FORM 8-B
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Registration of Securities Of Certain Successor Issuers
Filed Pursuant to Section 12(b) or (g) of The Securities Exchange
Act of 1934
DC Holdco, Inc.
(Exact name of registrant as specified in its charter)
Delaware 95-4545390
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 South Buena Vista Street, Burbank, California 91521
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Common Stock, $.01 par value New York Stock Exchange
Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of class)
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Item 1. General Information.
(a)DC Holdco, Inc. was incorporated in the State of
Delaware on July 28, 1995.
(b)The fiscal year of DC Holdco, Inc. ends on September
30 in each year.
Item 2. Transaction of Succession.
(a)Predecessor Entities. The Walt Disney Company and
Capital Cities/ABC, Inc.
(b)Succession Transaction. The description of the
succession transaction and the basis upon which the
securities are to be issued is incorporated by
reference from the Company's Registration Statement on
Form S-4 in the section entitled "SUMMARY - The
Reorganization Agreement," as filed with the Securities
and Exchange Commission on November 13, 1995.
Item 3. Securities to be Registered.
(a)Common Stock. The Company's Common Stock has a par
value of $.01. 1,200,000,000 shares have been
authorized and 100 shares have been issued and are
outstanding.
(b)Preferred Stock Purchase Rights. One right ("Right")
will be attached to each share of Common Stock issued
at or following the Effective Time (as defined in the
Reorganization Agreement) and until the earlier of the
Distribution Date (as defined in the Rights Agreement
dated as of November 8, 1995, between the Company and
the Bank of New York, as Rights Agent) or the date on
which the Rights expire or are redeemed.
Item 4. Description of Registrant's Securities to be Registered.
The description of the securities to be registered hereby is
incorporated by reference from the Company's Registration
Statement on Form S-4 in the section entitled "Description
of New Disney Capital Stock," as filed with the Securities
and Exchange Commission on November 13, 1995.
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Item 5. Financial Statements and Exhibits.
(a)Financial Statements.
None.
(b)Exhibits.
1(a) The Company's Registration Statement on Form S-4, filed with
the Securities and Exchange Commission on November 13, 1995,
File No. 33-64141 (the "Form S-4").
1(b) Selected pages from the Form S-4 containing the section
entitled "SUMMARY - The Reorganization Agreement"
incorporated herein in Item 2 of this Form 8-B.
1(c) Selected pages from the Form S-4 containing the section
entitled "Description of New Disney Capital Stock"
incorporated herein in Item 4 of this Form 8-B.
2(a) Amended and Restated Plan of Reorganization, dated as of
July 31, 1995, among The Walt Disney Company and Capital
Cities/ABC, Inc., attached as Appendix A-1 to the Joint
Proxy Statement/Prospectus included in the Form S-4, is
hereby incorporated by reference.
2(b) Form of Plan and Agreement of Merger among The Walt Disney
Company, DCA Merger Corp, and the Registrant, attached as
Appendix A-2 to the Joint Proxy Statement/Prospectus
included in the Form S-4, is hereby incorporated by
reference.
2(c) Form of Plan and Agreement of Merger among Capital
Cities/ABC, Inc., DCB Merger Corp. and the Registrant,
attached as Appendix A-3 to the Joint Proxy
Statement/Prospectus included in the Form S-4, is hereby
incorporated by reference.
3(a) Restated Certificate of Incorporation of the Registrant,
filed as Exhibit 3.1 to the Form S-4, is hereby incorporated
by reference.
3(b) Amended Bylaws of the Registrant, filed as Exhibit 3.2 to
the Form S-4, is hereby incorporated by reference.
4(a) Form of Registration Rights Agreement entered into or to be
entered into with certain stockholders of the Registrant,
filed as Exhibit B to Exhibit 2.1 to The Walt Disney Company's
Current Report on Form 8-K dated July 31, 1995, is hereby
incorporated by reference.
4(b) Rights Agreement dated as of November 8, 1995 between New
Disney and The Bank of New York, as rights agent, filed as
Exhibit 4.2 to the Form S-4, is hereby incorporated by
reference.
4(c) 364-Day Credit Agreement, dated as of October 31, 1995,
among the Registrant, as Borrower, Citicorp USA, Inc., as
Administrative Agent, Credit Suisse, as Co-Administrative
Agent and the Financial Institutions named therein, filed as
Exhibit 4.3 to the Form S-4, is hereby incorporated by
reference.
4(d) Five-Year Credit Agreement, dated October 31, 1995, among
the Registrant, as Borrower, Citicorp USA, Inc., as
Administrative Agent, Credit Suisse, as Co-Administrative
Agent and the Financial Institutions named therein, filed as
Exhibit 4.4 to the Form S-4, is hereby incorporated by
reference.
10(a) (i) Agreement on the Creation and the Operation of
Euro Disneyland en France, dated March 25, 1987, and (ii)
Letter relating thereto of Michael D. Eisner, Chairman of
The Walt Disney Company, dated March 24, 1987, filed as
Exhibits 10(b) and 10(a), respectively, to The Walt Disney
Company's Current Report on Form 8-K filed April 24, 1987,
are hereby incorporated by reference.
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10(b) Limited Recourse Financing Facility Agreement,
dated as of April 27, 1988, among The Walt Disney Company,
Citibank Channel Island Limited and Citicorp International,
filed as Exhibit 10(a) to The Walt Disney Company's Current
Report on Form 8-K filed April 29, 1988, is hereby
incorporated by reference.
10(c) (i) Employment Agreement, dated as of January 10,
1989, between The Walt Disney Company and Michael D. Eisner,
filed as Exhibit 10(a) to The Walt Disney Company's Quarterly
Report on Form 10-Q for the period ended March 31, 1989;
(ii) Agreement, dated March 1, 1985, between The Walt Disney
Company and Michael D. Eisner, filed as Exhibit 2 to The
Walt Disney Company's Quarterly Report on Form 10-Q for the
period ended June 30, 1985; and (iii) description of action
by the Compensation Committee taken on November 30, 1990,
filed as Exhibit 10(c) to The Walt Disney Company's Annual
Report on Form 10-K for the year ended September 30, 1990,
are hereby incorporated by reference.
