EMPLOYMENT AGREEMENT
        Agreement, made this 18th day of September, 2001, 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").
               WHEREAS, Employer desires to retain the services of Employee and
Employee desires to be employed by Employer upon the terms and conditions
hereinafter set forth;
        NOW, THEREFORE, in consideration of the covenants herein contained, the
parties hereto agree as follows:
        1. Employment and Duties.
        (a) Effective September 18, 2001 (the "Effective Date"), Employer hereby
employs Employee and Employee hereby agrees to serve as President and Chief
Executive Officer reporting only to the Board of Directors of Employer with no
other person interposed as an officer in the reporting relationship to such
Board. Employee agrees to perform such services consistent with Employee's
position as shall, from time to time, be reasonably assigned to Employee,
including but not limited to development of existing and new channels which
Employer owns or in which Employer invests. Employee shall use Employee's best
efforts to promote the interests of Employer and shall devote Employee's full
business time, energy and skill exclusively to the business and affairs of
Employer during the "Term" (as "Term" is defined in Paragraph 2 below. Nothing
herein shall prevent Employee from spending time on his own investment
activities, subject to compliance with Paragraph 7 and subject to such
activities not materially impairing the performance of Employee's duties
        (b) Employee's primary duties shall be to act as the chief executive
officer and operating head of Employer responsible for administering the
approved annual budget and directing the overall development of Employer's
business subject to the guidance of the Board of Directors. Employee will be
responsible for such television programs and other audiovisual properties
(collectively, the "Properties" and individually, a "Property") as are
reasonably assigned to him.
        (c) Employer and its owners may be incorporating subsidiary production
or distribution companies for the development or distribution of individual
Properties. Employer shall have the right to loan or make available, without
additional compensation to Employee, Employee's services as an officer or
director to any such subsidiary, provided that his duties as an officer of any
such subsidiary shall be consistent with his duties hereunder and shall not
increase his duties hereunder. Employee further agrees that all the terms of
this Employment Agreement shall be applicable to Employee's services for each
such subsidiary.
        (d) Employer will use reasonable efforts to procure Employee's election
to its Board of Directors.
        2. Term of Employment. The term of Employee's employment ("Term") with
Employer shall commence on the Effective Date and shall end on the day before
the third anniversary of the Effective Date in 2004, unless terminated earlier
as is provided in Paragraph 8 of this Agreement or extended by mutual agreement
of the parties.
        3. Compensation.
        (a) Salary; Signing Bonus. As soon as practicable following execution of
this Agreement, Employer shall pay Employee a signing bonus of $100,000. As
compensation for Employee's services hereunder, Employer shall pay to Employee a
salary at the annual rate of $1,000,000 per year from the Effective Date until
September 17, 2002, $1,100,000 per year from September 18, 2002 through
September 17, 2003 and $1,250,000 per year from September 18, 2003 through the
end of the Term. Such salary shall be paid biweekly, in arrears. Employer shall
review, in good faith, Employee's salary annually for a possible increase based
on Employee's performance and based on salary levels for comparable positions in
comparable companies.
        (b) Performance Bonus. As of the day before each anniversary of the
Effective Date through the end of the Term, Employee shall be entitled to a
performance bonus of up to 100% of his then annual rate of salary if Employer
has achieved specific levels of performance, determined as follows. If Employer
for each 12-month period ending the day before each anniversary of the Effective
Date achieves the following percentage of Employer's business plan for both
revenue and EBITDA as accepted by Employer's Board of Directors for that period,
Employee shall receive the percentage of the performance bonus specified below:
   Percentage of Plan Achieved                     Percent of Bonus
   ---------------------------                     ----------------
   <S>                                             <C>
   Less than 70%                                            0%
   70% up to 80%                                       33 1/3%
   80% up to 95%                                       66 2/3%
   95% or more                                            100%
Both revenue and EBITDA shall be determined consistently with past practices. In
addition, Employer in its sole discretion may pay an additional bonus to
        (c) Withholding. All payments of salary shall be made in appropriate
installments to conform with the regular payroll dates for salaried personnel of
Employer. Employer shall be entitled to deduct from each payment of compensation
to Employee such items as federal, state and local income taxes, FICA, and such
other deductions as may be required by law.
