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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 1995
REGISTRATION NO. 33-62777
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
THE WALT DISNEY COMPANY DELAWARE 95-0684440
DC HOLDCO, INC. DELAWARE 95-4545390
(Exact name of registrant (State or other jurisdiction of (I.R.S. employer
as specified in its charter) incorporation or organization) identification number)
</TABLE>
<TABLE>
<S> <C>
DAVID K. THOMPSON
SENIOR VICE PRESIDENT -- ASSISTANT GENERAL COUNSEL
500 SOUTH BUENA VISTA STREET THE WALT DISNEY COMPANY
BURBANK, CALIFORNIA 91521 500 SOUTH BUENA VISTA STREET
(818) 560-1000 BURBANK, CALIFORNIA 91521
(Address, including zip code and telephone number, (818) 560-1000
including area code, of registrant's (Name, address, including zip code and
principal executive offices) telephone number, including area code,
of agent for service)
</TABLE>
COPY TO:
Thomas C. Janson, Jr.
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
(213) 687-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 30, 1995
PROSPECTUS
THE WALT DISNEY COMPANY
DC HOLDCO, INC.
SECURITIES
------------------
This Prospectus relates to the offering of securities described herein of
The Walt Disney Company, a Delaware corporation ("Disney"), and of DC Holdco,
Inc., a Delaware corporation ("New Disney"). New Disney is currently a wholly
owned subsidiary of Disney and, upon completion of the acquisition (the
"Acquisition") by Disney of Capital Cities/ABC, Inc. ("Capital Cities"), New
Disney will become the parent corporation of Disney and Capital Cities and be
renamed "The Walt Disney Company." See "The Acquisition." New Disney may offer
from time to time (i) debt securities (the "Debt Securities"), which may be any
of senior debt securities ("Senior Debt Securities"), senior subordinated debt
securities ("Senior Subordinated Debt Securities") or subordinated debt
securities ("Subordinated Debt Securities"), in each case consisting of
debentures, notes and/or other unsecured evidences of indebtedness, (ii) shares
of preferred stock (the "Preferred Stock"), which may be issued in the form of
depositary receipts (the "Depositary Shares"), each of which will represent a
fraction of a share of Preferred Stock, and (iii) warrants to purchase Debt
Securities or Preferred Stock as shall be designated by New Disney at the time
of the offering (the "Warrants"). The Debt Securities, the Preferred Stock, the
Depositary Shares, the Warrants and any guarantees of the foregoing by Disney
are collectively referred to as the "Securities" and will have an aggregate
initial offering price of up to $5,000,000,000 or the equivalent thereof in U.S.
dollars if any Securities are denominated in a currency other than U.S. dollars
or in currency units. If any Securities are issued by New Disney prior to the
consummation of the Acquisition, then the payment of principal, interest and
dividends thereon, together with any amounts payable upon liquidation or upon
redemption of such Securities, will be guaranteed by Disney to the extent and on
the terms described herein and in the accompanying Prospectus Supplement (as
defined below). Upon consummation of the Acquisition, any such guarantees by
Disney will be released. The Securities may be offered separately or together
(in any combination) and as separate series, in any case in amounts, at prices
and on terms to be determined at the time of sale.
The form in which the Securities are to be issued, their specific
designation, aggregate principal amount or aggregate initial offering price,
maturity, if any, rate and times of payment of interest or dividends, if any,
redemption, conversion, exchange and sinking fund terms, if any, voting or other
rights, if any, exercise price and detachability, if any, and other specific
terms will be set forth in a Prospectus Supplement (including any related term
sheet) relating to such Securities (the "Prospectus Supplement"), together with
the terms of offering of such Securities. If so specified in the applicable
Prospectus Supplement, Debt Securities of a series may be issued in whole or in
part in the form of one or more temporary or permanent global securities. The
Prospectus Supplement will also contain information, as applicable, about
certain material United States Federal income tax considerations relating to the
particular Securities offered thereby. The Prospectus Supplement will also
contain information, where applicable, as to any listing on a national
securities exchange of the Securities covered by such Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Securities may be sold directly, through agents designated from time to
time or to or through underwriters or dealers. See "Plan of Distribution." If
any agents of an issuer or any underwriters are involved in the sale of any
Securities in respect of which this Prospectus is being delivered, the names of
such agents or underwriters and any applicable commissions or discounts will be
set forth in a Prospectus Supplement. The net proceeds to the applicable
issuer(s) from such sale also will be set forth in a Prospectus Supplement.
------------------------
, 1995
<PAGE>
AVAILABLE INFORMATION
Disney and Capital Cities are each subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New
York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such reports and other information concerning
Disney and Capital Cities may also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005 and the Pacific Stock
Exchange, 115 Sansome Street, 2nd Floor, San Francisco, California 94104.
Information set forth herein relating to Capital Cities is derived entirely from
public filings made by Capital Cities and is being provided in contemplation of
the Acquisition. Consummation of the Acquisition is subject to a number of
important contingencies, and no assurances can be given that it will occur. An
investment in the Securities prior to the consummation of the Acquisition should
not be made in reliance upon the Acquisition occurring. See "The Acquisition."
If the Acquisition is consummated, Disney and Capital Cities intend to terminate
or suspend, to the extent permitted by applicable law, their reporting
obligations under the Exchange Act and, accordingly, may no longer file reports
or other information with the Commission. Instead, following the Acquisition,
New Disney will become subject to the informational requirements under the
Exchange Act and information would be provided, to the extent required, in
filings made by New Disney thereunder.
Disney and New Disney (collectively, the "Issuers") have filed with the
Commission in Washington, D.C. a registration statement on Form S-3 (including
all amendments thereto, the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Securities
offered hereby. As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. Such additional
information is available for inspection and copying at the offices of the
Commission. Statements contained in this Prospectus, in any Prospectus
Supplement or in any document incorporated by reference herein or therein as to
the contents of any contract or other document referred to herein or therein are
not necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to, or incorporated by
reference in, the Registration Statement, each such statement being qualified in
all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by Disney (File No. 1-4083) with
the Commission under the Exchange Act are incorporated herein by reference:
(a) Disney's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994 (the "Disney Form 10-K");
(b) Disney's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1994, March 31, 1995 and June 30, 1995 (the "Disney Form
10-Qs"); and
(c) Disney's Current Reports on Form 8-K, dated July 31, 1995 and
October 6, 1995 (collectively with the Disney Form 10-K and the Disney Form
10-Qs, the "Disney Reports").
The following documents previously filed by Capital Cities (File No. 1-4278)
with the Commission under the Exchange Act are incorporated herein by reference:
(a) Capital Cities' Annual Report on Form 10-K for the year ended
December 31, 1994 (the "Capital Cities Form 10-K");
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(b) Capital Cities' Quarterly Reports on Form 10-Q for the quarters
ended April 2, 1995, July 2, 1995 and Form 10-Q for the quarter ended
October 1, 1995 as amended by Form 10-Q/A filed with the Commission on
November 29, 1995 (the "Capital Cities Form 10-Qs"); and
(c) Capital Cities' Current Reports on Form 8-K, dated July 31, 1995 and
October 6, 1995 (collectively with the Capital Cities Form 10-K and the
Capital Cities Form 10-Qs, the "Capital Cities Reports").
The Joint Proxy Statement/Prospectus of Disney and Capital Cities dated
November 13, 1995 is also incorporated herein by reference.
All documents filed by Disney or Capital Cities pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of the Securities made hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents.
If the Acquisition is consummated, Disney and Capital Cities intend to
terminate or suspend, to the extent permitted by applicable law, their reporting
obligations under the Exchange Act and, accordingly, may no longer file reports
or other information with the Commission. Instead, following the Acquisition,
New Disney will become subject to the informational requirements under the
Exchange Act and information would be provided, to the extent required, in
filings made by New Disney thereunder. Accordingly, all documents filed by New
Disney, pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from
and after the consummation of the Acquisition, and prior to the termination of
the offering of the Securities made hereby, shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document that is or is deemed to be incorporated by
reference herein) modifies or supersedes such previous statement. Any statement
so modified or superseded shall not be deemed to constitute a part hereof except
as so modified or superseded.
Disney or, after the consummation of the Acquisition, New Disney will
provide without charge to each person to whom a copy of this Prospectus has been
delivered, on the written or oral request of such person, a copy of any or all
of the documents referred to above which have been or may be incorporated by
reference in this Prospectus other than exhibits to such documents, unless such
exhibits are also specifically incorporated by reference herein. Requests for
such copies should be directed to The Walt Disney Company, 500 South Buena Vista
Street, Burbank, California 91521, Attention: Corporate Secretary; telephone
number (818) 560-1000.
------------------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars" or "U.S.$").
------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ANY OF THE
ISSUERS OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THEIR RESPECTIVE DATES.
3
<PAGE>
BUSINESS OF DISNEY
Disney is a diversified international entertainment company with operations
in three business segments: Filmed Entertainment, Theme Parks and Resorts, and
Consumer Products. Disney employs approximately 69,000 people.
In its Filmed Entertainment business segment, Disney produces and acquires
live-action and animated motion pictures for distribution to the theatrical,
television and home video markets. Disney also produces original television
programming for the network and first-run syndication markets. In addition,
Disney provides programming for and operates The Disney Channel, a pay
television programming service, and KCAL-TV, a Los Angeles, California
television station. The success of all of Disney's theatrical motion pictures
and television programming is heavily dependent upon public taste, which is
unpredictable and subject to change without warning. In addition, filmed
entertainment operating results fluctuate due to the timing of theatrical and
home video releases. Release dates are determined by several factors, including
timing of vacation and holiday periods and competition in the market.
The Theme Parks and Resorts business segment includes Disney's operation of
the Walt Disney World-Registered Trademark- destination resort in Florida and
the Disneyland Park-Registered Trademark- and the Disneyland Hotel in
California. In addition, Disney earns royalties on revenues generated by the
Tokyo Disneyland theme park. All of the theme parks and most of the associated
resort facilities are operated on a year-round basis. Historically, the theme
parks and resorts business experiences fluctuations in park attendance and
resort occupancy resulting from the nature of vacation travel. Peak attendance
and resort occupancy generally occur during the summer months when school
vacations occur and during early-winter and spring holiday periods.
Disney's Consumer Products business segment involves the licensing of the
name "Walt Disney," as well as Disney's characters, visual and literary
properties and songs and music, to various consumer manufacturers, retailers,
show promoters and publishers throughout the world. Disney also engages in
direct retail distribution through The Disney Stores and consumer catalogs, and
is a publisher of books, magazines and comics in the United States and Europe.
In addition, Disney produces audio and computer software for all markets, as
well as film and video products for the educational marketplace. Operating
results for the consumer products business are influenced by seasonal consumer
purchasing behavior and by the timing of animated theatrical releases.
Disney is a Delaware corporation organized in 1986 as a successor to a
California corporation organized in 1938. As used herein, unless otherwise
specified or unless the context otherwise requires, the term "Disney" includes
The Walt Disney Company and its subsidiaries. Disney's principal executive
offices are located at 500 South Buena Vista Street, Burbank, California 91521,
and its telephone number is (818) 560-1000.
BUSINESS OF NEW DISNEY
New Disney, a wholly owned subsidiary of Disney, has not conducted any
substantial business activities to date, other than those incident to its
formation, its execution of the Merger Agreements (as defined below), its
participation in the preparation of the Registration Statement and this
Prospectus and other actions taken in contemplation of the consummation of the
Acquisition or in connection herewith. Immediately following the consummation of
the Acquisition, New Disney will become a holding company for Disney and Capital
Cities and their respective subsidiaries. Accordingly, the business of New
Disney, through its wholly owned subsidiaries Disney and Capital Cities and
their respective subsidiaries, will be the business currently conducted by
Disney and Capital Cities and their respective subsidiaries. Consummation of the
Acquisition is subject to a number of important contingencies, and no assurances
can be given that it will occur. An investment in the Securities prior to the
consummation of the Acquisition should not be made in reliance upon the
Acquisition occurring. See "The Acquisition," "Business of Disney" and "Business
of Capital Cities."
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New Disney is a Delaware corporation organized in 1995. As used herein,
unless otherwise specified or unless the context otherwise requires, the term
"New Disney" refers to DC Holdco, Inc. and includes its subsidiaries, including,
after the consummation of the Acquisition, Disney and Capital Cities. New
Disney's principal executive offices are located at 500 South Buena Vista
Street, Burbank, California 91521, and its telephone number is (818) 560-1000.
THE ACQUISITION
Disney and Capital Cities have entered into an Amended and Restated
Agreement and Plan of Reorganization, dated as of July 31, 1995 (the
"Reorganization Agreement"), which, together with related merger agreements (the
"Merger Agreements"), provides for the merger of DCA Merger Corp., a Delaware
corporation and a wholly owned subsidiary of New Disney (the "Disney Merger"),
with and into Disney and the merger of DCB Merger Corp., a Delaware corporation
and a wholly owned subsidiary of New Disney, with and into Capital Cities (the
"Capital Cities Merger"). The reorganization of the business of Disney and
Capital Cities contemplated by the Reorganization Agreement and the Merger
Agreements is referred to herein as the "Acquisition." As a result of the
Acquisition, each of Disney and Capital Cities will become a wholly owned
subsidiary of New Disney. Following the consummation of the Acquisition, New
Disney will be renamed "The Walt Disney Company." Upon consummation of the
Capital Cities Merger, each Outstanding Capital Cities Share (as defined below)
will be converted into the right to receive cash, shares of common stock, par
value $0.01 per share, of New Disney ("New Disney Common Stock") or a
combination of both cash and New Disney Common Stock. Each Capital Cities
shareholder will have the opportunity to indicate, on a form of election (the
"Election Form"), whether such shareholder wishes to make a Standard Election, a
Stock Election or a Cash Election (as such terms are defined below) for each
share of common stock, par value $0.10 per share, of Capital Cities ("Capital
Cities Common Stock") held by such shareholder. The allocation of cash and/or
shares of New Disney Common Stock that a shareholder of Capital Cities may
receive will depend on (i) the stated preferences of the Capital Cities
shareholders on the Election Forms and (ii) the proration procedures to be
applied if the Requested Stock Amount exceeds the Stock Component or the
Requested Cash Amount exceeds the Cash Component (as such terms are defined
below).
Shareholders of Capital Cities who make an effective "Standard Election"
will receive, for each share of Capital Cities Common Stock for which such
election is made, one share of New Disney Common Stock plus $65 in cash
(collectively, the "Standard Consideration"). The number of shares of New Disney
Common Stock and the amount of cash to be distributed to Capital Cities
shareholders who make an effective Standard Election will not be affected in any
way by the proration procedures described below. Shareholders of Capital Cities
who make an effective "Stock Election" will receive (subject to the proration
procedures described below), for each share of Capital Cities Common Stock for
which such election is made, (i) one share of New Disney Common Stock plus (ii)
a number of shares of New Disney Common Stock equal to a fraction, the numerator
of which is $65 and the denominator of which is the Disney Common Stock Price
(collectively, the "Stock Consideration"). The "Disney Common Stock Price" is an
amount equal to the average of the closing sales prices of Disney Common Stock
on the New York Stock Exchange Composite Tape on each of the ten consecutive
trading days immediately preceding the second trading day prior to the Effective
Time. "Effective Time" means the time and date which is the later of (a) the
date and time of the filing of the certificate of merger relating to the Disney
Merger with the Secretary of State of the State of Delaware (or such other date
and time as may be specified in such certificate as permitted by Delaware law)
and (b) the date and time of the filing of a certificate of merger by the
Department of State of the State of New York with respect to the Capital Cities
Merger (or such other date and time as may be specified in such certificate as
permitted by New York law). Shareholders of Capital Cities who make an effective
"Cash Election" will receive (subject to the proration procedures described
below) for each share of Capital Cities Common Stock for which such election is
made, in cash, an amount equal to $65 plus the Disney Common Stock Price
(collectively, the "Cash Consideration"). If a holder of Capital Cities Common
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Stock does not make a Standard Election, a Cash Election or a Stock Election, or
properly revokes an effective, properly completed Election Form without timely
submitting a revised, properly completed Election Form, such Capital Cities
shareholder will be deemed to have made a Cash Election.