10(d) Restricted Stock Agreement, dated May 5, 1995,
between The Walt Disney Company and Stephen F. Bollenbach
filed as Exhibit 10(d) to The Walt Disney Company's Annual
Report on Form 10-K for the year ended September 30, 1995,
is hereby incorporated by reference.
10(e) Employment Agreement, dated October 1, 1995,
between The Walt Disney Company and Michael S. Ovitz filed
as Exhibit 10(e) to The Walt Disney Company's Annual Report
on Form 10-K for the year ended September 30, 1995, is
hereby incorporated by reference.
10(f) (i) Contract, dated December 14, 1979, with E.
Cardon Walker, to purchase a 2% interest in certain motion
pictures to be produced by The Walt Disney Company and to
acquire an additional 2% profit participation; and (ii)
Amendment thereto, dated August 8, 1980, filed as Exhibits 1
and 3, respectively, to The Walt Disney Company's Annual
Report on Form 10-K for the year ended September 30, 1980,
are hereby incorporated by reference.
10(g) Form of Indemnification Agreement entered into or
to be entered into by certain officers and directors of The
Walt Disney Company as determined from time to time by the
Board of Directors, included as Annex C to the Proxy
Statement for The Walt Disney Company's 1988 Annual Meeting
of Stockholders, is hereby incorporated by reference.
10(h) 1995 Stock Option Plan for Non-Employee Directors,
filed as Exhibit A to the Proxy Statement for The Walt
Disney Company's 1995 Annual Meeting of Stockholders, is
hereby incorporated by reference.
10(i) (i) 1990 Stock Incentive Plan and Rules, filed as
Exhibits 28(a) and 28(b), respectively, to The Walt Disney
Company's Registration Statement on Form S-8 (No. 33-39770),
dated April 5, 1991, and (ii) Amended and Restated 1990
Stock Incentive Plan and Rules, attached as Appendix B-2 to
The Walt Disney Company's Joint Proxy Statement/Prospectus
included in the Form S-4, is hereby incorporated by
reference.
10(j) 1995 Stock Incentive Plan and Rules, attached as
Appendix B-1 to The Walt Disney Company's Joint Proxy
Statement/Prospectus included on the Form S-4, is hereby
incorporated by reference.
10(k) (i) 1987 Stock Incentive Plan and Rules, (ii)
1984 Stock Incentive Plan and Rules, (iii) 1981 Incentive
Plan and Rules and (iv) 1980 Stock Option Plan, all as set
forth as Exhibits 1(a), 1(b), 2(a), 2(b), 3(a), 3(b) and 4,
respectively, to the Prospectus contained in Part I of The
Walt Disney Company's Registration Statement on Form S-8
(No. 33-26106), dated December 20, 1988, are hereby
incorporated by reference.
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10(l) Contingent Stock Award Rules under The Walt Disney
Company's 1984 Stock Incentive Plan, filed as Exhibit 10(t)
to The Walt Disney Company s Annual Report on Form 10-K for
the year ended September 30, 1986, is hereby incorporated by
reference.
10(m) 1996 Cash Bonus Performance Plan, filed as Exhibit
10(m) to The Walt Disney Company's Annual Report on Form 10-
K for the year ended September 30, 1995, is hereby
incorporated by reference.
10(n) Disney Salaried Retirement Plan, as amended
through March 1, 1994, filed as Exhibit 10(l) to The Walt
Disney Company's Annual Report on Form 10-K for the year
ended September 30, 1994, is hereby incorporated by
reference.
10(o) The Walt Disney Company and Associated Companies
Key Employees Deferred Compensation and Retirement Plan,
filed as Exhibit 10(u) to The Walt Disney Company's Annual
Report on Form 10-K for the year ended September 30, 1985,
is hereby incorporated by reference.
10(p) Group Term Life Insurance Plan (summary plan
description), filed as Exhibit 10(x) to The Walt Disney
Company's Annual Report on Form 10-K for the year ended
September 30, 1985, is hereby incorporated by reference.
10(q) Group Personal Excess Liability Insurance Plan
(summary plan description), filed as Exhibit 10(z) to The
Walt Disney Company's Annual Report on Form 10-K for the
year ended September 30, 1986, is hereby incorporated by
reference.
10(r) Family Income Assurance Plan (summary plan
description), filed as Exhibit 10(aa) to the Annual Report
on Form 10-K for the year ended September 30, 1986, is
hereby incorporated by reference.
10(s) Disney Salaried Savings and Investment Plan, as
amended and restated, filed as Exhibit 10(s) to The Walt
Disney Company's Annual Report on Form 10-K for the year
ended September 30, 1995, is hereby incorporated by
reference.
10(t) Disney Salaried Savings and Investment Trust
Agreement, dated June 30, 1992, filed as Exhibit 10 to The
Walt Disney Company's Quarterly Report on Form 10-Q for the
period ended June 30, 1992, is hereby incorporated by
reference.
10(u) Master Trust Agreement for Employees Savings and
Retirement Plans, as amended and restated through June 1,
1990, between The Walt Disney Company and Bankers Trust
Company, as Trustee, filed as Exhibit 28(b) to The Walt
Disney Company's Registration Statement on Form S-8 (No. 33-
35405), filed June 14, 1990, is hereby incorporated by
reference.
10(v) Employee Stock Option Plan of Capital Cities/ABC,
Inc., as amended through December 15, 1987, filed as Exhibit
10(f) to Capital Cities/ABC, Inc.'s Annual Report on Form 10-
K for the year ended December 31, 1992, is hereby
incorporated by reference.
10(w) 1991 Stock Option Plan of Capital Cities/ABC,
Inc., as amended through March 19, 1991, filed as Exhibit
10(g) to Capital Cities/ABC, Inc.'s Annual Report on Form 10-
K for the year ended December 31, 1992, is hereby
incorporated by reference.
