January 28, 2011

Dear Fellow Shareholder,

I am pleased to invite you to our 2011 Annual Meeting of shareholders, which will be held on Wednesday, March 23, 2011, at 10 a.m. at the Rose Wagner Performing Arts Center in Salt Lake City, Utah.

At the meeting, we will be electing 13 members of our Board of Directors. We will also be consider- ing ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accountants, adoption of a new stock incentive plan, an advisory vote on executive compensation, an advisory vote on the frequency of votes on executive compensation and up to one shareholder proposal.

You may vote your shares using the Internet or the telephone by following the instructions on page 77 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 78 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 Company.

Sincerely,

Robert A. Iger President and

The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement 500 South Street Burbank, California 91521 January 28, 2011

Notice of Meeting The 2011 Annual Meeting of shareholders of will be held at the Rose Wagner Performing Arts Center, 138 West Broadway, Salt Lake City, Utah on Wednesday, March 23, 2011, beginning at 10:00 a.m. The items of business are: 1. Election of the 13 nominees named in the proxy statement as Directors, 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 2011. 3. Adoption of the Company’s 2011 Stock Incentive Plan. 4. Consideration of an advisory vote on executive compensation. 5. Consideration of an advisory vote on the frequency of votes on executive compensation. 6. Consideration of one shareholder proposal, if presented at the meeting. Shareholders of record of Disney common stock (NYSE: DIS) at the close of business on January 24, 2011, 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 , and Secretary Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on March 23, 2011 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 78 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 18, 2011. 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 2011 Annual Meeting and Proxy Statement

Table of Contents

1 Introduction 56 Items to Be Voted On 1 Corporate Governance and Board 56 Election of Directors Matters 63 Ratification of Appointment of 1 Corporate Governance Guidelines and Independent Registered Public Code of Ethics Accountants 1 Chairman of the Board 63 Approval of the 2011 Incentive Plan 2 Committees 73 Advisory Vote on Executive Compensation 4 The Board’s Role in Risk Oversight 74 Advisory Vote on Frequency of Votes on 4 Director Independence Executive Compensation 5 Director Selection Process 74 Shareholder Proposal 8 Board Compensation 77 Other Matters 12 Certain Relationships and Related 77 Information About Voting and the Person Transactions Meeting 13 Shareholder Communications 77 Shares Outstanding 14 Executive Compensation 77 Voting 14 Compensation Committee Report 78 Attendance at the Meeting 14 Compensation Discussion and Analysis 79 Other Information 33 Compensation Tables 79 Stock Ownership 54 Audit-Related Matters 80 Section 16(a) Beneficial Ownership 54 Audit Committee Report Reporting Compliance 55 Policy for Approval of Audit and 80 Electronic Availability of Proxy Permitted Non-audit Services Statement and Annual Report 55 Auditor Fees and Services 80 Reduce Duplicate Mailings 81 Proxy Solicitation Costs Annex A-1 2011 Stock Incentive Plan

The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement 500 South Buena Vista Street Burbank, California 91521 January 28, 2011

Introduction Corporate Governance Guidelines This proxy statement contains information and Code of Ethics relating to the annual meeting of share- The Board of Directors has adopted Corpo- holders of The Walt Disney Company to be rate Governance Guidelines, which set held on Wednesday, March 23, 2011, forth a flexible framework within which the beginning at 10:00 a.m. local time, at the Board, assisted by its Committees, directs Rose Wagner Performing Arts Center, 138 the affairs of the Company. The Guidelines West Broadway, Salt Lake City, Utah. On address, among other things, the or about January 28, 2011, we began mail- composition and functions of the Board of ing a notice containing instructions on Directors, director independence, stock how to access this proxy statement and ownership by and compensation of Direc- our annual report online and we began tors, management succession and review, mailing a full set of the proxy materials to Board Committees and selection of new shareholders who had previously Directors. requested delivery of the materials in paper copy. For information on how to The Company has Standards of Business vote your shares, see the instructions Conduct, which are applicable to all included on the proxy card or instruction employees of the Company, including the form and under “Information About Voting principal executive officer, the principal and the Meeting” on page 77. financial officer and the principal account- Corporate Governance and ing officer. The Board has a separate Code of Business Conduct and Ethics for Direc- Board Matters tors, which contains provisions specifically There are currently 13 members of the applicable to Directors. Board of Directors: The Corporate Governance Guidelines, the Susan E. Arnold Aylwin B. Lewis Standards of Business Conduct and the John E. Bryson Monica C. Lozano Code of Business Conduct and Ethics for John S. Chen Robert W. Matschullat Directors are available on the Company’s Judith L. Estrin John E. Pepper, Jr. Robert A. Iger Sheryl K. Sandberg Investor Relations website under the Steven P. Jobs Orin C. Smith “Corporate Governance” heading at Fred H. Langhammer www.disney.com/investors and in print to any shareholder who requests them from The Board met eight times during fiscal the Company’s Secretary. If the Company 2010. 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. As was the case respect to the chief executive officer, last year, Mr. Jobs’ ability to attend Board principal financial officer or principal meetings was influenced by health accounting officer, it will post the amend- considerations. All but one of our Direc- ment or waiver at the same location on its tors attended the Company’s 2010 annual website. shareholders meeting. Under the Compa- ny’s Corporate Governance Guidelines, Chairman of the Board each Director is expected to dedicate sufficient time, energy and attention to John Pepper became non-executive Chair- ensure the diligent performance of his or man of the Board effective January 1, 2007. her duties, including by attending annual The Chairman of the Board organizes and special meetings of the shareholders Board activities to enable the Board to of the Company, the Board and Commit- effectively provide guidance to and over- tees of which he or she is a member. sight and accountability of management.

