FitzSimons Memo to Tribune Staff — On the Sale’s Benefits

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By: E&P Staff

Dennis J. FitzSimons — chairman, president and CEO of the Tribune Company — sent the following memo to staffers today in the wake of the announced agreement to sell the company to Sam Zell.

Dear Fellow Employee:

After a rigorous and thorough process, our board of directors today announced the completion of the company?s strategic review process launched last September.

Through a newly-formed Employee Stock Ownership Plan (ESOP) and an investment by Sam Zell, one of the nation?s most successful investors, the company will become privately-held. Everyone who currently owns Tribune stock will receive $34 per share in cash in a series of transactions that we expect to be completed immediately after regulatory approvals, hopefully by the end of this year.

Sam Zell will join our board in the near future, and become chairman when the merger of Tribune and the ESOP is complete. We welcome Sam to the board, and know he?ll bring valuable insights from his successful career.

The attached press release provides additional information. However, it?s important to note that this decision by the board accomplishes a number of objectives:

— The payment of $34 in cash for each Tribune share owned is especially relevant for employees. More than half of our employees own stock, and much of it is in retirement accounts. The opportunity to receive a premium cash price for these shares is a significant advantage for employees.

— As a private company, operating outside the glare of the public markets, we will be better able to focus on long-term growth as we transform our publishing and broadcasting businesses. All our efforts will be focused on the future and how we can best serve our readers, viewers, advertisers and communities in a rapidly changing media environment.

— The ESOP will enable eligible employees to share directly in the future success of the company as part of their retirement benefits. No cash investment is required from participants because Tribune?s ESOP will be funded solely through company contributions. In addition, the ESOP?s financial structure has tax advantages that will make more of the company?s cash flow available to pay down debt.

Understandably, you will have many questions about the newly-created ESOP and its impact on your retirement benefits. Importantly, there will be no change to retirement benefits earned by employees and retirees through the end of 2007. Employees will keep everything they?ve already earned. And beginning Jan. 1, 2008, eligible Tribune employees will participate in three retirement plans: the ESOP, a cash balance plan and continue to have the opportunity to contribute to a 401(k) account.

At 1 p.m. CDT, we?ll hold a companywide ?Town Hall? meeting to discuss today?s announcements. Also this afternoon, we?ll be launching an employee information website, available through TribLink and The site will include Q&As and other resources. In the weeks to come, I hope to visit as many business units as possible.

This is an important day in the history of our company. Remember, Tribune was a private company for 136 years and has been public for 24. Together, we will make this ownership structure work for our customers, communities and employees.

Thank you for your dedication and patience during the long review process. Now it?s time to move forward.


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