In the event that the aggregate number of shares of New Disney Common Stock
requested by shareholders of Capital Cities pursuant to effective Stock
Elections (the "Requested Stock Amount") exceeds the Stock Component, each
holder making an effective Stock Election will receive, for each share of
Capital Cities Common Stock for which a Stock Election has been made, (x) a
number of shares of New Disney Common Stock equal to the product of the Stock
Consideration and a fraction, the numerator of which is the Stock Component and
the denominator of which is the Requested Stock Amount (such product, the
"Prorated Stock Amount") and (y) cash in an amount equal to the product of (a)
the Stock Consideration minus the Prorated Stock Amount and (b) the Disney
Common Stock Price. The "Stock Component" is the number of Outstanding Capital
Cities Shares minus the aggregate number of Outstanding Capital Cities Shares
with respect to which effective Standard Elections have been received by the
Exchange Agent (as defined below). The "Outstanding Capital Cities Shares"
consist of the shares of Capital Cities Common Stock outstanding immediately
prior to the Effective Time (which is exclusive of shares of Capital Cities
Common Stock held in the Capital Cities treasury) minus the number of shares of
Capital Cities Common Stock with respect to which dissenters' rights have been
perfected pursuant to Section 623 of the New York Business Corporation Law
("Dissenting Shares").
In the event that the aggregate amount of cash requested by shareholders of
Capital Cities pursuant to effective or deemed Cash Elections (the "Requested
Cash Amount") exceeds the Cash Component, each such holder will receive, for
each share of Capital Cities Common Stock for which a Cash Election has been
made or deemed to be made, (x) cash in an amount equal to the product of the
Cash Consideration and a fraction, the numerator of which is the Cash Component
and the denominator of which is the Requested Cash Amount (such product, the
"Prorated Cash Amount") and (y) a number of shares of New Disney Common Stock
equal to a fraction, the numerator of which is equal to the Cash Consideration
minus the Prorated Cash Amount and the denominator of which is the Disney Common
Stock Price. The "Maximum Cash Amount" is equal to the product of the number of
Outstanding Capital Cities Shares and $65; PROVIDED, HOWEVER, that the Maximum
Cash Amount may be increased in Disney's sole discretion at any time prior to
the fifth business day after the deadline (the "Election Deadline") for Capital
Cities shareholders to submit to the Exchange Agent appointed pursuant to the
Reorganization Agreement (the "Exchange Agent") their completed Election Forms.
The Election Deadline will be no later than the 20th business day after the
Effective Time. The "Cash Component" is equal to the Maximum Cash Amount minus
the product of (i) the number of shares of Capital Cities Common Stock for which
effective Standard Elections have been made and (ii) $65. See "Unaudited Pro
Forma Combined Condensed Financial Statements."
No fractional shares of New Disney Common Stock will be issued pursuant to
the Capital Cities Merger. In lieu of the issuance of any fractional shares of
New Disney Common Stock, cash equal to the product of such fractional share
amount and the Disney Common Stock Price will be paid to holders in respect of
any fractional share of New Disney Common Stock that would otherwise be
issuable.
The obligations of Disney and Capital Cities to consummate the Acquisition
are subject to the fulfillment of various conditions, including, among others:
(i) the effectiveness of the Registration Statement relating to the Acquisition
and the absence of any stop order suspending the effectiveness thereof and no
proceeding for that purpose having been initiated by the Commission; (ii)
approval by the stockholders of Disney and the shareholders of Capital Cities;
(iii) expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iv) receipt
of all requisite orders and approvals of the Federal Communications Commission;
and (v) listing of the New Disney Common Stock on the New York Stock Exchange,
subject only to official notice of issuance. Consummation of the Acquisition is
subject to a number of important
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contingencies, and no assurances can be given that it will occur. An investment
in the Securities prior to the consummation of the Acquisition should not be
made in reliance upon the Acquisition occurring.
BUSINESS OF CAPITAL CITIES
Capital Cities, directly or through its subsidiaries, operates the ABC
Television Network, ten television stations, the ABC Radio Networks and 21 radio
stations, and provides programming for cable television. Capital Cities, through
joint ventures, is engaged in international broadcast/cable services and
television production and distribution. Capital Cities also publishes daily and
weekly newspapers, shopping guides, various specialized and business periodicals
and books, provides research services and also distributes information from
databases.
Capital Cities' assets include the ABC Television Network, which as of June
30, 1995 had 224 primary affiliated stations reaching 99.9% of all U.S.
television households. A number of secondary affiliated stations add to the
primary coverage. In addition, Capital Cities owns nine very high frequency
(VHF) television stations, one ultra high frequency (UHF) television station,
eleven standard (AM) radio stations and ten frequency modulation (FM) radio
stations. All but one television station are affiliated with the ABC Television
Network and all but four radio stations are affiliated with the ABC Radio
Networks.
Generally, Capital Cities pays the cost of producing its own programs or
acquiring broadcast rights from other producers for its network programming and
pays varying amounts of compensation to its affiliated stations for broadcasting
the programs and commercial announcements included therein. Substantially all
revenues from network operations are derived from the sale to advertisers of
time in network programs for commercial announcements.
Capital Cities' Cable and International Broadcast operations are principally
involved in the production and distribution of cable television programming, in
the licensing of programming to domestic and international markets and in joint
ventures in foreign-based television operations and television production and
distribution entities. The primary domestic cable programming services are ESPN,
A&E Television Network and Lifetime Television.
Capital Cities' publishing operations (i) publish seven daily newspapers
(five of which have Sunday editions); weekly community newspapers in four
states; shopping guides and real estate magazines in eleven states; specialized
publications that involve news and ideas for various industries; and consumer,
special interest, trade and agricultural publications; and (ii) engage in
research and database services.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, New
Disney intends to use the net proceeds from the sale of the Securities for
general corporate purposes, including, without limitation, to finance a portion
of the Acquisition or to repay commercial paper or other indebtedness incurred
by New Disney to finance the Acquisition.
If the Acquisition is not consummated, the net proceeds of any Securities
issued by New Disney will be transferred to Disney and will be used by Disney
for general corporate purposes.
7
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RATIOS OF EARNINGS TO FIXED CHARGES
Set forth below are the consolidated ratios of earnings to fixed charges for
Disney for the nine-month periods ended June 30, 1995 and 1994 and for each of
the years in the five-year period ended September 30, 1994. Also set forth below
are the unaudited pro forma combined ratios of earnings to fixed charges for New
Disney for the nine months ended June 30, 1995 and for the year ended September
30, 1994:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED JUNE 30, YEAR ENDED SEPTEMBER 30,
--------------- -------------------------------------
1995 1994 1994 1993 1992 1991 1990
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Actual (1).................... 9x 8x 9x 7x 8x 6x 11x
Pro forma (1)(2):
Scenario 1.................. 4x 3x
Scenario 2.................. 3x 2x
<FN>
- ------------------------
(1) For purposes of these ratios, earnings are calculated by adding to
(subtracting from) income from continuing operations before income taxes
and cumulative effect of accounting changes, the following: fixed charges,
excluding capitalized interest; and losses and (undistributed earnings)
recognized with respect to less than 50% owned equity investments. Fixed
charges consist of interest on borrowings and that portion of rental
expense that approximates interest.
(2) The pro forma combined ratios of earnings to fixed charges for New Disney
give effect to the Acquisition as if it had been consummated at the
beginning of each period presented. Upon consummation of the Capital Cities
Merger, each outstanding share of Capital Cities Common Stock will be
converted into the right to receive cash, shares of New Disney Common Stock
or a combination of both cash and New Disney Common Stock. The exact amount
of cash and/or shares of New Disney Common Stock to be received by each
shareholder of Capital Cities pursuant to the Capital Cities Merger is
dependent upon, among other things, (i) the stated preferences of the
Capital Cities shareholders on their Election Forms, (ii) the proration
procedures to be applied if the Requested Stock Amount exceeds the Stock
Component or the Requested Cash Amount exceeds the Cash Component, and
(iii) the level of the Maximum Cash Amount, including any increase of the
Maximum Cash Amount by Disney, in its sole discretion. Accordingly, two
alternative scenarios of unaudited pro forma combined ratios of earnings to
fixed charges are presented, which give effect to the range of possible
amounts of New Disney Common Stock and/or cash to be received by Capital
Cities shareholders upon consummation of the Capital Cities Merger.
Scenario 1 assumes that all Capital Cities shareholders receive one share
of New Disney Common Stock and $65 in cash for each outstanding share of
Capital Cities Common Stock, reflecting the maximum number of shares of New
Disney Common Stock which could be issued in connection with the
Acquisition. Scenario 2 assumes that all Capital Cities shareholders
receive solely cash for each outstanding share of Capital Cities Common
Stock, without regard to the Cash Component. See "Unaudited Pro Forma
Combined Condensed Financial Statements."
</TABLE>
8
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
DISNEY/CAPITAL CITIES COMBINED COMPANY
The following unaudited pro forma combined condensed financial statements
are based upon the consolidated financial statements of Disney and Capital
Cities, combined and adjusted to give effect to the Acquisition. Upon
consummation of the Capital Cities Merger, each outstanding share of Capital
Cities Common Stock will be converted into the right to receive cash, shares of
New Disney Common Stock or a combination of both cash and New Disney Common
Stock. The exact amount of cash and/or shares of New Disney Common Stock to be
received by each shareholder of Capital Cities pursuant to the Capital Cities
Merger is dependent upon, among other things, (i) the stated preferences of the
Capital Cities shareholders on the Election Forms, (ii) the proration procedures
to be applied if the Requested Stock Amount exceeds the Stock Component or the
Requested Cash Amount exceeds the Cash Component, and (iii) the level of the
Maximum Cash Amount, including any increase of the Maximum Cash Amount by
Disney, in its sole discretion. Accordingly, two alternative scenarios of
unaudited pro forma combined condensed financial statements are presented, which
give effect to the range of possible amounts of New Disney Common Stock and/or
cash to be received by Capital Cities shareholders upon the consummation of the
Capital Cities Merger. Scenario 1 assumes that all Capital Cities shareholders
receive one share of New Disney Common Stock and $65 in cash (Standard
Consideration) for each outstanding share of Capital Cities Common Stock,
reflecting the maximum number of shares of New Disney Common Stock which could
be issued in connection with the Acquisition. Scenario 2 assumes that all
Capital Cities shareholders receive solely cash (Cash Consideration) for each
outstanding share of Capital Cities Common Stock, without regard to the Cash
Component. See "The Acquisition."
The following unaudited pro forma combined condensed statements of income
for the nine months ended June 30, 1995 and for the year ended September 30,
1994 give effect to the Acquisition as if it had occurred at the beginning of
each period presented. The unaudited pro forma combined condensed statements of
income for the nine months ended June 30, 1995 were prepared based upon the
unaudited consolidated statements of income of Disney for the nine months ended
June 30, 1995 and of Capital Cities for the six months ended July 2, 1995 and
the three months ended December 31, 1994. The unaudited pro forma combined
condensed statements of income for the year ended September 30, 1994 were
prepared based upon the consolidated statements of income of Disney for the year
ended September 30, 1994 and of Capital Cities for the nine months ended October
2, 1994 and the three months ended December 31, 1993.
The following unaudited pro forma combined condensed balance sheets at June
30, 1995 give effect to the Acquisition as if it had occurred on such date and
were prepared based upon the consolidated balance sheets of Disney as of June
30, 1995 and of Capital Cities as of July 2, 1995.
These unaudited pro forma combined condensed financial statements should be
read in conjunction with the Disney and Capital Cities audited consolidated
financial statements and unaudited interim consolidated financial statements,
including the notes thereto, which are incorporated by reference in this
Prospectus. See "Incorporation of Certain Documents by Reference."
The unaudited pro forma combined condensed financial statements are not
necessarily indicative of the results of operations or financial position of the
combined company that would have occurred had the Acquisition occurred at the
beginning of each period presented or on the date indicated, nor are they
necessarily indicative of future operating results or financial position.
The unaudited pro forma adjustments are based upon information set forth or
incorporated by reference in this Prospectus and certain assumptions included in
the notes to the unaudited pro forma combined condensed financial statements.
Disney and New Disney believe the pro forma assumptions are reasonable under the
circumstances. In addition, as of the date of this Prospectus, Disney and New
Disney believe that the unaudited pro forma financial statements reflect the
impact on the operations and liquidity of New Disney of all material events or
changes expected to result from the Acquisition.
9
<PAGE>
The Acquisition will be accounted for by the purchase method of accounting.
Accordingly, New Disney's cost to acquire Capital Cities (the "Purchase
Consideration"), calculated to be $19.08 billion assuming a Disney Common Stock
Price of $57, will be allocated to the assets acquired and liabilities assumed
according to their respective fair values, with the excess Purchase
Consideration being allocated to goodwill. The total cost to acquire Capital
Cities is subject to change, to the extent that fluctuations in the market value
of Disney Common Stock cause the Disney Common Stock Price to change. A change
in the Disney Common Stock Price will result in a corresponding change in
goodwill and related amortization expense. The final allocation of the Purchase
Consideration is dependent upon certain valuations and other studies that have
not progressed to a stage where there is sufficient information to make such an
allocation in the accompanying unaudited pro forma combined condensed financial
statements. Accordingly, the purchase allocation adjustments made in connection
with the development of the unaudited pro forma combined condensed financial
statements are preliminary and have been made solely for the purpose of
developing such unaudited pro forma combined condensed financial statements.
The $16.47 billion pro forma excess of Purchase Consideration over net
tangible assets acquired as of June 30, 1995 is being amortized over 40 years at
a rate of $411.7 million per year, in accordance with generally accepted
accounting principles, which require that acquired intangible assets be
amortized over lives not to exceed 40 years. New Disney believes that the
intangible assets acquired, representing principally the franchises and
trademarks of Capital Cities, represent scarce assets with indefinite lives,
which have historically appreciated in value over time. In addition, the
Acquisition will permit the continued expansion of current lines of business, as
well as the development of new businesses, via the cross promotion of the well
known franchises, trademarks and products of Disney and Capital Cities. New
Disney believes it will benefit from the Acquisition for an indeterminable
period of time of at least 40 years and, therefore, a 40-year amortization
period is appropriate. After consummation of the Acquisition, New Disney
anticipates completion of the valuations and other studies of the significant
assets, liabilities and business operations of Capital Cities. Using this
information, New Disney will make a final allocation of the Purchase
Consideration, including allocation to tangible assets and liabilities,
identifiable intangible assets and goodwill. New Disney believes that any
significant allocation of excess Purchase Consideration to assets other than
goodwill will be amortized over periods approximating 40 years.
New Disney will perform periodic reviews of the goodwill and other
intangible assets arising from the Acquisition, to ensure that they are carried
at recoverable amounts in light of current business conditions.
The future results of operations of New Disney will reflect increased
amortization of intangible assets, increased interest expense and a higher
effective income tax rate, since a significant portion of the consideration to
be received by Capital Cities shareholders upon the consummation of the Capital
Cities Merger will be non-deductible for tax purposes. The future financial
position of New Disney will reflect increased intangible assets as described
above, increased borrowings, and, under Scenario 1, increased stockholders'
equity resulting from the issuance of New Disney Common Stock to shareholders of
Capital Cities. See "Notes to Unaudited Pro Forma Combined Condensed Financial
Statements."
