Exhibit 10.11
Execution Copy
EQUITY STAKE TRANSITION AGREEMENT
This Equity Stake Transition Agreement (the “Agreement”) is entered into by and
between Discovery Communications, Inc., a Delaware corporation (the “Company”),
and John S. Hendricks (“the Executive”) as of the 5th day of November, 2008.
WHEREAS, the Executive is the founder of Discovery Communications (in 1982 the
Executive incorporated Cable Educational Network, Inc., which launched The
Discovery Channel in 1985, and later changed the company’s name to Discovery
Communications to reflect its flagship network brand);
WHEREAS, in 1986, the predecessor entities of the Company’s shareholders,
Discovery Holding Company and Advance Newhouse Communications, made investments
in Discovery Communications and, over time, entered into a number of agreements
with the Executive, whereby the Executive’s original equity holdings were
transitioned into phantom equity and appreciation units—forms of long-term
incentive compensation appropriate for a private company with no public market
value; and
WHEREAS, the Company is now a public company, and it is appropriate and in the
best interests of the Company that the Executive’s long-term incentive
compensation be transitioned to stock options, a form of incentive more suitable
for a public company, as stock options more directly align the Executive’s
incentive compensation with the interests of the Company’s shareholders.
NOW, THEREFORE, the parties hereto agree as follows:

1.   Discovery Appreciation Plan.

  a.   All “Appreciation Units” previously awarded to the Executive under the
terms of the Company’s Discovery Appreciation Plan (“DAP”) shall be paid to the
Executive, following his earning a vested right to the Appreciation Units, in
accordance with the terms of DAP, provided that, regardless of how the Company
determines “Ending Unit Value” (as defined in the DAP) for other DAP
participants, the “Ending Unit Value” of such Appreciation Units shall be
determined without application of the 110% multiplier referred to in the DAP’s
definition of “Ending Unit Value.”     b.   As of the date hereof, the Executive
holds (or recently had settled) the following Appreciation Unit awards under
DAP:

  i.   4,779,467 Appreciation Units which vested on October 1, 2008 (“2008 DAP
Units”) and have been settled;     ii.   1,042,171 Appreciation Units which are
scheduled to vest on October 1, 2009 (“2009 DAP Units”);

 

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  iii.   415,831 Appreciation Units which are scheduled to vest on October 1,
2010 (“2010 DAP Units”); and     iv.   415,831 Appreciation Units which are
scheduled to vest on October 1, 2011 (“2011 DAP Units”).

         The number of Appreciation Units associated with the 2008 DAP Units,
the 2009 DAP Units, the 2010 DAP Units and the 2011 DAP Units, as well as the
“Beginning Unit Value” and “Ending Unit Value” of such awards, shall remain
subject to adjustment (for example, for changes in capitalization related to the
Company becoming publicly traded) in accordance with DAP and, except as
described above, will be governed by the terms of DAP.   2.   Stock Option
Grants.

  a.   Option Grant. If the Executive remains an employee of the Company in good
standing as of the date his Appreciation Units under DAP vest and become
payable, then the Company shall issue to the Executive, as of the date such
Appreciation Units mature (or if such day is not a business day, then as of the
next following business day) an equivalent number of nonqualified stock options
to purchase Series A common stock of the Company with the terms specified below
(the “Options”).     b.   Option Term. With respect to Options granted upon
maturation of the Executive’s Appreciation Units, the Options will expire no
later than the number of years following the date of grant, as follows:

          Appreciation Units   Expiration Date  
2008 DAP Units
  10 years
2009 DAP Units
  9 years
2010 DAP Units
  8 years
2011 DAP Units
  7 years

    All Options will expire no later than October 1, 2018.

  c.   Exercise Price. The exercise price of each Option granted upon maturation
of a DAP Appreciation Unit shall be equal to the fair market value of the
Company’s Series A Common Stock on the date the Option is granted.     d.  
Vesting and Exercise. The Executive’s right to exercise each Option granted upon
maturation of a DAP Appreciation Unit shall vest in four equal installments of
twenty-five percent (25%) on each of the four anniversaries immediately
following the date the Option is granted, provided that in the event the