1 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

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

2 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

The members of the Audit Committee are: review of Director independence and the Board’s annual self-evaluation, makes Monica C. Lozano recommendations to the Board with Robert W. Matschullat respect to compensation of non-executive John E. Pepper, Jr. members of the Board of Directors Orin C. Smith (Chair) (starting in fiscal 2011), makes recom- mendations to the Board with respect to Committee assignments and oversees the The functions of the Audit Committee are Board’s director education practices. The described below under the heading “Audit Committee met five times during fiscal Committee Report.” The Audit Committee 2010. All of the members of the Gover- met nine times during fiscal 2010. All of nance and Nominating Committee are the members of the Audit Committee are independent within the meaning of the list- independent within the meaning of SEC ing standards of the New York Stock regulations, the listing standards of the Exchange and the Company’s Corporate New York Stock Exchange and the Governance Guidelines. Company’s Corporate Governance Guide- lines. The Board has determined that Mr. Smith, the chair of the Committee, and The members of the Compensation Mr. Matschullat and Mr. Pepper are quali- Committee are: fied as audit committee financial experts within the meaning of SEC regulations, Susan E. Arnold and that they have accounting and related John S. Chen financial management expertise within the Fred H. Langhammer (Chair) meaning of the listing standards of the Aylwin B. Lewis New York Stock Exchange, and that John E. Pepper, Jr. Ms. Lozano is financially literate within the meaning of the listing standards of the The Compensation Committee is respon- New York Stock Exchange. sible for reviewing and approving corporate goals and objectives relevant to the com- The members of the Governance and pensation of the Company’s chief execu- Nominating Committee are: tive officer, evaluating the performance of the chief executive officer and, either as a Judith L. Estrin committee or together with the other independent members of the Board, Aylwin B. Lewis (Chair) determining and approving the compensa- Robert W. Matschullat tion level for the chief executive officer. The John E. Pepper, Jr. Committee is also responsible for making Sheryl K. Sandberg recommendations to the Board regarding the compensation of other executive offi- The Governance and Nominating Commit- cers and certain compensation plans, and tee is responsible for developing and the Board has also delegated to the Com- implementing policies and practices relat- mittee the responsibility for approving ing to corporate governance, including these arrangements. Additional information reviewing and monitoring implementation on the roles and responsibilities of the of the Company’s Corporate Governance Compensation Committee is provided Guidelines. In addition, the Committee under the heading “Compensation Dis- assists the Board in developing criteria for cussion and Analysis,” below. In fiscal 2010, open Board positions, reviews back- the Compensation Committee met ten ground information on potential candi- times and acted once by unanimous writ- dates and makes recommendations to the ten consent. All of the members of the Board regarding such candidates. The Committee are independent within the Committee also reviews and approves meaning of the listing standards of the transactions between the Company and New York Stock Exchange and the Directors, officers, 5% stockholders and Company’s Corporate Governance Guide- their affiliates under the Company’s lines. Related Person Transaction Approval Policy, supervises the Board’s annual

3 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

The members of the Executive Committee subject of regularly scheduled reports to are: either the full Board or one of its Commit- tees. The Board has established a process Robert A. Iger to determine on an annual basis whether John E. Pepper, Jr. (Chair) these reports appropriately cover the sig- nificant risks that the Company may then The Executive Committee serves primarily be facing. as a means for taking action requiring Board approval between regularly sched- Each of the Board’s committee’s uled meetings of the Board. The Executive addresses risks that fall within the Committee is authorized to act for the full committee’s areas of responsibility. For Board on matters other than those example, the Audit Committee reviews specifically reserved by Delaware law to annually the audit plan of management the Board. In practice, the Committee’s audit, the international labor standards actions are generally limited to matters compliance program, the Company’s such as the authorization of transactions information technology risks and miti- including corporate credit facilities and gation strategies, the tax function, treas- borrowings. In fiscal 2010, the Executive ury operations (including insurance) and Committee held no meetings. the ethical standards program. In addition, the Audit Committee receives regular The Board’s Role in Risk Oversight reports from: corporate controllership and the outside auditor on financial reporting matters; management audit about sig- As noted in the Company’s Corporate nificant findings; and the general counsel Governance Guidelines the Board, acting regarding legal and regulatory risks. The directly or through Committees, is Audit Committee reserves time at each responsible for “assessing major risk fac- meeting for private sessions with the chief tors relating to the Company and its per- financial officer, general counsel, head of formance” and “reviewing measures to management audit and outside auditors. address and mitigate such risks.” In dis- The Compensation Committee addresses charging this responsibility, the Board, risks arising out of the Company’s execu- either directly or through its committees, tive compensation programs as described assesses both the risks that inhere in the at page 23, below. key economic and market assumptions that underpin the Company’s business plans and growth strategies and sig- The Chairman of the Board promotes effec- nificant operational risks related to the tive communication and consideration of conduct of the Company’s day-to-day matters presenting significant risks to the operations. Company through his role in setting the Board’s agenda, advising committee chairs and communicating between Risks that relate to the market and eco- independent directors and the chief nomic assumptions that underpin each executive officer, though the Board business unit’s growth plans are specifi- believes that in appropriate circumstances cally addressed in connection with the an independent lead director could also Board’s annual review of the Company’s fulfill this role. five-year plan. The Board also has the opportunity to address such risks at each Board meeting in connection with its regu- Director Independence lar review of significant business and financial developments. The Board The provisions of the Company’s Corpo- reviews risks arising out of specific sig- rate Governance Guidelines regarding nificant transactions when these trans- Director independence meet and in some actions are presented to the Board for areas exceed the listing standards of the review or approval. New York Stock Exchange. These provi- sions are included in the Company’s Significant operational risks that relate to Corporate Governance Guidelines, which on-going business operations are the are available on the Company’s Investor

4 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Relations website under the “Corporate Although the relationship between the Governance” heading at www.disney.com/ Company, Lifetime and Ms. Bryson may investors. not mandate disqualification from independence under the Company’s Pursuant to the Guidelines, the Board Guidelines, the Board determined that the undertook its annual review of Director relationship was sufficient to deem independence in December 2010. During Mr. Bryson non-independent at this time. this review, the Board considered trans- Mr. Jobs is considered a non-independent actions and relationships between each outside director because, during fiscal Director or any member of his or her 2006, the Company acquired , of immediate family and the Company and its which Mr. Jobs was chairman and chief subsidiaries and affiliates. The Board also executive officer and the beneficial owner considered whether there were any trans- of 50.6% of the issued and outstanding actions or relationships between Directors equity. or any member of their immediate family (or any entity of which a Director or an In determining the independence of each immediate family member is an executive Director, the Board considered the follow- officer, general partner or significant ing relationships, which it determined were equity holder) and members of the immaterial to the Directors’ independence. Company’s senior management or their The Board considered that the Company affiliates. As provided in the Guidelines, and its subsidiaries in the ordinary course the purpose of this review was to of business have, during the last three determine whether any such relationships years, sold products and services to and/ or transactions existed that were incon- or purchased products and services from sistent with a determination that the Direc- companies at which some of our Directors tor is independent. or their immediate family members were officers or employees during fiscal 2010. As a result of this review, the Board affir- In each case, the amount paid to or matively determined that all of the Direc- received from these companies in each of tors nominated for election at the annual the last three years did not approach the meeting are independent of the Company 2% of total revenue threshold in the Guide- and its management under the standards lines. The Board also considered employ- set forth in the Corporate Governance ment relationships with immediate family Guidelines, with the exception of Robert members of Directors that involved com- Iger, John Bryson and Steven Jobs. pensation of less than the threshold of Mr. Iger is considered an inside Director $120,000 in the Company’s Guidelines. because of his employment as a senior The Board determined that none of the executive of the Company. The Board relationships it considered impaired the determined that Mr. Bryson is not an independence of the Directors. independent Director as a result of past relationships between the Company, Life- Director Selection Process time Entertainment Television and Mr. Bryson’s wife. Until the end of fiscal Working closely with the full Board, the year 2009, Lifetime was a joint venture that Governance and Nominating Committee was 50% owned by the Company. Late in develops criteria for open Board positions, fiscal year 2009, Lifetime was merged into taking into account such factors as it A&E Television Networks, a joint venture deems appropriate, which may include: that is 42% owned by the Company. the current composition of the Board; the Ms. Bryson was an executive officer of range of talents, experiences and skills Lifetime until 2008 and a consultant to that would best complement those already Lifetime through April 2009. In addition, represented on the Board; the balance of Lifetime acquired programming from and management and independent Directors; sold advertising time to Company sub- and the need for financial or other speci- sidiaries while Ms. Bryson was affiliated alized expertise. Applying these criteria, with Lifetime in an aggregate amount that the Committee considers candidates for exceeded 2% of Lifetime’s total revenues Board membership suggested by its during the applicable fiscal years. members and other Board members, as

