<PAGE>
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:
/ / Preliminary Proxy Statement
/X/ 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)
THE WALT DISNEY COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / 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:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
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<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 21, 1995
Notice is hereby given that the Annual Meeting of Stockholders of The Walt
Disney Company will be held at Disney's Contemporary Resort Convention Center,
4600 North World Drive, Lake Buena Vista, Florida, on Tuesday, February 21,
1995, at 10:00 a.m., Eastern Standard Time, for the following purposes:
(1) To elect four directors, each for a term of three years;
(2) To ratify the appointment of Price Waterhouse LLP as the Company's
independent accountants for the 1995 fiscal year;
(3) To approve the 1995 Stock Option Plan for Non-Employee Directors;
(4) To act upon a stockholder proposal with respect to the adoption of a
dividend reinvestment and stock purchase plan;
(5) To act upon a stockholder proposal with respect to the adoption of a
stock purchase plan; and
(6) To act upon such other matters as may properly come before the meeting
or any postponements or adjournments thereof.
Only stockholders of record at the close of business on December 22, 1994
are entitled to notice of and to vote at the meeting or any postponements or
adjournments thereof. Please note that space limitations and the increasing
number of stockholders make it necessary to limit attendance at the Annual
Meeting to stockholders and one guest.
By order of the Board of Directors,
Marsha L. Reed
CORPORATE SECRETARY
December 29, 1994
Burbank, California
<PAGE>
[LOGO]
500 SOUTH BUENA VISTA STREET
BURBANK, CALIFORNIA 91521
------------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors and management of The Walt Disney Company, a Delaware
corporation (the "Company"), of proxies for use at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at the Disney's
Contemporary Resort Convention Center, 4600 North World Drive, Lake Buena Vista,
Florida, on Tuesday, February 21, 1995, at 10:00 a.m., Eastern Standard Time,
and at any and all postponements or adjournments thereof, for the purposes set
forth in the accompanying Notice of Meeting.
This Proxy Statement, Notice of Meeting and accompanying proxy card are
first being mailed to stockholders on or about January 4, 1995.
GENERAL
Only stockholders of record at the close of business on December 22, 1994
are entitled to notice of and to vote the shares of common stock, par value
$.025 per share, of the Company (the "Common Stock") held by them on that date
at the Annual Meeting or any postponements or adjournments thereof.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote for the slate of
nominees proposed by the Board of Directors, for ratification of the appointment
of Price Waterhouse LLP as the Company's independent accountants for the fiscal
year ending September 30, 1995, for approval of the 1995 Stock Option Plan for
Non-Employee Directors, against approval of the two stockholder proposals
described herein and as recommended by the Board of Directors with regard to all
other matters or, if no such recommendation is given, in their own discretion.
Each stockholder may revoke a previously granted proxy at any time before it is
exercised by filing with the Secretary of the Company a revoking instrument or a
duly executed proxy bearing a later date. The powers of the proxy holders will
be suspended if the person executing the proxy attends the Annual Meeting in
person and so requests. Attendance at the Annual Meeting will not, in itself,
constitute revocation of a previously granted proxy.
The presence at the Annual Meeting, in person or by proxy, of the holders of
a majority of the shares of Common Stock outstanding on December 22, 1994 will
constitute a quorum. Each outstanding share entitles its holder to cast one vote
on each matter to be voted upon at the Annual Meeting. As of December 15, 1994,
517,075,130 shares of Common Stock were outstanding.
<PAGE>
STOCK OWNERSHIP
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to the beneficial ownership of
each person known to the Company to own more than 5% of the outstanding Common
Stock as of December 15, 1994.
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER OWNED CLASS
- ------------------------------------------------------- ------------ -----------
<S> <C> <C>
Bass Management Trust (1).............................. 31,125,578 6.02%
2700 First City Bank Tower
201 Main Street
Fort Worth, Texas 76102
<FN>
- ------------------------
(1) According to a Schedule 13D, amended through January 28, 1992, filed on
behalf of the Bass Management Trust (the "Trust"), Mr. Perry R. Bass may
also be deemed a beneficial owner of the shares held by the Trust by virtue
of his authority as Trustee and a trustor of the Trust, and Nancy L. Bass
may also be deemed a beneficial owner of such shares as a trustor of the
Trust.
</TABLE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table reflects shares of Common Stock beneficially owned (or
deemed to be beneficially owned pursuant to the rules of the Securities and
Exchange Commission) as of December 15, 1994 by each director of the Company,
each of the executive officers named in the Summary Compensation Table included
elsewhere herein and the current directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
SOLE SHARED VOTING
VOTING AND AND/OR ACQUIRABLE
INVESTMENT INVESTMENT WITHIN 60 PERCENT OF
NAME POWER (1) POWER (1)(2) DAYS (3) COMMON STOCK (4)
- ------------------------------ ---------- ------------- ---------- ----------------
<S> <C> <C> <C> <C>
Reveta F. Bowers..............
Roy E. Disney (5)............. 5,684,520 2,594,632 160,000 1.63%
Michael D. Eisner............. 2,912,022 98,945 5,000,000 1.55%
Stanley P. Gold............... 1,000 1,936 *
Sanford M. Litvack............ 498 240,000 *
Ignacio E. Lozano, Jr. ....... 5,148 440 *
Lawrence P. Murphy............ 20,272 1,008 212,000 *
Richard D. Nanula............. 100 2,908 151,200 *
Richard A. Nunis.............. 71,549 34,864 400,000 *
Sidney Poitier................
Irwin E. Russell.............. 4,000 *
Robert A.M. Stern............. 140 *
E. Cardon Walker.............. 166,503 *
Raymond L. Watson............. 17,360 *
Frank G. Wells (6)............ 8,456 3,000,000 *
Gary L. Wilson................
All current directors and
executive officers as a group
(18 persons, including the
foregoing)................... 8,698,751 2,931,445 9,289,488 4.05%
<FN>
- ------------------------
* Represents less than 1% of the Company's outstanding Common Stock.
(1) Certain of the directors and executive officers included in the table
disclaim beneficial ownership of some of these shares as follows: Mr.
Eisner--53,600 shares held by Mr. Eisner's wife directly and as
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
custodian for their children, 36,000 shares held in trust for the benefit
of their children and 1,600 shares held in a family trust; Mr.
Disney--2,594,632 shares (see footnote (5) below); Mr. Gold--1,520 shares
held by Mr. Gold's wife and children and 416 shares held by Shamrock
Holdings, Inc., of which he is an officer and director; Mr. Lozano--440
shares that he holds as custodian for the benefit of his child; Mr.
Nunis--3,070 shares held by a trust of which Mr. Nunis is trustee for the
benefit of his son; and all current directors and executive officers as a
group--2,691,628 shares.
(2) Includes interests in shares held for the benefit of the following
individuals and for all current directors and executive officers as a group
in the Disney Salaried Savings and Investment Plan as of December 1, 1994,
with respect to which such persons have sole voting power but no investment
rights: Mr. Eisner-- 7,745 shares; Mr. Litvack--498 shares; Mr.
Murphy--1,008 shares; Mr. Nanula--2,659 shares; Mr. Nunis--9,272 shares;
Mr. Wells--8,106 shares; and all current directors and executive officers
as a group--33,183 shares.
(3) Reflects the number of shares that could be purchased by exercise of
options available as of December 15, 1994 or within 60 days thereafter
under the Company's stock option or stock incentive plans.
(4) Based on the number of shares outstanding at, or acquirable within 60 days
of, December 15, 1994.
(5) The shares listed in the table for Mr. Disney include 2,594,632 shares as
to which Mr. Disney disclaims beneficial ownership, consisting of 1,507,520
shares owned by Mr. Disney's wife; 1,086,696 shares held in trusts for the
benefit of his four children, of which Mr. Disney is the trustee; and 416
shares owned by a subsidiary of 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 grand children.
(6) Mr. Wells' stock ownership is reported as of April 3, 1994, the date of his
death.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership and
reports of changes of ownership of the Company's Common Stock with the
Securities and Exchange Commission. Executive officers and directors are
required to furnish the Company with copies of all Section 16(a) forms that they
file. Based upon a review of these filings and written representations from
certain of the Company's directors and executive officers that no other reports
were required, the Company notes that Robert A.M. Stern inadvertently failed to
report the purchase of 40 shares on September 1, 1994. That purchase was
subsequently reported.
ITEM 1--ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes, as
nearly equal in number as possible. Each class serves three years, with the
terms of office of the respective classes expiring in successive years. The term
of office of directors in Class II expires at the 1995 Annual Meeting. The Board
of Directors proposes that the nominees described below, all of whom are
currently serving as Class II directors, be elected to Class II for a new term
of three years and until their successors are duly elected and qualified. The
Board of Directors has no reason to believe that any of the nominees will not
serve if elected, but if any of them should become unavailable to serve as a
director, and if the Board designates a substitute nominee, the persons named as
proxies will vote for the substitute nominee designated by the Board.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting. If elected, all nominees are expected to serve until the 1998 Annual
Meeting and until their successors are duly elected and qualified.
3
<PAGE>
DIRECTORS STANDING FOR ELECTION--CLASS II
RICHARD A. NUNIS Director since 1981
Mr. Nunis, 62, is Chairman of Walt Disney Attractions, a principal business
of the Company encompassing the Company's theme parks and resorts, and has
been a senior executive of the Company or a subsidiary thereof for more than
the past five years. He is also a member of the Boards of Directors of Sun
Banks, N.A. and Florida Progress Corporation, a diversified holding company
whose interests include an electric utility. Mr. Nunis is a member of the
Travel and Tourism Advisory Board of the U.S. Department of Commerce and a
director or trustee of several educational, civic and charitable
organizations, including the University of Central Florida.
