EMPLOYMENT AGREEMENT

 

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                                                                 EXHIBIT 99.3

 

                              EMPLOYMENT AGREEMENT

 

      This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, originally dated as of

March 15, 2000, and amended and restated on July 1, 2005 (the "Restatement

Date"), originally entered into between MediaNews Services, Inc., a Delaware

corporation, whose rights and obligations have been assigned to and assumed by

MediaNews Group, Inc. (the "Company"), a Delaware corporation, and Joseph J.

Lodovic, IV ("Executive"). Capitalized terms used but not defined herein are

used as defined in Section 12.

 

                                   WITNESSETH:

 

      WHEREAS, the Company wishes to employ and retain the services of

Executive, and Executive wishes to be employed by the Company.

 

      NOW, THEREFORE, in consideration of the mutual covenants herein contained,

this Agreement is hereby amended and restated, to read in full, and the Company

and the Executive hereby agree, as follows:

 

      1. Period of Employment.

 

      Company shall employ the Executive to perform the services described

herein, with his principal office activities being situated in Denver, Colorado,

or such other location as the Executive and the Company's Chief Executive

Officer shall mutually agree upon, for the period commencing January 1, 2000,

and terminating December 31, 2009, unless earlier terminated as provided herein

or extended as provided in the next paragraph. Upon termination of this

Agreement, Executive's employment with the Company and its subsidiaries shall

terminate.

 

      Effective January 1, 2010, this Agreement shall be automatically renewed

for additional periods of one year each unless either party shall have given

notice to the other at least one hundred twenty (120) days prior to December 31,

2009 or the expiration of any subsequent one-year term, electing not to renew

this Agreement, in which case this Agreement shall terminate on the next

succeeding December 31.

 

      2. Compensation.

 

      During the period of his employment, Executive shall:

 

            (a) be paid a base salary, in equal monthly installments, on the

      regular pay day established for executives of the Company, at the annual

      rate of six hundred fifty five thousand two hundred Dollars ($655,200.00),

      which salary shall be increased annually, commencing January 1, 2006, at

      an annual rate of five percent (5%), or such higher annual rate as the

      Board of Directors of the Company shall determine appropriate; provided,

      that if the Company's Chief Executive Officer determines that business

      conditions are such that all or a portion of the foregoing increases

      should be delayed until such time as those conditions improve, then

      concurrently with the Chief Executive Officer's decision to delay similar

      annual increases relative to his own salary, such increases may

      appropriately be delayed;

 

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            (b) be reimbursed in a manner consistent with policies of the

      Company established for executive personnel, for all reasonable expenses

      of the Company and its subsidiaries incurred by the Executive in the

      discharge of any duties hereunder;

 

            (c) receive such fringe benefits including accident,

      hospitalization, disability, medical and life insurance plans, as shall be

      made generally available to the executive personnel or other employees of

      the Company or as otherwise approved by the Company's Chief Executive

      Officer;

 

            (d) have an appropriate opportunity, commensurate with his executive

      stature, to participate in all stock options, restricted stock or other

      forms of equity ownership plans, and incentive plans which may be

      established for executive personnel of the Company;

 

            (e) be eligible to receive an annual bonus for each of the Company's

      fiscal years (commencing with the fiscal year ended June 30, 2005)

      commencing before the termination of this Agreement (pro rated for partial

      years prior to termination hereof based on performance for the full fiscal

      year) of up to $400,000 payable as soon as practicable after completion by

      the Company's independent accountants of their audit of the Company for

      the relevant fiscal year (but in no event later than the March 15

      immediately following the end of the relevant fiscal year), based on a

      comparison of operating profits to the budget of the Company approved by

      the Company's Board of Directors for such fiscal year as follows (or in

      such greater amounts as may be approved by the Company's Board of

      Directors):

 

                  (i)   If operating profits for such fiscal year are 100% or

                        more of budget, then the bonus amount payable shall be

                        $350,000, plus 5% of the excess of operating profits

                        over budget, up to a total of an additional $50,000

                        (i.e. a maximum bonus of $400,000);

