DC10198.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing








DISCOVERY PERFORMANCE EQUITY PROGRAM


NONQUALIFIED STOCK OPTION GRANT AGREEMENT FOR EMPLOYEES


     Discovery Communications, Inc. (the “Company”) has granted you an option (the
“Option”) under the Discovery Communications, Inc. 2005 Incentive Plan (As Amended and Restated) (the “Plan”). The Company’s general program to offer equity and equity-type awards to eligible employees is referred to as the “Performance Equity Program” (or “PEP”). The Option lets you purchase a specified
number (the “Option Shares”) of shares of the Company’s Series A common stock, at a specified price per share (the “Grant Price”).


     The individualized communication you received (the “Cover Letter”) provides the details
for your Option. It specifies the number of Option Shares, the Grant Price, the Date of Grant, the schedule for exercisability, and the latest date the Option will expire (the “Term Expiration
Date”).


The Option is subject in all respects to the applicable provisions of the Plan. This Grant 


Agreement does not cover all of the rules that apply to the Option under the Plan; please refer to the Plan document. Capitalized terms are defined either further below in this grant agreement (the
“Grant Agreement”) or in the Plan. If you are located in a country other than the United States, you are also receiving an International Addendum to
this Grant Agreement (the “International Addendum”). You are required to sign a copy of the International Addendum in addition to accepting this Grant
Agreement electronically. The International Addendum is incorporated into the Grant Agreement by reference and supplements the terms of this Grant Agreement and future grants to you under the Plan.


The Plan document is available on the Fidelity website. The Prospectus for the Plan, the Company’s S-8, Annual Report on Form 10-K, and other filings the Company makes with the Securities and Exchange Commission
are available for your review on the Company’s web site. You may also obtain paper copies of these documents upon request to the Company’s HR department.


Neither the Company nor anyone else is making any representations or promises regarding the duration of your service, exercisability of the Option, the value of the Company's stock or of this Option, or the Company's
prospects. The Company is not providing any advice regarding tax consequences to you or regarding your decisions regarding the Option; you agree to rely only upon your own personal advisors.


NO ONE MAY SELL, TRANSFER, OR DISTRIBUTE THE OPTION OR THE SECURITIES THAT MAY BE PURCHASED UPON EXERCISING THE
OPTION WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO DISCOVERY COMMUNICATIONS, INC. OR OTHER INFORMATION AND 


REPRESENTATIONS SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.











In addition to the Plan’s terms and restrictions, the following terms and restrictions apply:

	
Option 
		
 		
While your Option remains in effect under the Option Expiration section, you 
	
	
Exercisability 
		
 		
may exercise any exercisable portions of the Option (and buy the Option Shares) 
	
	
 
		
 		
under the timing rules of this section. 
	
	
 
	
	
 
		
 		
The Option will become exercisable on the schedule provided in the Cover Letter 
	
	
 
		
 		
to this Grant Agreement, assuming you remain employed (or serve as a member 
	
	
 
		
 		
of the Company’s board of directors) through each Exercisability Date. Any 
	
	
 
		
 		
fractional shares will be carried forward to the following Exercisability Date, 
	
	
 
		
 		
unless the Committee selects a different treatment. For purposes of this Grant 
	
	
 
		
 		
Agreement, employment with the Company will include employment with any 
	
	
 
		
 		
Subsidiary whose employees are then eligible to receive Awards under the Plan 
	
	
 
		
 		
(provided that a later transfer of employment to an ineligible Subsidiary will not 
	
	
 
		
 		
terminate employment unless the Committee determines otherwise). 
	
	
 
	
	
 
		
 		
Exercisability will accelerate fully on your Retirement, or, while employed, your 
	
	
 
		
 		
Disability or death. If the Company terminates your employment without Cause 
	
	
 
		
 		
during a calendar year before the Option is fully exercisable, the Option shall 
	
	
 
		
 		
remain or become exercisable as though you remained working through any 
	
	
 
		
 		
Exercisability Dates occurring during the 90 days after the date of termination. 
	
