**EXHIBIT 10.3**

 

**FORM OF**

**AMENDED AND RESTATED**

**CROWN MEDIA HOLDINGS,INC.**

**RESTRICTED STOCK UNITAGREEMENT**

 

THIS AMENDEDAND RESTATED RESTRICTED STOCK UNIT AGREEMENT (the “Amended Agreement”) is madeand entered into as of                          ,2004, by and between Crown Media Holdings, Inc. a Delaware corporation(“Crown”) and                      (“Executive”)pursuant to the terms and conditions of the Amended and Restated Crown MediaHoldings, Inc. 2000 Long Term Incentive Plan (the “Plan”) and hereby amends andrestates the Restricted Stock Unit Agreement between the parties (“Agreement”)dated as of May 29, 2003 (“Grant Date”). Capitalized terms not defined in this Amended Agreement shall have themeanings set forth in the Plan.

 

1.  Award of RestrictedStock Units.

 

Pursuant to the Plan, Crown awarded to Executive                       Restricted Stock Units(“RSUs”), each unit corresponding to one share of Crown Common Stock (asdefined in the Plan), subject to the terms and conditions set forth in thisAgreement and the Plan.  A copy of thePlan has been delivered to the Executive. By signing below, the Executiveagrees to be bound by all the provisions of the Plan. Each RSU constitutes anunsecured promise of Crown to deliver either a share of Common Stock or cash inan amount equivalent to one share of Common Stock to Executive on the DeliveryDate (as defined below).  As a holder ofRSUs, Executive has only the rights of a general unsecured creditor of Crown.

 

2.  Vesting.

 

Subject to continued employment with Crown and/or its affiliatesas of each anniversary of the Grant Date (unless one of the events enumerated in Section 4 of thisAgreement shall have occurred)the RSUs shall vest and become nonforfeitable in equal one-third installments(or as nearly equal installments as practicable) on each of the first, secondand third anniversaries of the Grant Date. In the eventof a Change in Control, subject to the Executive’s continued employment withCrown as of the date of the Change in Control (unless one of the eventsenumerated in Section 4 of this Agreement shall have occurred), all unvestedRSUs shall vest.  Each anniversary ofthe Grant Date, the date on which a Change in Control occurs and the date onwhich any one of the events in Section 4 occurs shall be a “Vesting Date.”

 

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3.  Settlement of RSUAward.

 

(a) Settlement. Subject to any cancellation of the RSUs pursuant to Section 4, Crownshall deliver to Executive on the Delivery Date, at Crown’s sole, absolute andunfettered discretion, either:  (1) thenumber of shares of Common Stock corresponding to such RSUs; or (2) cash in anamount equal to the number of shares of Common Stock corresponding to such RSUsmultiplied by the average of the Fair Market Value (as defined below) of the CommonStock 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 businessday immediately preceding the Vesting Date) unless Executive has otherwiseelected to defer receipt of such award in accordance with Committeeauthorization or pursuant to the terms of a nonqualified plan adopted byCrown.  Crown shall have sole, absoluteand unfettered discretion in determining whether to deliver shares of CommonStock or cash in an amount equivalent to the number of shares of Common Stockon the Vesting Date.

 

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

 

(c) Dividend and Stock Split Equivalents.  For so long as Executive holds RSUs, at thetime any dividend is paid with respect to a share of Common Stock or anyforward stock split occurs, Crown shall credit to the RSU award of theExecutive on the same date (or as soon as practicable thereafter) in respect ofeach RSU held by the Executive as of the record date for such dividend or splitan amount at Crown’s sole, absolute and unfettered discretion, in cash, CommonStock, or other property, or in a combination thereof, in each case having avalue equal to the dividend or split, subject to any deferral election by Executivein accordance with Committee authorization or pursuant to the terms of anonqualified plan adopted by Crown. Such amounts shall vest and shall be paid on a *pro rata* basis at the same time as theunderlying RSU award is settled.

 

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

 

Executive’s rights with respect to any outstanding unvested RSUsshall immediately terminate and no payment shall be made in respect of suchRSUs if prior to the Vesting Date Executive experiences a Termination ofEmployment (as defined in the Plan).  Notwithstanding the foregoing, anyoutstanding unvested RSUs shall vest immediately upon an Executive’sTermination of Employment by reason of : (1) the death of the Executive; (2)the Disability of the Executive ; (3) the retirement of the

 

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Executive from Crown at the“normal retirement age” as defined in the Hallmark Affiliates Employee SavingsPlan, or any successor plan; (4) upon an Executive’s involuntary Termination ofEmployment without Cause within 90 days prior to the date on which a Change inControl occurs; or (5) an Executive’s involuntary Termination of Employmentwithout Cause within 90 days of the date on which any sale, merger, or otherdisposition or sale of substantially all of the assets of the Crown subsidiaryor affiliate for which Executive is principally employed occurs (suchdetermination of principal employment to be made by Crown in its reasonablediscretion).

 

5.  Definitions.  For purposes of this Agreement:

 

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

 

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

 

6.  Withholding Tax.

 

Executive may be subject to withholding taxes as a result of thesettlement of RSUs. Unless the Committee permits otherwise, Executive shall payto Crown in cash, promptly when the amount of such obligations becomedeterminable, all applicable federal, state, local and foreign withholdingtaxes that Crown determines result from such settlement. Unless the Committeeotherwise determines and subject to such rules and procedures as the Committeemay establish, Executive may make an election to have shares of Stock withheldby Crown or to tender any such securities to Crown to pay the amount of tax thatCrown in its discretion determines to be required so to be withheld by Crownupon settlement of RSUs, subject to satisfying any applicable requirements forcompliance with Section 16(b) of the Exchange Act. Any shares of Stock or othersecurities so withheld or tendered will be valued as of the date they arewithheld or tendered, provided that Stock shall be valued at Fair Market Valueon such date. Unless otherwise permitted by the Committee, the value of shareswithheld or tendered may not exceed the minimum federal, state, local andforeign withholding tax obligations as computed by Crown.

 

7.  Non-transferability.

 

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

 

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8.  Counterparts.

 

This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all of which together shallconstitute one and the same instrument.

 

9.  Governing Law.

 

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

 
|   | CROWN MEDIA  HOLDINGS, INC. |
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|   |                        |
|   | By:                         |   |   |
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|   | Name:                       |   |   |
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|   | Title:                      |   |   |
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|   |                        |   |
|   | EXECUTIVE                   |
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