        (d) Expenses. During the Term, Employer shall pay or reimburse Employee
on an accountable basis for all reasonable and necessary out-of-pocket expenses
for entertainment, first-class travel and hotel accommodations, meals and other
expenditures incurred by Employee in connection with Employee's services to
Employer in accordance with Employer's expense account policies for its senior
executive personnel and Employer's past practices relative to Employee.
        (e) Fringe Benefits. During the Term, Employee shall be entitled to
receive the following fringe benefits: (i) four weeks paid vacation per year,
(ii) 1,000,000 non-qualified stock options under the Amended and Restated Crown
Media Holdings, Inc. 2000 Long Term Incentive Plan pursuant to the grant
attached hereto as Exhibit A, and (iii) any other fringe benefits, on terms that
are or may become available generally to senior executives of Employer or to any
executive of Employer more senior to Employee, whichever is more favorable to
        4. Place of Employment, Personal Assistant. During the Term, Employee
shall be required to perform Employee's duties at the Los Angeles office of
Employer, and Employee shall undertake all reasonable travel required by
Employer in connection with the performance of Employee's duties hereunder.
Employee's current personal assistant will be employed by Employer as Employee's
personal assistant.
        5. Confidentiality, Intellectual Property, Name and Likeness.
        (a) Employee agrees that Employee will not during the Term or thereafter
divulge to anyone (other than Employer (and its principal owners, executives,
representatives and employees who need to know such information) or any persons
designated by Employer) any knowledge or information of any type whatsoever
designated or treated as confidential by Employer relating to the business of
Employer or any of its subsidiaries or affiliates, including, without
limitation, all types of trade secrets, business strategies, marketing and
distribution plans as well as concrete proposals, plans, scripts, treatments and
formats described in subparagraph (b) below. Employee further agrees that
Employee will not disclose, publish or make use of any such knowledge or
information of a confidential nature (other than in the performance of
Employee's duties hereunder) without the prior written consent of Employer. This
provision does not apply to information which becomes available publicly without
the fault of Employee or information which Employee discloses in confidence to
his own privileged representatives or is required to disclose in legal
proceedings, provided Employee gives advance notice to the President of Employer
and an opportunity to Employer to resist such disclosure in legal proceedings.
        (b) During the Term, Employee will disclose to Employer all concrete
proposals, plans, scripts, treatments, and formats invented or developed by
Employee during the term which relate directly or indirectly to the business of
Employer or any of its subsidiaries or affiliates including, without limitation,
any proposals and plans which may be copyrightable, trademarkable, patentable or
otherwise exploitable. Employee agrees that all such proposals, plans, scripts,
treatments, and formats are and will be the property of Employer. Employee
further agrees, at Employer's request, to do whatever is reasonably necessary or
desirable to secure for the Employer the rights to said proposals, plans,
scripts, treatments, and formats, whether by copyright, trademark, patent or
otherwise and to assign, transfer and convey the rights thereto to Employer at
Employer's expense.
        (c) Employer shall have the right in perpetuity to use Employee's name
reasonably in connection with credits for Properties for which Employee performs
any services.
        6. Employee's Representations. Employee represents and warrants that:
        (a) Employee has the right to enter into this Agreement and is not
subject to any contract, commitment, agreement, arrangement or restriction of
any kind which would prevent Employee from performing Employee's duties and
obligations hereunder;
        (b) To the best of Employee's actual knowledge, Employee is not subject
to any undisclosed medical condition which might have a material effect on
Employee's ability to perform satisfactorily Employee's services hereunder,
        7. Non-Competition, No Raid.
        (a) During the Term, Employee shall not engage directly or indirectly,
whether as an employee, independent contractor, consultant, partner, shareholder
or otherwise, in a business or other endeavor which interferes with any of his
duties or obligations hereunder or which is directly competitive with the
business of the Employer or its subsidiaries, including but not limited to the
production, distribution or any other exploitation of audiovisual television
material (the "Other Business").
        (b) Employee further agrees that during the Term and for a period of one
year thereafter, Employee will not (i) employ or knowingly attempt to employ or
assist anyone else to employ any person who is, at the date of termination of
Employee's employment, working as an. officer, policymaker or in high-level
creative, development or distribution (including without limitation executive
employees) for or rendering substantially full-time services as such to
Employer, (ii) publicly disparage Employer or (iii) interfere with Employer's
relationships with suppliers, customers or other organizations or individuals
with which the Employer now or hereafter has a business relationship.