	
 
		
 		
(“Cause” has the meaning provided in Section 11.2(b) of the Plan. “Retirement” 
	
	
 
		
 		
means your employment ends for any reason other than Cause at a point at 
	
	
 
		
 		
which you are at least age 60 and have been employed by the Company, any of 
	
	
 
		
 		
its subsidiaries, or Discovery Communications, LLC for at least five years, where 
	
	
 
		
 		
your period of service is determined using the Company’s Prior Employment 
	
	
 
		
 		
Service Policy or a successor policy chosen by the Committee. Acceleration 
	
	
 
		
 		
upon Retirement does not apply in countries subject to the EU Directive on 
	
	
 
		
 		
Discrimination.) 
	
	
 
	
	
                    Change in 
		
 		
                    Notwithstanding the Plan’s provisions, if an Approved Transaction, 
	
	
                    Control 
		
 		
                    Control Purchase, or Board Change (each a “Change in Control”) 
	
	
 
		
 		
                    occurs while you remain employed by the Company, the Option will only 
	
	
 
		
 		
                    have accelerated exercisability as a result of the Change in Control if 
	
	
 
		
 		
                    (i) within 12 months after the Change in Control, (x) your employment is 
	
	
 
		
 		
                    terminated without Cause or (y) you resign for Good Reason and (ii) with 
	
	
 
		
 		
                    respect to any Approved Transaction, the transaction actually closes and 
	
	
 
		
 		
                    the qualifying separation from employment occurs within 12 months after 
	
	
 
		
 		
                    the closing date. 
	
	
 
	
	
 
		
 		
                    “Good
Reason” has the meaning provided in your employment 
	
	
 
		
 		
                    agreement with the Company or, if no such agreement is in effect after a 
	
	
 
		
 		
                    Change in Control, any of the following events without your consent and 
	
	
 
		
 		
                    as measured against the status in effect at the Change in Control (unless 
	
	
 
		
 		
                    you have subsequently consented to a different status): (a) a required 
	
	
 
		
 		
                    relocation of your principal place of employment that results in an 
	
	
 
		
 		
                    increase in commuting distance of at least 50 miles, (b) a job level 
	
	
 
		
 		
                    reduction of at least two levels, or (c) a reduction in base salary, provided 
	
	
 
		
 		
                    however, that you must
provide the Company with written notice of the 
	
	
 
		
 		
                    existence of the event constituting Good Reason within 45 days of your 
	
	
 
		
 		
                    knowledge of any such event having occurred and allow the Company 
	
	
 
		
 		
                    30 days to cure the same. If the Company so cures the change, you will 
	
	
 
		
 		
                    not have a basis for terminating your employment for Good Reason with 
	




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                    respect to such cured change. If such event is not cured within such 
	
	
 
		
 		
                    30 day period, you may make your resignation effective at the end of 
	
	
 
		
 		
                    such 30 day period. Unless the Committee determines otherwise, Good 
	
	
 
		
 		
                    Reason provides an acceleration only for resignations during the 
	
	
 
		
 		
                    12 month period following a Change in Control. 
	
	
 
	
	
 
		
 		
                    The Committee reserves its ability under Section 11.1(b) of the Plan to 
	
	
 
		
 		
                    vary this treatment if the Committee determines there is an equitable 
	
	
 
		
 		
                    substitution or replacement award in connection with a Change in 
	
	
 
		
 		
                    Control. 
	
	
 
	
	
Option Expiration 
		
 		
The Option will expire no later than the close of business on the Term Expiration 
	
	
 
		
 		
Date. Unexercisable portions of the Option expire immediately when you cease 
	
	
 
		
 		
to be employed (unless you are concurrently remaining or becoming a member 
	
	
 
		
 		
of the Board). If the Company terminates your employment for Cause, the 
	
	
 
		
 		
Option will immediately expire without regard to whether it is then exercisable. 
	
