January 22, 2010

Dear Fellow Shareholder,

I am pleased to invite you to our 2010 Annual Meeting of shareholders, which will be held on Wednesday, March 10, 2010, at 10 a.m. at the JW Marriott San Antonio Hill Country in San Anto- nio, Texas.

At the meeting, we will be electing 13 members of our Board of Directors. I am pleased that the Board has nominated Sheryl Sandberg as a new Director. We think she will be a valuable addition to our Board with the experience she brings from her current position with Facebook and her prior experience at Google and in the United States Treasury Department.

At the meeting we will also be considering ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accountants, an amendment to our stock incentive plan, four amendments to our Certificate of Incorporation and up to two shareholder proposals.

You may vote your shares using the Internet or the telephone by following the instructions on page 79 of the proxy statement. Of course, you may also vote by returning a proxy card or vot- ing instruction form if you received a paper copy of this proxy statement.

If you wish to attend the meeting in person, you will need to request an admission ticket in advance. You can request a ticket by following the instructions set forth on page 80 of the proxy statement. If you cannot attend the meeting, you can still listen to the meeting, which will be webcast and available on our Investor Relations website.

Thank you very much for your continued interest in The Walt Disney Company.

Sincerely,

Robert A. Iger President and Chief Executive Officer

The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement 500 South Buena Vista Street Burbank, California 91521 January 22, 2010

Notice of Meeting The 2010 Annual Meeting of shareholders of The Walt Disney Company will be held at JW Marriott San Antonio Hill Country, 23808 Resort Parkway, San Antonio, Texas on Wednesday, March 10, 2010, beginning at 10:00 a.m. The items of business are: 1. Elect as Directors the 13 nominees named in the proxy statement, each for a term of one year. 2. Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for fiscal 2010. 3. Approval of an amendment to the Company’s Amended and Restated 2005 Stock Incentive Plan. 4. Approval of four amendments to the Company’s Restated Certificate of Incorporation. 5. Consideration of two shareholder proposals, if presented at the meeting. Shareholders of record of Disney common stock (NYSE: DIS) at the close of business on January 11, 2010, are entitled to vote at the meeting and any postponements or adjourn- ments of the meeting. A list of these shareholders is available at the offices of the Company in Burbank, California.

Alan N. Braverman Senior Executive Vice President, General Counsel and Secretary Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on March 10, 2010 The proxy statement and annual report to shareholders and the means to vote by Internet are available at www.ProxyVote.com. Your Vote is Important Please vote as promptly as possible by using the Internet or telephone or by signing, dating and returning the Proxy Card mailed to those who receive paper copies of this proxy statement If you plan to attend the meeting, you must request an admission ticket in advance following the instructions set forth on page 80 of this proxy statement. Tickets will be issued to registered and beneficial owners and to one guest accompanying each registered or beneficial owner. Requests for admission tickets will be processed in the order in which they are received and must be requested no later than March 5, 2010. Please note that seating is limited and requests for tickets will be accepted on a first-come, first-served basis. On the day of the meeting, each shareholder will be required to present a valid picture identification such as a driver’s license or passport with their admission ticket. Seating will begin at 9:00 a.m. and the meeting will begin at 10:00 a.m. Cameras (including cell phones with photographic capabilities), recording devices and other electronic devices will not be permitted at the meeting. The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Table of Contents

1 Introduction 57 Items to Be Voted On 1 Corporate Governance and Board 57 Election of Directors Matters 61 Ratification of Appointment of 1 Corporate Governance Guidelines and Independent Registered Public Code of Ethics Accountants 1 Chairman of the Board 61 Approval of an Amendment to the Amended and Restated 2005 Stock 2 Committees Incentive Plan 4 Director Independence 70 Approval of Amendments to the 5 Director Selection Process Restated Certificate of Incorporation 6 Board Compensation 73 Shareholder Proposals 10 Certain Relationships and Related 78 Other Matters Person Transactions 78 Information About Voting and the 12 Shareholder Communications Meeting 13 Executive Compensation 78 Shares Outstanding 13 Compensation Committee Report 79 Voting 13 Compensation Discussion and Analysis 80 Attendance at the Meeting 34 Compensation Tables 81 Other Information 55 Audit-Related Matters 81 Stock Ownership 55 Audit Committee Report 81 Section 16(a) Beneficial Ownership Reporting Compliance 56 Policy for Approval of Audit and Permitted Non-audit Services 81 Electronic Availability of Proxy Statement and Annual Report 56 Auditor Fees and Services 82 Reduce Duplicate Mailings 82 Proxy Solicitation Costs Annexes A-1 Restated Certificate of Incorporation The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement 500 South Buena Vista Street Burbank, California 91521 January 22, 2010

Introduction Board and Committees of which he or she is a member. This proxy statement contains information relating to the annual meeting of share- Corporate Governance Guidelines holders of The Walt Disney Company to be and Code of Ethics held on Wednesday, March 10, 2010, beginning at 10:00 a.m. local time, at JW The Board of Directors has adopted Corpo- Marriott San Antonio Hill Country, San rate Governance Guidelines, which set Antonio, Texas. On or about January 22, forth a flexible framework within which the 2010, we began mailing a notice contain- Board, assisted by its Committees, directs ing instructions on how to access this the affairs of the Company. The Guidelines proxy statement and our annual report address, among other things, the online and we began mailing a full set of composition and functions of the Board of the proxy materials to shareholders who Directors, director independence, stock had previously requested delivery of the ownership by and compensation of Direc- materials in paper copy. For information tors, management succession and review, on how to vote your shares, see the Board Committees and selection of new instructions included on the proxy card or Directors. instruction form and under “Information The Company has Standards of Business About Voting and the Meeting” on page 79. Conduct, which are applicable to all employees of the Company, including the Corporate Governance and principal executive officer, the principal Board Matters financial officer and the principal account- ing officer. The Board has a separate Code of Business Conduct and Ethics for Direc- There are currently 12 members of the tors, which contains provisions specifically Board of Directors: applicable to Directors. The Corporate Governance Guidelines, the Susan E. Arnold Fred H. Langhammer and the John E. Bryson Aylwin B. Lewis Standards of Business Conduct John S. Chen Monica C. Lozano Code of Business Conduct and Ethics for Judith L. Estrin Robert W. Matschullat Directors are available on the Company’s Robert A. Iger John E. Pepper, Jr. Investor Relations website under the Steven P. Jobs Orin C. Smith “Corporate Governance” heading at www.disney.com/investors and in print to any shareholder who requests them from The Board met nine times during fiscal the Company’s Secretary. If the Company 2009. Each Director other than Mr. Jobs amends or waives the Code of Business attended at least 75% of all of the meet- Conduct and Ethics for Directors, or the ings of the Board and Committees on Standards of Business Conduct with which he or she served. Mr. Jobs’ inability respect to the chief executive officer, to attend at least 75% of the meetings this principal financial officer or principal fiscal year was due to medical reasons. All accounting officer, it will post the amend- but two of our Directors attended the ment or waiver at the same location on its Company’s 2009 annual shareholders website. meeting. Under the Company’s Corporate Governance Guidelines, each Director is Chairman of the Board expected to dedicate sufficient time, energy and attention to ensure the diligent John Pepper became non-executive performance of his or her duties, including Chairman of the Board effective January 1, by attending annual and special meetings 2007. The Chairman of the Board organ- of the shareholders of the Company, the izes Board activities to enable the Board

1 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement to effectively provide guidance to and • Working with the Governance and Nomi- oversight and accountability of manage- nating Committee to develop and main- ment. To fulfill that role, the Chairman, tain the agreed-on definitions of the role among other things: creates and maintains of the Board and the organization, proc- an effective working relationship with the esses and governance guidelines Chief Executive Officer and other members necessary to carry it out; of management and with the other mem- • After consulting with other Board bers of the Board; provides the Chief members and the chief executive officer, Executive Officer ongoing direction as to making recommendations to the Gover- Board needs, interests and opinions; and nance and Nominating Committee as to assures that the Board agenda is the membership of various Board Com- appropriately directed to the matters of mittees and Committee Chairs; greatest importance to the Company. In carrying out his responsibilities, the Chair- • Working with management on effective man preserves the distinction between communication with shareholders, management and oversight, maintaining including being available for consultation the responsibility of management to and direct communication upon the develop corporate strategy and the reasonable request of major share- responsibility of the Board to review and holders; express its views on corporate strategy. • Encouraging active participation by each The functions of the Chairman include: member of the Board; and • Presiding over all meetings of the Board • Performing such other duties and serv- of Directors and shareholders, including ices as the Board may require. regular executive sessions of non-management Directors of the Board; The Company’s Corporate Governance • Establishing the annual agenda of the Guidelines specify that the Chairman of the Board and agendas of each meeting in Board will be an independent Director consultation with the chief executive unless the Board determines that the best officer; interests of the shareholders would be otherwise better served, in which case the • Advising Committee chairs, in con- Board will disclose in the Company’s sultation with the chief executive officer, proxy statement the reasons for a different on meeting schedules, agenda and arrangement and appoint an independent information needs for the Board commit- director as Lead Director with duties and tees; responsibilities detailed in the Corporate • Defining the subject matter, quality, Governance Guidelines. quantity and timeliness of the flow of information between management and Committees the Board and overseeing the dis- The Board of Directors has four standing tribution of that information; committees: Audit, Governance and Nomi- • Coordinating periodic review of manage- nating, Compensation and Executive. ment’s strategic plan for the Company; Information regarding these committees is provided below. The charters of the Audit, • Leading the Board review of the succes- Governance and Nominating and Compen- sion plan for the chief executive officer sation Committees are available on the and other key members of senior man- Company’s Investor Relations website agement; under the “Corporate Governance” heading • Coordinating the annual performance at www.disney.com/investors and in print to review of the chief executive officer and any shareholder who requests them from other key senior managers; the Company’s Secretary.

• Consulting with Committee Chairs about The members of the Audit Committee are: the retention of advisors and experts; • Acting as the principal liaison between Robert W. Matschullat the independent directors and the chief John E. Pepper, Jr. executive officer on sensitive issues; Orin C. Smith (Chair)

2 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The functions of the Audit Committee are The members of the Compensation described below under the heading “Audit Committee are: Committee Report.” The Audit Committee met nine times during fiscal 2009. All of Susan E. Arnold the members of the Audit Committee are John S. Chen independent within the meaning of SEC Fred H. Langhammer (Chair) regulations, the listing standards of the Aylwin B. Lewis New York Stock Exchange and the John E. Pepper, Jr. Company’s Corporate Governance Guide- lines. The Board has determined that Mr. Smith, the chair of the Committee, and The Compensation Committee is respon- Mr. Matschullat and Mr. Pepper are quali- sible for reviewing and approving corpo- fied as audit committee financial experts rate goals and objectives relevant to the within the meaning of SEC regulations, compensation of the Company’s chief and that they have accounting and related executive officer, evaluating the perform- financial management expertise within the ance of the chief executive officer and, meaning of the listing standards of the either as a committee or together with the New York Stock Exchange. other independent members of the Board, determining and approving the compensa- The members of the Governance and tion level for the chief executive officer Nominating Committee are: and making recommendations regarding compensation of other executive officers Judith L. Estrin and certain compensation plans to the Aylwin B. Lewis (Chair) Board (the Board has delegated to the Monica C. Lozano Committee the responsibility for approving Robert W. Matschullat these arrangements). Additional John E. Pepper, Jr. information on the roles and responsibilities of the Compensation Committee is provided under the heading The Governance and Nominating Commit- “Compensation Discussion and Analysis,” tee is responsible for developing and below. In fiscal 2009, the Compensation implementing policies and practices relat- Committee met ten times. All of the ing to corporate governance, including members of the Committee are reviewing and monitoring implementation independent within the meaning of the list- of the Company’s Corporate Governance Guidelines. In addition, the Committee ing standards of the New York Stock assists the Board in developing criteria for Exchange and the Company’s Corporate open Board positions, reviews back- Governance Guidelines. ground information on potential candi- dates and makes recommendations to the The members of the Executive Committee Board regarding such candidates. The are: Committee also reviews and approves transactions between the Company and Robert A. Iger Directors, officers, 5% stockholders and John E. Pepper, Jr. (Chair) their affiliates under the Company’s Related Person Transaction Approval Policy, supervises the Board’s annual The Executive Committee serves primarily review of Director independence and the as a means for taking action requiring Board’s annual self-evaluation, makes Board approval between regularly sched- recommendations to the Board with uled meetings of the Board. The Executive respect to Committee assignments and Committee is authorized to act for the full oversees the Board’s director education Board on matters other than those practices. The Committee met six times specifically reserved by Delaware law to during fiscal 2009. All of the members of the Board. In practice, the Committee’s the Governance and Nominating Commit- actions are generally limited to matters tee are independent within the meaning of such as the authorization of transactions the listing standards of the New York including corporate credit facilities and Stock Exchange and the Company’s borrowings. In fiscal 2009, the Executive Corporate Governance Guidelines. Committee held no meetings.

3 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Director Independence (It merged with A&E Television Networks, a joint venture that is 42% owned by the The provisions of the Company’s Corpo- Company, in the fourth quarter of the fis- rate Governance Guidelines regarding cal year). Ms. Bryson was under contract Director independence meet and in some to serve as a consultant to Lifetime areas exceed the listing standards of the through April 2009 and received compen- New York Stock Exchange. These provi- sation from Lifetime as described under sions are included in the Company’s “Certain Relationships and Related Person Corporate Governance Guidelines, which Transactions” below. In addition, Lifetime are available on the Company’s Investor acquired programming from and sold Relations website under the “Corporate advertising time to Company subsidiaries Governance” heading at www.disney.com/ in an aggregate amount that exceeded 2% investors. of Lifetime’s total revenues for fiscal year 2009. Although the relationship between Pursuant to the Guidelines, the Board the Company, Lifetime and Ms. Bryson undertook its annual review of Director may not mandate disqualification from independence in December 2009. During independence under the Company’s this review, the Board considered trans- Guidelines, the Board determined that the actions and relationships between each relationship was sufficient to deem Director or any member of his or her Mr. Bryson non-independent at this time. immediate family and the Company and its Mr. Jobs is considered a non-independent subsidiaries and affiliates, including those outside director because, during fiscal reported under “Certain Relationships and 2006, the Company acquired Pixar, of Related Person Transactions” below. The which Mr. Jobs was chairman and chief Board also considered whether there were executive officer and the beneficial owner any transactions or relationships between of 50.6% of the issued and outstanding Directors or any member of their immedi- equity. ate family (or any entity of which a Director or an immediate family member is an In determining the independence of each executive officer, general partner or sig- Director, the Board considered the follow- nificant equity holder) and members of the ing relationships, which it determined were Company’s senior management or their immaterial to the Directors’ independence. affiliates. As provided in the Guidelines, The Board considered that the Company the purpose of this review was to and its subsidiaries in the ordinary course determine whether any such relationships of business have, during the last three or transactions existed that were incon- years, sold products and services to and/ sistent with a determination that the Direc- or purchased products and services from tor is independent. companies at which some of our Directors or their immediate family members were As a result of this review, the Board affir- officers or employees during fiscal 2009. matively determined that all of the Direc- In each case, the amount paid to or tors nominated for election at the annual received from these companies in each of meeting are independent of the Company the last three years did not approach the and its management under the standards 2% of total revenue threshold in the Guide- set forth in the Corporate Governance lines. The Board also considered employ- Guidelines, with the exception of Robert ment relationships with immediate family Iger, John Bryson and Steven Jobs. members of Directors that involved com- Mr. Iger is considered an inside Director pensation of less than the threshold of because of his employment as a senior $120,000 in the Company’s Guidelines. executive of the Company. The Board The Board determined that none of the determined that Mr. Bryson is not an relationships it considered impaired the independent Director as a result of independence of the Directors. relationships between the Company, Life- time Entertainment Television and Mr. Bryson’s wife. Lifetime was a joint venture that was 50% owned by the Company during most of the fiscal year.

4 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Director Selection Process • the prospective nominee’s standards of integrity, commitment and independence Working closely with the full Board, the of thought and judgment; Governance and Nominating Committee • the prospective nominee’s ability to develops criteria for open Board positions, taking into account such factors as it dedicate sufficient time, energy and deems appropriate, which may include: attention to the diligent performance of the current composition of the Board; the his or her duties, including the pro- range of talents, experiences and skills spective nominee’s service on other that would best complement those already public company boards, as specifically represented on the Board; the balance of set out in the Company’s Corporate management and independent Directors; Governance Guidelines; and the need for financial or other speci- • the extent to which the prospective alized expertise. Applying these criteria, nominee contributes to the range of the Committee considers candidates for Board membership suggested by its talent, skill and expertise appropriate for members and other Board members, as the Board; well as management and shareholders. • the extent to which the prospective The Committee retains a third-party nominee helps the Board reflect the executive search firm to identify and diversity of the Company’s shareholders, review candidates upon request of the employees, customers and guests and Committee from time to time. the communities in which it operates; and Once the Committee has identified a prospective nominee—including pro- • the willingness of the prospective nomi- spective nominees recommended by nee to meet the minimum equity interest shareholders—it makes an initial determi- holding guideline set out in the Compa- nation as to whether to conduct a full ny’s Corporate Governance Guidelines. evaluation. In making this determination, the Committee takes into account the If the Committee decides, on the basis of information provided to the Committee its preliminary review, to proceed with with the recommendation of the candi- further consideration, members of the date, as well as the Committee’s own Committee, as well as other members of knowledge and information obtained through inquiries to third parties to the the Board as appropriate, interview the extent the Committee deems appropriate. nominee. After completing this evaluation The preliminary determination is based and interview, the Committee makes a primarily on the need for additional Board recommendation to the full Board, which members and the likelihood that the pro- makes the final determination whether to spective nominee can satisfy the criteria nominate or appoint the new Director after that the Committee has established. If the considering the Committee’s report. Committee determines, in consultation with the Chairman of the Board and other A shareholder who wishes to recommend Directors as appropriate, that additional a prospective nominee for the Board consideration is warranted, it may request should notify the Company’s Secretary or the third-party search firm to gather addi- any member of the Governance and tional information about the prospective Nominating Committee in writing with nominee’s background and experience whatever supporting material the share- and to report its findings to the Commit- holder considers appropriate. The Gover- tee. The Committee then evaluates the nance and Nominating Committee will also prospective nominee against the specific consider whether to nominate any person criteria that it has established for the posi- nominated by a shareholder pursuant to tion, as well as the standards and qual- the provisions of the Company’s Bylaws ifications set out in the Company’s relating to shareholder nominations as Corporate Governance Guidelines, includ- ing: described in “Shareholder Communica- tions” below. • the ability of the prospective nominee to represent the interests of the share- holders of the Company;

5 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Board Compensation 4 Grant is made on March 1 of each year for a number of options with a fair value on the date of Under the Company’s Corporate Gover- grant equal to the amount shown. nance Guidelines, non-employee Director compensation is determined annually by At Mr. Jobs’ request, the Board has the Board of Directors acting upon the excluded Mr. Jobs from receiving recommendation of the Compensation compensation as a Director. Committee. Directors who are also employees of the Company receive no additional compensation for service as a The Company does not provide retirement Director. Since July 1, 2008, annual com- benefits to any non-employee Directors pensation for non-employee Directors has who served during fiscal 2009. been as follows:

Annual Board retainer $ 80,000 Unless the Board exempts a Director, Annual committee retainer1 $ 10,000 each Director is required to retain at all Annual committee chair retainer2 $ 15,000 times stock representing no less than 50% of the after-tax value of exercised options Annual deferred stock unit grant $ 84,000 and shares received upon distribution of Annual retainer for Board Chairman3 $500,000 deferred stock units until he or she leaves the Board. The Company’s Corporate 4 Annual stock option grant $ 56,000 Governance Guidelines also encourage 1 Per committee. Directors to own, or acquire within three 2 This is in addition to the annual committee years of first becoming a Director, shares retainer the Director receives for serving on the of common stock of the Company committee. 3 In lieu of all other Director compensation except (including stock units received as Director the annual stock option grant. Paid in shares of compensation) having a market value of at Company common stock. least $100,000.

The following table identifies the compensation earned during fiscal 2009 by each person who is currently a non-employee Director. Information regarding the amounts in each column follows the table.

DIRECTOR COMPENSATION FOR FISCAL 2009 Fees Earned or Paid in Stock Option All Other Cash Awards Awards Compensation Total

Susan E. Arnold $ 90,000 $ 83,971 $18,593 $ 3,678 $196,242

John E. Bryson 80,000 83,971 54,694 338 219,003

John S. Chen 90,000 84,773 54,694 7,091 236,558

Judith L. Estrin 90,000 83,971 54,694 6,974 235,639

Steven P. Jobs — — — — —

Fred H. Langhammer 105,000 85,389 49,157 7,309 246,855

Aylwin B. Lewis 108,376 84,773 54,694 — 247,843

Monica C. Lozano 96,625 83,971 54,694 19,512 254,802

Robert W. Matschullat 95,583 83,971 54,694 1,935 236,183

John E. Pepper, Jr. (Chairman) — 501,248 39,530 9,954 550,732

Orin C. Smith 105,000 85,386 39,530 14 229,930

6 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Fees Earned or Paid in Cash. The annual annual rate equal to the Moody’s Average Board retainer and annual committee and Corporate (Industrial) Bond Yield, adjusted committee-chair retainers are payable in quarterly. For fiscal 2009, the average cash at the end of each quarter. The interest rate was 6.59%. Interest earned Company’s Amended and Restated 1997 on deferred amounts is included in the “All Non-Employee Directors Stock and Other Compensation” column. Directors Deferred Compensation Plan allows who elect to receive deferred compensa- non-employee Directors to elect each year tion in stock receive stock units each to receive all or part of their retainers in quarter and shares of stock are distributed Disney stock or to defer all or part of this with respect to these units after their serv- compensation until after their service as a ice as a Director ends. Director ends. Directors who elect to receive stock instead of cash but who do This column sets forth amounts payable in not defer their compensation are credited cash on a current basis, whether paid each quarter with a dollar amount equal to currently or deferred by the Director to be fees earned that quarter and receive paid in cash or shares after their service shares after the end of each calendar year ends. None of the Directors elected to based on the average of the fair market receive stock on a current basis for fiscal value of shares of the Company’s common 2009. This column does not include fees stock at the end of each quarter. Directors paid for service as Chairman of the Board, who elect to defer their compensation may as those fees are required to be paid in also elect to receive cash or stock. Direc- the form of shares of stock distributed to tors who elect to receive deferred the Chairman after the end of the calendar compensation in cash receive a credit year in which they were earned and are each quarter, and the balance in their therefore included in the “Stock Awards” deferred cash account earns interest at an column.

The following table identifies for each Director the dollar amount included in the “Fees Earned or Paid in Cash” column received in cash, the dollar amount deferred to be paid in cash, and the number and dollar value of stock units received as deferred compensation. The number of units awarded is equal to the dollar amount of fees accruing each quarter divided by the average over the last ten trading days of the quarter of the average of the high and low trading price for shares of Company common stock on each day in the ten-day period.

FORM OF RECEIPT OF DIRECTOR FEES FOR FISCAL 2009 Deferred Fees To be Paid in Fees Stock Paid To be Currently Paid in Number Value of in Cash Cash of Units Units Susan E. Arnold — $45,000 2,003 $ 45,000 John E. Bryson — — 3,560 80,000 John S. Chen $ 45,000 — 2,003 45,000 Judith L. Estrin 90,000 — — — Steven P. Jobs — — — — Fred H. Langhammer — — 4,672 105,000

Aylwin B. Lewis 54,188 — 2,396 54,188 Monica C. Lozano 48,313 — 2,165 48,313 Robert W. Matschullat — — 4,233 95,583 John E. Pepper, Jr. — — — — Orin C. Smith 105,000 — — —

7 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Stock Awards. This column sets forth the DIRECTOR STOCK UNIT AWARDS FOR FISCAL 2009 dollar amount recognized for financial Stock Units and statement reporting purposes for Restricted Grant Stock Date compensation expense incurred by the Units Fair Company for service in fiscal 2009 with Awarded Value respect to: Susan E. Arnold 3,738 $ 83,971

• the annual deferred stock unit grant; John E. Bryson 3,738 83,971

• for the Chairman of the Board, shares John S. Chen 3,738 83,971

awarded with respect to the annual Judith L. Estrin 3,738 83,971 retainer; and Steven P. Jobs — — • stock units and restricted stock units awarded in fiscal 2007 as compensation Fred H. Langhammer 3,738 83,971 related to the dilutive effect of the ABC Aylwin B. Lewis 3,738 83,971 Radio spin-off which occurred during Monica C. Lozano 3,738 83,971 that fiscal year. Robert W. Matschullat 3,738 83,971 The accounting charge for compensation John E. Pepper, Jr. 22,250 499,833 expense incurred by the Company is Orin C. Smith 3,738 83,971 calculated using the average of the high and low trading prices on the date of grant. Except for restricted stock units One fourth of the annual deferred stock awarded as compensation for the dilutive unit grant and annual retainer is awarded effect of the ABC Radio spin-off, all at the end of each quarter. Shares with charges relating to stock unit grants are respect to annual deferred stock unit reflected in the fiscal year for which the grants are distributed to the Director on grant is made because they are immedi- the second anniversary of the award date, ately vested. A portion of the charge for whether or not the Director is still a Direc- restricted stock units awarded as tor on the date of distribution. Shares with compensation for the dilutive effect of the respect to the annual retainer for the ABC Radio spin-off in fiscal 2007 was Chairman of the Board are distributed reflected in fiscal 2009 and these amounts after the end of the calendar year in which are included in the table. they are earned.

The number of shares awarded to each At the end of any quarter in which divi- Director was calculated by dividing the dends are distributed to shareholders, amount payable with respect to a quarter Directors receive additional stock units by the average over the last ten trading with a value (based on the average of the days of the quarter of the average of the high and low trading prices of Disney high and low trading price on each day. stock averaged over the last ten trading The following table identifies the number days of the quarter) equal to the amount of and grant date fair value (which is equal to dividends they would have received on all the market value of the Company’s stock units held by them at the end of the common stock on the date of the award prior quarter. Shares with respect to these times the number of shares underlying the additional units are distributed when the units) of stock units awarded to each underlying units are distributed. Units Director during fiscal 2009. awarded in respect of dividends are included in the fair value of the stock units when the units are initially awarded and therefore are not included in the tables above, but they are included in the total units held at the end of the fiscal year in the following table.

8 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The following table sets forth all stock Option Awards. This column sets forth units held by each Director as of the end the dollar amount recognized for financial of fiscal 2009. All stock units are fully statement reporting purposes for vested when granted, but shares are dis- compensation expense incurred by the tributed with respect to the units only lat- Company in fiscal 2009 with respect to er, as described above. Stock units in this options awarded to Directors. The fair table are included in the share ownership value of the options on the date of their table on page 81 except to the extent they award is calculated using the binomial may have been distributed as shares and model. The assumptions used in estimat- sold prior to January 11, 2010. ing the fair value of options are set forth in footnote 13 to the Company’s Audited DIRECTOR STOCK UNIT HOLDINGS AT Financial Statements for fiscal year 2009. THE END OF FISCAL 2009 The accounting charge reported in the Stock Units table excludes a portion of the fair value of options awarded in fiscal 2009 to reflect Susan E. Arnold 10,347 the fact that vesting of the options occurs John E. Bryson 32,133 in future years and it includes amounts with respect to options awarded in prior John S. Chen 14,434 years to reflect the fact that vesting Judith L. Estrin 5,852 occurs in or after fiscal 2009. Steven P. Jobs — Fred H. Langhammer 18,514 Aylwin B. Lewis 15,440 Monica C. Lozano 24,913 Robert W. Matschullat 29,687 John E. Pepper, Jr. 19,945 Orin C. Smith 5,852

The following table sets forth, for each Director, the fair value of option awards received by Directors in fiscal 2009 and the amount included in the “Options Awards” column with respect to prior-year grants and this year’s grant.

DIRECTOR OPTION VALUES FOR FISCAL 2009

Amount Reported in Fiscal 2009 Attributable to

Grant Date Fair Prior- Fiscal Value of Fiscal Year 2009 2009 Awards Awards Awards Susan E. Arnold $56,005 $10,346 $8,247 John E. Bryson 56,005 46,447 8,247 John S. Chen 56,005 46,447 8,247 Judith L. Estrin 56,005 46,447 8,247 Steven P. Jobs —— — Fred H. Langhammer 56,005 40,910 8,247 Aylwin B. Lewis 56,005 46,447 8,247 Monica C. Lozano 56,005 46,447 8,247 Robert W. Matschullat 56,005 46,447 8,247 John E. Pepper, Jr. 56,005 31,283 8,247 Orin C. Smith 56,005 31,283 8,247

9 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Each Director identified in the table above offerings personally, the Board has received an option for 10,360 shares on adopted a policy, that, subject to avail- March 2, 2009, except for Mr. Jobs, who ability, entitles each non-employee Direc- does not receive director compensation. tor (and his or her spouse, children and The exercise price of the options granted grandchildren) to use Company products, in fiscal 2009 is $16.225 (the average of attend Company entertainment offerings the high and low prices reported on the and visit Company properties (including New York Stock Exchange on the date of staying at resorts, visiting theme parks grant; the closing price on that date was and participating in cruises) at the $16.05). The options vest in equal install- Company’s expense, up to a maximum of ments over four years and have a seven- $15,000 in fair market value per calendar year term. If a Director ends his or her year plus reimbursement of associated tax service by reason of mandatory retirement liabilities. In addition, the Company pursuant to the Board’s retirement or reimburses Directors for the travel tenure policy or permanent disability, the expenses of or provides transportation on options continue to vest in accordance Company aircraft for immediate family with their original schedule. If service ends members of Directors if the family mem- by reason of death, the options vest bers are specifically invited to attend immediately. In any of the foregoing cas- events for appropriate business purposes es, the options remain exercisable for five and allows family members (including years following termination or until the domestic partners) to accompany Direc- original expiration date of the option, tors traveling on company aircraft for whichever is sooner. In all other cases, business purposes on a space-available options cease to vest upon termination basis. The value of these benefits is not and all vested options must be exercised included in the table as permitted by SEC within three months of termination. rules because the aggregate incremental cost to the Company of providing the The following table sets forth the benefits did not exceed $10,000 for any aggregate number of stock options out- Director. The reimbursement of associated standing for each Director at the end of tax liabilities is included in the table fiscal 2009. above, which was less than $10,000 for each Director. The column also includes

DIRECTOR OPTION HOLDINGS AT interest earned on deferred cash compen- THE END OF FISCAL 2009 sation, which was less than $10,000 for Number of each Director except for Ms. Lozano, for Shares whom interest earned totaled $19,297. Underlying Options Held Certain Relationships and Related Susan E. Arnold 16,360 Person Transactions John E. Bryson 58,360 The Board of Directors has adopted a writ- John S. Chen 40,360 ten policy for review of transactions Judith L. Estrin 64,360 involving more than $120,000 in any fiscal Steven P. Jobs — year in which the Company is a participant and in which any Director, executive offi- Fred H. Langhammer 34,360 cer, holder of more than 5% of our out- Aylwin B. Lewis 40,360 standing shares or any immediate family member of any of these persons has a Monica C. Lozano 58,360 direct or indirect material interest. Direc- Robert W. Matschullat 46,360 tors, 5% shareholders and executive offi- John E. Pepper, Jr. 28,360 cers are required to inform the Company of any such transaction promptly after Orin C. Smith 28,360 they become aware of it, and the Com- pany collects information from Directors All Other Compensation. To encourage and executive officers about their affili- Directors to experience the Company’s ations and affiliations of their family products, services and entertainment members so the Company can search its

10 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement records for any such transactions. Trans- Director John Bryson’s wife, Louise Bry- actions are presented to the Governance son, served during the fiscal year as a and Nominating Committee of the Board consultant to Lifetime Entertainment Tele- (or to the Chairman of the Committee if the vision, a cable television programming Committee delegates this responsibility) service in which the Company had an for approval before they are entered into indirect 50% equity interest during most of or, if this is not possible, for ratification the fiscal year (and which was merged after the transaction has been entered with A&E Television Networks, a joint into. The Committee approves or ratifies a venture that is 42% owned by the Com- transaction if it determines that the trans- pany, in the fourth quarter of the fiscal action is consistent with the best interests year). Ms. Bryson received an aggregate of the Company, including whether the salary (including car allowance and pay- transaction impairs independence of a ments of deferred compensation) of Director. The policy does not require $668,546 for her services with Lifetime review of the following transactions: during fiscal 2009 and received a bonus of $433,031 in fiscal 2009 with respect to her • Employment of executive officers services in fiscal 2008. Under her approved by the Compensation Commit- employment agreement and her separa- tee; tion agreement entered into in connection • Compensation of Directors approved by with her retirement from Lifetime, the Board; Ms. Bryson was entitled to continue receiving her base compensation and • Transactions in which all shareholders benefits through April 30, 2009, but is not receive benefits proportional to their entitled to receive any incentive shareholdings; compensation thereafter. This ongoing • Ordinary banking transactions identified relationship was reviewed and approved in the policy; by the Governance and Nominating Committee under the Related Person • Any transaction contemplated by the Transaction Approval Policy at the begin- Company’s Certificate of Incorporation, ning of fiscal 2009. Ms. Bryson also Bylaws or Board action where the inter- received a lump sum payment of pension est of the Director, executive officer, 5% benefits in the amount of $1,441,536 and shareholder or family member is dis- monthly annuity payments totaling closed to the Board prior to such action; $12,884 in fiscal 2009. In addition, as • Commercial transactions in the ordinary noted above, Lifetime acquired program- course of business with entities affiliated ming and purchased advertising time with Directors, executive officers, 5% from, and sold advertising time to, Com- shareholders or their family members if pany subsidiaries, but the Company the aggregate amount involved during a believes that neither Mr. Bryson nor fiscal year is less than the greater of Ms. Bryson had a material direct or (a) $1,000,000 and (b) 2% of the Compa- indirect interest in those transactions. ny’s or other entity’s gross revenues and the related person’s interest in the During fiscal year 2009, Fidelity Manage- transaction is based solely on his or her ment Trust Company (FMTC) served as position with the entity; trustee of the Company’s 401(k) plan and • Charitable contributions to entities the Company paid FMTC approximately where a Director is an executive officer $400,266 in fees for this and ancillary serv- of the entity if the amount is less than ices. Additionally, entities affiliated with the lesser of $200,000 and 2% of the FMTC benefit from fees incurred by plan entity’s annual contributions; and participants on balances invested in mutual funds through the plan. FMTC and • Transactions with entities where the its affiliated entities are subsidiaries of Director, executive officer, 5% share- FMR LLC, which was the beneficial owner holder or immediate family member’s of more than 5% of the Company’s out- sole interest is as a non-executive officer standing shares at the end of the fiscal employee of, volunteer with, or director year. This relationship has been in place or trustee of the entity. since before FMR LLC was the beneficial

11 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement owner of more than 5% of the Company’s bers of the Board and request copies of outstanding shares, and the ongoing rela- any such correspondence. Concerns relat- tionship was reviewed and approved by ing to accounting, internal controls or the Governance and Nominating Commit- auditing matters are immediately brought tee under the Related Person Transaction to the attention of the Company’s internal Approval Policy in December 2009. audit department and handled in accord- ance with procedures established by the Shareholder Communications Audit Committee with respect to such matters.

