claims or rights
you may have as of the date you sign this Agreement arising under the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. Sec. 621, et seq. You further agree that:

     (a) your waiver of rights under this release is knowing and voluntary and in compliance with
the Older Workers Benefit Protection Act of 1990 (OWBPA);

     (b) you understand the terms of this release;

     (c) the consideration provided in Paragraph 3 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;

     (d) the Company is hereby advising you in writing to consult with your attorney prior to
executing this release;

     (e) the Company is giving you a period of twenty-one days within which to consider this
release;

8

 

     (f) following your execution of this release you have seven 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, Esq., Legal Department, Chicago Sun-Times Inc., 350 North
Orleans Street, 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

     (g) 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 Release does not waive rights or claims that may arise under the ADEA after the date you
sign this Agreement.

9

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