5 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

well as management and shareholders. talent, skill and expertise appropriate for The Committee retains a third-party the Board; executive search firm to identify and • the extent to which the prospective review candidates upon request of the nominee helps the Board reflect the Committee from time to time. diversity of the Company’s shareholders, employees, customers and guests and Once the Committee has identified a the communities in which it operates; prospective nominee—including pro- and spective nominees recommended by shareholders—it makes an initial determi- • the willingness of the prospective nomi- nation as to whether to conduct a full nee to meet the minimum equity interest evaluation. In making this determination, holding guideline set out in the Compa- the Committee takes into account the ny’s Corporate Governance Guidelines. information provided to the Committee with the recommendation of the candi- If the Committee decides, on the basis of date, as well as the Committee’s own its preliminary review, to proceed with knowledge and information obtained further consideration, members of the through inquiries to third parties to the Committee, as well as other members of extent the Committee deems appropriate. the Board as appropriate, interview the The preliminary determination is based nominee. After completing this evaluation primarily on the need for additional Board and interview, the Committee makes a members and the likelihood that the pro- recommendation to the full Board, which spective nominee can satisfy the criteria makes the final determination whether to that the Committee has established. If the nominate or appoint the new Director after Committee determines, in consultation considering the Committee’s report. with the Chairman of the Board and other Directors as appropriate, that additional In selecting nominees for Director, the consideration is warranted, it may request Board seeks to achieve a mix of members the third-party search firm to gather addi- who together bring experience and tional information about the prospective personal backgrounds relevant to the nominee’s background and experience Company’s strategic priorities and the and to report its findings to the Commit- scope and complexity of the Company’s tee. The Committee then evaluates the business. In light of the Company’s cur- prospective nominee against the specific rent priorities, the Board seeks experience criteria that it has established for the posi- relevant to managing the creation of high- tion, as well as the standards and qual- quality branded entertainment products ifications set out in the Company’s and services, addressing the impact of Corporate Governance Guidelines, includ- rapidly changing technology and expand- ing: ing business outside of the . • the ability of the prospective nominee to The Board also seeks experience in large, represent the interests of the share- diversified enterprises and demonstrated holders of the Company; ability to manage complex issues that involve a balance of risk and reward and • the prospective nominee’s standards of seeks directors who have expertise in integrity, commitment and independence specific areas such as consumer and cul- of thought and judgment; tural trends, business innovation, growth strategies and financial oversight. The • the prospective nominee’s ability to background information on current nomi- dedicate sufficient time, energy and nees beginning on page 57 sets out how attention to the diligent performance of each of the current nominees contributes his or her duties, including the pro- to the mix of experience and qualifications spective nominee’s service on other the Board seeks. public company boards, as specifically set out in the Company’s Corporate In making its recommendations with Governance Guidelines; respect to the nomination for re-election • the extent to which the prospective of existing Directors at the annual share- nominee contributes to the range of holders meeting, the Committee assesses

6 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement the composition of the Board at the time whatever supporting material the share- and considers the extent to which the holder considers appropriate. The Gover- Board continues to reflect the criteria set nance and Nominating Committee will also forth above. consider whether to nominate any person nominated by a shareholder pursuant to A shareholder who wishes to recommend the provisions of the Company’s Bylaws a prospective nominee for the Board relating to shareholder nominations as should notify the Company’s Secretary or described in “Shareholder Communica- any member of the Governance and tions” below. Nominating Committee in writing with

7 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Board Compensation grant by $56,000 and provided for a $56,000 annual deferred stock grant to the Under the Company’s Corporate Gover- Board Chairman. 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. During Fiscal 2010, annual benefits to any non-employee Directors compensation for non-employee Directors who served during fiscal 2010. was as follows: Unless the Board exempts a Director, Annual Board retainer $ 80,000 each Director is required to retain at all

1 times stock representing no less than 50% Annual committee retainer $ 10,000 of the after-tax value of exercised options Annual committee chair retainer2 $ 15,000 and shares received upon distribution of deferred stock units until he or she leaves Annual deferred stock unit grant $ 84,000 the Board. Effective October 1, 2010, the Annual retainer for Board Chairman3 $500,000 Company’s Corporate Governance Guide- Annual stock option grant4 $ 56,000 lines also encourage Directors to own, or acquire within three years of first becom- 1 Per committee. ing a Director, shares of common stock of 2 This is in addition to the annual committee the Company (including stock units retainer the Director receives for serving on the received as Director compensation) having committee. 3 In lieu of all other Director compensation except a market value of at least three times the the annual stock option grant. Paid in shares of amount of the annual Board retainer for Company common stock. the Director. 4 Grant was made on March 1 for a number of options with a fair value on the date of grant equal to the amount shown. The following table identifies the compen- sation earned during fiscal 2010 by each Effective October 1, 2010, the Board elimi- person who is currently a non-employee nated the annual stock option grant, Director. Information regarding the increased the annual deferred stock unit amounts in each column follows the table.

DIRECTOR COMPENSATION FOR FISCAL 2010 Fees Earned or Paid in Stock Option All Other Cash Awards Awards Compensation Total

Susan E. Arnold $ 90,000 $ 82,949 $56,006 $ 7,476 $236,431 John E. Bryson 80,000 82,949 56,006 311 219,266 John S. Chen 90,000 82,949 56,006 816 229,771 Judith L. Estrin 90,000 82,949 56,006 7,461 236,416 Steven P. Jobs — — — — — Fred H. Langhammer 105,000 82,949 56,006 5,829 249,784 Aylwin B. Lewis 115,000 82,949 56,006 54 254,009 Monica C. Lozano 90,000 82,949 56,006 17,956 246,911 Robert W. Matschullat 100,000 82,949 56,006 11,270 250,225 John E. Pepper, Jr. (Chairman) — 493,747 56,006 11,853 561,606 Sheryl K. Sandberg 50,250 45,449 — — 95,699 Orin C. Smith 105,000 82,949 56,006 74 244,029