Generally. Shareholders may communi- Shareholder Proposals for Inclusion in cate with the Company through its Share- 2011 Proxy Statement. To be eligible for holder Services Department by writing to inclusion in the proxy statement for our 500 South Buena Vista Street, MC 9722, 2011 annual meeting, shareholder pro- Burbank, California 91521, by calling posals must be received by the Compa- Shareholder Services at (818) 553-7200, or ny’s Secretary no later than the close of by sending an e-mail to business on September 24, 2010. Pro- [email protected]. posals should be sent to the Secretary, Additional information about contacting The Walt Disney Company, 500 South the Company is available on the Compa- Buena Vista Street, Burbank, California ny’s investor relations website 91521-1030 and follow the procedures (www.disney.com/investors) under “My required by SEC Rule 14a-8. Shareholder Account.” Shareholder Director Nominations and Shareholders and other persons interested Other Shareholder Proposals for Pre- in communicating directly with the Chair- sentation at the 2011 Annual Meet- man of the Board or with the ing. Under our bylaws, written notice of non-management Directors as a group shareholder nominations to the Board of may do so by writing to the Chairman of Directors and any other business pro- the Board, The Walt Disney Company, 500 posed by a shareholder that is not to be South Buena Vista Street, Burbank, Cal- included in the proxy statement must be ifornia 91521-1030. Under a process delivered to the Company’s Secretary not approved by the Governance and less than 90 nor more than 120 days prior Nominating Committee of the Board for to the first anniversary of the preceding handling letters received by the Company year’s annual meeting. Accordingly, any and addressed to non-management shareholder who wishes to have a nomi- members of the Board, the office of the nation or other business considered at the Secretary of the Company reviews all such 2011 annual meeting must deliver a written correspondence and forwards to Board notice (containing the information speci- members a summary and/or copies of any fied in our bylaws regarding the share- such correspondence that, in the opinion holder and the proposed action) to the of the Secretary, deals with the functions Company’s Secretary between of the Board or Committees thereof or that November 10, 2010 and December 10, he otherwise determines requires their 2010. SEC rules permit management to attention. Directors may at any time review vote proxies in its discretion with respect a log of all correspondence received by to such matters if we advise shareholders the Company that is addressed to mem- how management intends to vote.

12 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Executive Compensation of Mr. Iger, only about 10% of his target annual compensation (excluding benefits Compensation Committee Report and perquisites) is guaranteed at the beginning of the year in the form of his The Compensation Committee has: base salary. The remaining ninety percent of Mr. Iger’s target annual compensation, (1) reviewed and discussed the including performance-based bonus, Compensation Discussion and stock awards and options, is linked Analysis included in this proxy directly to the Company’s performance. statement with management; and Although the percentages differ modestly for the other named executive officers and (2) based on the review and benefits and perquisites received during discussion referred to in the year can increase the percentage of paragraph (1) above, fixed compensation somewhat, more than recommended to the Board of 80% of all annual compensation awarded Directors that the Compensation to the named executive officers in recent Discussion and Analysis be years was tied to the Company’s perform- included in the Company’s proxy ance. statement relating to the 2010 annual meeting of shareholders. In making decisions on performance- based compensation in fiscal 2009, the Members of the Compensation Committee Compensation Committee weighed the Company’s overall performance against Susan E. Arnold one of the worst national and global eco- John S. Chen nomic downturns in the post-war era. It Fred H. Langhammer (Chair) took into consideration not only the Aylwin B. Lewis Company’s ability to weather the down- John E. Pepper, Jr. turn effectively but to make changes and introduce initiatives critical to positioning Compensation Discussion and the Company for future long-term growth, Analysis particularly in operations affected by secu- lar challenges brought on by technology Overview shifts and changes in consumer behavior.

Disney’s executive compensation program For the year, Disney’s revenues decreased is designed to align the interests of senior to $36.1 billion, 4% below the previous management with shareholders by tying a year, while earnings per share, excluding significant portion of their compensation the impact of items that affected com- to the Company’s performance as meas- parability between the years, decreased ured by a variety of factors during the by 20%.1 The challenging economic sit- fiscal year in question, including financial uation was also reflected in the Compa- returns, stock price performance and ny’s stock price performance. Total efforts to position the Company for long- shareholder return for the Company in term success. fiscal 2009 was a decrease of 7.1%, lag- ging the S&P 500, which saw a decrease Under the program, the portion of compen- of 4.8% in total shareholder return. Over sation guaranteed to the Company’s five the last five years, however, total share- named executives at the beginning of any holder return for the Company was an fiscal year represents only a fraction of the increase of 29.1%, compared to an total potential compensation. In the case increase of only 5.2% for the S&P 500.

1 Earnings per share for the current year included a non-cash gain in connection with the merger of Lifetime Entertainment Serv- ices (Lifetime) and A&E Television Networks (A&E), a gain on the sale of our investment in two pay television services in Latin America, and restructuring and impairment charges, which collectively had a net adverse impact of $0.06. Earnings per share for the prior year included an accounting gain related to the acquisition of the Disney Stores North America, a gain on the sale of movies.com, the favorable resolution of certain income tax matters, a bad debt charge for a receivable from Lehman Brothers, and an impairment charge, which collectively had no net impact on earnings per share.

13 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Taking into account these circumstances, intrinsic value of previously granted equity and driven primarily by the application of awards was reduced by the decline in the the financial performance measures market price of the Company’s shares. described on page 29 in determining Overall, total annual compensation for the performance-based bonuses, total annual five named executive officers, including cash compensation for the five named the grant date fair value of equity awards, executive officers serving at the end of decreased by an aggregate of approx- fiscal 2009 (as set forth in the table imately 10.3% in fiscal 2009. In addition, below)2 was in the aggregate 25.6% less Mr. Braverman received a special equity than in fiscal 2008, primarily due to a award in fiscal 2009 in connection with the 33.6% average decline in performance- execution of a new employment agree- based bonuses. The grant-date fair value ment at the beginning of the fiscal year, of the regular annual equity awards which which is intended to compensate him over were granted in January 2009, was 18.0% the five-year term of the agreement. higher than in fiscal 2008, driven primarily Mr. Iger and Mr. Staggs each received by the impact of equity award minimums special equity awards in connection with under new employment agreements for the renegotiation of their employment Mr. Staggs, Mr. Braverman and Mr. Mayer agreements in fiscal 2008, but none in that increased the target value of their fiscal 2009. equity awards. At the same time, the

2 We have not included in this analysis the compensation received by Dennis Shuler, who left the Company in April 2009 and was not among the five named executive officers in fiscal 2008. His compensation is included in the Summary Compensation Table on page 34 of this proxy statement because, based on the accounting treatment of his equity awards in light of the termination of his employment, his compensation as reported in that table would have placed him among the five highest paid executive officers if he had been an executive officer at the end of the fiscal year. His compensation is discussed below under “Fiscal 2009 Decisions — Severance.”

14 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The following table sets forth the compensation received by the five named executive officers for the last three fiscal years. It provides, for fiscal years 2007, 2008 and 2009: (a) cash compensation comprised of salary, benefits and perquisites and the annual performance- based bonus; (b) the grant-date fair value of regular annual equity awards during the fiscal year; (c) total annual compensation comprised of fixed compensation, performance-based bonus and the grant-date fair value of regular annual equity awards; and (d) grant-date fair value of any special equity awards received during the fiscal year. The amounts in the table differ from those in the Summary Compensation Table on page 34 in that this table uses the grant-date fair value of equity awards rather than the portion of grant date fair value of cur- rent and former awards that is included in the financial statements as the annual expense of these awards. This table also does not include the change in pension value included in the Summary Compensation Table. This table also excludes Mr. Shuler, who served for only a portion of both fiscal 2008 and fiscal 2009. This table is not a substitute for the Summary Compensation Table and is intended to provide additional information that the Company believes is useful in analyzing compensation decisions made by the Company with respect to the three fiscal years covered.

Annual Compensation and Other Equity Awards Annual Compensation Cash Compensation Regular Performance- Annual Total Special Fixed Based Percent Equity Annual Equity Year Compensation1 Bonus2 Total Change Awards2 Compensation Awards3

Robert A. Iger 2009 $2,780,063 $ 9,260,000 $12,040,063 (28.0)% $ 9,538,409 $21,578,471 — 2008 2,773,090 13,945,493 16,718,583> 9,335,949 26,054,532 $25,018,048 1.8% 2007 2,745,177 13,670,686 16,415,863> 9,328,365 25,744,228 2,242,026 Thomas O. Staggs 2009 1,317,824 2,450,000 3,767,824 (29.8)% 4,212,811 7,980,635 — 2008 1,265,116 4,100,000 5,365,116> 2,800,786 8,165,902 7,380,000 (4.6)% 2007 1,174,271 4,450,000 5,624,271> 2,963,127 8,587,398 1,052,971 Alan N. Braverman 2009 1,154,919 2,035,000 3,189,919 (22.2)% 2,331,653 5,521,572 3,035,500 2008 1,100,534 3,000,000 4,100,534> 1,867,193 5,967,727 — (8.8)% 2007 1,048,106 3,450,000 4,498,106> 2,271,731 6,769,837 521,345 Kevin A. Mayer 2009 733,158 900,000 1,633,158 (1.6)% 1,600,369 3,233,527 — 2008 665,398 1,025,000 1,690,398> 980,278 2,670,676 — (7.5)% 2007 626,618 1,200,000 1,826,618> 1,086,480 2,913,098 101,330 Christine M. McCarthy 2009 608,879 545,000 1,153,879 (16.9)% 991,999 2,145,878 — 2008 589,340 800,000 1,389,340> 840,237 2,229,577 — (2.4)% 2007 548,682 875,000 1,423,682> 888,938 2,312,620 141,532 Total for five officers 2009 6,594,843 15,190,000 21,784,843 (25.6)% 18,675,241 40,460,084 3,035,500 2008 6,393,478 22,870,493 29,263,971> 15,824,443 45,088,414 32,398,048 (1.8)% 2007 6,142,854 23,645,686 29,788,540> 16,538,641 46,327,181 4,059,204

1 Salary and “other compensation” as set forth in the Summary Compensation Table. The amounts reflect compensation for 53 weeks in fiscal year 2009 compared to 52 weeks in fiscal 2008 and fiscal 2007 due to the timing of fiscal period end. 2 In fiscal 2007, some named executive officers received a portion of their performance based bonus in the form of restricted stock units. The grant date fair value of these units is included in the “Performance-Based Bonus” column and excluded from the “Regular Annual Equity Awards” column. 3 In the case of Mr. Iger and Mr. Staggs, the awards in fiscal 2008, and in the case of Mr. Braverman, the award in fiscal 2009, were options or units awarded in connection with the signing of a new employment agreement. In the case of each of the named executive officers, the other awards in fiscal 2007 were restricted stock units awarded to compensate for the dilutive effect on outstanding stock units and options arising from the Company’s transaction relating to ABC Radio.

15 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Compensation Objectives and Program • “Competitive Considerations” addresses Design how we evaluate the competitive market for talent and use that evaluation in The Company’s executive compensation designing compensation packages. program seeks to promote the creation of • “Other considerations” addresses the long-term shareholder value by: use of employment agreements and tax deductibility of executive compensation. • tying a substantial portion of executives’ total compensation to financial perform- ance measures that align with long-term Specific compensation decisions relating shareholder value and leadership actions to fiscal 2009 are discussed in the section that are expected to position the Com- titled “2009 Decisions.” pany for long-term success; and Roles and Responsibilities • attracting and retaining high-caliber executives in a competitive market for The Compensation Committee determines talent. the compensation, including related terms We use five different types of compensa- of employment agreements for those who tion in pursuing these objectives: have them, for each of the named execu- tive officers. • a base salary; • a variable, annual, performance-based The Committee also conducts reviews of bonus; the Company’s general executive compensation policies and strategies and • periodic grants of long-term, equity- oversees and evaluates the Company’s based compensation such as stock overall compensation structure and pro- options, restricted stock units and grams. The Committee’s responsibilities performance-based restricted stock include: units; • evaluating and approving goals and • retirement plans and agreements and objectives relevant to compensation of arrangements regarding compensation the chief executive officer and other upon termination of employment; and executive officers, and evaluating per- formance in light of those goals and • benefits and perquisites. objectives;

This section discusses how we have • determining compensation for executive designed our compensation program to officers and other senior officers; address these objectives. • evaluating and approving all grants of • “Roles and Responsibilities” addresses equity-based compensation to executive the process used to make compensation officers and other senior officers; decisions for executive officers. • recommending to the Board compensa- • “Compensation Mix” addresses how we tion policies for non-employee directors; balance fixed and performance-based and compensation to achieve our objectives. • reviewing performance-based and equity-based incentive plans for the • “Performance-Based Compensation” chief executive officer and other execu- addresses the specific design elements tive officers and reviewing any other of the Company’s performance-based benefit programs presented to the bonus and equity compensation pro- Committee by the chief executive officer. grams that are designed to align compensation with the creation of long- term shareholder value. In carrying out these responsibilities, the Committee: reviews the Company’s gen- • “Fixed Compensation” addresses base eral executive compensation policies; salary, benefits and perquisites and determines salaries and bonuses for and retirement plans. equity awards to the named executive

16 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement officers and such other officers as it whatever input is provided by the full determines appropriate; reviews benefit Board in making its final determination. programs for the named executive offi- cers; reviews and approves (or recom- Management also provides data, analysis mends approval to the Board where it and recommendations for the Commit- deems appropriate) all incentive, tee’s consideration regarding the Compa- performance-based and equity-based ny’s executive compensation programs plans and any other benefit plans sub- and policies, preparing materials for the mitted to it by the chief executive officer; information of and review by the Compen- reviews and approves all employment sation Committee. Management also contracts with named executive officers administers those programs and policies and such other officers as it deems consistent with the direction of the Com- appropriate; and recommends mittee. Management provides an ongoing non-employee Director compensation review of the effectiveness of the policies to the Board of Directors. compensation programs, including com- petitiveness and alignment with the The Compensation Committee determines Company’s objectives, and recommends the compensation of the chief executive changes, if necessary to promote officer without management input, but is achievement of all program objectives. assisted in this determination by its independent compensation consultant The Committee meets regularly outside of (described below) and reviews its the presence of management to discuss determination with the Board of Directors compensation decisions and matters relat- (without members of management pres- ing to the design of compensation pro- ent) prior to its final determination. grams.

In making determinations regarding The Committee has retained the firm of compensation for other named executive Towers Perrin as its compensation con- officers, the Committee considers the sultant to assist in the continual develop- recommendations of the chief executive ment and evaluation of compensation officer and the input received from its policies and the Committee’s determi- independent compensation consultant. nations of compensation awards. The The chief executive officer recommends Committee’s consultant attends Compen- compensation, including the compensa- sation Committee meetings, meets with tion provisions of employment agreements the Committee without management for those who have them, for named present and provides third-party data, executive officers other than himself and advice and expertise on proposed execu- all other officers whose compensation is tive and director compensation and determined by the Compensation Commit- executive compensation plan designs. At tee. In making this recommendation, the the direction of the Committee, the con- chief executive officer evaluates the per- sultant reviews briefing materials prepared formance of the executives, considers the by management and advises the Commit- executive’s responsibilities and tee on the matters included in the materi- compensation in relation to other officers als, including the consistency of proposals of the Company, and considers publicly with the Committee’s compensation available information regarding the com- philosophy and comparisons to programs petitive market for talent and information at other companies. At the request of the provided to him by the Company and Committee, the consultant also prepares information provided to the Committee by its own analysis of compensation matters, the Committee’s independent consultant. including positioning of programs in the As with the chief executive officer’s competitive market and the design of compensation, the Committee advises the plans consistent with Committee’s com- full Board of its deliberations prior to pensation philosophy. making a final determination of annual bonus and equity incentive awards for In October 2008, the Compensation named executive officers and considers Committee adopted a policy requiring its

17 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement consultant to be independent of Company successful performance, matched with the management. The policy provides that a prospect of reduced compensation in the consultant will be considered independent absence of success. The Committee also if: the firm does not receive from the Com- believes that compensation for more senior pany fees for services or products provided executive officers, including the named to the Company in any fiscal year that executive officers, should be more heavily exceed 1% of the firm’s annual gross rev- weighted toward variable elements of enues; the individual that advises the compensation than is the case for less Committee does not participate directly or senior officers because the performance of by collaboration with others in the firm in these officers is more likely to have a strong the provision of any services or products to and direct impact in achieving strategic and the Company without the approval of the financial goals that are most likely to affect chair of the Compensation Committee shareholder value. unless the related fees are, in the aggregate, less than $100,000; the con- At the same time, the Committee believes sultant does not provide any products or that the Company must attract and retain services to any executive officer of the high-caliber executives, and therefore must Company; and the Committee pre-approves offer a mixture of fixed and at-risk compen- any specific engagement of the firm if the sation, and that the levels and mix of these estimated cost of the engagement exceeds types of compensation must be attractive in $500,000. The Committee performs an light of the competitive market for senior annual assessment of the consultant’s executive talent. independence to determine whether the consultant is independent. The Committee The following charts show the percentage completed this assessment in December of total annual compensation (constituting 2009 and confirmed that its consultant is cash compensation and benefits plus the independent under the policy. grant-date fair value of regular annual equity awards) awarded to Mr. Iger and to Compensation Mix all of the other named executive officers serving at the end of fiscal 2009 combined The Committee believes that a substantial over the last three years that is portion of the total compensation of senior performance-based (performance-based executives should be variable and tied to bonus and equity awards) versus fixed performance in order to align compensation (salary and all other compensation) based with measures that correlate with creation on amounts shown in the Annual of long-term shareholder value. This should Compensation and Other Equity Awards offer an opportunity for gain in the event of table, above:

Mr. Iger Other Named Executive Officers 100% 100%

90% 90% Variable (Equity) Variable (Equity) Variable (Equity) Variable (Equity) 34.1% 80% 36.2% 35.8% Variable (Equity) 80% 35.0% 44.2% Variable (Equity) 48.5% 70% 70%

60% 60%

50% 50% Variable (Bonus) Variable (Bonus) 46.9% 40% 40% 48.5% Variable (Bonus) Variable (Bonus) Variable (Bonus) 53.1% 53.5% Variable (Bonus) 31.4% 30% 42.9% 30% Percent of Total Compensation for Year Percent of Total Compensation for Year

20% 20%

Fixed (Salary) 10% 10% Fixed (Salary) Fixed (Salary) Fixed (Salary) 20.1% Fixed (Salary) 16.5% Fixed (Salary) 19.0% 16.5% 16.5% 19.0% 19.0% 10.7% 10.6% 12.9% 0% 0% 2007 2008 2009 2007 2008 2009 Fiscal Year Fiscal Year

18 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The amounts shown for equity compensa- Committee deems relevant, including tion above reflect the grant-date fair value minimums set in the employment of equity awards, but the actual value of agreement where applicable, the these awards will depend directly on the recommendation of the chief executive performance of the Company’s stock price officer (except with respect to his own over the period during which restricted bonus), the nature and responsibility of units vest and options can be exercised the position and competitive market and, with respect to performance-based conditions. stock units, whether the performance tests (2) Setting Company financial performance for vesting of these units are met. The ranges. Early each fiscal year, the value realized by an executive for options Compensation Committee receives and performance-based restricted stock recommended financial performance unit awards could be as little as zero, measures and ranges from senior which would occur if the Company’s stock management, reviews them with senior price were less than the exercise price of management and the Committee’s options and none of the performance tests compensation consultant, and then related to the restricted stock units were sets performance measures and met (including tests to assure deductibility ranges and reports their determination under Section 162(m) of the Internal Rev- to the full Board. These performance enue Code). ranges may anticipate adjustments to take into account expected events that Performance-based Compensation will have a predictable impact on the measure. The Company ties compensation to the achievement of performance that aligns (3) Setting other performance with long-term shareholder value through: objectives. The Committee believes that the bulk of the bonus should be • an annual performance-based bonus based on objective measures of finan- determined using performance measures cial performance, but believes that designed to correlate closely with the more subjective elements are also creation of long-term shareholder value; important in recognizing achievement and and motivating officers. Therefore, at • equity-based compensation whose the same time it sets Company-wide realizable value varies directly with the financial performance ranges, the market price of the Company’s common Committee also approves other per- stock and a portion of which (for senior formance objectives for the Company. executives) is subject to performance These objectives are based on the tests based on the Company’s stock recommendations of the chief execu- price and earnings per share in addition tive officer and the Committee’s dis- to a test to assure deductibility under cussion with him regarding corporate Section 162(m). objectives. These objectives allow the Committee to play a more proactive Annual Performance-based Bonus. The role in identifying performance Company’s annual performance-based objectives beyond purely financial bonus compensates individuals based on measures. the achievement of specific annual finan- (4) Measuring performance and preliminary cial and other objectives that the Commit- bonus determination. After the end of tee believes correlate closely with growth the fiscal year, the Committee reviews of long-term shareholder value. The proc- the Company’s actual performance ess for determining the amount of this against each of the financial perform- bonus for named executive officers ance ranges established at the outset involves four basic steps: of the year. In determining the extent to (1) Setting a target bonus. Early in the which the financial performance ranges fiscal year, the Committee approves a are met for a given period, the Commit- target bonus amount for each named tee exercises its judgment whether to executive officer. The target bonus reflect or exclude the impact of takes into account all factors that the changes in accounting principles and

19 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

extraordinary, unusual or infrequently the steps set out above, including dis- occurring events. cretion to award no bonus at all. To make its preliminary bonus determination, the Committee multi- Equity-based Compensation. The plies an amount equal to 70% of the Company’s long-term incentive program target bonus by a factor reflecting provides for the award of restricted stock actual performance compared to the units and stock options to participating financial performance ranges set at the employees including the named executive beginning of the year. The factor officers. The program is designed to pro- ranges from a minimum of zero to a vide incentives to create and maintain maximum of 200% for Mr. Iger, shareholder value over a multi-year period Mr. Staggs and Mr. Braverman and a by making annual awards whose value maximum of 150% for Mr. Mayer and depends on and is directly related to sus- Ms. McCarthy. The Committee estab- tained changes in the market price of the lishes a higher maximum for Mr. Iger, Company’s shares. For senior officers, Mr. Staggs and Mr. Braverman con- including the named executive officers, sistent with its philosophy that a higher each annual award is typically in the form percentage of the most senior execu- of a mix of stock options and restricted tives’ compensation should be tied to stock units as follows: performance measures and that • stock options with an exercise price not greater compensation should be avail- less than the market price on the date of able for superior performance. grant (40% of the grant-date fair value of The Committee then multiplies the the award); remaining 30% of the target bonus • restricted stock units whose vesting is amount by a factor to reflect the conditioned on the satisfaction of per- Committee’s assessment of perform- formance conditions in addition to a test ance against the other performance to ensure that the compensation is objectives set at the outset of the year deductible pursuant to Internal Revenue as well as the named executive offic- Code Section 162(m) (30% of the grant- er’s overall contribution to the Compa- date fair value of the award); and ny’s success. This factor may range from 0% to a maximum that, when • restricted stock units whose vesting is combined with the award based on not subject to performance conditions financial performance factors, will, other than the test to ensure that the except in special circumstances such compensation is deductible pursuant to as unusual challenges or extraordinary Internal Revenue Code Section 162(m) successes, result in a bonus that does (30% of the grant-date fair value of the not exceed 200% of the target bonus. award). In arriving at this factor, the Committee Stock options and restricted stock units considers the recommendation of the are generally scheduled to vest from one chief executive officer in cases other to four years after the awards are made than his own bonus, and the Commit- and stock options generally remain tee may consider the nature and exercisable for seven years (for awards impact of events that resulted in made in 2005 through 2009) or ten years adjustments to the financial perform- (for all other awards) after the date of the ance targets as described above. award. Participants realize value from All bonus awards for named executive stock options only if and to the extent the officers are also subject to a test specifi- market price of the Company’s common cally designed to assure that the awards stock when a participant exercises an are eligible for deductibility under Sec- award exceeds the market price on the tion 162(m), which is in addition to the date of grant. Participants realize value on performance measures described above. restricted stock units subject to perform- ance tests only if and to the extent that the The Committee has the discretion, in tests described below are satisfied at the appropriate circumstances, to award a time the units vest. The value participants bonus less than the amount determined by realize on restricted stock units (whether

20 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement or not subject to performance tests) varies for executive officers) if the Company’s directly with the market price of the total shareholder return exceeds the Company’s common stock at the time the total shareholder return for the S&P500 units vest. for either the one- or two-year period ending at the end of the second month The Committee has weighted the awards prior to the second anniversary of the slightly more toward restricted stock units award (based on market prices for the because these awards reflect both last 20 trading days of the period). If this increases and decreases in stock price performance test is not met, the units from the grant-date market price and thus remain available to vest after four years tie compensation more closely to changes (again assuming continued employment in shareholder value at all levels compared and satisfaction of the Section 162(m) to options, whose intrinsic value changes test) if the Company’s total shareholder with shareholder value only when the return exceeds the total shareholder market price of shares is above the return for the S&P500 for either the one- exercise price. In addition, the weighting or four-year period ending at the end of toward restricted stock units allows the the second month prior to the fourth Committee to deliver equivalent value with anniversary of the award. use of fewer authorized shares. The • The other 50% of these units vest four Committee may in the future adjust this years after the date of the award mix of award types or approve different (assuming continued employment and award types, such as restricted stock, as satisfaction of the Section 162(m) test) if part of the overall long-term incentive the Company’s total shareholder return award. Awards made in connection with a exceeds the total shareholder return for new, extended or expanded employment the S&P500 for either the one- or relationship may involve a different mix of two-year period ending at the end of the restricted stock units and options depend- second month prior to the fourth ing on the Compensation Committee’s anniversary of the award. assessment of the total compensation package being offered. • Any units that have not satisfied the total shareholder return tests at the end of The Committee adjusts performance tests four years could still vest on that date if for restricted stock units from time to time the average annual growth rate of the in response to changes in the competitive Company’s earnings per share for the environment and to ensure that the pro- sixteen preceding fiscal quarters gram meets the objective of providing (adjusted to reflect changes that the clear incentives tied to the creation of Committee deems appropriate to fairly long-term shareholder value. Units subject reflect earnings per share growth) is 8% to a performance test awarded in 2009 are or more, with 100% of the units vesting if subject to the following test: the growth rate is 10% or more and 50% of the units vesting if the growth rate is • 50% of these units vest two years after 8% or more but less than 10%. the date of the award (assuming the par- ticipant is employed by the Company on that date and the test to ensure deductibility under Section 162(m) is met

21 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

In 2009, the Committee revised the employment and satisfaction of the Sec- performance tests for units issued in tion 162(m) test applicable to awards to calendar 2010 while retaining the split executive officers) if (a) the Company’s between options, restricted stock units three-year total shareholder return (TSR in without performance tests and restricted the table below ) equals or exceeds the stock units with performance tests at 40%, total three-year shareholder return of 25% 30% and 30% of grant-date fair value. The of the companies in the S&P500 (based on revised performance test is designed to market prices for the last 20 trading days of provide clearer incentives through a sim- the period ending one month prior to the pler test and to respond to changes in third anniversary of the award) or (b) the market practice. Under the new test, all Company’s growth in earnings per share units subject to a performance test from continuing operations (EPS in the awarded in 2010 will be eligible for vesting table below) for the 12 quarters reported on three years after the award date. The or before one month prior to the third anni- number of units that vest is based on a versary equals or exceeds the growth in target number of units and depends on the earnings per share from continuing oper- level of performance, with the number of ations of 50% of the companies in the units vesting ranging from 0% of the target S&P500 over the same period. The number to 150% of the target. Units will vest on the of units that vest will be determined vesting date (assuming continued according to the following schedule:

Percent of Target First Performance Test Second Performance Test (if applicable) Units Vesting* TSR below 25th percentile EPS below 50th percentile 0% EPS 50th percentile or higher 50% TSR equal to 25th percentile to 50th percentile EPS below 50th percentile 50% to 100% EPS 50th percentile or higher 75% to 100% TSR equal to 50th percentile to 75th percentile Not applicable 100% to 150% TSR 75th percentile and above Not applicable 150%

* The percent of units vesting varies within ranges in a linear manner from the low end of the range to the high end of the range based on the Company’s TSR percentile.