        8. Termination.
        (a) This Agreement may be terminated and the Term ended on five business
days written notice for any one of the following reasons (except (i) in which
case termination shall occur on the date of death):
               (i) The death of Employee;
               (ii) By Employer, on the physical or mental disability of
        Employee to such an extent that Employee is unable to render services to
        Employer for a period exceeding 90 consecutive days or an aggregate of
        180 business days during any 12-month period of the Term. For purposes
        of counting the aggregate of 180 business days, days properly designated
        by Employee as vacation days shall not be counted;
               (iii) By Employer, for "cause," which for purposes of this
        Agreement shall be defined as:
        (A) the illegal use of a controlled substance, or the immoderate use of
alcohol, either of which adversely, materially and frequently affects Employee's
performance of Employee's services under this Agreement;
        (B) Employee's conviction of any act which constitutes a felony under
federal, state or local laws or the law of any foreign country;
        (C) Employee's persistent and material failure after written notice to
perform, or Employee's persistent refusal to perform after written notice,
Employee's significant duties and responsibilities pursuant to this Agreement as
determined by the Board of Directors; or
        (D) Employee's commission of significant acts of theft or embezzlement
in financial dealings with or on behalf of Employer, its subsidiaries,
affiliates and parent corporation or in connection with performance of his
duties hereunder.
               (iv) By Employee, for "good reason" which phrase shall mean: (a)
        a material breach by Employer of any of its material obligations to
        Employee hereunder which Employer has failed to cure within ten business
        days after written notice from Employee specifying such breach; or (b) a
        Change of Control (defined hereafter) of Employer and Employee
        thereafter ceasing to be employed hereunder for any reason not described
        in Paragraph 8(a)(i) or (ii).
        (b) Employer shall also have the right to terminate Employee prior to
the expiration of the Term in addition to pursuant to Paragraph 8(a) above by
providing Employee with not less than 30 days advance notice in writing. In the
event of a termination pursuant to this Paragraph 8(b), the Employer shall pay
to the Employee the remaining amounts described in Paragraph 3(a) above for the
balance of the Term as if there had been no termination of this Agreement (or if
less than 180 days are left in the Term at the termination of employment, for
180 days as if there had been no termination of this Agreement) plus any bonus
achieved under Paragraph 3(b) for the period in which termination occurs, all
options described in Paragraph 3(e) shall vest immediately, and Employer shall
have no further obligations to Employee hereunder. If Employer terminates
Employee under this Paragraph 8(b), Paragraphs 7(a) and 7(b) shall not apply
from the date of termination.
        (c) In the event that Employer terminates this Agreement due to any of
the reasons set forth in Paragraphs 8(a)(i) and 8(a)(iii)(A)-(D) above, Employee
shall be paid Employee's salary through the later of the expiration of the five
(5) business days period referred to in Paragraph 8(a) or the end of the month
in which the termination event occurs after which Employer's obligation to pay
salary to Employee shall terminate. Should Employer terminate this Agreement due
to Employee's disability as defined above in Paragraph 8(a)(ii), Employee shall
continue to receive six months of salary. After making the payments provided for
in this subparagraph (c), Employer shall have no further obligations to
        (d) If Employee validly terminates this Agreement for good reason,
Employer shall pay to Employee within 30 days after such notice of termination
the remaining amounts described in Paragraph 3(a) above for the balance of the
Term, as if there had been no
termination of this Agreement (plus any bonus achieved under Paragraph 3(b) for
the period in which termination occurs), all options described in Paragraph 3(e)
shall vest immediately, and Employer shall have no further obligations to
Employee hereunder. If Employee terminates this Agreement under this Paragraph
8(d), Paragraphs 7(a) and 7(b) shall not apply from the date of termination.
        (e) Upon termination of this Agreement, Employee shall promptly return
all of Employer's property to Employer.
        (f) Upon termination of Employee's employment for any reason, Employee
shall tender Employee's resignation from the Board of Directors of any of
Employer's subsidiaries or affiliates on which Employee is serving, and Employer
shall accept such resignation forthwith.