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      Executive’s employment with the Company is terminated, the Executive’s
right to exercise the Options will be governed by the following provisions:

  i.   If the Executive’s employment with the Company is terminated for Cause,
then all of the Options (whether or not previously vested and exercisable)
immediately shall cease to be exercisable and shall be forfeited.     ii.   If
the Executive’s employment with the Company is terminated (A) as a result of
death, Disability, or Retirement, or (B) by the Company other than for Cause,
then all of the Options shall be immediately vested, and the Options will remain
exercisable during their original term;     iii.   If the Executive’s employment
with the Company terminates for any other reason (not described in (i) or (ii)),
then any Options not vested and exercisable on the date of termination
immediately shall be forfeited, and any Options vested as of such date shall
remain exercisable for one year following the termination (but not beyond their
original term); and     iv.   The Executive’s right to exercise any Options
during any period of time following termination of employment, pursuant to
(ii) or (iii), above, shall be conditioned upon the Executive signing a General
Liability Release and abiding by a Non-Competition Agreement, and if such
release is not timely signed (and not revoked) or if the Company determines that
the Non-Competition Agreement is breached, then no Options may be exercised
after the date of termination and any gains the Executive recognized from the
post-termination exercise of the Options may be clawed back by the Company in
its discretion (by requiring an immediate cash payment to the Company).

  e.   Incorporation of Plan. Except as specified above, the terms of the
Options shall be consistent with the Company’s 2005 Incentive Plan, as amended
from time to time, or any successor plan under which the Options are granted,
including the adjustment of the Options (in terms of number of shares, exercise
price or class of shares) in the event of a recapitalization of the Company.

3.   Definitions for Options. The following definitions will apply to this
Agreement and to the Options granted upon maturation of a DAP Appreciation Unit:

  a.   Board. “Board” means the Company’s Board of Directors, as it may be
constituted from time to time.     b.   Cause. The Company shall have “Cause” to
terminate the Executive’s employment as a result of the Executive’s:

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  i.   Willful malfeasance in connection with his services to the Company (and
its successors), including embezzlement, or misappropriation of funds, property
or corporate opportunity;     ii.   Committing any act or becoming involved in
any situation or occurrence involving moral turpitude, which is materially
damaging to the business or reputation of the Company (or its successors); or  
  iii.   Conviction of, or plea of guilty or nolo contendere to, or failure to
defend against the prosecution for, a felony or a crime involving moral
turpitude.     iv.   The Executive’s employment shall not be terminated for
Cause under clauses (i) or (ii) unless the Company notifies the Executive in
writing of its intention to terminate his employment for Cause, describes with
reasonably specificity the circumstances giving rise thereto, and (provided the
Board believes such circumstances are susceptible of being cured by the
Executive) provides the Executive a period of at least ten (10) business days to
cure, and the Executive has failed to effect such a cure within such period. The
Board, in its reasonable discretion, exercised in good faith, shall determine
whether the Executive has cured the circumstances giving rise to Cause. In
addition, the Executive’s removal as Chairman of the Company is subject to the
special class voting rights of the Company’s Series A convertible preferred
stockholders (requiring a supermajority vote).

  c.   Disability. The Executive shall be deemed to have a “Disability” if the
Executive is unable to perform substantially all of his duties to the Company in
the normal and regular manner due to mental or physical illness or injury, and
has been unable so to perform for one hundred fifty (150) days or more during
the twelve (12) consecutive months then ending. The determination of the
Executive’s Disability shall be made by the Board. The Executive shall cooperate
fully with any physician or health care professional (the “Doctor”) chosen by
the Board, in its sole discretion, to review the Executive’s medical condition.
The Executive shall cooperate with the Doctor by, among other things, executing
any necessary releases to grant the Doctor full access to any and all of the
Executive’s medical records, authorizing or requiring physicians and other
healthcare professionals who have treated or dealt with the Executive to consult
with the Doctor and submitting to such physical examinations or testing as may
be requested by the Doctor. The Executive shall be deemed to have a Disability
if he is receiving disability benefits under the long term disability plan
sponsored by the Company.     d.   General Liability Release. The General
Liability Release shall have terms substantively identical to the form annexed
hereto as Attachment A.     e.   Non-Competition Agreement. The Non-Competition
Agreement shall have terms which are substantively identical to the form annexed
hereto as Attachment B.