8 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Fees Earned or Paid in Cash. The annual quarter and shares of stock are distributed Board retainer and annual committee and with respect to these units after their serv- committee-chair retainers are payable in ice as a Director ends. cash at the end of each quarter. The Company’s Amended and Restated 1997 This column sets forth amounts payable in Non-Employee Directors Stock and cash on a current basis, whether paid Deferred Compensation Plan allows currently or deferred by the Director to be non-employee Directors to elect each year paid in cash or shares after their service to receive all or part of their retainers in ends. None of the Directors elected to Disney stock or to defer all or part of this receive stock on a current basis for fiscal compensation until after their service as a 2010. This column does not include fees Director ends. Directors who elect to paid for service as Chairman of the Board, receive stock instead of cash but who do as those fees are required to be paid in not defer their compensation are credited the form of shares of stock distributed to each quarter with a dollar amount equal to the Chairman after the end of the calendar fees earned that quarter and receive year in which they were earned and are shares after the end of each calendar year therefore included in the “Stock Awards” based on the average of the fair market column. value of shares of the Company’s common stock at the end of each quarter. Directors who elect to defer their compensation may The following table identifies for each also elect to receive cash or stock. Direc- Director the dollar amount included in the tors who elect to receive deferred “Fees Earned or Paid in Cash” column compensation in cash receive a credit received in cash, the dollar amount each quarter, and the balance in their deferred to be paid in cash, and the deferred cash account earns interest at an number and dollar value of stock units annual rate equal to the Moody’s Average received as deferred compensation. The Corporate (Industrial) Bond Yield, adjusted number of units awarded is equal to the quarterly. For fiscal 2010, the average dollar amount of fees accruing each quar- interest rate was 5.62%. Interest earned ter divided by the average over the last ten on deferred amounts is included in the “All trading days of the quarter of the average Other Compensation” column. Directors of the high and low trading price for who elect to receive deferred compensa- shares of Company common stock on tion in stock receive stock units each each day in the ten-day period.

FORM OF RECEIPT OF DIRECTOR FEES FOR FISCAL 2010 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 1,341 $ 45,000 John E. Bryson — — 2,385 80,000 John S. Chen $ 45,000 — 1,341 45,000 Judith L. Estrin 90,000 — — — Steven P. Jobs — — — — Fred H. Langhammer 78,750 — 815 26,250 Aylwin B. Lewis 57,500 — 1,714 57,500 Monica C. Lozano 45,000 — 1,341 45,000 Robert W. Matschullat — — 2,981 100,000 John E. Pepper, Jr. — — — — Sheryl K. Sandberg 25,125 — 742 25,125 Orin C. Smith 105,000 — — —

9 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Stock Awards. This column sets forth the At the end of any quarter in which divi- grant date fair market value of awards for dends are distributed to shareholders, service in fiscal 2010 with respect to: Directors receive additional stock units • the annual deferred stock unit grant; and with a value (based on the average of the high and low trading prices of Disney • for the Chairman of the Board, shares stock averaged over the last ten trading awarded with respect to the annual days of the quarter) equal to the amount of retainer. dividends they would have received on all stock units held by them at the end of the The grant date fair market value is equal to prior quarter. Shares with respect to these the market value of the Company’s additional units are distributed when the common stock on the date of the award underlying units are distributed. Units times the number of shares underlying the awarded in respect of dividends are units. included in the fair value of the stock units when the units are initially awarded and The number of shares awarded to each therefore are not included in the tables Director was calculated by dividing the above, but they are included in the total amount payable with respect to a quarter units held at the end of the fiscal year in by the average over the last ten trading the following table. days of the quarter of the average of the high and low trading price on each day. The following table sets forth all stock The following table identifies the number units held by each Director as of the end of stock units awarded to each Director of fiscal 2010. All stock units are fully during fiscal 2010. vested when granted, but shares are dis-

DIRECTOR STOCK UNIT AWARDS FOR FISCAL 2010 tributed with respect to the units only lat- Stock er, as described above. Stock units in this Units table are included in the share ownership Awarded table on page 79 except to the extent they Susan E. Arnold 2,504 may have been distributed as shares and John E. Bryson 2,504 sold prior to January 24, 2011.

John S. Chen 2,504 DIRECTOR STOCK UNIT HOLDINGS AT THE END OF FISCAL 2010 Judith L. Estrin 2,504 Stock Steven P. Jobs — Units

Fred H. Langhammer 2,504 Susan E. Arnold 12,190 Aylwin B. Lewis 2,504 John E. Bryson 35,242 Monica C. Lozano 2,504 John S. Chen 16,319 Robert W. Matschullat 2,504 Judith L. Estrin 6,305 John E. Pepper, Jr. 14,904 Steven P. Jobs — Sheryl K. Sandberg 1,386 Fred H. Langhammer 19,918 Orin C. Smith 2,504 Aylwin B. Lewis 17,708 Monica C. Lozano 26,903 One fourth of the annual deferred stock unit grant and annual retainer is awarded Robert W. Matschullat 33,370 at the end of each quarter. Shares with John E. Pepper, Jr. 38,922 respect to annual deferred stock unit Sheryl K. Sandberg 2,128 grants are distributed to the Director on the second anniversary of the award date, Orin C. Smith 6,305 whether or not the Director is still a Direc- tor on the date of distribution. Shares with Option Awards. This column sets forth respect to the annual retainer for the the grant date fair value with respect to Chairman of the Board are distributed options awarded to Directors in fiscal after the end of the calendar year in which 2010. The fair value of the options on the they are earned. date of their award is calculated using the

10 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement binomial model. The assumptions used in The following table sets forth the estimating the fair value of options are set aggregate number of stock options out- forth in footnote 13 to the Company’s standing for each Director at the end of Audited Financial Statements for fiscal fiscal 2010. year 2010. DIRECTOR OPTION HOLDINGS AT Each Director identified in the table above THE END OF FISCAL 2010 Number of received an option for 6,143 shares on Shares March 1, 2010, except for Mr. Jobs, who Underlying Options does not receive director compensation, Held and Ms. Sandberg, who was not a Director on March 1, 2010. The exercise price of Susan E. Arnold 22,503 the options granted in fiscal 2010 is $31.47 John E. Bryson 64,503 (the average of the high and low prices John S. Chen 46,503 reported on the New York Stock Exchange on the date of grant; the closing price on Judith L. Estrin 64,503 that date was $31.54). The options vest in Steven P. Jobs — equal installments over four years and have a ten-year term. If a Director ends his Fred H. Langhammer 40,503 or her service by reason of mandatory Aylwin B. Lewis 46,503 retirement pursuant to the Board’s retire- Monica C. Lozano 64,503 ment or tenure policy or permanent dis- ability, the options continue to vest in Robert W. Matschullat 52,503 accordance with their original schedule. If John E. Pepper, Jr. 34,503 service ends by reason of death, the Sheryl K. Sandberg — options vest immediately. In any of the foregoing cases, the options remain Orin C. Smith 34,503 exercisable for five years following termi- nation or until the original expiration date All Other Compensation. To encourage of the option, whichever is sooner. In all Directors to experience the Company’s other cases, options cease to vest upon products, services and entertainment termination and all vested options must be offerings personally, the Board has exercised within three months of termi- adopted a policy, that, subject to avail- nation. ability, entitles each non-employee Direc- tor (and his or her spouse, children and grandchildren) to use Company products, attend Company entertainment offerings and visit Company properties (including staying at resorts, visiting theme parks and participating in cruises) at the Company’s expense, up to a maximum of $15,000 in fair market value per calendar year plus reimbursement of associated tax liabilities. In addition, the Company reimburses Directors for the travel expenses of or provides transportation on Company aircraft for immediate family members of Directors if the family mem- bers are specifically invited to attend events for appropriate business purposes and allows family members (including domestic partners) to accompany Direc- tors traveling on company aircraft for business purposes on a space-available basis. The value of these benefits is not included in the table as permitted by SEC rules because the aggregate incremental

