Document:

Exhibit 10.1

 

	
  

  
	
   

  	
   

  
	
   

  	
  David Evans

  
	
   

  	
  President & Chief Executive Officer

  
	
   

  	
  Crown Media
  Holdings, Inc.

  

 

 

July 9, 2004

 

Jeff Henry

9 Fairmile Lane

Cobham, Surrey

United Kingdom KT1112DL

 

Dear Jeff,

 

This will confirm our
understanding regarding settlement of your March 12, 2004 “Employment
Agreement” with Crown Media International, LLC (“Crown”) in the event of a sale
or other transaction involving our international business.

 

While your Employment Agreement
may be assumed by a buyer of Crown’s international assets, we realize that you
may elect not to continue employment with that buyer.  Accordingly, Crown Media Holdings, Inc. has agreed to the
following if there is transaction involving Crown Media International, LLC or
Crown Entertainment Limited which affects your position:

 

If, as a part of the
transaction, your Employment Agreement is assumed by a buyer of one of these
entities but, after due consultation with me or the then-current Chief
Executive Officer of Crown Media Holdings you do not elect to be employed by
the buyer, then you will have the right to terminate your Employment Agreement
by written notice.  Such termination
will be effective on the date which is the later of 45 days after the effective
date of the transaction or 45 days after our receipt of your notice.  Within 15 days of the effective date of your
termination of the Employment Agreement, we will pay you the present value of
the remaining salary and bonuses which would have been payable to you under
Paragraphs 3(a) and (b) of your Employment Agreement.  This payment, however, will be offset by any amounts you receive
from a buyer in discharge or settlement of the Employment Agreement.  Also, the provisions of clauses 5 (a) and
7(b) of your Employment Agreement shall survive any termination thereof
(provided that clause 7(b) will apply only to individuals who are employees of
Crown Media Holdings, Inc. or its then-current subsidiaries at the time of the
solicitation.

 

	
  

  
	
   

  
	
  12700 Ventura Boulevard, Studio City, CA 91604

  Ph: 818.755.2670 Fx: 818.755.2674

  davidevans@hallmarkchannel.com

  

 

 

 

In the event your Employment
Agreement is not assumed by a buyer or the Crown operations with which you are
associated are not actually sold and you remain with Crown, you will be
eligible for the same “Retention Bonus” as that which has been extended to
other senior employees of the international operations.  The amount of this bonus, however, will be
offset by any other special bonuses which the Crown Media Holdings, Inc. Board
of Directors may award you in connection with the international transaction.

 

This agreement is in
recognition of your extraordinary contributions to the growth and success of
Crown’s UK and EMEA operations and your efforts in assisting us in finding an
appropriate buyer which can capitalize on this success.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David
  Evans

  	
   

  
	
   

  	
  David EvansEXHIBIT 10.2

 

EMPLOYMENT AGREEMENT

AMENDMENT NO. 1

 

This Amendment No. 1 is made as of May 28, 2004 to
that certain Employment Agreement, dated as of September 18, 2001 (the
“Agreement”), between Crown Media Holdings, Inc., a Delaware corporation with
offices at 6430 South Fiddlers Green Circle, Suite 500, Greenwood Village,
Colorado 80111, or its permitted assigns (“Employer”), and David Evans, 1464
Lindacrest Drive, Beverly Hills, California 90210 (“Employee”).

 

WITNESSETH:

 

WHEREAS, Employer and
Employee desire to extend the term of the Agreement upon the terms and
conditions hereinafter set forth;

 

NOW, THEREFORE, for good and valuable consideration
the receipt and sufficiency of which is mutually acknowledged, the parties
hereto agree as follows:

 

1.             Section 2 – Term of Employment shall be amended
by replacing “the third anniversary date” with “the fourth anniversary date”
thereby extending the Term until September 17, 2005, unless terminated earlier
as provided in paragraph 8 of the Agreement.

 

2.             Section 3(a) – Salary; Signing Bonus shall be
amended by providing that Employer shall pay to Employee a salary at the annual
rate of $1,312,500 from September 18, 2004 through the end of the Term.

 

3.             Except to the extent amended herein, all terms and
conditions of the Agreement shall remain in full force and effect.

 

4.             This Amendment No. 1 is contingent upon and subject to
Employer and Employee executing an Amendment to that certain Restricted Stock
Unit Agreement dated as of May 29, 2003 between the parties, which Amendment
shall be substantially in the form attached hereto as Exhibit A.

 

 

5.             This Amendment No. 1 may be signed in any number of
counterparts, each of which shall be an original, and all of which, taken
together, shall constitute one instrument.

 

IN WITNESS WHEREOF,
Employer has by its appropriate officer signed this Amendment No. 1 and
Employee has signed this Amendment No. 1 as of the day and year first above
written.

 

 

	
   

  	
  CROWN MEDIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles Stanford

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President, General Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  /s/ David Evans

  	
   

  
	
   

  	
  David Evans

  
							

 

2EXHIBIT 10.3

 

FORM OF

AMENDED AND RESTATED

CROWN MEDIA HOLDINGS,
INC.

RESTRICTED STOCK UNIT
AGREEMENT

 

THIS AMENDED
AND RESTATED RESTRICTED STOCK UNIT AGREEMENT (the “Amended Agreement”) is made
and 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 Media
Holdings, Inc. 2000 Long Term Incentive Plan (the “Plan”) and hereby amends and
restates 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 the
meanings set forth in the Plan.

 

1.  Award of Restricted
Stock Units.

 

Pursuant to the Plan, Crown awarded 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.

 

2.  Vesting.

 

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 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
RSUs shall vest.  Each anniversary of
the Grant Date, the date 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. 
Subject to any cancellation of the 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 RSU award is settled.

 

4.  Termination of RSUs
and Non-Delivery Upon Certain Other Events, Acceleration of 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 if prior to the Vesting Date Executive experiences a Termination of
Employment (as defined in the Plan).  Notwithstanding the foregoing, any
outstanding unvested 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) upon 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 of 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

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