 

                  (ii)  If operating profits for such fiscal year are 95% or

                        more (but under 100%) of budget, then the bonus amount

                        payable shall be $300,000;

 

                  (iii) If operating profits for such fiscal year are 90% or

                        more (but under 95%) of budget, then the bonus amount

                        payable shall be $250,000;

 

                  (iv)  If operating profits for such fiscal year are 85% or

                        more (but under 90%) of budget, then the bonus amount

                        payable shall be $150,000;

 

                  (v)   If operating profits for such fiscal year are 80% or

                        more (but under 85%) of budget, or if no budget has been

                        adopted and approved for such fiscal year, then the

                        bonus amount payable shall be $100,000; and

 

                  (vi)  If operating profits for such fiscal year are under 80%

                        of budget, then no bonus shall be payable; and

 

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            (f) a one-time bonus of $100,000.

 

      All payments made payable to the Executive under this Agreement shall be

subject to withholding for any applicable taxes, social security or other

governmental levies.

 

      3. Duties.

 

      The Executive shall serve as President of the Company, reporting to the

Chief Executive Officer of the Company.

 

      The Executive accepts the aforementioned responsibilities at the

compensation and upon the terms specified herein. During the term of this

Agreement, Executive shall devote his best efforts principally to the service of

the Company, its affiliates and their subsidiaries and the performance of the

duties specified above, it being understood that the preponderance of

Executive's time will be applied to furthering the interest of such entities.

Except at the request of the Company, Executive shall not engage in any other

business activity or outside activity which is materially inconsistent with or

an impediment to the carrying out of his duties hereunder, provided that, so

long as it does not materially interfere with the performance of his duties

hereunder, Executive may serve as a director, trustee or officer of, or

otherwise participate in, trade, professional, educational, welfare, social,

religious and civic organizations.

 

      4. Vacation.

 

      Executive shall be entitled to an annual paid vacation of five weeks, such

vacation to be taken at such times as he may select.

 

      5. Death or Incapacity.

 

      In the event of death of Executive during the term hereof, this Agreement

shall terminate.

 

      If, on account of physical or mental disability, Executive shall fail or

be unable to perform the duties contemplated by this Agreement for a period of

180 consecutive days, the Company may, at any time thereafter upon 30 days'

notice to Executive, terminate this Agreement. In such event, this Agreement

shall terminate and come to an end on the date set forth in such notice as if

such date were the termination date of this Agreement.

 

      In the case of termination of this Agreement pursuant to this Section 5,

except for the rights of Executive and his beneficiaries under the benefit plans

described in Sections 2(c) and 2(d) of this Agreement, the Company shall not be

subject to any further obligation to Executive (or his estate or legal

representatives) hereunder, except that Executive (or his estate or legal

representatives) shall be entitled to receive payment of unreimbursed expenses

pursuant to Section 2(b) of this Agreement and the unpaid salary, vacation and

bonus due for service prior to termination of this Agreement, and in the case of

the death of Executive through and including the last day of the month in which

Executive died.

 

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      6. Covenant Not To Compete.

 

            (a) Executive agrees that after any termination hereof (other than

      termination (i) by Executive pursuant to paragraphs (a) or (b) of Section

      7 hereof or (ii) by the Company in breach of this Agreement), he will not,

      during the Restricted Period (as defined below), unless with the prior

      written consent of the Board of Directors of the Company, engage in, or

      materially assist any other business enterprise in, the business of

      publishing and distributing daily newspapers in any geographical areas in

      which daily newspapers owned or managed by the Company and/or its

      subsidiaries have paid print circulation in excess of 25,000 at the time

      of termination of this Agreement; provided, however, that the ownership of

      up to 5% of any class of publicly traded securities of any entity shall

      not be deemed to be a violation of this Section 6. "Restricted Period"

      means, in respect of the termination of Executive's employment, the period

      commencing on the date of termination of employment and ending on the

      first to occur of (x) the date one year after the date a replacement for

      Executive is hired (or another officer of the Company takes over his

      responsibilities) and (y) the second anniversary of the termination of

      Executive's employment.