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  f.   Retirement. Retirement shall mean the Executive’s voluntary termination
of employment after attainment of age 65.

4.   Mutual Intent. The parties mutually agree that the Executive will not be
eligible to participate in any ongoing periodic equity awards which the Company
may grant to other executives and that the Option awards described herein
constitute all of the equity awards which will be made to the Executive through
2018 (although the Company may grant additional equity at its sole discretion).
Furthermore, the parties mutually agree that to the extent the Executive
exercises an Option, the Executive will not be entitled to be “reloaded” with an
additional Option grant.   5.   Miscellaneous.

  a.   Waiver or Modification. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as, or be construed to be, a
waiver of any other breach of such provision of this Agreement. The failure of a
party to insist upon strict adherence to any term of this Agreement on one or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Neither this Agreement nor any part of it may be waived,
changed or terminated orally, and any waiver, amendment or modification must be
in writing and signed by each of the parties. Any waiver of any right of the
Company hereunder or any amendment hereof shall require the approval of the
Chairman of the Compensation Committee. Until such approval or waiver has been
obtained, no such waiver or amendment shall be effective.     b.   Successors
and Assigns. The rights and obligations of the Company under this Agreement
shall be binding on and inure to the benefit of the Company, its successors and
permitted assigns. The rights and obligations of the Executive under this
Agreement shall be binding on and inure to the benefit of the heirs and legal
representatives of the Executive. The Company may assign this Agreement to a
successor in interest, including the purchaser of all or substantially all of
the assets of the Company, provided that the Company shall remain liable
hereunder unless the assignee purchased all or substantially all of the assets
of the Company. The Executive may not assign any of his duties or rights under
this Agreement.     c.   Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall, when executed, be deemed to be an
original and all of which shall be deemed to be one and the same instrument.    
d.   Governing Law. This Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of Maryland, without regard
to its conflicts of law rules.     e.   Entire Agreement. This Agreement
contains the entire understanding of the parties relating to the subject matter
of this Agreement and supersedes all other prior written or oral agreements,
understandings or arrangements regarding the

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      subject matter, including that certain Hendricks Equity Stake Transition
Term Sheet dated July 29, 2008. The Executive and the Company each acknowledges
that, in entering into this Agreement, he/it does not rely on any statements or
representations not contained in this Agreement.     f.   Severability. Any term
or provision of this Agreement which is determined to be invalid or
unenforceable by any court of competent jurisdiction in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction and
such invalid or unenforceable provision shall be modified by such court so that
it is enforceable to the extent permitted by applicable law.     g.   Notices.
All notices, demands and requests required or permitted to be given under the
provisions of this Agreement shall be (a) in writing, (b) sent by telecopy or
email (with receipt personally confirmed by telephone), delivered by personal
delivery, sent by nationally reputable commercial overnight delivery service or
sent by registered or certified U.S. mail, with return receipt requested,
(c) deemed to have been given on the date telecopied or emailed with receipt
confirmed, the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:

  (i)   if to the Company, to:         Discovery Communications, Inc.
One Discovery Place
Silver Spring, MD 20910
Attention: General Counsel     (ii)   if to Executive, to:         John S.
Hendricks
8484 Georgia Avenue, Suite 700
Silver Spring, MD 20910

      or to any other or additional persons and addresses as the parties may
from time to time designate in a writing delivered in accordance with this
Paragraph 5(g).     h.   Titles. The titles and headings of any paragraphs in
this Agreement are for reference only and shall not be used in construing the
terms of this Agreement.     i.   No Third Party Beneficiaries. This Agreement
does not create, and shall not be construed as creating, any rights enforceable
by any person not a party to this Agreement.

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  j.   Survival. The covenants, agreements, representations and warranties
contained in this Agreement shall survive the termination of the Term of
Employment and the Executive’s termination of employment with the Company for
any reason.

     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
Parties as of the first date written above.
The Compensation Committee of
Discovery Communications, Inc.