21 Subsidiaries of the Registrant is filed herewith.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
application for registration (or registration statement) to be
signed on its behalf by the undersigned, thereunto duly
authorized.
DC HOLDCO, INC.
(Registrant)
By: /s/ David K. Thompson
Name: David K. Thompson
Title: Senior Vice President -
Assistant General Counsel
Dated: December 28, 1995
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<TABLE>
<CAPTION>
Index to Exhibits Page
<S> <C>
1(b) Selected pages from the Form S-4 containing the
section entitled "SUMMARY" - The Reorganization
Agreement" 8
1(c) Selected pages from the Form S-4 containing the
section entitled "Description of New Disney
Capital Stock" 13
21 Subsidiaries of the Registrant 18
</TABLE>
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Exhibit 1(b)
THE REORGANIZATION AGREEMENT
General. The Reorganization Agreement provides, among other things, for: (a)
the merger of DCA Merger Corp. with and into Disney pursuant to the Disney
Merger Agreement, which will result in Disney, as the surviving corporation of
the Disney Merger, becoming a wholly owned subsidiary of New Disney, and (b)
the merger of DCB Merger Corp. with and into Capital Cities pursuant to the
Capital Cities Merger Agreement, which will result in Capital Cities, as the
surviving corporation of the Capital Cities Merger, becoming a wholly owned
subsidiary of New Disney.
Conversion of Disney Common Stock. Upon consummation of the Disney Merger,
each outstanding share of Disney Common Stock will be converted into one share
of New Disney Common Stock. Each share of Disney Common Stock which is held in
the treasury of Disney ("Disney Treasury Stock") will be canceled and cease to
exist. See "THE REORGANIZATION AGREEMENT--Conversion of Disney Common Stock."
For a description of the New Disney Common Stock, see "DESCRIPTION OF NEW
DISNEY CAPITAL STOCK." For a summary of the principal differences between the
rights of holders of New Disney Common Stock and Disney Common Stock, see
"COMPARISON OF STOCKHOLDERS' RIGHTS--Comparison of Stockholders' Rights with
Respect to New Disney and Disney."
AT THE EFFECTIVE TIME, EACH CERTIFICATE REPRESENTING SHARES OF DISNEY COMMON
STOCK SHALL, WITHOUT ANY ACTION ON THE PART OF THE HOLDER THEREOF, BE DEEMED TO
REPRESENT AN EQUIVALENT NUMBER OF SHARES OF NEW DISNEY COMMON STOCK. HOLDERS OF
DISNEY COMMON STOCK SHOULD NOT SEND ANY CERTIFICATES REPRESENTING DISNEY COMMON
STOCK WITH THE ENCLOSED PROXY CARD.
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Consideration to be Received by Capital Cities Shareholders. Upon
consummation of the Capital Cities Merger, each Outstanding Capital Cities
Share (as defined below), will be converted into the right to receive cash,
shares of New Disney Common Stock or a combination of both cash and New Disney
Common Stock. See "THE REORGANIZATION AGREEMENT--Capital Cities Merger
Consideration." Each Capital Cities shareholder will have the opportunity to
indicate, on a form of election (the "Election Form"), whether such shareholder
wishes to make a Standard Election, a Stock Election or a Cash Election (as
such terms are defined below) for each share of Capital Cities Common Stock
held by such shareholder. The allocation of cash and/or shares of New Disney
Common Stock that a shareholder of Capital Cities may receive will depend on
(i) the stated preferences of the Capital Cities shareholders on the Election
Forms and (ii) the proration procedures to be applied if the Requested Stock
Amount exceeds the Stock Component or the Requested Cash Amount exceeds the
Cash Component (as such terms are defined below).
Shareholders of Capital Cities who make an effective "Standard Election" will
receive, for each share of Capital Cities Common Stock for which such election
is made, one share of New Disney Common Stock plus $65 in cash (collectively,
the "Standard Consideration"). The number of shares of New Disney Common Stock
and the amount of cash to be distributed to Capital Cities shareholders who
make an effective Standard Election will not be affected in any way by the
proration procedures described below. Shareholders of Capital Cities who make
an effective "Stock Election" will receive (subject to the proration procedures
described below), for each share of Capital Cities Common Stock for which such
election is made, (i) one share of New Disney Common Stock plus (ii) a number
of shares of New Disney Common Stock equal to a fraction, the numerator of
which is $65 and the denominator of which is the Disney Common Stock Price
(collectively, the "Stock Consideration"). The "Disney Common Stock Price" is
an amount equal to the average of the closing sales prices of Disney Common
Stock on the NYSE Composite Tape on each of the ten consecutive trading days
immediately preceding the second trading day prior to the Effective Time.
"Effective Time" means the time and date which is the later of (a) the date and
time of the filing of the certificate of merger relating to the Disney Merger
with the Secretary of State of the State of Delaware (or such other date and
time as may be specified in such certificate as permitted by Delaware law) and
(b) the date and time of the filing of a certificate of merger by the
Department of State of the State of New York with respect to the Capital Cities
Merger (or such other date and time as may be specified in such certificate as
permitted by New York law). Shareholders of Capital Cities who make an
effective "Cash Election" will receive (subject to the proration procedures
described below) for each share of Capital Cities Common Stock for which such
election is made, in cash, an amount equal to $65 plus the Disney Common Stock
Price (collectively, the "Cash Consideration"). If a holder of Capital Cities
Common Stock does not make a Standard Election, a Cash Election or a Stock
Election, or properly revokes an effective, properly completed Election Form
without timely submitting a revised, properly completed Election Form, such
Capital Cities shareholder will be deemed to have made a Cash Election. See
"THE REORGANIZATION AGREEMENT--Capital Cities Merger Consideration" and "THE
REORGANIZATION AGREEMENT--Election Procedure."