EPS for the Company will be adjusted as tion 162(m) test and are generally not the Committee deems appropriate in its subject to any additional performance sole discretion (i) to exclude the effect of test, although restricted stock units extraordinary, unusual and/or nonrecurring awarded to Mr. Iger in connection with the items and (ii) to reflect such other factors execution of his employment agreement in as the Committee deems appropriate to 2005 were subject to a total shareholder fairly reflect earnings per share growth. No return test based on total shareholder adjustments to the diluted EPS from con- return from the date the agreement was tinuing operations of S&P 500 companies originally entered into through the appli- will be made. cable vesting dates. Vesting of restricted stock unit awards granted in lieu of cash under the Company’s annual bonus pro- Units subject to a performance test that gram is subject to a time-vesting con- were awarded prior to 2009 had perform- dition, but vesting has not been ance tests described in our proxy state- conditioned on a total shareholder return ments for the years in which the awards or earnings per share test or an additional were issued. Section 162(m) test because the awards related to bonuses that were subject to a The Committee may impose different vest- test to determine deductibility under Sec- ing conditions on awards of restricted tion 162(m), which was satisfied at the stock units other than the annual award. time the bonuses were awarded. Restricted stock units awarded upon commencement of employment or Equity awards to named executive officers execution of a new employment agree- (and to other employees of the Company ment are generally subject to the Sec- except as described below) are made by

22 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement the Compensation Committee only on thereby discourage behavior that leads to dates the Compensation Committee excessive risk: meets. Compensation Committee meet- • The financial metrics used to determine ings are normally scheduled well in the amount of an executive’s bonus are advance and are not scheduled with an measures the Committee believes drive eye to announcements of material long-term shareholder value. These information regarding the Company. The measures are operating income, return Committee may make an award with an on invested capital, after-tax free cash effective date in the future contingent on flow and earnings per share. Moreover, commencement of employment, execution the Committee attempts to set ranges of a new employment agreement or some for these measures that encourage other subsequent event. success without encouraging excessive risk taking to achieve short-term results. The Committee will not grant stock In addition, the overall bonus is not options with exercise prices below the fair expected to exceed two times the target market value of the Company’s stock on amount, no matter how much financial the date of grant. The Company defines performance exceeds the ranges estab- fair market value as the average of the lished at the beginning of the year. high and low stock prices on the date of grant, which may be higher or lower than • The measures used to determine the closing price on that day. The Commit- whether performance-based stock units tee believes that the average of high and vest are based on one to four years of low prices is a better representation of the performance, with all new awards based fair market value on the date of grant and on three years of performance. The tends to be less volatile than the closing Committee believes that the longer per- price. The Committee will not reduce the formance periods encourage executives exercise price of stock options (except in to attain sustained performance over connection with adjustments to reflect several periods, rather than performance recapitalizations, stock or extraordinary in a single period. dividends, stock splits, mergers, spin-offs • Stock options become exercisable over and similar events permitted by the rele- a four year period and remain vant plan) without shareholder approval. exercisable for up to ten years (seven years for options issued from 2005 to Equity awards to employees of Pixar 2009) from the date of grant, encourag- (other than awards granted as part of the ing executives to look to long-term annual equity grant and awards granted to appreciation in equity values. senior officers of Pixar, which are issued by the Compensation Committee) are • Named executive officers are required to issued by action of the chief executive acquire over time and hold as long as officer or the chief human resources offi- they are executive officers of the Com- cer pursuant to authority delegated by the pany shares (including restricted stock Compensation Committee. These awards units) having a value of at least three generally relate to new hires and promo- times their base salary amounts, or five tions and are granted on the first fiscal times in the case of the chief executive Monday of a month after hiring or promo- officer. To the extent these levels have tion, with options carrying an exercise not been reached, these officers are price equal to the average of the high and required to retain ownership of shares low prices of Company stock on the date representing at least 75% of the after-tax of grant. gain (100% in the case of the chief executive officer) realized on exercise of options for a minimum 12 months. Risk Management Considerations. The Committee believes that the Company’s • If the Company is required to restate its performance-based bonus and equity financial results due to material non- programs create incentives to create long- compliance with financial reporting term shareholder value. Several elements requirements under the securities laws of the program are designed to promote as a result of misconduct by an execu- the creation of long-term value and tive officer, applicable law permits the

23 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Company to recover incentive compensa- • competitive market information regard- tion from that executive officer (including ing salaries to the extent available and profits realized from the sale of Com- relevant; pany securities). In such a situation, the • the importance of retaining the individual Board of Directors would exercise its along with the competitiveness of the business judgment to determine what market for the individual executive’s action it believes is appropriate. Action talent and services; and may include recovery or cancellation of any bonus or incentive payments made • the recommendations of the president to an executive on the basis of having and chief executive officer (except in the met or exceeded performance targets case of his own compensation). during a period of fraudulent activity or a material misstatement of financial results Where not specified by contract, salaries if the Board determines that such recov- are generally reviewed annually. ery or cancellation is appropriate due to intentional misconduct by the executive Benefits and Perquisites. Employment officer that resulted in performance tar- agreements with Mr. Iger, Mr. Staggs, gets being achieved that would not have Mr. Braverman and Mr. Mayer provide that been achieved absent such misconduct. each is entitled to participate in employee benefits and perquisites generally made Each of these elements of the compensa- available to senior executives of the tion program other than the share Company (except, in the case of retention requirements apply to all of the Mr. Mayer, the Family Income Assurance senior executives of the Company, and all Plan, which, as described on page 32 of but the share retention requirements and this proxy statement, is being phased out). performance tests for equity awards apply The Company provides benefits to its sal- to all participants in the program. aried employees, including health care coverage, life and disability insurance Fixed Compensation protection, reimbursement of certain educational expenses and access to Two elements of compensation for execu- favorably priced group insurance cover- tive officers are not performance-based: age. The Company provides these benefits base salary and benefits and perquisites, to help alleviate the financial costs and including pension benefits. These ele- loss of income arising from illness, dis- ments are discussed below. ability or death, to encourage ongoing education in job-related areas and to allow Base Salary. Base salary provides fixed employees to take advantage of reduced compensation to an individual that reflects insurance rates available for group poli- his or her job responsibilities, experience, cies. value to the Company, and demonstrated performance. In addition to the benefits provided to salaried employees generally, executive Salaries or minimum salaries for Mr. Iger, officers receive benefits and perquisites Mr. Staggs, Mr. Braverman and Mr. Mayer that are substantially the same as those are determined in their employment offered to other officers of the Company at agreements. These salaries or minimum or above the level of vice president, salaries, the amount of any increase over including: the option of receiving an minimums, and Ms. McCarthy’s salary automobile supplied by the Company (which is not specified in an agreement) (including insurance, maintenance and are determined by the Compensation fuel) or a monthly payment in lieu of the Committee based on its subjective evalua- automobile benefit; relocation assistance; tion of a variety of factors, including: eligibility for reimbursement of up to $450 for health club membership or exercise • the nature and responsibility of the posi- equipment and reimbursement of up to tion; $1,500 for an annual physical exam; com- • the impact, contribution, expertise and plimentary access to the Company’s experience of the individual executive; theme parks and some resort facilities and

24 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement discounts on Company merchandise and Competitive Considerations resort facilities; and personal use of tick- ets acquired by the Company for business In designing the Company’s compensation entertainment when they become avail- program, the Committee seeks to offer able because no business use has been compensation that responds to the com- arranged. In addition to the benefits and petitive market for executive talent in such perquisites provided to vice presidents, a way that the Company can attract executive officers may be eligible to executives of the highest caliber. We con- receive basic financial planning services, sider the competitive landscape in enhanced excess liability coverage, determining the mix of compensation increased relocation assistance, an elements, the level of compensation and increased automobile benefit and, until its other specific terms of compensation phase-out is completed, benefits under packages and seek to promote attraction the Family Income Assurance Plan. The and retention of executives by offering the Company pays the cost of security serv- opportunity for compensation that is ices and equipment for the president and competitively desirable in the event of chief executive officer and, in the interest successful performance. of security, requires the chief executive officer to use corporate aircraft for The Company is a complex organization personal travel. Other senior executive that operates and recruits talent across officers are also permitted at times to use diverse industries and markets and corporate aircraft for personal travel at the necessarily must make each compensa- discretion of the chief executive officer. tion decision in the context of the partic- ular situation, including the characteristics Retirement Plans. The Company main- of the business or businesses in which the tains defined benefit and defined con- individual operates and the individual’s tribution retirement programs for its specific roles, responsibilities, qual- salaried employees in which the Compa- ifications and experience. The Company ny’s named executive officers participate. takes into account information about the These programs aim to recruit and retain competitive market for executive talent, talent by helping provide financial security but because of the complex mix of busi- into retirement and rewarding and motivat- nesses in which the Company is engaged, ing tenure. the Company believes that strict bench- marking against selected groups of In addition to the Company’s tax-qualified companies does not provide a meaningful defined benefit plans, the Company main- basis for establishing compensation. tains non-qualified defined benefit plans in Therefore, the Committee does not which the named executive officers partic- attempt to maintain a specific target per- ipate. All tax-qualified defined benefit centile with respect to a specific list of plans have a maximum compensation limit benchmark companies in determining and a maximum annual benefit, which limit compensation for named executive offi- the benefit to participants whose cers. Rather, the Committee reviews compensation exceeds these limits. In information regarding competitive con- order to provide retirement benefits ditions from a variety of sources in making commensurate with salary levels, the compensation decisions. These sources non-qualified plans provide benefits to key include broad public company indexes salaried employees, including the named such as Fortune 100 companies, the four executive officers, using the same formula U.S. public companies that are major, for calculating benefits as is used under complex, diversified and publicly-held the tax-qualified plans but on compensa- entertainment companies (CBS Corp., tion in excess of the compensation limi- News Corp., Time Warner and Viacom), tations and maximum benefit accruals for and a group of companies assembled by tax-qualified plans. Additional information Towers Perrin (the Committee’s regarding the terms of retirement pro- independent consultant), which Towers grams for named executive officers is Perrin has determined are relevant to the included in “Compensation Tables – Pen- Committee’s determinations in a number sion Benefits” beginning on page 45. of respects, including size, complexity,

25 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement diversity and global presence. Towers September 30, 2013) and Mr. Mayer (for a Perrin periodically revises this group, term through September 30, 2012). which, at the beginning of fiscal 2009, consisted of the following 30 companies: Employment agreements with executive officers provide executive officers with certain benefits upon termination of their • Accenture • IBM employment in various circumstances, as • Amazon • Johnson & Johnson described under “Compensation Tables — • AT&T • Kimberly Clark • BCE • Microsoft Payments and Rights on Termination,” • CBS Corp. • Motorola beginning on page 47. The termination • Cisco Systems • News Corp provisions define the rights the executives • Colgate Palmolive • Nextel Communications and the Company have in various termi- • Comcast • Oracle nation scenarios and serve a variety of • Dell • Procter & Gamble purposes including providing benefits to • DirectTV Group • SAP the executive and his family in the event of • EMC • Texas Instruments the death or disability of the executive, • Emerson Electric • Time Warner Cable defining when an executive can be termi- • Google • Time Warner nated with cause and receive no further • Hewlett-Packard • Verizon compensation, and clearly defining rights • Intel • Viacom in the event of a termination in other cir- cumstances. By the end of the fiscal year, this list was revised to add Apple and Pepsico The agreements specifically define bene- (because they were deemed to be fits that are provided in the event of termi- comparably-sized businesses whose nation following a change in control, which consumer-oriented focus was determined are intended to motivate executive officers to be similar to that of the Company) and to remain with the Company despite the to delete BCE and Motorola (because they uncertainty and dislocation that arises in no longer were considered to be of com- the context of change in control situations parable size to the Company). and to ensure that opportunities for change in control are evaluated in light of shareholders’ long-term interests rather Other Considerations than any loss of prospective compensa- tion the executive may suffer as a result of the change in control. Employment Agreements. The Committee enters into employment agreements with The termination provisions are also senior officers when it determines that an designed to align executives’ interests employment agreement is desirable for the with long-term shareholder growth by Company to obtain a measure of assur- providing that, in those circumstances in ance as to the executive’s continued which bonus payments are made and employment in light of prevailing market equity awards vest after termination, the competition for the particular position held payments and awards are (except in the by the executive officer, or where the case of vesting of restricted stock units Committee determines that an employ- following termination due to death or ment agreement is necessary and appro- disability) subject to the same perform- priate to attract an executive in light of ance measures (other than the test to market conditions, the prior experience of assure deductibility under Section 162(m)) the executive or practices at the Company as apply if there is no termination. with respect to other similarly situated employees. With respect to the named Other material terms of the employment executive officers serving at the end of agreements with Mr. Iger, Mr. Staggs, fiscal 2009, the Company has entered into Mr. Braverman and Mr. Mayer are employment agreements with Mr. Iger (for described under “Fixed Compensations” a term through January 31, 2013), above and “Fiscal 2009 Decisions” below. Mr. Staggs (for a term through March 31, 2013), Mr. Braverman (for a term through

26 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Tax deductibility. Section 162(m) of the Base Salary Internal Revenue Code generally disallows a tax deduction to public corporations for Employment agreements with Mr. Iger, compensation over $1,000,000 paid for Mr. Staggs, Mr. Braverman and Mr. Mayer any fiscal year to the corporation’s chief provide for a base salary as follows: executive officer and up to three other • Mr. Iger’s employment agreement pro- executive officers whose compensation vides for Mr. Iger to receive an annual must be included in this proxy statement salary of at least $2,000,000. because they are the most highly • Mr. Staggs’s employment agreement compensated executive officers. However, provides for an annual salary of the statute exempts qualifying $1,250,000 from April 1, 2008 through performance-based compensation from March 31, 2009, $1,325,000 through the deduction limit if certain requirements March 31, 2010, $1,400,000 through are met. The Committee has structured March 31, 2011, $1,450,000 through awards to executive officers under the March 31, 2012 and $1,500,000 through Company’s annual performance-based March 31, 2013. In light of the adverse bonus program and equity awards pro- economic environment facing the gram to qualify for this exemption. How- Company’s businesses and efforts to ever, the Committee believes that reduce costs in response to these con- shareholder interests are best served if the ditions, Mr. Staggs volunteered to defer Committee’s discretion and flexibility in the increase in his base salary scheduled awarding compensation is not restricted, in his employment agreement for April 1, even though some compensation awards 2009. may result in non-deductible compensa- • Mr. Braverman’s employment agreement tion expenses. Therefore, the Committee provides for an annual salary of has approved salaries for executive offi- $1,100,000 for the first year of the cers that were not fully deductible agreement, effective October 1, 2008, because of Section 162(m) at the time of and provides for the Company to set an approval and retains the right to authorize annual salary for subsequent years in its payments or take other actions that can sole discretion as long as the amount is result in the payment of compensation at least $1,100,000. In light of the that is not deductible for income tax pur- adverse economic environment facing poses. the Company’s businesses and efforts to reduce costs in response to these con- Fiscal 2009 Decisions ditions, Mr. Braverman’s salary was not increased during the fiscal year. The following is a discussion of specific • Mr. Mayer’s employment agreement decisions made by the Compensation provides for an annual salary of $700,000 Committee in fiscal year 2009 or with for the first year of the agreement, effec- respect to fiscal year 2009 compensation tive October 1, 2008, and provides for for the named executive officers. the Company to set an annual salary of no less than that amount for subsequent Employment Agreements years in its sole discretion. In light of the adverse economic environment facing The Compensation Committee approved the Company’s businesses and efforts to new employment agreements for reduce costs in response to these con- Mr. Braverman and Mr. Mayer at the very ditions, Mr. Mayer’s salary was not beginning of fiscal 2009, which were increased during the fiscal year. described in our proxy statement for the • Ms. McCarthy does not have an employ- 2009 annual meeting because they were ment agreement, and her salary is made so close to the end of fiscal 2008. adjusted each year at the discretion of The Committee also agreed to the Company. In light of the adverse non-material amendments to Mr. Iger’s economic environment facing the and Mr. Staggs’ employment agreements Company’s businesses and efforts to to ensure that the terms of the agreements reduce costs in response to these con- complied with the terms of Internal Rev- ditions, Ms. McCarthy’s salary was not enue Code Section 409A. increased during the fiscal year.

27 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Annual Performance Bonuses for selected operating income, return on Named Executive Officers invested capital, after-tax free cash flow and earnings per share and established The Committee approved one change in the performance ranges and weightings the performance bonus program design shown in the table on the following page. during fiscal 2009. The program had pre- The performance measures and relative viously called for an adjustment to the weightings were the same as used in fiscal bonus amount to take into account the 2008. The Committee selected the stock price performance of the Company performance ranges based on recom- relative to the broad market. The bonus mendations of the chief executive officer amount was increased ratably by up to and after reviewing the Company’s annual 20% if the Company’s total shareholder operating plan for fiscal 2009, the long- return outperformed the total shareholder term strategic plan and adjustments to the return of the S&P 500 index by 15 operating plan based on the rapidly percentage points, or reduced by up to deteriorating economic climate at the end 20% if the Company underperformed this of calendar year 2008. The Committee measure by 15 percentage points. The determined that performance below the Committee decided to eliminate this threshold level of each range represented adjustment beginning with the perform- performance at a level that, in light of ance bonus for fiscal 2009 because the planned business operations and bonus is based on financial performance expected conditions for the year, repre- metrics designed to reflect creation of sented marginal performance and that the long-term shareholder value and the maximum of each range represented adjustment tended only to reflect short- exceptional performance in light of these term changes in the Company’s stock conditions and expectations. In light of the price. Moreover, the Committee volatile economic environment, the Com- determined that the overall compensation mittee established ranges that were package was adequately aligned to share broader than in prior years. price performance through the award of restricted stock units and options. At the same time, the Committee also approved other Company-wide perform- The Committee approved the following ance factors to be used in making the target bonuses for the named executive determination with respect to the 30% officers for fiscal 2009: portion of the target bonus for each of the named executive officers. The Committee Named Executive Officer Target Bonus approved the following factors based on Robert A. Iger $10,000,000 the recommendation of Mr. Iger and the Thomas O. Staggs 200% of year-end salary strategic objectives of the Company: Alan N. Braverman 200% of year-end salary Kevin A. Mayer 125% of year-end salary • Foster quality, creativity and innovation Christine M. McCarthy 100% of year-end salary to differentiate our content, products and experiences For Mr. Iger, Mr. Staggs, Mr. Braverman • Manage efficiency across all areas of and Mr. Mayer, the targets were equal to spending, with a specific focus on over- the minimum amount set forth in their head expenses, to mitigate the impact of respective employment agreements. macro-economic factors Ms. McCarthy’s target was established • Implement initiatives, including early in the fiscal year based on Mr. Iger’s restructuring where appropriate, to posi- recommendation and the Committee’s tion our business for further growth evaluation of her performance and con- tribution to the Company. • Prudently invest for growth with a focus on consumer-facing, brand and share In January 2009, the Committee also building initiatives across global mar- selected four financial performance meas- kets. Reassess deployment of capital in ures to be used in making the determi- 2009 to strengthen liquidity nation with respect to the 70% portion of • Invest in our people including an the target bonus based on financial per- emphasis on diversity, leadership and formance measures. The Committee succession planning.

28 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The bonuses awarded to the named executive officers were determined as follows:

• Performance for the fiscal year on the four financial performance measures was compared to the performance range for each of the measures established by the Committee at the beginning of the fiscal year. A performance factor was calculated for each of the four finan- cial performance measures, with the performance factor equal to zero if the bottom of the performance range was not achieved and the factor increasing from 35% to 200% from the bottom of the performance range to the top of performance range for Mr. Iger, Mr. Staggs and Mr. Braverman and from 35% to 150% for Mr. Mayer and Ms. McCarthy. The resulting performance factor for each financial performance measure was multiplied by the weight shown below to arrive at a weighted multiple, and the four weighted multiples were added to arrive at an aggregate financial performance multiple, as shown below.

Adjusted Actual Fiscal Performance Year 2009 Resulting Performance Range Performance Factor Weighted Multiple Iger, Staggs Mayer Iger, Staggs Mayer (dollars in millions except per and and and and Performance Measure share amounts) Braverman McCarthy Weight Braverman McCarthy Operating income $4,559-$10,637 $6,622 79% 79% .250 19.8% 19.8% Return on invested capital* 4.6%-13.6% 8.0% 84% 84% .250 21.0% 21.0% After-tax free cash flow** $436-$3,643 $3,203 173% 136% .214 37.0% 29.1% Earnings per share $1.25-$2.91 $1.80 78% 78% .286 22.3% 22.3% Aggregate Financial Performance Goal Multiple***: 100.1% 92.3%

* “Return on invested capital” is aggregate segment operating income plus corporate and unallocated shared expenses after tax, divided by average net assets (including gross goodwill) invested in operations, all on an equity basis (i.e., including Euro Disney and Hong Kong Disneyland on a basis that reflects our actual ownership percentage rather than on a consolidated basis). ** “After-tax free cash flow” is cash provided by operations less investments in parks, resorts and other properties, all on an equity basis (i.e., including Euro Disney and Hong Kong Disneyland on a basis that reflects our actual ownership percentage rather than on a consolidated basis). *** Total may not equal the sum of the column due to rounding.

In determining actual performance for with Mr. Iger’s conclusions (with respect fiscal year 2009, the Committee to the other executive officers) that: excluded the impacts of the following • Mr. Iger effectively led the Compa- items: gain on the sale of HBO Latin ny’s rapid response to exceptionally America; restructuring and impairment challenging economic conditions charges; and accounting gain related to coupled with secular shifts in some the merger of Lifetime into A&E Tele- of the Company’s core businesses, vision Networks. The Committee successfully mitigating the immediate determined that these items were not impact of the crisis while continuing related to the ongoing operation of the to manage for long-term growth and Company in a manner consistent with improve the Company’s strategic the way the performance ranges were position. Despite the challenging set. Instead, these items were consid- economic environment, the Company ered, as appropriate, in the evaluation of quickly mobilized to acquire Marvel, each officer’s performance against other a move designed to increase share- performance objectives as described holder value over time and that high- below. The amounts included in the lights the Company’s strategic focus table above reflect these adjustments. on high-quality branded content, technological innovation and interna- • The Committee then evaluated each tional expansion. Mr. Iger also officer’s performance against the other instituted key leadership changes performance objectives established in among senior management, January 2009 as set forth above. With strengthening management talent in respect to performance by each execu- key areas and highlighting the com- tive officer, the Committee determined mitment to long-range talent plan- (in the case of Mr. Iger) and concurred ning and leadership succession at the Company.

29 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

• Mr. Staggs skillfully addressed the • Ms. McCarthy provided excellent financial impact on the Company of leadership of the Company’s treasury the challenging economic environ- and corporate real estate operations, ment, leading efforts to identify cost proactively addressing the crisis in reductions and deliver strong cash the financial markets to maintain the flow that would not impair the quality Company’s strong financial position of the Company’s products and and access to the capital markets operations and maintaining the and effectively managed the Compa- Company’s liquidity and access to ny’s exposure to turbulent foreign capital in the face of the worst credit exchange markets. She led the crisis in a generation. Mr. Staggs analysis and structuring of key capi- continued his effective oversight of tal projects, including the financial the Company’s process for address- restructuring of Hong Kong Disney- ing long-term strategic imperatives land and development of a capital and brand-building opportunities, plan for the Company’s proposed including key transactions designed project in Shanghai. She also spear- to position the Company for long- headed efforts to create greater effi- term growth such as the acquisition ciency in corporate facilities of Marvel. He also guided important construction and operations. initiatives in corporate responsibility and environmental affairs, including The Committee determined that these the Company’s first Corporate factors justified the application of a Responsibility Report and initiation of multiple for other performance factors programs to achieve environmental that would exceed 100% for each of the goals set out in the report. named executive officers. However, management recommended that, in view • Mr. Braverman provided extremely of the impact of the difficult economic adept leadership of the Company’s environment on the overall financial legal function in the face of challeng- performance of the Company and its ing legal and regulatory issues pre- stock price, the Committee use its dis- sented by the economic cretion to lower total bonus awards to an environment, a rapidly changing landscape for the Company’s busi- amount that would be meaningfully nesses and the Company’s con- lower than in fiscal 2008 for each of the tinued exploration of strategic executive officers, with somewhat lesser initiatives. This included excellent relative reductions for Ms. McCarthy and counsel in and management of a Mr. Mayer. The Committee accepted that number of complex and difficult recommendation and exercised its dis- issues and key victories in important cretion to establish a multiple for other matters, while continuing to success- performance factors that would achieve fully manage costs of the legal func- this result. Accordingly, the Committee tion. set the multiple at 75% for each of Mr. Iger, Mr. Staggs and Mr. Braverman. • Mr. Mayer played a vital leadership In the case of Mr. Mayer, the Committee role in each of the Company’s key strategic initiatives during the year. established a multiple of 128% in recog- Most notably, he led the analysis, nition of his exceptional performance in due diligence and negotiation of the connection with the acquisition of Mar- Marvel acquisition, as well as the vel, and in the case of Ms. McCarthy Company’s investment in Hulu and established a 100% multiple in view of the restructuring of the ownership of her skillful handling of the A&E and Lifetime. He continued his unprecedented credit environment that effective management of the prevailed throughout the year. Company’s strategic planning proc- ess and collaborated closely with business unit leaders to develop and articulate strategic viewpoints on the challenges and opportunities facing their businesses.

30 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

• The Committee then calculated final fiscal year 2009 bonuses for the named executive offi- cers as follows, rounding to the nearest $5,000, except in the case of Mr. Staggs rounding to the nearest $10,000:

BONUS CALCULATION FOR FISCAL 2009

Company Performance Individual Performance Amount Amount Calculated Bonus Target 70% of 30% of Amount Bonus Target Multiple Subtotal Target Multiple1 Subtotal (Rounded)

Robert A. Iger $10,000,000 $7,000,000 100.1% $7,007,500 $3,000,000 75% $2,250,000 $9,260,000

Thomas O. Staggs2 2,650,000 1,855,000 100.1% 1,856,988 795,000 75% 596,250 2,450,000 Alan N. Braverman 2,200,000 1,540,000 100.1% 1,541,650 660,000 75% 495,000 2,035,000 Kevin A. Mayer 875,000 612,500 92.3% 565,583 262,500 128% 336,000 900,000 Christine M. McCarthy 577,500 404,250 92.3% 373,284 173,250 100% 173,250 545,000

1 Individual performance multiples were reduced on the recommendation of managements, as described above. 2 Mr. Staggs was scheduled to receive, but volunteered to defer, a base salary increase to $1,325,000 in April of 2009. His contract specifies that his bonus target is 200% of scheduled fiscal year-end salary, which for fiscal year 2009 was $1,325,000.

Long-Term Incentive Compensation noted in last year’s proxy statement, Mr. Braverman also received an award of stock units in connection with the The Committee made regular annual execution of his employment agreement at equity awards to the named executive the beginning of fiscal 2009. The number officers in January 2009. Consistent with of restricted stock units and options is the equity award policies in place at the reflected in the Fiscal 2009 Grants of Plan time (as described under “ Performance- Based Awards table on page 38 below. Based Compensation — Equity-Based Compensation” above), the Committee awarded restricted stock units and In determining the annual grants of options, with 30% of the grant-date fair restricted stock units and options for each value of the award in the form of restricted executive officer, the Committee consid- stock units subject to performance vesting ered the minimums required by employ- conditions in addition to the Sec- ment agreements, where applicable, and tion 162(m) test, 30% in the form of the Company’s overall long-term incentive restricted stock units subject only to the guidelines for all executives, which Section 162(m) test and 40% in the form of attempt to balance, in the context of the options. For purposes of determining the competitive market for executive talent, value of restricted stock units received by the benefits of incentive compensation executives that included performance tied to performance of the Company’s conditions, the grant date fair value of stock with the dilutive effect of equity these restricted stock units used for compensation awards. The Committee accounting purposes as estimated at the also considered Mr. Iger’s recom- time of the award was discounted by 10% mendations, except in the case of to reflect the uncertainty that the perform- Mr. Iger’s own agreement and award. ance conditions would be met. The dis- counted grant-date fair value of the In fiscal 2009, the Committee approved awards to Mr. Iger, Mr. Staggs and several changes to the design of the Mr. Braverman were equal to $9,000,000, Company’s long-term incentive program $3,975,000 and $2,200,000, respectively, for awards made starting in calendar year which were equal to the minimum pro- 2010. The Committee updated the vided in their respective employment performance tests for restricted stock agreements. The discounted grant-date units subject to the test as described and fair values of the award to Mr. Mayer and for the reasons set forth under Ms. McCarthy, neither of whom have con- “Performance-Based Compensation — tractually agreed minimums, were Equity-Based Compensation” above. The $1,510,000 and $936,000, respectively. As Committee also determined that restricted

31 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement stock units that are not subject to perform- described on page 50, Mr. Iger’s current ance tests would vest in four annual equal employment agreement entitles him to installments rather than 50% on each of compensation to offset all of this tax the second and fourth anniversary of the liability, and Mr. Staggs and award, and that the term of options issued Mr. Braverman’s agreements entitle them starting in calendar year 2010 would be to compensation to offset a portion of this ten years instead of seven years to con- liability. The Committee determined that in form more closely to industry practice. In light of evolving market practice, it would addition, in December 2009, the Commit- establish a cap on this reimbursement in tee determined that options and restricted connection with any renegotiation of stock units awarded after December 2009 material terms of, or renewal or replace- (and awarded at least one year before ment of employment agreements with any retirement) would, subject to the attain- executive officer. The Committee will ment of any applicable performance con- determine the level of this cap in light of ditions, continue to vest for three years market conditions and negotiation at the after retirement (and options would remain time of any such renegotiation, renewal or exercisable until the earlier of three years replacement. after retirement and the original expiration date) if the participant was age 60 or Severance greater and had at least ten years of serv- ice at the date of retirement, except that Mr. Shuler served as Executive Vice Presi- this would not apply for employees out- dent and Chief Human Resources Officer side the United States where, in the judg- from April 2008 to April 2009. In con- ment of management, doing so would nection with the termination of his create issues under applicable local laws. employment, Mr. Shuler received the benefits provided under his employment Benefits and Perquisites agreement in the event of a termination for good reason by the executive or the In fiscal 2009, the Committee determined exercise by the Company of its termi- that it would phase out the Family Income nation right. As set forth in greater detail Assurance Plan. As described on page 48 under “Compensation Tables — Payments below, this plan provides a continuation of and Rights on Termination — Compensation a declining portion of an executive’s salary of Mr. Shuler,” upon completion of a six for three years after his or her death while month consulting agreement, Mr. Shuler employed by the Company. Pursuant to received a payment equal to the salary he their current employment agreements, would have earned through completion of Mr. Iger, Mr. Staggs and Mr. Braverman his employment agreement on March 31, (as well as certain other executives) are 2011 and a bonus equal to the target entitled to this benefit. The Committee amount of his bonus established by the determined that it would not renew this Committee at the beginning of the fiscal benefit for executives when their current year, which was equal to 100% of his sal- employment agreements expired or offer it ary, pro rated through April 2009. In addi- to any other employee. The Company had tion, option and equity awards held by him been reducing the number of executives at the time his employment ended con- covered by the plan as employment dis- tinue to vest (and options remain cussions have focused on other elements exercisable) until the scheduled termi- of the overall package. In light of the nation of his employment agreement. The declining focus, the Committee Company also agreed to reimburse determined to discontinue this benefit for expenses (and the tax costs of that all executives as their current employment reimbursement) incurred by Mr. Shuler in agreements expire. relocating back to the state in which he resided prior to beginning with the Com- The Committee also reviewed the practice pany in 2008. of providing compensation for certain executives who are subject to excise taxes on compensation received on termi- nation following a change in control. As

32 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Deductibility of Compensation infrequent items; and extraordinary liti- gation costs and insurance recoveries. For Awards to executive officers under the the one- and two-year periods ending at Management Incentive Bonus Program the end of fiscal 2009, the adjusted net and the long-term incentive program income targets were $2.3 billion and $5.8 include a test specifically designed to billion, respectively, and the Company ensure that the awards are fully deductible achieved adjusted net income of $3.4 bil- under Section 162(m). As required by Sec- lion and $7.9 billion, respectively. In fiscal tion 162(m), the criterion established must 2009, net income was adjusted to exclude not be certain of being achieved at the the impact of a gain on the sale of HBO time it is set. The regulations under Sec- Latin America ($71 million), restructuring tion 162(m) specifically indicate that a test and impairment charges ($310 million) and based on profitability is not assured of an accounting gain related to the merger being attained. Accordingly, our bonus of Lifetime into A&E Television Networks program and equity award program both ($141 million). In fiscal 2008, net income use a test based on adjusted net income, was adjusted to exclude the impact of an which means net income adjusted, as accounting gain related to the acquisition appropriate, to exclude the following items of the Disney Stores North America ($11 or variances: change in accounting princi- million), a gain on the sale of movies.com ples; acquisitions; dispositions of a busi- ($9 million) and a bad debt charge for a ness; asset impairments; restructuring receivable from Lehman Brothers ($57 charges; extraordinary, unusual or million).