10
<PAGE>
INDEX TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
Scenario 1: Capital Cities shareholders receive the Standard Consideration
(maximum stock)
- Unaudited pro forma combined condensed statements of income:
-- Nine months ended June 30, 1995
-- Year ended September 30, 1994
- Unaudited pro forma combined condensed balance sheet as of June 30, 1995
Scenario 2: Capital Cities shareholders receive the Cash Consideration, without
regard to the Cash Component (maximum cash)
- Unaudited pro forma combined condensed statements of income:
-- Nine months ended June 30, 1995
-- Year ended September 30, 1994
- Unaudited pro forma combined condensed balance sheet as of June 30, 1995
Notes to unaudited pro forma combined condensed financial statements
11
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
NINE MONTHS ENDED JUNE 30, 1995
(SCENARIO 1: CAPITAL CITIES SHAREHOLDERS RECEIVE THE STANDARD CONSIDERATION
(MAXIMUM STOCK))
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------ -----------------------
DISNEY CAPITAL CITIES ADJUSTMENTS COMBINED
-------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
(IN MILLIONS, EXCEPT PER SHARE DATA)
Revenues........................... $8,988.5 $5,229.8 $14,218.3
Costs and Expenses................. 6,682.9 3,985.3 10,668.2
Depreciation....................... 345.9 84.3 430.2
Amortization of Intangible
Assets............................ 48.1 $ 260.7(a) 308.8
-------- -------------- ----------- ---------
Operating Income................... 1,959.7 1,112.1 (260.7) 2,811.1
General and Administrative
Expenses.......................... 126.8 35.4 162.2
Interest Expense, Net.............. 101.3 2.1 466.5(b) 569.9
Other.............................. 19.6 (3.7) 15.9
-------- -------------- ----------- ---------
Income Before Income Taxes......... 1,712.0 1,078.3 (727.2) 2,063.1
Income Taxes....................... 595.9 471.1 (181.9)(c) 885.1
-------- -------------- ----------- ---------
Net Income......................... $1,116.1 $ 607.2 $(545.3) $ 1,178.0
-------- -------------- ----------- ---------
-------- -------------- ----------- ---------
Earnings Per Share................. $ 2.11 $ 3.94 $ 1.72(d)
-------- -------------- ---------
-------- -------------- ---------
Average Number of Common and
Common Equivalent Shares
Outstanding....................... 530.2 154.0 685.1(d)
-------- -------------- ---------
-------- -------------- ---------
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
12
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
YEAR ENDED SEPTEMBER 30, 1994
(SCENARIO 1: CAPITAL CITIES SHAREHOLDERS RECEIVE THE STANDARD CONSIDERATION
(MAXIMUM STOCK))
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------- -----------------------
DISNEY CAPITAL CITIES ADJUSTMENTS COMBINED
--------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
(IN MILLIONS, EXCEPT PER SHARE DATA)
Revenues........................... $10,055.1 $6,160.1 $16,215.2
Costs and Expenses................. 7,679.7 4,849.8 12,529.5
Depreciation....................... 409.7 105.3 515.0
Amortization of Intangible
Assets............................ 62.8 $ 348.9(a) 411.7
--------- -------------- ----------- ---------
Operating Income................... 1,965.7 1,142.2 (348.9) 2,759.0
General and Administrative
Expenses.......................... 162.2 40.7 202.9
Interest Expense (Income), Net..... (10.0) 29.8 671.4(b) 691.2
Other.............................. 110.4 110.4
--------- -------------- ----------- ---------
Income Before Income Taxes......... 1,703.1 1,071.7 (1,020.3) 1,754.5
Income Taxes....................... 592.7 465.7 (261.8)(c) 796.6
--------- -------------- ----------- ---------
Net Income......................... $ 1,110.4 $ 606.0 $ (758.5) $ 957.9
--------- -------------- ----------- ---------
--------- -------------- ----------- ---------
Earnings Per Share................. $ 2.04 $ 3.87 $ 1.37(d)
--------- -------------- ---------
--------- -------------- ---------
Average Number of Common and
Common Equivalent Shares
Outstanding....................... 545.2 156.5 700.1(d)
--------- -------------- ---------
--------- -------------- ---------
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
13
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF JUNE 30, 1995
(SCENARIO 1: CAPITAL CITIES SHAREHOLDERS RECEIVE THE STANDARD CONSIDERATION
(MAXIMUM STOCK))
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------- ---------------------------
DISNEY CAPITAL CITIES ADJUSTMENTS COMBINED
--------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
(IN MILLIONS)
ASSETS
Cash and Cash Equivalents........ $ 956.7 $1,169.3 $ (1,626.0)(a) $ 500.0
Investments...................... 1,457.3 284.2 (1,000.0)(b) 741.5
Receivables...................... 1,449.9 885.3 2,335.2
Inventories...................... 727.9 727.9
Film and Television Costs........ 1,974.9 565.8 2,540.7
Theme Parks, Resorts and Other
Property, Net................... 6,131.9 1,286.4 7,418.3
Intangible Assets, Net........... 1,995.2 14,471.9(c) 16,467.1
Other Assets..................... 1,682.7 811.2 2,493.9
--------- -------------- ----------- ---------
$14,381.3 $6,997.4 $ 11,845.9 $33,224.6
--------- -------------- ----------- ---------
--------- -------------- ----------- ---------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts Payable and Other
Accrued Liabilities............. $ 3,170.3 $1,205.9 $ (344.6)(d) $ 4,031.6
Borrowings....................... 3,362.2 612.9 7,965.1(e) 11,940.2
Other Liabilities................ 1,474.7 574.7 2,049.4
Stockholders' Equity............. 6,374.1 4,603.9 4,225.4(f) 15,203.4
--------- -------------- ----------- ---------
$14,381.3 $6,997.4 $ 11,845.9 $33,224.6
--------- -------------- ----------- ---------
--------- -------------- ----------- ---------
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
14
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
NINE MONTHS ENDED JUNE 30, 1995
(SCENARIO 2: CAPITAL CITIES SHAREHOLDERS RECEIVE THE CASH CONSIDERATION,
WITHOUT REGARD TO THE CASH COMPONENT (MAXIMUM CASH))
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------ -----------------------
DISNEY CAPITAL CITIES ADJUSTMENTS COMBINED
-------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
(IN MILLIONS, EXCEPT PER SHARE DATA)
Revenues........................... $8,988.5 $5,229.8 $14,218.3
Costs and Expenses................. 6,682.9 3,985.3 10,668.2
Depreciation....................... 345.9 84.3 430.2
Amortization of Intangible
Assets............................ 48.1 $ 260.7(a) 308.8
-------- -------------- ----------- ---------
Operating Income................... 1,959.7 1,112.1 (260.7) 2,811.1
General and Administrative
Expenses.......................... 126.8 35.4 162.2
Interest Expense, Net.............. 101.3 2.1 896.9(b) 1,000.3
Other.............................. 19.6 (3.7) 15.9
-------- -------------- ----------- ---------
Income Before Income Taxes......... 1,712.0 1,078.3 (1,157.6) 1,632.7
Income Taxes....................... 595.9 471.1 (349.8)(c) 717.2
-------- -------------- ----------- ---------
Net Income......................... $1,116.1 $ 607.2 $ (807.8) $ 915.5
-------- -------------- ----------- ---------
-------- -------------- ----------- ---------
Earnings Per Share................. $ 2.11 $ 3.94 $ 1.73(d)
-------- -------------- ---------
-------- -------------- ---------
Average Number of Common and
Common Equivalent Shares
Outstanding....................... 530.2 154.0 530.2(d)
-------- -------------- ---------
-------- -------------- ---------
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
15
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
YEAR ENDED SEPTEMBER 30, 1994
(SCENARIO 2: CAPITAL CITIES SHAREHOLDERS RECEIVE THE CASH CONSIDERATION,
WITHOUT REGARD TO THE CASH COMPONENT (MAXIMUM CASH))
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------- -----------------------------
DISNEY CAPITAL CITIES ADJUSTMENTS COMBINED
--------- -------------- -------------- ------------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues........................... $10,055.1 $6,160.1 $ 16,215.2
Costs and Expenses................. 7,679.7 4,849.8 12,529.5
Depreciation....................... 409.7 105.3 515.0
Amortization of Intangible
Assets............................ 62.8 $ 348.9(a) 411.7
--------- -------------- -------------- ------------
Operating Income................... 1,965.7 1,142.2 (348.9) 2,759.0
General and Administrative
Expenses.......................... 162.2 40.7 202.9
Interest Expense (Income), Net..... (10.0) 29.8 1,245.3(b) 1,265.1
Other.............................. 110.4 110.4
--------- -------------- -------------- ------------
Income Before Income Taxes......... 1,703.1 1,071.7 (1,594.2) 1,180.6
Income Taxes....................... 592.7 465.7 (485.7)(c) 572.7
--------- -------------- -------------- ------------
Net Income......................... $ 1,110.4 $ 606.0 $(1,108.5) $ 607.9
--------- -------------- -------------- ------------
--------- -------------- -------------- ------------
Earnings Per Share................. $ 2.04 $ 3.87 $ 1.12(d)
--------- -------------- ------------
--------- -------------- ------------
Average Number of Common and Common
Equivalent Shares Outstanding . 545.2 156.5 545.2(d)
--------- -------------- ------------
--------- -------------- ------------
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
16
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF JUNE 30, 1995
(SCENARIO 2: CAPITAL CITIES SHAREHOLDERS RECEIVE THE CASH CONSIDERATION,
WITHOUT REGARD TO THE CASH COMPONENT (MAXIMUM CASH))
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------- --------------------------------
DISNEY CAPITAL CITIES ADJUSTMENTS COMBINED
--------- -------------- ---------------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents........ $ 956.7 $1,169.3 $ (1,626.0)(a) $ 500.0
Investments...................... 1,457.3 284.2 (1,000.0)(b) 741.5
Receivables...................... 1,449.9 885.3 2,335.2
Inventories...................... 727.9 727.9
Film and Television Costs........ 1,974.9 565.8 2,540.7
Theme Parks, Resorts and Other
Property, Net................... 6,131.9 1,286.4 7,418.3
Intangible Assets, Net........... 1,995.2 14,471.9(c) 16,467.1
Other Assets..................... 1,682.7 811.2 2,493.9
--------- -------------- ---------------- ---------
$14,381.3 $6,997.4 $ 11,845.9 $33,224.6
--------- -------------- ---------------- ---------
--------- -------------- ---------------- ---------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts Payable and Other
Accrued Liabilities............. $ 3,170.3 $1,205.9 $ (344.6)(d) $ 4,031.6
Borrowings....................... 3,362.2 612.9 16,794.4(e) 20,769.5
Other Liabilities................ 1,474.7 574.7 2,049.4
Stockholders' Equity............. 6,374.1 4,603.9 (4,603.9)(f) 6,374.1
--------- -------------- ---------------- ---------
$14,381.3 $6,997.4 $ 11,845.9 $33,224.6
--------- -------------- ---------------- ---------
--------- -------------- ---------------- ---------
</TABLE>
See accompanying notes to unaudited pro forma combined condensed financial
statements.
17
<PAGE>
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
(TABULAR DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The unaudited pro forma combined condensed financial statements reflect the
conversion of each outstanding share of Capital Cities Common Stock (154.9
million shares, representing 153.9 million shares outstanding as of July 2, 1995
plus an estimated 1.0 million shares expected to be issued through the Effective
Time in connection with the Capital Cities employee stock purchase plan) into
cash and/or shares of New Disney Common Stock as follows:
<TABLE>
<CAPTION>
SCENARIO 1 SCENARIO 2
MAXIMUM STOCK MAXIMUM CASH
-------------- --------------
<S> <C> <C>
Consideration exchanged consists of the following:
Cash........................................................................... $ 10,068.5 $ 18,897.8
New Disney Common Stock........................................................ 8,829.3 --
Settlement of certain benefit plans (1).......................................... 178.0 178.0
-------------- --------------
Total Purchase Consideration..................................................... 19,075.8 19,075.8
Less: Capital Cities net tangible assets as of July 2, 1995...................... 2,608.7 2,608.7
-------------- --------------
Excess of Purchase Consideration over net tangible assets acquired............... $ 16,467.1 $ 16,467.1
-------------- --------------
-------------- --------------
</TABLE>
- ------------------------
(1) As a result of the Acquisition, certain Capital Cities benefit plans will
become fully vested and the related benefits will become immediately payable
in a single lump-sum distribution. In addition, the Acquisition results in
accelerated vesting of certain options to purchase shares of Capital Cities
Common Stock, which for purposes of these pro forma combined condensed
financial statements are assumed to be settled in cash. The amount included
in the Purchase Consideration reflects total estimated payments of $522.6
million, less related amounts accrued at July 2, 1995 of $207.0 million, and
less estimated income tax benefits of $137.6 million.
Acquisition expenses, including debt issuance costs, are not expected to be
material and, accordingly, have not been included in the unaudited pro forma
combined condensed financial statements.
Transactions between Disney and Capital Cities have not been eliminated from
the unaudited pro forma combined condensed financial statements, as the amounts
are immaterial in each of the periods presented.
Certain reclassifications have been made to the Disney and Capital Cities
historical consolidated financial statements to set forth the unaudited pro
forma combined condensed financial statements of New Disney after giving effect
to the Acquisition.
Pro forma adjustments giving effect to the Acquisition in the unaudited pro
forma combined condensed statements of income reflect the following:
(a) Amortization of the excess of Purchase Consideration over net tangible
assets acquired on a straight-line basis over 40 years, net of
elimination of Capital Cities' historical amortization of excess
acquisition costs over the values assigned to net tangible assets
acquired in prior acquisitions.
(b) Increase in interest expense resulting from the use of new borrowings to
finance a portion of the Purchase Consideration and reduction in
investment and interest income, resulting from the use of certain
short-term investments and cash to fund partial payment of the Purchase
Consideration. The interest rate on new borrowings of $7.97 billion under
Scenario 1 and $16.79 billion under Scenario 2 is assumed to be 6.5%. A
change of 1/8 of 1% in the assumed interest rate will change annual
interest expense by $10.0 million under Scenario 1 and $21.0 million
under Scenario 2.
18
<PAGE>
(c) Income tax effect of pro forma adjustments, excluding amortization of
the excess of Purchase Consideration over net tangible assets acquired,
which is non-deductible for tax purposes.
(d) Earnings per share based upon the weighted average number of shares of
Disney Common Stock and common equivalent shares outstanding for each
period presented, including under Scenario 1, the shares of New Disney
Common Stock assumed to be issued in connection with the Acquisition, as
if they had been issued at the beginning of each period presented.
Pro forma adjustments giving effect to the Acquisition in the unaudited pro
forma combined condensed balance sheets reflect the following:
(a) Liquidation of certain cash balances to fund partial payment of the
Purchase Consideration.
(b) Liquidation of certain short-term investments to fund partial payment of
the Purchase Consideration.
(c) Excess of Purchase Consideration over net tangible assets acquired, net
of elimination of Capital Cities' historical excess of Purchase
Consideration over the values assigned to net tangible assets acquired in
prior acquisitions.
(d) Liquidation of accrued liabilities related to the cash settlement of
certain Capital Cities benefit plans and recording of income tax benefits
related to the distribution of accelerated benefits.
(e) New borrowings to finance the cash portion of the Purchase Consideration
and the cash settlement of certain Capital Cities benefit plans.
(f) Cancellation of treasury stock of Disney, elimination of Capital Cities
shareholders' equity, and under Scenario 1, issuance of 154.9 million
shares of New Disney Common Stock.
As more fully described elsewhere in this Prospectus, the amount of cash
and/or shares of New Disney Common Stock to be received by each shareholder of
Capital Cities pursuant to the Capital Cities Merger is dependent upon, among
other things, (i) the stated preferences of the Capital Cities shareholders on
the Election Forms, (ii) the proration procedures to be applied if the Requested
Stock Amount exceeds the Stock Component or the Requested Cash Amount exceeds
the Cash Component, and (iii) the level of the Maximum Cash Amount, including
any increase of the Maximum Cash Amount by Disney, in its sole discretion. The
two scenarios of unaudited pro forma combined condensed financial statements
presented above give effect to the range of possible amounts of New Disney
Common Stock and/or cash to be received by Capital Cities shareholders upon
consummation of the Capital Cities Merger. However, assuming a Disney Common
Stock Price of $57 and final Purchase Consideration of $14.50 billion in cash
and $4.40 billion in Disney Common Stock (77.2 million shares), representing a
scenario whereby the aggregate amount of cash payable to Capital Cities
shareholders is set at a point approximately halfway between its level under
Scenario 1 and Scenario 2, as defined above, unaudited pro forma combined
earnings per share would be $1.72 and $1.26 for the nine months ended June 30,
1995 and the year ended September 30, 1994, respectively.