SIDNEY POITIER Director since 1994
Mr. Poitier, 67, was elected to the Board of Directors on November 21, 1994
to fill the vacancy created by the death of Frank G. Wells. The actor,
director and writer is the Chief Executive Officer of Verdon-Cedric
Productions, a film production company, and a member of the Boards of
Directors of SpectraVision, Inc., a designer and operator of closed-circuit
television movie viewing systems, and Sarah Lawrence College. Mr. Poitier
has won many awards, including the Academy Award for Best Actor and the
American Film Institute's Lifetime Achievement Award. He belongs to numerous
civic organizations, including the Children's Defense Fund, the NAACP Legal
Defense and Education Fund and the Natural Resources Defense Council.
ROBERT A.M. STERN Director since 1992
Mr. Stern, 55, is a practicing architect, teacher and writer. He is Senior
Partner of Robert A.M. Stern Architects of New York, which he founded, and a
Fellow of the American Institute of Architects. Mr. Stern is also a
professor at the Graduate School of Architecture, Planning and Preservation
at Columbia University in New York, where he is Director of the Historic
Preservation Program. Mr. Stern was the architect of the Yacht and Beach
Club hotels and the Casting Center at the Walt Disney World Resort and the
Newport Bay Club and the Cheyenne Hotel at Disneyland-Paris. He is also the
architect of Disney's Boardwalk Hotel currently in design for the Walt
Disney World Resort and the Feature Animation Building at the Company's
headquarters in Burbank, California.
E. CARDON WALKER Director since 1960
Mr. Walker, 78, was a senior executive of the Company for more than 25 years
until 1984, serving as President from 1971 to 1977 and Chairman of the Board
and Chief Executive Officer from 1980 to 1983. From 1984 through 1989, he
provided consulting and other services to the Company.
DIRECTORS CONTINUING IN OFFICE
CLASS III--TERM EXPIRES AT THE 1996 ANNUAL MEETING
REVETA F. BOWERS Director since 1993
Mrs. Bowers, 46, has been the Head of School for the Center for Early
Education, an independent school for pre-school through sixth grade located
in Los Angeles, since 1976. Mrs. Bowers is a member of the Board of
Directors of several non-profit educational organizations, including the
National Association of Independent Schools and Educational Records Bureau,
Inc. She is also a trustee of Harvard-Westlake School, an independent high
school located in Los Angeles.
4
<PAGE>
ROY E. DISNEY Director since June
1984; also from 1967
to March 1984
Mr. Disney, 64, has been Vice Chairman of the Board of Directors of the
Company since 1984, and since November 1985 has also served as head of the
Company's animation department. In addition, Mr. Disney is Chairman of the
Board of Shamrock Holdings, Inc., which, through its subsidiaries, is
engaged in real estate development and the making of investments. Mr. Disney
is a nephew of the late Walt Disney.
IGNACIO E. LOZANO, JR. Director since 1981
Mr. Lozano, 67, is Chairman and Editor-in-Chief of Lozano Enterprises, which
publishes LA OPINION, the largest Spanish-language newspaper in the Los
Angeles metropolitan area. Mr. Lozano was Publisher and Editor of LA OPINION
from 1953 to 1986, except for the period from 1976 through 1977 when he was
the United States Ambassador to El Salvador. Mr. Lozano is a member of the
Boards of Directors of Bank America Corporation, a bank holding company;
Bank of America N.T & S.A.; Pacific Enterprises, a holding company with
interests in a natural gas public utility; Pacific Mutual Life Insurance
Company; and a number of public service and charitable organizations.
GARY L. WILSON Director since 1985
Mr. Wilson, 54, is Co-Chairman of the Board of Northwest Airlines
Corporation. From July 1985 through December 1989, he was Executive Vice
President and Chief Financial Officer of the Company. Prior to joining the
Company, Mr. Wilson was Executive Vice President and Chief Financial Officer
of Marriott Corporation, a diversified company involved in lodging, food
service and related businesses.
CLASS I--TERM EXPIRES AT THE 1997 ANNUAL MEETING
MICHAEL D. EISNER Director since 1984
Mr. Eisner, 52, is Chairman of the Board and Chief Executive Officer of the
Company. Prior to joining the Company in September 1984, Mr. Eisner was
President and Chief Operating Officer of Paramount Pictures Corp., which was
then a wholly owned subsidiary of Gulf+Western Industries, Inc. Prior to
joining Paramount in 1976, Mr. Eisner was Senior Vice President, Prime Time
Programming, for ABC Entertainment, a division of the American Broadcasting
Company, Inc., with responsibility for the development and supervision of
all prime-time series programming, limited series movies made for television
and the acquisition of talent.
STANLEY P. GOLD Director since 1987;
also from June 1984
to September 1984
For more than the past five years, Mr. Gold, 52, has served as President and
Chief Executive Officer of Shamrock Holdings, Inc. Since January 1, 1990,
Mr. Gold has been President of Trefoil Investors, Inc., the general partner
of Trefoil Capital Investors, L.P., an investment partnership, as well as
President of Shamrock Capital Advisors, Inc., which acts as manager of the
partnership. Mr. Gold is also Chairman of the Board of Directors of L.A.
Gear, Inc., a manufacturer and distributor of athletic and casual footwear.
5
<PAGE>
IRWIN E. RUSSELL Director since 1987
Mr. Russell, 68, is an attorney engaged in private practice specializing in
the entertainment industry. From 1989 to 1992 he served of counsel to the
law firm of Rudin, Appel & Rosenfeld. From 1980 through September 1986, he
was senior partner in the law firm of Russell & Glickman. From 1971 to 1976,
Mr. Russell was Executive Vice President, Treasurer and Director of The
Wolper Organization, Inc., a film production company. Mr. Russell serves as
an ad hoc arbitrator for the Federal Mediation and Conciliation Service and
the American Arbitration Association.
RAYMOND L. WATSON Director since 1974
Mr. Watson, 68, has served as Chairman of the Executive Committee of the
Company's Board of Directors since September 1984 and was Chairman of the
Board of the Company from May 1983 to September 1984. Since September 1986,
Mr. Watson has been Vice Chairman of the Board of The Irvine Company, a land
development company. From 1985 to 1986, he was Regents Professor in the
Graduate School of Management at the University of California, Irvine. Mr.
Watson is also a member of the Boards of Directors of Pacific Mutual Life
Insurance Company; Mitchell Energy & Development Co., a company engaged in
oil and gas exploration, production, distribution and land development; and
Irvine Apartment Communities, Inc., a real estate investment trust engaged
in the development and management of apartment units.
DIRECTORS' REMUNERATION; ATTENDANCE
Directors who are also full-time employees of the Company receive no
additional compensation for services as directors. During the Company's fiscal
year ending September 30, 1994 ("Fiscal 1994"), each nonemployee director
received an annual retainer fee in the amount of $27,500, together with a fee of
$1,000 per Board or Committee meeting attended. Any individual director
receiving these fees may elect to defer payment of all or any part of them
pursuant to the Company's Deferred Compensation Plan for Outside Directors
until, generally, after the termination of that director's relationship with the
Company or until after that director attains a specified age. Reveta F. Bowers
is currently participating in this plan.
The Board of Directors met nine times during Fiscal 1994. No director
attended fewer than 75% of the total number of meetings of the Board and
Committees on which such director served.
COMMITTEES OF THE BOARD
The Board has standing Executive, Compensation, Audit Review and Nominating
Committees.
EXECUTIVE COMMITTEE. The Executive Committee is composed of Messrs. Disney,
Eisner, Nunis and Watson (Chairman). In Fiscal 1994, the Executive Committee did
not meet but took action by unanimous written consent 12 times. The Executive
Committee possesses all of the powers of the Board except the power to issue
stock, approve mergers with nonaffiliated corporations or declare dividends
(except at a rate or in a periodic amount or within a price range established by
the Board), and certain other powers specifically reserved by Delaware law to
the Board.
COMPENSATION COMMITTEE. The Compensation Committee, composed of Messrs.
Lozano, Russell (Chairman) and Watson, met seven times during Fiscal 1994. Its
functions are to review the Company's general compensation strategy; establish
salaries and review benefit programs (including pensions) for the Chief
Executive Officer and those persons who report directly to him; review, approve,
recommend and administer the Company's incentive compensation and stock option
plans and certain other compensation plans; and approve certain employment
contracts.
6
<PAGE>
AUDIT REVIEW COMMITTEE. The Audit Review Committee, composed of Ms. Bowers
and Messrs. Lozano (Chairman), Walker, Watson and Williams, met twice during
Fiscal 1994. Its functions are to recommend the appointment of independent
accountants; review the arrangements for and scope of the audit by independent
accountants; review the independence of the independent accountants; consider
the adequacy of the system of internal accounting controls and review any
proposed corrective actions; review and monitor the Company's policies regarding
business ethics and conflicts of interests; discuss with management and the
independent accountants the Company's draft annual financial statements and key
accounting and/or reporting matters; and review the activities and
recommendations of the Company's Management Audit Department.