11 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement cost to the Company of providing the • Transactions in which all shareholders benefits did not exceed $10,000 for any receive benefits proportional to their Director. The reimbursement of associated shareholdings; tax liabilities is included in the table above, which was less than $10,000 for • Ordinary banking transactions identified each Director other than Mr. Matschullat in the policy; and Mr. Pepper, for whom the reimburse- ment was $11,270 and $11,853, • Any transaction contemplated by the respectively. The column also includes Company’s Certificate of Incorporation, interest earned on deferred cash compen- Bylaws or Board action where the inter- sation, which was less than $10,000 for est of the Director, executive officer, 5% each Director except for Ms. Lozano, for shareholder or family member is dis- whom interest earned totaled $17,491. closed to the Board prior to such action; • Commercial transactions in the ordinary course of business with entities affiliated Certain Relationships and Related with Directors, executive officers, 5% Person Transactions shareholders or their family members if the aggregate amount involved during a The Board of Directors has adopted a writ- fiscal year is less than the greater of ten policy for review of transactions (a) $1,000,000 and (b) 2% of the Compa- involving more than $120,000 in any fiscal ny’s or other entity’s gross revenues and year in which the Company is a participant the related person’s interest in the and in which any Director, executive offi- transaction is based solely on his or her cer, holder of more than 5% of our out- position with the entity; standing shares or any immediate family member of any of these persons has a • Charitable contributions to entities direct or indirect material interest. Direc- where a Director is an executive officer tors, 5% shareholders and executive offi- of the entity if the amount is less than cers are required to inform the Company the lesser of $200,000 and 2% of the of any such transaction promptly after entity’s annual contributions; and they become aware of it, and the Com- pany collects information from Directors • Transactions with entities where the and executive officers about their affili- Director, executive officer, 5% share- ations and affiliations of their family holder or immediate family member’s members so the Company can search its sole interest is as a non-executive officer records for any such transactions. Trans- employee of, volunteer with, or director actions are presented to the Governance or trustee of the entity. and Nominating Committee of the Board (or to the Chairman of the Committee if the During fiscal year 2010, Fidelity Manage- Committee delegates this responsibility) ment Trust Company (FMTC) served as for approval before they are entered into trustee of the Company’s 401(k) plan and or, if this is not possible, for ratification the Company paid FMTC approximately after the transaction has been entered $294,315 in fees for this and ancillary serv- into. The Committee approves or ratifies a ices. Additionally, entities affiliated with transaction if it determines that the trans- FMTC benefit from fees incurred by plan action is consistent with the best interests participants on balances invested in of the Company, including whether the mutual funds through the plan. FMTC and transaction impairs independence of a its affiliated entities are subsidiaries of Director. The policy does not require FMR LLC, which was the beneficial owner review of the following transactions: of more than 5% of the Company’s out- • Employment of executive officers standing shares during fiscal year 2010. approved by the Compensation Commit- This relationship has been in place since tee; before FMR LLC was the beneficial owner of more than 5% of the Company’s out- • Compensation of Directors approved by standing shares, and the ongoing the Board; relationship was reviewed and approved

12 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement by the Governance and Nominating ing to accounting, internal controls or Committee under the Related Person auditing matters are immediately brought Transaction Approval Policy in December to the attention of the Company’s internal 2010. 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- cate with the Company through its Share- Shareholder Proposals for Inclusion in holder Services Department by writing to 2012 Proxy Statement. To be eligible for 500 South Buena Vista Street, MC 9722, inclusion in the proxy statement for our Burbank, California 91521, by calling 2012 annual meeting, shareholder pro- Shareholder Services at (818) 553-7200, or posals must be received by the Compa- by sending an e-mail to ny’s Secretary no later than the close of [email protected]. business on September 30, 2011. Pro- Additional information about contacting posals should be sent to the Secretary, the Company is available on the Compa- The Walt Disney Company, 500 South ny’s investor relations website Buena Vista Street, Burbank, California (www.disney.com/investors) under “My 91521-1030 and follow the procedures Shareholder Account.” required by SEC Rule 14a-8. Shareholders and other persons interested in communicating directly with the Chair- Shareholder Director Nominations and man of the Board or with the non- Other Shareholder Proposals for Pre- management Directors as a group may do sentation at the 2012 Annual Meet- so by writing to the Chairman of the ing. Under our bylaws, written notice of Board, The Walt Disney Company, 500 shareholder nominations to the Board of South Buena Vista Street, Burbank, Cal- Directors and any other business pro- ifornia 91521-1030. Under a process posed by a shareholder that is not to be approved by the Governance and included in the proxy statement must be Nominating Committee of the Board for delivered to the Company’s Secretary not handling letters received by the Company less than 90 nor more than 120 days prior and addressed to non-management to the first anniversary of the preceding members of the Board, the office of the year’s annual meeting. Accordingly, any Secretary of the Company reviews all such shareholder who wishes to have a nomi- correspondence and forwards to Board nation or other business considered at the members a summary and/or copies of any 2012 annual meeting must deliver a written such correspondence that, in the opinion notice (containing the information speci- of the Secretary, deals with the functions fied in our bylaws regarding the share- of the Board or Committees thereof or that holder and the proposed action) to the he otherwise determines requires their Company’s Secretary between attention. Directors may at any time review November 23, 2011 and December 23, a log of all correspondence received by 2011. SEC rules permit management to the Company that is addressed to mem- vote proxies in its discretion with respect bers of the Board and request copies of to such matters if we advise shareholders any such correspondence. Concerns relat- how management intends to vote.

