Exhibit 10.78

 

CROWN MEDIA HOLDINGS, INC.
2005 RESTRICTED STOCK UNIT AGREEMENT

 

THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”) is made and entered into
as of August               , 2005 (the “Grant Date”), by and between Crown Media
Holdings, Inc. a Delaware corporation (“Crown”) and David Evans (“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.                          Award of Restricted Stock Units.

 

(a)                     General Award. Pursuant to the Plan, Crown awards to
Executive 115,000 Restricted Stock Units (“RSUs”), each unit corresponding to
one share of Crown Common Stock (as defined in the Plan), 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. Each RSU constitutes an unsecured
promise of Crown to deliver either a share of Common Stock or cash in an amount
equivalent to one share of Common Stock to Executive on the Delivery Date (as
defined below). As a holder of RSUs, Executive has only the rights of a general
unsecured creditor of Crown.

 

(b)                    Types of RSUs. Of the total 115,000 RSUs granted to
Executive, 57,500 shall be deemed to be Employment RSUs and 57,500 shall be
deemed to be Performance RSUs. The applicable provisions of this Agreement shall
be specified by type of RSU, and if not so specified, shall apply to all RSUs
granted hereunder.

 

2.                          Vesting

 

(a)                     Employment RSUs. Subject to continued employment with
Crown and/or its affiliates as of each three month anniversary of the Grant Date
(unless one of the events enumerated in Section 4 of this Agreement shall have
occurred) the Employment RSUs shall vest and become nonforfeitable in equal
one-third installments (or its nearly equal installments as practicable) on each
of November 18, 2005, February 18, 2006 and May 18, 2006. In the event of a
Change in Control, subject to the Executive’s continued employment with Crown as
of the date of the Change in Control (unless one of the events enumerated in
Section 4 of this Agreement shall have occurred), all unvested Employment RSUs
shall vest. Each of November 18, 2005, February 18, 2006 and May 18, 2006, the
date immediately prior to that on which a Change in Control occurs and the date
on which any one of the events in Section 4 occurs shall be a “Vesting Date.”

 

(b)                    Performance RSUs.

 

(i) Regular Vesting. Subject to continued employment with Crown and/or its
affiliates, the Performance RSUs shall vest and become nonforfeitable in their

 

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entirety only upon May 18, 2006 and only if the average of the Fair Market Value
(as defined below) of the Common Stock for the immediately preceding 60 business
days including the Vesting Date (or, if such Vesting Date does not fall on a
business day, as of the business day immediately preceding the Vesting Date)
equals or exceeds $14.00 (USD). May 18, 2006 shall be a “Vesting Date.”
Section 4, Acceleration of Vesting, shall not apply to Performance RSUs.

 

(ii) Vesting upon a Change in Control. The date on which a Change in Control
occurs shall be a “Vesting Date.” In the event of a Change in Control (subject
to the Executive’s continued employment with Crown as of the date of the Change
in Control or upon an Executive’s involuntary Termination of Employment without
Cause within 90 days prior to the date on which a Change in Control occurs), all
unvested Performance RSUs shall vest and be settled immediately prior to the
Change in Control only if the average of the Fair Market Value (as defined
below) of the Common Stock for the immediately preceding 60 business days
including the Vesting Date (or, if such Vesting Date does not fall on a business
day, as of the business day immediately preceding the Vesting Date) equals or
exceeds $10.00 (USD).

 

3.                         Settlement of RSU Award.

 

(a)                     Settlement. Subject to any cancellation of the
Employment RSUs pursuant to Section 4, Crown shall deliver to Executive on the
Delivery Date, at Crown’s sole, absolute and unfettered discretion, either:
(1) the number of shares of Common Stock corresponding to such RSUs; or (2) cash
in an amount equal to the number of shares of Common Stock corresponding to such
RSUs multiplied by the average of the Fair Market Value (as defined below) of
the Common Stock for the immediately preceding 14 business days including the
Vesting Date (or, if such Vesting Date does not fall on a business day, as of
the business day immediately preceding the Vesting Date) unless Executive has
otherwise elected to defer receipt of such award in accordance with Committee
authorization or pursuant to the terms of a nonqualified plan adopted by Crown.
Crown shall have sole, absolute and unfettered discretion in determining whether
to deliver shares of Common Stock or cash in an amount equivalent to the number
of shares of Common Stock on the Vesting Date.