 

            (b) The parties intend that the covenants contained in paragraph (a)

      shall be construed as a series of separate covenants, one for each state

      and other jurisdiction covered thereby, and one for each county and city

      included within such state or other jurisdiction and, except for

      geographic coverage, each such separate covenant shall be deemed

      identical. The parties agree that the covenants deemed included in

      paragraph (a) are, taken as a whole, reasonable in activities prohibited

      and geographic scope and their duration and no party shall raise any issue

      of the reasonableness of the scope or duration of the covenants in any

      proceeding to enforce any such covenants. If, in any judicial proceeding,

      a court shall refuse to enforce any such separate covenant, then the

      unenforceable covenant shall be modified in order to make it acceptable to

      the court and enforced accordingly, or, if necessary, deemed eliminated to

      the extent necessary to permit the remaining separate covenants to be

      enforced. Executive acknowledges that the remedy at law for any breach by

      him of this covenant will be inadequate and that the Company shall be

      entitled to injunctive relief for the same.

 

            (c) Notwithstanding anything to the contrary in this Section 6, the

      provisions of paragraph (a) of this Section 6 shall terminate and be

      ineffective (whether before or after termination of Executive's

      employment) from and after any Change in Control.

 

      7. Termination Of This Agreement For Certain Reasons.

 

            (a) Either party may terminate this Agreement prior to its stated

      term in the event of a material breach hereof by the other, provided that

      if such breach is capable of cure, it is not cured within 30 days of

      written notice thereof delivered by the non-breaching party to the

      breaching party.

 

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            (b) Executive may terminate this Agreement if his responsibilities

      and stature as President of the Company are diminished in any material

      respect below such responsibilities on the Restatement Date, and if such

      responsibilities and stature are not restored within 15 days of written

      notice of diminishment thereof delivered to the Company.

 

            (c) The Company may terminate this Agreement for "Cause" (as defined

      below).

 

            (d) Executive may terminate this Agreement in his discretion at any

      time upon 90 days' prior notice to the Company.

 

            (e) Termination pursuant to this Section 7 shall be by notice in

      writing specifying such material breach or other grounds and shall be

      effective on the date said notice is deemed to be given (or such later

      date provided for in this Section 7), without prejudice to the rights of

      the party upon whom such notice is served to contest such termination by

      any judicial means at such party's disposal.

 

            (f) For purposes of termination of this Agreement by the Company

      pursuant to paragraph (c), the following events shall be considered as

      "Cause":

 

                  (i)   unreasonable failure by the Executive to perform his

                        material duties as provided in Section 3 hereof, after

                        he has received written notice from the Company of his

                        alleged failure to perform the same, and has failed

                        within a reasonable period of time to cure such failure;

 

                  (ii)  theft, embezzlement or misappropriation by the Executive

                        of any material funds or other property of the Company

                        or its subsidiaries; or

 

                  (iii) any conviction or a plea of nolo contendere with respect

                        to any felony or any other serious crime involving moral

                        turpitude.

 

      8. Termination by Executive Upon a Change in Control.

 

      Executive may terminate this Agreement prior to its stated term following

the occurrence of a Change in Control. Such termination shall be by notice to

the Company in writing given during the one hundred eighty (180) days following

such Change in Control.

 

      9. Payment Upon Termination in Certain Circumstances.

 

            (a) If this Agreement is terminated by Executive pursuant to

      paragraphs (a) or (b) of Section 7 hereof, or by the Company in breach of

      this Agreement (except as provided in Section 9(b)), Executive shall be

      entitled to receive a cash payment equal to the greater of (x) the present

      value (based on the Company's then current cost of senior bank borrowings)

      of his projected salary pursuant to Section 2(a) and bonuses pursuant to

      Section 2(e) (prior to any elective deferrals or any other deductions) and

      the deemed

 

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      value of all fringe benefits for the balance of the term of this Agreement

      and (