33 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Compensation Tables

The following table provides information concerning total compensation earned in fiscal 2007, fiscal 2008 and fiscal 2009 by the chief executive officer, the chief financial officer and the three other persons serving as executive officers at the end of fiscal 2009 who were the most highly compensated executive officers of the Company in fiscal 2009. In addition, we have included information for fiscal 2009 with respect to Dennis W. Shuler, who was Execu- tive Vice President and Chief Human Resources Officer from April 2008 through April 2009, and whose compensation in fiscal 2009, as reported in the table below, would have made him one of the five most highly compensated executive officers if he had been an executive officer at the end of the fiscal year. These six officers are referred to as the named executive officers in this proxy statement. Information regarding the amounts in each column follows the table.

SUMMARY COMPENSATION TABLE Change in Pension Value and Nonqualified Non-Equity Deferred Stock Option Incentive Plan Compensation All Other Name and Principal Position Year Salary1 Awards1 Awards1 Compensation Earnings Compensation Total Robert A. Iger 2009 $2,038,462 $6,336,509 $8,308,6472 $ 9,260,000 $2,343,1433 $ 741,601 $29,028,362 President and Chief Executive 2008 2,000,000 7,766,676 5,975,3322 13,945,493 156,761 773,090 30,617,352 Officer 2007 2,000,000 7,931,660 2,243,180 13,670,686 1,108,498 745,177 27,699,201 Thomas O. Staggs 2009 1,274,038 3,519,7204 1,270,961 2,450,000 717,7973 43,786 9,276,302 Senior Executive Vice President 2008 1,187,019 2,834,8394 953,581 4,100,000 47,617 78,097 9,201,153 and Chief Financial Officer 2007 1,106,250 2,196,727 1,004,354 4,450,000 223,362 68,021 9,048,714 Alan N. Braverman 2009 1,120,769 1,908,471 735,7525 2,035,000 815,4393 34,150 6,649,581 Senior Executive Vice President, 2008 1,032,885 1,603,625 720,599 3,000,000 277,071 67,649 6,701,829 General Counsel and Secretary 2007 1,000,000 2,083,860 985,364 3,450,000 290,593 48,106 7,857,923 Kevin A. Mayer 2009 713,269 613,100 533,219 900,000 257,1003 19,889 3,036,577 Executive Vice President, 2008 646,442 495,937 447,396 1,025,000 52,824 18,956 2,686,554 Corporate Strategy, Business 2007 610,000 368,520 355,816 1,200,000 82,725 16,618 2,633,679 Development and Technology

Christine M. McCarthy 2009 588,606 496,277 299,084 545,000 247,1713 20,273 2,196,411 Executive Vice President, 2008 563,221 459,451 260,357 800,000 56,238 26,119 2,165,386 Corporate Finance and Real 2007 530,000 438,602 277,406 875,000 87,141 18,682 2,226,831 Estate, and Treasurer

Dennis W. Shuler 2009 395,000 255,831 218,244 — — 3,122,3747 3,991,449 EVP and Chief Human Resources Officer6

1 The amounts reflect compensation for 53 weeks in fiscal year 2009 compared to 52 weeks in fiscal 2008 and fiscal 2007 due to the timing of fiscal period end. 2 The amounts recorded for fiscal 2009 and fiscal 2008 include $4,802,714 and $3,281,055, respectively, relating to an award of options to purchase 3,000,000 shares at an exercise price of $29.51 per share and scheduled to vest through 2013 awarded to Mr. Iger in fiscal 2008 as an inducement to enter into an extended employment agreement. 3 As described more fully under “Change in Pension Value and Nonqualified Deferred Compensation Earnings” below, the change in this amount from fiscal 2008 to fiscal 2009 is driven largely by a change in the discount rate applied to calculate the present value of future pension payments. 4 The amounts recorded for fiscal 2009 and fiscal 2008 include $1,463,113 and $942,544 relating to an award of 250,000 restricted stock units scheduled to vest in 2013 awarded to Mr. Staggs in fiscal 2008 as an inducement to enter into a new employment agreement. 5 The amount recorded for fiscal 2009 includes $760,952 relating to an award of 100,000 restricted stock units scheduled to vest through 2012 awarded to Mr. Braverman in fiscal 2009 as an inducement to enter into a new employment agreement. 6 Mr. Shuler’s employment terminated on April 23, 2009. 7 The components of this compensation related to the termination of Mr. Shuler’s employment are described in “Compensation Tables — Payments and Rights on Termination — Compensation of Mr. Shuler”.

34 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Salary. This column sets forth salary Awards” column for each fiscal year with earned during each fiscal year, none of respect to prior-year grants and grants in which was deferred. the fiscal year.

FISCAL 2007-2009 CHARGES FOR RESTRICTED STOCK Stock Awards. This column sets forth the UNIT AWARDS dollar amount recognized for financial statement reporting purposes for Amount Included in Table compensation expense incurred by the Attributable to Current Company in each fiscal year with respect Fiscal Prior-Year Fiscal Year to grants in that fiscal year and in prior Year Awards Awards fiscal years of: Robert A. Iger 2009 $5,166,417 $1,170,092 2008 6,540,212 1,226,464 • restricted stock units awarded as part of 2007 5,018,975 2,912,685 the Company’s long-term incentive Thomas O. Staggs 2009 3,002,9381 516,782 compensation program, and 2008 1,524,356 1,310,4831 2007 1,032,916 1,163,811 • restricted stock units awarded as com- Alan N. Braverman 2009 861,489 1,046,9822 pensation related to the dilutive effect of 2008 1,358,333 245,293 the ABC Radio spin-off. 2007 1,388,083 695,777 Kevin A. Mayer 2009 416,786 196,314 This column does not include accounting 2008 367,158 128,779 2007 163,020 205,500 charges related to restricted stock units Christine M. McCarthy 2009 374,598 121,679 that the Compensation Committee has 2008 349,069 110,382 elected to award in lieu of cash for a por- 2007 229,331 206,769 tion of the annual bonus awarded the Dennis W. Shuler 2009 184,732 71,099 executive officer under the Company’s Management Incentive Bonus Program. 1 The amounts recorded for fiscal 2009 and fiscal 2008 include $1,463,113 and $942,544 relating to an award of The full dollar amount of the bonus 250,000 restricted stock units scheduled to vest in 2013 (including restricted stock units valued at awarded to Mr. Staggs in fiscal 2008 as an inducement the average of the high and low trading to enter into a new employment agreement. 2 The amount recorded for fiscal 2009 includes $760,952 prices on the date of award) was included relating to an award of 100,000 restricted stock units in the “Non-Equity Incentive Plan scheduled to vest through 2012 awarded to Compensation” column when awarded. Mr. Braverman in fiscal 2009 as an inducement to enter into a new employment agreement. This column also does not include the accounting charges recognized as a result Option Awards. This column sets forth of the termination of Mr. Shuler’s the dollar amount recognized for financial employment, which amounts are included statement reporting purposes for in the “Other Compensation” column. compensation expense incurred by the Company in each fiscal year with respect The grant date fair value of restricted to options awarded to the named execu- stock units awarded during fiscal 2009 tive officers. The grant date fair value of (which differs from the amounts set forth options awarded during fiscal 2009 (which in the table above) is included in the differs from the amounts set forth in the Grants of Plan Based Awards table on table above) is included in the Grants of page 38 and was determined using the Plan Based Awards table on page 38 and methodology described on that page. The was determined using the methodology amount recognized for financial statement described on that page. The amount reporting purposes excludes a portion of recognized for financial statement report- the fair value of restricted stock units ing purposes excludes a portion of the fair awarded during the fiscal year to reflect value of options awarded during the fiscal the fact that vesting of the restricted stock year to reflect the fact that vesting of the units occurs in future years and it includes options occurs in future years and it amounts with respect to restricted stock includes amounts with respect to options units awarded in prior years to reflect the awarded in prior years to reflect the fact fact that vesting occurs in or after the that vesting occurs in or after the fiscal fiscal year. The following table sets forth year. This column does not include the the amount included in the “Stock accounting charges recognized as a result

35 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement of the termination of Mr. Shuler’s employ- Change in Pension Value and Nonqualified ment, which amounts are included in the Deferred Compensation Earnings. This “Other Compensation” column. The column reflects the aggregate change in following table sets forth the amount the actuarial present value of each named included in the “Option Awards” column executive officer’s accumulated benefit with respect to prior-year awards and the under all defined benefit plans, including current year’s award. supplemental plans, during each fiscal year reported. The amounts recorded in FISCAL 2007-2009 CHARGES FOR OPTION AWARDS this column vary with a number of factors, Amount Included in Table including the discount rate applied to Attributable to determine the value of future payment Current streams. As a result of a reduction in pre- Fiscal Prior-Year Fiscal Year Year Awards Awards vailing interest rates in the credit markets Robert A. Iger 2009 $7,662,9041 $ 645,743 during late 2008 and 2009, the discount 2008 2,078,826 3,896,5061 rate used pursuant to pension accounting 2007 1,616,094 627,086 rules to calculate the present value of Thomas O. Staggs 2009 985,758 285,203 future payments decreased from 7.00% 2008 768,946 184,635 for fiscal 2008 to 5.75% for fiscal 2009, 2007 804,403 199,952 driving the substantial increases in the Alan N. Braverman 2009 577,905 157,847 present value of future payments reported 2008 597,508 123,091 for fiscal 2009. The increase in pension 2007 832,651 152,714 value resulting from the change in the Kevin A. Mayer 2009 424,879 108,340 2008 382,773 64,623 discount rate does not result in any 2007 282,500 73,316 increase in the benefits payable to partic- Christine M. McCarthy 2009 231,927 67,157 ipants under the plan. None of the named 2008 204,966 55,391 executive officers had earnings on 2007 217,649 59,758 deferred compensation other than Dennis W. Shuler 2009 181,644 36,600 Mr. Iger, whose earnings on deferred compensation, which are disclosed below 1 The amounts recorded for fiscal 2009 and fiscal 2008 include $4,802,714 and $3,281,055, respectively, relating under “Deferred Compensation,” were not to an award of options to purchase 3,000,000 shares at above market rates and therefore are not an exercise price of $29.51 per share and scheduled to included in this column. vest through 2013 awarded to Mr. Iger as an induce- ment to enter into an extended employment agreement. All Other Compensation. This column sets Non-Equity Incentive Plan Compensa- forth compensation that is not included in tion. This column sets forth the amount other columns, including: of compensation earned by the named • the incremental cost to the Company of executive officers under the Company’s perquisites and other personal benefits; Management Incentive Bonus program with respect to fiscal 2009. A description • the amount of Company contributions to of the Company’s annual performance- employee savings plans; based bonus program is included in the • the dollar value of insurance premiums discussion of “Performance Based paid by the Company with respect to in the Compensation” “Compensation excess liability insurance for the named section, Objectives and Program Design” executive officers; and and the determination of performance- based bonuses for fiscal 2009 is described • for Mr. Shuler, the accounting expense in the discussion of “Annual Performance recognized in fiscal 2009 in connection Bonus for Named Executive Officers” in the with the termination of his employment, “Fiscal 2009 Decisions” section, of the as detailed under “Compensation Compensation Discussion and Analysis, Tables — Payments and Rights on Termi- beginning on page 13. This column also nation — Compensation of Mr. Shuler” does not include the performance bonus and reimbursement for taxes incurred as awarded to Mr. Shuler in connection with a result of reimbursement of relocation the termination of his employment, which expenses. is included in the “Other Compensation” column.

36 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

In accordance with SEC interpretations of The following table identifies the its rules, the table includes the incremental incremental cost of each perquisite or cost of some items that are provided to personal benefit that exceeded the greater executives for business purposes but of $25,000 or 10% of the total amount of which may not be considered integrally perquisites and personal benefits for a related to the executive’s duties. named executive officer in fiscal 2009.

FISCAL 2009 PERQUISITES AND PERSONAL BENEFITS Personal Air Travel Security Other Total Robert A. Iger $132,374 $589,102 $14,400 $735,876 Thomas O. Staggs — — 39,115 39,115 Alan N. Braverman — — 28,566 28,566 Kevin A. Mayer — — 14,520 14,520 Christine M. McCarthy — — 14,850 14,850 Dennis W. Shuler — — 26,768 26,768

The incremental cost of the items speci- Company of the vehicle benefit, relocation fied above was determined as follows: expenses, personal air travel where the cost to the Company for personal air travel • Personal air travel: the actual catering is less than $25,000, reimbursement of up costs, landing and ramp fees, fuel costs to $450 for health club membership or and lodging costs incurred by flight crew exercise equipment, reimbursement of up plus a per hour charge based on the to $1,500 for an annual physical exam and average hourly maintenance costs for the reimbursement of expenses for financial aircraft during the year for flights that consulting. Executives also are entitled to were purely personal in nature, and a pro the other benefits described in the Com- rata portion of catering costs where pensation Discussion and Analysis under personal guests accompanied executives the discussion of “Fixed Compensation” in on flights that were business in nature. the “Compensation Objectives and Program • Security: actual costs incurred by the Design” section, which either involved no Company for providing security equip- incremental cost to the Company or are ment and services. offered through programs that are avail- able to substantially all of the Company’s The column labeled “Other” in the table salaried employees. above includes the incremental cost to the

37 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Grants of Plan Based Awards The following table provides information concerning the range of awards available to named executive officers under the Company’s management incentive bonus program for fiscal 2009 and information concerning option and restricted stock unit awards made to named executive officers during fiscal 2009. Additional information regarding the amounts in each column follows the table.

FISCAL 2009 GRANTS OF PLAN BASED AWARDS

All Other Grant Option Date Grant Estimated Future Payouts Estimated Future Payouts Awards: Exercise Closing Date Fair Under Non-Equity Under Equity Number of or Base Price of Value of Incentive Plan Awards Incentive Plan Awards Securities Price of Shares Stock and Grant Underlying Option Underlying Option Date Threshold Target Maximum Threshold Target Maximum Options Awards Options Awards Robert A. Iger 1/14/09 480,000 $20.81 $20.80 $3,598,402 1/14/09 142,720 285,440 5,940,006 $3,500,000 $10,000,000 $20,000,000 Thomas O. Staggs 1/14/09 212,000 20.81 20.80 1,589,294 1/14/09 63,035 126,070 2,623,517 $ 927,500 $ 2,650,000 $ 5,300,000 Alan N. Braverman 10/02/08 100,0001 3,035,500 1/14/09 117,334 20.81 20.80 879,614 1/14/09 34,888 69,776 1,452,039 $ 770,000 $ 2,200,000 $ 4,400,000 Kevin A. Mayer 1/14/09 80,534 20.81 20.80 603,737 1/14/09 23,946 47,892 996,633 $ 306,250 $ 875,000 $ 1,750,000 Christine M. McCarthy 1/14/09 49,920 20.81 20.80 374,234 1/14/09 14,843 29,686 617,766 $ 202,125 $ 577,500 $ 1,155,000 Dennis W. Shuler 1/14/09 72,000 20.81 20.80 539,760 1/14/09 21,408 42,816 890,001 $ 227,500 $ 650,000 $ 1,300,000 1 Restricted stock units scheduled to vest through 2013 awarded as an inducement to enter into a new employment agreement.

Grant date. The Compensation Commit- ance factors and other performance factors tee awarded the annual grant of stock for the fiscal year, but the bonus may be options and restricted stock units for fiscal zero if performance factors (including the 2009 on January 14, 2009. Mr. Braverman Section 162(m) test) fall below threshold received a grant of restricted stock units amounts or less than the calculated on October 2, 2008 in connection with the amounts if the Committee otherwise execution of his new employment agree- decides to reduce the bonus. As discussed ment. The Compensation Committee in the discussion of Fiscal 2009 Decisions in approved awards under the Management the Compensation Discussion and Analysis, Incentive Bonus Program on the employment agreements of Mr. Iger, December 15, 2009. Mr. Staggs, Mr. Braverman and Mr. Mayer, as well as the employment agreement for Estimated Future Payouts Under Non-equity Mr. Shuler, set a minimum target bonus. Incentive Plan Awards. As described in the This column shows the range of bonus Compensation Discussion and Analysis, the amounts for each named executive officer Compensation Committee sets target from the threshold to the maximum based bonuses at the beginning of the fiscal year on the target set at the beginning of the under the Company’s Management Incentive fiscal year. The actual amounts awarded for Bonus Program and the Amended and fiscal 2009 other than for Mr. Shuler are set Restated 2002 Executive Performance Plan, forth in the Summary Compensation Table and bonuses for named executive officers in the Non-Equity Incentive Plan will, except in special circumstances such as Compensation column; the amount for unusual challenges or extraordinary suc- Mr. Shuler is set forth under “Compensation cesses, range from 35% to 200% of the Tables — Payments and Rights on Termi- target amount based on financial perform- nation — Compensation of Mr. Shuler”.

38 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Estimated Future Payouts Under Equity tive would receive no shares on that vest- Incentive Plan Awards. This column sets ing date. forth the number of restricted stock units awarded to the named executive officers All Other Option Awards: Number of Secu- during fiscal 2009 that are subject to per- rities Underlying Options. This column formance tests as described below and/or sets forth options awarded to the named to the test to assure eligibility for executive officers as part of the annual deduction under Section 162(m). These grant in January 2009. Vesting dates for include: these options are described under “Outstanding Equity Awards,” below. The • units awarded to each of the named options are scheduled to expire seven executive officers as part of the annual years after the date of grant. grant in January 2009, 50% of which are subject to the performance tests Exercise or Base Price of Option Awards; described in the Compensation Dis- Grant Date Closing Price of Shares Under- cussion and Analysis under the heading lying Options. These columns set forth “Performance-based Compensation — the exercise price for each option grant Equity-based Compensation” and all of and the closing price of the Company’s which (other than those held by common stock on the date of grant. The Mr. Shuler) are subject to the test to exercise price is equal to the average of assure eligibility under Section 162(m); the high and low trading price on the grant and date, which may be higher or lower than • units awarded to Mr. Braverman on the closing price on the grant date. October 2, 2008 in connection with the execution of his new employment Grant Date Fair Value of Stock and Option agreement (which are subject to the test Awards. This column sets forth the grant to assure eligibility under Sec- date fair value of stock and option awards tion 162(m)). calculated in accordance with applicable accounting requirements. The grant date fair value of all restricted stock unit Vesting dates for all restricted stock units awards is equal to the number of units held as of the end of fiscal year 2009 are awarded times the average of the high and described under “Outstanding Equity low trading price of the Company’s Awards,” below. common stock on the grant date subject to discounts for restricted stock units that In each of the cases described above, if all have performance vesting conditions other applicable tests (including the Sec- than the test to assure deductibility under tion 162(m) test) are met on the applicable Section 162(m). The discounts are vesting dates, the named executive officer determined using a Monte Carlo simu- will be entitled to the number of shares in lation that determines the probability that the “target” column plus any units the performance targets will be achieved. received as dividend equivalents prior to The grant-date fair values of options were vesting. (When dividends are distributed to calculated using the binomial model. The stockholders, dividend equivalents are assumptions used in estimating the fair credited in an amount equal to the dollar value of options are set forth in footnote amount of dividends on the number of 13 to the Company’s Audited Financial units held on the dividend record date Statements for fiscal year 2009. divided by the fair market value of the Company’s shares of common stock on Outstanding Equity Awards the dividend distribution date.) If the Sec- tion 162(m) test is met but none of the The following table provides information other tests are met, the executive would concerning unexercised options and receive the threshold number of shares unvested restricted stock unit awards held (which are subject to no additional per- by the named executive officers of the formance tests) plus dividend equivalents Company as of October 3, 2009. on those shares. If the Section 162(m) test Information regarding the amounts in the is not met on any vesting date, the execu- columns follows the table.

39 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

OUTSTANDING EQUITY AWARDS AT END OF FISCAL 2009 Option Awards Stock Awards

Equity Incentive Plan Awards

Market Number Number of Value of of Market Number of Securities Shares or Shares or Unearned Value of Underlying Units of Units of Units Unearned Unexercised Options Option Option Stock That Stock That That Units That Grant Exercise Expiration Have Have Have Not Have Not Date Exercisable Unexercisable Price Date Not Vested Not Vested Vested Vested Robert A. Iger 01/24/00 19,353 — $132.57 01/24/10 — — — — 11/27/01 1,750,000 — 21.05 11/27/11 — — — — 06/27/05 274,241 — 25.81 06/27/12 — — 88,274(A) $2,401,940 10/02/05 — — — — — — 212,546(B) 5,783,375 01/09/06 308,250 102,750(C) 24.87 01/09/13 10,689(D) $290,834 169,355(E) 4,608,146 01/10/07 188,889 188,889(F) 34.27 01/10/14 — — 99,031(G) 2,694,621 01/09/08 105,263 315,790(H) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 203,348(I) 5,533,112 01/31/08 500,000 2,500,000(J) 29.51 01/31/15 — — — — 01/14/09 — 480,000(K) 20.81 01/14/16 — — 285,440(L) 7,766,822 Thomas O. Staggs 11/22/99 335,000 — $ 26.81 11/22/09 — — — — 01/24/00 27,095 — 132.57 01/24/10 — — — — 01/28/02 600,000 — 22.20 01/28/12 — — — — 06/27/05 125,367 — 25.81 06/27/12 40,354(A) 1,098,036 01/09/06 115,500 38,500(C) 24.87 01/09/13 10,689(D) 290,834 64,101(E) 1,744,195 01/10/07 60,000 60,000(F) 34.27 01/10/14 12,210(M) 332,222 31,457(G) 855,945 01/09/08 31,579 94,737(H) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 61,005(I) 1,659,934 01/30/08 — — — — — — 254,186(N) 6,916,390 01/14/09 — 212,000(K) 20.81 01/14/16 — — 126,070(L) 3,430,365 Alan N. Braverman 01/24/00 120,000 — $ 32.88 01/24/10 — — — — 02/05/01 120,000 — 30.23 02/05/11 — — — — 01/28/02 197,500 — 22.20 01/28/12 — — — — 01/24/03 84,000 — 17.14 01/24/13 — — — — 03/19/03 60,000 — 16.70 03/19/13 — — — — 01/22/04 150,000 — 24.64 01/22/14 — — — — 01/03/05 60,000 — 28.04 01/03/12 — — — — 01/09/06 65,250 21,750(C) 24.87 01/09/13 7,482(D) 203,587 36,403(E) 990,499 01/10/07 46,000 46,000(F) 34.27 01/10/14 6,491(M) 176,628 24,117(G) 656,267 01/09/08 21,052 63,159(H) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 40,670(I) 1,106,622 10/02/08 — — — — — — 101,674(O) 2,766,556 01/14/09 — 117,334(K) 20.81 01/14/16 — — 69,776(L) 1,898,605 Kevin A. Mayer 06/27/05 120,000 — $ 25.81 06/27/12 — — — — 01/09/06 30,000 10,000(C) 24.87 01/09/13 — — 18,946(E) 515,516 01/10/07 22,000 22,000(F) 34.27 01/10/14 — — 11,534(G) 313,832 01/09/08 11,052 33,159(H) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 21,352(I) 580,977 01/14/09 — 80,534(K) 20.81 01/14/16 — — 47,892(L) 1,303,141 Christine M. McCarthy 01/24/00 65,000 — $ 32.88 01/24/10 — — — — 01/24/00 1,452 — 132.57 01/24/10 — — — — 02/05/01 46,000 — 30.23 02/05/11 — — — — 01/28/02 60,000 — 22.20 01/28/12 — — — — 01/24/03 25,200 — 17.14 01/24/13 — — — — 01/22/04 30,000 — 24.64 01/22/14 — — — — 01/03/05 22,000 — 28.04 01/03/12 — — — — 01/09/06 24,000 8,000(C) 24.87 01/09/13 — — 15,156(E) 412,402 01/10/07 18,000 18,000(F) 34.27 01/10/14 — — 9,438(G) 256,801 01/09/08 9,473 28,422(H) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 18,301(I) 497,980 01/14/09 — 49,920(K) 20.81 01/14/16 — — 29,686(L) 807,756 Dennis W. Shuler 04/01/08 — 150,000(P) $ 31.77 04/01/15 20,335(Q) 553,311 20,335(R) 553,311 01/14/09 — 72,000(K) 20.81 01/14/16 21,408(S) 582,512 21,408(T) 582,512

40 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Number of Securities Underlying tive effect of the Company’s spin-off of the Unexercised Options: Exercisable and ABC Radio business. The market value is Unexercisable. These columns report, for equal to the number of shares underlying each officer and for each grant made to the units times the closing market price of the officer, the number of shares of the Company’s common stock on Friday, common stock that can be acquired upon October 2, 2009, the last trading day of the exercise of outstanding options. The vest- Company’s fiscal year. The vesting ing schedule for each grant with schedule and performance tests and/or unexercisable options is shown under the test to assure eligibility under Sec- “Vesting Schedule,” below with options tion 162(m) are shown under “Vesting identified by the letter following the num- Schedule,” below. ber of shares underlying options that are unexercisable. Vesting of options held by Vesting Schedule. The options reported named executive officers may be accel- above that are not yet exercisable and erated in the circumstances described restricted stock units that have not yet under “Payments and Rights on vested are scheduled to become Termination,” below. exercisable and vest as set forth below.

Number; Market Value of Shares or Units of (A) Restricted stock units granted Stock That Have Not Vested. These June 27, 2005 subject to performance columns report the number and market tests: The remaining units vested on value, respectively, of shares underlying December 1, 2009 upon determi- each grant of restricted stock units to nation that the test to assure eligi- each officer that is not subject to perform- bility under Section 162(m) was ance vesting conditions nor the test to satisfied. assure eligibility of deduction pursuant to Section 162(m). The number of shares (B) Restricted stock units granted includes dividend equivalent units that October 2, 2005 subject to perform- have accrued for dividends payable ance tests: This grant, which was through October 3, 2009. The market value awarded to Mr. Iger in connection is equal to the number of shares under- with the commencement of his lying the units times the closing market employment agreement, is subject to price of the Company’s common stock on a total shareholder return test and the Friday, October 2, 2009, the last trading test to assure eligibility for deduction day of the Company’s fiscal year. The pursuant to Section 162(m). With vesting schedule for each grant is shown respect to this grant, the Company’s below, with grants identified by the letter total shareholder return from the following the number of shares underlying grant date until the end of the appli- the grant. Vesting of restricted stock units cable measurement period must meet held by named executive officers may be or exceed the total shareholder return accelerated in the circumstances for the S&P 500 index for the same described under “Payments and Rights on period. On December 1, 2009, Termination,” below. 106,272 of these units vested upon the certification by the Compensation Committee that the test to assure Number; Market Value of Unearned Units eligibility under Section 162(m) was These columns That Have Not Vested. satisfied with respect to these units. report the number and market value, There is one remaining measurement respectively, of shares underlying each period ending on October 2, 2010. grant of restricted stock units to each offi- These units are also subject to a test cer that subject to performance vesting is to determine whether they are eligible conditions and/or the test to assure eligi- for deductibility consistent with Sec- bility for deduction pursuant to Sec- tion 162(m). tion 162(m). The number of shares includes dividend equivalent units that (C) Options granted January 9, 2006: The have accrued for dividends payable remaining unexercisable options through October 3, 2009 and includes became exercisable on January 9, units awarded to compensate for the dilu- 2010.

41 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

(D) Restricted stock units granted Jan- of Compensation — Long-term uary 9, 2006 in lieu of a cash bonus Incentive Compensation — Vesting of and therefore not subject to further Restricted Stock Units,” above. performance tests: the remaining (J) Options granted January 31, 2008 in units vested January 9, 2010. connection with the extension of (E) Restricted stock units granted Jan- Mr. Iger’s employment agreement: uary 9, 2006 subject to performance Options with respect to 500,000 tests: The remaining units vested shares become exercisable on each January 9, 2010. of January 31, 2010, 2011 and 2012, and options with respect to 1,000,000 (F) Options granted January 10, 2007: shares become exercisable on Jan- One half of the remaining uary 31, 2013. unexercisable options became exercisable on January 10, 2010 and (K) Options granted January 14, 2009: the remaining unexercisable options One-fourth of the remaining are scheduled to become exercisable unexercisable options became on January 10, 2011. exercisable on January 14, 2010 and one-third of the then remaining (G) Restricted stock units granted Jan- unexercisable options are scheduled uary 10, 2007 subject to performance to become exercisable on each of tests: The remaining units vest on January 14, 2011, 2012 and 2013, January 10, 2011, subject to determi- except that the options awarded to nation that the test to assure eligi- Mr. Shuler and scheduled to become bility under Section 162(m) was exercisable on January 14, 2012 and satisfied, except that vesting of half 2013 were forfeited in connection of the units scheduled to vest on that with the termination of his employ- date are also subject to satisfaction ment. of the total shareholder return test described under “Compensation Dis- (L) Restricted stock units granted Jan- cussion and Analysis — Compensation uary 14, 2009 subject to performance Objectives and Program Design — tests: One-eighth of the units vested Performance-based Compensation — on January 14, 2010 and one-sixth of Equity-based Compensation,” above. the then remaining units are sched- uled to vest on each of January 14, (H) Options granted January 9, 2008: 2011, 2012 and 2013, in each case One-third of the remaining subject to determination that the test unexercisable options became to assure eligibility under Sec- exercisable on January 9, 2010 and tion 162(m) was satisfied. One fourth one-half of the then remaining of the units are scheduled to vest on unexercisable options are scheduled each of January 14, 2011 and 2013, in to become exercisable on each of each case subject to determination January 9, 2011 and 2012. that the test to assure eligibility under Section 162(m) was satisfied and also (I) Restricted stock units granted Jan- subject to satisfaction of total share- uary 30, 2008 subject to performance holder return or earnings per share tests: One-half of the units are test described under “Compensation scheduled to vest on each of Jan- Discussion and Analysis — Compensa- uary 30, 2010 and 2012, in the case of tion Objectives and Program Design — the units scheduled to vest in 2012, Performance-based Compensation — subject to determination that the test Equity-based Compensation,” above. to assure eligibility under Sec- tion 162(m) was satisfied, except that (M) Restricted stock units granted Jan- vesting of half of the units scheduled uary 10, 2007 in lieu of a cash bonus to vest on each date is also subject to and therefore not subject to further satisfaction of total shareholder performance tests: The remaining return or earnings per share test units are scheduled to vest on Jan- described under “Compensation Dis- uary 10, 2011. cussion and Analysis — Determination

42 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

(N) Restricted stock units granted to have been forfeited as a result of Mr. Staggs January 30, 2008 in con- Mr. Shuler’s termination of nection with the execution of a new employment. employment agreement and subject (R) Restricted stock units awarded to performance tests: All of the units April 1, 2008, in connection with are scheduled to vest on March 31, Mr. Shuler’s initial employment 2013, subject to determination that agreement, subject to performance the test to assure eligibility under tests: One-half of the units are Section 162(m) is satisfied. scheduled to vest on April 1, 2010, subject to satisfaction of the total (O) Restricted stock units awarded to shareholder return or earnings per Mr. Braverman on October 2, 2008 in share test described under connection with the execution of his “Compensation Discussion and Analy- new employment agreement: sis — Compensation Objectives and One-half of the units are scheduled to Program Design — Performance-based vest on each of October 2, 2010 and Compensation — Equity-based 2012, in each case subject to the test Compensation,” above. The remaining to assure eligibility under Sec- one-half of these units have been tion 162(m). forfeited as a result of Mr. Shuler’s termination of employment. (P) Options awarded April 1, 2008 in connection with Mr. Shuler’s initial (S) Restricted stock units granted Jan- employment agreement. One-half of uary 14, 2009: One-quarter of the the options are scheduled to become units vested January 14, 2010, and exercisable on April 1, 2010 and one-third of the then remaining units one-fourth are scheduled to become are scheduled to vest on January 14, exercisable on April 1, 2011. The 2010 and 2011. The remaining units remaining options have been forfeited have been forfeited as a result of as a result of his termination of Mr. Shuler’s termination of employ- employment. ment. (T) Restricted stock units granted Jan- (Q) Restricted stock units awarded uary 14, 2009 subject to performance April 1, 2008, in connection with tests: One-half of the units vested Mr. Shuler’s initial employment January 14, 2010. The remaining units agreement: One-half of the units are have been forfeited as a result of scheduled to vest on April 1, 2010. Mr. Shuler’s termination of employ- The remaining one-half of these units ment.