	
 
	
	
 
		
 		
Exercisable portions of the Option remain exercisable until the first to occur of the 
	
	
 
		
 		
following (the “Final Exercise Date”), each as defined further in the Plan or the 
	
	
 
		
 		
Grant Agreement: 
	



	
·      		
The 30 th day after your employment (or directorship) ends if you resign other than on Retirement (except as extended below on
death)	
	 
	
·      		
The 90 th day after your employment (or directorship) ends if the Company terminates your employment without Cause (even if then eligible for
Retirement, except as the Committee otherwise provides, and except as extended below on death)	
	 
	
·      		
For death, Disability, or Retirement, the first anniversary of the date employment ends	
	 
	
·      		
The Term Expiration Date	
	 


	
 
		
 		
If you die during the 30 or 90 day period after your employment ends (on a 
	
	
 
		
 		
termination without Cause or a resignation), the period for exercise will be 
	
	
 
		
 		
extended until the first anniversary of the date your employment ended, subject 
	
	
 
		
 		
to the Term Expiration Date, and the extended date will be the Final Exercise 
	
	
 
		
 		
Date. 
	
	
 
	
	
 
		
 		
The Committee can override the expiration provisions of this Grant Agreement. 
	
	
 
	
	
Automatic Exercise 
		
 		
At close of business on the Final Exercise Date, if the Exercise Spread Test is 
	
	
 
		
 		
met, the Option will be automatically exercised using the “net exercise” method 
	
	
 
		
 		
described below, without regard to the notice requirement and with additional 
	
	
 
		
 		
shares retained for purposes of satisfying the minimum applicable tax 
	
	
 
		
 		
withholdings (the “Automatic Exercise”). The Option satisfies the
“Exercise 
	
	
 
		
 		
Spread Test” if the per share spread between the closing price of the
Company’s 
	
	
 
		
 		
Series A common stock and the Grant Price (the “Exercise
Spread”) on the 
	
	
 
		
 		
Final Exercise Date is at least one dollar. If the Exercise Spread Test is not 
	
	
 
		
 		
satisfied, the unexercised portions of the Option will expire as of close of 
	
	
 
		
 		
business on the Final Exercise Date. 
	
	
 
	
	
 
		
 		
For avoidance of doubt, you may exercise any exercisable portion of the Option 
	
	
 
		
 		
prior to the time of an Automatic Exercise and no portion of the Option may or will 
	
	
 
		
 		
be exercised at or after your termination for Cause. 
	




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The Automatic Exercise procedure is provided as a convenience and as a 
	
	
 
		
 		
protection against inadvertent expiration of an Option. Because any exercise of 
	
	
 
		
 		
an Option is normally your responsibility, you hereby waive any claims against 
	
	
 
		
 		
the Company or any of its employees or agents if an Automatic Exercise does 
	
	
 
		
 		
not occur for any reason and the Option expires. 
	
	
 
	
	
Method of 
		
 		
Subject to this Grant Agreement and the Plan, and other than for portions of the 
	
	
Exercise and 
		
 		
Option that are automatically exercised as described in the Automatic Exercise 
	
	
Payment for 
		
 		
section, you may exercise the Option only by providing a written notice (or notice 
	
	
Shares 
		
 		
through another previously approved method, which could include a web-based 
	
	
 
		
 		
or voice- or e-mail system) to the Secretary of the Company or to whomever the 
	
	
 
		
 		
Committee designates, received on or before the date the Option expires. Each 
	
	
 
		
 		
such notice must satisfy whatever then-current procedures apply to that Option 
	
	
 
		
 		
and must contain such representations (statements from you about your 
	
	
 
		
 		
situation) as the Company requires. You must, at the same time, pay the Grant 
	
	
 
		
 		
Price using one or more of the following methods: 
	
	
 
	
	
                    Cash/Check 
		
 		
                    cash or check in the amount of the Grant Price payable to the order of 
	
	
 
		
 		
                    the Company; 
	
	
 
	
	
                    Cashless 
		
 		
                    an approved cashless exercise method, including directing the Company 
	
	
                    Exercise 
		
 		
                    to send the stock certificates (or other acceptable evidence of ownership) 
	
	
 
		
 		
                    to be issued under the Option to a licensed broker acceptable to the 
	
	
 
