2004 Proxy Statement

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MARCH 3, 2004 To our Shareholders: The 2004 annual meeting of shareholders of The Walt Disney Company will be held at the Pennsylvania Convention Center, 1101 Arch Street, Philadelphia, Pennsylvania, on Wednesday, March 3, 2004, beginning at 10:00 a.m. local time. At the meeting, the holders of the Company’s outstanding common stock will act on the following matters: (1) Election of 11 directors, each for a term of one year; (2) Ratification of the appointment of the Company’s independent auditors for fiscal 2004; (3) Consideration of three shareholder proposals, if presented at the meeting; and (4) Any other matters that properly come before the meeting. All holders of record of shares of Disney common stock (NYSE: DIS) at the close of business on January 16, 2004 are entitled to vote at the meeting and any postponements or adjournments of the meeting. IF YOU PLAN TO ATTEND: Please note that space limitations make it necessary to limit attendance to shareholders and one guest. Admission to the meeting will be on a first-come, first-served basis. Registration will begin at 8:00 a.m., and seating will begin at 9:00 a.m. Each shareholder may be asked to present valid picture identification, such as a driver’s license or passport. Shareholders holding stock in brokerage accounts (“street name” holders) will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. Cameras, recording devices and other electronic devices will not be permitted at the meeting. By order of the Board of Directors, David K. Thompson Senior Vice President–Deputy General Counsel – Corporate and Corporate Secretary January 27, 2004 Burbank, California TABLE OF CONTENTS Page About the Meeting ..................................................................... 1 What is the purpose of the annual meeting? ............................................... 1 Who is entitled to vote at the meeting? ................................................... 1 What are the voting rights of the holders of Disney common stock? ............................ 1 Who can attend the meeting? .......................................................... 1 What constitutes a quorum? ........................................................... 1 How do I vote? ..................................................................... 2 Can I vote by telephone or electronically? ................................................ 2 Can I change my vote after I return my proxy card? ........................................ 2 How do I vote my 401(k) shares? ....................................................... 2 What are the Board’s recommendations? ................................................ 2 What vote is required to approve each item? .............................................. 2 Stock Ownership ....................................................................... 3 Who are the largest owners of the Company’s stock? ....................................... 3 How much stock do the Company’s directors and executive officers own? ....................... 3 Section 16(a) Beneficial Ownership Reporting Compliance .................................. 4 Governance of the Company ............................................................. 5 Who are the current members of the Board? .............................................. 5 What is the role of the Board’s committees? .............................................. 5 Who is the Board’s presiding director? .................................................. 6 How does the Board select nominees for the Board? ........................................ 6 How does the Board determine which directors are considered independent? .................... 7 How often did the Board meet during fiscal 2003? ......................................... 7 How are directors compensated? ....................................................... 8 Certain Relationships and Related Transactions—What related party transactions involved directors? ....................................................................... 8 How do shareholders communicate with the Board? ........................................ 10 Does the Company have a Code of Ethics? ............................................... 10 Certain Legal Proceedings ............................................................... 10 Report of the Audit Committee ........................................................... 10 Executive Compensation ................................................................ 12 Report of the Compensation Committee ................................................. 12 Compensation Committee Interlocks and Insider Participation ................................ 16 Employment Agreements ............................................................. 16 Executive Compensation Summary Table ................................................ 22 Option Grants during Fiscal 2003 ...................................................... 23 Option Exercises and Values for Fiscal 2003 .............................................. 25 Retirement Plans .................................................................... 25 Equity Compensation Plans ........................................................... 27 Comparison of Cumulative Total Returns .................................................. 28 Item 1—Election of Directors ............................................................ 29 Item 2—Ratification of Appointment of Independent Auditors ................................ 31 Fees to Independent Auditors for Fiscal 2003 and 2002 ..................................... 32 Item 3—Shareholder Proposals ........................................................... 32 Proposal 1—China Labor Standards (Harrington Investments) ............................... 32 Proposal 2—China Labor Standards (New York City Retirement Systems and Pension Funds) ...... 34 Proposal 3—Theme Park Safety ........................................................ 35 Other Matters ......................................................................... 36 Additional Information ................................................................. 37 ANNEX I—Charter of the Audit Committee of the Board of Directors .......................... A-1 ANNEX II—Corporate Governance Guideline on Director Independence ....................... B-1 500 South Buena Vista Street Burbank, California 91521 PROXY STATEMENT This proxy statement contains information related to the annual meeting of shareholders of The Walt Disney Company to be held on Wednesday, March 3, 2004, beginning at 10:00 a.m., at the Pennsylvania Convention Center, 1101 Arch Street, Philadelphia, Pennsylvania, and at any postponements or adjournments thereof. This proxy statement is being mailed to shareholders on or about January 27, 2004. ABOUT THE MEETING What is the purpose of the annual meeting? At our annual meeting, shareholders will act upon the matters outlined in the notice of meeting on the cover page of this proxy statement, including the election of directors, ratification of the Company’s independent auditors and consideration of three shareholder proposals, if presented to the meeting. In addition, management will report on the performance of the Company and respond to questions from shareholders. Who is entitled to vote at the meeting? Only shareholders of record at the close of business on January 16, 2004, the record date for the meeting, are entitled to receive notice of and to participate in the annual meeting. If you were a shareholder of record on that date, you will be entitled to vote all of the shares that you held on that date at the meeting, or any postponements or adjournments of the meeting. What are the voting rights of the holders of Disney common stock? Each outstanding share of Disney common stock will be entitled to one vote on each matter considered at the meeting. Who can attend the meeting? Subject to space availability, all shareholders as of the record date, or their duly appointed proxies, may attend the meeting, and each may be accompanied by one guest. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration will begin at 8:00 a.m., and seating will begin at 9:00 a.m. If you attend, please note that you may be asked to present valid picture identification, such as a driver’s license or passport. Cameras, recording devices and other electronic devices will not be permitted at the meeting. Please also note that if you hold your shares in “street name” (that is, through a broker or other nominee), you will need to bring a copy of a brokerage statement reflecting your stock ownership as of the record date and check in at the registration desk at the meeting. What constitutes a quorum? The presence at the meeting, in person or by proxy, of the holders of a majority of the aggregate voting power of the common stock outstanding on the record date will constitute a quorum, permitting the meeting to conduct its business. As of the record date, 2,046,268,478 shares of common stock, representing the same number of votes, were outstanding. Thus, the presence of the holders of common stock representing at least 1,023,134,240 votes will be required to establish a quorum. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of votes considered to be present at the meeting. How do I vote? If you complete and properly sign the accompanying

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