Exhibit 10.4

 

April 12, 2006

 

Chris Moseley

5224 Los Encantos Way

Los Angeles, CA 90027

 

Dear Chris:

 

This will confirm our agreement regarding termination of your employment with
Crown Media Holdings, Inc. (hereafter “Crown” or “the company”) as well as of
your employment agreement with Crown dated June 20, 2003, as amended May 24,
2004 (the “Employment Agreement”). Pursuant to the terms of the Employment
Agreement, your contract is scheduled to expire on July 15, 2006 (“Contract
Term”). Based on the terms of this severance agreement (“Agreement”), the
effective date of the termination of your employment will be April 21, 2006, the
date your job duties are scheduled to end (“Term Date”).

 

In connection with the termination of your employment and Employment Agreement,
Crown agrees to do the following:

 

1.             To pay you your full pay (less appropriate payroll deductions) at
your current base salary rate from April 22, 2006 through the Contract Term.
This amount will be paid in one lump sum amount of One Hundred Ninety-Five
Thousand, Nine Hundred Six Dollars ($195,906) (less appropriate payroll
deductions) no later than May 15, 2006.

 

2.             To pay you a lump sum amount of Fifty-Nine Thousand One Hundred
Twenty-One Dollars ($59,121.00) (less appropriate payroll deductions), which
constitutes a pro-rata bonus for the period January 1, 2006 through the Contract
Term (based on the annual rate of fifteen (15) percent of salary), no later than
May 15, 2006.

 

3.             From April 22, 2006 through the Contract Term, your medical and
dental coverage under the Crown medical, dental and vision plans will continue
pursuant to Consolidated Omnibus Budget Reconciliation Act (“COBRA”), with the
company paying the premiums. Your participation in all other Crown employee
benefit plans (including any fringe benefits under the Employment Agreement)
will cease as of the Term Date, except as provided in this Agreement. Following
the Term Date, you will be entitled to distribution of all vested, accrued
benefits in your Crown 401(k) account pursuant to the terms of the Crown 401(k)
Savings Plan and payment in installments, in accordance with

 

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the terms of Crown’s Deferred Compensation Plan, of any compensation which you
have deferred under the Plan. Amounts paid under this paragraph shall not be
included in calculating any benefits under the Crown benefit plan.

 

4.             To pay you Eighty-Nine Thousand Five Hundred Fifty-Six Dollars
($89,556) (less appropriate payroll deductions) for thirty-two (32) days accrued
but unused vacation, no later than May 15, 2006. You acknowledge this pay is
compensation for all accrued vacation time that may be due to you now or in the
future.

 

5.             To pay you one Lump sum amount of Three Thousand Three Hundred
Seventy-Five Dollars ($3,375) (less appropriate payroll deductions) in lieu of
your car allowance from April 22, 2006 through the Contract Term, no later than
May 15, 2006. Amounts paid under this paragraph shall not be included in
calculating any benefits under the Crown benefit plans.

 

6.             In accordance with the terms of Paragraph 8(b) of the Employment
Agreement, Crown will reimburse you for your expenses, up to $35,000, of
relocating from the Los Angeles area, provided such expenses are incurred prior
to October 22, 2006. Amounts paid under this paragraph shall not be included in
calculating any benefits under the Crown benefit plans.

 

Provided you sign and return this Agreement, Crown agrees:

 

A.            To pay you a total amount of severance pay equivalent to one (1)
year base salary of Seven Hundred Twenty Seven Thousand Six Hundred Fifty
Dollars ($727,650.00) (less appropriate payroll deductions) no later than May
15, 2006. Amounts paid under this paragraph shall not be included in calculating
any benefits under the Crown benefit plans.

 

B.            The following Restricted Stock Units granted you in 2003 and 2004
will be deemed vested on May 29, 2006, and will be settled in accordance with
the terms of the Restricted Stock Unit Agreements dated as of May 29, 2003, as
amended May 29, 2004 (the “2003 Grant”), and May 28, 2004 (the “2004 Grant”):

 

a)  28,667 (1/3rd of 2003 Grant)

 

b)  14,000 (1/3rd of the “Employment RSU” portion of the 2004 Grant)

 

C.            Crown will pay the cost of COBRA coverage for medical, dental and
vision plans from July 16, 2006 through July 15, 2007, provided that you make
the necessary COBRA elections, you continue to be legally eligible for coverage
and are not covered under any other employer’s medical plan. Amounts paid under
this paragraph shall not be included in calculating any benefits under the Crown
benefit plans.

 

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In return for the above payments and benefits, you agree:

 

(i)            To sign and return a copy of this letter. You have a minimum of
twenty- one (21) days from the date you receive this letter in which to consult
an attorney and consider whether you want to accept and sign this Agreement. The
Agreement will become effective on the eighth (8th) day after you sign it and
you have the right to revoke the Agreement during the seven day period after you
sign it. You agree that any changes to this Agreement, whether material or
immaterial, will not restart the running of the 21- day period.