NOMINATING COMMITTEE. On November 21, 1994, the Board of Directors
established a Nominating Committee, composed of Ms. Bowers and Messrs. Gold
(Chairman) and Wilson. Its functions are to solicit recommendations for
candidates for the Board of Directors; develop and review background information
for candidates; make recommendations to the Board regarding such candidates; and
review and make recommendations to the Board for candidates for directors
proposed by stockholders.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON COMPENSATION OF EXECUTIVE OFFICERS OF THE
COMPANY
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
EXECUTIVE OFFICER COMPENSATION
The Company's compensation program for executive officers (other than the
Chief Executive Officer and the Company's former Chief Operating Officer, who
are compensated pursuant to agreements described in "Employment Agreements"
below) consists of three key elements: a base salary, a discretionary annual
bonus and periodic grants of stock options. The Committee believes that this
approach best serves the interests of stockholders by ensuring that executive
officers are compensated in a manner that advances both the short-and long-term
interests of stockholders. Thus, compensation for the Company's executive
officers involves a high proportion of pay which is at risk: the variable annual
bonus (which permits individual performance to be recognized on an annual basis,
and which is based, in part, on an evaluation of the contribution made by the
officer to Company performance) and stock options (which directly relate a
significant portion of the executive officer's long-term remuneration to stock
price appreciation realized by the Company's stockholders).
BASE SALARY. Salaries paid to executive officers (other than the Chief
Executive Officer and the Company's former Chief Operating Officer and one other
executive officer who was also employed pursuant to an employment agreement) are
reviewed annually by the Chief Executive Officer based upon his subjective
assessment of the nature of the position, and the contribution, experience and
Company tenure of the executive officer. The Senior Executive Vice President and
Chief of Corporate Operations (the "Chief of Corporate Operations"), under the
Chief Executive Officer's direction, reviews all salary recommendations with the
Compensation Committee, which is responsible for approving or disapproving those
recommendations. The Chief Executive Officer reviews any salary recommendations
for the Chief of Corporate Operations with the Compensation Committee, which
then approves or disapproves such recommendations.
ANNUAL BONUS. Following each fiscal year, the Chief Executive Officer,
working with the Chief of Corporate Operations and other Company executives,
develops a Company-wide bonus pool, which excludes payments to be made to the
Chief Executive Officer and the Company's former Chief Operating
7
<PAGE>
Officer. The size of the bonus pool is based upon a subjective assessment of
overall Company and individual business unit performance as compared to both
budgeted and prior fiscal year performance, and the extent to which the Company
achieved its overall financial goals of growth in earnings and return on
stockholders' equity. The amount of the bonus pool is subject to the approval of
both the Committee and the Board of Directors as a whole. Once the overall bonus
pool is approved, the Chief Executive Officer makes individual bonus
recommendations for executive officers based upon his evaluation of each
executive officer's direct contribution to Company performance. The Chief
Executive Officer reviews each executive officer's fiscal year performance and
contribution and the rationale for that executive officer's recommended bonus
with the Committee before the Committee is asked to approve the bonus. The Chief
Executive Officer's and the former Chief Operating Officer's nondiscretionary
annual bonuses were awarded pursuant to the terms of their employment
agreements, which are described under "Employment Agreements" below.
In approving the bonus pool for Fiscal 1994, the Committee took into account
the Company's improved performance during the year, particularly in the filmed
entertainment and consumer products segments. The Committee approved
significantly larger Fiscal 1994 bonuses for the Chief of Corporate Operations,
the Executive Vice President--Strategic Planning and Development and the
Executive Vice President and Chief Financial Officer in recognition of their
performances in carrying out their increased responsibilities following the
death of the Company's Chief Operating Officer, as well as their contribution as
chief negotiators and contributors on the Company's behalf in the financial
restructuring of Euro Disney S.C.A.
STOCK OPTIONS. In 1992, the Company reviewed the long-term incentive
practices of Fortune 100-sized companies with five-year stockholder return
levels that are comparable to the Company's. Based on that study, and to ensure
that executive officers hold equity stakes in the Company, the Chief Executive
Officer and other members of the Company's senior management determined that
continued use of stock options was the best mechanism for long-term incentive
compensation of executive officers. Accordingly, the Company's management
modified the existing stock option grant guidelines, and the results of the
study and these guidelines were reviewed and approved by the Committee.
Under the approved guidelines, stock option grants may be made to executive
officers when one of the following events occurs: upon initial employment, upon
promotion to a new, higher level position that entails increased responsibility
and accountability, and/or when all previously granted stock options have either
fully vested or are within 12 months of full vesting. Using the guidelines, the
Chief of Corporate Operations, under the direction of the Chief Executive
Officer, recommends the number of options to be granted, within a range
associated with the individual's salary level, and presents this to the
Committee for its review and approval. The Chief Executive Officer and/or the
Chief of Corporate Operations may make a recommendation to the Committee that
deviates from the guidelines, where they deem it appropriate. While options
typically vest over a minimum five-year period, options granted to certain
executive officers have longer vesting periods. The Chief Executive Officer
reviews any proposed stock option grant for the Chief of Corporate Operations
directly with the Compensation Committee, which then approves or disapproves the
grant.
During Fiscal 1994, the Committee approved stock option grants with respect
to 200,000 shares of Common Stock for each of the Company's Chief of Corporate
Operations and Chief Financial Officer in connection with their respective
promotions and assumption of additional responsibilities as described above. The
Chief Executive Officer reviewed stock options held by other executive officers
and business unit heads to ensure that these grants were within a fair and
appropriate range before recommending them to the Committee. The options were
granted at fair market value on the date of grant, have a ten-year exercise term
and will vest over a five-year period in the case of the options granted to the
Chief of Corporate Operations and seven-year period in the case of the options
granted to the Chief Financial Officer.
8
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
As Chief Executive Officer, Mr. Eisner is compensated pursuant to an
employment agreement described under "Employment Agreements" below. An
independent consultant, retained by the Board of Directors, reviewed the
compensation set forth in Mr. Eisner's employment agreement prior to the Board's
approval of that agreement in 1989. Mr. Eisner's compensation is substantially
related to the Company's performance because his employment agreement provides
for a nondiscretionary annual bonus, determined pursuant to a specific formula
which is based on the Company's achievement of defined stockholder return
levels, and stock options (75% of which were granted at an exercise price equal
to and 25% of which were granted at an exercise price $10 above the then-current
fair market value of the Company's Common Stock).
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993 and applicable
to the Company beginning with its 1995 fiscal year, generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
corporation's Chief Executive Officer and four other most highly compensated
executive officers. The Company believes that Section 162(m) does not apply to:
(i) compensation paid to the Chief Executive Officer under his current
employment agreement, dated as of January 11, 1989 (see "Employment Agreements"
below) or (ii) stock options currently outstanding or subsequently granted under
the Company's existing stock option plans.
Section 162(m) provides that qualifying performance-based compensation will
not be subject to the deduction limit if certain requirements are met. The
Company currently intends to structure grants under future stock option plans in
a manner that complies with this statute. The Company does not currently intend
to structure the discretionary annual bonus for executive officers described
under "Annual Bonus" above to comply with Section 162(m). Such bonuses do not
meet Section 162(m)'s requirement that they be "payable solely on account of the
attainment of one or more performance goals." The Company believes the annual
discretionary bonuses, as currently structured, best serve the interests of the
Company and its stockholders by allowing the Company to recognize an executive
officer's contribution as appropriate.
Members of the Compensation Committee
IRWIN E. RUSSELL (CHAIRMAN)
IGNACIO E. LOZANO, JR.
RAYMOND L. WATSON
EMPLOYMENT AGREEMENTS
Mr. Eisner serves the Company pursuant to an employment agreement dated as
of January 11, 1989, which provides for his employment as Chairman and Chief
Executive Officer of the Company through September 30, 1998. Mr. Eisner's base
salary is $750,000 per year through the entire term of the agreement. In
addition, his agreement provides for a nondiscretionary annual bonus equal to 2%
of the amount (the "Bonus Base") by which the Company's net income for the
fiscal year exceeds the amount representing a return on stockholder's equity of
11% (9% for 1989 and 1990). Mr. Eisner's bonuses for the first two years of the
agreement were payable in cash; thereafter, bonuses, to the extent earned, are
payable in cash to the extent the return on stockholders' equity is equal to or
less than 17.5%, and in restricted stock, as defined in the employment
agreement, to the extent of any amount over 17.5%. Mr. Eisner's employment
agreement provided for a single stock option grant (made on January 11, 1989)
with respect to 8,000,000 shares of Common Stock. Of the options granted, 25%
were granted at a exercise price $10 above the then-current fair market value of
the Common Stock, with the remaining 75% granted at a price equal to fair market
value. In the event of death or disability, Mr. Eisner's employment agreement
provides for continued payment of base
9
<PAGE>
salary for the remaining term of the agreement and continued payment of annual
bonuses for 24 months. Mr. Eisner is entitled to termination payments under
certain circumstances and is indemnified up to stated limits in respect of
potential tax liabilities for certain of such payments.
Until his death on April 3, 1994, Mr. Wells served the Company pursuant to
an employment agreement dated as of January 11, 1989, which provided for his
employment as President and Chief Operating Officer through December 31, 1994.
Mr. Wells' compensation pursuant to his agreement consisted of a base salary of
$400,000 per year, with an annual bonus equal to 1% of the Bonus Base. Under his
agreement, his annual bonus, to the extent earned, was payable in cash to the
extent the return on stockholders' equity was equal to or less than 17.5% and in
restricted stock to the extent of any amount over 17.5%. Mr. Wells' employment
agreement also provided that all restrictions on such restricted stock grants
ceased upon his death. His agreement provided for a single stock option grant
(made on January 11, 1989) with respect to 3,000,000 shares of Common Stock, 25%
of which were granted at an exercise price $10 above the then-current fair
market value of the Common Stock, with the remaining 75% granted at a price
equal to fair market value.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors Lozano, Russell and Watson comprise the Company's Compensation
Committee. Messrs. Lozano and Russell are nonemployee directors. Mr. Watson was
Chairman of the Board of Directors of the Company from May 1983 to September
1984, but he has not served as a Company employee since that time.