43 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Option Exercises and Stock Unit Vesting During Fiscal 2009

The following table provides information concerning exercises of options and vesting of restricted stock units held by the named executive officers during fiscal 2009. Information regarding the amounts in the columns follows the table.

FISCAL 2009 OPTION EXERCISE AND STOCK VESTED Option Awards Stock Awards Number of Value Number of Shares Realized Shares Value Acquired on on Acquired on Realized Exercise Exercise Vesting on Vesting Robert A. Iger — — 457,289 $9,736,350 Thomas O. Staggs 500,000 $725,159 77,479 1,717,136 Alan N. Braverman — — 200,838 4,320,615 Kevin A. Mayer — — 13,377 299,432 Christine M. McCarthy — — 19,214 433,479 Dennis W. Shuler —— — —

The value realized on exercise of options is equal to the closing market price of the is equal to the amount per share at which Company’s common stock on the date of the executive sold shares acquired on vesting times the number of shares exercise (all of which occurred on the date acquired upon vesting. The number of of exercise) minus the exercise price of shares and value realized on vesting the options times the number of shares includes shares that were withheld at the acquired on exercise of the options. The time of vesting to satisfy tax withholding value realized on vesting of stock awards requirements.

Equity Compensation Plans The following table summarizes information, as of October 3, 2009, relating to equity compen- sation plans of the Company pursuant to which grants of options, restricted stock, restricted stock units or other rights to acquire shares may be granted from time to time.

EQUITY COMPENSATION PLANS Number of securities remaining available for Number of securities Weighted-average future issuance under to be issued upon exercise exercise price of equity compensation of outstanding options, outstanding options, plans (excluding securities warrants and rights warrants and rights reflected in column (a)) Plan category (a) (b) (c)

Equity compensation plans approved by security holders1 203,595,6653 $26.794 82,508,1795 Equity compensation plans not approved by security holders — — — Total2 203,595,6653 $26.794 82,508,1795

1 These plans are the Company’s Amended and Restated 2005 Stock Incentive Plan, 1995 Stock Option Plan for Non-Employee Directors, Amended and Restated 1995 Stock Incentive Plans, The Walt Disney Company/Pixar 1995 Stock Plan, and The Walt Disney Company/Pixar 2004 Equity Incentive Plan (Disney/Pixar Plans were assumed by the Company in connection with the acquisition of Pixar). 2 Does not include 2,115 shares, at a weighted average exercise price of $154.61, granted under plans assumed in connection with acquisition transactions (other than the Disney/Pixar Plans) and under which no additional options may be granted. 3 Includes an aggregate of 32,273,203 restricted stock units and performance-based restricted stock units. Also includes options to purchase an aggregate of 27,653,671 shares, at a weighted average exercise price of $22.52, and 789,882 restricted stock units, in each case granted under plans assumed by the Company in connection with the acquisition of Pixar, which plans were approved by the shareholders of Pixar prior to the Company’s acquisition. 4 Weighted average exercise price of outstanding options; excludes restricted stock units and performance-based restricted stock units. 5 Includes 199,785 securities available for future issuance under plans assumed by the Company in connection with the acquisition of Pixar, which plans were approved by the shareholders of Pixar prior to the Company’s acquisition.

44 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Pension Benefits offset, while a participant under the plan. Average compensation is based on the The Company maintains a tax-qualified, highest five consecutive years of noncontributory retirement plan, called the compensation during the last ten-year Disney Salaried Retirement Plan, for sal- period of active plan participation, and aried employees who have completed one compensation includes salary and bonus, year of service. Benefits are based on a but excludes equity compensation (except percentage of total average monthly to the extent that the annual bonus is paid compensation plus a portion of average as equity), fringe benefits and expense monthly compensation that exceeds allowances. Like the Company’s Amended $2,500 multiplied by years of credited and Restated Key Plan, the Benefits service. Average monthly compensation is Equalization Plan of ABC, Inc., is a equal to base salary and excludes other non-qualified, non-funded plan that pro- compensation such as bonuses and equity vides eligible participants retirement bene- compensation and is calculated based on fits in excess of the compensation limits the highest five consecutive years of and maximum benefit accruals that apply compensation during the ten year period to tax-qualified plans. In addition, a term prior to termination or retirement, which- of the 1995 purchase agreement between ever is earlier. In addition, each participant ABC, Inc. and the Company provides that receives a flat dollar amount derived from employees transferring employment to a table based solely on years and hours of coverage under a Disney pension plan will service. Retirement benefits are receive an additional benefit under Disney non-forfeitable after five years of vesting plans equal to (a) the amount the service, or at age 65 after one year of serv- employee would receive under the Disney ice. After five years of vesting service, pension plans if all of his or her ABC serv- actuarially reduced benefits are paid to ice were counted under the Disney pen- participants who retire before age 65 but sion less (b) the combined benefits he or on or after age 55. she receives under the ABC plan (for serv- ice prior to the transfer) and the Disney In calendar year 2009, the maximum plan (for service after the transfer). compensation limit under a tax-qualified plan was $245,000, and the maximum annual benefit that may be accrued under Both Mr. Iger and Mr. Braverman trans- a tax-qualified defined benefit plan was ferred from ABC, and each receives a $195,000. To provide additional retirement pension benefit to bring his total benefit benefits for key salaried employees, the up to the amount he would have received Company maintains a supplemental non- if all his years of service had been credited qualified, unfunded plan, the Amended under the Disney plans. (The effect of and Restated Key Plan, which provides these benefits is reflected in the present retirement benefits in excess of the com- value of benefits under the Disney plans in pensation limitations and maximum bene- the table below). fit accruals under tax-qualified plans. This plan recognizes deferred amounts of base Both Mr. Iger and Mr. Braverman are cur- salary for purposes of determining appli- rently eligible for early retirement. The cable retirement benefits, and benefits are early retirement reduction for the Disney otherwise calculated on the same basis as Salaried Retirement Plan and the Restated under the tax-qualified plan. and Amended Key Plan is 50% at age 55, decreasing to 0% at age 65. The early Company employees (including two of the retirement reduction for the ABC, Inc., named executive officers) who transferred Retirement Plan, and the Benefit Equal- to the Company from ABC, Inc. after the ization Plan of ABC, Inc. is 28% at age 55, Company’s acquisition of ABC are also decreasing to 0% at age 62 (the Social entitled to benefits under the ABC, Inc. Security offset reduction at age 55 is 42%, Retirement Plan. Benefits under that plan decreasing to 0% at age 62). are based on a percentage of average compensation and years of credited serv- ice while employed by ABC, Inc., less an actuarially determined Social Security

45 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The following table sets forth the present the plans and is also the age at which value to each of the named executive offi- unreduced benefits are payable under the cers of the pension benefits to which they Disney plans; the earliest age at which are entitled under each of the plans unreduced benefits are payable under the described above. The present values ABC plans is age 62. The values also assume each officer retires at age 65 for assume straight life-annuity payment for purposes of the Disney Salaried Retire- an unmarried participant. Participants may ment Plan and the Amended and Restated elect other actuarially reduced forms of Key Plan and age 62 for purposes of the payment, such as joint and survivor bene- ABC, Inc. Retirement Plan, and the Benefit fits and payment of benefits for a period Equalization Plan of ABC, Inc. Age 65 is certain irrespective of the death of the the normal retirement age under each of participant.

FISCAL YEAR END 2009 PENSION BENEFITS Number of Years of Present Value of Credited Accumulated Payments Service at Benefit at During Last Name Plan Name Fiscal Year End Fiscal Year End Fiscal Year Robert A. Iger Disney Salaried Retirement Plan 10 $ 428,247 — Disney Amended and Restated Key Plan 10 3,513,430 — ABC, Inc. Retirement Plan 25 720,807 — Benefit and Equalization Plan of ABC, Inc. 25 5,690,767 — Total $10,353,251 — Thomas O. Staggs Disney Salaried Retirement Plan 20 $ 393,196 — Disney Amended and Restated Key Plan 20 1,560,021 — Total $ 1,953,217 — Alan N. Braverman Disney Salaried Retirement Plan 7 $ 449,106 — Disney Amended and Restated Key Plan 7 1,011,839 — ABC, Inc. Retirement Plan 9 252,041 — Benefit and Equalization Plan of ABC, Inc. 9 1,405,191 — Total $ 3,118,177 — Kevin A. Mayer Disney Salaried Retirement Plan 12 $ 215,870 — Disney Amended and Restated Key Plan 12 342,632 — Total $ 558,502 — Christine M. McCarthy Disney Salaried Retirement Plan 10 $ 278,838 — Disney Amended and Restated Key Plan 10 372,970 — Total $ 651,808 — Dennis W. Shuler Disney Salaried Retirement Plan — — — Disney Amended and Restated Key Plan — — — Total — — —

The present values were calculated using Deferred Compensation the 5.75% discount rate assumptions set forth in footnote 11 to the Company’s The Company does not now defer current Audited Financial Statements for fiscal compensation of any named executive year 2009 and using actuarial factors officer on a basis that is not tax qualified, including RP2000 white collar combined but from 2000 to 2005, $500,000 per year mortality table projected 10 years for of Mr. Iger’s annual salary was deferred. males and females at 5.75% interest. The Mr. Iger’s employment agreement pro- present values shown in the table are not vides that the deferred compensation will available as lump sum payment under the be paid, together with interest at the plans. applicable federal rate for mid-term treas- uries, reset annually, no later than 30 days after Mr. Iger is no longer subject to the

46 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement provisions of Section 162(m) of the Internal • expiration of an employment agreement, Revenue Code (or at such later date as is retirement or other voluntary termination. necessary to avoid the imposition of an additional tax on Mr. Iger under Sec- The compensation that each of our named tion 409A of the Internal Revenue Code). executive officers (other than Mr. Shuler) The interest rate is adjusted annually in may receive under each of these termi- March and the weighted average interest nation circumstances is described below, rate for fiscal 2009 was 2.37%. including quantification of the amount each executive would have become enti- The following table sets forth the earnings tled to assuming a termination at the end on the deferred amount in fiscal 2009 and of fiscal 2009 under the circumstances the aggregate balance including accumu- described. With respect to Mr. Shuler, the lated earnings as of October 3, 2009. compensation he received in connection There were no additions during the fiscal with his termination in April 2009 is year to the deferred amount by either the described under “Compensation of Company or Mr. Iger other than these Mr. Shuler,” below. earnings and no withdrawals during the fiscal year. Because the earnings during Any actual compensation received by our this year and previous years were not named executive officers in the circum- above market or preferential, these stances described below may be different amounts are not included in the Summary than we describe because many factors Compensation Table. affect the amount of any compensation received. These factors include: the date of the executive’s termination of employ- FISCAL 2009 NONQUALIFIED DEFERRED COMPENSATION ment; the executive’s base salary at the Aggregate Aggregate time of termination; the Company’s stock Earnings Balance at price at the time of termination; and the in Last Last Fiscal Fiscal Year Year End executive’s age and service with the Company at the time of termination. In $ 84,339 $3,644,185 addition, although the Company has entered into individual agreements with each of our named executive officers other Payments and Rights on Termination than Ms. McCarthy, in connection with a particular termination of employment the Our named executive officers may receive Company and the named executive officer compensation in connection with the may mutually agree on severance terms termination of their employment. This that vary from those provided in compensation is payable pursuant to pre-existing agreements. (a) the terms of compensation plans appli- cable by their terms to all participating In each of the circumstances described employees and (b) the terms of employ- below, our executive officers are entitled ment agreements of Mr. Iger, Mr. Staggs, to earned, unpaid salary and uncondition- Mr. Braverman and Mr. Shuler. The avail- ally vested accrued benefits pursuant to ability, nature and amount of this policies applicable to all employees. In compensation differ depending on Mr. Iger’s case, this includes the deferred whether employment terminates because salary and interest earned on it as of: described under “Deferred Compensation,” above. This earned compensation is not • death or disability; described or quantified below because the • the Company’s termination of the execu- amount of compensation to which the tive pursuant to the Company’s termi- officer is entitled does not change nation right or the executive’s decision because of the termination, but we do to terminate because of action the describe and quantify benefits that con- Company takes or fails to take; tinue beyond the date of termination that are in addition to those provided for in the • the Company’s termination of the applicable benefit plans. The executive’s employee for cause; or accrued benefits include the pension

47 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

benefits described under “Pension insurance plans offered by the Company Benefits,” above, which become payable to to all full-time employees to the extent she all participants who have reached retire- elects to pay the premiums for partic- ment age. Because they have reached ipation, but she is not otherwise entitled to retirement age under the plans, Mr. Iger compensation in the event of death or and Mr. Braverman each would have been disability beyond compensation and bene- entitled to these early retirement benefits if fits accrued at the time of her death or their employment had terminated at the termination of employment and rights end of fiscal year 2009. Because the pen- under equity compensation plans sion benefits available to Mr. Iger and described below. Mr. Braverman upon termination are not different from those described above In addition to the compensation and rights under “Pension Benefits” except in ways in the employment agreements described that are equally applicable to all salaried above, pursuant to the terms of the employees, the nature and amount of Amended and Restated 1995 Stock pension benefits are not described or Incentive Plan and the Amended and quantified below. Restated 2005 Stock Incentive Plan (which we refer to as the 1995 and 2005 Plans, Death and Disability respectively), all options awarded to a participant (including the named executive The employment agreements of Mr. Iger, officers) become exercisable upon the Mr. Staggs, Mr. Braverman and Mr. Mayer death of the participant and remain each provide that if he dies or his exercisable for 18 months, and all employment terminates because of dis- restricted stock units awarded to the par- ability during the term of the agreement, ticipant under the plans will, to the extent he (or his estate) will receive a bonus for the units had not previously been forfeited, any fiscal year that had been completed at vest and become payable upon the death the time of his death or termination of or disability of the participant. Upon employment due to disability but for which termination due to disability, the exercis- the bonus had not yet been paid. The ability of options will not accelerate but amount of the bonus will be determined by the participant will have one year following the Compensation Committee using the termination (or 18 months in the case of same criteria used for determining a participants who are eligible for immediate bonus as if the executive remained retirement benefits) rather than three employed. months following termination to exercise options that were at the time of termi- In addition, Mr. Iger, Mr. Staggs and nation, or within three months would Mr. Braverman are currently eligible for become, exercisable. participation in the Company’s Family Income Assurance Plan, which is being In addition, Mr. Iger’s employment agree- phased out as described in the Compensa- ment provides that, upon his death, the tion Discussion and Analysis, above, but restricted stock units (plus any dividend provides that, in the event of the death of equivalent units that had accrued with a participating key executive while respect to those units) awarded to Mr. Iger employed by the Company, the eligible in connection with the signing of his 2005 spouse, same sex domestic partner or employment agreement that have not dependent child is entitled to receive an previously vested will immediately vest. amount equal to 100% of the executive’s The agreement provides that upon salary in effect at the date of death for the Mr. Iger’s termination due to disability, first year after such date of death, 75% these units will be distributed on the dates thereof during the second year, and 50% they would have vested in the absence of thereof during the third year. such termination, but without regard to whether the performance tests were sat- Ms. McCarthy, who does not have an isfied as of those dates. employment agreement, is entitled to disability compensation under disability benefit plans and death benefits under life

48 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The following table provides the value of day in fiscal 2009) and the weighted aver- benefits each of our executive officers age exercise price of options with an would have received under compensation exercise price less than the market price plans and their employment agreements times the number of such options that or compensation arrangements in effect would accelerate as a result of termi- on the date of this proxy statement if their nation. The value of restricted stock unit employment had terminated at the close acceleration is equal to the $27.21 market of business on the last day of fiscal 2009 price of shares of the Company’s common as a result of death or disability. The value stock on October 2, 2009 and the number of option acceleration is equal to the of units that would accelerate as a result difference between the $27.21 market of (or, in the case of Mr. Iger’s disability, price of shares of the Company’s common continue to vest despite) termination. stock on October 2, 2009 (the last trading

DEATH AND DISABILITY Option Acceleration Restricted Cash (only upon Stock Unit Payment death) Acceleration

Robert A. Iger $16,500,0001 $3,312,949 $26,676,911 Thomas O. Staggs 5,262,500 1 1,447,083 15,229,885 Alan N. Braverman 4,510,0001 801,941 7,798,765 Kevin A. Mayer 900,0001 538,861 2,713,466 Christine M. McCarthy — 338,248 1,974,939

1 This amount is equal to the bonus awarded to the executives with respect to fiscal 2009 and set forth in the Summary Compensation Table under the column labeled “Non-Equity Incentive Plan Compensation” plus, in the cases of Mr. Iger, Mr. Staggs and Mr. Braverman, amounts payable under the Family Income Assurance Plan.

Termination Pursuant to Company executing a mutual release of liability and Termination Right or by Executive for agreeing to provide the Company with cer- Good Reason tain consulting services for a period of six months after his termination (or, if less, for The employment agreements of Mr. Iger, the remaining term of his employment Mr. Staggs, Mr. Braverman and Mr. Mayer agreement) pursuant to a form of consulting each provide that if his employment is agreement attached to the employment terminated by the Company pursuant to the agreement. Company’s termination right (as described • A lump sum payment to be made six below) or by the named executive officer months and one day after termination with good reason (as described below), he equal to the base salary the named will receive, in addition to salary and bene- executive officer would have earned had fits through the date his employment is he remained employed during the term of terminated, a bonus for any fiscal year that his consulting agreement. had been completed at the time of his termination of employment but for which • If the consulting agreement was not the bonus had not yet been paid. The terminated as a result of the named amount of the bonus will be determined by executive officer’s material breach of the the Compensation Committee using the consulting agreement, a further lump sum same criteria used for determining a bonus payment to be made six months and one if the executive remained employed. day after termination of his employment equal to the base salary the named In addition, the employment agreements of executive officer would have earned had Mr.Iger,Mr.Staggs,Mr.Bravermanand he remained employed after the termi- Mr. Mayer each provide that the named nation of his consulting agreement and executive officer will receive the following until the original scheduled expiration compensation and rights conditioned on his date of his employment agreement.

49 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

• A bonus for the year in which he is termi- payable to the named executive officer nated equal to a pro-rata amount of a that are treated as “parachute pay- target bonus amount determined in ments” for purposes of the applicable accordance with his employment federal tax provisions would not exceed agreement. the maximum amount that can be paid • All options that had vested as of the to the named executive officer without termination date or were scheduled to incurring such excise tax by at least vest prior to the original scheduled 10%, in which case the named executive expiration date of his employment officer’s compensation would be agreement (or within three months reduced to the maximum amount that thereafter) will remain or become would not result in the named executive exercisable as though the named execu- officer incurring the excise tax. tive officer were employed until the original scheduled expiration date of his Under the employment agreements, the employment agreement and will remain Company has the right to terminate the exercisable until the earlier of (a) the named executive officer’s employment scheduled expiration date of the options subject to the foregoing compensation in and (b) 3 months (or in the case of its sole, absolute and unfettered discretion Mr. Iger and Mr. Braverman, 18 months, for any reason or no reason whatsoever. A as provided in the Company’s equity termination for cause does not constitute compensation plans) after the original an exercise of this right and would be scheduled expiration date of his subject to the compensation provisions employment agreement. In addition, all described below under “Termination for options issued to Mr. Iger prior to 2005 Cause.” (all of which are currently exercisable) will remain exercisable for the period Termination by the executive for good specified in the applicable option reason means a termination by the named agreements. executive officer following notice given to the Company within three months of his • All restricted stock units that were sched- having actual notice of the occurrence of uled to vest prior to the original sched- any of the following events (except that uled expiration date of his employment the Company will have 30 days after agreement will (subject to satisfaction of receipt of the notice to cure the conduct applicable performance conditions) vest specified in the notice): (i) a reduction in as though the named executive officer the named executive officer’s base salary, were employed until the original sched- annual target bonus opportunity or (where uled expiration date of his employment applicable) annual target long-term agreement, except that any test to incentive award opportunity; (ii) the assure deductibility of compensation removal of the officer from his position under Section 162(m) will be waived for (including in the case of Mr. Iger, the fail- any units scheduled to vest after the ure to elect or reelect him as a member of fiscal year in which the termination of the Board or his removal from the position employment occurs unless application of of president other than in connection with the test is necessary to preserve the appointment of another person who is deductibility. acceptable to him to serve as president); • If any of the foregoing compensation or (iii) a material reduction in his duties and rights would be subject to excise tax as responsibilities (other than, in the case of an “excess parachute payment” under Mr. Iger, in connection with the appoint- federal income tax rules, the Company ment of another person to serve as has agreed to pay Mr. Iger, Mr. Staggs president); (iv) the assignment to him of and Mr. Braverman an additional amount duties that are materially inconsistent with to compensate for their incremental tax his position or duties or that materially costs up to a maximum of $4 million in impair his ability to function in his office; the case of Mr. Staggs and $2 million in (v) relocation of his principal office to a the case of Mr. Braverman. This obliga- location that is more than 50 miles outside tion to provide additional compensation of the greater Los Angeles area and, in the will not apply if the aggregate amounts case of Mr. Iger, that is also more than 50

50 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement miles from Manhattan; or (vi) a material ing or intended to result in personal gain breach of any material provision of the at the expense of the Company; unsat- agreement by the Company. Termination isfactory performance; improper dis- for good reason also includes any occur- closure of proprietary or confidential rence after a change in control (as defined information of the Company; misconduct; in the 1995 and 2005 Plans) that would and receipt of an offer of alternative constitute a triggering event. The 1995 and employment from a successor to or affili- 2005 Plans each provide that if, within 12 ate of the Company or made at the months following a change in control as request of the Company. Under the sev- defined in the plans, a “triggering event” erance pay plan, Ms. McCarthy is entitled occurs, any outstanding stock options, to a payment equal to 18 weeks of her restricted stock units, performance-based salary plus two weeks for each year of restricted stock units or other plan awards service (up to a maximum of 52 weeks), for will generally become fully vested and, in a total that is currently equal to 36 weeks certain cases, paid to the plan participant. of her salary. Except as provided in the A triggering event is defined to include: 1995 and 2005 Plans in the case of a trig- (a) a termination of employment by the gering event following a change in control Company other than for death, disability or as described above, Ms. McCarthy is not “cause;” or (b) a termination of employ- entitled to any acceleration of her options ment by the participant following a reduc- or restricted stock units in the case of a tion in position, pay or other “constructive termination by the Company pursuant to termination.” Under the plans, cause has its termination right or by the executive for the meaning in the executive’s employ- good reason. ment agreement, if applicable, as defined below under “Termination for Cause” or, if Restricted stock units that were awarded there is no employment agreement or the in lieu of cash as a portion of a bonus executive would have greater rights under award vest upon termination for any rea- the following definition, cause means son other than a termination for cause as conviction for or pleading to a felony defined in an executive’s employment under state or Federal law, willful gross agreement. misconduct or material breach of an agreement with the Company with respect The following table quantifies benefits to confidentiality, noncompetition, non- each of our executive officers would have solicitation or a similar restrictive cove- received if their employment had been nant. Under the terms of the plans, terminated at the end of fiscal 2009 by the payments under awards that become Company pursuant to its termination right subject to the excess parachute tax rules or by the executive with good reason. may be reduced under certain circum- stances. The table quantifies the benefits of con- tinued vesting and exercisability of options The employment agreements of Mr. Iger, in the case of a termination in the absence Mr. Staggs, Mr. Braverman and Mr. Mayer of a change in control by setting forth the provide that they are not required to seek difference between the $27.21 market other employment to obtain compensation price of shares of the Company’s common to offset the amounts payable by the stock on October 2, 2009 and the Company as described above and com- weighted average exercise price of pensation resulting from subsequent options with an exercise price less than employment will not be offset against the market price times the number of amounts described above. options that would become exercisable despite the termination, although, as Ms. McCarthy is entitled to compensation described above, options do not become under the Company’s severance pay plan, immediately exercisable absent a change which provides for compensation if in control. The actual value of the options employment is terminated as a result of realized by an executive when they involuntary termination. Involuntary termi- become exercisable may therefore be nation excludes termination because of: more or less than that shown below an act or omission of the employee result- depending on movements in the stock

51 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement price pending actual vesting of the payable to compensate the executive for options. The table quantifies the benefits the excise tax payable (and the additional of continued vesting of restricted stock taxes payable due to such additional units in the absence of a change in control payment) by reason of the compensation by setting forth an amount equal to the received as a result of a change in con- $27.21 market price of shares of the trol. The calculation of whether, and to Company’s common stock on October 2, what extent, any such compensation 2009 times the number of units that are would have been payable to each of the scheduled to vest prior to the scheduled executive officers was based on the termination date of the applicable assumption that the termination occurred employment agreement, although, as as of the close of business on the last day described above, restricted stock units do of fiscal 2009 and applying the regulations not immediately vest absent a change in under Section 280G of the Internal Rev- control. The value of restricted stock units enue Code, including, as applicable realized by an executive may again be (including in respect of the annual more or less than that shown below bonuses payable to each such officer), the depending on movements in the stock special rules applicable to amounts the price pending actual vesting of the payment of which is contingent solely on restricted stock units. the continued performance of services for a specified period and in respect of which The value of compensation for additional at least a portion of the services were taxation is the amount estimated to be performed before the termination.

TERMINATION PURSUANT TO COMPANY TERMINATION RIGHT OR BY EXECUTIVE FOR GOOD REASON Restricted Compensation Cash Option Stock Unit for Additional Payment Valuation Valuation Taxation Robert A. Iger No change in control $18,666,6671 $3,312,949 $26,676,911 — Change in control 18,666,6671 3,312,949 26,676,911 — Thomas O. Staggs No change in control 6,825,0001 1,447,083 15,229,885 — Change in control 6,825,0001 1,447,083 15,229,885 — Alan N. Braverman No change in control 6,435,0001 801,941 7,798,765 — Change in control 6,435,0001 801,941 7,798,765 — Kevin A. Mayer No change in control 3,000,0001 410,010 2,224,769 — Change in control 3,000,0001 538,861 2,713,466 — Christine M. McCarthy No change in control 399,808 — — — Change in control 399,808 338,248 1,974,939 —

1 This amount is equal to the bonus awarded to the executives with respect to fiscal 2009 and set forth in the Summary Compensation Table under the column labeled “Non-Equity Incentive Plan Compensation” plus the lump sum payments based on salary through the end of the employment term as described above.

Termination for Cause “Termination for Cause” is defined in Mr. Iger’s employment agreement as The employment agreements of Mr. Iger, termination by the Company due to Mr. Staggs, Mr. Braverman and Mr. Mayer (i) conviction of a felony or the entering of each provide that if his employment is a plea of nolo contendere to a felony terminated by the Company for cause he charge; (ii) gross neglect, willful malfea- will only be entitled to compensation sance or willful gross misconduct in con- earned and benefits vested through the nection with his employment which has date of termination, including any rights he had a material adverse effect on the busi- may have under his indemnification ness of the Company and its subsidiaries, agreement with the Company or the equity unless he reasonably believed in good plans of the Company. faith that such act or non-act was in, or

52 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement not opposed to, the best interests of the addition to compensation earned through Company; (iii) his substantial and continual that date: refusal to perform his duties, responsibilities or obligations under the • A separation payment equal to the sum agreement that continues after receipt of of his then current base salary and aver- written notice identifying the duties, age bonus payable to him for the last responsibilities or obligations not being three completed fiscal years for which performed; (iv) a violation that is not timely the bonus has been determined at the cured of the Company’s code of conduct time of the termination. In determining or any Company policy that is generally the average bonus, the bonus for any applicable to all employees or all officers year for which no bonus is received shall of the Company that he knows or reason- be zero. Payment of the separation ably should know could reasonably be payment is subject to Mr. Iger executing expected to result in a material adverse a mutual release of liability in sub- effect on the Company; (v) any failure (that stantially the form attached to his is not timely cured) to cooperate, if employment agreement. If Mr. Iger’s requested by the Board, with any inves- employment agreement were scheduled tigation or inquiry into his or the Compa- to expire at the end of fiscal 2009 and he ny’s business practices, whether internal terminated within 30 days thereafter, this or external; or (vi) any material breach that payment would be equal to $16,243,855. is not timely cured of covenants relating to non-competition during the term of • Mr. Iger and his eligible dependants will employment and protection of the be entitled to continue participating in all Company’s confidential information. medical, dental and hospitalization benefit plans until the earlier of 12 months following the date of termination “Termination for Cause” is defined in and the date Mr. Iger receives equivalent Mr. Staggs’, Mr. Braverman’s and coverage and benefits from a sub- Mr. Mayer’s employment agreement as sequent employer. If this continuation of termination by the Company due to gross benefits conflicts with any law or regu- negligence, gross misconduct, willful lation or has adverse tax consequences nonfeasance or willful material breach of for Mr. Iger, the Company or other pro- the agreement by the executive unless, if gram participants, Mr. Iger will receive the Company determines that the conduct the economic equivalent of the con- or cause is curable, such conduct or tinuation of benefits including cause is timely cured by the executive. compensation for the tax costs of receiv- ing the economic equivalent rather than Ms. McCarthy does not have an employ- the benefits. If Mr. Iger’s employment ment agreement with the Company. In the agreement were scheduled to expire at event her employment is terminated by the the end of fiscal 2009 and he terminated Company with cause, the Company’s only within 30 days thereafter, this value of obligation is to pay earned but unpaid continued benefits would be $17,797 salary and unconditionally vested accrued based on the Company’s estimated cost benefits and business expenses and sev- of providing these benefits. erance pay to the extent available as described above. Mr. Iger is not required to seek other employment to obtain compensation to Expiration of Employment Term; offset the amounts payable by the Com- Retirement pany as described above, and compensa- tion resulting from subsequent Under his employment agreement, if employment will not be offset against Mr. Iger’s employment ends at or within 30 amounts described above except that days following the expiration of the stated continuation of medical benefits may be term of his employment agreement (i.e., terminated if Mr. Iger receives equivalent January 31, 2013), he will be entitled to the coverage and benefits as described following compensation and rights, in above.