In the event that the aggregate number of shares of New Disney Common Stock
requested by shareholders of Capital Cities pursuant to effective Stock
Elections (the "Requested Stock Amount") exceeds the Stock Component, each
holder making an effective Stock Election will receive, for each share of
Capital Cities Common Stock for which a Stock Election has been made, (x) a
number of shares of New Disney Common Stock equal to the product of the Stock
Consideration and a fraction, the numerator of which is the Stock Component and
the denominator of which is the Requested Stock Amount (such product, the
"Prorated Stock Amount") and (y) cash in an amount equal to the product of (A)
the Stock Consideration minus the Prorated Stock Amount and (B) the Disney
Common Stock Price. The "Stock Component" is the number of shares of
Outstanding Capital Cities Shares minus the aggregate number of shares of
Outstanding Capital Cities Shares with respect to which effective Standard
Elections have been received by the Exchange Agent. The "Outstanding Capital
Cities Shares" consist of the number of shares of Capital Cities Common Stock
outstanding immediately prior to the Effective Time (which is exclusive of
shares of Capital Cities Common Stock held in the Capital Cities treasury)
minus the number of shares of Capital Cities Common Stock with respect to which
dissenters'
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rights have been perfected pursuant to Section 623 of the NYBCL ("Dissenting
Shares"). The Exchange Agent will be a bank or trust company designated by
Disney and reasonably acceptable to Capital Cities.
In the event that the aggregate amount of cash requested by shareholders of
Capital Cities pursuant to effective or deemed Cash Elections (the "Requested
Cash Amount") exceeds the Cash Component, each such holder will receive, for
each share of Capital Cities Common Stock for which a Cash Election has been
made or deemed to be made, (x) cash in an amount equal to the product of the
Cash Consideration and a fraction, the numerator of which is the Cash Component
and the denominator of which is the Requested Cash Amount (such product, the
"Prorated Cash Amount") and (y) a number of shares of New Disney Common Stock
equal to a fraction, the numerator of which is equal to the Cash Consideration
minus the Prorated Cash Amount and the denominator of which is the Disney
Common Stock Price. The "Maximum Cash Amount" is equal to the product of the
number of Outstanding Capital Cities Shares and $65, provided, however, that
the Maximum Cash Amount may be increased in Disney's sole discretion at any
time prior to the fifth business day after the deadline (the "Election
Deadline") for Capital Cities shareholders to submit to the Exchange Agent
appointed pursuant to the Reorganization Agreement (the "Exchange Agent") their
completed Election Forms. The Election Deadline will be no later than the 20th
business day after the Effective Time. The "Cash Component" is equal to the
Maximum Cash Amount minus the product of (i) the number of shares of Capital
Cities Common Stock for which effective Standard Elections have been made and
(ii) $65.
Ability of Disney to Increase the Maximum Cash Amount After the Election
Deadline. As described above, the Maximum Cash Amount may be increased in
Disney's sole discretion at any time prior to the fifth business day after the
Election Deadline. The ability of Disney to increase the Maximum Cash Amount is
a factor that shareholders of Capital Cities may wish to consider in making an
election decision. As of the date of this Proxy Statement/Prospectus, Disney
has made no decisions regarding whether it will increase the Maximum Cash
Amount. It is anticipated that such decision will be made following the
Election Deadline based upon, among other things, the elections made by Capital
Cities shareholders, the Disney Common Stock Price, the impact, if any, on New
Disney's credit rating and borrowing costs of an increase in the amount of cash
consideration to be paid and interest rates and other conditions prevailing in
the financial markets at the time the decision is made. To the extent that the
Requested Cash Amount exceeds the Cash Component and Disney increases the
Maximum Cash Amount, (i) Capital Cities shareholders making a Cash Election
will receive a greater portion of the merger consideration in cash than would
otherwise have been received by such shareholders and (ii) the form of merger
consideration to be received by Capital Cities shareholders making a Stock
Election or a Standard Election will not be affected. If the Maximum Cash
Amount is increased, the Prorated Cash Amount will increase and, therefore, the
amount of merger consideration to be paid in the form of New Disney Common
Stock to shareholders making a Cash Election will be proportionately decreased.
If the number of shares of New Disney Common Stock issued in the Capital Cities
Merger is less than the number of Outstanding Capital Cities Shares, the
percentage of New Disney Common Stock owned by the former shareholders of
Capital Cities following the Mergers will decrease relative to the percentage
of New Disney Common Stock owned by the former stockholders of Disney following
the Mergers. See "THE REORGANIZATION AGREEMENT--Capital Cities Merger
Consideration" and "UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL
STATEMENTS."
No fractional shares of New Disney Common Stock will be issued pursuant to
the Capital Cities Merger. In lieu of the issuance of any fractional shares of
New Disney Common Stock, cash equal to the product of such fractional share
amount and the Disney Common Stock Price will be paid to holders in respect of
any fractional share of New Disney Common Stock that would otherwise be
issuable.
Promptly after the Effective Time, a letter of transmittal, an Election Form
and a Joint Proxy Statement/Prospectus will be mailed to each person who was a
holder of Outstanding Capital Cities Shares immediately prior to the Effective
Time. Each such holder shall have the right to submit an Election Form
specifying the number of shares of Capital Cities Common Stock that such person
desires to have converted into Standard Consideration pursuant to a Standard
Election, the number of shares of Capital Cities Common Stock
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that such person desires to have converted, subject to the proration procedures
described above, into the Stock Consideration pursuant to a Stock Election and
the number of shares of Capital Cities Common Stock that such person desires to
have converted, subject to the proration procedures described above, into the
Cash Consideration pursuant to an effective or deemed Cash Election. See "THE
REORGANIZATION AGREEMENT--Election Procedure."