EXECUTIVE COMPENSATION SUMMARY TABLE
The following table sets forth information concerning total compensation
earned or paid to the Chief Executive Officer, the four most highly compensated
executive officers of the Company who served in such capacities on September 30,
1994 and the Company's former Chief Operating Officer (the "named executive
officers") for services rendered to the Company during each of the last three
fiscal years.
10
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------- -------------------------- ALL OTHER
NUMBER OF RESTRICTED COMPENSATION
NAME AND PRINCIPAL FISCAL STOCK OPTIONS STOCK (1993/1994
POSITIONS YEAR SALARY (4) BONUS (5) GRANTED AWARDS (7) ONLY) (8)(9)
- ------------------------------ ------ ---------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael D. Eisner ............ 1994 $ 750,000 $7,268,807 -- $2,638,394 $9,730
Chief Executive Officer and 1993 750,000 -- -- -- 9,667
Chairman of the Board 1992 764,423 6,694,558 -- --
Sanford M. Litvack (1) ....... 1994 $ 500,000 $1,600,000 200,000 -- $9,731
Senior Executive Vice 1993 500,000 375,000 -- -- 9,992
President and Chief of 1992 509,616 350,000 -- --
Corporate Operations
Lawrence P. Murphy ........... 1994 $ 436,846 $800,000 -- -- $9,701
Executive Vice President-- 1993 408,558 375,000 -- -- 10,151
Strategic Planning and 1992 405,578 350,000 -- --
Development
Richard D. Nanula (2) ........ 1994 $ 382,212 $800,000 200,000 -- $9,699
Executive Vice President and 1993 329,166 350,000 -- -- 5,513
Chief Financial Officer 1992 287,056 275,000 -- --
Roy E. Disney ................ 1994 $ 350,000 $500,000 -- -- $6,670
Vice Chairman of the Board 1993 350,000 450,000 -- -- 5,532
1992 356,732 250,000 -- --
Frank G. Wells (3) ........... 1994 $ 200,000 $2,476,801 -- -- $3,076,801
President and Chief Operating 1993 400,000 -- -- -- 13,934
Officer 1992 407,692 3,347,279 -- --
<FN>
- ------------------------
(1) Mr. Litvack assumed this position on August 24, 1994; prior to that he was
Executive Vice President-- Law and Human Resources.
(2) Mr. Nanula assumed his current position on February 22, 1994; prior to that
he was Senior Vice President and Chief Financial Officer. On November 8,
1994, Mr. Nanula assumed the position of President of The Disney Store
Worldwide.
(3) Mr. Wells held this position until his death on April 3, 1994 and is
included in the executive compensation tables in accordance with the rules
of the Securities and Exchange Commission ("S.E.C").
(4) The amount reported as Mr. Wells' Fiscal 1994 salary is for services
rendered prior to his death, as required by the S.E.C.'s rules. Salary
figures for all named executive officers reflect 53 weekly pay periods
included in Fiscal 1992.
(5) Mr. Eisner's and Mr. Wells' bonuses were calculated pursuant to the bonus
formulas set forth in their employment agreements (see "Employment
Agreements" above). For Fiscal 1994, Mr. Eisner received a cash bonus of
$7,268,807 and 60,618 shares of restricted stock (valued at $2,638,394)
pursuant to the formula set forth in his employment agreement. In
accordance with the S.E.C.'s rules, (i) the cash and restricted stock
portions of Mr. Eisner's bonus are reported separately in, respectively,
the "Bonus" and "Restricted Stock" columns above, (ii) the amount reported
as Mr. Wells' Fiscal 1994 bonus is for services rendered prior to his death
and (iii) compensation paid to Mr. Wells' estate during or with respect to
Fiscal 1994 is reported in the "All Other Compensation" column above. For
Fiscal 1993, the
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Company did not meet the bonus threshold set forth in Mr. Eisner's and Mr.
Wells' employment agreements and they accordingly did not receive bonuses
for that fiscal year. All other bonuses reported in this column were paid
pursuant to the Company's bonus policies and practices as described in the
"Compensation Committee Report" above.
(6) In accordance with the S.E.C.'s rules, amounts relating to Fiscal 1992, if
any, and amounts totalling less than $50,000 have been omitted.
(7) Mr. Eisner received 60,618 shares of restricted stock for part of his
Fiscal 1994 bonus pursuant to the formula in his employment agreement (see
"Employment Agreements" above). Pursuant to Mr. Eisner's employment
agreement, the restricted stock value is based upon the average closing
price for the Company's Common Stock between November 28 and December 9,
1994 ($43.525 per share). Mr. Eisner is entitled to receive dividends on
the restricted stock, and all restrictions will lapse on the third
anniversary following the date of grant, or earlier in the event of death
or certain corporate transactions that eliminate or materially impair the
market for the Company's Common Stock.
(8) In accordance with the S.E.C.'s rules, amounts related to Fiscal 1992, if
any, have been omitted. The Company provides the named executive officers
with certain group life, health, medical and other non-cash benefits
generally available to all salaried employees and not included in this
column pursuant to the S.E.C.'s rules. The amounts shown in this column
include the following:
(a) The Disney Salaried Savings and Investment Plan (the "Savings Plan")
currently permits salaried employees of the Company to elect to make
tax-deferred contributions of a portion of their base compensation.
Amounts deferred through payroll deductions are contributed by the
Company on behalf of a participant as tax-deferred contributions
pursuant to Section 401(k) of the Internal Revenue Code. Under the
Savings Plan, the Company currently matches a participant's first 4%
of tax-deferred contributions by an amount equal to 50% of such
contribution for each year, subject to a maximum of 2% of the
participant's compensation for that year. Participants may allocate
their contributions among six investment funds, including a fund
investing in the Company's Common Stock. All Company matching
contributions are invested in Common Stock of the Company. During
Fiscal 1994, the Company's matching contributions were $3,060 for Mr.
Eisner, $3,061 for Mr. Litvack, $3,031 for Mr. Murphy, $3,029 for Mr.
Nanula, $0 for Mr. Disney, who did not participate in the Plan, and
$2,154 for Mr. Wells.
(b) The Company provides certain key employees with personal liability
insurance coverage up to $5,000,000. Benefits under the plan
supplement each employee's personal homeowner's and automobile
liability insurance coverage. During Fiscal 1994, the Company paid
$520 in premiums on behalf of each of the named executive officers
except for Mr. Wells.
(c) The Supplemental Medical Plan is a fully insured hospital and medical
expense reimbursement plan covering certain key management employees
and their dependents. The plan provides coverage for 100% of medical
expenses incurred (with certain limited exceptions) up to 20% of the
employee's annual salary in any one year, provided that the expenses
are not covered by the Company's Major Medical Plan, which is
available to all salaried employees of the Company. The Company pays
the full cost of premiums for the Supplemental Medical Plan, as well
as premiums for additional voluntary insurance under the Company's
group life insurance plan. During Fiscal 1994, premiums of $6,150 were
paid on behalf of each of the named executive officers.
(9) In accordance with the S.E.C.'s rules, the figure reported for Mr. Wells
includes the following amounts paid during Fiscal 1994 in connection with
his death: half of his base salary ($200,000), half of the Fiscal 1994
bonus ($2,476,801), base salary from October 1 through December 30, 1994
($100,000) (see "Employment Agreements" above), and payments under the
Company's Family Income Assurance Plan ($300,000).
</TABLE>
12
<PAGE>
OPTION GRANTS FOR FISCAL 1994 AND POTENTIAL REALIZABLE VALUES
The following table sets forth as to each of the named executive officers
information with respect to option grants during Fiscal 1994 and the potential
realizable value of such option grants: (i) the number of shares of Common Stock
underlying options granted during Fiscal 1994, (ii) the percentage that such
options represent of all options granted to employees during Fiscal 1994, (iii)
the exercise price, (iv) the expiration date and (v) the potential realizable
value, assuming a 5% and 10% annual rate of appreciation in the Common Stock
during the option terms. The table also sets forth a hypothetical potential
realizable value during a corresponding 10-year term, assuming a 5% and 10%
annual rate of appreciation, for all stockholders. The 5% and 10% assumed rates
of growth are for illustrative purposes only. They are not intended to predict
future stock prices, which will depend on market conditions and other factors
such as the Company's performance.
OPTION GRANTS DURING FISCAL 1994
AND
ASSUMED POTENTIAL REALIZABLE VALUES
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------------------ AT ASSUMED ANNUAL RATES OF
% OF TOTAL STOCK PRICE APPRECIATION
NUMBER OF OPTIONS GRANTED EXERCISE FOR OPTION TERM (3)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION ------------------------------------
NAME GRANTED (3) FISCAL YEAR ($/SHARE) DATE 5% 10%
- --------------------------- ----------- --------------- ----------- ----------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Michael D. Eisner.......... -- -- -- -- -- --
Sanford M. Litvack......... 200,000 3.12% $39.875 9/26/2004 $5,015,435 $12,710,096
Lawrence P. Murphy......... -- -- -- -- -- --
Richard D. Nanula.......... 200,000 3.12% 39.875 9/26/2004 $5,015,435 $12,710,096
Roy E. Disney.............. -- -- -- -- -- --
Frank G. Wells............. -- -- -- -- -- --
All Stockholders (1)....... N/A N/A N/A N/A $13,209,443,811 $33,475,324,133
<FN>
- ------------------------
(1) The potential realizable gain to stockholders (based on 535,139,473 shares
outstanding and a fair market value of $39.25 per share on September 30,
1994 and 5% and 10% assumed annual rates over a term of ten years,
commencing on October 1, 1994), is provided as a comparison to the
potential gain realized by the named executive officers at the same assumed
annual rates of stock appreciation.