                 
By:
  /s/ Robert J. Miron       /s/ John S. Hendricks    
 
 
 
     Robert J. Miron      
 
John S. Hendricks    
 
       Chairman            

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ATTACHMENT A
GENERAL LIABILITY RELEASE
     FOR VALUABLE CONSIDERATION PAID, the receipt and sufficiency of which are
hereby acknowledged, I, John S. Hendricks, for myself, my heirs, executors,
administrators and assigns, do hereby release, acquit and forever discharge
Discovery Communications, Inc. (“DCI”), its parents, subsidiaries, affiliates
and related entities, as well as all of their respective officers, directors,
stockholders, members, partners, agents, employees and representatives
(hereafter collectively, the “DCI Parties”), from all obligations, claims,
demands, covenants, contracts, promises, agreements, liabilities, controversies,
costs, expenses, attorneys’ fees, actions or causes of action whatsoever,
whether known or unknown, I ever had or now have or claim to have against the
DCI Parties from the beginning of the world to the day and date hereof,
including any claim relating to the termination of my employment with DCI, and
further including specifically but not exclusively, and without limiting the
generality of the foregoing, any and all claims, demands and causes of action,
known or unknown, arising out of any transaction, act or omission concerning my
former employment by DCI and/or any of its subsidiaries or affiliates, and all
claims of every kind that may arise under any federal, state or local statutory
or common law, including the federal Age Discrimination In Employment Act of
1967, Title VII of the Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Equal Pay Act, the
Worker Adjustment and Retraining Notification Act, the Fair Labor Standards Act,
the Maryland Human Rights Act, as well as any similar state or local statute(s),
in each case as any such law may be amended from time to time; or any action
arising in tort or contract.
     I hereby acknowledge that my attorney has advised me regarding, and that I
am familiar with, the fact that certain state statutes provide that general
releases do not extend to claims that I do not know or suspect to exist in my
favor at the time I execute such a release, which if known by me may have
materially affected my execution of the release. Being aware of such statutes, I
hereby expressly waive and relinquish any rights or benefits I may have under
such statutes, as well as any other state or federal statutes or common law
principles of similar effect. I also hereby specifically and knowingly waive the
provisions of Section 1542 of the Civil Code of the State of California, which
reads: A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor. Notwithstanding the provisions of Civil Code Section 1542 stated above
and for the purpose of implementing a full and complete release and discharge of
the DCI Parties, I expressly acknowledge that this General Liability Release is
intended to include in its effect all claims that I do not know or suspect to
exist in my favor at the time I sign this General Liability Release.
     I hereby acknowledge that I am executing this General Liability Release
pursuant to Section 2 of that certain Equity Stake Transition Agreement, dated
November 5, 2008 (the “Agreement”), and that certain consideration to be
provided to me pursuant to Section 2 of the Agreement is in addition to what I
would have been entitled to receive in the absence of this General Liability
Release. I hereby acknowledge that I am executing this General Liability Release
voluntarily and with full knowledge of all relevant information and any and all
rights I may have. I hereby acknowledge that I have been advised to consult with

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an independent attorney of my own choosing in connection with this General
Liability Release to explain to me the legal effect of the terms and conditions
of this General Liability Release. I hereby acknowledge that I am voluntarily
and knowingly agreeing to the terms and conditions of this General Liability
Release without any threats, coercion or duress, whether economic or otherwise,
and that I agree to be bound by the terms of this General Liability Release. I
acknowledge that I have been given twenty-one (21) days to consider this General
Liability Release, and I understand that I have seven (7) days following my
execution of this General Liability Release in which to revoke my agreement to
comply with this General Liability Release by providing written notice of
revocation to the General Counsel of DCI no later than three business days
following such period.
     I further hereby covenant and agree that this General Liability Release
shall be binding in all respects upon myself, my heirs, executors,
administrators, assigns and transferees and all persons claiming under them, and
shall inure to the benefit of all of the DCI Parties.
     IN WITNESS WHEREOF, I have signed this General Liability Release this ___
day of                     , 20___.

             
 
  By:        
 
     
 
     John S. Hendricks    

     Subscribed and sworn to before me this ___ day of                     ,
20___.