19
<PAGE>
The unaudited pro forma combined condensed financial statements have been
prepared assuming a Disney Common Stock Price of $57. The Disney Common Stock
Price is not subject to a minimum or maximum amount and the actual Disney Common
Stock Price may vary to any degree. The following table sets forth the impact of
other Disney Common Stock Prices (representing a $5 variance (chosen
arbitrarily) from the assumed Disney Common Stock Price) on certain elements of
the Acquisition, including unaudited pro forma per share results:
<TABLE>
<CAPTION>
SCENARIO 1 SCENARIO 2
MAXIMUM STOCK MAXIMUM CASH
------------------------ ------------------------
<S> <C> <C> <C> <C>
Disney Common Stock Price.................................. $ 52 $ 62 $ 52 $ 62
New Disney shares issued (1)............................... 154.9 154.9 -- --
Purchase consideration:
Cash..................................................... $ 10,068.5 $ 10,068.5 $ 18,123.3 $ 19,672.3
Stock.................................................... 8,054.8 9,603.8 -- --
Settlement of certain benefit plans...................... 159.5 191.9 159.5 191.9
----------- ----------- ----------- -----------
Total.................................................. $ 18,282.8 $ 19,864.2 $ 18,282.8 $ 19,864.2
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Pro forma earnings per share:
Nine months ended June 30, 1995.......................... $ 1.74 $ 1.70 $ 1.80 $ 1.65
Year ended September 30, 1994............................ $ 1.40 $ 1.34 $ 1.21 $ 1.02
</TABLE>
- ------------------------
(1) Based upon 153.9 million shares of Capital Cities Common Stock outstanding
as of July 2, 1995, plus an estimated 1.0 million shares expected to be
issued through the Effective Time in connection with the Capital Cities
employee stock purchase plan.
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DESCRIPTION OF THE DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more series,
and will constitute either Senior Debt Securities, Senior Subordinated Debt
Securities or Subordinated Debt Securities. Senior Debt Securities may be issued
from time to time under an Indenture (the "Senior Debt Securities Indenture") to
be entered into between New Disney, Disney, as guarantor, and Citibank, N.A., a
national association, as trustee (the "Senior Debt Securities Trustee"). Senior
Subordinated Debt Securities may be issued from time to time under an Indenture
(the "Senior Subordinated Debt Securities Indenture") to be entered into between
New Disney, Disney, as guarantor, and The Chase Manhattan Bank, N.A., as trustee
(the "Senior Subordinated Debt Securities Trustee"). Subordinated Debt
Securities may be issued from time to time under an Indenture (the "Subordinated
Debt Securities Indenture") to be entered into between New Disney, Disney, as
guarantor, and The First National Bank of Chicago, as trustee (the "Subordinated
Debt Securities Trustee").
The Senior Debt Securities Indenture, the Senior Subordinated Debt
Securities Indenture, and the Subordinated Debt Securities Indenture are
referred to herein individually as an "Indenture" and, collectively, as the
"Indentures," and the Senior Debt Securities Trustee, the Senior Subordinated
Debt Securities Trustee and the Subordinated Debt Securities Trustee are
referred to herein individually as the "Trustee" and collectively as the
"Trustees." Copies of the Indentures are filed as exhibits to the Registration
Statement. Capitalized terms used in this section which are not otherwise
defined in this Prospectus shall have the meanings set forth in the Indentures
to which they relate. The following summaries of certain provisions of the Debt
Securities and the Indentures do not purport to be complete and are subject to,
and are qualified in their entirety by express reference to, all the provisions
of the Indentures, including the definitions therein of certain terms. As used
in this section of the Prospectus, "New Disney" refers to DC Holdco, Inc. and
does not include its subsidiaries, including, after consummation of the
Acquisition, Disney or Capital Cities.
GENERAL
The Debt Securities will be direct, unsecured obligations of New Disney.
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provide that Debt Securities may be
issued thereunder from time to time in one or more series.
Under the Indentures, New Disney will have the ability to issue Debt
Securities with terms different from those of Debt Securities previously issued,
without the consent of the holders of previously issued series of Debt
Securities, in an aggregate principal amount determined by New Disney.
Securities may be issued as Discount Securities, which may be sold at a
discount below their principal amount. Even if Securities are not issued at a
discount below their principal amount, such Securities may, for United States
Federal income tax purposes, be deemed to have been issued with "original issue
discount" ("OID") because of certain interest payment characteristics. Special
United States Federal income tax considerations applicable to Securities issued
with original issue discount, including Discount Securities, will be described
in more detail in any applicable Prospectus Supplement. In addition, special
United States Federal tax considerations or other restrictions or terms
applicable to any Debt Securities which are issuable in bearer form, offered
exclusively to United States Aliens or denominated in a currency other than
United States dollars will be set forth in a Prospectus Supplement relating
thereto.
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The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities offered
thereby (the "Offered Debt Securities"): (i) the title of the Offered Debt
Securities; (ii) any limit on the aggregate principal amount of the Offered Debt
Securities; (iii) whether the Offered Debt Securities are to be issuable as
registered securities or bearer securities or both and whether the Offered Debt
Securities may be represented initially by a Debt Security in temporary or
permanent global form, and if so, the initial Depositary with respect to such
temporary or permanent global Debt Security and whether and the circumstances
under which beneficial owners of interests in any such temporary or permanent
global Debt Security may exchange such interests for Debt Securities of such
series and of like tenor of any authorized form and denomination; (iv) the price
or prices at which the Offered Debt Securities will be issued; (v) the date or
dates on which the principal of the Offered Debt Securities is payable or the
method of determination thereof; (vi) the place or places where and the manner
in which the principal of and premium, if any, and interest, if any, on such
Offered Debt Securities will be payable and the place or places where such
Offered Debt Securities may be presented for transfer and, if applicable,
conversion or exchange; (vii) the rate or rates at which the Offered Debt
Securities will bear interest, or the method of calculating such rate or rates,
if any, and the date or dates from which such interest, if any, will accrue;
(viii) the Stated Maturities (as defined below) of installments of interest (the
"Interest Payment Dates"), if any, on which any interest on the Offered Debt
Securities will be payable, and the Regular Record Date for any interest payable
on any Offered Debt Securities which are registered securities; (ix) the right
or obligation, if any, of New Disney to redeem or purchase Debt Securities of
the series pursuant to any sinking fund or analogous provisions or at the option
of a holder thereof, the conditions, if any, giving rise to such right or
obligation, and the period or periods within which, and the price or prices at
which and the terms and conditions upon which Debt Securities of the series
shall be redeemed or purchased, in whole or part, and any provisions for the
remarketing of such Debt Securities; (x) whether such Offered Debt Securities
are convertible or exchangeable into other debt or equity securities, and, if
so, the terms and conditions upon which such conversion or exchange will be
effected including the initial conversion or exchange price or rate and any
adjustments thereto, the conversion or exchange period and other conversion or
exchange provisions; (xi) the currency or currencies, including composite
currencies or currency units, of payment of principal of and interest, if any,
on the Offered Debt Securities, if other than U.S. dollars, and, if other than
U.S. dollars, whether the Offered Debt Securities may be satisfied and
discharged other than as provided in the Indenture and whether New Disney or the
holders of any such Offered Debt Securities may elect to receive payments in
respect of such Offered Debt Securities in a currency or currency units other
than that in which such Offered Debt Securities are stated to be payable; (xii)
any terms applicable to such Offered Debt Securities issued at an issue price
below their stated principal amount, including the issue price thereof and the
rate or rates at which such original issue discount will accrue; (xiii) if the
amount of payments of principal of and interest, if any, on the Offered Debt
Securities is to be determined by reference to an index or formula, or based on
a coin or currency or currency unit other than that in which the Offered Debt
Securities are stated to be payable, the manner in which such amounts are to be
determined and the calculation agent, if any, with respect thereto; (xiv) if
other than the principal amount thereof, the portion of the principal amount of
the Offered Debt Securities which will be payable upon declaration or
acceleration of the maturity thereof pursuant to an Event of Default; (xv) any
deletions from, modifications of or additions to the Events of Default or
covenants of New Disney with respect to such Offered Debt Securities, whether or
not such Events of Default or covenants are consistent with the Events of
Default or covenants set forth herein; (xvi) the terms and conditions of any
Debt Guarantees (as defined below) of Disney with respect to the Offered Debt
Securities, including the terms upon which any such guarantee may be released;
(xvii) any special United States Federal income tax considerations applicable to
the Offered Debt Securities; and (xviii) any other terms of the Offered Debt
Securities not inconsistent with the provisions of any applicable Indenture. The
applicable Prospectus Supplement will also describe the following terms of any
series of Subordinated or Senior Subordinated Debt Securities offered hereby in
respect of which this Prospectus is being delivered: (a) the rights, if any, to
defer payments of interest on the Subordinated or Senior Subordinated Debt
Securities of such series by extending the interest payment period,
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<PAGE>
and the duration of such extensions, and (b) the subordination terms of the
Subordinated or Senior Subordinated Debt Securities of such series. The
foregoing is not intended to be an exclusive list of the terms that may be
applicable to any Offered Debt Securities and shall not limit in any respect the
ability of New Disney to issue Debt Securities with terms different from or in
addition to those described above or elsewhere in this Prospectus provided that
such terms are not inconsistent with the applicable Indenture and this
Prospectus. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to the Offered
Debt Securities.
The operations of New Disney, if the Acquisition is consummated will be
conducted almost entirely through subsidiaries. The operations of Disney are
currently conducted in significant part through subsidiaries. Accordingly, the
cash flow and the consequent ability to service debt of New Disney and Disney,
including the Debt Securities and any Debt Guarantees of Disney, are dependent
upon the earnings of their subsidiaries and the distribution of those earnings
to New Disney or Disney, as the case may be, whether by dividends, loans or
otherwise. The payment of dividends and the making of loans and advances to New
Disney and Disney by their subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those subsidiaries
and are subject to various business considerations. Any right of New Disney and
Disney to receive assets of any of its subsidiaries upon their liquidation or
reorganization (and the consequent right of the holders of the Debt Securities
to participate in those assets) will be effectively subordinated to the claims
of that subsidiary's creditors (including trade creditors), except to the extent
that New Disney or Disney, as the case may be, is itself recognized as a
creditor of such subsidiary, in which case the claims of New Disney or Disney,
as the case may be, would still be subordinate to any security interests in the
assets of such subsidiary and any indebtedness of such subsidiary senior to that
held by New Disney or Disney.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Debt Securities of a series may be issued solely as registered
securities, solely as bearer securities (with or without coupons attached) or as
both registered securities and bearer securities. Debt Securities of a series
may be issuable in whole or in part in the form of one or more global Debt
Securities, as described below under "Global Debt Securities." Unless otherwise
indicated in an applicable Prospectus Supplement, registered securities will be
issuable in denominations of $1,000 and integral multiples thereof, and bearer
securities will be issuable in denominations of $5,000 and $100,000.
Registered securities of any series will be exchangeable for other
registered securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both registered securities and as bearer securities,
at the option of the holder, subject to the terms of the applicable Indenture,
bearer securities (accompanied by all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will be exchangeable
for registered securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. Unless otherwise indicated in an
applicable Prospectus Supplement, any bearer security surrendered in exchange
for a registered security between a Regular Record Date or a Special Record Date
and the relevant date for payment of interest will be surrendered without the
coupon relating to such date for payment of interest and interest will not be
payable in respect of the registered security issued in exchange for such bearer
security, but will be payable only to the holder of such coupon when due in
accordance with the terms of the applicable Indenture. Bearer securities may not
be issued in exchange for registered securities.
Debt Securities may be presented for exchange as provided above, and unless
otherwise indicated in an applicable Prospectus Supplement, registered
securities may be presented for registration of transfer, at the office or
agency of New Disney designated as registrar or co-registrar with respect to any
series of Debt Securities, without service charge and upon payment of any taxes,
assessments or other governmental charges as described in the applicable
Indenture. Such transfer or exchange will
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<PAGE>
be effected on the books of the registrar or any other transfer agent appointed
by New Disney upon such registrar or transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. New Disney intends to initially appoint the Trustee as registrar and
the name of any different or additional registrar designated by New Disney with
respect to the Offered Debt Securities will be included in the Prospectus
Supplement relating thereto. If a Prospectus Supplement refers to any transfer
agents (in addition to the registrar) designated by New Disney with respect to
any series of Debt Securities, New Disney may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that, if Debt Securities of a
series are issuable only as registered securities, New Disney will be required
to maintain a transfer agent in each Place of Payment for such series and, if
Debt Securities of a series are issuable as bearer securities, New Disney will
be required to maintain (in addition to the registrar) a transfer agent in a
Place of Payment for such series located outside the United States. New Disney
may at any time designate additional transfer agents with respect to any series
of Debt Securities.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Indentures do not include covenants limiting the amount of indebtedness that may
be incurred or otherwise restricting New Disney's or Disney's ability to enter
into a highly leveraged transaction, including a reorganization, restructuring,
merger or similar transaction involving New Disney or Disney, that may adversely
affect the holders of the Debt Securities, if such transaction is a permissible
consolidation, merger or similar transaction. In addition, unless otherwise
specified in an applicable Prospectus Supplement, the Indentures do not afford
the holders of the Debt Securities the right to require New Disney or Disney to
repurchase or redeem the Debt Securities in the event of a highly leveraged
transaction. See "Mergers and Sale of Assets."
In the event of any partial redemption of Debt Securities of any series, New
Disney will not be required to (i) issue, register the transfer of or exchange
Debt Securities of that series during a period beginning at the opening of
business 15 days before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on (a) if Debt Securities of the
series are issuable only as registered securities, the day of mailing of the
relevant notice of redemption, and (b) if Debt Securities of the series are
issuable as bearer securities, the day of the first publication of the relevant
notice of redemption or, if Debt Securities of the series are also issuable as
registered securities and there is no publication, the mailing of the relevant
notice of redemption; (ii) register the transfer of or exchange any registered
security, or portion thereof, called for redemption, except the unredeemed
portion of any registered security being redeemed in part; or (iii) exchange any
bearer security called for redemption, except to exchange such bearer security
for a registered security of that series and of like tenor and principal amount
that is immediately surrendered for redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on registered securities will be made at
the office of such paying agent or paying agents as New Disney may designate
from time to time, except that at the option of New Disney payment of principal
or interest may be made by check or by wire transfer to an account maintained by
the payee. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on registered securities will be made to
the person in whose name such registered security is registered at the close of
business on the Regular Record Date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on bearer securities will be payable,
subject to any applicable laws and regulations, at the offices of such paying
agents outside the United States as New Disney may designate from time to time,
or by check or by transfer to an account maintained by the payee outside the
United States. Unless otherwise indicated in an applicable Prospectus
Supplement, any payment of interest on any bearer securities will be made only
against surrender of the coupon relating to such interest installment.
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<PAGE>
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will be designated as New Disney's sole paying agent for payments with
respect to Debt Securities which are issuable solely as registered securities
and as New Disney's paying agent in the Borough of Manhattan, The City of New
York, for payments with respect to Debt Securities (subject to any limitations
described in any applicable Prospectus Supplement) which are issuable as bearer
securities. Any paying agents outside the United States and any other paying
agents in the United States initially designated by New Disney for the Offered
Debt Securities will be named in an applicable Prospectus Supplement. New Disney
may at any time designate additional paying agents or rescind the designation of
any paying agent or approve a change in the office through which any paying
agent acts, except that, if Debt Securities of a series are issuable only as
registered securities, New Disney will be required to maintain a paying agent in
each Place of Payment for such series and, if Debt Securities of a series are
issuable as bearer securities, New Disney will be required to maintain (i) a
paying agent in the Borough of Manhattan, The City of New York for payments with
respect to any registered securities of the series (and for payments with
respect to bearer securities of the series in the circumstances described in the
Indenture, but not otherwise), and (ii) a paying agent in a Place of Payment
located outside the United States where Debt Securities of such series and any
related coupons may be presented and surrendered for payment.
All moneys paid by New Disney to a paying agent for the payment of principal
of or interest, if any, on any Debt Security which remains unclaimed at the end
of two years after such principal or interest shall have become due and payable
will be repaid to New Disney, and the holder of such Debt Security or any coupon
will thereafter look only to New Disney for payment thereof.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole to the Depositary for such Debt Security or to a
nominee or successor of such Depositary. If any Debt Securities of a series are
issuable in global form, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
global Debt Security may exchange such interests for definitive Debt Securities
of such series and of like tenor and principal amount in any authorized form and
denomination, the manner of payment of principal of and interest, if any, on any
such global Debt Security and the specific terms of the depositary arrangement
with respect to any such global Debt Security.
