Exhibit
10.2


CROWN MEDIA HOLDINGS, INC. 


2006 RESTRICTED
STOCK UNIT AGREEMENT


THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”)
is made and entered into as of October 3, 2006 (the “Grant Date”), by and
between Crown Media Holdings, Inc. a Delaware corporation (“Crown”) and Henry
Schleiff (“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 200,000 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. This grant reflects a
two-year grant. Crown also awards the additional Performance RSUs that may be
vested under Section 2(b)(i)(A) and Section 2(b)(iii). 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 200,000 RSUs granted to
Executive, 100,000 shall be deemed to be Employment RSUs and 100,000 shall be
deemed to be Performance RSUs. Vesting of Performance RSUs shall depend on
those four significant distribution agreements identified on Schedule I hereto
(the “Major Distribution Agreements”) being Renewed by Crown or its subsidiary.
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 the fourth anniversary of the Grant Date
(unless one of the events enumerated in Section 4 of this Agreement shall have
earlier occurred) the Employment RSUs shall vest and become nonforfeitable on
the fourth anniversary of the Grant Date. 


(b)           Performance
RSUs 


                (i)            Achieved Performance
RSUs. Performance RSUs are eligible to vest as set forth below,
provided however, that only one of the following A-E shall apply and that which
is applicable shall be the “Achieved Performance RSUs”:


                                                                (A)          150% of Performance RSUs if at least three of the Major
Distribution Agreements are Renewed by November 8, 2007 and the fourth Major
Distribution Agreement is Renewed prior to its expiration date or within 120
days thereafter.









 



 


                                                                (B)           100% of Performance RSUs if at least
three of the Major Distribution Agreements are Renewed by November 8, 2007 and
the fourth Major Distribution Agreement is Renewed but not prior to its
expiration or within 120 days thereafter. 


                                                                (C)           100% of Performance RSUs if all Major
Distribution Agreements are Renewed on or prior to each agreement’s expiration
date. 


                                                                (D)          65%
of Performance RSUs if all Major Distribution Agreements are Renewed
within 120 days after expiration. 


                                                                (E)           0% of Performance RSUs if all Major
Distribution Agreements are not Renewed as outlined in any of A-D above. 


(ii)           First
Vesting. Subject to continued employment with Crown or one of its
affiliates, 65% of the Achieved Performance RSUs shall vest and become
nonforfeitable when the fourth Major Distribution Agreement is Renewed in
accordance with one of Section 2(b)(i) A-E above (the “First Vesting”). 


(iii)          Second
Vesting. Subject to Executive being employed by Crown or one of its
affiliates as of the date of the First Vesting, and subject to Section 2(b)(iv)
below, the remaining Achieved Performance RSUs shall vest and become
nonforfeitable on December 31, 2008 in accordance with the following formula:
(Achieved Performance RSUs multiplied times the
Modifier) less the Achieved
Performance RSUs settled in the First Vesting, where the Modifier is as set
forth below:




	
  Subscriber Revenue

  Achieved for 2008

  	
   

  	
  Modifier

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than $47.86
  mil

  	
   

  	
  65

  	
  %

  
	
  $47.86 mil to 55.17 mil

  	
   

  	
  85

  	
  %

  
	
  $55.17 mil to
  61.93 mil

  	
   

  	
  100

  	
  %

  
	
  $61.93 mil or more

  	
   

  	
  135

  	
  %

  






 


                (iv)          Discretion.
The Committee shall have the discretion to increase or decrease the
Modifier set forth in 2(b)(iii) above by 20%. The Committee shall also have the
discretion to extend deadlines for the satisfaction of vesting in the event that
renegotiation due to most favored nations clauses or other factors beyond the
control of Crown delays finalizing Renewal of one or more Major Distribution
Agreements. 


                (v)           Notwithstanding Section 4 hereof, in
the event of Executive’s involuntary Termination of Employment without Cause or
Executive’s Termination of Employment for Good Reason within 90 days prior to a
Vesting Date for Performance RSUs, the Performance RSUs shall vest in
accordance with Section 2(b) as though Executive were still employed by Crown
on that Vesting Date.



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3.             Settlement
of RSU Award. 


(a)           Settlement. Subject to any cancellation of 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)           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 and Non-Delivery Upon Certain Other Events. 


Subject to Section 5 hereof, 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). 


                5.             Acceleration of Vestings. 


(a)           Employment
RSUs. Notwithstanding Section 4 hereof, 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 or Executive’s Termination of Employment for Good
Reason within 90 days prior to or 90 days after the date on which a Change in
Control occurs. 


                (b)           Performance
RSUs. Notwithstanding Section 4 hereof, any outstanding Performance RSUs
shall vest immediately upon an Executive’s involuntary Termination of
Employment without Cause or Executive’s Termination of Employment for Good
Reason within 90 days prior to or 90 days after the date on which a Change in
Control occurs.



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                6.             Definitions.
For purposes of this Agreement: 


                (a)           “Delivery
Date” with respect to Employment RSUs or the First Vesting of Performance RSUs
pursuant to Section 2(b)(ii) shall mean any date designated by Crown within
thirty (30) days following a given Vesting Date. “Delivery Date” with respect
to the Second Vesting of Performance RSUs pursuant to Section 2(b)(iii) shall
mean the later of thirty (30) days following a given Vesting Date or fifteen
(15) days following the issuance of Crown’s audited financials for 2008. 


                (b)           “Fair
Market Value” shall mean “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. 


                (c)           “Renewal”
or “Renewed” shall mean that there is a fully executed, binding agreement with
the relevant MSO on new terms, in a form customary in the industry and that has
been approved by the Board. 


                (d)           “Vesting
Date” for Employment RSUs shall mean each of the fourth anniversary of the
Grant Date and the date on which any one of the events in Section 5 occurs.
Vesting Date for Performance RSUs shall mean (i) for Section 2(b)(ii) the date
on which the fourth Major Distribution Agreement is Renewed and (ii) for
Section 2(b)(iii), December 31, 2008. 


                (e)           “Good
Reason” shall have the meaning given in that Employment Agreement dated as of
the date hereof by and between Crown and Executive. 


                7.             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. 


                8.             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. 



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                9.             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.


                10.           Governing Law.


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


                IN WITNESS WHEREOF, the parties hereto have executed
this RSU Agreement as of the date first written above.


	
  

  	
  CROWN MEDIA HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald J. Hall, Jr.

  
	
  :

  	
  Name:

  	
   Donald J. Hall, Jr.

  
	
   

  	
  Title:

  	
   Co-chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Henry
  Schleiff

  
	
   

  	
  Henry Schleiff

  



 



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Schedule
I


	
  Comcast:

  	
   

  	
  Affiliation Agreement dated as of November 16, 1998
  by and between Satellite Services, Inc. and Crown Media United States, LLC as
  subsequently amended from time to time.

  
	
  DirecTV:

  	
   

  	
  Affiliation Agreement
  dated as of August 20, 2001 by and between DirecTV, Inc. and Crown Media
  United States, LLC as subsequently amended from time to time.

  
	
  Time Warner:

  	
   

  	
  Affiliation Agreement
  dated as of July 21, 1999 by and between Time Warner Entertainment Company,
  L.P. and Crown Media United States, LLC as subsequently amended from time to
  time.

  
	
  EchoStar:

  	
   

  	
  Affiliation Agreement
  dated as of                     ,
  2000 by and between [EchoStar] and Crown Media United States, LLC as
  subsequently amended from time to time.

  



 



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