(2) Mr. Litvack's options become exercisable in 12.5% installments on the first
and second and 25% installments on the third through fifth anniversaries
following the date of grant. Mr. Nanula's options become exercisable in 5%
installments on the first through fourth anniversaries of grant, 27%
installments on the fifth and sixth anniversaries and a 26% installment on
the seventh anniversary of grant.
(3) Amounts for the named executive officers shown under the "Potential
Realizable Value" columns above have been calculated by multiplying the
exercise price by the annual appreciation rate shown (compounded for the
term of the options), subtracting the exercise price per share and
multiplying the gain per share by the number of shares covered by the
options.
</TABLE>
OPTION EXERCISES AND VALUES FOR FISCAL 1994
The following table sets forth as to each of the named executive officers
information with respect to option exercises during Fiscal 1994 and the status
of their options on September 30, 1994: (i) the number of shares of Common Stock
underlying options exercised during Fiscal 1994, (ii) the aggregate dollar value
13
<PAGE>
realized upon the exercise of such options, (iii) the total number of
exercisable and non-exercisable stock options held on September 30, 1994 and
(iv) the aggregate dollar value of in-the-money exercisable options on September
30, 1994.
AGGREGATED OPTION EXERCISES DURING FISCAL 1994
AND
OPTION VALUES ON SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
NUMBER OF
SHARES NUMBER OF VALUE OF UNEXERCISED
ACQUIRED UNEXERCISED OPTIONS ON IN-THE-MONEY OPTIONS
UPON 9/30/94 9/30/94 (2)
EXERCISE OF VALUE REALIZED --------------------------- ---------------------------
NAME OPTION UPON EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- -------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Michael D. Eisner....................... -- -- 5,000,000 3,000,000 $107,425,000 $64,455,000
Sanford M. Litvack...................... -- -- 240,000 460,000 2,535,120 2,746,380
Lawrence P. Murphy...................... -- -- 212,000 240,000 3,484,564 3,044,720
Richard D. Nanula....................... -- -- 107,200 412,000 1,325,769 2,330,908
Roy E. Disney........................... -- -- 160,000 -- 2,570,080 --
Frank G. Wells (1)...................... -- -- 3,000,000 -- 64,455,000 --
<FN>
- ------------------------
(1) Mr. Wells' unvested options (600,000) vested on the date of his death
pursuant to the terms of the Company's 1987 Stock Incentive Plan.
(2) In accordance with the S.E.C.'s rules, values are calculated by subtracting
the exercise price from the fair market value of the underlying Common
Stock. For purposes of this table, fair market value is deemed to be
$39.25, the average of the high and low Common Stock price reported for the
New York Stock Exchange Composite Transactions on September 30, 1994.
</TABLE>
COMPARISON OF FIVE-AND TEN-YEAR AND CUMULATIVE TOTAL RETURNS
The following two graphs compare the performance of the Company's Common
Stock with the performance of the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500 Index") and a peer group index over the periods from,
respectively, September 30, 1989 and September 30, 1984 (shortly after Mr.
Eisner became the Company's Chairman and Chief Executive Officer on September
11, 1984). The graphs assume that $100 was invested on, respectively, September
30, 1989 and September 30, 1984 in each of the Company's Common Stock, the S&P
500 Index and the peer group index, and that all dividends were reinvested.
Because the Company is involved in a wide variety of entertainment/leisure,
consumer products and media businesses, no published peer group accurately
mirrors the Company's businesses or weighs those businesses to match their
relative contributions to the Company's overall performance. Accordingly, the
Company has created a special peer group index that includes companies in the
principal lines of business in which the Company does business. The common
stocks of the following companies have been included in the peer group index:
Capital Cities/ABC, Inc., Club Med, Inc., Hasbro, Inc., Hilton Hotels Corp.,
King World Productions, Inc., Mattel, Inc., Paramount Communications Inc., Time
Warner Inc., Turner Broadcasting System, Inc. and Viacom Inc. Paramount
Communications Inc.'s stock is included in the peer group index until July 7,
1994, when it became a subsidiary of Viacom Inc. Host Marriott Corp., which was
previously included in the peer group, has been removed as a result of the
spinoff of its hotel management business in October 1993. The peer group weighs
the constituent companies' stock performance on the basis of market
capitalization, measured at the beginning of each relevant time period.
14
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, S&P 500 INDEX AND PEER GROUP INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
THE WALT DISNEY COMPANY S&P 500 SELECTED PEER GROUP
<S> <C> <C> <C>
1989 100 100 100
1990 75 91 64
1991 95 119 76
1992 122 132 90
1993 128 149 134
1994 132 156 122
</TABLE>
PERFORMANCE GRAPH
COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, S&P 500 INDEX AND PEER GROUP INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
THE WALT DISNEY COMPANY S&P 500 SELECTED PEER GROUP
<S> <C> <C> <C>
1984 100 100 100
1985 150 114 133
1986 290 151 181
1987 573 216 259
1988 482 189 242
1989 903 251 387
1990 677 228 247
1991 861 299 296
1992 1101 332 348
1993 1154 375 518
1994 1192 393 474
</TABLE>
15
<PAGE>
RETIREMENT PLANS
The Company maintains a tax-qualified, noncontributory retirement plan for
salaried employees called the Disney Salaried Retirement Plan (the "Retirement
Plan"). Certain provisions of the Retirement Plan become effective if there is a
change in control of the Company (as defined in the Retirement Plan document).
These provisions prevent any assets of the Retirement Plan from reverting to the
Company and any transfers of assets or liabilities to or from the Retirement
Plan, and prevent any amendments to the Retirement Plan. In addition, the
Company maintains a nonqualified, unfunded plan, the Amended and Restated Key
Plan (the "Restated Key Plan"), which provides retirement benefits for key
salaried employees.
The table set forth below illustrates the total combined estimated annual
benefits payable under the Retirement Plan and the Restated Key Plan to eligible
salaried employees for years of service assuming normal retirement at age 65.
RETIREMENT PLAN AND RESTATED KEY PLAN
<TABLE>
<CAPTION>
AVERAGE
ANNUAL BASE
COMPENSATION YEARS OF SERVICE
FOR HIGHEST FIVE ------------------------------------------------
CONSECUTIVE YEARS 15 20 25 30 35
- ---------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 150,000.............................. $ 45,444 $ 60,621 $ 75,906 $ 91,050 $104,925
300,000.............................. 88,757 118,371 148,094 177,675 205,988
450,000.............................. 132,069 176,121 220,281 264,300 307,050
600,000.............................. 175,382 233,871 292,469 350,925 408,113
750,000.............................. 218,694 291,621 364,656 437,550 509,175
1,000,000.............................. 290,882 387,871 484,969 581,925 677,613
</TABLE>
The Retirement Plan covers salaried employees who have completed one year of
service. Benefits under the Retirement Plan are based primarily on the
participant's credited years of service and average base compensation (base
compensation excludes other compensation such as bonuses) for the highest five
consecutive years of compensation during the ten-year period prior to
termination or retirement, whichever is earlier. In addition, a portion of each
participant's retirement benefit is comprised of a flat dollar amount based
solely on years and hours of credited service. Benefits are non-forfeitable
after five years of vesting service, and actuarially reduced benefits are
available for participants who retire on or after age 55 after five years of
vesting service. The Restated Key Plan provides retirement benefits for key
salaried employees in excess of maximum benefit accruals for qualified plans
permitted under Code procedures. In calendar year 1994, the maximum annual
benefit accruable under a tax-qualified plan was $118,800. The benefits provided
under the Restated Key Plan are provided by the Company on a noncontributory
basis.
As of December 1, 1994, the estimated annual payments for services under the
Retirement Plan and the Restated Key Plan would be based upon an average
compensation of $750,000 for Mr. Eisner, $505,770 for Mr. Litvack, $382,366 for
Mr. Murphy, $277,000 for Mr. Nanula and $350,001 for Mr. Disney. Mr. Wells'
actual retirement benefit is based upon an average compensation of $401,539 and
nine years of service because he died during Fiscal 1994. Messrs. Eisner and
Disney each have ten years, Mr. Litvack has four years and Messrs. Nanula and
Murphy each have nine years of credited service for the plans. The table set
forth above illustrates estimated benefits payable determined on a straight-life
annuity basis. There is no offset in benefits under either plan for Social
Security benefits.
16
<PAGE>
RELATED TRANSACTIONS
During Fiscal 1994, E. Cardon Walker received payments totalling $19,374
with respect to films in which he had invested between 1963 and 1979 under a
former investment participation incentive program of the Company, but as to
which he had not yet recovered the amount of such investment, and $816,564 as
his net profit participation in prior years' programs.
During Fiscal 1994, a subsidiary of the Company retained the firm of Robert
A.M. Stern Architects, of which Mr. Stern is Senior Partner, for architectural
services relating to resort and office developments in California and Florida.
Payments to Mr. Stern's firm for these services aggregated approximately
$669,895 during Fiscal 1994.
ITEM 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Company has appointed Price Waterhouse LLP as the Company's independent
accountants for the fiscal year ending September 30, 1995 ("Fiscal 1995"). Price
Waterhouse LLP has served as the Company's independent accountants since the
incorporation of Walt Disney Productions in 1938. Services provided to the
Company and its subsidiaries by Price Waterhouse LLP with respect to Fiscal 1994
included the examination of the Company's consolidated financial statements,
limited reviews of quarterly reports, services related to filings with the
Securities and Exchange Commission and consultations on various tax and
information services matters. Representatives of Price Waterhouse LLP will be
present at the Annual Meeting to respond to appropriate questions and to make
such statements as they may desire.
