___________________________________________________________________________
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE WALT DISNEY COMPANY
- ---------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
Notes:
<PAGE>
PRELIMINARY COPY
The Walt Disney Company
To our Stockholders:
I am pleased to report to you that your Board of Directors has
approved a three-for-one split of the common stock of The Walt Disney
Company. The split is subject to stockholder approval of an amendment to
the Company's certificate of incorporation increasing the number of
authorized shares of Company common stock in order to provide sufficient
additional shares to make the split possible.
The Board of Directors unanimously recommends that stockholders
approve the proposed amendment, which is more fully described in the
accompanying materials. Toward that end, the Board asks that you complete,
sign and return the enclosed consent form by June 9, 1998. Your consent
is important, since approval of the amendment requires the execution of
written consents on behalf of the holders of a majority of the outstanding
shares of common stock. As a result, if you do not return a properly
completed and signed consent, you will effectively be voting against the
amendment.
The consent that the Board of Directors is soliciting will allow the
Company to proceed with the proposed amendment of the certificate of
incorporation without the necessity of convening a special meeting of
stockholders. We anticipate that the amendment and stock split will be
completed during the month of June, as further described in the enclosed
document.
Please take a moment to review the materials and to complete, sign and
return your consent.
Very truly yours,
Michael D. Eisner
Chairman of the Board
and Chief Executive Officer
May __, 1998
<PAGE>
PRELIMINARY COPY
The Walt Disney Company
Consent Solicitation
May __, 1998
This consent solicitation contains important information relating to a
proposed amendment to the certificate of incorporation of The Walt Disney
Company to increase its authorized common stock from 1,200,000,000 to
3,600,000,000 shares. The Board of Directors is recommending approval of
the amendment in connection with its authorization of a three-for-one split
of the Company's common stock.
The following pages include information on:
* the stock split (questions 1 to 9);
* the proposed amendment to the certificate of incorporation
(questions 10 to 12);
* procedures for the consent solicitation (questions 13 to 21); and
* current stock ownership and other matters relating to the Company
(questions 22 and 23).
This consent solicitation was first mailed to stockholders on May __,
1998. Stockholders are requested to return their consent forms by June 9,
1998.
The Stock Split
1. What is the stock split?
On April 21, 1998, the Company's Board of Directors authorized a three-
for-one split of the Company's common stock, subject to receipt of
stockholder approval of an amendment to the Company's certificate of
incorporation to increase the amount of the Company's authorized common
stock. An increase in authorized common stock is necessary to permit the
split to occur, since the Company does not currently have enough authorized
but unissued shares to carry out the split.
2. Why is the stock being split?
The purpose of the split is to bring the trading range of the
Company's common stock within a band that makes it attractive to a broader
range of investors. The Board of Directors has in the past authorized a
number of stock splits for this same purpose when the common stock has
reached trading ranges higher than the stock of many similarly situated
companies. The most recent splits of the Company's common stock were in
April 1992 and February 1986.
The closing price of a share of the Company's common stock on the New
York Stock Exchange on May 1, 1998 was $_____, and trading prices between
January 1 and May 1, 1998 ranged from $_____ to $_____. In authorizing the
split, the Board took into account that this trading range was higher than
that of many other major corporations, including almost all other common
stocks included in the "Dow 30." The Board believes that the three-for-one
split will bring the stock into a more widely accessible trading range,
particularly for individual investors.
3. How and when will the stock split be carried out?
The stock split will be effected by means of a stock dividend of two
shares for each outstanding share of common stock as of the record date for
the split. The record date will be set as soon as practicable after the
Company receives consents from the requisite majority of stockholders
authorizing the amendment of the certificate of incorporation. Assuming
that the requisite consents are received by June 9, 1998, the end of
the initial solicitation period (see question 16 below), the Company
anticipates that the amendment of the certificate of incorporation and the
record date for the split would be on or about June 22, 1998. If the
solicitation period is extended, the effectiveness of the amendment and
the record date for the split would be deferred until approximately ten
days after the receipt of the requisite consents.
Stockholders of record as of the close of business on the record date
for the split will be entitled to receive two new shares for each share
that they hold as of that date. The Company expects to begin mailing to
registered stockholders certificates representing the additional shares
approximately two weeks following the record date.