53 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Under the terms of restricted stock units options or restricted stock units held by awarded to Mr. Iger, Mr. Staggs and the named executive officers on Mr. Braverman in lieu of a portion of their October 3, 2009. annual bonus award, these restricted stock units will vest immediately upon Compensation of Mr. Shuler termination of their employment for any reason other than cause. If Mr. Iger, Mr. Shuler’s service as Executive Vice Mr. Staggs or Mr. Braverman’s employ- President and Chief Human Resources ment had terminated at the end of fiscal Officer of the Company ended on April 23, 2009 for any reason other than cause, the 2009. Mr. Shuler was employed pursuant value of this acceleration, based on the to an employment agreement dated market price of shares of the Company’s March 19, 2008, which contained provi- common stock on October 3, 2009 times sions that were applicable in the circum- the number of units that would accelerate stances of his termination relating to as a result of termination, would be compensation upon termination by the $289,578, $620,366 and $378,574 for Company pursuant to its termination right Mr. Iger, Mr. Staggs and Mr. Braverman, or by the executive because of action the respectively. Company takes or fails to take that are the same as those described above for Mr. Staggs, Mr. Braverman, and Mr. Mayer Mr. Iger, Mr. Staggs, Mr. Braverman and and Ms. McCarthy are entitled to earned, Mr. Mayer. As a result, six months and one unpaid salary and unconditionally vested day after the end of his employment, accrued benefits if their employment Mr. Shuler became entitled to receive a terminates at the expiration of their lump sum payment equal to his salary employment agreement (where applicable) from the date his employment ended or they otherwise retire, but they are not through the scheduled termination of his contractually entitled to any additional employment agreement on March 31, compensation in this circumstance. 2011, and a bonus equal to the target bonus established for him at the beginning Under a change in the Company’s long- of the fiscal year pro-rated through the term incentive program approved by the date his employment ended. In addition, Compensation Committee in December Mr. Shuler’s outstanding stock options 2009, options and restricted stock units continue to vest and remain exercisable awarded after December 2009 (and through the date that is three months after awarded at least one year before retire- the scheduled termination of his employ- ment) would continue to vest for three ment agreement, and restricted stock years after retirement (and options would units continue to vest through the sched- remain exercisable until the earlier of three uled termination of his employment years after retirement and the original agreement. The Company also agreed to expiration date) if the participant was age reimburse expenses (and the tax costs of 60 or greater and had at least ten years of that reimbursement) incurred by service at the time of retirement except Mr. Shuler in relocating back to the state when, in the judgment of management, in which he resided prior to beginning with this would create issues under applicable the Company in 2008. local laws. This change did not affect any

54 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Although Mr. Shuler did not become entitled to these payments (and the extension of the vesting and exercise periods of equity awards could have been terminated) until after the end of the Company’s fiscal year, pursuant to applicable accounting rules the Company recorded the expense relating to all of this compensation in fiscal 2009. This expense consisted of the following:

Expenses Recorded with Respect to Termination of Mr. Shuler Salary continuation (April 24, 2008 through March 31, 2011) $1,314,135 Pro-rated bonus 364,420 Accounting expense relating to stock options 846,666 Accounting expense relating to restricted stock units 550,743 Relocation expenses and tax cost reimbursement 11,073 Total expense recorded with respect to termination $3,087,037

The accounting expense relating to stock ny’s common stock on that date, and the options and restricted stock units set forth value he can realize on his equity awards above arises from recording as an when they vest or are exercised could be expense the remaining unamortized grant- more or less than the amount set forth date fair value of the options and above. Moreover, one-half of the restricted restricted stock units held by Mr. Shuler stock units held by Mr. Shuler are subject that will ultimately vest as a result of his to performance tests based on total employment termination and does not shareholder return for the Company rela- represent the value he has realized or will tive to that of the S&P 500 and earnings realize from those awards. None of the per share of the Company, and there is no options that were exercisable at the time assurance that these tests will be sat- of his termination had an exercise price isfied. less than the market price of the Compa-

Audit-Related Matters In carrying out these responsibilities, the Audit Committee, among other things:

Audit Committee Report • monitors preparation of quarterly and annual financial reports by the Compa- The charter of the Audit Committee of the ny’s management; Board specifies that the purpose of the Committee is to assist the Board in its • supervises the relationship between the oversight of: Company and its independent registered public accountants, including: having • the integrity of the Company’s financial direct responsibility for their appoint- statements; ment, compensation and retention; reviewing the scope of their audit serv- • the adequacy of the Company’s system ices; approving audit and non-audit serv- of internal controls; ices; and confirming the independence of the independent registered public • the Company’s compliance with legal accountants; and and regulatory requirements; • the qualifications and independence of • oversees management’s implementation the Company’s independent registered and maintenance of effective systems of public accountants; and internal and disclosure controls, includ- ing review of the Company’s policies • the performance of the Company’s relating to legal and regulatory com- independent registered public account- pliance, ethics and conflicts of interests ants and of the Company’s internal audit and review of the Company’s internal function. auditing program.

55 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The Committee met nine times during internal audit department staffing levels fiscal 2009. The Committee schedules its and steps taken to maintain the effective- meetings with a view to ensuring that it ness of internal procedures and controls. devotes appropriate attention to all of its tasks. The Committee’s meetings include, Taking all of these reviews and dis- whenever appropriate, executive sessions cussions into account, the undersigned in which the Committee meets separately Committee members recommended to the with the Company’s independent regis- Board that the Board approve the tered public accountants, the Company’s inclusion of the Company’s audited finan- internal auditors, the Company’s chief cial statements in the Company’s Annual financial officer and the Company’s gen- Report on Form 10-K for the fiscal year eral counsel. ended October 3, 2009, for filing with the Securities and Exchange Commission. As part of its oversight of the Company’s financial statements, the Committee Members of the Audit Committee reviews and discusses with both management and the Company’s Robert W. Matschullat independent registered public account- John E. Pepper, Jr. ants all annual and quarterly financial Orin C. Smith (Chair) statements prior to their issuance. During fiscal 2009, management advised the Policy for Approval of Audit and Committee that each set of financial statements reviewed had been prepared in Permitted Non-audit Services accordance with generally accepted accounting principles, and reviewed sig- All audit, audit-related and tax services nificant accounting and disclosure issues were pre-approved by the Audit Commit- with the Committee. These reviews tee, which concluded that the provision of included discussion with the independent such services by PricewaterhouseCoopers registered public accountants of matters LLP was compatible with the maintenance required to be discussed pursuant to Pub- of that firm’s independence in the conduct lic Company Accounting Oversight Board of its auditing functions. The Audit AU 380 (Communication With Audit Committee’s Outside Auditor Committees), including the quality of the Independence Policy provides for Company’s accounting principles, the pre-approval of specifically described reasonableness of significant judgments audit, audit-related and tax services by the and the clarity of disclosures in the finan- Committee on an annual basis, but cial statements. The Committee also dis- individual engagements anticipated to cussed with PricewaterhouseCoopers LLP exceed pre-established thresholds must matters relating to its independence, be separately approved. The policy also including a review of audit and non-audit requires specific approval by the Commit- fees and the written disclosures and letter tee if total fees for audit-related and tax from PricewaterhouseCoopers LLP to the services would exceed total fees for audit Committee pursuant to applicable services in any fiscal year. The policy requirements of the Public Company authorizes the Committee to delegate to Accounting Oversight Board regarding the one or more of its members pre-approval independent accountants’ communica- authority with respect to permitted serv- tions with the Audit Committee concerning ices. independence. Auditor Fees and Services In addition, the Committee reviewed key initiatives and programs aimed at The following table presents fees for pro- maintaining the effectiveness of the fessional services rendered by Pricewa- Company’s internal and disclosure control terhouseCoopers LLP for the audit of the structure. As part of this process, the Company’s annual financial statements Committee continued to monitor the and internal control over financial report- scope and adequacy of the Company’s ing for fiscal 2009 and fiscal 2008, internal auditing program, reviewing together with fees for audit-related serv-

56 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement ices and tax services rendered by Pricewa- the Board may designate a substitute terhouseCoopers LLP during fiscal 2009 nominee. In that case, the persons named and fiscal 2008. Audit related services as proxies will vote for the substitute consisted principally of audits of employee nominee designated by the Board. benefit plans and other entities related to the Company and financial due diligence Directors are elected by a majority of reviews. Tax services consisted principally votes cast unless the election is con- of tax compliance (primarily international tested, in which case Directors are elected returns), planning and advisory services, by a plurality of votes cast. A majority of as well as tax examination assistance. votes cast means that the number of shares voted “for” a Director exceeds the Fiscal 2009 Fiscal 2008 number of votes cast “against” the Direc- (in millions) tor. If an incumbent Director in an uncon- Audit fees $18.9 $18.4 tested election does not receive a majority of votes cast for his or her election, the Audit-related fees 2.3 2.8 Director is required to submit a letter of Tax fees 2.3 3.1 resignation to the Board of Directors for All other fees — — consideration by the Governance and Nominating Committee. The Governance and Nominating Committee is required to promptly assess the appropriateness of Items to Be Voted On such nominee continuing to serve as a Director and recommend to the Board the Election of Directors action to be taken with respect to the tendered resignation. The Board is The current term of office of all of the required to determine whether to accept Company’s Directors expires at the 2009 or reject the resignation, or what other annual meeting. The Board proposes that action should be taken, within 90 days of all of the currently serving Directors be the date of the certification of election re-elected and that Sheryl Sandberg, who results. is not currently serving as a Director, be elected for a term of one year and until Unlike previous years, brokers holding their successors are duly elected and shares beneficially owned by their clients qualified. Ms. Sandberg was initially will no longer have the ability to cast votes identified as a potential nominee by a with respect to the election of Directors third-party search firm and recommended unless they have received instructions for nomination by the Governance and from the beneficial owner of the shares. It Nominating Committee. Each of the nomi- is therefore important that you provide nees has consented to serve if elected. If instructions to your broker if your shares any of them becomes unavailable to serve are held by a broker so that your vote as a Director before the annual meeting, with respect to Directors is counted.

57 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The Board recommends a vote “FOR” each of the persons nominated by the Board.

Susan E. Arnold, 55, is retired Judith L. Estrin, 55, is Chief and was President—Global Business Units of Executive Officer of JLABS, LLC, (formerly Procter & Gamble from 2007 to 2009. Prior to that, Packet Design Management Company, LLC), a she was Vice Chair of P&G Beauty and Health from privately held company focused on furthering 2006, Vice Chair of P&G Beauty from 2004 and innovation in business, government and President Global Personal Beauty Care and Global non-profit organizations. Ms. Estrin served as Feminine Care from 2002. She is a director of Chief Technology Officer and Senior Vice McDonalds Corporation. Ms. Arnold has been a President of Cisco Systems Inc., a developer of Director of the Company since 2007. networking products, from 1998 until April 2000, and as President and Chief Executive Officer of Precept Software, Inc., a developer of network- ing software of which she was co-founder, from 1995 until its acquisition by Cisco in 1998. She is also a director of FedEx Corporation, an international provider of transportation and delivery services. Ms. Estrin has been a Director of the Company since 1998.

John E. Bryson, 66, serves as Senior Advisor to Kohlberg Kravis Roberts & Co. (KKR) and is Retired Chairman of the Board and Chief Executive Officer, Edison International. Mr. Bryson served as Chairman, President and Chief Executive Officer of Edison International (an electric power generator and distributor), the parent company of Southern California Edison, from 1990 to 2008. He is also a director of The Robert A. Iger, 58, has Boeing Company, a trustee of the California served as President and Chief Executive Officer Institute of Technology and a director of the W.M. of the Company since October 2005, having Keck Foundation and the California Endowment. previously served as President and Chief Mr. Bryson has been a Director of the Company Operating Officer since January 2000 and as since 2000. President of Walt Disney International and Chairman of the ABC Group from 1999 to January 2000. From 1974 to 1998, Mr. Iger held a series of increasingly responsible positions at ABC, Inc. and its predecessor Capital Cities/ ABC, Inc., culminating in service as President of the ABC Network Television Group from 1993 to 1994 and President and Chief Operating Officer of ABC, Inc. from 1994 to 1999. He is a member of the Board of Directors of Lincoln Center for the Performing Arts in New York City. Mr. Iger has been a Director of the Company since John S. Chen, 54, has been 2000. The Company has agreed in Mr. Iger’s Chairman, Chief Executive Officer and President of employment agreement to nominate him for Sybase, Inc., a software developer, since re-election as a member of the Board at the November 1998. From February 1998 through expiration of each term of office during the term November 1998, he served as co-Chief Executive of the agreement, and he has agreed to Officer. Mr. Chen joined Sybase in August 1997 as continue to serve on the Board if elected. Chief Operating Officer and served in that capacity until February 1998. From March 1995 to July 1997, Mr. Chen was President of the Open Enterprise Computing Division, Siemens Nixdorf, a computer and electronics company, and Chief Executive Officer and Chairman of Siemens Pyramid, a subsidiary of Siemens Nixdorf. He is a director of Wells Fargo & Company. Mr. Chen has been a Director of the Company since 2004.

58 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Steven P. Jobs, 54, has served Aylwin B. Lewis, 56, has as Chief Executive Officer of Apple Inc., a served as President and Chief Executive Officer designer, manufacturer and marketer of personal of Potbelly Sandwich Works since June 2008. computers, mobile communication devices and Prior to that, Mr. Lewis was President and Chief portable digital music and video players, since Executive Officer of Sears Holdings Corpo- February 1997 and is a member of its Board of ration, a nationwide retailer, from September Directors. Prior to the Company’s acquisition of 2005 to February 2008. Prior to being named Pixar, Mr. Jobs also served as Chairman of Pixar Chief Executive Officer of Sears, Mr. Lewis was from March 1991 and as Chief Executive Officer of President of Sears Holdings and Chief Execu- Pixar from February 1986. Mr. Jobs has been a tive Officer of KMart and Sears Retail following Director of the Company since the Company’s Sears’ acquisition of KMart Holding Corporation acquisition of Pixar in May 2006. in March 2005. Prior to that acquisition, Mr. Lewis had been President and Chief Execu- tive Officer of KMart since October 2004. Prior to that, Mr. Lewis was Chief Multibranding and Operating Officer of YUM! Brands, Inc., a fran- chisor and licensor of quick service restaurants including KFC, Long John Silvers, Pizza Hut, Taco Bell and A&W, from 2003 until October 2004, Chief Operating Officer of YUM! Brands from 2000 until 2003 and Chief Operating Offi- cer of Pizza Hut from 1996. Mr. Lewis has been a Director of the Company since 2004.

Fred H. Langhammer, 66, is Monica C. Lozano, 53, is Chairman, Global Affairs, of The Estée Lauder Publisher and Chief Executive Officer of Companies Inc., a manufacturer and marketer of La Opinión, the largest Spanish-language cosmetics products. Prior to being named newspaper in the United States, and Senior Chairman, Global Affairs, Mr. Langhammer was Vice President of its parent company, Chief Executive Officer of The Estée Lauder ImpreMedia, LLC. In addition, Ms. Lozano is a Companies Inc. from 2000 to 2004, President from member of the Board of Regents of the Uni- 1995 to 2004 and Chief Operating Officer from versity of California and a trustee of the Uni- 1985 through 1999. Mr. Langhammer joined The versity of Southern California. She is a director Estée Lauder Companies in 1975 as President of of Bank of America Corporation and a director its operations in Japan. In 1982, he was appointed of the Weingart Foundation. Ms. Lozano has Managing Director of its operations in Germany. been a Director of the Company since 2000. He is also a director of The Shinsei Bank Limited. Mr. Langhammer has been a Director of the Company since 2005.

59 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Robert W.Matschullat, 62, a Sheryl Sandberg, 40, has private equity investor, served from 1995 until 2000 served as the Chief Operating Officer of Face- as Vice Chairman of the board of directors and book, Inc., an online social utility company, Chief Financial Officer of The Seagram Company since March 2008. From 2001 to March 2008, Ltd., a global company with entertainment and Ms. Sandberg was the Vice President of Global beverage operations. Prior to joining Seagram, Online Sales and Operations for Google Inc., an Mr. Matschullat was head of worldwide investment Internet search engine company. Ms. Sandberg banking for Morgan Stanley & Co. Incorporated, a also is a former Chief of Staff of the United securities and investment firm, and was on the States Treasury Department and previously Morgan Stanley Group board of directors. He is a served as a management consultant with director of The Clorox Company, where he was McKinsey & Company and as an economist Interim Chairman of the Board and Interim Chief with The World Bank. Ms. Sandberg is a direc- Executive Officer from March to October 2006, and tor of Starbucks Corp. and serves on a number a director of Visa Inc. Mr. Matschullat has been a of nonprofit boards including The Brookings Director of the Company since 2002. Institution, The AdCouncil, Women for Women International, and V-Day.

John E. Pepper, Jr., 71, has Orin C. Smith, 67, was served as Chairman of the Board of the Company President and Chief Executive Officer of Star- since January 1, 2007 and is Co-Chairman of the bucks Corporation from 2000 to 2005. He National Underground Railroad Freedom Center. joined Starbucks as Vice President and Chief Previously, he served as Chief Executive Officer of Financial Officer in 1990, became President the National Underground Railroad Freedom Cen- and Chief Operating Officer in 1994, and ter from December 2005 to May 2007 and as Vice became a director of Starbucks in 1996. Prior President of Finance and Administration at Yale to joining Starbucks, Mr. Smith spent a total of University from January 2004 to December 2005. 14 years with Deloitte & Touche. Mr. Smith is a Prior to that, he served as Chairman of the Execu- director of Nike, Inc. and Washington Mutual. tive Committee of the Board of Directors of The He also serves on the Board of Directors of Procter & Gamble Company until December 2003. Conservation International and the University Since 1963, he had served in various positions at of Washington Foundation Board and is Procter & Gamble, including Chairman of the Chairman of the Starbucks Foundation Board. Board from 2000 to 2002, Chief Executive Officer Mr. Smith has been a Director of the Company and Chairman from 1995 to 1999, President from since 2006. 1986 to 1995 and director from 1984 to 2003. Mr. Pepper serves on the board of Boston Scien- tific Corp. and is a member of the Executive Committee of the Cincinnati Youth Collaborative. Mr. Pepper has been a Director of the Company since 2006.

60 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Ratification of Appointment of accounting firm at any time during the Independent Registered Public year if it determines that such a change Accountants would be in the best interests of the Company and our shareholders. The Audit Committee of the Board has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for the fiscal year ending October 2, 2010. Services provided Approval of an Amendment to the to the Company and its subsidiaries by Amended and Restated 2005 Stock PricewaterhouseCoopers LLP in fiscal Incentive Plan 2009 are described under “Audit-Related Matters — Auditor Fees and Services,” The Board of Directors recommends that above. shareholders approve an amendment to the Company’s Amended and Restated We are asking our shareholders to ratify 2005 Stock Incentive Plan (which we refer the selection of PricewaterhouseCoopers to as the 2005 Plan). The amendment LLP as our independent registered public increases the maximum total number of accountants. Although ratification is not shares of common stock we may issue required by our Bylaws or otherwise, the under the 2005 Plan by 42,000,000 shares Board is submitting the selection of from 136,000,000 to 178,000,000 shares. PricewaterhouseCoopers LLP to our shareholders for ratification as a matter of The purpose of the increase in authorized good corporate practice. shares is to secure adequate shares to fund expected awards under the Compa- Representatives of Pricewaterhou- ny’s long-term incentive program through seCoopers LLP will be present at the at least the next annual award in January annual meeting to respond to appropriate 2011. The Board believes that this number questions and to make such statements represents a reasonable amount of poten- as they may desire. tial equity dilution and allows the Com- pany to continue awarding equity The affirmative vote of the holders of a incentives, which are an important majority of shares represented in person component of our overall compensation or by proxy and entitled to vote on this program. The Company expects that it will item will be required for approval. need to seek shareholder approval in 2011 Abstentions will be counted as repre- for additional shares to continue the pro- sented and entitled to vote and will there- gram beyond 2011. fore have the effect of a negative vote. The affirmative vote of the holders of a The Board recommends that share- majority of shares represented in person holders vote “FOR” ratification of the or by proxy and entitled to vote on this appointment of Pricewaterhou- item will be required for approval of the seCoopers LLP as the Company’s amendments to the 2005 Plan. independent registered public Abstentions will be counted as repre- accountants for fiscal 2010. sented and entitled to vote and will there- fore have the effect of a negative vote. In the event shareholders do not ratify the Broker non-votes (as described under appointment, the appointment will be “Information About Voting and the Meet- reconsidered by the Audit Committee and ing — Voting”) will not be considered enti- the Board. Even if the selection is ratified, tled to vote on this item and therefore will the Audit Committee in its discretion may not be counted in determining the number select a different registered public of shares necessary for approval.

61 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Purpose of the 2005 Plan remain available for issuance of future awards pursuant to the 2005 Plan, The 2005 Plan governs grants of stock- 0.25 million shares remain available for based awards to employees and future awards pursuant to the Walt Disney non-employee directors. It is designed to Company/Pixar 2004 Equity Incentive Plan support the Company’s long-term busi- (which we refer to as the Disney/Pixar ness objectives in a manner consistent Plan), and 0.1 million shares remain avail- with our executive compensation philoso- able for future awards pursuant to the phy. The Board believes that by allowing Amended and Restated 1995 Stock the Company to continue to offer its Incentive Plan (which we refer to as the employees long-term, performance-based 1995 Plan). The number of shares that may compensation through the 2005 Plan, the be issued under these plans may increase Company will promote the following key to the extent outstanding awards are objectives: cancelled due to forfeiture of awards or expiration of awards without exercise. • aligning the interest of employees with Other plans remain active with out- those of the shareholders; standing awards, but no future awards • reinforcing key Company goals and may be made from those plans. objectives that help drive shareholder value; and The following table sets forth the number of shares authorized for future issuance • attracting, motivating and retaining (including shares authorized for issuance experienced and highly qualified pursuant to restricted stock, restricted employees who contribute to the stock unit and stock awards) as of Company’s financial success. January 13, 2010 and after including the additional shares under the amendment, Shares Available Under Plans along with the equity dilution represented by the shares available for future awards As of January 13, 2010, and prior to the as a percentage of the common shares requested increase, 44.7 million shares outstanding.

SHARE AUTHORIZATION (shares in millions) Equity Dilution: Percent of Basic Common Shares Total Shares Available Outstanding Shares authorized for future awards as of January 13, 20101 45.0 2.33% Requested increase to shares available in the 2005 Plan after amendment 42.0 2.17% Shares authorized for future awards after approval of amendment1 87.0 4.50%

1 Includes shares authorized under the Amended and Restated 2005 Stock Incentive Plan, Amended and Restated 1995 Stock Incentive Plan, and the Walt Disney Company/Pixar 2004 Equity Incentive Plan.

On January 13, 2010, the equity overhang, of the requested amendment. Equity over- or the percentage of outstanding shares hang following the original approval of the (plus shares that could be issued pursuant 2005 Plan in February 2005 was 12.9%, to plans) represented by all stock was 12.1% following approval of an incentives granted and those available for amendment in March 2007, was 12.7% future grant under all plans, was 11.5%.1 following approval of an amendment in The equity overhang from all stock March 2008 and was 13.6% following incentives granted and available would be approval of an amendment in March 2009. approximately 13.2% assuming approval

1 Equity overhang was calculated as all shares issuable upon exercise of outstanding options and vesting of outstanding restricted stock units plus shares available for future grant divided by (a) basic common shares outstanding + (b) shares in the numerator.

62 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The options and units outstanding (as had the effect of reducing the common shown in the following table) also include shares outstanding. All of these factors the impact (net of subsequent activity) of increase overhang and, in light of these the addition of 44 million options and factors, the Company believes its over- 1 million unvested restricted stock units hang level is reasonable. converted in connection with the acquis- ition of Pixar in May 2006. In addition, the The following table sets forth information Company’s share buyback program, under regarding outstanding options and which the Company repurchased restricted stock units as of January 13, 4,586,000 shares during Fiscal 2009, has 2010.

OUTSTANDING AWARDS (shares in millions) Weighted Unvested Average Weighted Average Restricted Range of Outstanding Exercise Remaining Years Stock Exercise Prices Options Price of Contractual Life Units

$0 - $15.99 6.4 $11.01 2.5 n/a $16 - $20.99 22.9 19.84 5.4 n/a $21 - $25.99 30.5 23.95 3.1 n/a $26 - $30.99 58.8 29.18 4.0 n/a $31 - $35.99 43.1 33.32 4.9 n/a $36 - $40.99 3.4 39.85 0.4 n/a $41 - $45.99 3.0 42.21 0.7 n/a $46 - $135 1.0 102.96 0.2 n/a Total 169.1 28.22 4.0 37.9

The following table sets forth information regarding options outstanding on January 13, 2010. Approximately 48.2% of all options outstanding on January 13, 2010 were exercisable on that date and had exercise prices below the closing trading price on that date, and approximately 17.9% of the options outstanding on that date were exercisable, had been outstanding for more than six years and had exercise prices below the closing price on that date.

OUTSTANDING AWARDS (shares in millions) Weighted Average Weighted Average Outstanding Exercise Remaining Years Options Price of Contractual Life

In-the-money options outstanding six years or more 30.3 $22.57 1.8 All options outstanding less than six years 122.7 $28.01 5.1 Underwater options outstanding six years or more 16.1 $40.41 0.3

The Company continues to manage its run special award in connection with the rate1 of awards granted over time to levels extension of Mr. Iger’s employment it believes are reasonable in light of agreement and the reduction in common changes in its business and number of shares outstanding due to the Company’s outstanding shares while ensuring that our active repurchase of shares during the overall executive compensation program fiscal year. Adjusting for the impact of is competitive, relevant and motivational. these two factors, the 2008 run rate would The Committee adjusted grant guidelines have been 1.74%. The Committee further for fiscal years 2007, 2008 and 2009 to adjusted grant guidelines for fiscal 2010 as reduce average awards per recipient. The a means to continue reducing average run rate in fiscal 2008 was impacted by the awards per recipient.

1 Run rate was calculated as (a) all option awards and non-performance restricted stock units granted in a fiscal year + (b) actual performance-based restricted stock units vested in a fiscal year, divided by the number of basic common shares outstanding at the end of that fiscal year.

63 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The following table sets forth information regarding awards granted and earned, the run rate for each of the last three fiscal years and the average run rate over the last three years.

RUN RATE (shares in millions) Fiscal Fiscal Fiscal 3-year 2007 2008 2009 Average Stock options granted 24.8 29.8 17.4 24.0 Service-based restricted stock units granted 9.8 7.4 11.3 9.5 Actual performance-based restricted stock units earned 1.1 0.3 1.8 1.07 Basic common shares outstanding at fiscal year end 1,916.7 1,853.8 1,861.4 1,877.3 Run rate 1.86% 2.02% 1.64% 1.84%

On January 13, 2010, the closing price of awarded to senior executives include our common stock traded on the New performance requirements for vesting. The York Stock Exchange was $31.29 per 2005 Plan is designed to meet the share. requirements for deductibility of executive compensation under Section 162(m) of the Overview of Plans Internal Revenue Code with respect to stock options and stock appreciation All employees of the Company and its affili- rights. Other awards may qualify under ates are eligible to receive awards under Section 162(m) if they are granted in the 2005 Plan, but awards in fiscal 2009 accordance with the Company’s Amended were generally limited to approximately and Restated 2002 Executive Performance 4,500 Disney and Pixar employees and Plan and subject to performance con- non-employee Directors of Disney (of ditions as specified in that plan. Also, in whom there are currently 11 and one of order to meet Section 162(m) require- whom does not receive Director ments, the 2005 Plan provides limits on compensation). The relative weight of the number and type of shares that any equity compensation in the total compen- one participant may receive during any sation package generally increases in rela- calendar-year period, as described below. tion to a participant’s role in influencing shareholder value. Neither the 2005 Plan nor the 1995 Plan The 2005 Plan is an “omnibus” stock plan permit any modification of options or that provides for a variety of equity award stock appreciation rights that would be vehicles to maintain flexibility. The 2005 treated as a “repricing” (under applicable Plan permits the grant of stock options, rules, regulations or New York Stock stock appreciation rights, restricted and Exchange listing requirements) without the unrestricted stock awards and stock units. approval of shareholders, nor the granting As described more fully in Compensation of discounted options or stock options Discussion and Analysis, participants cur- with reload features. They both count rently are generally granted a mix of stock stock appreciation rights as one share for options and restricted stock units. every stock-settled exercise, regardless of Restricted stock units granted in fiscal the actual number of shares used to settle 2009 that do not have performance con- the stock appreciation right upon exercise. ditions (other than the test to assure Neither plan contains an “evergreen” deductibility under Section 162(m)) vest provision to automatically increase the 25% on each of the first four anniversaries number of shares available for future issu- of grant. Restricted stock units granted in ance. fiscal 2009 that have performance con- ditions (in addition to the test to assure The Disney/Pixar Plan does not permit the deductibility under Section 162(m), where granting of discounted options or stock applicable) vest 50% on the second anni- options with reload features. The Disney/ versary of the grant and 50% on the fourth Pixar Plan does not prohibit the repricing anniversary of grant. Except for restricted of options, but the Board does not intend stock units issued as a part of an execu- to reprice options or stock appreciation tive’s bonus, restricted stock units rights granted from this plan without the

64 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement approval of shareholders. In addition, the appreciation award reduces the number of Company is subject to exchange rules shares available for issuance under the which prohibit the repricing of stock 2005 Plan by one share, and each share options without shareholder approval. subject to an award of restricted or unre- stricted stock, or stock unit awards would Summary of 2005 Plan reduce the number of shares available for issuance by two shares. A maximum of The following is a summary of the material 4,0000,000 shares may be granted under terms of the amended 2005 Plan. the 2005 Plan to an individual pursuant to stock options and stock appreciation Plan Administration rights awarded during any calendar year. For restricted stock, restricted stock units The selection of employee participants in and stock awards, a maximum of the 2005 Plan, the level of participation of 2,000,000 shares may be granted under each participant and the terms and con- the 2005 Plan to an individual during any ditions of all awards are determined by the calendar year. These limitations on grants Compensation Committee. It is intended to an individual will be applied in that each member of the Compensation aggregate to all awards granted under any Committee will be an “independent direc- equity-based compensation plan of the tor” for purposes of the Company’s Corpo- Company. rate Governance Guidelines, the Compensation Committee’s charter and Shares delivered under the 2005 Plan will the New York Stock Exchange listing be authorized but unissued shares of Dis- requirements; a “non-employee Director” ney common stock, treasury shares or within the meaning of Rule 16b-3 under shares purchased in the open market or the Securities Exchange Act of 1934, as otherwise. To the extent that any award amended, and an “outside director” within payable in shares is forfeited, cancelled, the meaning of Section 162(m) of the returned to the Company for failure to sat- Internal Revenue Code. Currently, the isfy vesting requirements or upon the Compensation Committee is comprised of occurrence of other forfeiture events, or five directors meeting these independence otherwise terminates without payment criteria. The Compensation Committee has being made, the shares covered thereby the discretionary authority to interpret the will no longer be charged against the 2005 Plan, to prescribe, amend and maximum share limitation and may again rescind rules and regulations relating to be made subject to awards under the 2005 the 2005 Plan, and to make all other Plan, and will return at the same ratio as determinations necessary or advisable for the ratio at which they were granted. Not- the administration of the 2005 Plan. The withstanding the foregoing, upon exercise Committee may delegate authority to of a stock-settled stock appreciation right, administer the 2005 Plan as it deems the number of shares subject to the award appropriate, subject to the express limi- being exercised shall be counted against tations set forth in the 2005 Plan. In the the maximum aggregate number of shares case of awards under the 2005 Plan to of common stock that may be issued under non-employee Directors, the powers of the the plan as provided above, on the basis of Compensation Committee will be one share for every share subject thereto, exercised by the full Board. regardless of the actual number of shares used to settle the stock appreciation right Limits on Plan Awards upon exercise. Any awards settled in cash will not be counted against the maximum This paragraph assumes adoption of the share reserve under the 2005 Plan. Any requested amendment. The Board has shares exchanged by a participant or with- reserved a maximum of 178,000,000 held from a participant as full or partial shares for issuance pursuant to stock payment to the Company of the exercise options, stock appreciation rights, price or the tax withholding upon exercise restricted and unrestricted stock awards or payment of an award will not be returned and stock units under the 2005 Plan. Each to the number of shares available for issu- share subject to a stock option or stock ance under the 2005 Plan.