Ratification of the appointment of Price Waterhouse LLP as the Company's
independent accountants for Fiscal 1995 will require the affirmative vote of a
majority of the shares of Common Stock represented in person or by proxy and
entitled to vote at the Annual Meeting. In the event stockholders do not ratify
the appointment of Price Waterhouse LLP as the Company's independent accountants
for the forthcoming fiscal year, such appointment will be reconsidered by the
Audit Review Committee and the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR FISCAL 1995.
ITEM 3--APPROVAL OF 1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On November 21, 1994, the Board of Directors adopted, subject to approval by
the Company's stockholders, the 1995 Stock Option Plan for Non-Employee
Directors (the "Plan"). The Plan is designed to assist the Company in
attracting, retaining and compensating highly qualified individuals who are not
employees of the Company for service as members of the Board and to provide them
with a proprietary interest in the Company's Common Stock. The Board believes
the Plan will be beneficial to the Company and its stockholders by allowing
non-employee directors to have a personal financial stake in the Company, in
addition to underscoring their common interest with stockholders in increasing
the value of the Company's stock over the long term. Non-employee directors also
receive cash remuneration for their services, as described above under
"Directors' Remuneration; Attendance."
DESCRIPTION OF THE PLAN
The following summary description of the Plan is qualified in its entirety
by reference to the full text of the Plan, which is attached to this Proxy
Statement as Exhibit A.
If approved by the Company's stockholders, the Plan will provide for
automatic yearly grants of options to purchase 2,000 shares of Common Stock
(subject to adjustment as provided in the Plan) to each active director serving
on the Board at the time of the grant who is not an employee of the Company or
any of its
17
<PAGE>
subsidiaries or affiliates. For Fiscal 1995, the Plan would provide a grant to
Ms. Bowers and Messrs. Gold, Lozano, Poitier, Russell, Stern, Walker, Watson and
Wilson; Messrs. Disney, Eisner and Nunis would not be eligible to participate.
Each option grant, vesting in equal installments over five years and having a
ten-year term, will permit the holder to purchase shares at their fair market
value on the date the option was granted. Payment for shares to the Company may
be in cash, Common Stock or a combination thereof. The Plan will expire, unless
earlier terminated, on December 31, 2004.
Option grants under the Plan will be made on March 1 of each year (or the
first business day thereafter on which the Company's Common Stock is traded on
the principal securities exchange on which it is listed), commencing on March 1,
1995.
The following table sets forth summary information concerning the
hypothetical value of option grants for a single year to all eligible directors
under the Plan, based on the assumption that such grants had been made at the
beginning of Fiscal 1994.
1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
OPTION TERM (2)
NUMBER OF ------------------------
PLAN PARTICIPANTS SHARES (1) 5% 10%
- ----------------------------------------------------- ------------- ---------- ------------
<S> <C> <C> <C>
Reveta F. Bowers..................................... 2,000 $ 47,243 $ 119,722
Stanley P. Gold...................................... 2,000 47,243 119,722
Ignacio E. Lozano, Jr................................ 2,000 47,243 119,722
Sidney Poitier....................................... 2,000 47,243 119,722
Irwin E. Russell..................................... 2,000 47,243 119,722
Robert A.M. Stern.................................... 2,000 47,243 119,722
E. Cardon Walker..................................... 2,000 47,243 119,722
Raymond L. Watson.................................... 2,000 47,243 119,722
Gary L. Wilson....................................... 2,000 47,243 119,722
Non-employee directors as a group.................... 18,000 425,187 1,077,498
<FN>
- ------------------------
(1) Number of shares acquirable with each annual option grant.
(2) Amounts shown in these columns are based upon a hypothetical grant date of
October 1, 1993, at the then-current fair market value of the Company's
Common Stock ($37.56). Amounts have been determined by multiplying the
exercise price by the annual appreciation rate shown (compounded for the
term of the options), multiplying the result by the number of shares
covered by the options and subtracting the aggregate exercise price of the
options. The calculations are made at the 5% and 10% rates set by S.E.C.
rules, and therefore are not intended to forecast possible future
appreciation of the Company's Common Stock. As of December 15, 1994, the
fair market value of the Company's Common Stock was $43.88.
</TABLE>
All options will expire ten years after the date of grant, subject to Plan
provisions relating to death, retirement or disability. If a participating
director terminates service on the Board as the result of disability or
mandatory retirement pursuant to Board policy, previously granted options will
continue to become exercisable as described above but must be exercised within
five years of such termination and in any event within ten years of grant. In
the event of the death of the holder of any unexercised option either while
serving on the Board or within five years after termination as the result of
disability or mandatory retirement, all of the holder's outstanding options will
become immediately exercisable by his or her legal representative. If death
occurs while the holder is a director, unexercised options must be exercised
within five years of
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death. If death occurs after retirement, such options must be exercised within
two years of death or five years after retirement, whichever is later. If a
participating director terminates service on the Board for any reason other than
retirement, disability or death, his or her outstanding options may be exercised
only to the extent that they were exercisable at the time of such termination
and expire three months after such termination. Each option will be
non-assignable and non-transferable other than by will or the laws of descent
and distribution.
An aggregate of 250,000 shares of common stock will be subject to the Plan.
Shares subject to options that terminate unexercised will be available for
future option grants. Adjustments will be made in the number and kind of shares
subject to the Plan and outstanding options, and in the purchase price of
outstanding options, in the event of any change in the Company's outstanding
shares by reason of any stock split or stock dividend, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change.
ADMINISTRATION
The Plan will be administered by a committee appointed by the Board and
consisting of directors who are not eligible to participate in the Plan. The
initial members of the committee will be Messrs. Disney, Eisner and Nunis. The
committee will be authorized to interpret the Plan, establish and amend rules
relating to the Plan and make other determinations necessary or advisable for
the administration of the Plan, but will have no discretion with respect to the
selection of directors to receive options, the number of shares subject to the
Plan or to each grant or the purchase price for shares subject to option. The
committee will also have no authority to increase Plan benefits materially.
The committee may terminate the Plan at any time or amend it in whole or in
part, except that the provisions specifying amounts, pricing and timing of
grants may not be amended more than once every six months, other than to comport
with specified changes in applicable law. In addition, any amendment that
increases the number of shares subject to the Plan or to any option or extends
the period during which options may be granted will require approval by the
Company's stockholders.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The options granted under the Plan will be non-statutory options not
intended to qualify under Section 422A of the Internal Revenue Code. The grant
of options will not result in taxable income to the director or a tax deduction
for the Company. The exercise of an option will result in taxable ordinary
income to the director and a corresponding deduction for the Company, in each
case equal to the difference between the fair market value of the shares on the
date the option was granted (the option price) and their fair market value on
the date the option was exercised.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE 1995 STOCK
OPTION PLAN FOR NON-EMPLOYEE DIRECTORS. PROXIES SOLICITED HEREBY WILL BE VOTED
IN FAVOR OF ADOPTION OF THE PLAN UNLESS THE STOCKHOLDER SPECIFIES OTHERWISE.
ITEM 4--STOCKHOLDER PROPOSAL
John and Helga Kern, 2344 Meadow Isle Lane, Lawrenceville, Georgia 30243,
owners of 108 shares, have submitted the following proposal:
"WHEREAS, The Walt Disney Company has many shareholders that had previously
participated in the dividend reinvestment and stock purchase plan for the Walt
Disney Company common stock. The Walt Disney Company dividend reinvestment and
stock plan was canceled by management without due regard to the shareholder's
need for a low cost investment plan.
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"WE THEREFORE REQUEST AND RECOMMEND, that management reinstate a dividend
reinvestment and stock purchase plan for the Walt Disney Company common stock.
We recommend and request that the Management institute a plan that can meet the
needs of the shareholders as well as minimize costs for the company. We
recommend and request that the above mentioned plan should be implemented within
six months of the date of the annual shareholders meeting."
In support of this proposal, John and Helga Kern have submitted the
following statement:
"1. Dividend reinvestment and stock option plans are ideal for long term
investors who are looking for low-cost, convenient way to build a stock
portfolio. There are no stockbroker fees, this is especially important
when the number of shares purchased is relatively small, e.g. less than
100 shares. A DRIP also allows investors to take advantage of dollar-cost
averaging. This systematic buying program entails the investment of
similar dollar amounts at fixed intervals.
"2. Close to 800 major firms offer dividend reinvestment plans to their
shareholders. These companies include AT&T, Ameritech, Coca-Cola, Ford
Motor Company, General Motors, Johnson & Johnson, Kellogg Company, Gerber
Products, NYNEX Corporation, Quaker Oats, and others.
"3. A dividend reinvestment and stock purchase plan that includes provisions
for a reasonable number of minimum shares on deposit and a small fee per
transaction would allow Walt Disney Company to offer this plan to its
shareholders without burdening the corporation or shareholders who do not
wish to participate with unreasonable expense. The Company has stated
that $4.20 was spent annually to mail quarterly DRIP statements to each
DRIP shareholder and that the Company therefore cannot justify the
approximately $332,000 annual expense of the plan. This is misleading
since the expense of quarterly correspondence with shareholders must
occur, whether the letter includes a DRIP statement or the current
dividend check.