             
 
     
 
Notary Public    
 
           
 
      My Commission Expires                         

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ATTACHMENT B
NON-COMPETITION AGREEMENT
     This NON-COMPETITION AGREEMENT (this “Non-Competition Agreement”) is dated
as of the ___ day of                     , 20___(the “Effective Date”), by and
among Discovery Communications, Inc., a Delaware corporation (the “Company”),
and John S. Hendricks (the “Executive”).
     WHEREAS, the parties entered into that certain Equity Stake Transition
Agreement, dated November 5, 2008 (the “Transition Agreement”), pursuant to
which the Company has issued to the Executive certain options to buy common
stock of the Company (the “Options”); and
     WHEREAS, the Executive’s right to exercise the Options during the period
following the termination of his employment with the Company is conditioned, in
part, on Executive signing and abiding by the terms of this Non-Competition
Agreement.
     NOW, THEREFORE, the parties hereto agree as follows:
     1. Covenants. As a means to protect the Company’s legitimate business
interests, including protection of the “Confidential Information” of the Company
(Executive hereby agreeing and acknowledging that the activities prohibited by
this Paragraph 1 would necessarily involve the use of Confidential Information),
during the “Restricted Period”, the Executive shall not, directly, indirectly or
as an agent on behalf of any person, firm, partnership, corporation or other
entity (other than the Company or any Company Entity):
          (a) solicit for employment, consulting or any other provision of
personal services, or hire, any person who is (i) a full-time or part-time
employee of (or in the preceding six (6) months was employed by) the Company (or
a Company Entity); or (ii) an individual performing, on average, twenty or more
hours per week of personal services as an independent contractor to the Company
(or a Company Entity); provided the prohibition in this clause (a) shall not
apply to the Executive’s Executive Assistant and such other former employees of
the Company who are currently employed by Hendricks Investment Holdings LLC
(“HIH”) (including, for example, Barbara Bennett, a former Chief Financial
Officer of the Company, who as of the effective date of the Transition Agreement
was serving as a financial advisor to HIH), as are approved in writing by the
Company’s Chief Executive Officer and by the Nominating and Corporate Governance
Committee of the Company’s Board of Directors. This covenant includes, but is
not limited to, inducing or attempting to induce, or influencing or attempting
to influence, any such person to terminate his or her employment or performance
of services with or for the Company (or a Company Entity); or
          (b) (i) solicit or encourage any person or entity who is, or within
the prior six (6) months was, a customer, producer, advertiser, distributor or
supplier of the Company (or a Company Entity) to discontinue such person’s or
entity’s business relationship with the Company (or a Company Entity); or
(ii) discourage any prospective customer, producer, advertiser, distributor or
supplier of the Company (or a Company Entity) from becoming a customer,
producer, advertiser, distributor or supplier of the Company (or a Company
Entity),

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including, without limitation, making any negative statements or communications
about the Company (or a Company Entity) or their respective shareholders,
directors, officers, employees or agents; provided that the restrictions of this
Paragraph 1(b) shall apply only to customers, producers, advertisers,
distributors or suppliers of the Company with which Executive had personal
contact, or for whom Executive had some responsibility in the performance of
Executive’s duties for the Company; or
          (c) hold any interest in (whether as owner, investor, shareholder,
lender or otherwise) or perform any services for (whether as employee,
consultant, advisor, director or otherwise), including the service of providing
advice for, a “Competitive Business” regardless of whether such business is
located in the United States or anywhere else in the world. Notwithstanding the
foregoing, the Executive may own, directly or indirectly, (i) an aggregate of
not more than 2% of the outstanding publicly traded stock or other publicly
traded equity interest in any entity that engages in a Competitive Business, so
long as such ownership therein is solely as a passive investor and does not
include the performance of any services (as director, employee, consultant,
advisor or otherwise) to such entity; and (ii) any interests in HIH and the
associated businesses used to carry out the business activities and interests of
HIH, as described by Discovery Holding Company (on behalf of the Company as
registrant) in the Form S-4/A (p. 27) filed with the Securities and Exchange
Commission (“SEC”) on August 6, 2008 (the “SEC Form S-4”); or
          (d) (i) use for the benefit, purposes or account of himself or any
other person or entity (other than the Company and Company Entities), or
(ii) disclose, divulge, reveal, communicate, share, transfer or provide access
to any person or entity outside the Company and Company Entities (other than
their shareholders, directors, officers, managers, employees, agents, counsel,
investment advisers or representatives in the normal course of the performance
of their duties), any Confidential Information without the prior authorization
of the Company’s Board of Directors. Notwithstanding the foregoing provisions of
this Paragraph 1(d), this Non-Competition Agreement shall not preclude the
Executive from disclosing the Confidential Information to the extent required by
applicable law, rule or regulation (including complying with any oral or written
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar legal process to which Executive is
subject), provided that the Executive gives the Company prompt notice of such
request(s), to the extent practicable, so that the Company may seek an
appropriate protective order or similar relief (and the Executive shall
cooperate with such efforts by the Company, and shall in any event make only the
minimum disclosure required by such law, rule or regulation). Nothing contained
herein shall prevent the use in any formal dispute resolution proceeding
(subject, to the extent possible, to a protective order) of Confidential
Information in connection with the assertion or defense of any claim, charge or
other dispute by or against the Company (or a Company Entity) or the Executive;
or
          (e) continue to use, or commence using, any Confidential Information
or intellectual property (including any patent, invention, copyright, trade
secret, trademark, trade name, logo, domain name or other source indicator)
owned or used by the Company (or a Company Entity); and the Executive shall
immediately destroy, delete, or return to the Company (at the Company’s option)
all originals and copies in any form or medium (including memoranda, books,
papers, plans, computer files, letters and other data) in the Executive’s