HOLDERS OF CAPITAL CITIES COMMON STOCK SHOULD NOT SEND ANY CERTIFICATES
REPRESENTING CAPITAL CITIES COMMON STOCK WITH THE ENCLOSED PROXY CARD. IF THE
TRANSACTION IS APPROVED, A LETTER OF TRANSMITTAL AND AN ELECTION FORM WILL BE
MAILED AFTER THE EFFECTIVE TIME TO EACH PERSON WHO WAS A HOLDER OF OUTSTANDING
CAPITAL CITIES SHARES IMMEDIATELY PRIOR TO THE EFFECTIVE TIME. CAPITAL CITIES
SHAREHOLDERS SHOULD SEND CERTIFICATES REPRESENTING CAPITAL CITIES COMMON STOCK
TO THE EXCHANGE AGENT ONLY AFTER THEY RECEIVE, AND IN ACCORDANCE WITH, THE
INSTRUCTIONS CONTAINED IN THE LETTER OF TRANSMITTAL AND THE ELECTION FORM.
Federal Income Tax Considerations in Choosing an Election. A shareholder of
Capital Cities who makes an effective Standard Election for all of such
shareholder's Capital Cities Common Stock generally will recognize taxable gain
(but will not recognize taxable loss) for Federal income tax purposes,
calculated separately for each block of Capital Cities Common Stock
surrendered, in an amount equal to the lesser of (i) the excess of the sum of
the cash and the fair market value of New Disney Common Stock allocable to each
block of Capital Cities Common Stock surrendered over the shareholder's tax
basis in such block and (ii) the amount of cash received that is allocable to
such block. A shareholder of Capital Cities who makes an effective Stock
Election for all of such shareholder's Capital Cities Common Stock generally
will not recognize taxable gain or loss for Federal income tax purposes, unless
such shareholder receives cash as a result of the proration procedures
described above. If cash is received as a result of proration, the Federal
income tax consequences will be those described in the first sentence of this
paragraph for a shareholder who makes an effective Standard Election. A
shareholder of Capital Cities who makes (or is deemed to make) an effective
Cash Election for all of such shareholder's Capital Cities Common Stock
generally will recognize capital gain or loss equal to the difference between
the shareholder's tax basis in the shares of Capital Cities Common Stock
surrendered and the amount of cash received, unless such shareholder receives
New Disney Common Stock as a result of the proration procedures described
above. If New Disney Common Stock is received as a result of proration, the tax
consequences will be those described in the first sentence of this paragraph
for a shareholder who makes an effective Standard Election. See "THE
ACQUISITION--Certain Federal Income Tax Consequences" for a more detailed
description of the above matters and information with respect to the
applicability of the foregoing to certain taxpayers subject to special
treatment. The actual Federal income tax consequences to each Capital Cities
shareholder of making a Cash Election or Stock Election will not be
ascertainable at the time the election is made because shareholders of Capital
Cities will not know at such time if, or to what extent, the proration
procedures and Disney's ability to increase the Maximum Cash Amount described
above will apply.
Conditions to the Acquisition. The obligations of Disney and Capital Cities
to consummate the Acquisition are subject to the fulfillment of various
conditions, including, among others: (i) the effectiveness of the Registration
Statement and the absence of any stop order suspending the effectiveness
thereof and no proceeding for that purpose having been initiated by the
Commission; (ii) approval by the stockholders of Disney and the shareholders of
Capital Cities; (iii) expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"); (iv) receipt of all requisite orders and approvals of
the Federal Communications Commission ("FCC"); and (v) listing of the New
Disney Common Stock on the NYSE, subject only to official notice of issuance.
See "THE REORGANIZATION AGREEMENT--Conditions to the Acquisition."
Termination of the Reorganization Agreement. The Reorganization Agreement is
subject to termination at the option of either Disney or Capital Cities if the
Mergers are not consummated on or before October 1, 1996, and prior to such
time by the mutual consent of Disney and Capital Cities, or upon the occurrence
of certain
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events. The Reorganization Agreement may be terminated by Capital Cities, at
any time prior to the Effective Time, if: (i) in the exercise of its fiduciary
duties to its shareholders, the Capital Cities Board determines that such
termination is required by reason of a proposal with respect to a merger,
acquisition or similar transaction involving the purchase of a significant
portion of the stock or assets of Capital Cities (an "Alternative Proposal")
being made; (ii) there has been a breach by Disney of any representation or
warranty in the Reorganization Agreement which would have, or which would be
reasonably likely to have, a material adverse effect on Disney; (iii) there has
been a material breach by Disney of any of the covenants or agreements in the
Reorganization Agreement which is not curable or not cured within 30 days after
written notice of the breach; or (iv) the Disney Board shall have withdrawn or
modified, in a manner materially adverse to Capital Cities, its approval or
recommendation of the Reorganization Agreement or the Mergers. Disney may
terminate the Reorganization Agreement, at any time prior to the Effective
Time, if: (i) the Capital Cities Board shall have withdrawn or modified in a
manner materially adverse to Disney its approval or recommendation of the
Reorganization Agreement or the Mergers or shall have recommended an
Alternative Proposal to the Capital Cities shareholders; (ii) there has been a
breach by Capital Cities of any representation or warranty in the
Reorganization Agreement which would have, or which would be reasonably likely
to have, a material adverse effect on Capital Cities; or (iii) there has been a
material breach by Capital Cities of any of the covenants or agreements in the
Reorganization Agreement which is not curable or not cured within 30 days of
written notice of the breach. See "THE REORGANIZATION AGREEMENT--Termination of
the Reorganization Agreement."
Termination Fee. If an Alternative Proposal is made for Capital Cities and
thereafter (i) the Reorganization Agreement is terminated (A) by action of the
Capital Cities Board in the exercise of its fiduciary duties by reason of such
Alternative Proposal or (B) by action of the Disney Board if (a) the Capital
Cities Board has withdrawn or modified in a manner materially adverse to Disney
its approval or recommendation of the Reorganization Agreement or the Mergers
or has recommended an Alternative Proposal to the Capital Cities shareholders,
or (b) there has been a breach by Capital Cities of any representation or
warranty in the Reorganization Agreement which would have, or which would be
reasonably likely to have, a material adverse effect on Capital Cities, or (c)
there has been a material breach by Capital Cities of any of the covenants or
agreements in the Reorganization Agreement which breach is not curable or not
cured within 30 days after written notice of the breach given by Disney to
Capital Cities or (ii) the Reorganization Agreement is terminated for any
reason (A) other than as a result of a breach of the Reorganization Agreement
by Disney and (B) other than as a result of the failure by the stockholders of
Disney to approve the Disney Proposal and, in the case of clause (ii) only, a
definitive agreement with respect to an Alternative Proposal is executed within
one year after such termination, then Capital Cities must pay Disney a
termination fee of $400 million. See "THE REORGANIZATION AGREEMENT--Termination
Fee."
