EXHIBIT 10.63
December 26, 2002
Xx. Xxxx Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxxxx, XX. 90046
Dear Xx. Xxxxx:
The following will confirm our agreement regarding termination of your
employment with Crown Media United States, LLC (hereafter referred to as
"Crown"). As you have been previously advised, Xxxxx has elected to terminate
your employment and employment agreement with Crown dated September 25, 2001
(the "Employment Agreement"), effective December 31, 2002. Such termination is
pursuant to Paragraph 8(b) of the Employment Agreement. Notwithstanding the
terms of the Employment Agreement, we have agreed that:
1. In lieu of payment of the salary provided for in Paragraph 3(a) of the
Employment Agreement over the remainder of the Term as provided in
Paragraph 8(b), Crown will pay you a lump sum of $1,325,521 on or
before December 31, 2002. This lump sum payment will be subject to any
withholdings or deductions required by law.
2. You will receive a flat bonus of $300,000 for 2002 (subject to any
deductions required by law), in lieu of a bonus calculated pursuant to
Paragraph 3(b) of the Employment Agreement. This bonus will be paid in
2003 on the date the 2002 bonuses are paid to other Crown employees.
3. The bonuses for 2003 and 2004 (in the latter case, adjusted for the
partial contract year) will be calculated and paid as provided in
Paragraph 3(b) of the Employment Agreement. In calculating these
bonuses, any overall adjustments in the formulas or benchmarks which
are used to calculate bonuses for other senior executives whose bonus
formulas are similarly based on EBITA or revenues and which are
necessary to allow for unforeseen developments in Crown's operations or
the television marketplace, will also be made in your bonus
calculations. In other words, you will be treated consistently with out
top executives with respect to any such adjustments. These bonuses will
be subject to the mitigation provisions of Paragraph 3(b) of the
Employment Agreement.
4. You are eligible for continued medical, dental and vision coverage for
yourself and your family pursuant to the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"). Xxxxx has agreed to make all payments
required for continuation of this COBRA coverage on your behalf through
June 30, 2004, provided that you are not eligible for coverage under
any other employer's medical plans. Your participation in all other
Crown employee benefit plans (including Fringe Benefits under the
Employment Agreement) will cease as of December 31, 2002.
5. You may retain the computer equipment which Crown previously installed
in your home, consisting of:
1 Dell desktop
2 Dell 17" monitors
2 HP 1200 printers
1 DSL router
1 Dell Latitude LS 400 w/ docking station
1 Dell keyboard
1 Dell mouse
1 Zip drive
1 Blackberry
You may also retain your company cell phone and Crown will ask that the
cell phone be transferred to your account with your existing provider
effective January 18, 2003. Similarly Crown will request that your high
speed DSL service be transferred to your personal account on the same
date. The DirectTV service, which has been provided to you, will be
terminated.
6. Notwithstanding Paragraph 5(a)(iii) of the "Nonqualified Stock Option
Agreement" between you and Crown Media Holdings, Inc., dated as of
August 1, 2000, and the terms of the Crown Media Holdings, Inc. Amended
and Restated 2000 Long Term Incentive Plan, the 62,047 Crown options
which were awarded under that agreement in lieu of the Odyssey SARs
which you held (which options have fully vested) may be exercised at
any time on or before December 31, 2005. The options will then expire
on December 31, 2005.
7. You, on behalf of yourself and your heirs, representatives and assigns,
hereby release and discharge Crown, its parent companies, their
subsidiaries and divisions, and all of the respective current and
former directors, officers, shareholders, successors, agents,
representatives and employees of each, from any and all claims you ever
had, now have, or may in the future assert regarding any matter
occurring prior to the Effective Date, including, without limitation,
all claims regarding your employment or termination of your employment
with Crown (including any rights and claims under the Age
Discrimination in Employment Act and any other employment
discrimination claims), any contract claim (express or implied), any
tort, any claim for wages or benefits, any claim for breach of a fair
employment practice law or any breach of any other local, state or
federal law, statute, ordinance, regulation or provision. Except as
provided herein, you acknowledge that you are owed no additional
compensation under your Employment Agreement or otherwise in connection
with the termination of your employment and that Crown will have no
obligation to provide you at any time in the future any payments or
benefits, other than those provided for in this agreement and vested
benefits under Crown's benefit plans
8. This Agreement does not constitute an admission by Crown of any
violation of any federal, state, local or administrative statute,
ordinance, regulation or provision.
9. The terms and provisions of this Agreement are severable and if any
term or provision is held to be invalid or unenforceable, it shall not
affect the validity or enforceability of any other term or provision.
10. You agree that any confidential information you acquired during your
employment with Crown shall not be disclosed, either directly or
indirectly, to any other person or used in a manner detrimental to
Crown's interests. You further agree not retain any business records or
documents relating to any activity of Crown or any of its parents,
subsidiary or affiliated companies, and to return and not retain any
property belonging to Crown or its parents, subsidiaries, and
affiliates.
11. Neither you nor anyone acting on your behalf shall publicize,
disseminate or otherwise make known the terms of this Agreement,
directly or indirectly, to any other person, except for those rendering
professional financial or legal advice, to your immediate family, or
unless required to do so by court order or other compulsory process of
law.
12. You agree to cooperate with Crown in the preparation and production of
evidence and in providing testimony in any judicial or administrative
proceeding pending now or in the future that involves allegations
arising during the period of your employment. (Crown is not currently
aware of any such pending proceedings.) You shall not be required to
voluntarily participate (as opposed to participating pursuant to a
valid subpoena) if to do so would result in self-incrimination or
negatively impact your reputation, belief system or then-current
employment or would be a conflict of interest with those of a
then-current or past employer.
13. This letter sets forth the entire agreement between you and Crown and
supersedes any and all prior oral or written agreements or
understandings between you and Crown concerning this subject except by
a further writing signed by you and an authorized representative of
Crown.
14. The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly
for or against any party. This Agreement shall be governed by and
construed in accordance with the laws of the State of California
without regard to conflicts of law rules.
15. Paragraphs 5(a), 5(c) and 7(b) of your Employment Agreement and all
other provisions of that agreement which by their terms are intended to
survive after the end of the Term, will continue in effect for the
periods indicated.
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16. This agreement will become effective seven days after you sign it, and
you have the right to revoke the agreement during that seven day
period.
If the foregoing correctly and fully recites the substance of our Agreement,
please so signify by signing in the space below.
Very truly yours,
Crown Media United States, LLC
By: /s/ X. Xxxxxxxx
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Name: X. Xxxxxxxx
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Title: VP
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I am fully aware of and understand this Agreement's contents and I am entering
into this Agreement knowingly, voluntarily, willfully and free form any coercion
or duress.
ACCEPTED & AGREED:
By: /s/ Xxxx Xxxxx Date: December 27, 2002
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Xxxx Xxxxx
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