**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 youremployment with Crown Media Holdings, Inc. (hereafter “Crown” or “the company”)as well as of your employment agreement with Crown dated June 20, 2003, asamended May 24, 2004 (the “Employment Agreement”). Pursuant to the terms of theEmployment Agreement, your contract is scheduled to expire on July 15, 2006 (“ContractTerm”). Based on the terms of this severance agreement (“Agreement”), theeffective 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 yourfull pay (less appropriate payroll deductions) at your current base salary ratefrom April 22, 2006 through the Contract Term. This amount will be paid in onelump 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 lumpsum amount of Fifty-Nine Thousand One Hundred Twenty-One Dollars ($59,121.00)(less appropriate payroll deductions), which constitutes a pro-rata bonus forthe period January 1, 2006 through the Contract Term (based on the annual rateof fifteen (15) percent of salary), no later than May 15, 2006.

 

3.             From April 22, 2006through the Contract Term, your medical and dental coverage under the Crownmedical, dental and vision plans will continue pursuant to Consolidated OmnibusBudget Reconciliation Act (“COBRA”), with the company paying the premiums. Yourparticipation in all other Crown employee benefit plans (including any fringebenefits under the Employment Agreement) will cease as of the Term Date, exceptas provided in this Agreement. Following the Term Date, you will be entitled todistribution of all vested, accrued benefits in your Crown 401(k) accountpursuant to the terms of the Crown 401(k) Savings Plan and payment ininstallments, in accordance with

 

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the terms of Crown’s Deferred Compensation Plan, of any compensationwhich you have deferred under the Plan. Amounts paid under this paragraph shallnot be included in calculating any benefits under the Crown benefit plan.

 

4.             To pay youEighty-Nine Thousand Five Hundred Fifty-Six Dollars ($89,556) (less appropriatepayroll deductions) for thirty-two (32) days accrued but unused vacation, nolater than May 15, 2006. You acknowledge this pay is compensation for allaccrued vacation time that may be due to you now or in the future.

 

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

 

6.             In accordance withthe terms of Paragraph 8(b) of the Employment Agreement, Crown will reimburseyou 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 paidunder this paragraph shall not be included in calculating any benefits underthe Crown benefit plans.

 

Provided you sign and return this Agreement, Crown agrees:

 

A.            To pay you a totalamount of severance pay equivalent to one (1) year base salary of Seven HundredTwenty Seven Thousand Six Hundred Fifty Dollars ($727,650.00) (less appropriatepayroll deductions) no later than May 15, 2006. Amounts paid under thisparagraph shall not be included in calculating any benefits under the Crownbenefit plans.

 

B.            The followingRestricted Stock Units granted you in 2003 and 2004 will be deemed vested onMay 29, 2006, and will be settled in accordance with the terms of theRestricted 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 (1/3rdof 2003 Grant)

 

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

 

C.            Crown will pay thecost of COBRA coverage for medical, dental and vision plans from July 16, 2006through July 15, 2007, provided that you make the necessary COBRA elections,you continue to be legally eligible for coverage and are not covered under anyother employer’s medical plan. Amounts paid under this paragraph shall not beincluded 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 returna copy of this letter. You have a minimum of twenty- one (21) days from thedate you receive this letter in which to consult an attorney and considerwhether you want to accept and sign this Agreement. The Agreement will becomeeffective on the eighth (8th) day after you sign it and you have the right torevoke the Agreement during the seven day period after you sign it. You agreethat any changes to this Agreement, whether material or immaterial, will notrestart the running of the 21- day period.

 

(ii)           You, on behalf ofyourself and your heirs, representatives and assigns, hereby release anddischarge Crown, its parent companies, their predecessors, subsidiaries anddivisions, and all of their respective current and former directors, officers,shareholders, successors, agents, representatives and employees of each, fromany and all claims you ever had, now have, or may in the future assertregarding any matter occurring prior to the Term Date, including, withoutlimitation, all claims, demands, damages costs and expenses regarding youremployment or termination of your employment with Crown (including any rightsand claims under the Age Discrimination in Employment Act and any otheremployment discrimination claims), any contract claim (express or implied), anytort, any claim for wages or benefits, any claim for breach of a fairemployment practice law or any breach of any other local, stale or federal law,statute, ordinance, regulation or provision.

 

(iii)          It is understoodand agreed that this is a full and final release covering all known or unknown,undisclosed and unanticipated losses, wrongs, injuries, debts, claims ordamages to you which may have arisen, or may arise from any act or omissionprior to the date of execution of this Agreement arising out of or related,directly or indirectly, to your employment, or separation from employment withCrown, as well as any alleged losses, wrongs, injuries, debts, claims ordamages now known or disclosed which have arisen, or may arise as a result ofany act or omission. Therefore, you hereby waive any and all rights or benefitswhich you may now have, or in the future may have, under the terms of Section1542 of the California Civil Code, which provides as follows:

 

“A general release does not extend to claims which the creditor doesnot 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 thedebtor.”

 

(iv)          Except as providedherein, you acknowledge that you are owed no additional compensation under yourEmployment Agreement or otherwise in connection with the termination of youremployment and that Crown will have no obligation to provide you at any time inthe future any payments or benefits, other than those provided for in thisAgreement and vested benefits under Crown’s benefit plans, pursuant to theterms of the plans. You acknowledge and agree that the payments and benefitsyou

 

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

 

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

 

(vi)          Neither you noranyone acting on your behalf shall publicize, disseminate or otherwise makeknown the terms of this Agreement, directly or indirectly, to any other person,except for those rendering professional financial or legal advice, to yourimmediate family, or unless required to do so by court order or othercompulsory process of law.

 

(vii)         You agree tocooperate with Crown in the defense of any legal matter, in the preparation andproduction of evidence and in providing testimony in any judicial oradministrative proceeding pending now or in the future that involvesallegations arising during the period of your employment provided that Crownwill reimburse you pursuant to its business travel expense policy for yourreasonable business travel and out-of-pocket expenses incurred in providingsuch cooperation and assistance.

 

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

 

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

 

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

 

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

 

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

 

(xii)          This Agreement doesnot constitute an admission by Crown of any violation of any law, whetherfederal, state, local or administrative statute, ordinance, regulation orprovision.

 

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

 

(xiv)        This letter setsforth the entire agreement between you and Crown and supersedes any and allprior oral or written agreements or understandings between you and Crown. ThisAgreement cannot be modified except by a further writing signed by you and anauthorized representative of Crown.

 

 

If the foregoing correctly and fully recites the substance of ourAgreement, please so signify by signing duplicate originals in the spacedesignated 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 amentering into this Agreement knowingly, voluntarily, willfully and free formany coercion or duress.

 

ACCEPTED & AGREED:

 

 
| By:    | /s/ Chris Moseley |   | Date:  | 4/13/06 |
|--------|-------------------|--------|--------|---------|
|   | Chris Moseley     |   |   |    |

 

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