RELEASE AND SETTLEMENT AGREEMENT

 

<PAGE>

   PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE

  SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL

             TREATMENT. SUCH PORTIONS ARE DESIGNATED [REDACTED].

 

 

                                                                    EXHIBIT 10.20

 

                        RELEASE AND SETTLEMENT AGREEMENT

 

      This Release and Settlement Agreement (the "Agreement") is entered into

this 27th day of April 2004 between Peter Y. Atkinson ("Atkinson") and Hollinger

International, Inc. ("International").

 

      WHEREAS by resolutions dated June 19, 2003, and January 20, 2004, the

Board of Directors of International formed and authorized a Special Committee

(the "SC") to investigate, among other things, allegations regarding various

related-party transactions and payments, including various "non-competition"

payments;

 

      WHEREAS Atkinson was a recipient of the "non-competition" payments;

 

      WHEREAS, in early November 2003, Atkinson volunteered to repay a portion

of the "non-competition" payments;

 

      WHEREAS during the course of its investigation, the Special Committee

discovered, among other things, another category of related-party payments,

i.e., those made under the Hollinger Digital Management Incentive Plan;

 

      WHEREAS Atkinson was a recipient of payments under the Hollinger Digital

Management Incentive Plan;

 

      WHEREAS on December 10, 2003, the action Cardinal Value Equity Partners,

L.P. v. Black, et al., C.A. No. 105-N (Del. Ch., filed Dec. 10, 2003) (the

"Cardinal Action") was brought on behalf of International, naming Atkinson,

among other defendants, challenging, among other things, the "non-competition"

payments;

 

      WHEREAS on January 16, 2004, the SC filed suit against, among others,

Conrad M. Black and F. David Radler in the United States District Court for the

Southern District of New York, which case was subsequently dismissed and refiled

in the United States District Court for the Northern District of Illinois,

Eastern Division, Case No. 04C 0698 (the "Illinois Action");

 

      WHEREAS in or about April 2004, the SC began discussions with Atkinson

regarding resolving International's claims against Atkinson;

 

      WHEREAS, Atkinson wishes to settle and finally resolve all actual or

potential claims arising out of or relating to the matters that have been or may

be asserted against him in the Cardinal Action and the Illinois Action;

 

      WHEREAS, Atkinson has denied that he has liability to any of the

plaintiffs in the Cardinal Action and/or the Illinois Action and has not

admitted any of the allegations of the complaints filed in those actions;

 

      WHEREAS, Atkinson has agreed to enter into the Agreement to resolve any

potential liability in connection with the Cardinal Action and the Illinois

Action, and to reduce further expense, inconvenience, and the distraction of

burdensome and protracted litigation;

 

<PAGE>

 

      WHEREAS, the SC believes that this settlement with Atkinson (the "Atkinson

Settlement") is fair, reasonable and adequate and in the best interests of the

shareholders of International; and

 

      NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, subject to the

approval of the Court as more fully described herein, as follows:

 

      1. Settlement Amount-- "Non-Competition" Payments and Hollinger Digital

Management Incentive Plan Payments in Full-with Interest. Atkinson agrees to

pay to International, with interest, the "non-competition" payments he received,

as identified in paragraph 3 of the Complaint in the Illinois Action. The

"non-competition" payments (not including interest) for Atkinson total

$2,180,929. Atkinson also agrees to pay to International, with interest, the

Digital incentive compensation payments he received: he received $50,0000 on

August 11, 2000 and $100,000 on January 16, 2001, for a total of $150,000. The

applicable rate of interest is the U.S. federal rate at the time Atkinson

received each payment, compounded annually. The applicable rates are: (i) 6.33%

on the August 2000 payment (the first of the two Hollinger Digital Management

Incentive Plan payments); (ii) 6.01% on the November 2000 payments (the CanWest

payment and the first of the three U.S. Community newspaper payments); (iii)

5.61% on the January 2001 payment (the second of two Hollinger Digital

Management Incentive Plan payments); (iv) 5.07% on the February 2001 payment

(the second of the three U.S. Community newspaper payments) (v) 4.94% on the

April 2001 payment (the last of the three U.S. Community newspaper payments;

(vi) 4.07% on the July 2001 payment (the first of the two Osprey payments; and

(vii) 2.73% on the November 2001 payment (the second of the two Osprey

payments). The total amount to be paid by Atkinson including interest (as of

April 26, 2004) for the "non-competition" payments and the Hollinger Digital

Management Incentive Plan payments is $2,460,181.43. Atkinson has paid $350,000,

and the balance to be paid as of April 26, 2004 including interest is

$2,110,181.43 (the "Settlement Amount"). Atkinson will pay the Settlement Amount

into escrow by exercising stock options as provided in paragraph 2 below.