Important note: Certificates representing shares issued prior to
the split will continue to represent the same number of shares after
the effective date. Therefore, please do not destroy your existing
certificates or return them to the Company.
Stockholders whose shares are held in "street name" will not receive
certificates representing the new shares. Instead, their accounts will be
credited with the new shares in accordance with the procedures applicable
to their broker or other nominee.
4. Will the new shares resulting from the split be different from
currently outstanding shares?
No. The new shares will be identical in all respects to currently
outstanding shares. Each new share will be fully paid and nonassessable
and carry the same one-vote-per-share voting right as existing shares. The
split will not alter any stockholder's proportionate ownership interest in
the Company.
5. How will the split affect treasury shares, Company stock options, the
Company's share repurchase program and the Preferred Stock Purchase Rights
Plan?
The split will result in a three-for-one adjustment in all shares held
in the Company's treasury, as well as shares held by the Company's
subsidiary, the TWDC Stock Compensation Fund. In addition, corresponding
adjustments will be made in the number of shares of common stock reserved
for issuance under the Company's various stock option and incentive plans
and the exercise prices of outstanding option grants.
The Company currently has in place authorization to repurchase up to
approximately 133.3 million shares of Company common stock. Purchases
under this program are made from time to time in the open market or through
privately negotiated transactions in accordance with applicable laws and
regulations. Upon the effectiveness of the split, the number of shares
authorized to be repurchased will be adjusted on a three-for-one basis to
400 million shares.
The split will also have the effect of adjusting the outstanding
rights granted to holders of common stock pursuant to the Company's
Preferred Stock Purchase Rights Plan. The rights issued under this Plan,
which trade automatically with the common stock, become exercisable only
upon the occurrence of certain events involving the acquisition or
potential acquisition of 25% or more of the Company's common stock by any
person or group in a transaction not approved by the Company's Board of
Directors. The rights are not currently exercisable and trade with the
common stock on the basis of one right for each full share of common stock.
Following the effectiveness of the split, each outstanding share of common
stock of the Company will be accompanied by one-third of a right.
6. How will fractional share interests be treated?
Fractional share interests reflected as of the record date for the
split in the accounts of stockholders who participate in The Walt Disney
Company Investment Plan or the Company's "401(k)" plans will be credited
with proportionate additional share interests upon the effectiveness of the
split.
7. Will the stock split be taxable?
The Company has been advised by tax counsel that, under existing
United States federal income tax laws, the stock split will not result in
gain or loss or realization of taxable income to holders of common stock.
Immediately after the stock split, the tax basis of each share of Company
stock will be one-third of the tax basis before the stock split. For
United States federal income tax purposes, each new share will be deemed to
have been acquired at the same time as the original share with respect to
which the new share was issued.
The laws of jurisdictions other than the United States may impose
income taxes on the receipt of the additional shares. Stockholders may
wish to consult their own tax advisors with respect to these and other
possible tax consequences of the split.
8. Will the new shares be listed on a stock exchange?
The Company will apply to list the additional shares issued pursuant
to the stock split on the New York Stock Exchange and the Pacific Stock
Exchange.
9. Will the split affect the Company's financial statements?
On the Company's consolidated balance sheet, the split will result in
the allocation of an amount equal to the aggregate par value of the new
shares resulting from the split (approximately $14 million) to the "common
stock" line of stockholders' equity, and a corresponding deduction of the
same amount from the "retained earnings" line. The Company's reported
amounts of authorized and issued shares, as well as the number of shares of
treasury stock, will also be adjusted on a three-for-one basis.
The split will not affect the Company's income or cash flow
statements, except to the extent of the costs of this consent solicitation
and related activities to effectuate the amendment and the split, which are
not material to the Company. The split will affect all earnings per share
amounts reflected on the income statement, since earnings per share will be
restated for the periods presented to reflect the increase in the number of
common shares outstanding.