 

(b)                    Change in Control Settlement. Notwithstanding
Section 3(a), in the event of a Change in Control, Section 10(c) of the Plan
shall apply to RSUs. RSUs settled under Section 3(a) shall use the Change in
Control Price pursuant to Section 10(c) of the Plan applicable to non-Incentive
Stock Option holders.

 

(c)                     Dividend and Stock Split Equivalents. For so long as
Executive holds RSUs, at the time any dividend is paid with respect to a share
of Common Stock or any forward stock split occurs, Crown shall credit to the RSU
award of the Executive on the same date (or as soon as practicable thereafter)
in respect of each RSU hold by the Executive as of the record date for such
dividend or split an amount at Crown’s sole, absolute and unfettered discretion,
in cash, Common Stock, or other property, or in a

 

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combination thereof, in each case having a value equal to the dividend or split,
subject to any deferral election by Executive in accordance with Committee
authorization or pursuant to the terms of a nonqualified plan adopted by Crown.
Such amounts shall vest and shall be paid on a pro rata basis at the same time
as the underlying Employment or Performance RSU award with which such dividend
or stock split is associated is settled.

 

4.                          Termination of RSUs and Non-Delivery Upon Certain
Other Events, Acceleration of Vesting.

 

Executive’s rights with respect to any outstanding unvested RSUs shall
immediately terminate and no payment shall be made in respect of such RSUs if
prior to the Vesting Date Executive experiences a Termination of Employment (as
defined in the Plan). Notwithstanding the foregoing, any outstanding unvested
Employment RSUs 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 within 90 days prior to the date on which a Change in Control
occurs.

 

5.                         Definitions. For purposes of this Agreement:

 

(a)                     “Delivery Date” means the day immediately following a
given Vesting Date.

 

(b)                    “Fair Market Value” means “Fair Market Value” as defined
in the Plan; provided, however, that if there is no regular public trading
market for such Common Stock, “Fair Market Value” shall mean the value
established by the most recent independent appraisal of Crown conducted prior to
the relevant Delivery Date.

 

6.                         Withholding Tax.

 

Executive may be subject to withholding taxes as a result of the settlement of
RSUs. Unless the Committee permits otherwise, Executive shall pay to Crown in
cash, promptly when the amount of such obligations become determinable, all
applicable federal, state, local and foreign withholding taxes that Crown
determines result from such settlement. Unless the Committee otherwise
determines and subject to such rules and procedures as the Committee
may establish, Executive may make an election to have shares of Stock withheld
by Crown or to tender any such securities to Crown to pay the amount of tax that
Crown in its discretion determines to be required so to be withheld by Crown
upon settlement of RSUs, subject to satisfying any applicable requirements for
compliance with Section 16(b) of the Exchange Act. Any shares of Stock or other
securities so withheld or tendered will be valued as of the date they are
withheld or tendered, provided that Stock shall be valued at Fair Market Value
on such date. Unless otherwise permitted by the Committee, the value of shares
withheld or tendered may not exceed the minimum federal, state, local and
foreign withholding tax obligations as computed by Crown.

 

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7.                         Non-transferability.

 

No RSUs shall be assignable or otherwise transferable by Executive. During the
life of Executive any elections with respect to RSUs may be made only by
Executive or Executive’s guardian or legal representative.

 

8.                         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.

 

9.                         Governing Law.

 

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

 

 

 

 

CROWN MEDIA HOLDINGS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

By:

  /s/ Charles Stanford

 

 

 

 

 

 

 

 

 

 

 

Name:

  Charles Stanford

 

 

 

 

 

 

 

 

 

 

 

Title:

    EVP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ David Evans

 

 

 

 

 

EXECUTIVE

 

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