12
Exhibit 1(c)
DESCRIPTION OF NEW DISNEY CAPITAL STOCK
The summary of the terms of the stock of New Disney set forth below does not
purport to be complete and is subject to and qualified in its entirety by
reference to the New Disney Certificate and the New Disney Bylaws.
AUTHORIZED CAPITAL STOCK
Under the New Disney Certificate, the total number of shares of all classes
of stock that New Disney has authority to issue is 1,300,000,000 shares, of
which 1,200,000,000 are shares of New Disney Common Stock (par value $.01 per
share) and 100,000,000 are shares of New Disney Preferred Stock (par value
$.01 per share).
The additional shares of authorized stock available for issuance by New
Disney might be issued at such times and under such circumstances as to have a
dilutive effect on earnings per share and on the equity ownership of the
holders of New Disney Common Stock. The ability of the New Disney Board of
Directors to issue additional shares of stock could enhance the New Disney
Board of Directors' ability to negotiate on behalf of the stockholders in a
takeover situation and also could be used by the New Disney Board of Directors
to make a change in control more difficult, thereby denying stockholders the
potential to sell their shares at a premium and entrenching current
management.
COMMON STOCK
Holders of New Disney Common Stock will be entitled to one vote per share on
all matters voted on generally by the stockholders, including the election of
directors, and, except as otherwise required by law or except as provided with
respect to any series of New Disney Preferred Stock, the holders of such
shares will possess all voting power. The New Disney Certificate does not
provide for cumulative voting for the election of directors. Thus, under the
DGCL, the holders of more than one-half of the outstanding shares of New
Disney Common Stock generally will be able to elect all the directors of New
Disney then standing for election and holders of the remaining shares will not
be able to elect any director.
Subject to any preferential rights of any series of New Disney Preferred
Stock, holders of shares of New Disney Common Stock will be entitled to
receive dividends on such stock out of assets legally available for
distribution when, as and if authorized and declared by the New Disney Board
of Directors and to share ratably in the assets of New Disney legally
available for distribution to its stockholders in the event of its
liquidation, dissolution or winding up.
Holders of New Disney Common Stock will have no preferences, preemptive,
conversion or exchange rights.
PREFERRED STOCK
The New Disney Board of Directors is authorized to issue shares of New
Disney Preferred Stock, in one or more series, and to fix for each such series
the number of shares thereof and voting powers and such preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions as are permitted by the DGCL. The
New Disney Board of Directors could authorize the issuance of shares of New
Disney Preferred Stock with terms and conditions which could discourage a
takeover or other transaction that holders of some or a majority of shares of
New Disney Common Stock might believe to be in their best interests or in
which such holders might receive a premium for their shares of stock over the
then market price of such shares. As of the date hereof, no shares of New
Disney Preferred Stock are outstanding and the New Disney Board of Directors
has no present intention to issue any shares of New Disney Preferred Stock
after the Effective Time.
In connection with the New Disney Rights Plan, the New Disney Certificate
provides for the issuance of a series of shares of New Disney Preferred Stock
designated as the Series R Preferred Stock (the "Series R Preferred Stock"). A
description of the terms of the Series R Preferred Stock is set forth below
under "--Preferred Stock Purchase Rights."
13
<PAGE>
PREFERRED STOCK PURCHASE RIGHTS
In November 1995, New Disney adopted the New Disney Rights Plan and in
connection therewith entered into the New Disney Rights Agreement. To
implement the New Disney Rights Plan, the New Disney Board of Directors
authorized the issuance of one New Disney Right for each share of New Disney
Common Stock issued at or following the Effective Time and until the earlier
of the Distribution Date (as defined in the New Disney Rights Agreement), or
on the date on which the New Disney Rights expire or are redeemed.
Each New Disney Right entitles the registered holder to purchase from New
Disney one one-hundredth (1/100) of a share of Series R Preferred Stock at an
initial Purchase Price of $350.00, subject to adjustment. The terms and
conditions of the New Disney Rights are contained in the New Disney Rights
Agreement.
Until the close of business on the Distribution Date, which will occur on
the earlier of (i) the tenth day following a public announcement that a person
or group of affiliated or associated persons ("Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 25% or
more of the outstanding New Disney Common Stock (the "Stock Acquisition Date")
or (ii) a date fixed by the New Disney Board of Directors which is not later
than the nineteenth business day after the commencement by any person or group
of, or the first public announcement of the intent of any person or group to
commence, a tender or exchange offer which would result in that person or
group owning 25% or more of the outstanding New Disney Common Stock, the New
Disney Rights will be represented by and transferred only with the New Disney
Common Stock.
The New Disney Rights are not exercisable until the Distribution Date. The
New Disney Rights will expire at the close of business on June 30, 1999,
unless redeemed earlier as described below.
The Series R Preferred Stock will be nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of New Disney
Preferred Stock, subordinate to all other series of New Disney Preferred
Stock. The Series R Preferred Stock may not be issued except upon exercise of
the New Disney Rights. Each share of Series R Preferred Stock will be entitled
to receive, when, as and if declared, a quarterly dividend in an amount equal
to the greater of $1.00 per share or 100 times the quarterly cash dividend
declared on the New Disney Common Stock. In addition, the Series R Preferred
Stock is entitled to 100 times any non-cash dividends (other than dividends
payable in equity securities) declared on the New Disney Common Stock, in like
kind. In the event of liquidation, the holders of Series R Preferred Stock
will be entitled to receive a liquidation payment in an amount equal to the
greater of $100.00 per share or 100 times the liquidation payment made per
share of New Disney Common Stock. Each share of Series R Preferred Stock will
have 100 votes, subject to adjustment, voting together with the New Disney
Common Stock and not as a separate class unless otherwise required by law or
the New Disney Certificate. In the event of any merger, consolidation or other
transaction in which common shares are exchanged, each share of Series R
Preferred Stock will be entitled to receive 100 times the amount received per
share of New Disney Common Stock. The rights of the Series R Preferred Stock
as to dividends, voting rights and liquidation are protected by antidilution
provisions.