 

      2. Resignation and Exercise of Stock Options. Atkinson hereby resigns as

an officer of International as of April 27, 2004. Atkinson hereby confirms that

he is aware and that he has been advised that the United States securities laws

prohibit any person who has material non-public information about a company

from purchasing or selling securities of such company. Atkinson agrees that he

will not purchase or offer, sell, contract to sell, pledge, grant any option to

purchase, make any short sale or otherwise dispose of any such shares of common

stock of the Company, or any options or warrants to purchase any such shares of

stock of the Company, or any securities convertible into, exchangeable for or

that represent the right to receive such shares of common stock of the Company

while in possession of such information. Accordingly, International agrees to

allow Atkinson to exercise his vested stock options immediately upon his

resignation. Atkinson may exercise his vested options immediately upon his

resignation. If he elects to sell the resulting shares, he shall deposit all

proceeds of any such sale of stock resulting from the exercise of his vested

stock options into the Escrow Account. Atkinson agrees that a portion of the

proceeds equal to the Settlement Amount (plus all interest accrued thereon)

shall be released to International in satisfaction of Atkinson's obligations as

set forth in paragraph 1 of this Agreement. Upon satisfaction of such

obligations, International agrees that the remainder of those proceeds, if any,

shall revert to Atkinson. For purposes of this Agreement, "Escrow

 

                                       2

<PAGE>

 

Account" shall mean the account described in the Escrow Agreement, substantially

in the form attached hereto as Exhibit A, providing for the deposit of all

amounts due from Atkinson under the terms of this Agreement until Final

Approval. Upon Final Approval, the amounts will be wired to an account

designated by International, for International's unrestricted use. "Final

Approval" means the point at which the Final Order approving the Atkinson

Settlement becomes final and unappealable, whether by the passage of time,

affirmance on appeal or otherwise.

 

      3. Cooperation. Atkinson agrees to cooperate fully and actively with

International and in particular with the work of the SC as of the signing of

this Agreement. Atkinson agrees to make himself available to respond to

inquiries and provide information as reasonably requested by the SC, and agrees

to provide full and complete information as requested by the SC and as legally

permitted under applicable law. Atkinson and International further agree that

Atkinson will continue as a consultant to International pursuant to the terms of

a separate Consulting Agreement, in the form attached hereto as Exhibit B (the

"Consulting Agreement").

 

      4. Release and Settlement. Upon Final Approval, and payment in full of the

Settlement Amount, International and its agents, advisors, representatives,

affiliates, subsidiaries, divisions, officers, current and former directors,

shareholders, employees, attorneys, predecessors, successors and assigns do

hereby fully, finally and forever release Atkinson and any of his respective

agents, heirs, successors, assigns, survivors and executors from any and all

rights, interests, obligations, debts, dues, sums of money, accounts,

reckonings, damages, claims, actions, allegations, causes of action,

counterclaims or demands whatsoever, whether known or unknown, in law or in

equity, that have been or that could be asserted from the beginning of time

through the date hereof against Atkinson (the "Settled Claims") and Atkinson and

any of his respective agents, heirs, successors, assigns, survivors and

executors do hereby fully, finally and forever release International and its

agents, advisors, representatives, affiliates, subsidiaries, divisions,

officers, current and former directors, shareholders, employees, attorneys,

predecessors, successors and assigns from any and all rights, interests,

obligations, debts, dues, sums of money, accounts, reckonings, damages, claims,

actions, allegations, causes of action, counterclaims or demands whatsoever,

whether known or unknown, in law or in equity, that have been or that could be

asserted from the beginning of time through the date hereof against them. The

releases provided under this paragraph do not relate to any pending or future

securities class action suits and do not affect the rights of contribution and

indemnification the parties to this Agreement may have against each other in any

securities class action suits. The releases also do not release Atkinson or

International from their respective obligations under this Agreement or the

Consulting Agreement.

 

      5. Indemnification for Legal Expenses. International will advance monies

in accordance with Article 4.6 of the International's by-laws for reasonable

legal costs and expenses incurred by Atkinson in responding to the investigation

of the SC, regulatory investigations, and in defending litigation arising

therefrom. International also will reimburse Atkinson on the same basis for

reasonable legal costs and expenses incurred to date. Atkinson agrees to provide

International with details of legal costs and expenses incurred to date for

which reimbursement will be sought.