13 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Executive Compensation fiscal year represents only a fraction of the total potential compensation. In the case of Mr. Iger, only about 10% of the value of Compensation Committee Report his target annual compensation this fiscal year (excluding benefits and perquisites) The Compensation Committee has: was assured at the beginning of the year (1) reviewed and discussed the in the form of his base salary. The value of Compensation Discussion and the remaining 90% of Mr. Iger’s target annual compensation, including Analysis included in this proxy performance-based bonus, stock awards statement with management; and and options, is linked directly to the (2) based on the review and Company’s performance. Although the discussion referred to in percentages differ modestly for the other paragraph (1) above, named executive officers and benefits and perquisites received during the year can recommended to the Board of increase the percentage of fixed compen- Directors that the Compensation sation somewhat, more than 80% of all Discussion and Analysis be annual compensation awarded to the included in the Company’s proxy other two named executive officers who statement relating to the 2011 have held their same position throughout annual meeting of shareholders. recent years was tied to the Company’s performance. Members of the Compensation Committee In making decisions on performance- Susan E. Arnold based compensation in fiscal 2010, the John S. Chen Compensation Committee considered the Fred H. Langhammer (Chair) Company’s financial performance in the Aylwin B. Lewis face of ongoing challenges of a recovering John E. Pepper, Jr. US and global economy and the importance of the Company continuing to Compensation Discussion and invest in opportunities for future growth. In the face of these conditions, the Commit- Analysis tee viewed the Company’s 14% growth in earnings per share, excluding the impact Overview of items that affected comparability between the years,1 and a 5% growth in Disney’s executive compensation program revenues as exceptional performance for is designed to align the interests of senior the year. This performance for the year management with shareholders by tying a was reflected in the Company’s total significant portion of their compensation shareholder return, which increased to the Company’s performance as meas- 23.9%, compared to the total shareholder ured by a variety of factors during the return for the S&P 500, which increased fiscal year in question, including financial 14.1%. returns, stock price performance and efforts to position the Company for long- Taking into account these circumstances, term success. and driven primarily by the application of the financial performance measures Under the program, the portion of compen- described on page 29 in determining sation guaranteed to the Company’s performance-based bonuses, total annual named executives at the beginning of any cash compensation increased for the

1 Earnings per share for the current year included restructuring and impairment charges, gains on the sales of investments in two television services in Europe, a gain on the sale of the Power Rangers property, and an accounting gain related to the acquisition of The Japan, which collectively had a net adverse impact of $0.04. Earnings per share for the prior year included restructuring and impairment charges, a non-cash gain in connection with the merger of Lifetime Entertainment Services (Lifetime) and A&E Television Networks (A&E) and a gain on the sale of investments in two pay television services in Latin Amer- ica, which collectively had a net adverse impact of $0.06.

14 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement named executive officers this year com- of 18%, driven primarily by the Commit- pared to last year. We provide information tee’s determination to reward Mr. Iger for on all six named executive officers in the excellent management of the Company in Summary Compensation Table on page 33, a difficult economic environment and to but for comparability purposes, in discus- reward Mr. Mayer for the critical role he sing aggregate compensation for the played in completion of the acquisition of previous three years, we only consider the Marvel. In addition, Mr. Braverman information provided below for the three received a special equity award pursuant officers who held their current positions to his employment agreement as a result for all three years. For these three officers, of his assuming responsibility over gov- total annual cash compensation (as set ernmental affairs at the beginning of the forth in the table below) was in the calendar year. aggregate, 35.2% higher than in fiscal 2009, primarily due to an increase in Overall, total annual compensation for performance-based bonuses. The grant these three named executive officers, date fair value of equity awards to these including the grant date fair value of equity three officers increased by an aggregate awards, increased by 27.7% in fiscal 2010.

The following table sets forth the compensation received for the last three fiscal years by the three named executive officers who held their current positions in each of fiscal 2008, 2009 and 2010. It provides, for each of these years: (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 33 in that this table does not include named executive officers who did not hold the same position throughout fiscal 2010 that they held in prior years and in that it does not include the change in pension value included in the Summary Compensation Table. 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 with respect to the three fiscal years covered.

Annual Compensation and Other Equity Awards

Annual Compensation Cash Compensation Performance- Annual Total Special Fixed Based Percent Equity Annual Equity Year Compensation Bonus Total Change Awards Compensation Awards

Robert A. Iger 2010 $2,798,433 $13,460,000 $16,258,433 35.0% $11,759,051 $28,017,484 — 2009 2,780,063 9,260,000 12,040,063> 9,538,408 21,578,471 — -28.0% 2008 2,773,090 13,945,493 16,718,583> 9,335,949 26,054,532 $25,018,048 Alan N. Braverman 2010 $1,190,049 $ 3,030,000 $ 4,220,049 32.3% $ 2,351,856 $ 6,571,905 $ 1,556,000 2009 1,154,919 2,035,000 3,189,919> 2,331,653 5,521,572 3,035,500 -22.2% 2008 1,100,534 3,000,000 4,100,534> 1,867,193 5,967,727 — Kevin A. Mayer 2010 $ 736,987 $ 1,590,000 $ 2,326,987 42.5% $ 1,817,356 $ 4,144,343 — 2009 733,158 900,000 1,633,158> 1,600,370 3,233,528 — -3.4% 2008 665,398 1,025,000 1,690,398> 980,278 2,670,676 — Total for three officers 2010 $4,725,469 $18,080,000 $22,805,469 35.2% $15,928,263 $38,733,732 $ 1,556,000 2009 4,668,140 12,195,000 16,863,140> 13,470,431 30,333,571 3,035,500 -25.1% 2008 4,539,022 17,970,493 22,509,515> 12,183,420 34,692,935 25,018,048

15 The Walt Disney Company Notice of 2011 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 use long-term shareholder value by: of employment agreements and tax • tying a substantial portion of executives’ deductibility of executive compensation. total compensation to financial perform- ance measures that align with long-term Specific compensation decisions relating shareholder value and leadership actions to fiscal 2010 are discussed in the section that are expected to position the Com- titled “Fiscal 2010 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 of employment agreements for those who We use five different types of compensa- have them, for each of the named execu- tion in pursuing these objectives: tive officers. • a base salary; The Committee also conducts reviews of • a variable, annual, performance-based the Company’s general executive bonus; 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; • reviewing and approving corporate goals • retirement plans and agreements and and objectives relevant to compensation arrangements regarding compensation of 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 (through fiscal 2010; this responsibility compensation to achieve our objectives. was transferred to the Governance and Nominating Committee starting fiscal • “Performance-Based Compensation” 2011); and addresses the specific design elements of the Company’s performance-based • reviewing performance-based and bonus and equity compensation pro- equity-based incentive plans for the grams that are designed to align chief executive officer and other execu- compensation with the creation of long- tive officers and reviewing any other term shareholder value. benefit programs presented to the Committee by the chief executive officer. • “Fixed Compensation” addresses base salary, benefits and perquisites and retirement plans.