GUARANTEES OF DEBT SECURITIES
Under the terms of the Indentures and subject to the provisions thereof,
prior to the consummation of the Acquisition, Disney will, and subsequent to the
consummation of the Acquisition, Disney may, at its option, unconditionally
guarantee to the holders from time to time of specified series of Debt
Securities the full and prompt payment of principal, premium, if any, and
interest when and as the same shall become due and payable, whether at maturity,
upon redemption or otherwise. Any such guarantees (each, a "Debt Guarantee")
will be unsecured obligations of Disney. Any right of payment of the holders of
Senior Debt Securities under the related Debt Guarantee will be prior to the
right of payment of the holders of Senior Subordinated Debt Securities or
Subordinated Debt Securities under the related Debt Guarantee, and any right of
payment of the holders of Senior Subordinated Debt Securities under the related
Debt Guarantee will be prior to the right of payment of the holders of
Subordinated Debt Securities under the related Debt Guarantee, in each case upon
the terms set forth in the applicable Prospectus Supplement. The Debt Guarantees
may be subordinated to other indebtedness and obligations of Disney to the
extent set forth in the applicable Prospectus Supplement. Unless otherwise
stated in the applicable Prospectus Supplement, upon consummation of the
Acquisition, without any action by Disney, New Disney, the Trustees or any other
person, all obligations of
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<PAGE>
Disney under the Indentures and any Debt Guarantees will terminate and any event
related to Disney which would otherwise constitute an Event of Default under the
Indenture shall not constitute an Event of Default.
If a Debt Guarantee is applicable to Debt Securities offered hereby,
reference is made to the applicable Indenture and the accompanying Prospectus
Supplement for a description of the specific terms of such Debt Guarantee,
including events of default relating thereto, the outstanding principal amount
of indebtedness and other obligations that will rank senior to such Debt
Guarantee and, where applicable, subordination provisions of such Debt Guarantee
and covenants of the Guarantor.
MERGERS AND SALES OF ASSETS
New Disney may not consolidate with or merge into any other person or
convey, transfer or lease its properties and assets substantially as an entirety
to another person, unless, among other things, (i) the resulting, surviving or
transferee person (if other than New Disney) is organized and existing under the
laws of the United States, any state thereof or the District of Columbia and
such person expressly assumes all obligations of New Disney under the Debt
Securities and the Indenture, and (ii) immediately after giving effect to such
transaction, no event which is, or after notice or passage of time or both would
be, an Event of Default (any such event, a "Default") or Event of Default shall
have occurred or be continuing under the Indenture. Upon the assumption of New
Disney's obligations by a person to whom such properties or assets are conveyed,
transferred or leased, subject to certain exceptions, New Disney shall be
discharged from all obligations under the Debt Securities and the Indenture.
Notwithstanding the foregoing, in the event the Acquisition does not occur, New
Disney may consolidate with or merge into Disney and, upon such consolidation or
merger, the Debt Securities will thereafter be obligations solely of Disney
without any action on the part of Disney, New Disney or any other person.
So long as any Debt Guarantee is in effect with respect to a series of Debt
Securities, Disney may not consolidate with or merge into any other person or
convey, transfer or lease its properties and assets substantially as an entirety
to another person, unless, among other things, (i) the resulting, surviving or
transferee person (if other than Disney) is organized and existing under the
laws of the United States, any state thereof or the District of Columbia and
such person expressly assumes all obligations of Disney under the Debt
Guarantees and the Indenture, and (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred or be continuing
under the Indenture. Upon the assumption of Disney's obligations by a person to
whom such properties or assets are conveyed, transferred or leased, subject to
certain exceptions, Disney shall be discharged from all obligations under the
Debt Guarantees and the Indenture.
EVENTS OF DEFAULT
Each Indenture provides that, if an Event of Default specified therein shall
have occurred and be continuing, with respect to each series of the Debt
Securities outstanding thereunder individually, the Trustee or the holders of
not less than 25% in aggregate principal amount of the outstanding Debt
Securities of such series may declare the principal amount (or, if any of the
Debt Securities of such series are Discount Securities, such portion of the
principal amount of such Debt Securities as may be specified by the terms
thereof) of the Debt Securities of such series to be immediately due and
payable. Under certain circumstances, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of such series may rescind
such a declaration.
Under each Indenture, an Event of Default is defined as, with respect to
each series of Securities outstanding thereunder individually, any of the
following: (i) default in payment of the principal of any Debt Security of such
series; (ii) default in payment of any interest on any Debt Security of such
series when due, continuing for 30 days (or 60 days, in the case of Senior
Subordinated or Subordinated Debt Securities); (iii) failure by New Disney to
comply with its other agreements in the Debt Securities of such series or such
Indenture for the benefit of the holders of Debt Securities of such series upon
the receipt by New Disney of notice of such Default by the Trustee or the
holders of at least 25% in aggregate principal amount of the outstanding Debt
Securities of such series and New Disney's failure
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<PAGE>
to cure such Default within 60 days after receipt by New Disney of such notice;
(iv) certain events of bankruptcy or insolvency; (v) in the case of Debt
Securities guaranteed by Disney, any Debt Guarantee shall for any reason cease
to be, or be asserted in writing by a responsible officer of Disney not to be,
in full force and effect, except to the extent contemplated by the Indenture and
such Debt Guarantee; and (vi) any other Event of Default set forth in an
applicable Prospectus Supplement.
The Trustee shall give notice to holders of the Debt Securities of any
continuing Default known to the Trustee within 90 days after the occurrence
thereof; PROVIDED, that the Trustee may withhold such notice, as to any Default
other than a payment Default, if it determines in good faith that withholding
the notice is in the interests of the holders.
The holders of a majority in principal amount of the outstanding Debt
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series; PROVIDED that such direction shall not be in conflict with any law or
the Indenture and subject to certain other limitations. Before proceeding to
exercise any right or power under the Indenture at the direction of such
holders, the Trustee shall be entitled to receive from such holders reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in complying with any such direction.
With respect to each series of Debt Securities, no holder will have any right to
pursue any remedy with respect to the Indenture or the Debt Securities, unless
(i) such holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of such series;
(ii) the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of such series shall have made a written request to
the Trustee to pursue such remedy; (iii) such holder or holders have offered to
the Trustee reasonable indemnity satisfactory to the Trustee; (iv) the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of such series have not given the Trustee a direction inconsistent with such
request within 60 days after receipt of such request; and (v) the Trustee shall
have failed to comply with the request within such 60-day period.
Notwithstanding the foregoing, the right of any holder of any Debt Security
or coupon to receive payment of the principal of and interest in respect of such
Debt Security or payment of such coupon on the date specified in such Debt
Security or coupon representing such installment of interest as the fixed date
on which an amount equal to the principal of such Debt Security or an
installment of principal thereof or interest thereon is due and payable (the
"Stated Maturity" or "Stated Maturities") or to institute suit for the
enforcement of any such payments shall not be impaired or adversely affected
without such holder's consent. The holders of at least a majority in aggregate
principal amount of the outstanding Debt Securities of any series may waive an
existing Default with respect to such series and its consequences, other than
(i) any Default in any payment of the principal of, or interest on, any Debt
Security of such series or (ii) any Default in respect of certain covenants or
provisions in the Indenture which may not be modified without the consent of the
holder of each outstanding Debt Security of such series affected as described in
"Modification and Waiver," below.
Each Indenture provides that the Company shall deliver to the Trustee within
120 days after the end of each fiscal year of the Company (beginning with the
fiscal year ending September 30, 1996) an officers' certificate stating whether
or not the signers know of any Default that occurred during such period.
MODIFICATION AND WAIVER
New Disney, Disney and the Trustee may execute a supplemental indenture
without the consent of the holders of the Debt Securities or any related coupons
(i) to add to the covenants, agreements and obligations of New Disney or Disney
for the benefit of the holders of all the Debt Securities of any series and any
related Debt Guarantees or to surrender any right or power conferred in the
Indenture upon New Disney or Disney; (ii) to evidence the succession of another
corporation to New Disney and the assumption by it of the obligations of New
Disney under the Indenture and the Debt Securities or to evidence the succession
of another corporation to Disney and the assumption by it of the obligations
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<PAGE>
of Disney under the Indenture and the Debt Guarantees; (iii) to provide that
bearer securities may be registrable as to principal, to change or eliminate any
restrictions (including restrictions relating to payment in the United States)
on the payment of principal of or interest, if any, on bearer securities, to
permit bearer securities to be issued in exchange for registered securities, to
permit bearer securities to be issued in exchange for bearer securities of other
authorized denominations or to permit the issuance of Debt Securities in
uncertificated form; (iv) to establish the form or terms of Debt Securities of
any series and any related Debt Guarantees or coupons as permitted by the
Indenture; (v) to provide for the acceptance of appointment under the Indenture
of a successor Trustee with respect to the Debt Securities of one or more series
and to add to or change any provisions of the Indenture as shall be necessary to
provide for or facilitate the administration of the trusts by more than one
Trustee; (vi) to cure any ambiguity, defect or inconsistency; (vii) to add to,
change or eliminate any provisions (which addition, change or elimination may
apply to one or more series of Debt Securities), PROVIDED that any such
addition, change or elimination neither (a) applies to any Debt Security of any
series created prior to the execution of such supplemental indenture and is
entitled to the benefit of such provision nor (b) modifies the rights of the
holder of any such Debt Security with respect to such provision; (viii) to
secure the Debt Securities; or (ix) to make any other change that does not
adversely affect the rights of any Securityholder.
Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt Securities
of the series affected by such supplemental indenture, New Disney, Disney and
the Trustee may also execute a supplemental indenture to add provisions to, or
change in any manner or eliminate any provisions of, the Indenture with respect
to such series of Debt Securities or modify in any manner the rights of the
holders of the Debt Securities of such series and any related coupons under such
Indenture; PROVIDED that no such supplemental indenture will, without the
consent of the holder of each such outstanding Debt Security affected thereby
(i) change the stated maturity of the principal of, or any installment of
principal or interest on, any such Debt Security or any premium payable upon
redemption thereof, or reduce the amount of principal of any Debt Security that
is a Discount Security and that would be due and payable upon declaration of
acceleration of maturity thereof; (ii) reduce the principal amount of, or the
rate of interest on, any such Debt Security; (iii) change the place or currency
of payment of principal or interest, if any, on any such Debt Security; (iv)
impair the right to institute suit for the enforcement of any payment on or with
respect to any such Debt Security; (v) reduce the above-stated percentage of
holders of Debt Securities of any series necessary to modify or amend such
Indenture; (vi) modify the foregoing requirements or reduce the percentage in
principal amount of outstanding Debt Securities of any series necessary to waive
any covenant or past default; (vii) make any change in the terms of any Debt
Guaranty with respect to the Debt Securities of any series in any manner adverse
to the rights of the holders of Debt Securities of such series; or (viii) in the
case of Senior Subordinated or Subordinated Debt Securities, amend or modify any
of the provisions of such Indenture relating to subordination of the Debt
Securities in any manner adverse to the holders of such Debt Securities. Holders
of not less than a majority in principal amount of the outstanding Debt
Securities of any series may waive certain past Defaults and may waive
compliance by New Disney with certain of the restrictive covenants described
above with respect to the Debt Securities of such series.
DISCHARGE AND DEFEASANCE
Unless otherwise indicated in an applicable Prospectus Supplement, each
Indenture provides that New Disney may satisfy and discharge obligations
thereunder with respect to the Debt Securities of any series by delivering to
the Trustee for cancellation all outstanding Debt Securities of such series or
depositing with the Trustee, after such outstanding Debt Securities have become
due and payable, cash sufficient to pay at Stated Maturity all of the
outstanding Debt Securities of such series and paying all other sums payable
under the Indenture with respect to such series.
In addition, unless otherwise indicated in an applicable Prospectus
Supplement, each Indenture provides that: New Disney and Disney (a) shall be
discharged from its obligations in respect of the
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Debt Securities of such series ("defeasance and discharge"), or (b) may cease to
comply with certain restrictive covenants ("covenant defeasance") including
those described under "Mergers and Sales of Assets" and any such omission shall
not be an Event of Default with respect to the Debt Securities of such series,
in each case at any time prior to the Stated Maturity or redemption thereof,
when New Disney has irrevocably deposited with the Trustee, in trust, (i)
sufficient funds in the currency or currency unit in which the Debt Securities
are denominated to pay the principal of (and premium, if any) and interest to
Stated Maturity (or redemption) on, the Debt Securities of such series, or (ii)
such amount of direct obligations of, or obligations the principal of (and
premium, if any) and interest on which are fully guaranteed by, the government
which issued the currency in which the Debt Securities are denominated, and
which are not subject to prepayment, redemption or call, as will, together with
the predetermined and certain income to accrue thereon without consideration of
any reinvestment thereof, be sufficient to pay when due the principal of (and
premium, if any) and interest to Stated Maturity (or redemption) on, the Debt
Securities of such series. Such defeasance and discharge and covenant defeasance
are conditioned upon, among other things, New Disney's delivery of an opinion of
counsel that the holders of the Debt Securities of such series will not
recognize income, gain or loss for United States Federal income tax purposes as
a result of such defeasance, and will be subject to tax in the same manner as if
no defeasance and discharge or covenant defeasance, as the case may be, had
occurred. Upon such defeasance and discharge, the holders of the Debt Securities
of such series shall no longer be entitled to the benefits of the Indenture,
except for the purposes of registration of transfer and exchange of the Debt
Securities of such series and replacement of lost, stolen or mutilated Debt
Securities and shall look only to such deposited funds or obligations for
payment.
THE TRUSTEES
The Senior Debt Securities Trustee is a national banking association, is a
participating lender under various credit arrangements with Disney and its
subsidiaries and is also the fiscal agent with respect to certain debt
securities of Disney. The Senior Debt Securities Trustee is also an affiliate of
the administrative agent under New Disney's credit agreements. Each of the
Senior Subordinated Debt Securities Trustee and the Subordinated Debt Securities
Trustee is a lender under New Disney's credit agreements. Each Trustee will be
permitted to engage in other transactions with Disney, New Disney and each of
their subsidiaries; HOWEVER, if the Trustee acquires any conflicting interest,
it must eliminate such conflict or resign.
DESCRIPTION OF PREFERRED STOCK
New Disney may issue, from time to time, shares of one or more series or
classes of Preferred Stock. The obligation of New Disney to make dividend
payments and payments upon liquidation or redemption with respect to Preferred
Stock issued prior to the consummation of the Acquisition will be guaranteed, to
the extent set forth herein and in any applicable Prospectus Supplement, by
Disney, which guarantee will be released upon the consummation of the
Acquisition. See "Guarantees of Preferred Stock."
The following description sets forth certain general terms and provisions of
the Preferred Stock to which any Prospectus Supplement may relate. The
particular terms of any series of Preferred Stock and the extent, if any, to
which such general provisions may apply to the series of Preferred Stock so
offered will be described in the Prospectus Supplement relating to such
Preferred Stock. The following summary of certain provisions of the Preferred
Stock do not purport to be complete and is subject to, and is qualified in its
entirety by express reference to, the provisions of New Disney's Restated
Certificate of Incorporation (the "New Disney Certificate of Incorporation") and
the Certificate of Designation relating to a specific series of the Preferred
Stock (the "Certificate of Designation"), which will be in the form filed as an
exhibit to, or incorporated by reference in, the Registration Statement of which
this Prospectus is a part at or prior to the time of issuance of such series of
Preferred Stock.
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Under the New Disney Certificate of Incorporation, New Disney has the
authority to issue 100,000,000 shares of Preferred Stock. The Board of Directors
of New Disney is authorized to issue shares of Preferred Stock, in one or more
series or classes, and to fix for each such series voting powers and such
preferences and relative, participating, optional or other special rights and
such qualifications, limitations or restrictions as are permitted by the
Delaware General Corporation Law.