Amendment of the Certificate of Incorporation
10. What is the proposed amendment to the Certificate of Incorporation?
The Company's certificate of incorporation currently authorizes the
issuance of a total of 1,300,000,000 shares, composed of 1,200,000,000
shares of common stock, par value $0.01 per share, and 100,000,000 shares
of preferred stock, par value $0.01 per share. The proposed amendment
will increase the total number of authorized shares to 3,700,000,000, and
the number of shares of common stock authorized to 3,600,000,000. The
amendment will modify the first paragraph of Article FOURTH of the
certificate of incorporation to read as follows:
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 3,700,000,000
shares, composed of 3,600,000,000 shares of common stock, par
value $0.01 per share ("Common Stock"), and 100,000,000 shares of
preferred stock, par value $0.01 per share ("Preferred
Stock").
Each of the newly authorized shares of common stock will have the same
rights and privileges as currently authorized common stock. The new
shares, like the currently authorized shares, will not have preemptive
rights. The amendment will not change the par value of the common stock.
The amendment will not change the currently authorized number of
shares of preferred stock, which will remain set at 100,000,000. No shares
of preferred stock have been issued.
11. Why is the amendment necessary?
An increase in the amount of common stock authorized by the
certificate of incorporation is necessary to permit the Company to carry
out the stock split, since the Company does not currently have enough
authorized but unissued shares to accommodate the split. As of May 1,
1998, there were ____________ shares of issued and outstanding common
stock, including shares held in the TWDC Stock Compensation Fund created by
the Company to satisfy obligations under various compensation and benefit
plans, leaving a total of ____________ authorized shares available for
future issuance. Since the stock split will result in the issuance of two
new shares for every share outstanding as of the record date for the split,
additional authorization is needed.
The Board of Directors has determined that the number of authorized
shares of common stock should be increased in the same three-for-one
proportion as the stock split, resulting in the proposed increase from
1,200,000,000 to 3,600,000,000. This will ensure that the Company
continues to have available for future issuance the same proportionate
amount of authorized common stock as it currently has.
12. How will the additional authorized common stock be used?
After the stock split, the Company will have aproximately 2.1 billion
shares of common stock outstanding, leaving approximately 1.5 billion
shares available for future issuance for valid corporate purposes
such as acquisitions, financings, incentive compensation and further stock
dividends. The newly authorized common stock will be available for issuance
without further action by stockholders except as required by law or stock
exchange requirements. For example, the current rules of the New York Stock
Exchange would require approval by the Company's stockholders if the number
of shares of common stock to be issued equaled or exceeded 20% of the
number of shares of common stock outstanding immediately prior to such
issuance. Current stockholders do not have preemptive rights, which means
they do not have the right to purchase any new issuance of common stock
in order to maintain their proportionate interests in the Company.
The Company has no current plan or commitment to issue shares of stock
for purposes other than those discussed above.
The additional authorized shares could be used to discourage persons
from attempting to gain control of the Company, by diluting the voting
power of shares then outstanding or increasing the voting power of persons
who would support the Board in opposing a takeover bid or a solicitation in
opposition to management. The Company is not currently aware of any effort
to obtain control of the Company, and has no plans to use the new shares
for purposes of discouraging any such effort.
The Consent Solicitation
13. Who is being asked to approve the amendment?
Only stockholders of record at the close of business on May 1, 1998
are entitled to execute and deliver consents with respect to the proposed
amendment. On that date, there were ____________ shares of Company common
stock outstanding. Each share is entitled to one consent.
As noted above (question 3), a separate record date will be set for
the stock split, assuming the amendment to the certificate of incorporation
becomes effective.
14. What level of approval is required for the amendment?
Approval of the amendment will require the execution and delivery
to the Company of written consents on behalf of the holders of an absolute
majority of the issued and outstanding shares of the Company's common
stock.
15. How do I consent to the amendment?
You may consent to the proposed amendment with respect to your shares
by completing and signing the enclosed consent form and returning it to the
Company on or before the final consent date (as described under question 16
below).
If your shares are held in "street name," your broker or nominee may
authorize consent on your behalf if you do not direct your broker or
nominee not to do so.
Please note that not returning your consent or abstaining from the
vote has the same impact as disapproving the amendment, since approval
of the amendment requires written consent on behalf of the holders of an
absolute majority of the common stock outstanding and entitled to vote,
rather than simply a majority of those who actually execute and deliver
consents.