16 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

In carrying out these responsibilities, the bonus and equity incentive awards for Committee: reviews the Company’s gen- named executive officers and considers eral executive compensation policies; whatever input is provided by the full determines salaries and bonuses for and Board in making its final determination. equity awards to the named executive officers and such other officers as it Management also provides data, analysis determines appropriate; reviews benefit and recommendations for the Commit- programs for the named executive offi- tee’s consideration regarding the Compa- cers; reviews and approves (or recom- ny’s executive compensation programs mends approval to the Board where it and policies, preparing materials for the deems appropriate) all incentive, information of and review by the Compen- performance-based and equity-based sation Committee. Management also plans and any other benefit plans sub- administers those programs and policies mitted to it by the chief executive officer; consistent with the direction of the Com- and reviews and approves all employment mittee. Management provides an ongoing contracts with named executive officers review of the effectiveness of the and such other officers as it deems compensation programs, including com- appropriate. petitiveness and alignment with the Company’s objectives, and recommends The Compensation Committee determines changes, if necessary to promote the compensation of the chief executive achievement of all program objectives. officer without management input, but is assisted in this determination by its The Committee meets regularly outside of independent compensation consultant the presence of management to discuss (described below) and reviews its compensation decisions and matters relat- determination with the Board of Directors ing to the design of compensation pro- (without members of management pres- grams. ent) prior to its final determination. The Committee has retained the firm of In making determinations regarding Pay Governance LLC as its compensation compensation for other named executive consultant to assist in the continual officers, the Committee considers the development and evaluation of recommendations of the chief executive compensation policies and the Commit- officer and the input received from its tee’s determinations of compensation independent compensation consultant. awards. The Committee’s consultant The chief executive officer recommends attends Compensation Committee meet- compensation, including the compensa- ings, meets with the Committee without tion provisions of employment agreements management present and provides third- for those who have them, for named party data, advice and expertise on pro- executive officers other than himself and posed executive compensation and all other officers whose compensation is executive compensation plan designs. At determined by the Compensation Commit- the direction of the Committee, the con- tee. In making this recommendation, the sultant reviews briefing materials prepared chief executive officer evaluates the per- by management and outside advisers to formance of the executives, considers the management and advises the Committee executive’s responsibilities and on the matters included in the materials, compensation in relation to other officers 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. The Committee making a final determination of annual considers these analyses as one factor in

17 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement making decisions with respect to compen- predecessor firms received fees of sation matters along with information and $164,227 to provide advice or recom- analyses it receives from management and mendations on the amount or form of its own judgment and experience. In executive and director compensation and particular, with respect to positioning of fees of $185,230 for additional services to programs in the competitive market, the the Company. Towers Watson also pro- Committee considers the analyses in the vided services to the Company after context of the factors discussed under February 1, 2010, and received fees for “Competitive Considerations,” below. such services of $1,183,516 for services provided from February 1, 2010 through In October 2008, the Compensation the end of the Company’s fiscal year. Committee adopted a policy requiring its Management of the Company made the consultant to be independent of Company decision to engage Towers Watson and its management. The policy provides that a predecessors for the additional services, consultant will be considered independent and the Compensation Committee was if: the firm does not receive from the aware of the relationship with Towers Per- Company fees for services or products rin as a result of its review of the provided to the Company in any fiscal year independence of Towers Perrin prior to its that exceed 1% of the firm’s annual gross merger with Watson Wyatt, though the revenues; the individual that advises the Committee was not asked to specifically Committee does not participate directly or approve the engagement. by collaboration with others in the firm in the provision of any services or products Compensation Mix to the Company without the approval of the chair of the Compensation Committee The Committee believes that a substantial unless the related fees are, in the portion of the total compensation of senior aggregate, less than $100,000; the con- executives should be variable and tied to sultant does not provide any products or performance in order to align compensa- services to any executive officer of the tion with measures that correlate with Company; and the Committee creation of long-term shareholder value. pre-approves any specific engagement of This should offer an opportunity for gain in the firm if the estimated cost of the the event of successful performance, engagement exceeds $500,000. The matched with the prospect of reduced Committee performs an annual assess- compensation in the absence of success. ment of the consultant’s independence to The Committee also believes that determine whether the consultant is compensation for more senior executive independent. The Committee completed officers, including the named executive this assessment in December 2010 and officers, should be more heavily weighted confirmed that its consultant is toward variable elements of compensation independent under the policy. than is the case for less senior officers because the performance of these officers All of the Services provided by Pay Gover- is more likely to have a strong and direct nance LLC during fiscal 2010 were to the impact in achieving strategic and financial Committee to provide advice or recom- goals that are most likely to affect share- mendations on the amount or form of holder value. executive and director compensation, and Pay Governance LLC did not provide any At the same time, the Committee believes additional services to the Company during that the Company must attract and retain fiscal year 2010. Prior to February 1, 2010, high-caliber executives, and therefore the Committee’s independent consultant must offer a mixture of fixed and at-risk was Towers Watson, and Towers Watson compensation, and that the levels and mix (and its predecessor firms, Towers Perrin of these types of compensation must be and Watson Wyatt) provided additional attractive in light of the competitive market services to the Company. Prior to Febru- for senior executive talent. ary 1, 2010, Towers Watson and its

18 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

The following charts show the percentage of total annual compensation (constituting cash compensation and benefits plus the grant-date fair value of regular annual equity awards) awarded to Mr. Iger and to the other two named executive officers who have served in their current positions during the last three years that is performance-based (performance-based bonus and equity awards) versus fixed (salary and all other compensation) based on amounts shown in the Annual Compensation and Other Equity Awards table, above:

Mr. Iger Other Named Executive Officers 100% 100%

90% 90%

Variable (Equity) Variable (Equity) Variable (Equity) 80% Variable (Equity) Variable (Equity) 35.8% 80% 38.9% Variable (Equity) 33.0% 42.0% 44.2% 44.9%

70% 70%

60% 60%

50% 50% Variable (Bonus) Variable (Bonus) 33.5% 40% Variable (Bonus) 40% 43.1% Variable (Bonus) Variable (Bonus) 53.5% Variable (Bonus) 48.0% 42.9% 46.6% 30% 30% Percent of Total Compensation for Year Percent of Total Compensation for Year

20% 20%

Fixed (Salary) Fixed (Salary) 10% 10% Fixed (Salary) Fixed (Salary) 21.6% 20.4% Fixed (Salary) 16.5% 19.0% Fixed (Salary) 18.0% 16.5% 19.0% 10.0% 12.9% 10.6% 0% 0% 2010 2009 2008 2010 2009 2008 Fiscal Year Fiscal Year

The amounts shown for equity compensa- market price of the Company’s common tion above reflect the grant-date fair value stock and a portion of which (for senior of equity awards, but the actual value of executives) is subject to performance these awards will depend directly on the tests based on the Company’s stock performance of the Company’s stock price price and earnings per share in addition over the period during which restricted to a test to assure deductibility under units vest and options can be exercised Section 162(m). and, with respect to performance-based stock units, whether the performance tests Annual Performance-based Bonus. The for vesting of these units are met. The Company’s annual performance-based value realized by an executive for options bonus compensates individuals based on and performance-based restricted stock the achievement of specific annual finan- unit awards could be as little as zero, cial and other objectives that the Commit- which would occur with respect to options tee believes correlate closely with growth if the Company’s stock price were less of long-term shareholder value. The proc- than the exercise price of options and ess for determining the amount of this would occur with respect to performance- bonus for named executive officers based restricted stock units if none of the involves four basic steps: performance tests were met (including tests to assure deductibility under Sec- (1) Setting a target bonus. Early in the tion 162(m) of the Internal Revenue Code). fiscal year, the Committee approves a target bonus amount for each named Performance-based Compensation executive officer based on a percent- The Company ties compensation to the age of the named executive officer’s achievement of performance that aligns fiscal year end salary. The target bonus with long-term shareholder value through: takes into account all factors that the Committee deems relevant, including • an annual performance-based bonus minimums set in the employment determined using performance measures agreement where applicable, the designed to correlate closely with the recommendation of the chief executive creation of long-term shareholder value; officer (except with respect to his own and bonus), the nature and responsibility of • equity-based compensation whose the position and competitive market realizable value varies directly with the conditions.