"THEREFORE, the shareholders are urged to vote for this proposal."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS STOCKHOLDER PROPOSAL
FOR THE FOLLOWING REASONS:
The Company established a dividend reinvestment and stock purchase plan a
number of years ago and terminated that plan in November of 1990. The Company,
after careful consideration by management, made the decision to terminate the
plan because the benefits to the relatively few stockholders who elected to
participate and take advantage of the plan did not outweigh the overall costs
and burdens to the Company in administering the plan.
The Company's registered stockholder base has more than doubled since the
previous plan was terminated, growing to more than 470,000 stockholders, and
continues to grow at an average of over 4,000 stockholders a month. The
administrative costs and burdens of such a plan today would be significantly
greater than five years ago. These costs and burdens are not limited to postage
for mailing, but also include, among other things, costs associated with
additional staffing, printing of plan documents, brokerage commissions and
computer processing. Charging a small fee per transaction, as suggested in the
Kerns' supporting statement, would not defray enough of the costs related to
such a plan to make it beneficial to the Company and its stockholders.
Mr. and Mrs. Kern also suggest in their supporting statement that
prohibiting stockholders with less than a "reasonable number of minimum shares"
from participating in the plan, in addition to charging a small fee per
transaction, would alleviate the unreasonable costs to the Company. The
Company's management believes, however, that such an arrangement would create
undesirable differences of treatment among stockholders. Currently,
approximately 69% of the Company's registered stockholders own 25 shares or
less, 78% own 50 shares or less, and 83% own 100 shares or less. Establishing a
cost-effective minimum number of
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shares that must be held by a stockholder to participate in the plan would
preclude a large number of the Company's stockholders from benefiting in any way
from the plan, making it available only to larger stockholders.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"AGAINST" THIS PROPOSAL, AND YOUR PROXY WILL BE SO VOTED IF THE PROPOSAL IS
PRESENTED UNLESS YOU SPECIFY OTHERWISE.
Approval of this proposal, if presented, will require the affirmative vote
of a majority of the shares of Common Stock represented in person or by proxy
and entitled to vote at the Annual Meeting.
ITEM 5--STOCKHOLDER PROPOSAL
Gary J. Schoof and Gary D. Davis, 1001 Maple Avenue, LaPorte, Indiana 46350,
owners of a combined total of 122 shares, have submitted the following proposal:
"WE THEREFORE REQUEST AND RECOMMEND that the management reinstate and put into
place on behalf of all shareholders of Walt Disney Common Stock, a voluntary
stock purchase plan with a minimum required investment of $100.00 and maximum
investment of $5,000.00 on a quarterly basis. Said purchases are to be made by
The Walt Disney Corporation on a quarterly basis. All costs of this voluntary
stock purchase plan are to be borne by The Disney Corporation. The plan would
specifically exclude any dividend reinvestment plan."
In support of this proposal, Messrs. Schoof and Davis have submitted the
following statement:
"1. A voluntary stock purchase plan is ideal for long term investors who are
looking for a low cost, convenient way to build a stock portfolio. The
company should and would attract long-term investors if this particular
investment option is available to stock purchases.
"2. Approximately 800 major corporations offer dividend reinvestment plans
and voluntary stock purchase plans. Some of the names of those
corporations are the Kellogg Company, Abbott Laboratories, Sara Lee,
Coca-Cola, GTE, Exxon and many others.
"3. The argument made by Disney management for terminating the plan was that
the cost of dividend reinvestment was prohibitive. This plan specifically
excludes dividend reinvestment. It is simply a voluntary stock purchase
plan with a minimum deposit amount and a maximum deposit amount. This
would assure that the plan was not prohibitively expensive. In fact, the
minimum and maximum have been factored to completely eliminate any cost
disadvantage to The Disney Corporation.
"4. The Disney Corporation offers many lucrative stock options and other
financial incentives to retain and reward management of the company. A
voluntary stock purchase plan that specifically eliminates the dividend
reinvestment plan would allow the shareholders of The Disney Corporation
to also benefit from the company's success while at the same time not
putting a financial and economic burden on the corporation.
"THEREFORE, the shareholders are urged and requested to vote for this proposal."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS STOCKHOLDER PROPOSAL
FOR THE FOLLOWING REASONS:
As indicated in the response to the stockholder proposal set forth in Item
4, the Company terminated its prior stock purchase and dividend reinvestment
plan in 1990 because the plan's benefits failed to justify its associated costs
and burdens. The stock purchase plan proposed by Messrs. Schoof and Davis, even
without a dividend reinvestment component, also entails costs and burdens that
the Company's management does
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not believe are warranted. The proposed minimum and maximum investment amounts
would not, in management's view, materially affect these costs or provide any
assurance that the plan would not become prohibitively expensive.
The practical effect of the proposed plan would be to require the
Company--and thus indirectly all of its stockholders--to bear the brokerage and
other transaction costs of purchasing shares, as well as costs of plan
administration, for the benefit of a relatively small proportion of stockholders
willing and able to participate. The Company's management does not believe that
such a plan would serve the best interests of either the Company or its
stockholders as a whole.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"AGAINST" THIS PROPOSAL, AND YOUR PROXY WILL BE SO VOTED IF THE PROPOSAL IS
PRESENTED UNLESS YOU SPECIFY OTHERWISE.
Approval of this proposal, if presented, will require the affirmative vote
of a majority of the shares of Common Stock represented in person or by proxy
and entitled to vote at the Annual Meeting.
OTHER MATTERS
As of the date of this proxy statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than the
items referred to above. Proxies in the enclosed form will be voted in respect
of any other business that is properly brought before the Annual Meeting in
accordance with the judgment of the person or persons voting the proxies.
STOCKHOLDER PROPOSALS FOR THE 1996 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's 1996
Annual Meeting of Stockholders must be received by the Secretary of the Company,
for inclusion in the Company's proxy statement relating to the 1996 Annual
Meeting, by September 6, 1995.
QUARTERLY REPORTS
All stockholders (both record and "street name" holders) who wish to receive
the Company's quarterly reports may call the Company at 818-505-7040 (between 8
a.m. and 5 p.m. Pacific standard time) or write to Shareholder Services, The
Walt Disney Company, 500 South Buena Vista Street, Burbank, California
91521-7320, to be included on the Company's mailing list.
ADDITIONAL INFORMATION
The cost of soliciting proxies in the enclosed form will be borne by the
Company. The Company has retained Georgeson & Co., 100 Wall Street, New York,
New York 10005, to aid in the solicitation of proxies. For these services, the
Company will pay Georgeson & Co. a fee of $15,000 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 proxies by further mailing or personal conversations, or by telephone,
telex or facsimile. The Company will, upon request, reimburse brokerage firms
and others for their reasonable expenses in forwarding solicitation material to
the beneficial owners of stock.
By order of the Board of Directors,
Marsha L. Reed
CORPORATE SECRETARY
December 29, 1994
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EXHIBIT A
THE WALT DISNEY COMPANY
1995 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSES.
The 1995 Stock Option Plan for Non-Employee Directors (the "Plan") is
established to attract, retain and compensate highly qualified individuals who
are not employees of The Walt Disney Company (the "Company") for service as
members of the Board of Directors ("Non-Employee Directors") and to provide them
with an ownership interest in the Company's common stock. The Plan will be
beneficial to the Company and its stockholders by allowing these Non-Employee
Directors to have a personal financial stake in the Company through an ownership
interest in the Company's common stock, in addition to underscoring their common
interest with stockholders in increasing the value of the Company's stock over
the long term.
2. EFFECTIVE DATE.
The Plan shall be effective as of the date it is adopted by the Board of
Directors of the Company, subject to the approval of the Plan by the holders of
at least a majority of the outstanding shares of Company common stock present,
or represented, and entitled to vote at the 1995 Annual Meeting of Stockholders.
Grants of options may be made under the Plan on and after its effective date,
subject to stockholder approval of the Plan as provided above. In the event such
approval is not obtained, any options granted under the Plan shall be null and
void.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee appointed by the Board of
Directors and consisting of Directors who are not eligible to participate in the
Plan (the "Committee"). Subject to the provisions of the Plan, the Committee
shall be authorized to interpret the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan; PROVIDED, HOWEVER,
that the Committee shall have no discretion with respect to the eligibility or
selection of Non-Employee Directors to receive options under the Plan, the
number of shares of stock subject to any such options or the Plan, or the
purchase price thereunder; AND PROVIDED FURTHER, that the Committee shall not
have the authority to take any action or make any determination that would
materially increase the benefits accruing to participants under the Plan. The
Committee's interpretation of the Plan, and all actions taken and determinations
made by the Committee pursuant to the powers vested in it hereunder, shall be
conclusive and binding upon all parties concerned including the Company, its
stockholders and persons granted options under the Plan. The Chairman of the
Board and Chief Executive Officer of the Company shall be authorized to
implement the Plan in accordance with its terms and to take or cause to be taken
such actions of a ministerial nature as shall be necessary to effectuate the
intent and purposes thereof.
4. PARTICIPATION IN THE PLAN.
All active members of the Company's Board of Directors who are not as of the
date of any option grant employees of the Company or any of its subsidiaries or
affiliates shall be eligible to participate in the Plan. Directors emeritus
shall not be eligible to participate.
5. NON-QUALIFIED STOCK OPTIONS.
Only non-qualified stock options ("options") may be granted under this Plan.
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6. TERMS, CONDITIONS AND FORM OF OPTIONS.
(a) OPTION GRANT DATES. Options to purchase 2,000 shares of Stock (as
adjusted pursuant to Section 8) shall be automatically granted on an annual
basis to each eligible Non-Employee Director on March 1st (or the first
succeeding business day thereafter on which the Company's common stock is traded
on the principal securities exchange on which it is listed) of each year,
commencing March 1, 1995.