The Purchase Price payable and the number of shares of Series R Preferred
Stock or other securities or property issuable upon exercise of the New Disney
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series R Preferred Stock, (ii) upon the grant to
holders of the Series R Preferred Stock of certain rights or warrants to
subscribe for Series R Preferred Stock or convertible securities at less than
the current market price of the Series R Preferred Stock or (iii) upon the
distribution to holders of the Series R Preferred Stock of evidences of
indebtedness or assets (excluding regular cash dividends and dividends payable
in Series R Preferred Stock) or of subscription rights or warrants.
If (i) any person becomes the beneficial owner of 25% or more of the then
outstanding shares of New Disney Common Stock, other than pursuant to a
purchase or series of related purchases of shares of New Disney Common Stock
that the New Disney Board of Directors, taking into account the long-term
value of New Disney and all other factors that the New Disney Board of
Directors considers relevant, determines to be fair to and
14
<PAGE>
otherwise in the best interests of the holders of New Disney Common Stock (a
"Permitted Transaction"), or (ii) any Acquiring Person or any of its
affiliates or associates engages in one or more "self-dealing" transactions as
described in the New Disney Rights Agreement, then each holder of a New Disney
Right, other than the Acquiring Person, will have the right to receive, upon
payment of the Purchase Price, in lieu of Series R Preferred Stock, a number
of shares of New Disney Common Stock having a market value equal to twice the
Purchase Price. To the extent that insufficient shares of New Disney Common
Stock are available for the exercise in full of the New Disney Rights, holders
of New Disney Rights will receive upon exercise shares of New Disney Common
Stock to the extent available and then cash, property or other securities of
New Disney (which may be accompanied by a reduction in the Purchase Price), in
proportions determined by New Disney, so that the aggregate net value received
is equal to twice the Purchase Price. New Disney Rights are not exercisable
following the acquisition of shares of New Disney Common Stock by an Acquiring
Person as described in this paragraph until the expiration of the period
during which the New Disney Rights may be redeemed as described below.
Notwithstanding the foregoing, after the occurrence of an event described in
the first sentence of this paragraph, New Disney Rights that are (or, under
certain circumstances, New Disney Rights that were) beneficially owned by an
Acquiring Person will be null and void.
Unless the New Disney Rights are redeemed earlier, if, after the Stock
Acquisition Date, New Disney is acquired in a merger or other business
combination (in which New Disney is not the surviving corporation or in which
any shares of New Disney Common Stock are converted or exchanged) or more than
50% of the assets or earning power of New Disney and its subsidiaries (taken
as a whole) are sold or transferred in one or a series of related
transactions, the New Disney Rights Agreement provides that proper provision
shall be made so that each holder of record of a New Disney Right will from
and after that time have the right to receive, upon payment of the Purchase
Price, that number of shares of common stock of the acquiring company which
has a market value at the time of such transaction equal to twice the Purchase
Price.
Fractions of shares of Series R Preferred Stock may, at the election of New
Disney, be evidenced by depositary receipts. New Disney may also issue cash in
lieu of fractional shares of Series R Preferred Stock which are not integral
multiples of one one-hundredth of a share.
At any time until ten days following the Stock Acquisition Date (subject to
extension by the New Disney Board of Directors), the New Disney Board of
Directors may cause New Disney to redeem the New Disney Rights in whole, but
not in part, at a price of $.01 per New Disney Right, subject to adjustment to
reflect any stock split, stock dividend or similar transaction. Immediately
upon the action of the New Disney Board of Directors authorizing redemption of
the New Disney Rights, the right to exercise the New Disney Rights will
terminate, and the holders of the New Disney Rights will only be entitled to
receive the redemption price without any interest thereon.
As long as the New Disney Rights are redeemable, New Disney may, except with
respect to the redemption price, the number of one one-hundredths of a share
of Series R Preferred Stock for which a New Disney Right is exercisable, or
the date of expiration of the New Disney Rights, amend the New Disney Rights
in any manner, including an amendment to extend the time period in which the
New Disney Rights may be redeemed. At any time when the New Disney Rights are
not redeemable, New Disney may amend the New Disney Rights in any manner,
subject to the foregoing exceptions and except for the time period during
which the New Disney Rights may be redeemed, that does not adversely affect
the interests of holders of the New Disney Rights as such.
Until a New Disney Right is exercised, the holder, as such, will have no
rights as a stockholder of New Disney, including without limitation the right
to vote or to receive dividends.
The New Disney Rights have certain anti-takeover effects. The New Disney
Rights will cause substantial dilution to a person or group that attempts to
acquire, or merge with, New Disney without conditioning the offer on the New
Disney Rights being rendered inapplicable.
TRANSFER AGENT AND REGISTRAR
The principal transfer agent and registrar for New Disney Common Stock will
be New Disney.
15
<PAGE>
CERTAIN ANTITAKEOVER EFFECTS OF NEW DISNEY CERTIFICATE, NEW DISNEY BYLAWS AND
DELAWARE LAW
General. Certain provisions of the New Disney Certificate, the New Disney
Bylaws and the DGCL may have the effect of impeding the acquisition of control
of New Disney by means of a tender offer, a proxy fight, open market purchases
or otherwise in a transaction not approved by the New Disney Board of
Directors.
The provisions of the New Disney Certificate, the New Disney Bylaws and the
DGCL described below are designed to reduce, or have the effect of reducing,
the vulnerability of New Disney to an unsolicited proposal for the
restructuring or sale of all or substantially all of the assets of New Disney
or an unsolicited takeover attempt which is unfair to New Disney stockholders.