65 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Eligibility and Participation cash, shares of Disney common stock, through a broker-assisted cashless All of the approximately 103,000 full-time exercise or as otherwise permitted by the employees of the Company and its affili- Compensation Committee. ates, as well as the Company’s non-employee Directors, are eligible to The Compensation Committee determines participate in the 2005 Plan. Approx- the terms of each stock option grant at the imately 4,500 Disney employees (including time of the grant. Generally since 2005, six executive officers of the Company) and Disney has granted options that terminate non-employee Directors receive long-term after a seven-year period from the date of incentive awards in a given year, although the grant, but beginning with the 2010 this may vary from year to year. From time annual awards the Committee has modi- to time, the Compensation Committee (or fied the exercise term of future awards to as to non-employee Directors, the Board) ten years. The Committee specifies at the will determine who will be granted awards, time each option is granted the time or the number of shares subject to such times at which, and in what proportions, grants and all other terms of awards. an option becomes vested and exercisable. Vesting may be based on the As described in “Corporate Governance continued service of the participant for and Board Matters — Board Compensation”, specified time periods or on the attain- each non-employee Director (other than ment of specified business performance Mr. Jobs) is currently awarded on an goals established by the Committee or annual basis stock options to purchase both. The Committee may accelerate the shares of Disney common stock pursuant vesting of options at any time and, unless to a Director compensation program otherwise provided in the award agree- adopted by the Board of Directors. Each ment, vesting accelerates if the participant non-employee Director (other than dies while employed by the Company or Mr. Jobs) is also awarded a grant or any of its affiliates. grants of stock or deferred stock units. The Board expects that similar annual In general, except for termination for awards will be continued under the 2005 cause as described in the 2005 Plan, a Plan, and any change to that program stock option expires (i) 12 months after would be determined by the Board of termination of service, if service ceases Directors in the future. due to disability, (ii) 36 months after termi- nation, if service ceases when the partic- Types of Plan Awards ipant has reached the definition of “eligible retirement” for such provision unless As described in the Compensation Dis- management determines that doing so for cussion and Analysis, the Company’s cur- a participant outside the United States rent equity compensation awards to would create issues under applicable local employees are generally comprised of laws, (iii) 18 months after termination, if stock options and restricted stock units. service ceases when the participant is The 2005 Plan provides for a variety of eligible to receive retirement benefits other equity instruments to preserve flexi- under a Company pension plan but does bility. The types of securities that may be not meet the definition of “eligible retire- issued under the 2005 Plan are described ment” or if the participant died while below. employed by the Company or any of its affiliates, or (iv) 3 months after termination, Stock Options. Stock options granted if service ceases under any other circum- under the 2005 Plan may be either stances. The Compensation Committee non-qualified stock options or incentive may provide for extension of the expira- stock options qualifying under Section 422 tion of options in individual option agree- of the Internal Revenue Code. The price of ments and has done so pursuant to any stock option granted may not be less employment agreements of certain offi- than the fair market value of the Disney cers as described under Payments and common stock on the date the option is Rights on Termination, above. granted. The option price is payable in

66 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Stock Appreciation Rights. A stock Stock Units. An award of stock units appreciation right (which we refer to as an provides the participant the right to SAR) entitles the participant, upon settle- receive a payment based on the value of a ment, to receive a payment based on the share of Disney common stock. Stock excess of the fair market value of a share units may be subject to such vesting of Disney common stock on the date of requirements, restrictions and conditions settlement over the base price of the right, to payment as the Compensation Commit- multiplied by the applicable number of tee determines are appropriate. Vesting shares of Disney common stock. SARs requirements may be based on the con- may be granted on a stand-alone basis or tinued service of the participant for a in tandem with a related stock option. The specified time period or on the attainment base price may not be less than the fair of specified business performance goals market value of a share of Disney common established by the Committee or both. A stock on the date of grant. The stock unit award may also be granted on a Compensation Committee will determine fully vested basis, with a deferred payment the vesting requirements and the payment date. Stock unit awards are payable in and other terms of an SAR, including the cash or in shares of Disney common stock effect of termination of service of a partic- or in a combination of both. Stock units ipant. Vesting may be based on the con- may also be granted together with related tinued service of the participant for dividend equivalent rights. specified time periods or on the attain- ment of specified business performance Stock Awards. A stock award represents goals established by the Committee or shares of Disney common stock that are both. The Committee may accelerate the issued free of restrictions on transfer and vesting of SARs at any time. Generally, free of forfeiture conditions and to which any SAR, if granted, would terminate after the participant is entitled all the rights of a the ten-year period from the date of the shareholder. A stock award may be grant. SARs may be payable in cash or in granted for past services, in lieu of bonus shares of Disney common stock or in a or other cash compensation, as Director’s combination of both. compensation or for any other valid pur- pose as determined by the Compensation The Company has not issued any SARs Committee. under any of its currently effective Section 162(m) Awards compensation plans, and does not cur- rently have any SARs outstanding. Awards of options and stock appreciation rights granted under the 2005 Plan will Restricted Stock. A restricted stock automatically qualify for the “performance- award represents shares of Disney com- based compensation” exception under mon stock that are issued subject to Section 162(m) of the Internal Revenue restrictions on transfer and vesting Code pursuant to their expected terms. In requirements as determined by the Com- addition, awards of restricted stock, stock pensation Committee. Vesting require- units or stock awards may qualify under ments may be based on the continued Section 162(m) if they are granted in service of the participant for specified time accordance with the Company’s Amended periods or on the attainment of specified and Restated 2002 Executive Performance business performance goals established Plan (or successor plans) and the by the Committee or both. Subject to the performance conditions specified there- transfer restrictions and vesting require- under. Under Section 162(m), the terms of ments of the award, the participant will the award must state, in terms of an have the same rights as one of Disney’s objective formula or standard, the method shareholders, including all voting and of computing the amount of compensation dividend rights, during the restriction peri- payable under the award, and must pre- od, unless the Committee determines clude discretion to increase the amount of otherwise at the time of the grant. compensation payable under the terms of the award (but may give the Compensa- tion Committee discretion to decrease the amount of compensation payable).

67 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Effect of Change in Control Term, Amendment and Termination

Awards under the 2005 Plan are generally The 2005 Plan has a term of seven years subject to special provisions upon the expiring on December 30, 2011, unless occurrence of a “change in control” (as terminated earlier by the Board of Direc- defined in the 2005 Plan) transaction with tors. The Board may at any time and from respect to the Company. Under the 2005 time to time and in any respect amend or Plan, if within twelve months of a change modify the Plan. The Board may seek the in control there occurs a “triggering event” approval of any amendment or mod- (as defined in the 2005 Plan) with respect ification by the Company’s shareholders to the employment of the participant, any to the extent it deems necessary or advis- outstanding stock options, SARs or other able in its sole discretion for purposes of equity awards under the 2005 Plan will compliance with Section 162(m) or Sec- generally become fully vested and tion 422 of the Internal Revenue Code, the exercisable, and, in certain cases, paid to listing requirements of the New York Stock the participant. A triggering event is Exchange or other exchange or securities defined generally to include a termination market or for any other purpose. No of employment by the Company other than amendment or modification of the 2005 for cause or a termination of employment Plan will adversely affect any outstanding by the participant following a reduction in award without the consent of the partic- position, pay or other constructive termi- ipant or the permitted transferee of the nation event. Payments under awards that award. become subject to the excess parachute payment rules under Section 280G of the Plan Benefits Internal Revenue Code may be reduced under certain circumstances. Future benefits under the 2005 Plan are not currently determinable. With respect to Limited Transferability fiscal year 2009, stock options and restricted stock units were granted under All options, stock appreciation rights, the 2005 Plan to the Company’s named restricted stock and restricted stock units executive officers as set forth in the table granted under the 2005 Plan are non- captioned Fiscal 2009 Grants of Plan transferable except upon death, either by Based Awards, and options for a total of the participant’s will or the laws of descent 1,011,788 million shares and a total of and distribution or through a beneficiary 701,680 million restricted stock units were designation, or in the case of nonqualified awarded to the named executive officers options, during the participant’s lifetime to as a group. With respect to fiscal year immediate family members of the partic- 2009, options, stock units and restricted ipant as may be approved by the stock units were granted to non-employee Compensation Committee. Directors as set forth in the tables cap- tioned Form of Receipt of Director Fees Adjustments for Corporate Changes for Fiscal 2009, Director Stock Unit Awards for Fiscal 2009 and Director In the event of stock splits, stock divi- Option Values for Fiscal 2009 and the dends, recapitalizations, reclassifications, accompanying text. Options for a total of mergers, spin-offs or other changes 16,237,882 million shares and a total of affecting the Company or shares of Disney 13,959,057 million restricted stock units common stock, equitable adjustments were awarded to employees other than shall be made to the number of shares of executive officers with respect to fiscal Disney common stock available for grant, year 2009. as well as to other maximum limitations under the 2005 Plan, and the number and U.S. Tax Treatment of Awards kind of shares of Disney common stock or other rights and prices under outstanding Incentive Stock Options. An incentive awards and other terms of outstanding stock option results in no taxable income awards affected by such events. to the optionee or deduction to the Com-

68 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement pany at the time it is granted or exercised. the shares will be a long-term or short- However, the excess of the fair market term gain (or loss), depending upon the value of the shares acquired over the holding period of the shares. option price is an item of adjustment in computing the alternative minimum tax- If a non-qualified option is exercised by able income of the optionee. If the optio- tendering previously owned shares of the nee holds the stock received as a result of Company’s common stock in payment of an exercise of an incentive stock option the option price, then, instead of the for at least two years from the date of the treatment described above, the following grant and one year from the date of generally will apply: a number of new exercise, then the gain realized on dis- shares equal to the number of previously position of the stock is treated as a long- owned shares tendered will be considered term capital gain. If the shares are to have been received in a tax-free disposed of during this period (i.e., a exchange; the optionee’s basis and hold- “disqualifying disposition”), then the ing period for such number of new shares optionee will include in income, as com- will be equal to the basis and holding pensation for the year of the disposition, period of the previously owned shares an amount equal to the excess, if any, of exchanged. The optionee will have com- the fair market value of the shares, upon pensation income equal to the fair market exercise of the option over the option value on the date of exercise of the num- price (or, if less, the excess of the amount ber of new shares received in excess of realized upon disposition over the option such number of exchanged shares; the price). The excess, if any, of the sale price optionee’s basis in such excess shares over the fair market value on the date of will be equal to the amount of such com- exercise will be a short-term capital gain. pensation income; and the holding period In such case, the Company will be entitled in such excess shares will begin on the to a deduction, in the year of such a dis- date of exercise. position, for the amount includible in the optionee’s income as compensation. The Stock Appreciation Rights. Generally, optionee’s basis in the shares acquired the recipient of a stand-alone SAR will not upon exercise of an incentive stock option recognize taxable income at the time the is equal to the option price paid, plus any stand-alone SAR is granted. If an amount includible in his or her income as a employee receives the appreciation result of a disqualifying disposition. inherent in the SARs in cash, the cash will be taxed as ordinary income to the Non-Qualified Stock Options. A employee at the time it is received. If an non-qualified stock option results in no employee receives the appreciation taxable income to the optionee or inherent in the SARs in stock, the spread deduction to the Company at the time it is between the then current fair market value granted. An optionee exercising such an of the stock and the base price will be option will, at that time, realize taxable taxed as ordinary income to the employee compensation in an amount equal to the at the time the stock is received. In gen- difference between the option price and eral, there will be no federal income tax the then market value of the shares. Sub- deduction allowed to the Company upon ject to the applicable provisions of the the grant or termination of SARs. How- Internal Revenue Code, a deduction for ever, upon the settlement of an SAR, the federal income tax purposes will be allow- Company will be entitled to a deduction able to the Company in the year of equal to the amount of ordinary income exercise in an amount equal to the taxable the recipient is required to recognize as a compensation recognized by the optionee. result of the settlement.

The optionee’s basis in such shares is Other Awards. The current United States equal to the sum of the option price plus federal income tax consequences of other the amount includible in his or her income awards authorized under the 2005 Plan are as compensation upon exercise. Any gain generally in accordance with the following: (or loss) upon subsequent disposition of (i) restricted stock is generally subject to

69 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement ordinary income tax at the time the Approval of Amendments to the restrictions lapse, unless the recipient Restated Certificate of elects to accelerate recognition as of the date of grant; (ii) stock unit awards are Incorporation generally subject to ordinary income tax at the time of payment; and (iii) unrestricted The Board of Directors recommends that stock awards are generally subject to shareholders approve amendments to the ordinary income tax at the time of grant. In Company’s Restated Certificate of each of the foregoing cases, the Company Incorporation. The amendments relate to will generally be entitled to a correspond- four different aspects of the Restated Cer- ing federal income tax deduction at the tificate of Incorporation, and are therefore same time the participant recognizes set forth as four separate proposals: ordinary income. • Interested Person Transactions. Reduce from four-fifths of outstanding shares to Section 162(m). Compensation of per- two-thirds of outstanding shares the sons who are “covered employees” of the shareholder vote required to approve Company is subject to the tax deduction certain business combinations with limits of Section 162(m) of the Internal “Interested Persons” and amendments Revenue Code. Awards that qualify as to this provision in the Restated Certifi- “performance-based compensation” are cate of Incorporation. exempt from Section 162(m), thus allowing the Company the full federal tax deduction • Bylaw Amendments. Reduce from otherwise permitted for such compensa- 66 2⁄3% of outstanding shares to a tion. The 2005 Plan enables the majority of outstanding shares the Compensation Committee to grant awards shareholder vote required to approve that will be exempt from the deduction amendments to the Company’s Bylaws. limits of Section 162(m). • Tracking Stock Provisions. Delete from Section 409A. Acceleration of income, the Restated Certificate of Incorporation additional taxes, and interest apply to obsolete provisions relating to tracking nonqualified deferred compensation that stock of go.com, which was previously is not compliant with Section 409A of the outstanding. Internal Revenue Code. To be compliant • Classified Board Transition Provi- with Section 409A rules with respect to the sions. Delete from the Restated Certifi- timing of elections to defer compensation, cate of Incorporation obsolete distribution events and funding must be provisions relating to the transition of the satisfied. The Company has adopted Board from a classified board to a amendments to the 2005 Plan intended to non-classified board, which has long ensure that awards under it will not be since occurred. subject to adverse tax consequences applicable to deferred compensation We discuss below each of these four under Section 409A. proposals. We will restate the Company’s Certificate of Incorporation to incorporate Tax Treatment of Awards to each of the amendments that are Non-Employee Directors and to Employ- approved by the requisite vote of the ees Outside the United States. The shareholders, and the complete text of the grant and exercise of options and awards Restated Certificate of Incorporation under the 2005 Plan to non-employee assuming all of the amendments are Directors and to employees outside the adopted is set forth as Annex A to this United States may be taxed on a different Proxy Statement. basis.

The Board recommends that • Interested Person Transactions shareholders vote “FOR” the As part of its continuing review of evolving amendment to the Amended and practices in corporate governance, the Restated 2005 Stock Incentive Plan. Board of Directors has revisited the provi- sions of the Company’s Restated Certifi-

70 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement cate of Incorporation that require approval approval by the Board of Directors, pur- of the vote of more than a majority of out- suant to which the Board would exercise standing shares. There are two such its fiduciary duties to make a judgment provisions, one relating to business that takes into account the interests of all combinations with “Interested Persons” shareholders. and the other (discussed in the following section) relating to amendment of the The Board of Directors is proposing to Bylaws. change the shareholder vote required to approve business combination trans- Article VII of the Restated Certificate of actions with an interested person from Incorporation requires a vote of four-fifths four-fifths to two-thirds of outstanding of the outstanding shares to approve any shares. The proposed two-thirds vote business combination with any person (an requirement mirrors Section 203 of the “Interested Person”) who beneficially Delaware General Corporation Law, which owns more than 5% of any class of voting (unless shareholders approve a provision securities of the Company at the time of of the Certificate of Incorporation or the transaction unless (a) the transaction Bylaws expressly electing not to be cov- is approved by the Board of Directors and ered by this section) prohibits certain (b) a majority of the members of the Board transactions with “interested stock- were members of the Board before the holders” unless the transaction is person acquired more than 5% of the approved by a vote of two-thirds of out- Company’s shares. The provision defines standing shares or meets other a business combination to include a exceptions. The Board of Directors merger, sale of all or substantially all of the believes that, taking into account evolving Company’s assets, purchase of all or governance practices, the voting standard substantially all of the assets of another used in the Delaware General Corporation entity and any other transaction that Law, combined with the other provisions requires the approval of shareholders of Article VII of the Restated Certificate of under the Delaware General Corporation Incorporation, provides the right balance Law. The provision defines an Interested for achieving appropriate protection of Person to include a person, firm or corpo- shareholder interests. For similar reasons, ration, or any group acting or intending to the Board believes that it is appropriate to act in concert, including persons who are reduce to two-thirds of shares outstanding directly or indirectly controlling or con- the vote required in Article VIII to approve trolled by one another or are under direct an amendment to Article VII. As currently or indirect common control. Article VIII of drafted, a vote of eighty percent of out- the Restated Certificate of Incorporation standing shares is needed to amend that requires a vote of four-fifths of out- Article. The Board therefore recommends standing shares to amend Article VII. that Article VII and VIII of the Restated Certificate be amended to read as set These provisions are designed to protect forth in Annex A. minority shareholders in an instance in which a party seeks to acquire the Com- Following this amendment, our Restated pany or its assets through the open mar- Certificate of Incorporation will continue to ket accumulation of shares. In such an require supermajority shareholder appro- instance, the interests of the Interested val at a reduced level for business combi- Person may diverge from the interests of nation transactions with Interested other shareholders because the acquirer Persons if the Board does not approve the seeks to complete the takeover either transaction (or if the Board does not con- without an appropriate premium or by tain a majority of members elected before wielding substantial (and self-interested) the Interested Person became an Inter- influence over the outcome of any ested Person), and the Company will required shareholder vote. These provi- remain subject to the anti-takeover provi- sions ensure that the interests of all sions of the Delaware General Corporation shareholders are adequately represented Law. These provisions of our Certificate of either through the super-majority require- Incorporation and of Delaware Law could ment or through the requirement of have the effect of delaying or preventing a

71 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement change of control in some circumstances. proposals, the mechanics for electing In addition, the Restated Certificate of Directors, rules governing repurchase of Incorporation contains a provision regulat- securities from holders of significant ing the ability of shareholders to bring amounts of shares and the requirements matters for action before annual and spe- for adopting and maintaining shareholder cial meetings and authorizes the Board of rights plans. These matters require careful Directors to issue and set the terms of consideration of the rights of all share- preferred stock. The regulations on share- holders, and should not be lightly changed holder action could make it more difficult in ways that may disadvantage minority for any person seeking to acquire control shareholders. of the Company to obtain shareholder approval of actions that would support this effort. The issuance of preferred stock After reviewing practices at other public could effectively dilute the interests of any companies regarding the requisite share- person seeking control or otherwise make holder vote needed to amend a bylaw, the it more difficult to obtain control. Board has determined that it is appro- priate to reduce the shareholder vote The affirmative vote of four-fifths of the required to amend the Bylaws from 66 2⁄3% number of shares of common stock out- of outstanding shares to a majority of standing on the record date for the Annual outstanding shares. This level is con- Meeting will be required for approval of sistent with that of many companies with this proposal. Abstentions will have the businesses similar to the Company’s, effect of a negative vote on this proposal. including Time Warner, Viacom and CBS. Broker non-votes (as described under The proposed requirement of a majority of “Information About Voting and the Meeting shares outstanding, while less than the — Voting”) will not be considered entitled current requirement for 66 2⁄3%, is a higher to vote on this proposal and will have the hurdle than a majority of shares voting on effect of a negative vote on this proposal. the proposal and provides a continuing measure of protection for minority share- The Board of Directors has determined holders that the Board believes is appro- that this amendment is advisable and priate. The Board therefore recommends that Article X of the Restated Certificate recommends that you vote “FOR” this be amended to read as set forth in proposal, and if you properly submit Annex A. your proxy it will be voted for this proposal unless you specify otherwise. The affirmative vote of two-thirds of the number of shares of common stock out- • Bylaw Amendments standing on the record date for the Annual Meeting will be required for approval of Article X of the Restated Certificate of this proposal. Abstentions will have the Incorporation authorizes the Board of effect of a negative vote on this proposal. Directors to amend the Bylaws of the Broker non-votes (as described under Company and provides that the Bylaws “Information About Voting and the Meet- may also be amended by the affirmative ing — Voting”) will not be considered enti- vote of 66 2⁄3% of the outstanding shares tled to vote on this proposal and will have of the Company. This provision is the effect of a negative vote on this pro- designed to protect the rights of minority posal. shareholders by assuring that fundamental changes in how the Company is governed The Board of Directors has determined are not made without either the approval that this amendment is advisable and of the Board of Directors (taking into recommends that you vote “FOR” this account the interests of all shareholders) proposal, and if you properly submit or a substantial majority of shareholders. your proxy it will be voted for this Matters covered by the Bylaws include important governance issues such as the proposal unless you specify otherwise. timetable and requirements for share- holder nominations of Directors or meeting

72 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

• Tracking Stock Provisions a one-year term each year. This con- version occurred over a three-year period, In 1999, the Company added provisions to with each class serving out its existing its Certificate of Incorporation to create term before being converted to a one-year two classes of common stock: Disney term, and the Restated Certificate of common stock and go.com common Incorporation reflected this transition stock. The go.com common stock had period. Now that the three-year terms that voting, dividend, liquidation and con- were in effect at the time of the 2001 version rights that were tied to the amendment have all expired and all Direc- Company’s go.com business and the tors are elected to a one-year term, the Disney common stock had rights that were transition provisions are obsolete and can tied to the remainder of the Company’s be removed. As there is no longer any business. In 2001, all shares of go.com purpose served by the transition provi- common stock were converted to shares sions, the Board of Directors recommends of Disney common stock pursuant to the that Section 2 of Article V of the Restated terms set forth in the Restated Certificate Certificate of Incorporation be amended of Incorporation, and no shares of go.com by deleting it in its entirety and replacing it common stock have been outstanding with the language set forth in Section 2, since that time. Therefore, the provisions Article V of Annex A to remove the tran- in the Restated Certificate of Incorporation sition provisions. defining the rights of the separate classes of common stock are now obsolete and The affirmative vote of a majority of shares can be removed. As there is no longer any of common stock outstanding on the purpose served by these provisions, the record date for the Annual Meeting will be Board of Directors recommends that they required for approval of this proposal. be removed from the Restated Certificate Abstentions will have the effect of a neg- of Incorporation. The language set forth in ative vote on this proposal. Article IV of Annex A accomplishes that The Board of Directors has determined objective by removing the provisions relat- ing to the tracking stock, but otherwise that this amendment is advisable and leaving the Article as it was. recommends that you vote “FOR” this proposal, and if you properly submit The affirmative vote of a majority of shares your proxy it will be voted for this of common stock outstanding on the proposal unless you specify otherwise. record date for the Annual Meeting will be required for approval of this proposal. Abstentions will have the effect of a neg- Shareholder Proposals ative vote on this proposal. The Company has been notified that two The Board of Directors has determined shareholders intend to present proposals that this amendment is advisable and for consideration at the annual meeting. recommends that you vote “FOR” this The shareholders making these proposals have presented the proposals and proposal, and if you properly submit supporting statements below, and we are your proxy it will be voted for this presenting the proposals as they were proposal unless you specify otherwise. submitted to us. While we take issue with a number of the statements contained in • Classified Board Transition Provi- the proposals and the supporting state- sions ments, we have limited our responses to the most important points and have not In 2001, the Company amended its Certifi- attempted to address all the statements cate of Incorporation to change from a with which we disagree. The address and classified board, in which Directors served stock ownership of each of the propo- three-year terms that were staggered so nents will be furnished by the Company’s approximately one-third of the Directors Secretary to any person, orally or in writ- were elected each year, to a non-classified ing as requested, promptly upon receipt of board, in which all Directors are elected to any oral or written request.

73 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The affirmative vote of the holders of a An Advisory Vote establishes an annual majority of shares represented in person referendum process for shareholders or by proxy and entitled to vote on the about senior executive compensation. proposal will be required for approval of We believe the voting results, espe- each of the proposals. Abstentions will be cially when linked to a robust investor counted as represented and entitled to communication program, would pro- vote and will have the effect of a negative vide Disney’s board and management vote on all proposals. Broker non-votes useful information about shareholder (as described under “Information About views on Disney’s senior executive Voting and the Meeting — Voting”) will not compensation. be considered entitled to vote on these proposals and will not be counted in In its 2008 proxy Aflac submitted an determining the number of shares neces- Advisory Vote resulting in a 93% vote sary for approval of the proposals. in favor, indicating strong investor support for good disclosure and a reasonable compensation package. • Proposal 1–Shareholder Advisory Daniel Amos, Chairman and CEO said, Vote on Executive Compensation “An advisory vote on our compensation report is a helpful avenue for our Walden Asset Management has notified shareholders to provide feedback on the Company that it intends to present the our pay-for-performance compensation following proposal for consideration at the philosophy and pay package.” annual meeting: A number of other companies have RESOLVED, that shareholders of The also agreed to an Advisory Vote, Walt Disney Company request the including Ingersoll Rand, Verizon, board of directors to adopt a policy Hewlett Packard, Intel, MBIA, H&R that provides shareholders the oppor- Block, Blockbuster, and PG&E. And tunity at each annual shareholder approximately 300 companies under meeting to vote on an advisory reso- TARP are now implementing the Advi- lution, proposed by management, to sory Vote providing an opportunity to ratify the compensation of the named see it in action. executive officers (“NEOs”) set forth in Influential proxy voting service Risk- the proxy statement’s Summary Metrics Group, recommends votes in Compensation Table (the “SCT”) and favor, noting: “RiskMetrics encourages the accompanying narrative disclosure companies to allow shareholders to of material factors provided to under- express their opinions of executive stand the SCT (but not the Compensa- compensation practices by establish- tion Discussion and Analysis). The ing an annual referendum process. An proposal submitted to shareholders advisory vote on executive compensa- should make clear that the vote is tion is another step forward in enhanc- non-binding and would not affect any ing board accountability.” compensation paid or awarded to any NEO. A bill to allow annual advisory votes passed the House of Representatives SUPPORTING STATEMENT: Investors by a 2-to-1 margin in the last Congress. are increasingly concerned about We expect legislation on this issue will mushrooming executive compensation pass in the near future. especially when it is insufficiently linked to performance. We believe that existing U.S. Securities and Exchange Commission rules and In 2009, shareholders filed close to 100 stock exchange listing standards do “Say on Pay” resolutions. Votes aver- not provide shareholders with sufficient aged 47% in favor, with eighteen pass- mechanisms for providing input to ing, demonstrating strong shareholder boards on senior executive compensa- support for this reform. Public senti- tion. In contrast, in the United King- ment and Congressional concern about dom, public companies allow executive compensation has reached shareholders to cast a vote on the new levels of intensity. “directors’ remuneration report,” which

74 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

discloses executive compensation. detail on pages 18 to 19 of this Proxy Such a vote isn’t binding, but gives Statement, over the last several years shareholders a clear voice that could only approximately 20% of the help shape senior executive compensation awarded to named compensation. executive officers is guaranteed at the beginning of the year in the form of We believe that a company that has a salary and benefits. The remainder of clearly explained compensation these executive’s compensation is in philosophy and metrics, reasonably the form of a performance-based links pay to performance, and commu- bonus and equity awards whose value nicates effectively to investors would depends on Company performance. In find a management sponsored Advi- addition, the Committee regularly sory Vote a helpful tool. reviews the relationship between the Company’s compensation philosophy, The Board of the Company the incentives it seeks to create to recommends a vote “AGAINST” this drive long-term growth and the com- proposal for the following reasons: petitive market for executive talent. In effect, the Board’s task is to strike the The Board respects the proponent’s view delicate balance between a compensa- that, in the right circumstances, advisory tion philosophy that will attract and votes can enhance shareholder value, and retain the level of talent that the Com- the Board acknowledges that legislation pany needs while, at the same time, has been introduced that could require providing appropriate incentives to companies to hold some form of advisory align our executive with the creation of vote. At the same time, the Board believes long-term shareholder value. that the proposed advisory vote is not in 2. The Board is further of the view that the best interest of the shareholders of one of the other justifications that is Disney and that the one-size-fits-all sometimes offered in support of advi- approach of the proposed legislation does sory votes — the need to encourage not represent a sound approach to dealing Board dialogue with shareholders — with compensation issues. In this Board’s also doesn’t exist with respect to Dis- view, the potential benefits of advisory ney. This Board already believes that votes cannot be generalized and the need the views of shareholders are, and for an advisory vote in any given case need to be, an important input into the rests on an assessment of whether the Board’s decision making process and potential gains associated with an advi- has demonstrated its responsiveness sory vote outweigh its potential draw- to developing best practices in backs in light of the approach to compensation and in governance compensation previously taken by a issues generally. The opportunity for particular board. For the reasons that fol- dialogue is facilitated by Disney’s low, the Board believes that, when such Board structure, which, as a result of an assessment is made for Disney, the splitting the chairman of the Board and balance tips against an advisory vote and chief executive officer functions, gives that an advisory vote therefore should not shareholders access to the Board be implemented at this time. through an independent, non-executive 1. One assumption underlying advisory chairman. In short, when our share- vote proposals is that they are needed holders have a desire to focus on to encourage boards to focus on compensation philosophy and practi- executive compensation decisions and ces, there is already in place a mean- take them more seriously. This Board ingful process for views to be of Directors does not believe that any expressed and heard. Our Directors such justification exists with respect to also monitor ongoing public discussion Disney. Over the past several years, of issues of governance and through its Compensation Committee, compensation. Indeed, the Company’s the Board has created a rigorous current “pay for performance” pay-for-performance compensation compensation design was influenced structure. As we describe in greater by significant interaction with inter-

