EXHIBIT 10.1
 

 
May 11, 2010

Mr. William J. Abbott
50 Snowball Drive
Cold spring Harbor, NY 11724
 
Re: Employment Agreement Amendment
 
Dear Mr. Abbott
 
This will confirm our agreement to amend your employment agreement with Crown
Media Holdings, Inc. (“Crown”) dated May 7, 2009 (the “Agreement”) as follows:
 
1.  
The term of the Agreement and your employment by Crown as set out in Paragraph 2
of the Agreement, is extended until December 31, 2012, unless otherwise
terminated in accordance with the terms of the Agreement.

 

 
2.  
Effective June 1, 2010, your base salary as set forth in Paragraph 3(a) shall be
Six Hundred Eighty-Seven Thousand Dollars ($687,000) per year. On June 1 of each
year, Employer shall consider additional salary increases at its discretion
based on your performance.

 
Except as amended herein, all other terms of the Agreement will remain in full
force and effect.
 

 
Very truly yours,
Crown Media Holdings, Inc.

By: /s/ DONALD J. HALL, JR.
Donald J. Hall, Jr.
Co-Chairman of the Board

Agreed and Accepted:

/s/ WILLIAM J. ABBOTT
William J. Abbott

 
 

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CROWN MEDIA HOLDINGS, INC.
2010 LONG TERM INCENTIVE COMPENSATION AGREEMENT

THIS LONG TERM INCENTIVE COMPENSATION AGREEMENT (the “Agreement”) is made and
entered into as of January 1, 2010 (the “Grant Date”), by and between Crown
Media Holdings, Inc., a Delaware corporation (“Crown”), and William Abbott
(“Executive”) pursuant to the terms and conditions of the Amended and Restated
Crown Media Holdings, Inc. 2000 Long Term Incentive Plan (the
“Plan”).  Capitalized terms not defined in this Amended Agreement shall have the
meanings set forth in the Plan.

1.           Awards.

(a)           General Award.  Pursuant to the Plan, Crown grants to Executive
the opportunity to earn $536,000 (“Target Award”), subject to the terms and
conditions set forth in this Agreement and the Plan.  A copy of the Plan has
been delivered to the Executive. By signing below, the Executive agrees to be
bound by all the provisions of the Plan.  Target Award constitutes an unsecured
promise of Crown to deliver to Executive on the Delivery Date (as defined
below) cash in the amount of the Target Award actually achieved.  Executive has
only the rights of a general unsecured creditor of Crown.

           (b)           Types of Awards.  Of the total Target Award, $268,000
(50%) shall be deemed to be the Employment Award and $268,000 (50%) shall be
deemed to be the Performance Award (collectively, the “Awards”).  Vesting of the
Performance Award shall depend on the degree to which the cumulative cash flow
and EBITDA plan set forth on Schedule 1 hereto (“Performance Plan”) is
achieved.  The applicable provisions of this Agreement shall be specified by
type of award, and if not so specified, shall apply to both awards granted
hereunder.

2.           Vesting.

(a)           The Employment Award.  Subject to continued employment with Crown
and/or its affiliates as of August 31, 2012, the Employment Award shall vest and
become nonforfeitable on August 31, 2012.

(b)           The Performance Award.

(i)           Performance Award Metrics.  Subject to continued employment with
Crown and/or its affiliates, as of December 31, 2012, the Performance Award is
eligible to vest and become nonforfeitable in accordance with the 3-Year
Cumulative Performance Award Metrics attached hereto as Schedule 1.

(ii)           Other Measures.  The Compensation Committee shall also have the
ability to increase or decrease the payout based on an assessment of
demographics achieved, relative market conditions and management of expenses.

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3.           Settlement of Awards.

Subject to any cancellation of Awards pursuant to Section 4, Crown shall deliver
to Executive on the Delivery Date, cash in the amount of the Target Award
actually achieved, unless Executive has otherwise elected to defer receipt of
such award.  Executive may only elect to defer provided that such election is
made in accordance with the terms of Crown’s Deferred Compensation Plan as
amended and restated effective January 1, 2008.