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possession or control (including any of the foregoing stored or located in the
Executive’s office, home, laptop or other computer, whether or not such computer
is Company property) that contain Confidential Information or otherwise relate
to the business of the Company, except that Executive may retain only those
portions of any personal notes, notebooks and diaries that do not contain any
Confidential Information. The Executive will notify and fully cooperate with the
Company regarding the delivery or destruction of any other Confidential
Information of which Executive is or becomes aware.
     2. Definitions.
          (a) A “Competitive Business” shall be any business that directly
competes with the Company for viewers, advertisers, distributors, producers,
actors or the like in (i) the production, post-production assembly, or
distribution/delivery by electronic means (including, but not limited to,
broadcast, cable, satellite, or the internet) of video entertainment, or
(ii) the exploitation of video entertainment through retail sales
establishments, theatres or the internet. For the avoidance of doubt, the
foregoing is not intended to prohibit the Executive from working for or engaging
in activities on behalf of a business primarily engaged in the production,
distribution and exploitation of video entertainment in the form of motion
pictures intended primarily for theatrical release or computer-based gaming,
such as Lions Gate Entertainment, Paramount Pictures and Electronic Arts (as
those businesses are constituted and operated in 2008), or the production of
life-long learning multimedia, on-line and lecture materials for distribution by
HIH’s “learning academy” as described in the SEC Form S-4.
          (b) Notwithstanding Paragraph 2(a), above, if the Executive’s
employment with the Company has been terminated by the Company for reasons of
Disability or without Cause, then the definition of “Competitive Business” shall
be as follows: any business that directly competes with the Company for viewers,
advertisers, distributors, producers, actors or the like in the post-production
assembly and/or distribution/delivery by electronic means (including, but not
limited to, broadcast, cable, satellite and internet) of branded, non-fiction
video entertainment. For the purpose of clarification, such a Competitive
Business would (i) include, but would not be limited to, National Geographic
Channel International, Arts & Entertainment Television Networks, BBC and the
Scripps Networks (as those businesses are constituted and operated in 2008), and
(ii) exclude, but would not be limited to, Sci-Fi, the USA Network and Lifetime
Entertainment Services (as those businesses are constituted and operated in
2008) and the production of life-long learning multimedia, on-line and lecture
materials for distribution by HIH’s “learning academy” as described in the SEC
Form S-4. For the avoidance of doubt, the Executive shall not be prohibited from
working for or engaging in activities on behalf of a business entity that does
not constitute a Competitive Business under this Paragraph 2(b) merely by virtue
of the fact that such business entity is affiliated with a business entity that
does constitute a Competitive Business, provided that the Executive is not
working for or engaging in any activity on behalf of such Competitive Business
and, unless the Competitive Business is less than five percent (5%) of the
business entity’s overall business (measured in terms of gross revenue,
operating income and cash flow), the Executive does not have responsibility for
such Competitive Business. Furthermore, this Paragraph 2(b) shall not restrict
the Executive from providing services to any television broadcast service, the
video and audio portions of which are intelligibly receivable without charge by
means of standard roof-top or television set built-in antennae, even if such
service is also carried via cable, satellite or internet,