        (g) A "Change of Control" shall mean (i) an acquisition of shares, or a
merger or other business combination, of Employer so that Hallmark Cards,
Incorporated or its current or future subsidiaries ("Current Owners") no longer
elect a majority of the Board of Directors of Employer, (ii) a sale of all or
substantially all of the assets of Crown to persons other than the Current
Owners or (iii) a liquidation of Crown.
        9. Breach; Remedies. Both parties recognize that the services to be
rendered under this Agreement by Employee are special, unique and extraordinary
in character, and that in the event of the breach by Employee of the terms and
conditions of this Agreement, Employer shall be entitled, inter alia, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to obtain damages for any breach of
this Agreement, and to seek to enforce the specific performance thereof by
Employee, and/or to seek to enjoin Employee from performing services for any
other person, firm or corporation. The parties further stipulate that the law of
New York shall apply to any dispute or action regarding this agreement and
Employee agrees to submit to the jurisdiction of any court of competent
jurisdiction in New York in any such action and agrees to waive all objections
to such jurisdiction, including (but not limited to) any objections based upon
lack of personal jurisdiction or venue or forum non conveniens.
        10. Assignment. This Agreement is a personal contract and, except as
specifically set forth herein, the rights, interests and obligations of Employee
herein may not be sold, transferred, assigned, pledged or hypothecated, although
he may assign or use as security payments due hereunder from Employer. The
rights and obligations of Employer hereunder shall bind in their entirety the
successors and assigns of Employer, although Employer shall remain fully liable
hereunder. As used in this Agreement, the term "successor" shall include any
person, firm, corporation or other business entity which at the time, whether by
merger, purchase or otherwise, acquires all or substantially all of the assets
or business of Employer.
        11. Amendment; Captions. This Agreement contains the entire agreement
between the parties. It may not be changed orally, but only by agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. Paragraph headings are for convenience of
reference only and shall not be considered a part of Agreement. If any clause in
this Agreement is found to be unenforceable, illegal or contrary to public
policy, the parties agree that this Agreement shall remain in full force and
effect except for such clause.
        12. Prior Agreements. This Agreement supersedes and terminates all prior
agreements between the parties relating to the subject matter herein addressed
(including the Employment Agreement dated March 1, 1999, as amended, with
Employer), and sets out the full agreement between the parties concerning its
subject matter.
        13. Notices. Any notices or other communications required or permitted
hereunder shall be in writing and shall be deemed effective when delivered in
person or, if mailed, by registered or certified mail, return receipt requested,
in which case the notice shall be deemed effective on the date of deposit in the
mails, postage prepaid, addressed to Employee at Employee's address
first written above and, in the case of Employer, addressed to its President
with a copy to General Counsel, Hallmark Cards, Incorporated, 2501 McGee
Trafficway, Kansas City, Missouri 64108. Either party may change the address to
which notices are to be addressed by notice in writing given to the other in
accordance with the terms hereof.
        14. Periods of Time. Whenever in this Agreement there is a period of
time specified for the giving of notices or the taking of action, the period
shall be calculated excluding the day on which the giver sends notice and
excluding the day on which action to be taken is actually taken.
        15. Counterparts. This Agreement 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 Agreement and Employee has signed this Agreement as of the day and
year first above written.
                                    CROWN MEDIA HOLDINGS, INC.
                                    By:   /s/ Robert Halmi, Jr.
                                    Title:  Chairman of the Board
                                       /s/ David Evans
                                    David Evans
                                    Exhibit A
        1,000,000 non-qualified stock options are hereby granted to David Evans
effective as of September 18, 2001 pursuant to the Amended and Restated Crown
Media Holdings, Inc. 2000 Long Term Incentive Plan. The exercise price of the
stock options shall be the closing price of the Company's stock on that date.
The stock options shall vest one-third on August 1, 2002, one-third on August 1,
2003, and one-third on August 1, 2004. Options may be exercised when vested. The
term of the options shall be as follows: one-third of the then unexercised
options shall expire on October 1, 2004, another one-third of the then
unexercised options shall expire on February 1, 2005 and all remaining
unexercised options shall expire on August 1, 2005.