 

(ii)           You, on behalf of yourself and your heirs, representatives and
assigns, hereby release and discharge Crown, its parent companies, their
predecessors, subsidiaries and divisions, and all of their respective current
and former directors, officers, shareholders, successors, agents,
representatives and employees of each, from any and all claims you ever had, now
have, or may in the future assert regarding any matter occurring prior to the
Term Date, including, without limitation, all claims, demands, damages costs and
expenses regarding your employment or termination of your employment with Crown
(including any rights and claims under the Age Discrimination in Employment Act
and any other employment discrimination claims), any contract claim (express or
implied), any tort, any claim for wages or benefits, any claim for breach of a
fair employment practice law or any breach of any other local, stale or federal
law, statute, ordinance, regulation or provision.

 

(iii)          It is understood and agreed that this is a full and final release
covering all known or unknown, undisclosed and unanticipated losses, wrongs,
injuries, debts, claims or damages to you which may have arisen, or may arise
from any act or omission prior to the date of execution of this Agreement
arising out of or related, directly or indirectly, to your employment, or
separation from employment with Crown, as well as any alleged losses, wrongs,
injuries, debts, claims or damages now known or disclosed which have arisen, or
may arise as a result of any act or omission. Therefore, you hereby waive any
and all rights or benefits which you may now have, or in the future may have,
under the terms of Section 1542 of the California Civil Code, which provides as
follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which, if
known by him, must have materially affected his settlement with the debtor.”

 

(iv)          Except as provided herein, you acknowledge that you are owed no
additional compensation under your Employment Agreement or otherwise in
connection with the termination of your employment and that Crown will have no
obligation to provide you at any time in the future any payments or benefits,
other than those provided for in this Agreement and vested benefits under
Crown’s benefit plans, pursuant to the terms of the plans. You acknowledge and
agree that the payments and benefits you

 

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receive under this Agreement supersede and replace any rights you may have had
or could have under any severance pay plan in existence now or in the future at
Crown.

 

(v)           You agree that any confidential information which you acquired
during your employment with Crown or any predecessor shall not be disclosed,
either directly or indirectly, to any other person or used in a manner
detrimental to the interests of Crown, its parent companies, predecessors or
other related entities. You further agree not retain any business records or
documents relating to any activity of Crown or any of its parents, predecessor,
subsidiary or affiliated companies, and to return and not retain any property
belonging to any of these entities.

 

(vi)          Neither you nor anyone acting on your behalf shall publicize,
disseminate or otherwise make known the terms of this Agreement, directly or
indirectly, to any other person, except for those rendering professional
financial or legal advice, to your immediate family, or unless required to do so
by court order or other compulsory process of law.

 

(vii)         You agree to cooperate with Crown in the defense of any legal
matter, in the preparation and production of evidence and in providing testimony
in any judicial or administrative proceeding pending now or in the future that
involves allegations arising during the period of your employment provided that
Crown will reimburse you pursuant to its business travel expense policy for your
reasonable business travel and out-of-pocket expenses incurred in providing such
cooperation and assistance.

 

(viii)        Paragraphs 5(a), 5(c), 7(b), 8(d) and 8(e) of your Employment
Agreement and all other provisions of that agreement which by their terms are
intended to survive after the end of the Term, will continue in effect for the
periods indicated.

 

(ix)           The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly for or
against any party. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to conflicts
of law rules.

 

(x)            You recognize that your complete and total release and discharge
of Crown as provided herein is an indispensable part of Crown’s agreement to pay
you the amounts set forth above and which you would otherwise not be entitled
to, and it is understood that if you hereafter institute any claim, arbitration,
lawsuit, action, investigation, grievance, complaint, charge, demand or other
proceeding of the kind described in the paragraphs above, or breach the
additional obligations set forth in this Agreement, Crown may discontinue or
demand repayment of the compensation and benefits paid under this Agreement.

 

(xi)           In the event that you ever contest the enforceability of this
Agreement, in whole or in part, the entire amounts paid or payable by Crown
under this Agreement shall

 

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become immediately due and payable to Crown and any further such payments shall
cease. In the event you ever make such challenge, Crown will have and may pursue
its legal remedies for such prior payments.

 

(xii)          This Agreement does not constitute an admission by Crown of any
violation of any law, whether federal, state, local or administrative statute,
ordinance, regulation or provision.

 

(xiii)         The terms and provisions of this Agreement are severable and if
any term or provision is held to be invalid or unenforceable, it shall not
affect the validity or enforceability of any other term or provision.

 

(xiv)        This letter sets forth the entire agreement between you and Crown
and supersedes any and all prior oral or written agreements or understandings
between you and Crown. This Agreement cannot be modified except by a further
writing signed by you and an authorized representative of Crown.

 

 

If the foregoing correctly and fully recites the substance of our Agreement,
please so signify by signing duplicate originals in the space designated below.

 

 

Very truly yours,

 

 

 

Crown Media Holdings, Inc.

 

 

 

 

 

By:

/s/ C. Stanford

 

 

 

 

 

 

Name:

Charles Stanford

 

 

 

 

 

 

Title:

Exec. VP

 

 

I am fully aware of and understand this Agreement’s contents and I am entering
into this Agreement knowingly, voluntarily, willfully and free form any coercion
or duress.

 

ACCEPTED & AGREED:

 

 

By:

/s/ Chris Moseley

 

Date:

4/13/06

 

Chris Moseley

 

 

 

 

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