The summary of such provisions set forth below does not purport to be complete
and is subject to and qualified in its entirety by reference to the New Disney
Certificate, the New Disney Bylaws and the DGCL.
Other than the adoption of a stockholder rights plan, the New Disney Board
of Directors has no present intention to introduce additional measures which
might have an antitakeover effect. The New Disney Board of Directors, however,
expressly reserves the right to introduce such measures in the future.
Classified Board; Removal of Directors. The New Disney Certificate provides
that its Board of Directors shall consist of not less than nine nor more than
21 directors, with the exact number of directors to be determined from time to
time by the New Disney Board of Directors. The New Disney Certificate further
provides that the New Disney Board of Directors be divided into three classes,
and, after an initial term, each director will be elected for a three-year
term. See "MANAGEMENT OF NEW DISNEY--Directors."
The New Disney Certificate provides that directors may only be removed for
cause upon the affirmative vote of the holders of a majority of the
outstanding shares of New Disney then entitled to vote generally in the
election of directors.
Business Combinations. Section 203 of the DGCL restricts a wide range of
transactions ("business combinations") between a corporation and an interested
stockholder. An "interested stockholder" is, generally, any person who
beneficially owns, directly or indirectly, 15% or more of the corporation's
outstanding voting stock. Business combinations are broadly defined to include
(i) mergers or consolidations with, (ii) sales or other dispositions of more
than 10% of the corporation's assets to, (iii) certain transactions resulting
in the issuance or transfer of any stock of the corporation or any subsidiary
to, (iv) certain transactions which would result in increasing the
proportionate share of stock of the corporation or any subsidiary owned by, or
(v) receipt of the benefit (other than proportionately as a stockholder) of
any loans, advances or other financial benefits by, an interested stockholder.
Section 203 provides that an interested stockholder may not engage in a
business combination with the corporation for a period of three years from the
time of becoming an interested stockholder unless (i) the board of directors
approved either the business combination or the transaction which resulted in
the person becoming an interested stockholder prior to the time such person
became an interested stockholder; (ii) upon consummation of the transaction
which resulted in the person becoming an interested stockholder, that person
owned at least 85% of the corporation's voting stock (excluding shares owned
by persons who are officers and also directors and shares owned by certain
employee stock plans); or (iii) the business combination is approved by the
board of directors and authorized by the affirmative vote of at least 66 2/3%
of the outstanding voting stock not owned by the interested stockholder. The
restrictions on business combinations with interested stockholders contained
in Section 203 do not apply to a corporation whose certificate of
incorporation contains a provision expressly electing not to be governed by
the statute. The New Disney Certificate does not contain a provision electing
to "opt-out" of Section 203.
Supermajority Requirements. In addition to the requirements of Section 203
of the DGCL, the New Disney Certificate provides that the affirmative vote of
four-fifths of the outstanding stock of New Disney entitled to vote shall be
required for (i) any merger or consolidation to which New Disney, or any of
its subsidiaries, and an Interested Person (as defined below) are parties;
(ii) any sale or other disposition by New Disney, or any of its subsidiaries,
of all or substantially all of its assets to an Interested Person; (iii) any
purchase or other acquisition by New Disney, or any of its subsidiaries, of
all or substantially all of the assets or stock of an
16
<PAGE>
Interested Person; and (iv) any other transaction with an Interested Person
which requires the approval of the stockholders of New Disney under the DGCL;
unless, in each case, any such transaction is authorized by a resolution of
the New Disney Board of Directors which is approved by board members, provided
that the majority of the members approving such transaction were duly elected
and acting members of the New Disney Board of Directors prior to the date that
the person, firm or corporation, or any group thereof, with whom such
transaction is proposed, became an Interested Person. An "Interested Person"
is any person, firm or corporation, or any group thereof, acting or intending
to act in concert, including any person directly or indirectly controlling or
controlled by or under direct or indirect common control with such person,
firm or corporation or group, which owns of record or beneficially, directly
or indirectly, five percent (5%) or more of any class of voting securities of
New Disney.
Special Meetings; Prohibition of Actions by Written Consent. Pursuant to the
DGCL, a special meeting of stockholders may be called by the board of
directors or by any other person authorized to do so in the certificate of
incorporation or the bylaws. The New Disney Certificate provides that special
meetings of stockholders may only be called by the New Disney Board of
Directors, the Chairman of the New Disney Board of Directors, or the President
of New Disney. In addition, the New Disney Certificate provides that any
action required or permitted to be taken at any annual or special meeting of
stockholders may be taken only upon the vote of the stockholders at an annual
or special meeting, and may not be taken by a written consent of the
stockholders.
Rights Plan. In November 1995, New Disney adopted the New Disney Rights
Plan. The New Disney Rights have certain anti-takeover effects. The New Disney
Rights will cause substantial dilution to a person or group that attempts to
acquire, or merge with, New Disney without conditioning the offer on the New
Disney Rights being rendered inapplicable. A description of the New Disney
Rights is set forth under "DESCRIPTION OF NEW DISNEY CAPITAL STOCK--Preferred
Stock Purchase Rights."
17
Exhibit 21
Subsidiaries of DC Holdco, Inc.
<TABLE>
<CAPTION>
Name of Subsidiary State of Incorporation
<S> <C>
ABC Holding Company Inc. Delaware
American Broadcasting Companies, Inc. Delaware
Buena Vista Home Video, Inc. California
Buena Vista International, Inc. California
Buena Vista Pictures Distribution, Inc. California
Buena Vista Television California
Capital Cities/ABC, Inc. New York
Disney Development Company Florida
EDL Holding Company Delaware
ESPN Holding Company, Inc. Delaware
ESPN Inc. Delaware
KCAL-TV, Inc. California
Lake Buena Vista Communities, Inc. Delaware
The Disney Channel California
The Disney Store, Inc. California
The Walt Disney Company Delaware
Walt Disney Pictures and Television California
Walt Disney World Co. Delaware
WCO Parent Corporation Delaware
18
</TABLE>