(b) EXERCISE PRICE. The exercise price per share of stock for which each
option is exercisable shall be 100% of the fair market value per share of common
stock on the date the option is granted, which shall be the average of the high
and low price of the stock based upon its consolidated trading as generally
reported for the principal securities exchange on which the Company's common
stock is listed.
(c) EXERCISABILITY AND TERM OF OPTIONS. Each option granted under the Plan
shall become exercisable in five equal installments, commencing on the first
anniversary of the date of grant and annually thereafter. Each option granted
under the Plan shall expire ten years from the date of grant, and shall be
subject to earlier termination as hereinafter provided.
(d) TERMINATION OF SERVICE. In the event of the termination of service on
the Board by the holder of any option, other than by reason of mandatory
retirement, permanent disability or death as set forth in paragraph (e) hereof,
the then outstanding options of such holder shall be exercisable only to the
extent that they were exercisable on the date of such termination and shall
expire three months after such termination, or on their stated expiration date,
whichever occurs first.
(e) RETIREMENT, DISABILITY OR DEATH. In the event of termination of
service by reason of mandatory retirement pursuant to Board policy or permanent
disability of the holder of any option, each of the then outstanding options of
such holder will continue to become exercisable in accordance with Section 6(c)
above, but the holder shall be entitled to exercise such options, including any
portions thereof that become exercisable after such termination, within five
years of such termination, but in no event after the expiration date of the
option. In the event of the death of the holder of any option, each of the then
outstanding options of such holder shall become immediately exercisable in full,
and shall be exercisable by the holder's legal representative at any time within
a period of five years after death, but in no event after the expiration date of
the option. However, if the holder dies within five years following termination
of service on the Board by reason of mandatory retirement or permanent
disability, such option shall be exercisable only until the later of (i) two
years after the holder's death or (ii) five years after such termination, or the
expiration date of the option, if earlier.
(f) PAYMENT. The option price shall be paid in cash (whether or not such
cash is loaned by the Company to the participant for such purpose) or by the
surrender of shares of common stock of the Company, valued at their fair market
value on the date of exercise, or by any combination of cash and such shares.
7. SHARES OF STOCK SUBJECT TO THE PLAN.
The shares that may be purchased pursuant to options under the Plan shall
not exceed an aggregate of 250,000 shares of Company common stock (as adjusted
pursuant to Section 8). Any shares subject to an option grant which for any
reason expires or is terminated unexercised as to such shares shall again be
available for issuance under the Plan.
8. DILUTION AND OTHER ADJUSTMENT.
In the event of any change in the outstanding shares of Company stock by
reason of any stock split, stock dividend, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, such equitable adjustments shall be made in the Plan and the grants
thereunder, including the
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exercise price of outstanding options, as the Committee determines are necessary
or appropriate, including, if necessary, any adjustments in the maximum number
of shares referred to in Section 7 of the Plan. Such adjustment shall be
conclusive and binding for all purposes of the Plan.
9. MISCELLANEOUS PROVISIONS.
(a) RIGHTS AS STOCKHOLDER. A participant under the Plan shall have no
rights as a holder of Company common stock with respect to option grants
hereunder, unless and until certificates for shares of such stock are issued to
the participant.
(b) ASSIGNMENT OR TRANSFER. No options granted under the Plan or any
rights or interests therein shall be assignable or transferable by a participant
except by will or the laws of descent and distribution. During the lifetime of a
participant, options granted hereunder are exercisable only by, and payable only
to, the participant.
(c) AGREEMENTS. All options granted under the Plan shall be evidenced by
agreements in such form and containing such terms and conditions (not
inconsistent with the Plan) as the Committee shall adopt.
(d) COMPLIANCE WITH LEGAL REGULATIONS. During the term of the Plan and the
term of any options granted under the Plan, the Company shall at all times
reserve and keep available such number of shares as may be issuable under the
Plan, and shall seek to obtain from any regulatory body having jurisdiction,
including the Commissioner of Corporations of the State of California, any
requisite authority required in the opinion of counsel for the Company in order
to grant options to purchase shares of Company common stock or to issue such
stock pursuant thereto. If in the opinion of counsel for the Company the
transfer, issue or sale of any shares of its stock under the Plan shall not be
lawful for any reason, including the inability of the Company to obtain from any
regulatory body have jurisdiction authority deemed by such counsel to be
necessary to such transfer, issuance or sale, the Company shall not be obligated
to transfer, issue or sell any such shares. In any event, the Company shall not
be obligated to transfer, issue or sell any shares to any participant unless a
registration statement which complies with the provisions of the Securities Act
of 1933, as amended (the "Securities Act"), is in effect at the time with
respect to such shares or other appropriate action has been taken under and
pursuant to the terms and provisions of the Securities Act, or the Company
receives evidence satisfactory to the Committee that the transfer, issuance or
sale of such shares, in the absence of an effective registration statement or
other appropriate action, would not constitute a violation of the terms and
provisions of the Securities Act. The Company's obligation to issue shares upon
the exercise of any option granted under the Plan shall in any case be subject
to the Company being satisfied that the shares purchased are being purchased for
investment and not with a view to the distribution thereof, if at the time of
such exercise a resale of such shares would otherwise violate the Securities Act
in the absence of an effective registration statement relating to such shares.
(e) COSTS AND EXPENSES. The costs and expenses of administering the Plan
shall be borne by the Company and not charged to any option or to any
Non-Employee Director receiving an option.
10. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENTS. The Committee may from time to time amend the Plan in
whole or in part; provided, that no such action shall adversely affect any
rights or obligations with respect to any options theretofore granted under the
Plan, AND PROVIDED FURTHER, that the provisions of Sections 4 and 6 hereof may
not be amended more than once every six months, other than to comport with
change in the Internal Revenue Code or regulations thereunder.
Unless the holders of at least a majority of the outstanding shares of
Company common stock present, or represented, and entitled to vote at a meeting
of stockholders shall have first approved thereof, no amendment of the Plan
shall be effective which would (i) increase the maximum number of shares
referred
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to in Section 7 of the Plan or the number of shares subject to options that may
be granted pursuant to section 6(a) of the Plan to any one Non-Employee Director
or (ii) extend the maximum period during which options may be granted under the
Plan.
With the consent of the Non-Employee Director affected, the Committee may
amend outstanding agreements evidencing options under the Plan in a manner not
inconsistent with the terms of the Plan.
(b) TERMINATION. The Committee may terminate the Plan (but not any options
theretofore granted under the Plan) at any time. The Plan (but not any options
theretofore granted under the Plan) shall in any event terminate on, and no
options shall be granted after, December 31, 2004.
11. COMPLIANCE WITH SEC REGULATIONS.
It is the Company's intent that the Plan comply in all respects with Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and any related regulations. If any provision of this Plan is later found
not to be in compliance with such Rule and regulations, the provision shall be
deemed null and void. All grants and exercises of options under this Plan shall
be executed in accordance with the requirements of Section 16 of the Exchange
Act and regulations promulgated thereunder.
12. GOVERNING LAW.
The validity and construction of the Plan and any agreements entered into
thereunder shall be governed by the laws of the State of Delaware.
[LOGO]
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Annual Meeting of Stockholders - To Be Held February 21, 1995
THE BOARD OF DIRECTORS SOLICITS THIS PROXY
The undersigned hereby appoint(s) SANFORD M. LITVACK, RICHARD D. NANULA, and
DAVID K. THOMPSON, and each of them, attorney, agent and proxy of the
undersigned, with full power of substitution, to vote all shares of common
stock of The Walt Disney Company that the undersigned would be entitled to
cast if personally present at the 1995 Annual Meeting of Stockholders of the
Company, and at any postponement or adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED. IF NO CHOICE IS
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR
DIRECTOR LISTED ON THE REVERSE SIDE, FOR PROPOSAL NUMBER 2, FOR PROPOSAL
NUMBER 3, AGAINST PROPOSAL NUMBER 4, AGAINST PROPOSAL NUMBER 5 AND ACCORDING
TO THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF.
Please date, sign exactly as your name appears on the form and mail the proxy
promptly. When signing as an attorney, executor, administrator, trustee or
guardian, please give your full title as such. If shares are held jointly, both
owners must sign.
CONTINUED AND TO BE VOTED AND SIGNED ON REVERSE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
(1) ELECTION OF DIRECTORS: Richard A. Nunis, Sidney Poitier, Robert A.M. Stern,
E. Cardon Walker
<TABLE>
<S> <C> <C>
FOR WITHHOLD (INSTRUCTIONS: To withhold authority to vote for any individual
all nominees listed above authority to vote for all nominee, write that nominee's name in the space provided below.)
(except as marked to the nominees listed above / /
contrary to the right) / / _____________________________________________________________
</TABLE>
<TABLE>
<S> <C> <C> <C>
(2) To ratify the appointment of Price FOR AGAINST ABSTAIN (3) To approve the 1995 Stock Option FOR AGAINST ABSTAIN
Waterhouse LLP as the Company's / / / / / / Plan for Non-Employee Directors / / / / / /
independent accountants for the
1995 fiscal year.
_____________________________________________________________________________________________________________________________
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5.
<TABLE>
<C> <S> <S> <S>
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
(4) To recommend that management / / / / / / (5) To recommend that management / / / / / /
institute a dividend reinvestment institute a stock purchase plan.
and stock purchase plan.
</TABLE>
PLEASE MARK ALL
CHOICES LIKE THIS /X/
SIGNATURE___________________DATE_______
SIGNATURE___________________DATE_______