16. What is the deadline for delivering my consent?
The Board of Directors has set June 9, 1998 as the targeted final date
for receipt of consents. If the Company has received consents on behalf of
the holders of a majority of the Company's common stock by that date, the
consent solicitation will expire, and the Company will proceed with the
amendment of the certificate of incorporation.
The Board of Directors has reserved the right to extend the final
date for receipt of consents beyond June 9, 1998 in the event that the
requisite majority approval has not been obtained by that date. Any such
extension may be made without notice to individual stockholders.
17. How do I consent to the amendment with respect to my 401(k) shares?
If you participate in the Disney Savings and Investment Plan or the
ABC, Inc. Savings and Investment Plan (i.e., the Company's "401(k)" plans),
you may consent to the amendment with respect to shares of common stock of
the Company equivalent to the value of the interest credited to your
account by instructing Fidelity Management Trust Company, the trustee of
both plans, pursuant to the instruction card being mailed with this
document to plan participants. The trustee will deliver consents with
respect to your shares in accordance with your duly executed instructions
received by June __, 1998 (or such later date as the Board of Directors may
set in connection with any extension of the solicitation period). If you do
not send instructions, the trustee will deliver consents with respect to
the share equivalents credited to your account in the same proportion that
it delivers consents with respect to share equivalents for which it did
receive timely instructions.
18. Can I consent by telephone or electronically?
If you are a registered stockholder (that is, if you hold your stock
in your own name), you may deliver your consent by telephone, or
electronically through the Internet, by following the instructions included
with your consent form.
If your shares are held in "street name," you will need to contact
your broker or other nominee to determine whether you will be able to
consent by telephone or electronically.
19. Is my consent irrevocable?
No. Even after you have submitted your consent form, you may file
with the Secretary of the Company a notice of revocation or a subsequently
dated consent form at any time before the final consent date.
20. What is the recommendation of the Board of Directors?
The Board of Directors has unanimously approved the amendment of the
certificate of incorporation and believes that the amendment and the
completion of the stock split are in the best interest of the Company and
its stockholders. Accordingly, the Board unanimously recommends that
stockholders consent to the amendment.
21. How are costs of this solicitation being borne?
The expenses of preparing, printing and mailing these consent
solicitation materials are being borne by the Company. The Company has
retained Georgeson & Co., 100 Wall Street, New York, New York 10005, to aid
in the solicitation. For these services, the Company will pay Georgeson &
Co. a fee of $10,000 and reimburse it for certain out-of-pocket
disbursements and expenses. Officers and regular employees of the Company
may, but without compensation other than their regular compensation,
solicit consents by further mailing or personal conversations, or by
telephone, telex, facsimile or electronic means. The Company will, upon
request, reimburse brokerage firms and others for their reasonable expenses
in forwarding solicitation material to the beneficial owners of stock.
Additional Information
22. Stock Ownership
The following table gives information about the ownership of Company
common stock as of March 31, 1998 by the directors, the chief executive
officer, the four most highly compensated other executive officers (as of
September 30, 1997) and the executive officers and directors as a group.
The Company knows of no single person or group that is the beneficial owner
of more than 5% of the Company's common stock.
<TABLE>
<CAPTION>
Aggregate Number of Acquirable Percent of
Shares Beneficially within 60 Shares
Name Owned(1)(2) Days(3) Outstanding(4)
----- ------------------- ---------- --------------
<S> <C> <C> <C>
Reveta F. Bowers 100 2,300 *
Roy E. Disney 5,954,699 120,000 *
Michael D. Eisner 3,665,117 60,618 *
Stanley P. Gold 3,516 2,400 *
Sanford M. Litvack 11,349 350,000 *
Ignacio E. Lozano, Jr. 5,588 2,400 *
George J. Mitchell 1,700 1,200 *
Lawrence P. Murphy 21,253 272,000 *
Thomas S. Murphy 1,095,873 1,200 *
Richard D. Nanula 3,671 140,000 *
Richard A. Nunis 103,719 80,000 *
Leo J. O'Donovan, S.J. -- -- --
Sidney Poitier -- 2,400 *
Irwin E. Russell 4,000 2,400 *
Robert A.M. Stern 295 2,400 *
E. Cardon Walker 153,105 2,400 *
Raymond L. Watson 14,040 2,400 *
Gary L. Wilson 1,000 2,400 *
All directors and
executive officers
as a group (19 persons) 11,039,025 1,046,518 1.8%
</TABLE>
_________________________________
* Represents less than 1% of the Company's outstanding common stock.