The Board of Directors of New Disney shall be authorized to determine for
each series of Preferred Stock, and the Prospectus Supplement shall set forth
with respect to such series: (i) the designation of such shares and the number
of shares that constitute such series, (ii) the dividend rate (or the method of
calculation thereof), if any, on the shares of such series and the priority as
to payment of dividends with respect to other classes or series of capital stock
of New Disney, (iii) the dividend periods (or the method of calculation
thereof), (iv) the voting rights of the shares, (v) the liquidation preference
and the priority as to payment of such liquidation preference with respect to
other classes or series of capital stock of New Disney and any other rights of
the shares of such series upon any liquidation or winding-up of New Disney, (vi)
whether or not and on what terms the shares of such series will be subject to
redemption or repurchase at the option of New Disney, (vii) whether and on what
terms the shares of such series will be convertible into or exchangeable for
other debt or equity securities, (viii) whether depositary shares representing
shares of such series of Preferred Stock will be offered and, if so, the
fraction of a share of such series of Preferred Stock represented by each
depositary share (see "Description of Depositary Shares" below), (ix) whether
the shares of such series of Preferred Stock will be listed on a securities
exchange, (x) any special United States Federal income tax considerations
applicable to such series, and (xi) the other rights and privileges and any
qualifications, limitations or restrictions of such rights or privileges of such
series.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when and
as declared by the Board of Directors of New Disney out of funds of New Disney
legally available therefor, an annual cash dividend payable at such dates and at
such rates, if any, per share per annum as set forth in the applicable
Prospectus Supplement.
Unless otherwise set forth in the applicable Prospectus Supplement, each
series of Preferred Stock will rank junior as to dividends to any Preferred
Stock that may be issued in the future that is expressly senior as to dividends
to the Preferred Stock. If at any time New Disney has failed to pay accrued
dividends on any such senior shares at the time such dividends are payable, New
Disney may not pay any dividend on the Preferred Stock or redeem or otherwise
repurchase shares of Preferred Stock until such accumulated but unpaid dividends
on such senior shares have been paid or set aside for payment in full by New
Disney.
Unless otherwise set forth in the applicable Prospectus Supplement, no
dividends (other than in common stock or other capital stock ranking junior to
the Preferred Stock of any series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment, nor shall any other distribution be
declared or made upon the common stock, or any other capital stock of New Disney
ranking junior to or on a parity with the Preferred Stock of such series as to
dividends, nor shall any common stock or any other capital stock of New Disney
ranking junior to or on a parity with the Preferred Stock of such series as to
dividends be redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption of
any shares of any such stock) by New Disney (except by conversion into or
exchange for other capital stock of New Disney ranking junior to the Preferred
Stock of such series as to dividends) unless (i) if such series of Preferred
Stock has a cumulative dividend, full cumulative dividends on the Preferred
Stock of such series have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for all past
dividend periods and the then current dividend period and (ii) if such series of
Preferred Stock does not have a cumulative dividend, full dividends on the
Preferred Stock of such series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period;
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provided, however, that any monies theretofore deposited in any sinking fund
with respect to any preferred stock in compliance with the provisions of such
sinking fund may thereafter be applied to the purchase or redemption of such
preferred stock in accordance with the terms of such sinking fund, regardless of
whether at the time of such application full cumulative dividends upon shares of
the Preferred Stock outstanding on the last dividend payment date shall have
been paid or declared and set apart for payment; and provided, further, that any
such junior or parity preferred stock or common stock may be converted into or
exchanged for stock of New Disney ranking junior to the Preferred Stock as to
dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
CONVERTIBILITY
No series of Preferred Stock will be convertible into, or exchangeable for,
other securities or property except as set forth in the applicable Prospectus
Supplement.
REDEMPTION AND SINKING FUND
No series of Preferred Stock will be redeemable or receive the benefit of a
sinking fund except as set forth in the applicable Prospectus Supplement.
LIQUIDATION RIGHTS
Unless otherwise set forth in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of New Disney, the holders
of shares of each series of Preferred Stock are entitled to receive out of
assets of New Disney available for distribution to stockholders, before any
distribution of assets is made to holders of: (i) any other shares of preferred
stock ranking junior to such series of Preferred Stock as to rights upon
liquidation, dissolution or winding up; and (ii) shares of common stock,
liquidating distributions per share in the amount of the liquidation preference
specified in the applicable Prospectus Supplement for such series of Preferred
Stock plus any dividends accrued and accumulated but unpaid to the date of final
distribution; but the holders of each series of Preferred Stock will not be
entitled to receive the liquidating distribution of, plus such dividends on,
such shares until the liquidation preference of any shares of New Disney's
capital stock ranking senior to such series of the Preferred Stock as to the
rights upon liquidation, dissolution or winding up shall have been paid (or a
sum set aside therefor sufficient to provide for payment) in full. If upon any
liquidation, dissolution or winding up of New Disney, the amounts payable with
respect to the Preferred Stock, and any other Preferred Stock ranking as to any
such distribution on a parity with the Preferred Stock are not paid in full, the
holders of the preferred stock and such other parity preferred stock will share
ratably in any such distribution of assets in proportion to the full respective
preferential amount to which they are entitled. Unless otherwise specified in a
Prospectus Supplement for a series of Preferred Stock, after payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of shares of Preferred Stock will not be entitled to any further participation
in any distribution of assets by New Disney. Neither a consolidation or merger
of New Disney with another corporation nor a sale of securities shall be
considered a liquidation, dissolution or winding up of New Disney.
VOTING RIGHTS
Holders of Preferred Stock will not have any voting right except as set
forth below or in the applicable Prospectus Supplement or as otherwise from time
to time required by law. Whenever dividends on any applicable series of
Preferred Stock or any other class or series of stock ranking on a parity with
the applicable series of Preferred Stock with respect to the payment of
dividends shall be in arrears for the equivalent of six quarterly dividend
periods, whether or not consecutive, the holders of shares of such series of
Preferred Stock (voting separately as a class with all other series of Preferred
Stock then entitled to such voting rights) will be entitled to vote for the
election of two of the authorized number of directors of New Disney at the next
annual meeting of stockholders and at each
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subsequent meeting until all dividends accumulated on such series of Preferred
Stock shall have been fully paid or set apart for payment. The term of office of
all directors elected by the holders of such Preferred Stock shall terminate
immediately upon the termination of the right of the holders of such Preferred
Stock to vote for directors. Unless otherwise set forth in the applicable
Prospectus Supplement, holders of shares of Preferred Stock will have one vote
for each share held.
So long as any shares of any series of Preferred Stock remain outstanding,
New Disney shall not, without the consent of holders of at least two-thirds of
the shares of such series of Preferred Stock outstanding at the time, voting
separately as a class with all other series of Preferred Stock of New Disney
upon which like voting rights have been conferred and are exercisable, (i) issue
or increase the authorized amount of any class or series of stock ranking prior
to the outstanding Preferred Stock as to dividends or upon liquidation or (ii)
amend, alter or repeal the provisions of New Disney's Certificate of
Incorporation or of the resolutions contained in the Certificate of Designation
relating to such series of Preferred Stock, whether by merger, consolidation or
otherwise, so as to materially adversely affect any power, preference or special
right of such series of Preferred Stock or the holders thereof; PROVIDED,
HOWEVER, that any increase in the amount of the authorized common stock or
authorized preferred stock or any increase or decrease in the number of shares
of any series of preferred stock or the creation and issuance of other series of
common stock or preferred stock ranking on a parity with or junior to Preferred
Stock as to dividends and upon liquidation, dissolution or winding up shall not
be deemed to materially adversely affect such powers, preferences or special
rights.
GUARANTEES OF PREFERRED STOCK
Under the terms of a guarantee to be issued by Disney in favor of the
holders of Preferred Stock, and subject to the provisions thereof, prior to the
consummation of the Acquisition, Disney will, and subsequent to the consummation
of the Acquisition, Disney may, at its option, unconditionally guarantee to the
holders from time to time of specified series or classes of Preferred Stock the
full and prompt payment of dividend payments and payments upon liquidation or
redemption or otherwise. Any such guarantees (each, a "Preferred Stock
Guarantee") will be unsecured obligations of Disney. The Preferred Stock
Guarantees may be subordinated to other indebtedness and obligations of Disney
to the extent set forth in the applicable Prospectus Supplement. Unless
otherwise stated in the applicable Prospectus Supplement, upon consummation of
the Acquisition, without any action by Disney, New Disney, or any other person,
all obligations of Disney under any Preferred Stock Guarantees will terminate.
If a Preferred Stock Guarantee is applicable to Preferred Stock offered
hereby, reference is made to the applicable accompanying Prospectus Supplement
for a description of the specific terms of such Preferred Stock Guarantee and
covenants, if any, of Disney.
MISCELLANEOUS
The holders of Preferred Stock will have no preemptive rights. The Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. Shares of Preferred Stock redeemed or otherwise
reacquired by New Disney shall resume the status of authorized and unissued
shares of Preferred Stock undesignated as to series, and shall be available for
subsequent issuance. There are no restrictions on repurchase or redemption of
the Preferred Stock while there is any arrearage on sinking fund installments
except as may be set forth in an applicable Prospectus Supplement. Payment of
dividends on any series of Preferred Stock may be restricted by loan agreements,
indentures and other transactions entered into by New Disney. The accompanying
Prospectus Supplement will describe any material contractual restrictions on
dividend payments.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable Prospectus Supplement, the
Certificate of Incorporation or the applicable Certificate of Designation or as
otherwise required by law.
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TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Preferred Stock will be
designated in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
New Disney may, at its option, elect to offer fractional shares of the
Preferred Stock of a series, rather than full shares of the Preferred Stock of
such series. In the event such option is exercised, New Disney will issue
receipts for Depositary Shares, each of which will represent a fraction (to be
set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock) of a share of a particular series of Preferred Stock as
described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") among New
Disney, a depositary to be named in the applicable Prospectus Supplement (the
"Preferred Stock Depositary"), and the holders from time to time of depositary
receipts issued thereunder. Subject to the terms of the Deposit Agreement, each
holder of a Depositary Share will be entitled, in proportion to the applicable
fraction of a share of Preferred Stock represented by such Depositary Share, to
all the rights and preferences of the Preferred Stock represented thereby
(including dividend, voting, redemption, subscription and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of the
related series of Preferred Stock.
The following description sets forth certain general terms and provisions of
the Depositary Shares to which any Prospectus Supplement may relate. The
particular terms of the Depositary Shares to which any Prospectus Supplement may
relate and the extent, if any, to which such general provisions may apply to the
Depositary Shares so offered will be described in the applicable Prospectus
Supplement. The forms of Deposit Agreement and Depositary Receipt are filed as
exhibits to the Registration Statement. The following summary of certain
provisions of the Depositary Shares and Deposit Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by express
reference to, all the provisions of the Deposit Agreement, including the
definitions therein of certain terms.
Immediately following the issuance of shares of a series of Preferred Stock
by New Disney, New Disney will deposit such shares with the Preferred Stock
Depositary, which will then issue and deliver the Depositary Receipts to the
purchasers thereof. Depositary Receipts will only be issued evidencing whole
Depositary Shares. A Depositary Receipt may evidence any number of whole
Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of New Disney, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at New Disney's
expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the related series of Preferred Stock
to the record holders of Depositary Shares relating to such series of Preferred
Stock in proportion to the number of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the
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number of Depositary Shares owned by such holders, unless the Preferred Stock
Depositary determines that such distribution cannot be made proportionately
among such holders or that it is not feasible to make such distributions, in
which case the Preferred Stock Depositary may, with the approval of New Disney,
adopt such method as it deems equitable and practicable for the purpose of
effecting such distribution, including the sale (at public or private sale) of
the securities or property thus received, or any part thereof, at such place or
places and upon such terms as it may deem proper.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by New Disney or the Preferred Stock Depositary
on account of taxes or other governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Preferred Stock Depositary resulting from any redemption, in
whole or in part, of such series of the Preferred Stock held by the Preferred
Stock Depositary. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect to
such series of the Preferred Stock. If New Disney redeems shares of a series of
Preferred Stock held by the Preferred Stock Depositary, the Preferred Stock
Depositary will redeem as of the same redemption date the number of Depositary
Shares representing the shares of Preferred Stock so redeemed. If less than all
the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected by lot or substantially equivalent method determined by the
Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares. Any funds deposited by New Disney with the
Preferred Stock Depositary for any Depositary Shares that the holders thereof
fail to redeem will be returned to New Disney after a period of two years from
the date such funds are so deposited.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
the Preferred Stock are entitled to vote, the Preferred Stock Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such series of Preferred Stock. Each record
holder of such Depositary Shares on the record date (which will be the same date
as the record date for the related series of Preferred Stock) will be entitled
to instruct the Preferred Stock Depositary as to the exercise of the voting
rights pertaining to the number of shares of the series of Preferred Stock
represented by such holder's Depositary Shares. The Preferred Stock Depositary
will endeavor, insofar as practicable, to vote or cause to be voted the number
of shares of the Preferred Stock represented by such Depositary Shares in
accordance with such instructions, provided the Preferred Stock Depositary
receives such instructions sufficiently in advance of such meeting to enable it
to so vote or cause to be voted the shares of Preferred Stock, and New Disney
will agree to take all reasonable action that may be deemed necessary by the
Preferred Stock Depositary in order to enable the Preferred Stock Depositary to
do so. The Preferred Stock Depositary will abstain from voting shares of the
Preferred Stock to the extent it does not receive specific instructions from the
holders of Depositary Shares representing such Preferred Stock.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary and upon payment of the taxes, charges and fees
provided for in the Deposit Agreement and subject to the terms thereof, the
holder of the Depositary Shares evidenced thereby is entitled to delivery at
such office, to or upon his or her order, of the number of whole shares of the
related series of Preferred Stock and any money or other property, if any,
represented by such Depositary Shares.
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Holders of Depositary Shares will be entitled to receive whole shares of the
related series of Preferred Stock, but holders of such whole shares of Preferred
Stock will not thereafter be entitled to deposit such shares of Preferred Stock
with the Preferred Stock Depositary or to receive Depositary Shares therefor. If
the Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
whole shares of the related series of Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder or upon his or her order
at the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between New Disney and the Preferred Stock Depositary.
However, any amendment that materially adversely alters the rights of the
holders of Depositary Shares will not be effective unless such amendment has
been approved by the holders of at least a majority of the Depositary Shares
then outstanding. Every holder of a Depositary Receipt at the time such
amendment becomes effective will be deemed, by continuing to hold such
Depositary Receipt, to be bound by the Deposit Agreement as so amended.
Notwithstanding the foregoing, in no event may any amendment impair the right of
any holder of any Depositary Shares, upon surrender of the Depositary Receipts
evidencing such Depositary Shares and subject to any conditions specified in the
Deposit Agreement, to receive shares of the related series of Preferred Stock
and any money or other property represented thereby, except in order to comply
with mandatory provisions of applicable law. The Deposit Agreement may be
terminated by New Disney at any time upon not less than 60 days prior written
notice to the Preferred Stock Depositary, in which case, on a date that is not
later than 30 days after the date of such notice, the Preferred Stock Depositary
shall deliver or make available for delivery to holders of Depositary Shares,
upon surrender of the Depositary Receipts evidencing such Depositary Shares,
such number of whole or fractional shares of the related series of Preferred
Stock as are represented by such Depositary Shares. The Deposit Agreement shall
automatically terminate after all outstanding Depositary Shares have been
redeemed or there has been a final distribution in respect of the related series
of Preferred Stock in connection with any liquidation, dissolution or winding up
of New Disney and such distribution has been distributed to the holders of
Depositary Shares.
CHARGES OF DEPOSITARY
New Disney will pay all transfer and other taxes and the governmental
charges arising solely from the existence of the depositary arrangements. New
Disney will pay the charges of the Preferred Stock Depositary, including charges
in connection with the initial deposit of the related series of Preferred Stock
and the initial issuance of the Depositary Shares and all withdrawals of shares
of the related series of Preferred Stock, except that holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to New
Disney written notice of its election to do so, and New Disney may at any time
remove the Depositary, any such resignation or removal to take effect upon the
appointment of a successor Preferred Stock Depositary, which successor Preferred
Stock Depositary must be appointed within 60 days after delivery of the notice
of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to the holders of Depositary
Shares all reports and communications from New Disney that are delivered to the
Preferred Stock Depositary and which New Disney is required to furnish to the
holders of the Preferred Stock.
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The Preferred Stock Depositary's corporate trust office will be identified
in the applicable Prospectus Supplement. Unless otherwise set forth in the
applicable Prospectus Supplement, the Preferred Stock Depositary will act as
transfer agent and registrar for Depositary Receipts and if shares of a series
of Preferred Stock are redeemable, the Preferred Stock Depositary will act as
redemption agent for the corresponding Depositary Receipts.