		
 		
                    Company as your agent in exchange for the broker’s tendering to the 
	
	
 
		
 		
                    Company cash (or acceptable cash equivalents) equal to the Grant Price 
	
	
 
		
 		
                    and, if you so elect, any required tax withholdings; or 
	
	
 
	
	
                    Net Exercise 
		
 		
                    by delivery of a notice of “net exercise” to or as directed by the 
	
	
 
		
 		
                    Company, as a result of which you will receive (i) the number of shares 
	
	
 
		
 		
                    underlying the portion of the Option being exercised less (ii) such 
	
	
 
		
 		
                    number of shares as is equal to (A) the aggregate Grant Price for the 
	
	
 
		
 		
                    portion of the Option being exercised divided by (B) the Fair Market 
	
	
 
		
 		
                    Value on the date of exercise. 
	
	
 
	
	
 
		
 		
                    The Committee can approve additional payment methods, including use 
	
	
 
		
 		
                    of a fully or partially recourse promissory note, subject to any prohibitions 
	
	
 
		
 		
                    of applicable law. 
	
	
 
	
	
Clawback 
		
 		
If the Company’s Board of Directors or its Compensation Committee (the 
	
	
 
		
 		
“Committee”) determines, in its sole discretion, that you engaged in fraud or 
	
	
 
		
 		
misconduct as a result of which or in connection with which the Company is 
	
	
 
		
 		
required to or decides to restate its financials, the Committee may, in its sole 
	
	
 
		
 		
discretion, impose any or all of the following: 
	
	
 
	
	
 
		
 		
                    Immediate expiration of the Option , whether vested or not, if granted 
	
	
 
		
 		
                    within the first 12 months after issuance or filing of any financial 
	
	
 
		
 		
                    statement that is being restated (the “Recovery Measurement Period”) 
	
	
 
	
	
 
		
 		
                    As to any exercised portion of the Option (to the extent, during the 
	
	
 
		
 		
                    Recovery Measurement Period, the Option is granted, vests, is 
	
	
 
		
 		
                    exercised, or the purchased shares are sold), prompt payment to the 
	
	
 
		
 		
                    Company of any Option Gain. For purposes of this Agreement, the 
	
	
 
		
 		
                    “Option
Gain” per share you received on exercise of options is 
	




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                                        for stock you have sold or transferred
without sale, the greater of 
	
	
 
		
 		
                                        (i) the Exercise Spread and (ii) the spread between the price at 
	
	
 
		
 		
                                        which you sold (or the fair market value on
the date of other 
	
	
 
		
 		
                                        disposition of) the stock and the Grant Price
paid, and 
	
	
 
	
	
 
		
 		
                                        for stock you have retained, the greater of
(i) Exercise Spread 
	
	
 
		
 		
                                        and (ii) the spread between the closing price
on the date of the 
	
	
 
		
 		
                                        Committee’s request for repayment and
the Grant Price paid. 
	
	
 
	
	
 
	
	
 
		
 		
                    This remedy is in addition to any other remedies that the Company may 
	
	
 
		
 		
                    have available in law or equity. 
	
	
 
	
	
 
		
 		
                    Payment is due in cash or cash equivalents within 10 days after the 
	
	
 
		
 		
                    Committee provides notice to you that it is enforcing this clawback. 
	
	
 
		
 		
                    Payment will be calculated on a gross basis, without reduction for taxes 
	
	
 
		
 		
                    or commissions. The Company may, but is not required to, accept 
	
	
 
		
 		
                    retransfer of shares in lieu of cash payments. 
	
	
 
	
	
 
		
 		
                    By accepting this Option, you agree that the Clawback section, as it may 
	
	
 
		
 		
                    be amended from time to time without your further consent, applies to 
	
	
 
		
 		
                    any nonqualified stock options or other equity compensation grants (with 
	
	
 
		
 		
                    applicable modifications for the type of grant) you receive or received on 
	
	
 
		
 		
                    or after March 15, 2010. 
	