 

                                       3

<PAGE>

 

      6. Press Release. Any press release announcing this Agreement will be made

available to Atkinson for review and comment, but final approval on the contents

of the release will remain solely with International.

 

      7. Submission and Application to the Court. Atkinson acknowledges that

because he is a defendant in the Cardinal Action, this Agreement can only be

effective if approved by the Court. Atkinson further acknowledges that this

Agreement is one of a number of such agreements that may be entered into between

the SC, on behalf of International, and others (the "Settlements") and that the

SC, on International's behalf, intends to seek Court approval of the Settlements

as a single group to the extent necessary and appropriate. Therefore, as soon as

practicable after the execution of this Agreement and any other Settlements, and

the completion of the SC's investigation, the SC shall apply to the Delaware

Court of Chancery for a scheduling order (the "Scheduling Order") that shall

provide that:

 

            a.     a settlement hearing (the "Settlement Hearing") be held to

                  determine whether the Court should: (i) approve the

                  Settlements pursuant to the Chancery Court Rule 23.1 as fair,

                  reasonable, and adequate and in the best interests of

                  International's stockholders; and (ii) enter an Order and

                  Final Judgment dismissing Atkinson from the Cardinal Action

                  with prejudice, each party to bear its own costs and release

                  and enjoin prosecution against Atkinson of any and all Settled

                  Claims; and (iii) hear other such matters as the Court may

                  deem necessary and appropriate; and

 

            b.     a copy of the Notice of Hearing and Proposed Settlement of

                  Certain Defendants In Cardinal Value Equity Partners, L.P. v.

                  Black (the "Notice") shall be sent to all stockholders of

                  record of International as of the date of the Scheduling

                  Order, and further provide that the distribution of the Notice

                  substantially in the manner set forth in the Scheduling Order

                  constitutes the best notice practicable under the

                  circumstances, meets the requirements of applicable law and

                  due process, is due and sufficient notice of all matters

                  relating to the Settlements and fully satisfies the

                  requirements of due process and of Rule 23.1 of the Chancery

                  Court Rules.

 

      8. Notices. All costs incurred in identifying and notifying

International's stockholders of the Settlements, including the printing and the

copying of the Notice, as set forth in the Scheduling Order, will be paid by

International.

 

      9. Order and Final Judgment. If the Atkinson Settlement (including any

modification thereto made with the consent of International and Atkinson as

provided for herein) is approved by the Court, International and Atkinson shall

promptly request the Court to enter an Order and Final Judgment that will

automatically and without further action, among other things:

 

            a.     approve the Atkinson Settlement, adjudge the terms thereof to

                  be fair, reasonable, adequate and in the best interests of

                  International's stockholders, and direct consummation of the

                  Atkinson Settlement in accordance with the terms and

                  conditions of the Agreement;

 

                                       4

<PAGE>

 

            b.     determine that the requirements of Rule 23.1 of the Chancery

                  Court Rules and due process have been satisfied in connection

                  with the Notice to International's stockholders; and

 

            c.     dismiss Atkinson from the Cardinal Action with prejudice,

                  extinguish, discharge, and release, any and all Settled Claims

                  as against Atkinson, said dismissal subject only to compliance

                  by International and Atkinson with the terms of this Agreement

                  and any Order of the Court concerning this Agreement, and

                  permanently enjoin International from asserting, commencing,

                  prosecuting or continuing any of the Settled Claims.

 

      10. Right to Withdraw from the Atkinson Settlement. The parties hereto

shall have the right to withdraw from and terminate this Agreement as follows:

 

            a.     International and Atkinson shall each have the option to

                  withdraw from and terminate the Agreement (the "Termination

                  Option") in the event that (i) either the Scheduling Order or

                  Order and Final Judgment referred to above are not entered

                  substantially in the customary form for derivative settlements

                  in Delaware, or in some other form acceptable to International

                  and Atkinson, (ii) the Atkinson Settlement is not approved or

                  is materially modified by the Court or upon appeal, (iii) any

                   of the conditions of the Atkinson Settlement are not

                  fulfilled, including the SC's determination, in its sole

                  discretion, that Atkinson has failed to fulfill his

                  cooperation obligations as described in paragraph 3, above, or

                  (iv) application for the Scheduling Order shall not have been

                  made on or before October 31, 2004 (each of which shall

                  constitute a "Termination Event").

 

             b.     In order to exercise a Termination Option, the terminating

                  party must provide, within twelve business days of the

                  Termination Event giving rise to such Termination Option,

                  written notice of such withdrawal and the grounds therefor to

                  all si