DESCRIPTION OF WARRANTS
GENERAL
New Disney may issue, together with other Securities or separately, warrants
for the purchase of (i) Debt Securities ("Debt Warrants") or (ii) Preferred
Stock ("Preferred Stock Warrants" and, together with the Debt Warrants, the
"Warrants").
The Warrants will be issued under Warrant Agreements (as defined below) to
be entered into between New Disney and a bank or trust company, as warrant agent
(the "Warrant Agent"), all to be set forth in the applicable Prospectus
Supplement relating to any or all Warrants in respect of which this Prospectus
is being delivered. Copies of the form of agreement for each Warrant (each a
"Debt Securities Warrant Agreement" or "Preferred Stock Warrant Agreement," as
the case may be, or collectively the "Warrant Agreements"), including the forms
of certificates representing the Warrants ("Debt Warrant Certificates" or
"Preferred Stock Warrant Certificates," as the case may be, or collectively, the
"Warrant Certificates") reflecting the provisions to be included in such
agreements that will be entered into with respect to the particular offerings of
each type of warrant are filed as exhibits to the Registration Statement of
which this Prospectus forms a part.
The following description sets forth certain general terms and provisions of
the Warrants to which any Prospectus Supplement may relate. The particular terms
of the Warrants to which any Prospectus Supplement may relate and the extent, if
any, to which such general provisions may apply to the Warrants so offered will
be described in the applicable Prospectus Supplement. The following summary of
certain provisions of the Warrants, Warrant Agreements and Warrant Certificates
does not purport to be complete and is subject to, and is qualified in its
entirety by express reference to, all the provisions of the Warrant Agreements
and Warrant Certificates, including the definitions therein of certain terms.
DEBT WARRANTS
GENERAL. Reference is made to the applicable Prospectus Supplement for the
terms of Debt Warrants in respect of which this Prospectus is being delivered,
the Debt Securities Warrant Agreement relating to such Debt Warrants and the
Debt Warrant Certificates representing such Debt Warrants, including the
following: (i) the designation, aggregate principal amount and terms of the Debt
Securities purchasable upon exercise of such Debt Warrants and the procedures
and conditions relating to the exercise of such Debt Warrants; (ii) the
designation and terms of any related Debt Securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with each such
Debt Security; (iii) the date, if any, on and after which such Debt Warrants and
the related Debt Securities will be separately transferable; (iv) the principal
amount of Debt Securities purchasable upon exercise of each Debt Warrant and the
price at which such principal amount of Debt Securities may be purchased upon
such exercise; (v) the date on which the right to exercise such Debt Warrants
shall commence and the date on which such right shall expire; (vi) a discussion
of the material United States Federal income tax considerations applicable to
the exercise of Debt Warrants; (vii) whether the Debt Warrants represented by
the Debt Warrant Certificates will be issued in registered or bearer form, and,
if registered, where they may be transferred and registered; (viii) call
provisions of such Debt Warrants, if any; and (ix) any other terms of the Debt
Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of their
36
<PAGE>
Debt Warrants, holders of Debt Warrants will not have any of the rights of
holders of the Debt Securities purchasable upon such exercise and will not be
entitled to payments of principal of (and premium, if any) or interest, if any,
on the Debt Securities purchasable upon such exercise.
EXERCISE OF DEBT WARRANTS. Each Debt Warrant will entitle the holder to
purchase for cash such principal amount of Debt Securities at such exercise
price as shall in each case be set forth in, or be determinable as set forth in,
the applicable Prospectus Supplement relating to the Debt Warrants offered
thereby. Debt Warrants may be exercised at any time up to 5:00 p.m. New York
City time on the expiration date set forth in the applicable Prospectus
Supplement. After 5:00 p.m. New York City time on the expiration date,
unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, New Disney will, as soon as practicable, forward the Debt
Securities purchasable upon such exercise. If less than all of the Debt Warrants
represented by such Debt Warrant Certificate are exercised, a new Debt Warrant
Certificate will be issued for the remaining amount of Debt Warrants.
PREFERRED STOCK WARRANTS
GENERAL. Reference is made to the applicable Prospectus Supplement for the
terms of Preferred Stock Warrants in respect of which this Prospectus is being
delivered, the Preferred Stock Warrant Agreement relating to such Preferred
Stock Warrants and the Preferred Stock Warrant Certificates representing such
Preferred Stock Warrants, including the following: (i) the designation and terms
of the shares of Preferred Stock purchasable upon exercise of such Preferred
Stock Warrants and the procedures and conditions relating to the exercise of
such Preferred Stock Warrants; (ii) the designation and terms of any related
shares of Preferred Stock with which such Preferred Stock Warrants are issued
and the number of such Preferred Stock Warrants issued with each such share of
Preferred Stock; (iii) the date, if any, on and after which such Preferred Stock
Warrants and the related shares of Preferred Stock will be separately tradeable;
(iv) the offering price of such Preferred Stock Warrants, if any; (v) the number
of shares of Preferred Stock purchasable upon exercise of such Preferred Stock
Warrants and the initial price at which such shares may be purchased upon
exercise; (vi) the date on which the right to exercise such Preferred Stock
Warrants shall commence and the date on which such right shall expire; (vii) a
discussion of the material United States Federal income tax considerations
applicable to the exercise of Preferred Stock Warrants; (viii) call provisions
of such Preferred Stock Warrants, if any; and (ix) any other terms of the
Preferred Stock Warrants.
Preferred Stock Warrant Certificates will be exchangeable for new Preferred
Stock Warrant Certificates of different denominations and Preferred Stock
Warrants may be exercised at the corporate trust office of the Warrant Agent or
any other office indicated in the applicable Prospectus Supplement. Prior to the
exercise of their Preferred Stock Warrants, holders of Preferred Stock Warrants
will not have any of the rights of holders of Preferred Stock purchasable upon
such exercise, and will not be entitled to any dividend payments on the
Preferred Stock purchasable upon such exercise.
EXERCISE OF STOCK WARRANTS. Each Preferred Stock Warrant will entitle the
holder to purchase for cash such number of shares of Preferred Stock at such
exercise price as shall in each case be set forth in, or be determinable as set
forth in, the applicable Prospectus Supplement relating to the Preferred Stock
Warrants offered thereby. Unless otherwise specified in the applicable
Prospectus Supplement, Preferred Stock Warrants may be exercised at any time up
to 5:00 p.m. New York City time on the expiration date set forth in the
applicable Prospectus Supplement. After 5:00 p.m. New York City time on the
expiration date, unexercised Preferred Stock Warrants will become void.
Preferred Stock Warrants may be exercised as set forth in the applicable
Prospectus Supplement relating to the Preferred Stock Warrants. Upon receipt of
payment and the Preferred Stock Warrant
37
<PAGE>
Certificates properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the applicable Prospectus
Supplement, New Disney will, as soon as practicable, forward a certificate
representing the number of shares of Preferred Stock purchasable upon such
exercise. If less than all of the Preferred Stock Warrants represented by such
Preferred Stock Warrant Certificate are exercised, a new Preferred Stock Warrant
Certificate will be issued for the remaining amount of Preferred Stock Warrants.
PLAN OF DISTRIBUTION
New Disney may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in the
offer and sale of the Securities will be named in an applicable Prospectus
Supplement. Securities offered pursuant to a particular Prospectus Supplement
are referred to herein as "Offered Securities."
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. New Disney also may, from time to time, authorize
underwriters acting as its agents to offer and sell the Offered Securities upon
the terms and conditions set forth in any Prospectus Supplement. In connection
with the sale of Offered Securities, underwriters may be deemed to have received
compensation from New Disney in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions (which may be changed from time to time) from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by New Disney to underwriters or agents
in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Securities may be
deemed to be underwriters under the Securities Act, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and commissions
under the Securities Act. Underwriters, dealers and agents may be entitled,
under agreements with New Disney and, under certain circumstances, Disney, to
indemnification against and contribution toward certain civil liabilities,
including liabilities, under the Securities Act, and to reimbursement by New
Disney and, under certain circumstances, Disney for certain expenses.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, New Disney will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
If so indicated in an applicable Prospectus Supplement, New Disney will
authorize dealers acting as its agents to solicit offers by certain institutions
to purchase Offered Securities from New Disney at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated in
such Prospectus Supplement. Each Contract will be for an amount not less than,
and the aggregate principal amount of Offered Securities sold pursuant to
Contracts shall not be less nor more than, the respective amounts stated in such
Prospectus Supplement. Institutions with whom Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of New Disney.
Contracts will not be subject to any conditions except (i) the purchase by an
institution of the Offered Securities covered by its Contracts shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such
38
<PAGE>
institution is subject, and (ii) if the Offered Securities are being sold to
underwriters, New Disney shall have sold to such underwriters the total
principal amount of the Offered Securities less the principal amount thereof
covered by Contracts. Agents and underwriters will have no responsibility in
respect of the delivery or performance of Contracts.
The Securities may or may not be listed on a national securities exchange or
a foreign securities exchange. No assurances can be given that there will be a
market for any of the Securities.
LEGAL MATTERS
Certain legal matters with respect to the legality of the Securities being
offered hereby will be passed upon for New Disney and Disney by Skadden, Arps,
Slate, Meagher & Flom, Los Angeles, California.
EXPERTS
The consolidated financial statements and related schedules of Disney
incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended September 30, 1994 have been so incorporated in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements and related schedule of Capital Cities
incorporated in this Prospectus by reference to the Capital Cities Annual Report
on Form 10-K for the year ended December 31, 1994 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such reports,
given upon the authority of said firm as experts in auditing and accounting.
39
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All expenses other than the Securities and Exchange Commission filing fees
are estimated.
<TABLE>
<S> <C>
SEC registration fee........................................... $1,559,207
Accountants' fees and expenses................................. 20,000
Legal fees and expenses........................................ 50,000
Blue Sky fees and expenses..................................... 20,000
Printing and engraving expenses................................ 75,000
Rating agencies' fees.......................................... 750,000
Trustee's and registrar's fees and expenses.................... 25,000
Miscellaneous.................................................. 250,793
----------
Total:..................................................... $2,750,000
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
Delaware corporation to indemnify its directors, officers, employees and agents
under certain circumstances. Disney's Restated Certificate of Incorporation (the
"Disney Certificate") and bylaws and the New Disney Certificate of Incorporation
(together with the Disney Certificate, the "Certificates") and bylaws (together
with Disney's bylaws, the "Bylaws") each provide that Disney or New Disney, as
the case may be, shall indemnify to the full extent authorized or permitted by
law (as now or hereafter in effect) any person made, or threatened to be made, a
defendant or a witness to any action, suit or proceeding (whether civil or
criminal or otherwise) by reason of the fact that he, his testator or intestate,
is or was a director or officer of Disney or New Disney, as the case may be, or
by reason of the fact that such director or officer, at the request of Disney or
New Disney, as the case may be, is or was serving any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, in
any capacity. The Certificates and Bylaws further provide that Disney or New
Disney, as the case may be, may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of Disney or New
Disney, as the case may be, or is serving at the request of Disney or New
Disney, as the case may be, as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not Disney or
New Disney, as the case may be, would have the power to indemnify him against
such liability under the provisions of law. In addition, the Certificates and
Bylaws provide that Disney or New Disney, as the case may be, may create a trust
fund, grant a security interest and/ or use other means (including, without
limitation, letters of credit, surety bonds and/or similar arrangements), as
well as enter into contracts providing for indemnification to the full extent
authorized or permitted by law and including as part thereof provisions with
respect to any and all of the foregoing to ensure the payment of such amounts as
may become necessary to effect indemnification as provided therein, or
elsewhere. Moreover, the Certificates further provide that no director of Disney
or New Disney, as the case may be, shall be personally liable to Disney (or New
Disney, as the case may be) or its stockholders for monetary damages for any
breach of fiduciary duty as a director, except a director shall be liable to the
extent provided by applicable law (i) for any breach of the director's duty of
loyalty to Disney (or New Disney, as the case may be) or its stockholder; (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) for liability under Section 174 of the DGCL
(involving certain unlawful dividends or stock repurchases); or (iv) for any
transaction from which the director derived an improper personal benefit.
II-1
<PAGE>
Each of Disney and New Disney maintains an officer's and director's
liability insurance policy insuring its officers and directors against certain
liabilities and expenses incurred by them in their capacities as such, and
insuring Disney or New Disney, as the case may be, under certain circumstances,
in the event that indemnification payments are made by Disney to such officers
and directors.
Disney has entered into indemnification agreements (the "Indemnification
Agreements") with certain of its directors and officers (individually, the
"Indemnitee"). The Indemnification Agreements, among other things, provide for
indemnification to the fullest extent permitted by law against any and all
expenses, judgments, fines, penalties and amounts paid in settlement of any
claim. The Indemnification Agreements provide for the prompt advancement of all
expenses to the Indemnitee and for reimbursement to Disney if it is found that
such Indemnitee is not entitled to such indemnification under applicable law.
The Indemnification Agreements also provide that after a Change in Control (as
defined in the Indemnification Agreements) of Disney which is not approved by
the Disney Board of Directors, all determinations regarding a right to indemnity
and the right to advancement of expenses shall be made by independent legal
counsel selected by the Indemnitee and approved by the Board of Directors. In
addition, the event of a Potential Change In Control (as defined in the
Indemnification Agreements), the Indemnitee may require Disney to establish a
trust for his or her benefit and to fund such trust in amounts reasonably
anticipated or proposed to be paid to satisfy Disney's indemnification
obligations under the Indemnification Agreements.
New Disney expects to enter into substantially identical indemnification
agreements with certain of its directors and officers.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement between Disney, New Disney and the Underwriter(s) with respect to
Debt Securities.
*1.2 Form of Underwriting Agreement between Disney, New Disney and the Underwriter(s) with respect to
Preferred Stock.
*1.3 Form of Distribution Agreement between Disney, New Disney and the Agent(s) with respect to Debt
Securities.
*2.1 Amended and Restated Agreement and Plan of Reorganization, dated as of July 31, 1995, between
Disney and Capital Cities (incorporated by reference to Exhibit 2.1 to Disney's Current Report on
Form 8-K, dated October 6, 1995).
*2.2 Form of Agreement and Plan of Merger, dated as of , among New Disney, DCA Merger Corp. and
Disney.
*4.1 Form of Senior Debt Securities Indenture, dated as of , 1995 between New Disney, Disney, as
Guarantor, and Citibank, N.A., as Trustee (including form of Debt Guarantee by Disney).
*4.2 Form of Senior Subordinated Debt Securities Indenture, dated as of , 1995, between New
Disney, Disney, as Guarantor, and , as Trustee (including form of Debt Guarantee by Disney).
*4.3 Form of Subordinated Debt Securities Indenture, dated as of , 1995 between New Disney,
Disney, as Guarantor, and , as Trustee (including form of Debt Guarantee by Disney).
*4.4 Form of Debt Securities Warrant Agreement (including form of Debt Warrant Certificate).
*4.5 Form of Preferred Stock Warrant Agreement (including Form of Preferred Stock Warrant Certificate).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- --------------------------------------------------------------------------------------------------
<C> <S>
*4.6 Form of Deposit Agreement (including form of Depositary Receipts).
**4.7 Form of Disney guarantee of New Disney Preferred Stock.
*5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom regarding the Securities.
*12.1 Computation of Ratio of Earnings to Fixed Charges.
*12.2 Computation of Pro Forma Combined Ratio of Earnings to Fixed Charges.
*23.1 Consent of Skadden, Arps, Slate, Meagher & Flom (included in their opinion filed as Exhibit 5.1).
*23.2 Consent of Independent Accountants (Price Waterhouse LLP).
23.3 Consent of Independent Auditors (Ernst & Young LLP).
*24 Powers of Attorney.
*25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Citibank, N.A., as
Trustee under the Senior Debt Securities Indenture.
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan
Bank, N.A., as Trustee under the Senior Subordinated Debt Securities Indenture.
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First National
Bank of Chicago, as Trustee under the Subordinated Debt Securities Indenture.
*99.1 Consent of Thomas S. Murphy to be named a director of New Disney.
*99.2 Consent of Michael Ovitz to be named a director of New Disney.