	
 
	
	
Withholding 
		
 		
Issuing the Option Shares is contingent on satisfaction of all obligations with 
	
	
 
		
 		
respect to required tax or other required withholdings (for example, in the U.S., 
	
	
 
		
 		
Federal, state, and local taxes). Except as provided in the Automatic Exercise 
	
	
 
		
 		
section, the Company may take any action permitted under Section 11.9 of the 
	
	
 
		
 		
Plan to satisfy such obligation, including, if the Committee so determines, 
	
	
 
		
 		
satisfying the tax obligations by (i) reducing the number of Option Shares to be 
	
	
 
		
 		
issued to you in connection with any exercise of the Option by that number of 
	
	
 
		
 		
Option Shares (valued at their Fair Market Value on the date of exercise) that 
	
	
 
		
 		
would equal all taxes required to be withheld (at their minimum withholding 
	
	
 
		
 		
levels), (ii) accepting payment of the withholdings from a broker in connection 
	
	
 
		
 		
with a Cashless Exercise of the Option or directly from you, or (iii) taking any 
	
	
 
		
 		
other action under Section 11.9. If a fractional share remains after deduction for 
	
	
 
		
 		
required withholding, the Company will pay you the value of the fraction in cash. 
	
	
 
	
	
Compliance 
		
 		
You may not exercise the Option if the Company’s issuing stock upon such 
	
	
with Law 
		
 		
exercise would violate any applicable Federal or state securities laws or other 
	
	
 
		
 		
laws or regulations. You may not sell or otherwise dispose of the Option Shares 
	
	
 
		
 		
in violation of applicable law. As part of this prohibition, you may not use the 
	
	
 
		
 		
Cashless Exercise methods if the Company’s insider trading policy then prohibits 
	
	
 
		
 		
you from selling to the market. 
	
	
 
	
	
Additional 
		
 		
The Company may postpone issuing and delivering any Option Shares for so 
	
	
Conditions 
		
 		
long as the Company determines to be advisable to satisfy the following: 
	
	
to Exercise 
		
 		
 
	
	
 
	
	
 
		
 		
                    its completing or amending any securities registration or qualification of 
	
	
 
		
 		
                    the Option Shares or
its or your satisfying any exemption from 
	
	
 
		
 		
                    registration under any Federal or state law, rule, or regulation; 
	




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                    its receiving proof it considers satisfactory that a person seeking to 
	
	
 
		
 		
                    exercise the Option after your death is entitled to do so; 
	
	
 
	
	
 
		
 		
                    your complying with any requests for representations under the Plan; 
	
	
 
		
 		
                    and 
	
	
 
	
	
 
		
 		
                    your complying with any Federal, state, or local tax withholding 
	
	
 
		
 		
                    obligations. 
	
	
 
	
	
Additional 
		
 		
If you exercise the Option at a time when the Company does not have a current 
	
	
Representations 
		
 		
registration statement (generally on Form S-8) under the Securities Act of 1933 
	
	
from You 
		
 		
(the “Act”) that covers issuances of shares to you, you must comply with the 
	
	
 
		
 		
following before the Company will issue the Option Shares to you. You must — 
	
	
 
	
	
 
		
 		
                    represent to the Company, in a manner satisfactory to the Company’s 
	
	
 
		
 		
                    counsel, that you are acquiring the Option Shares for your own account 
	
	
 
		
 		
                    and not with a view to reselling or distributing the Option Shares; and 
	
	
 
	
	
 
		
 		
                    agree that you will not sell, transfer, or otherwise dispose of the Option 
	
	
 
		
 		
                    Shares unless: 
	
	
 
	
	
 
		
 		
                                        a registration statement under the Act is
effective at the time of 
	
	
 
		
 		
                                        disposition with respect to the Option Shares
you propose to sell, 
	
	
 
		
 		
                                        transfer, or otherwise dispose of;
or 
	
	
 
	
	
 
		
 		
                                        the Company has received an opinion of
counsel or other 
	
	
 
		
 		
                                        information and representations it considers
satisfactory to the 
	
	
 
		
 		
                                        effect that, because of Rule 144 under the
Act or otherwise, no 
	
	
 
		
 		
                                        registration under the Act is
required. 
	
