EXHIBIT 10.4


 


FORM OF


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
                               (“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                        
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                                RSUs granted to Executive, 70% (                ) shall be deemed to be Employment
RSUs and 30% (                        ) 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 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 as nearly equal installments
as practicable) on each of the first, second and third anniversaries of the
Grant 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
Employment RSUs shall vest.  Each
anniversary of the Grant 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.”


 

















 


(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 entirety only upon the third anniversary of the Grant
Date 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).  The
third anniversary of the Grant Date shall be a “Vesting Date.”  Section 4 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 following shall have occurred:  if the Change in Control occurs prior to the
first anniversary of the Grant Date, 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). 
If the Change in Control occurs on or after the first
anniversary of the Grant Date but prior to the second anniversary of the Grant
Date, 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
$12.00 (USD).  If the Change
in Control occurs on or after the second anniversary of the Grant Date but
prior to the third anniversary of the Grant Date, 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).


 


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


 


Executive’s rights with respect to any
outstanding unvested Employment 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
; (3) the retirement of the Executive from Crown at the “normal retirement age”
as defined in the Hallmark Affiliates Employee Savings Plan, or any successor
plan; (4) an Executive’s involuntary Termination of Employment without Cause
within 90 days prior to the date on which a Change in Control occurs; or (5) an
Executive’s involuntary Termination of Employment without Cause within 90 days
prior to the date on which any sale, merger, or other disposition
or sale of substantially all of the assets of the Crown subsidiary or affiliate
for which Executive is principally employed occurs


 

















 


(such determination of principal employment to be made
by Crown in its reasonable discretion).


 


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.


 


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:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE