Exhibit
10.5


 


CROWN MEDIA HOLDINGS, INC.

2004 RESTRICTED STOCK UNIT AGREEMENT


 


THIS RESTRICTED
STOCK UNIT AGREEMENT (the “Agreement”) is made and entered into as of May 28,
2004 (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
Agreement shall have the meanings set forth in the Plan.


 


1.  Award of
Restricted Stock Units.  Pursuant to
the Plan, Crown awards to Executive 115,000 Restricted Stock Units (“RSUs”).
Each unit corresponds to one share of Crown Common Stock (as defined in the
Plan) and shall be 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.


 


2.  Vesting.  Subject to Section 4 of this Agreement,
the RSUs shall vest and become nonforfeitable in equal one-half installments on
each of January 3, 2005 (“First Vesting Date”) and January 2, 2006
(“Second 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 (unless one of the events
enumerated in Section 4 of this Agreement shall have occurred), all
unvested RSUs shall vest.  The First
Vesting Date, the Second Vesting Date, 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.”


 


3.  Settlement of RSU Award.


 


(a) Settlement. 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.


 


1

















 


(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 shall be settled under Section 3(a) using 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 held 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
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; Accelerated 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 (i)
with respect to the First Vesting Date, if prior to such date, Executive
experiences a Termination of Employment (as defined in the Plan) with Crown,
excluding a Normal Retirement or (ii) with respect to the Second Vesting Date,
if prior to September 17, 2005, Executive experiences a Termination of
Employment (as defined in the Plan) with Crown, excluding Normal Retirement.  Notwithstanding the foregoing, all
outstanding unvested RSUs shall vest immediately by reason of: (1) Executive’s
involuntary Termination of Employment without Cause (2) the death of the
Executive; or (3) the Disability of the Executive resulting in Executive’s
Termination of Employment.


 


5.  Definitions.  For purposes of this Agreement:


 


(a)                                  “Change
in Control” means Change in Control as defined in the Plan.


 


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


 


(c)                                  “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.


 


2

















 


(d)                                 “Normal
Retirement” means the retirement of Executive from Crown at the “normal
retirement age” as defined in the Hallmark Employees Affiliates Savings Plan,
or any successor plan.


 


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.


 


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/ C. Stanford

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Exec. VP - Leg. &
  Bus. Affairs

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David Evans

  	
   July 2, 04

  
	
   

  	
  DAVID EVANS

  	
   

  
					



 


3