(1) The number of shares shown includes shares that are individually or
jointly owned, as well as shares over which the individual has either
sole or shared investment or voting authority. Certain of the
Company's directors and executive officers disclaim beneficial
ownership of some of the shares included in the table, as follows:
* Mr. Eisner - 29,600 shares held by his wife directly and as custodian
for their children, 12,000 shares held in a trust for his children,
8,799 shares held in trusts of which Mr. Eisner is a trustee and 3,200
shares held in a trust of which Mr. Eisner is the income beneficiary;
* Mr. Disney - 256,736 shares as to which he disclaims beneficial
ownership, consisting of 256,320 shares held in trusts for the benefit
of his children or grandchildren, of which Mr. Disney is the trustee;
and 416 shares beneficially owned by Shamrock Holdings, Inc., of which
both Mr. Disney and his wife are officers and directors and the shares
of which are held by Mr. Disney, his wife, certain of his children,
trusts for the benefit of his children and custodial accounts for the
benefit of certain of his children and grandchildren;
* Mr. Gold - 1,440 shares held by his wife and 416 shares beneficially
owned by Shamrock Holdings, Inc., of which he is an officer and
director;
* Mr. Litvack - 150 shares held by a trust of which he is a co-trustee;
* Mr. Lozano - 440 shares that he holds as custodian for the benefit of
his child;
* Thomas Murphy - 17,390 shares held in trust for the benefit of a non-
family member and 440 shares owned by Mr. Murphy's wife; and
* Mr. Nunis - 4,380 shares held by a trust of which Mr. Nunis is
trustee for the benefit of his son and 815 shares held by his wife as
trustee for her children.
All current directors and executive officers as a group disclaim
beneficial ownership of an aggregate of 335,806 shares.
(2) Includes interests in shares held in the Disney Salaried Savings and
Investment Plan, with respect to which the officers have sole voting
power but no investment rights: Mr. Eisner - 8,603 shares;
Mr. Litvack - 849 shares; Mr. Nanula - 3,422 shares; Lawrence Murphy
- 1,201 shares; Mr. Nunis - 10,077 shares; and all current directors
and executive officers as a group - 27,770 shares.
(3) Reflects the number of shares that could be purchased by exercise of
options available at March 31, 1998 or within 60 days thereafter under
the Company's stock option plans.
(4) Based on the number of shares outstanding at, or acquirable within 60
days of, March 31, 1998.
22. How can I obtain more information about the Company?
The Company files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or other
information filed by the Company at the SEC's public reference rooms in
Washington, D.C., New York City, and Chicago, Illinois. The Company's SEC
filings are also available from commercial document retrieval services or
on the SEC's web site at http://www.sec.gov. You may also request a copy
of the Company's financial reports filed with the SEC by contacting the
Company's Corporate Secretary, c/o The Walt Disney Company, 500 South Buena
Vista Street, Burbank, California 91521.
By order of the Board of Directors,
Marsha L. Reed
Corporate Secretary
May __, 1998
<PAGE>
[Form of Consent]
==========================================================================
PRELIMINARY COPY
Please mark vote as in example / X /
THE WALT DISNEY COMPANY
Consent Card
Solicited on Behalf of the Board of Directors
The undersigned hereby takes the following action with respect to all of
the shares of common stock of The Walt Disney Company that the undersigned
is entitled to vote:
Consents Does Not Abstains To the amendment of the Certificate
Consent of Incorporation of The Walt Disney
Company to increase the authorized
number of shares of common stock to
[ ] [ ] [ ] 3,600,000,000.
The Board of Directors unanimously recommends giving consent to the
amendment.
Marking the box "CONSENTS" constitutes your written consent to the
amendment. However, if no box is marked, your signature below will evidence
your written consent to the amendment as recommended by the Board of
Directors.
Please sign exactly as your name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Signature:______________Date:________Signature:______________Date:________
===========================================================================