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provided that less than fifty percent (50%) of the broadcaster’s programming for
such service is non-fiction content similar to that distributed by the Company.
          (c) “Company Entity” shall mean the Company, any subsidiary of the
Company and any other entity of which the Company, directly or indirectly, owns
fifty percent (50%) or more of the profits or voting interests.
          (d) “Confidential Information” shall mean any non-public, proprietary
or confidential information (including trade secrets, know-how, research and
development, software, databases, inventions, processes, formulae, technology,
designs and other intellectual property, information concerning finances,
investments, profits, pricing, costs, products, services, vendors, customers,
clients, partners, investors, personnel, compensation, recruiting, training,
advertising, sales, marketing, promotions, government and regulatory activities
and approval) concerning the past, current or future business, activities and
operations of the Company, any Company Entities and/or any third party that has
disclosed or provided any of same to the Company on a confidential basis.
Confidential Information shall not include any information that is (A) generally
known to the industry or the public other than as a result of the Executive’s
breach of his duties to the Company; (B) is or was available to the Executive on
a non-confidential basis prior to its disclosure to such Executive by the
Company (or a Company Entity), or (C) made available to Executive by a third
party who, to the best of such Executive’s knowledge, is or was not bound by a
confidentiality agreement with (or other confidentiality obligation to) the
Company (or a Company Entity) or another person or entity.
          (e) The “Restricted Period” shall begin on the Effective Date and
shall expire on the later of: (i) three (3) years after the Executive’s
termination of employment with the Company; or (ii) the expiration of all
outstanding Options.
          (f) Other capitalized terms herein shall have the meanings set forth
in the Transition Agreement.
     3. Reasonableness and Enforcement of Covenants. The Executive acknowledges
and agrees that: (i) the services he has provided to the Company have been of a
special, unique and extraordinary nature; (ii) the restrictions contained in
this Non-Competition Agreement are necessary to prevent the use and disclosure
of Confidential Information and to protect other legitimate business interests
of the Company; (iii) all of the restrictions in this Non-Competition Agreement
are reasonable in all respects, including duration, territory and scope of
activity; (iv) the restrictions contained in this Non-Competition Agreement
shall be construed as separate agreements independent of each other and any
other agreement between the Executive and the Company; (v) the existence of any
claim or cause of action by the Executive against the Company, whether
predicated on this Non-Competition Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants and restrictions in
this Non-Competition Agreement; and (vi) the restrictive covenants contained in
this Non-Competition Agreement are a material part of the Executive’s
obligations for which the Company has compensated Executive and will further
compensate him through the extension of the exercise period for the Options.