75 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

ested shareholder groups. In addition, for the underlying judgments, it is not the Board has adopted a number of realistic to believe that an up or down governance procedures designed to vote can effectively weigh, in an enhance accountability to shareholders informed fashion, the balance of fac- on a range of issues including execu- tors that inhere in the Board’s judg- tive compensation. These include a ments about how best to discharge bylaw providing for majority election of this vital aspect of its responsi- Directors, procedures for direct bility. Nor would an up or down vote communication with Directors (as likely provide useful guidance about described on page 12 of this proxy the driving force behind the vote. It statement) and procedures for share- would be difficult to discern whether holder nominations of Directors (as the drivers of the vote were long-term described on page 12 of this proxy or short-term investors — who may statement). We believe these meas- well have different perspectives on ures, together with the Board’s solic- compensation philosophy — or itation of input from shareholders on whether the vote was motivated by one executive compensation, already pro- aspect of compensation or another, or vide our shareholders with the oppor- compensation for one executive or tunity for meaningful input into another, on an entire compensation executive compensation decisions. package for the entire executive team. Understanding these drivers is, of 3. Some advocates assert that, what- course, critical to evaluating the input ever its limitations, there can be no and forming an appropriate harm from an advisory vote and that response. The Board believes the best the process would yield meaningful and only real way to develop that shareholder feedback that would assist understanding is the opportunity for a board in discharging its dialogue that is currently in place and responsibilities. This Board disagrees that the proposed process could create with that assessment. One of the real and unfortunate frictions that could Board’s most critical functions is to impair the ability of the Board to per- evaluate and provide appropriate form one of its core functions. incentives to the executive manage- ment team. This is particularly true of 4. Pending legislation that would, if the chief executive officer, where the enacted, require some form of advisory Board is directly responsible for vote does not change the Board’s view managing, in effect, the employee rela- that it would be inadvisable to imple- tionship. The Board’s management of ment an advisory vote at Disney at this that relationship is inherently and time. There is wide ranging debate necessarily based on proprietary and about whether this legislation should sensitive information, such as the be adopted and, if so, the form that any annual and long-term business plans advisory vote requirement should take. for the Company, and an assessment The Board therefore believes that the of the executive’s performance against Company should not institute an advi- those expectations. In discharge of its sory vote before any legislative fiduciary duties owed to shareholders, requirement is enacted. If an advisory a board is uniquely positioned to vote is required by law, the Board will assess how those sensitive factors seek to carefully tailor such a vote to should be weighed to appropriately the Company’s circumstances within manage, reward and incentivize the the parameters required by law. Unless chief executive officer. That is partic- and until those parameters are estab- ularly true of a Board such as Disney’s, lished, the Board believes that adopt- which has the added perspective of an ing an advisory vote would be independent chairman whose working premature and, for the reasons relationship with the chief executive described above, inadvisable. officer only enhances the insights that the Board brings to bear on this set of For all these reasons, the Board believes judgments. Given the proprietary basis that the existing opportunities for dialogue with shareholders, its consideration of

76 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement public debate regarding compensation Disney has a sexual orientation policy issues and its evaluation of these inputs in and mandatory diversity training for the context of the directors’ intense famil- employees that supports gays and iarity with the specific circumstances and bisexuals, but excludes any support for needs of the Company are far better ways ex-gays. to assess investor reaction to compensa- tion matters than a shareholder vote. In our Nation’s Capital, the Superior Court for the District of Columbia has Accordingly, the Board ruled that ex-gays are a legally pro- tected class under sexual orientation recommends that you vote and thus protected from discrimination “AGAINST” this proposal, and your under the D.C. Human Rights Act. proxy will be voted against if the RESOLVED: The shareholders request proposal is presented unless you that Disney amend its sexual ori- specify otherwise. entation policy to explicitly include the prohibition of discrimination based on • Proposal 2–Ex-Gay Non- ex-gay status. discrimination Policy SUPPORTING STATEMENT: Employee Bobbie Strohbar has notified the Company discrimination diminishes employee that she intends to present the following morale and productivity. Disney’s proposal for consideration at the annual exclusion of ex-gays from its sexual meeting: orientation policy and program reinforces the second-class status of WHEREAS: The Walt Disney Company ex-gays, and contributes to the neg- does not explicitly prohibit discrim- ative perceptions and discrimination ination based on ex-gay status in its against former homosexuals. Disney’s sexual orientation employment policy exclusion also disregards diversity and and diversity training for employees. the basic human right to dignity and Parents and Friends of Ex-Gays & Gays self-determination. Adding ex-gays to (PFOX), a national non-profit orga- Disney’s sexual orientation policy and nization defines the ex-gay community programs, which already include gays as men and women with unwanted and bisexuals, will increase diversity, same-sex attractions who leave homo- assure equality in the workplace, and sexuality by gender affirming therapy, be inexpensive for the Company to faith based ministries, Homosexuals implement. Anonymous support groups, or other Because state and local laws differ non-judgmental environments. Their with respect to employment discrim- decision is one only they can make. ination, our Company would benefit However, there are others in society from a consistent, corporate-wide who refuse to respect individual self- policy to further enhance efforts to determination. Consequently, formerly prevent discrimination, resolve com- gay men and women are reviled simply plaints internally to avoid costly liti- because they dare to exist. gation or damage to its reputation, PFOX has documented numerous access employees from the broadest incidents of intolerance against the possible talent pool, and ensure a ex-gay community. Ex-gays and their respectful and supporting atmosphere supporters are subject to an increas- for all employees. I urge you to vote for ingly hostile environment because they this beneficial proposal which serves to live out or support a different view of increase diversity at minimal cost. homosexuality. They remain closeted because of other’s negative reactions or disapproval. Ex-gay employees are uncomfortable being open about their sexual orientation with their colleagues because they fear discrimination or unfair treatment in the workplace.

77 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

The Board of the Company physical disabilities or who developed recommends a vote “AGAINST” this those disabilities in specific ways. It would be impossible to effectively identify and proposal for the following reasons: address every specific situation that might arise and the inclusion of some specific The Board believes that the Company’s situations would perhaps leave open to current employment discrimination poli- question whether other specific situations cies provide broad and appropriate pro- are covered. Moreover, any attempt to tection against discrimination based on catalog specific instances would impose a sexual orientation and that it would be rigid inflexibility in the application of the inappropriate to amend its policy to policy to the variety of legal, regulatory address the specific situation requested and cultural circumstances that arise in a by the proponent. company as diverse and wide ranging as ours. Contrary to the proponent’s assertion, the Company does not have a “sexual ori- The Board therefore believes it is far more entation policy” or a policy that specifi- appropriate for the Company’s policies to cally “supports gays and bisexuals” and address discrimination and harassment in “excludes any support for ex-gays.” What the general, non-exclusionary terms cur- the Company does have is an equal rently used than to try to address the employment opportunity policy pursuant specific instance raised by the proponent. to which the Company commits to provide equal opportunity for all employees based Accordingly, the Board on a list of characteristics and statuses recommends that you vote including sexual orientation without dis- tinguishing between homosexuals and “AGAINST” this proposal, and your heterosexuals. The Company also has a proxy will be voted against if the harassment policy, which prohibits proposal is presented unless you employees from harassing “any employee, specify otherwise. guest, or other person in the course of the Company’s business for any reason” Other Matters including based on sexual orientation, again without distinguishing between homosexuals and heterosexuals. Both of Management is not aware of any other these policies are designed to broadly matters that will be presented at the protect homosexuals and heterosexuals Annual Meeting, and Company Bylaws do alike from adverse treatment based on not allow proposals to be presented at the their sexual orientation. meeting unless they were properly pre- sented to the Company prior to December 10, 2009. However, if any other The Company’s policies are quite deliber- question that requires a vote is properly ately stated in general terms and broadly presented at the meeting, the proxy hold- prohibit discrimination and harassment ers will vote as recommended by the based on race, religion, color, sex, sexual Board or, if no recommendation is given, orientation, gender identity, national ori- in their own discretion. gin, age, marital status, covered veteran status, mental or physical disability, preg- nancy, or any other basis prohibited by state or federal law. If the policies were Information About Voting and amended to address the specific situation requested by the proponent, the Company the Meeting would also have to consider whether to address other specific situations, such as Shares Outstanding the application of the policies to persons of mixed race, persons who have changed Shareholders owning Disney common their religious identification, persons stock at the close of business on Jan- whose marital status has changed or uary 11, 2010 (the record date), may vote persons who have specific mental or at the 2010 Annual Meeting and any post-

78 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement ponements or adjournments of the meet- appointment of the independent regis- ing. On that date, 1,935,605,995 shares of tered public accountants, FOR approval of common stock were outstanding. Each the amendment to the Amended and share is entitled to one vote on each mat- Restated 2005 Stock Incentive Plan, FOR ter considered at the meeting. approval of each of the amendments to the Restated Certificate of Incorporation Voting and AGAINST each of the shareholder proposals. Shareholders have a choice of voting over the Internet, by telephone or by using a You may revoke your proxy and change traditional proxy card. your vote at any time before the close of • To vote by Internet, go to balloting at the Annual Meeting by submit- www.ProxyVote.com and follow the ting a written notice to the Secretary, by instructions there. You will need the 12 submitting a later dated and properly digit number included on your proxy executed proxy (including by means of a card, voter instruction form or notice. telephone or Internet vote) or by voting in person at the Annual Meeting. • To vote by telephone, registered share- holders should dial (800) 690-6903 and If you participate in the Disney Savings follow the instructions. Beneficial hold- and Investment Plan or the Disney Hourly ers should dial the phone number listed Savings and Investment Plan, you may on your voter instruction form. You will give voting instructions as to the number need the 12 digit number included on of shares of common stock equivalent to your proxy card, voter instruction form or the interest in Disney common stock cred- notice. ited to your account as of the record date. • If you received a notice and wish to vote You may provide voting instructions to by traditional proxy card, you can Fidelity Management Trust Company by receive a full set of materials at no voting online or by completing and return- charge through one of the following ing a proxy card if you received one. If you methods: hold shares other than through these 1) by internet: www.ProxyVote.com plans and you vote electronically, voting instructions you give with respect to your 2) by Phone: (800) 579-1639 other shares will be applied to Disney 3) by email: stock credited to your accounts in a sav- [email protected] (your ings and investment plan unless you email should contain the 12 digit request a separate control number with number in the subject line). respect to each account. To receive sepa- rate control numbers, please call The deadline for voting by telephone or (866) 412-8382. electronically is 11:59 p.m., Eastern Time, on March 9, 2010. If you are a registered The trustee will vote your shares in accord- shareholder and attend the meeting, you ance with your duly executed instructions may deliver your completed proxy card in received by March 5, 2010. If you do not person. “Street name” shareholders who send instructions, the trustee will vote the wish to vote at the meeting will need to number of shares equal to the share equiv- obtain a proxy form from the institution alents credited to your account in the same that holds their shares. proportion that it votes shares in your plan for which it did receive timely instructions If you properly sign and return your proxy from other participants. You may revoke card or complete your proxy via the tele- previously given voting instructions by phone or Internet, your shares will be March 5, 2010, by either revising your voted as you direct. If you sign and return instructions on line or by submitting to the your proxy but do not specify how you trustee either a written notice of revocation want your shares voted, they will be voted or a properly completed and signed proxy FOR the election of all nominees for Direc- card bearing a later date. Your voting tor as set forth under “Election of instructions will be kept confidential by the Directors,” FOR the ratification of the trustee.

79 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Under New York Stock Exchange Rules, • sending an e-mail to the Shareholder the proposal to approve the appointment Services department at of independent auditors and the proposals [email protected] to amend the Restated Certificate of providing the name under which you Incorporation to eliminate tracking stock hold shares of record or the evidence provisions and to eliminate classified described below of your beneficial board transition provisions are considered ownership of shares and whether you “discretionary” items. This means that are requesting one or two tickets; brokerage firms may vote in their dis- • sending a fax to (818) 553-7210 provid- cretion on these matters on behalf of cli- ing the name under which you hold ents who have not furnished voting shares of record or the evidence instructions at least 10 days before the described below of your beneficial date of the meeting. In contrast, the elec- ownership of shares and whether you tion of directors, the amendment to the are requesting one or two tickets; Amended and Restated 2005 Stock Incentive Plan, the amendments to the • calling Shareholder Services at Restated Certificate of Incorporation relat- (818) 553-7200 and following the ing to Interested Person transactions and instructions provided; or Bylaw amendments and the shareholder • sending a request by mail to Shareholder proposals are “non-discretionary” items. Services, The Walt Disney Company, 500 This means brokerage firms that have not S. Buena Vista St., MC 9722, Burbank, received voting instructions from their CA 91521 providing the name under clients on these proposals may not vote which you hold shares of record or the on them. These so-called “broker evidence described below of your non-votes” will be included in the calcu- beneficial ownership of shares and lation of the number of votes considered whether you are requesting one or two to be present at the meeting for purposes tickets. of determining a quorum, but will not be Please note that if you hold your shares in considered in determining the number of “street name” (that is, through a broker or votes necessary for approval and will have other nominee), you will need to send a no effect on the outcome of the vote for written request for a ticket either by regu- Directors, the amendments to the lar mail, fax or e-mail, along with proof of Amended and Restated 2005 Stock share ownership, such as a copy of the Incentive Plan and the shareholder pro- portion of your voting instruction form posals. Because the amendments to the showing your name and address, a bank Restated Certificate of Incorporation or brokerage firm account statement or a require approval by a percentage of all letter from the broker, trustee, bank or shares outstanding, broker non-votes will nominee holding your shares, confirming have the effect of a vote against these ownership. proposals. Requests for admission tickets will be We will post preliminary results of voting processed in the order in which they are at the meeting on our investor relations received and must be requested no later web site promptly after the meeting. than March 5, 2010. Please note that seat- ing is limited and requests for tickets will Attendance at the Meeting be accepted on a first-come, first-served basis. On the day of the meeting, each If you plan to attend the meeting, you shareholder will be required to present a must request an admission ticket in valid picture identification such as a driv- advance. Tickets will be issued to regis- er’s license or passport with their admis- tered and beneficial owners and to one sion ticket. Seating will begin at 9:00 a.m. guest accompanying each registered or and the meeting will begin at 10:00 a.m. beneficial owner. You may request tickets Cameras (including cell phones with by: photographic capabilities), recording • visiting www.disney.com/ devices and other electronic devices will annualmeeting2010 and following the not be permitted at the meeting. instructions provided;

80 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

• Ms. Lozano – 57 shares held for the benefit of a child; Other Information • Mr. Mayer – 65 shares held for the benefit of members of his family; and • Mr. Pepper – 150 shares held for the benefit of a child. Stock Ownership All Directors and executive officers as a group disclaim beneficial ownership of a total of 1,397 shares. 2 For executive officers, the number of shares listed includes interests in shares held in Company savings Based on a review of filings with the Secu- and investment plans as of January 11, 2010: rities and Exchange Commission, the Mr. Iger — 17,414 shares; Mr. Rasulo—19,696 shares; Company has determined that the follow- Mr. Braverman—8,138 shares; Ms. McCarthy—2,626 shares and all executive officers as a group—59,421 ing person holds more than 5% of the shares. outstanding shares of Disney common 3 Reflects the number of stock units credited as of December 31, 2009 to the account of each stock: non-employee Director participating in the Company’s Amended and Restated 1997 Non-Employee Directors Stock and Deferred Compensation Plan. These units are Name and Percent payable solely in shares of Company common stock as Address of Beneficial owner Shares of Class described under “Corporate Governance and Board Steven P. Jobs 138,000,0071 7.1% Matters—Board Compensation,” but do not have current One Infinite Loop voting or investment power. Excludes unvested Cupertino, CA 95014 restricted stock units awarded to executives under the Company’s Amended and Restated 2002 Executive 1 Held indirectly by Mr. Jobs through a trust. Performance Plan which vest on a performance basis and other restricted stock units awarded to executives that have not vested under their vesting schedules. 4 Excludes dividends to be credited March 31, 2010 on The following table shows the amount of restricted stock units held on December 31, 2009. Disney common stock beneficially owned 5 Reflects the number of shares that could be purchased (unless otherwise indicated) by our current by exercise of options exercisable at January 11, 2010, or within 60 days thereafter under the Company’s stock Directors, nominees and named executive option plans and the number of shares underlying officers and by Directors, nominees and restricted stock units that are not subject to perform- executive officers as a group. Except as ance conditions and vest within 60 days of January 11, 2010. otherwise indicated, all information is as of 6 Held indirectly by Mr. Jobs through a trust. January 11, 2010. Section 16(a) Beneficial Ownership Shares Acquirable Percent Reporting Compliance Stock Within of Name Shares1,2 Units3,4 60 Days4,5 Class Susan E. Arnold 2,321 10,875 4,990 * Based upon a review of filings with the Alan N. Braverman 171,576 — 1,037,828 * Securities and Exchange Commission and John E. Bryson 10,787 32,932 43,390 * written representations that no other John S. Chen 13,565 14,962 25,390 * reports were required, we believe that all Judith L. Estrin 36,592 6,031 49,390 * of our Directors and executive officers Robert A. Iger 793,269 — 3,354,970 * complied during fiscal 2009 with the Steven P. Jobs 138,000,0076 ——7.1% Fred H. Langhammer 16,487 19,508 19,390 * reporting requirements of Section 16(a) of Aylwin B. Lewis 8,861 16,065 25,390 * the Securities Exchange Act of 1934, with Monica C. Lozano 9,022 25,441 43,390 * the exception of Mr. Pepper who filed a Robert W. Matschullat 8,318 30,642 31,390 * report relating to the acquisition of shares Kevin A. Mayer 22,310 — 246,562 * one day following the due date of the Christine M. McCarthy 35,558 — 318,365 * report. John E. Pepper, Jr. 71,114 2,881 13,390 * James A. Rasulo 55,572 — 723,207 * Sheryl Sandberg — — — * Electronic Availability of Proxy Orin C. Smith 6,966 6,031 13,390 * All Directors and Statement and Annual Report executive officers as a group (18 persons) 139,275,650 165,367 6,014,283 7.5% As permitted by Securities and Exchange Commission rules, we are making this * Less than 1% of outstanding shares. proxy statement and our annual report 1 The number of shares shown includes shares that are individually or jointly owned, as well as shares over available to shareholders electronically via which the individual has either sole or shared invest- the Internet on the Company’s website at ment or voting authority. Some Directors and executive www.disney.com/investors. On January 22, officers disclaim beneficial ownership of some of the shares included in the table, as indicated below: 2010, we began mailing to our share- • Mr. Chen – 1,125 shares held for the benefit of chil- holders a notice containing instructions on dren; how to access this proxy statement and

81 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement our annual report and how to vote online. Once you have received notice from your If you received that notice, you will not broker or us that they or we will dis- receive a printed copy of the proxy continue sending multiple copies to the materials unless you request it by follow- same address, you will receive only one ing the instructions for requesting such copy until you are notified otherwise or materials contained on the notice or set until you revoke your consent. If you forth in the following paragraph. received only one copy of this proxy statement and the annual report or notice If you received a paper copy of this proxy of availability of these materials and wish statement by mail and you wish to receive to receive a separate copy for each a notice of availability of next year’s proxy shareholder at your household, or if, at statement either in paper form or any time, you wish to resume receiving electronically via e-mail, you can elect to separate proxy statements or annual receive a paper notice of availability by reports or notices of availability, or if you mail or an e-mail message that will provide are receiving multiple statements and a link to these documents on our website. reports and wish to receive only one, By opting to receive the notice of avail- please notify your broker if your shares are ability and accessing your proxy materials held in a brokerage account or us if you online, you will save the Company the cost hold registered shares. You can notify us of producing and mailing documents to by sending a written request to The Walt you, reduce the amount of mail you Disney Company, Shareholder Services, receive and help preserve environmental 500 South Buena Vista Street, MC 9722, resources. Registered shareholders may Burbank, California 91521, or by calling elect to receive electronic proxy and Shareholder Services at (818) 553-7200 annual report access or a paper notice of and we will promptly deliver additional availability for future annual meetings by materials as requested. registering online at www.disney.com/ investors. If you received electronic or Proxy Solicitation Costs paper notice of availability of these proxy materials and wish to receive paper deliv- The proxies being solicited hereby are ery of a full set of future proxy materials, being solicited by the Board of Directors you may do so at the same location. of the Company. The cost of soliciting Beneficial or “street name” shareholders proxies in the enclosed form will be borne who wish to elect one of these options by the Company. We have retained Laurel may also do so at Hill Advisory Group, LLC, 2 Robbins Lane, www.disney.com/investors. Suite 201, Jericho, New York 11753, to aid in the solicitation. For these and related Reduce Duplicate Mailings advisory services, we will pay Laurel Hill a fee of $35,000 and reimburse it for certain The Company is required to provide an out-of-pocket disbursements and annual report and proxy statement or expenses. Officers and regular employees notice of availability of these materials to of the Company may, but without all shareholders of record. If you have compensation other than their regular more than one account in your name or at compensation, solicit proxies by further the same address as other shareholders, mailing or personal conversations, or by the Company or your broker may dis- telephone, facsimile or electronic means. continue mailings of multiple copies. If you We will, upon request, reimburse broker- wish to receive separate mailings for age firms and others for their reasonable multiple accounts at the same address, expenses in forwarding solicitation you should mark the designated box on material to the beneficial owners of stock. your proxy card. If you are voting by tele- phone or the Internet and you wish to receive multiple copies, you may notify us at the address and phone number at the end of the following paragraph if you are a shareholder of record or notify your broker if you hold through a broker.

82 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

Annex A shares thereof then outstanding) by the affirmative vote of the holders of a majority Restated Certificate of of the voting power of the stock of the Corporation entitled to vote generally in Incorporation the election of directors.

ARTICLE I 2. Common Stock. NAME The voting powers, preferences and rela- The name of the corporation (the tive, participating, optional or other special “Corporation”) is The Walt Disney Com- rights of the Common Stock, and the qual- pany. ifications and restrictions thereon, shall be as follows in this Section 2.

ARTICLE II 2.1 Dividends. Subject to any preferences ADDRESS OF REGISTERED OFFICE; and relative, participating, optional or NAME OF REGISTERED AGENT other special rights of any outstanding The address of the registered office of the series of Preferred Stock and any qual- Corporation in the State of Delaware is ifications or restrictions on the Common 2711 Centerville Road, Suite 400, City of Stock created thereby, dividends may be Wilmington 19808, County of New Castle. declared and paid upon Common Stock The name of its registered agent at that upon such terms as the Board of Directors address is Corporation Services Company. may determine out of the funds of the Corporation legally available therefor.

ARTICLE III 2.2 Voting Powers. Except as otherwise PURPOSE provided by law or by the terms of any outstanding series of Preferred Stock or The purpose of the Corporation is to any provision of the Certificate of engage in any lawful act or activity for Incorporation or Bylaws of the Corpo- which a corporation may now or hereafter ration, the entire voting power of the be organized under the General Corpo- stockholders of the Corporation shall be ration Law of the State of Delaware as set vested in the holders of Common Stock of forth in Title 8 of the Delaware Code, as in the Corporation, who shall be entitled to effect from time to time (the “DGCL”). vote on any matter on which the holders of stock of the Corporation shall, by law or by the provisions of the Certificate of ARTICLE IV Incorporation or Bylaws of the Corpo- CAPITAL STOCK ration, be entitled to vote. On each matter 1. Authorization. to be voted on by the holders of Common Stock each outstanding share of Common The total number of shares of stock which Stock shall have one vote. the Corporation shall have authority to issue is 4,700,000,000, of which 2.3 Liquidation Rights. In the event of the 4,600,000,000 shares shall be shares of voluntary or involuntary dissolution of the common stock having a par value of $.01 Corporation or the liquidation and winding per share (“Common Stock”) and up of the Corporation, after payment or 100,000,000 shares shall be shares of provision for payment of the debts and preferred stock having a par value of $.01 other liabilities of the Corporation and the per share (“Preferred Stock”) and issuable full preferential amounts (including any in one or more classes or series as accumulated and unpaid dividends) to hereinafter provided. which the holders of Preferred Stock are entitled, unless otherwise provided in The number of authorized shares of any respect of a series of Preferred Stock by class or classes of capital stock of the the resolution of the Board of Directors Corporation may be increased or fixing the liquidation rights and prefer- decreased (but not below the number of ences of such series of Preferred Stock,

A-1 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement the holders of the outstanding shares of number of directors to be determined from Common Stock shall be entitled to receive time to time solely by resolution adopted the remaining assets of the Corporation on by the Board of Directors. a per share basis. Neither the merger nor consolidation of the Corporation into or with any other company, nor the merger or 2. Term of Office. consolidation of any other company into or with the Corporation, nor a sale, transfer or All directors shall be of one class and lease of all or any part of the assets of the serve for a term ending at the annual Corporation, shall, alone, be deemed a meeting following the annual meeting at liquidation or winding up of the Corpo- which the director was elected. In no case ration, or cause the dissolution of the shall a decrease in the number of directors Corporation, for purposes of this sub- shorten the term of any incumbent direc- section 2.3. tor. Each director shall hold office after the annual meeting at which his or her term is scheduled to end until his or her succes- sor shall be elected and shall qualify, 3. Preferred Stock. subject, however, to prior death, resig- Shares of the Preferred Stock of the Corpo- nation, disqualification or removal from ration may be issued from time to time in office. one or more classes or series, each of which class or series shall have such dis- tinctive designation, number of shares, or 3. Vacancies. title as shall be fixed by the Board of Any newly created directorship resulting Directors prior to the issuance of any from an increase in the number of direc- shares thereof. Each such class or series tors may be filled by a majority of the of Preferred Stock shall consist of such Board of Directors then in office, provided number of shares, and have such voting that a quorum is present, and any other powers, full or limited, or no voting pow- vacancy on the Board of Directors may be ers, and such preferences and relative, filled by a majority of the directors then in participating, optional or other special office, even if less than a quorum, or by a rights and such qualifications, limitations sole remaining director. or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such series of Preferred 4. Special Voting Rights of Preferred Stock as may be adopted from time to Stock Holders. time by the Board of Directors prior to the issuance of any shares thereof pursuant to Notwithstanding the foregoing provisions, the authority hereby expressly vested in it, whenever the holders of any one or more all in accordance with the laws of the classes or series of Preferred Stock issued State of Delaware. By Certificate of by the Corporation shall have the right, Designation dated November 17, 1999, the voting separately by class or series, to Corporation authorized the issuance of elect directors at an annual or special Series A Voting Preferred Stock, a copy of meeting of stockholders, the election, term which Certificate of Designations is of office, filling of vacancies and other attached hereto as Exhibit A. features of such directorships shall be governed by the terms of this Certificate of Incorporation or the resolution or reso- ARTICLE V lutions adopted by the Board of Directors BOARD OF DIRECTORS pursuant to Article IV applicable thereto. 1. Number of Directors. 5. Selection by Written Ballot. The business and affairs of the Corpo- ration shall be managed by or under the Elections of directors at an annual or spe- direction of a Board of Directors consist- cial meeting of stockholders shall be by ing of not less than nine directors or more written ballot unless the Bylaws of the than twenty-one directors, the exact Corporation shall otherwise provide.

A-2 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement

ARTICLE VI elected and acting members of the Board SPECIAL MEETINGS OF of Directors prior to the date that the STOCKHOLDERS person, firm or corporation, or any group thereof, with whom such transaction is Special meetings of the stockholders of proposed, became an Interested Person, the Corporation for any purpose or pur- or (ii) the provision of a vote in excess of poses may be called at any time by the that required by the Delaware General Board of Directors, the Chairman of the Corporation Law for such transaction Board of Directors or the President. Spe- violates the express provisions of the cial meetings of the stockholders of the Delaware General Corporation Law. Corporation may not be called by any other person or persons. 3. Definition of Interested Person. As used in this Article VII, the term ARTICLE VII “Interested Person” shall mean any per- CERTAIN BUSINESS COMBINATIONS son, firm or corporation, or any group thereof, acting or intending to act in con- 1. Vote Required for Certain Business cert, including any person directly or Combinations. indirectly controlling or controlled by or Except as set forth in subsection 2 of this under direct or indirect common control Article VII, the affirmative vote of the hold- with such person, firm or corporation or ers of two-thirds (2/3) of the outstanding group, which owns of record or benefi- stock of the Corporation entitled to vote cially, directly or indirectly, five percent shall be required for: (5%) or more of any class of voting secu- rities of the Corporation. 1.1 any merger or consolidation to which the Corporation, or any of its subsidiaries, and an Interested Person ARTICLE VIII (as hereinafter defined) are parties; AMENDMENT OF ARTICLE VII 1.2 any sale or other disposition by the The affirmative vote of the owners of Corporation, or any of its subsidiaries, two-thirds (2/3) of the outstanding Com- of all or substantially all of its assets to mon Stock of the Corporation entitled to an Interested Person; vote shall be required to amend, alter or repeal Article VII. 1.3 any purchase or other acquisition by the Corporation, or any of its sub- sidiaries, of all or substantially all of the ARTICLE IX assets or stock of an Interested Per- INDEMNIFICATION; LIMITATION ON son; and LIABILITY OF DIRECTORS 1.4 any other transaction with an Inter- 1. Indemnification. ested Person which requires the approval of the stockholders of the The Corporation shall indemnify to the full Corporation under the Delaware Gen- extent authorized or permitted by law (as eral Corporation Law. now or hereinafter in effect) any person made, or threatened to be made, a defendant or witness to any action, suit or 2. Exceptions. proceeding (whether civil or criminal or otherwise) by reason of the fact that he, The provisions of subsection 1 of this his testator or intestate, is or was a direc- Article VII shall not be applicable to any tor or officer of the Corporation or by transaction described therein if (i) such reason of the fact that such director or transaction is approved by resolution of officer, at the request of the Corporation, the Corporation’s Board of Directors, pro- is or was serving any other corporation, vided that a majority of the members of partnership, joint venture, trust, employee the Board of Directors voting for the benefit plan or other enterprise, in any approval of such transaction were duly capacity. Nothing contained herein shall

A-3 The Walt Disney Company Notice of 2010 Annual Meeting and Proxy Statement affect any rights to indemnification to indemnify him against such liability which employees other than directors and under the provisions of law; and officers may be entitled by law. No 3.2 the Corporation may create a trust amendment or repeal of this subsection 1 fund, grant a security interest and/or of this Article VIII shall apply to or have use other means (including, without any effect on any right to indemnification limitation, letters of credit, surety provided hereunder with respect to any bonds and/or other similar acts or omissions occurring prior to such arrangements), as well as enter into amendment or repeal. contracts providing indemnification to the full extent authorized or permitted 2. Limitation of Liability. by law and including as part thereof provisions with respect to any or all of A director of this Corporation shall not be the foregoing to ensure the payment of liable to the Corporation or its stock- such amounts as may become neces- holders for monetary damages for breach sary to effect indemnification as pro- of fiduciary duty as a director, except to vided therein, or elsewhere. the extent such exemption from liability or limitation thereof is not permitted under the DGCL. Any repeal or modification of ARTICLE X the foregoing sentence shall not adversely BYLAWS affect any right or protection of a director of the Corporation existing hereunder with In furtherance and not in limitation of the respect to any act or omission occurring powers conferred by statute, the Board of prior to such repeal or modification. Directors is expressly authorized to adopt, repeal, alter, amend or rescind the Bylaws of the Corporation. In addition, the Bylaws 3. Insurance; Trust Funds. of the Corporation may be adopted, repealed, altered, amended or rescinded In furtherance and not in limitation of the by the affirmative vote of a majority of the powers conferred by statute: outstanding stock of the Corporation enti- 3.1 the Corporation may purchase and tled to vote thereon. maintain insurance on behalf of any person who is or was a director, officer, ARTICLE XI employee or agent of the Corporation, or is serving at the request of the AMENDMENT OF CERTIFICATE OF Corporation as a director, officer, INCORPORATION employee or agent of another corpo- The Corporation reserves the right to ration, partnership, joint venture, trust, repeal, alter, amend or rescind any provi- employee benefit plan or other enter- sion contained in this Certificate of prise against any liability asserted Incorporation, in the manner now or here- against him and incurred by him in any after prescribed by statute, and all rights such capacity, or arising out of his conferred on stockholders herein are status as such, whether or not the granted subject to this reservation. Corporation would have the power to

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Cert no. SCS-COC-000648