</TABLE>
- ------------------------
* Previously filed
** To be filed by amendment or incorporated by reference from a Current Report
on Form 8-K
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrants each hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrants each hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of an annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange
II-3
<PAGE>
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a Registrant
of expenses incurred or paid by a director, officer or controlling person of
such Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(d) The undersigned Registrants hereby undertake to file an application for
the purpose of determining the eligibility of trustees to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Securities Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunder
duly authorized, in the City of Burbank, State of California, on the 29th day of
November, 1995.
THE WALT DISNEY COMPANY
By /s/ MICHAEL D. EISNER*
--------------------------------------
Michael D. Eisner
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ -------------------------------- -----------------------
<C> <S> <C>
/s/ MICHAEL D. EISNER*
------------------------------------------- Chairman of the Board and Chief November 29, 1995
(Michael D. Eisner) Executive Officer
/s/ STEPHEN F. BOLLENBACH* Senior Executive Vice President
------------------------------------------- and Chief Financial Officer and November 29, 1995
(Stephen F. Bollenbach) a Director
/s/ SANFORD M. LITVACK* Senior Executive Vice President
------------------------------------------- and Chief of Corporate November 29, 1995
(Sanford M. Litvack) Operations and a Director
/s/ JOHN J. GARAND* Senior Vice President --
------------------------------------------- Planning and Control (Chief November 29, 1995
(John J. Garand) Accounting Officer)
/s/ REVETA F. BOWERS*
------------------------------------------- Director November 29, 1995
(Reveta F. Bowers)
/s/ ROY E. DISNEY*
------------------------------------------- Director November 29, 1995
(Roy E. Disney)
/s/ STANLEY P. GOLD*
------------------------------------------- Director November 29, 1995
(Stanley P. Gold)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ -------------------------------- -----------------------
<C> <S> <C>
/s/ IGNACIO E. LOZANO, JR.*
------------------------------------------- Director November 29, 1995
(Ignacio E. Lozano, Jr.)
/s/ GEORGE J. MITCHELL*
------------------------------------------- Director November 29, 1995
(George J. Mitchell)
/s/ RICHARD A. NUNIS*
------------------------------------------- Director November 29, 1995
(Richard A. Nunis)
/s/ SIDNEY POITIER*
------------------------------------------- Director November 29, 1995
(Sidney Poitier)
/s/ IRWIN E. RUSSELL*
------------------------------------------- Director November 29, 1995
(Irwin E. Russell)
/s/ ROBERT A.M. STERN*
------------------------------------------- Director November 29, 1995
(Robert A.M. Stern)
/s/ E. CARDON WALKER*
------------------------------------------- Director November 29, 1995
(E. Cardon Walker)
/s/ RAYMOND L. WATSON*
------------------------------------------- Director November 29, 1995
(Raymond L. Watson)
/s/ GARY L. WILSON*
------------------------------------------- Director November 29, 1995
(Gary L. Wilson)
*By: /s/ DAVID K. THOMPSON
-------------------------------------------
David K. Thompson
Attorney-in-fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunder
duly authorized, in the City of Burbank, State of California, on the 29th day of
November, 1995.
DC HOLDCO, INC.
By /s/ SANFORD M. LITVACK*
-----------------------------------
Sanford M. Litvack
PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
------------------------- --------------------------------- ------------------
<C> <S> <C>
/s/ SANFORD M.
LITVACK* President and a Director November 29, 1995
-------------------------
(Sanford M. Litvack)
/s/ STEPHEN F.
BOLLENBACH* Senior Executive Vice President November 29, 1995
------------------------- and Chief Financial Officer
(Stephen F. Bollenbach)
/s/ JOHN J. Senior Vice President -- Planning
GARAND* and Control (Chief Accounting November 29, 1995
------------------------- Officer)
(John J. Garand)
/s/ DAVID K.
THOMPSON Director November 29, 1995
-------------------------
(David K. Thompson)
/s/ MARSHA L.
REED* Director November 29, 1995
-------------------------
(Marsha L. Reed)
*By: /s/ DAVID K.
THOMPSON
-------------------------
David K. Thompson
Attorney-in-fact
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
- ---------- ----------------------------------------------------------------------------------------------- -----
<C> <S> <C>
*1.1 Form of Underwriting Agreement between Disney, New Disney and the Underwriter(s) with respect
to Debt Securities
*1.2 Form of Underwriting Agreement between Disney, New Disney and the Underwriter(s) with respect
to Preferred Stock
*1.3 Form of Distribution Agreement between Disney, New Disney and the Agent(s) with respect to Debt
Securities
*2.1 Amended and Restated Agreement and Plan of Reorganization, dated as of July 31, 1995, between
Disney and Capital Cities (incorporated by reference to Exhibit 2.1 to Disney's Current Report
on Form 8-K, dated October 6, 1995)...........................................................
*2.2 Form of Agreement and Plan of Merger, dated as of , among New Disney, DCA Merger Corp.
and Disney
*4.1 Form of Senior Debt Securities Indenture, dated as of , 1995 between New Disney, Disney, as
Guarantor, and Citibank, N.A., as Trustee (including form of Debt Guarantee by Disney)
*4.2 Form of Senior Subordinated Debt Securities Indenture, dated as of , 1995, between New
Disney, Disney, as Guarantor, and , as Trustee (including form of Debt Guarantee by
Disney)
*4.3 Form of Subordinated Debt Securities Indenture, dated as of , 1995 between New Disney,
Disney, as Guarantor, and , as Trustee (including form of Debt Guarantee by Disney)
*4.4 Form of Debt Securities Warrant Agreement (including form of Debt Warrant Certificate)
*4.5 Form of Preferred Stock Warrant Agreement (including Form of Preferred Stock Warrant
Certificate)
*4.6 Form of Deposit Agreement (including form of Depositary Receipts)
**4.7 Form of Disney guarantee of New Disney Preferred Stock
*5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom regarding the Securities
*12.1 Computation of Ratio of Earnings to Fixed Charges
*12.2 Computation of Pro Forma Combined Ratio of Earnings to Fixed Charges
*23.1 Consent of Skadden, Arps, Slate, Meagher & Flom (included in their opinion filed as Exhibit
5.1)
*23.2 Consent of Independent Accountants (Price Waterhouse LLP)
23.3 Consent of Independent Auditors (Ernst & Young LLP)
*24 Powers of Attorney
*25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Citibank, N.A.,
as Trustee under the Senior Debt Securities Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase
Manhattan Bank, N.A., as Trustee under the Senior Subordinated Debt Securities Indenture
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The First
National Bank of Chicago, as Trustee under the Subordinated Debt Securities Indenture
*99.1 Consent of Thomas S. Murphy to be named a director of New Disney
*99.2 Consent of Michael Ovitz to be named a director of New Disney.
</TABLE>
- ------------------------
* Previously filed
** To be filed by amendment or incorporated by reference from a Current Report
on Form 8-K
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
-----------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------
D.C. HOLDCO, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4545390
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
500 SOUTH BUENA VISTA STREET
BURBANK, CALIFORNIA 91521-0684
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
<PAGE>
------------------------------------
THE WALT DISNEY COMPANY
(EXACT NAME OF GUARANTOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-0684440
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
500 SOUTH BUENA VISTA STREET 91521-0684
BURBANK, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------------------
SUBORDINATED DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
2
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
3
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 14th day of November, 1995.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
BY /S/ JOHN R. PRENDIVILLE
JOHN R. PRENDIVILLE
VICE PRESIDENT
*Exhibits 1, 2, 3 and 4 are herein incorporated by reference to
Exhibits bearing identical numbers in Item 12 of the Form T-1 of The
First National Bank of Chicago, filed as Exhibit 26 to the
Registration Statement on Form S-3 of The CIT Group Holdings, Inc.
filed with the Securities and Exchange Commission on February 16, 1993
(Registration No. 33-58418).
4
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 14, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture among D.C. Holdco, Inc., as
obligor, The Walt Disney Company, as guarantor, and The First National Bank of
Chicago, the undersigned, in accordance with Section 321(b) of the Trust
Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY /S/ JOHN R. PRENDIVILLE
JOHN R. PRENDIVILLE
VICE PRESIDENT
5
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 (-
DOLLAR AMOUNTS IN --------- -------
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . . . . 0081 3,184,875 1.a.
b. Interest-bearing balances(2). . . . . . . . . . . . . . . . . . . . 0071 8,932,069 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) . . . . . 1754 249,502 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D). . . . 1773 536,856 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold. . . . . . . . . . . . . . . . . . . . . . . . . 0276 2,897,736 3.a.
b. Securities purchased under agreements to resell . . . . . . . . . . 0277 1,417,129 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2122 16,567,408 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . . . . RCFD 3123 358,877 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . . . . RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c). . . . . . . . . . . . . . . . 2125 16,208,531 4.d.
5. Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . 3545 13,486,931 5.
6. Premises and fixed assets (including capitalized leases) . . . . . . . 2145 516,279 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . . . . 2150 11,216 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . . . . 2130 12,946 8.
9. Customers' liability to this bank on acceptances outstanding . . . . . 2155 501,943 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . . . . 2143 111,683 10.
11. Other assets (from Schedule RC-F). . . . . . . . . . . . . . . . . . . 2160 1,258,270 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . . . . 2170 49,325,966 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
6
<PAGE>
<TABLE>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) . . . . . . . . . . . . . . . . . . . RCON 2200 14,889,235 13.a.
(1) Noninterest-bearing(1). . . . . . . . . . . . . . . . . . . . RCON 6631 5,895,584 13.a.(1)
(2) Interest-bearing. . . . . . . . . . . . . . . . . . . . . . . RCON 6636 8,993,651 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II). . . . . . . . . . . . . . . . RCFN 2200 13,289,760 13.b.
(1) Noninterest bearing . . . . . . . . . . . . . . . . . . . . . RCFN 6631 315,549 13.b.(1)
(2) Interest-bearing. . . . . . . . . . . . . . . . . . . . . . . RCFN 6636 12,974,211 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . . . . . . . . . RCFD 0278 2,942,186 14.a.
b. Securities sold under agreements to repurchase. . . . . . . . . . RCFD 0279 1,160,512 14.b.
15. a. Demand notes issued to the U.S. Treasury. . . . . . . . . . . . . RCON 2840 112,768 15.a.
b. Trading Liabilities................................................. RCFD 3548 7.872,221 15.b.
16. Other borrowed money:
a. With original maturity of one year or less. . . . . . . . . . . . RCFD 2332 2,402,829 16.a.
b. With original maturity of more than one year . . . . . . . . . . RCFD 2333 643,987 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2910 278,108 17.
18. Bank's liability on acceptance executed and outstanding. . . . . . . RCFD 2920 501,943 18.
19. Subordinated notes and debentures. . . . . . . . . . . . . . . . . . RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . . . . . . . . . . . RCFD 2930 981,938 20.
21. Total liabilities (sum of items 13 through 20) . . . . . . . . . . . RCFD 2948 46,300,487 21.
22. Limited-Life preferred stock and related surplus . . . . . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus. . . . . . . . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) . . . . . . RCFD 3839 2,314,642 25.
26. a. Undivided profits and capital reserves. . . . . . . . . . . . . . RCFD 3632 510,093 26.a.b.
b. Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 8434 (880) 26.b.
27. Cumulative foreign currency translation adjustments. . . . . . . . . RCFD 3284 766 27.
28. Total equity capital (sum of items 23 through 27). . . . . . . . . . RCFD 3210 3,025,479 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28). . . . . . . . . . . . . . . . RCFD 3300 49,325,966 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes
the most comprehensive level of auditing work performed for the bank by independent external Number
----------------
auditors as of any date during 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 6724 N/A M.1.
-----------------
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by
with generally accepted auditing standards by a other external auditors (may be required by state
certified public accounting firm which submits a chartering authority)
report on the bank
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by
conducted in accordance with generally accepted auditing external auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
<PAGE>
Securities Act of 1933 File No. _________
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)___________
____________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
________________
THE WALT DISNEY COMPANY
(GUARANTOR)
(Exact name of obligor as specified in its charter)
DELAWARE 95-0684440
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 SOUTH BUENA VISTA STREET 91521
BURBANK, CALIFORNIA (Zip Code)
(Address of principal executive offices)
___________________________________________
DC HOLDCO, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 95-4545390
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 SOUTH BUENA VISTA STREET 91521
BURBANK, CALIFORNIA (Zip Code)
(Address of principal executive offices)
_____________________
DEBT SECURITIES
(Title of the indenture securities)
________________________________________________________________________________
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The Trustee is not the obligor, nor is the Trustee directly or
indirectly controlling, controlled by, or under common control with
the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of eligibility.
*1. -- A copy of the articles of association of the trustee as now in
effect . (See Exhibit T-1
(Item 12) , Registration No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase Manhattan Bank
(National Association)
and The Chase Bank of New York (National Association) to commence
business and a copy of approval of merger of said corporations,
all of which documents are still in effect.
(See Exhibit T-1 (Item 12), Registration No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank (National
Association) to exercise corporate trust powers, both of which
documents are still in effect. (See Exhibit T-1 (Item 12),
Registration No. 2-67437).
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit T-1
(Item 12(a)), Registration No. 33-60809.)
*5. -- A copy of each indenture referred to in Item 4, if the obligor is
in default. (Not applicable).
*6. -- The consents of United States institutional trustees required by
Section 321(b) of the Act.
(See Exhibit T-1, (Item 12), Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
___________________
*The Exhibits thus designated are incorporated herein by reference. Following
the description of such Exhibits is a reference to the copy of the Exhibit
heretofore filed with the Securities and Exchange Commission, to which there
have been no amendments or changes.
___________________
1.
<PAGE>
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized , all in the City of New York, and the
State of New York, on the 16th day November, 1995
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ Mary Lewicki
------------------------------
Second Vice President
_________________
2
<PAGE>
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
THE CHASE MANHATTAN BANK, N.A.
of New York in the State of New York, at the close of business on June 30, 1995,
published in response to call made by Comptroller of the Currency, under title
12, United States Code, Section 161.
<TABLE>
<CAPTION>
CHARTER NUMBER 2370 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,279,000
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,752,000
Held to maturity securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,779,000
Available-for-sale securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,607,000
Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:. . . . . . . . . . . . . . . . . . . . . . .
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,307,000
Securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . . . . . . . . . 207,000
Loans and lease financing receivable:
Loans and leases, net of unearned income . . . . . . . . . . . . . . . . . . . . . . $ 55,234,000
LESS: Allowance for loan and lease losses . . . . . . . . . . . . . . . . . . . . . . 1,095,000
LESS: Allocated transfer risk reserve 0
-----------
-----------
Loans and leases, net of unearned income, allowance, and reserve. . . . . . . . . . . . . . . . . . . 54,139,000
Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,459,000
Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . . . . . . . . . 1,824,000
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413,000
Investments in unconsolidated subsidiaries and associated companies. . . . . . . . . . . . . . . . . . . 33,000
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . 1,141,000
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 934,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,947,000
-----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $97,821,000
-----------
-----------
LIABILITIES
Deposits:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,648,000
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,207,000
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,441,000
-----------
In foreign offices, Edge and Agreement subsidiaries, and IBFs . . . . . . . . . . . . . . . . . . . . 35,397,000
Noninterest-bearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 3,024,000
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,373,000
-----------
Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,781,000
Securities sold under agreements to repurchase. . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,000
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Trading liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,479,000
Other borrowed money:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
With original maturity of one year or less. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,050,000
With original maturity of more than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433,000
Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . . . . . . . . . . . . . 40,000
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . . . . . . . 1,148,000
Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,960,000
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,239,000
---------
----------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,417,000
----------
----------
Limited-life preferred stock and related surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 921,000
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,869,000
Undivided profits and capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,650,000
Net unrealized holding gains (losses) on available-for-sale securities . . . . . . . . . . . . . . . . . (47,000)
Cumulative foreign currency translation adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000
------
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,404,000
---------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK,
AND EQUITY CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 97,821,000
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------------
</TABLE>
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I, Lester J. Stephens, Jr., Senior Vice President and Controller of the above
named bank do hereby declare that this Report of Condition is true and correct
to the best of my knowledge and belief.
(Signed) Lester J. Stephens, Jr.
We the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
(Signed) Thomas G. Labrecque
(Signed) Arthur F. Ryan Directors
(Signed) Richard J. Boyle