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     4. Remedies.
     (a) Remedies. Executive agrees that if he, or any affiliate of his, engages
or threatens to engage in any activity that constitutes a violation of any of
the provisions of this Non-Competition Agreement, the Company shall have the
right and remedy to have the provisions of this Non-Competition Agreement
specifically enforced to the extent permitted by law by any court having
jurisdiction, it being acknowledged and agreed that any breach of this
Non-Competition Agreement would cause immediate irreparable injury to the
Company and that money damages would not provide an adequate remedy at law for
any breach. Therefore, Executive agrees that the Company, without limiting any
other legal or equitable remedies available to it, shall be entitled to obtain
equitable relief by temporary restraining order, preliminary and permanent
injunction or otherwise from any court of competent jurisdiction (without the
requirement of posting a bond or other security), including, without limitation,
injunctive relief to prevent Executive’s failure to comply with the terms and
conditions of Paragraph 1 of this Agreement. Such right and remedy shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company at law or in equity, including the right to seek monetary damages. In
addition, the Restricted Period shall be tolled on a day-for-day basis for each
day during which the Executive violates the provisions of Paragraph 1 above in
any respect, so that the Executive is restricted from engaging in the activities
prohibited by Paragraph 1 for the full period.
     (b) Reformation. It is the intent of the parties that the provisions of the
Non-Competition Agreement be enforced to the fullest extent permissible under
applicable law. If any term or provision of this Non-Competition Agreement is
determined to be void, illegal, invalid or unenforceable by any court of
competent jurisdiction in any jurisdiction, then such term or provision shall,
as to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Non-Competition Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Non-Competition
Agreement in any other jurisdiction and such invalid or unenforceable provision
shall be modified by such court so that it is enforceable to the maximum extent
permitted by applicable law. The language used in this Non-Competition Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party. If, in any judicial proceeding, a court shall refuse to enforce one or
more of the covenants set forth in Paragraph 1 of this Non-Competition Agreement
because the duration is too long or the scope is too broad, it is expressly
agreed between the Company and the Executive that the court making such
determination shall be empowered to reduce the duration and scope of the
covenants set forth herein to the extent necessary to permit enforcement of such
covenants.
     5. Miscellaneous.
     (a) Notices. All notices, demands and requests required or permitted to be
given under the provisions of this Agreement shall be (a) in writing, (b) sent
by telecopy or email (with receipt personally confirmed by telephone), delivered
by personal delivery, sent by nationally reputable commercial overnight delivery
service or sent by registered or certified U.S. mail, with return receipt
requested, (c) deemed to have been given on the date telecopied or emailed with

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receipt confirmed, the date of personal delivery or the date set forth in the
records of the delivery service or on the return receipt, and (d) addressed as
follows:

  (iii)   if to the Company, to:         Discovery Communications, Inc.
One Discovery Place
Silver Spring, MD 20910
Attention:     General Counsel     (iv)   if to Executive, to:         John S.
Hendricks
8484 Georgia Avenue, Suite 700
Silver Spring, MD 20910

or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Paragraph 5(a).
     (b) Benefit and Binding Effect. The Executive may not assign this Agreement
without the prior written consent of the Company. The Company may assign its
rights under this Non-Competition Agreement to any other person or entity that
(i) acquires ownership or control of the Company, (ii) acquires substantially
all of the assets of the Company, or (iii) is a successor entity through merger,
conversion or other transaction or series of transactions. This Non-Competition
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns, so that the Executive and any
of his affiliates will be precluded from competing against the Company, and
interfering with the business of the Company, pursuant to Paragraph 1 for the
full Restricted Period.
     (c) Governing Law. This Non-Competition Agreement shall be governed,
construed and enforced in accordance with the laws of the State of Maryland
(without regard to the choice of law provisions thereof). Any action or
proceeding seeking to enforce any provision of, or based on any right arising
out of, this Non-Competition Agreement shall be brought against any of the
parties in the courts of the State of Maryland or in the United States District
Court for Maryland in Greenbelt, Maryland, and each of the parties consents to
the exclusive jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein.
     (d) Entire Agreement. This Non-Competition Agreement constitutes the entire
agreement and understanding between the parties hereto concerning the subject
matter hereof. In entering into this Non-Competition Agreement, the Executive is
not relying on any statements or representations not contained in this
Non-Competition Agreement. This Non-Competition Agreement supersedes any and all
prior agreements, arrangements and understandings, oral or written, with respect
to the subject matter hereof, between the parties hereto.

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     (e) Headings. The headings herein are included for ease of reference only
and shall not control or affect the meaning or construction of the provisions of
this Non-Competition Agreement.
     (f) Amendments/Waivers. This Non-Competition Agreement cannot be amended,
supplemented or changed except by an agreement in writing that makes specific
reference to this Non-Competition Agreement and which is signed by the party
against which enforcement of any such amendment, supplement, or modification is
sought. Any waiver of any provision of this Non-Competition Agreement must be in
writing and signed by the party granting the waiver.
     (g) Counterparts. This Non-Competition Agreement may be signed in
counterparts with the same effect as if the signature on each counterpart were
upon the same instrument.
     IN WITNESS WHEREOF, the parties hereto have duly executed this
Non-Competition Agreement as of the day and year first above written.

                  DISCOVERY COMMUNICATIONS, INC.    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    
 
                     
 
      John S. Hendricks    

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