	
 
	
	
No Effect on 
		
 		
Nothing in this Grant Agreement restricts the Company’s rights or those of any of 
	
	
Employment 
		
 		
its affiliates to terminate your employment or other relationship at any time and 
	
	
or Other 
		
 		
for any or no reason. The termination of employment or other relationship, 
	
	
Relationship 
		
 		
whether by the Company or any of its affiliates or otherwise, and regardless of 
	
	
 
		
 		
the reason for such termination, has the consequences provided for under the 
	
	
 
		
 		
Plan and any applicable employment or severance agreement or plan. 
	
	
 
	
	
Not a Stockholder 
		
 		
You understand and agree that the Company will not consider you a stockholder 
	
	
 
		
 		
for any purpose with respect to any of the Option Shares until you have 
	
	
 
		
 		
exercised the Option, paid for the shares, and received evidence of ownership. 
	
	
 
	
	
No Effect on 
		
 		
You understand and agree that the existence of the Option will not affect in any 
	
	
Running Business 
		
 		
way the right or power of the Company or its stockholders to make or authorize 
	
	
 
		
 		
any adjustments, recapitalizations, reorganizations, or other changes in the 
	
	
 
		
 		
Company’s capital structure or its business, or any merger or consolidation of the 
	
	
 
		
 		
Company, or any issuance of bonds, debentures, preferred or other stock, with 
	
	
 
		
 		
preference ahead of or convertible into, or otherwise affecting the Company’s 
	
	
 
		
 		
common stock or the rights thereof, or the dissolution or liquidation of the 
	
	
 
		
 		
Company, or any sale or transfer of all or any part of its assets or business, or 
	
	
 
		
 		
any other corporate act or proceeding, whether or not of a similar character to 
	
	
 
		
 		
those described above. 
	
	
 
	
	
Governing Law 
		
 		
The laws of the State of Delaware will govern all matters relating to the Option, 
	
	
 
		
 		
without regard to the principles of conflict of laws. 
	




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Notices 
		
 		
Any notice you give to the Company must follow the procedures then in effect. If 
	
	
 
		
 		
no other procedures apply, you must send your notice in writing by hand or by 
	
	
 
		
 		
mail to the office of the Company’s Secretary (or to the Chair of the Committee if 
	
	
 
		
 		
you are then serving as the sole Secretary). If mailed, you should address it to 
	
	
 
		
 		
the Company’s Secretary (or the Chair of the Committee) at the Company’s then 
	
	
 
		
 		
corporate headquarters, unless the Company directs optionees to send notices 
	
	
 
		
 		
to another corporate department or to a third party administrator or specifies 
	
	
 
		
 		
another method of transmitting notice. The Company and the Committee will 
	
	
 
		
 		
address any notices to you using its standard electronic communications 
	
	
 
		
 		
methods or at your office or home address as reflected on the Company’s 
	
	
 
		
 		
personnel or other business records. You and the Company may change the 
	
	
 
		
 		
address for notice by like notice to the other, and the Company can also change 
	
	
 
		
 		
the address for notice by general announcements to optionees. 
	
	
 
	
	
Amendment 
		
 		
Subject to any required action by the Board or the stockholders of the Company, 
	
	
 
		
 		
the Company may cancel the Option and provide a new Award in its place, 
	
	
 
		
 		
provided that the Award so replaced will satisfy all of the requirements of the 
	
	
 
		
 		
Plan as of the date such new Award is made and no such action will adversely 
	
	
 
		
 		
affect the Option to the extent then exercisable. 
	
	
 
	
	
Plan Governs 
		
 		
Wherever a conflict may arise between the terms of this Grant Agreement and 
	
	
 
		
 		
the terms of the Plan, the terms of the Plan will control. The Committee may 
	
	
 
		
 		
adjust the number of Option Shares and the Grant Price and other terms of the 
	
	
 
		
 		
Option from time to time as the Plan provides. 
	




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