4.           Termination of Awards and Non-Delivery Upon Certain Other Events.

Subject to Section 5 hereof, Executive’s rights with respect to any outstanding
unvested Awards shall immediately terminate and no payment shall be made in
respect of such Awards if, prior to the Vesting Date, Executive experiences a
Termination of Employment (as defined in the Plan).

           5.           Other Vestings.

(a)           The Employment Award.  Notwithstanding Section 4 hereof, a pro
rata portion of any outstanding unvested Employment Award shall vest immediately
upon an Executive’s Termination of Employment by reason of:  (1) the death of
the Executive; (2) the Disability of the Executive; or (3) an Executive’s
involuntary Termination of Employment without Cause, provided that with respect
to (3), such Termination occurs on or after January 1, 2011.

(b)           The Performance Award.  Notwithstanding Section 4 hereof, a pro
rata portion of any outstanding Performance Award shall vest pursuant to and on
the date indicated in Section 2(b) upon an Executive’s Termination of Employment
by reason of: (1) the death of the Executive; (2) the Disability of the
Executive; or (3) an Executive’s involuntary Termination of Employment without
Cause, provided that with respect to (3), such Termination occurs on or after
January 1, 2011.

           (c)           Pro Rata Calculations.  The pro rata portion shall be
calculated as the following percentage:  The number of days an Executive was
employed by Crown and/or its affiliates commencing with the date of this
Agreement divided by the total number of days, commencing with the date hereof
and concluding with the scheduled vesting date as set forth in Section 2(a) or
2(b), as applicable.

6.           Definitions.  For purposes of this Agreement:

(a)           “Delivery Date” with respect to the Employment Award shall mean
any date designated by Crown within thirty (30) days following the Vesting Date
and with respect to the Performance Award, any date designated by Crown within
the later of (x) thirty (30) days following the Vesting Date or (y) fifteen (15)
days following the issuance of Crown’s audited financials for the relevant year,
but in any event no later than March 15 of the year following the year in which
the Performance Award is vested.
 

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(b)           “Vesting Date” for the Employment Award shall mean August 31, 2012
or the date on which any one of the events in Section 5 occurs.  Vesting Date
for the Performance Award shall mean December 31, 2012, or the date on which any
one of the events in Section 5 occurs.
 
7.           Withholding Tax.
 
Executive may be subject to withholding taxes as a result of the settlement of
the Awards. Crown shall withhold from settlement payments the amount of such
obligations, including all applicable federal, state, local and foreign
withholding taxes that Crown determines result from such settlement.
 
8.           Non-transferability.
 
No Awards shall be assignable or otherwise transferable by Executive.  During
the life of Executive any elections with respect to Awards may be made only by
Executive or Executive’s guardian or legal representative.
 
9.           Counterparts.
 
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

10.           Governing Law.

This Agreement shall be governed by the laws of the State of Delaware, without
regard to conflict of law principles.

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Long Term Incentive
Compensation Agreement as of the date first written above.

CROWN MEDIA HOLDINGS, INC.

By: /s/ DONALD J. HALL, JR.
      Name:                      Donald J. Hall, Jr.
      Title:                      Co-Chairman of the Board

/s/ WILLIAM J. ABBOTT
William Abbott

 
 

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SCHEDULE 1

Performance Award Metrics & Vesting

I.           Performance Award Metrics (in millions)

Benchmarks
 
2010
   
2011
   
2012
   
3 Year Cumulative
 
Adjusted EBITDA
  $ 85.1     $ 115.7     $ 147.2     $ 348.0  
Cash Flow
  $ 82.0     $ 122.9     $ 137.0     $ 341.9  

II.           Performance Award Vesting

Performance Awards metrics are comprised of two components: Adjusted EBITDA (50%
of overall measurement) and Cash Flow (50% of overall measurement).

Upon vesting, Performance Awards are eligible for payout as set forth below:

Target Threshold*
 
Payout*

 
Less than 90%
    0 %
90% Achievement
    50 %
100% Achievement
    100 %
110% Achievement
    150 %

* financial performance results and payout percentages will be interpolated
between the illustrated points.