19 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

(2) Setting Company financial performance The Committee then multiplies the ranges. Early each fiscal year, the remaining 30% of the target bonus Compensation Committee receives amount by a factor to reflect the recommended financial performance Committee’s assessment of perform- measures and ranges from senior ance against the other performance management, reviews them with senior objectives set at the outset of the year management and the Committee’s as well as the named executive offic- compensation consultant, and then er’s overall contribution to the Compa- sets performance measures and ny’s success. This factor may range ranges and reports their determination from 0% to a maximum that, when to the full Board. combined with the award based on (3) Setting other performance financial performance factors, will, objectives. The Committee believes except in special circumstances such that the bulk of the bonus should be as unusual challenges or extraordinary based on objective measures of finan- successes, result in a bonus that does cial performance, but believes that not exceed 200% of the target bonus. more subjective elements are also In arriving at this factor, the Committee important in recognizing achievement considers the recommendation of the and motivating officers. Therefore, at chief executive officer in cases other the same time it sets Company-wide than his own bonus, and the Commit- financial performance ranges, the tee may consider the nature and Committee also approves other per- impact of events that resulted in formance objectives for the Company. adjustments to the financial perform- These objectives are based on the ance targets as described above. recommendations of the chief execu- All bonus awards for named executive tive officer and the Committee’s dis- officers are also subject to a test specifi- cussion with him regarding corporate cally designed to assure that the awards objectives. These objectives allow the are eligible for deductibility under Sec- Committee to play a more proactive tion 162(m), which is in addition to the role in identifying performance performance measures described above. objectives beyond purely financial measures. The Committee has the discretion, in (4) Measuring performance and preliminary appropriate circumstances, to award a bonus determination. After the end of bonus less than the amount determined by the fiscal year, the Committee reviews the steps set out above, including dis- the Company’s actual performance cretion to award no bonus at all. against each of the financial perform- ance ranges established at the outset Equity-based Compensation. The of the year. In determining the extent to Company’s long-term incentive program which the financial performance ranges provides for the award of restricted stock are met for a given period, the Commit- units and stock options to participating tee exercises its judgment whether to employees including the named executive reflect or exclude the impact of officers. The program is designed to pro- changes in accounting principles and vide incentives to create and maintain extraordinary, unusual or infrequently shareholder value over a multi-year period occurring events. by making annual awards whose value depends on and is directly related to sus- To make its preliminary bonus tained changes in the market price of the determination, the Committee multi- Company’s shares. For the named execu- plies an amount equal to 70% of the tive officers, each annual award is typically target bonus by a factor reflecting in the form of a mix of stock options and actual performance compared to the restricted stock units as follows: financial performance ranges set at the beginning of the year. The factor • stock options with an exercise price not ranges from a minimum of zero to a less than the market price on the date of maximum of 200% for each executive grant (40% of the grant-date fair value of officer. the award);

20 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

• restricted stock units whose vesting is Stock options are generally scheduled to conditioned on the satisfaction of per- vest over four years after the awards are formance conditions in addition to a test made and generally remain exercisable for to ensure that the compensation is seven years (for awards made in 2005 deductible pursuant to Internal Revenue through 2009) or ten years (for all other Code Section 162(m) (30% of the grant- awards) after the date of the award. date fair value of the award); and Restricted stock units without perform- ance tests (other than the test to ensure • restricted stock units whose vesting is that the compensation is deductible pur- not subject to performance conditions suant to Internal Revenue Code Sec- other than the test to ensure that the tion 162(m)) awarded in fiscal 2010 vest compensation is deductible pursuant to 25% per year beginning on the first anni- Internal Revenue Code Section 162(m) versary of the award date. Restricted (30% of the grant-date fair value of the stock units with performance tests award). awarded after 2009 vest three years after award. Restricted stock units with Participants receive value from stock performance tests awarded before 2010 options only if and to the extent the mar- vested 50% in two years and 50% in four ket price of the Company’s common stock years; units that did not vest after two when a participant exercises an award years because performance tests were not exceeds the market price on the date of then met could vest after four years if the grant. Participants realize value on performance tests were met at that time. restricted stock units subject to perform- Options and restricted stock units ance tests only if and to the extent that the awarded after December 2009 (and tests described below are met. The value awarded at least one year before participants receive on restricted stock retirement), subject to the attainment of units (whether or not subject to perform- any applicable performance conditions, ance tests) varies directly with the market continue to vest for three years after price of the Company’s common stock at retirement (and options remain exercisable the time the units vest. until the earlier of three years after retire- ment and the original expiration date) if The Committee has weighted the awards the participant was age 60 or greater and slightly more toward restricted stock units had at least ten years of service at the because these awards reflect both date of retirement, except that this does increases and decreases in stock price not apply for certain employees outside from the grant-date market price and thus the United States. tie compensation more closely to changes in shareholder value at all levels compared The Committee adjusts performance tests to options, whose intrinsic value changes for restricted stock units from time to time with shareholder value only when the in response to changes in the competitive market price of shares is above the environment and to ensure that the pro- exercise price. In addition, the weighting gram meets the objective of providing toward restricted stock units allows the clear incentives tied to the creation of Committee to deliver equivalent value with long-term shareholder value. Units subject use of fewer authorized shares. The to a performance test awarded in 2010 will Committee may in the future adjust this be eligible for vesting three years after the mix of award types or approve different award date. The number of units that vest award types, such as restricted stock, as is based on a target number of units and part of the overall long-term incentive depends on the level of performance, with award. Awards made in connection with a the number of units vesting ranging from new, extended or expanded employment 0% of the target to 150% of the target. relationship may involve a different mix of Units will vest on the vesting date restricted stock units and options depend- (assuming continued employment or ing on the Compensation Committee’s extension of vesting as described in the assessment of the total compensation preceding paragraph and satisfaction of package being offered. the Section 162(m) test applicable to awards to executive officers) if (a) the

21 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Company’s three-year total shareholder ations (EPS in the table below) for the return (TSR in the table below) equals or 12 quarters reported on or before one exceeds the total three-year shareholder month prior to the third anniversary equals return of 25% of the companies in the or exceeds the growth in earnings per S&P500 (based on market prices for the share from continuing operations of 50% last 20 trading days of the period ending of the companies in the S&P500 over the one month prior to the third anniversary of same period. The number of units that the award) or (b) the Company’s growth in vest will be determined according to the earnings per share from continuing oper- 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 Equity awards are made by the Compensa- the Committee deems appropriate in its tion Committee only on dates the sole discretion (i) to exclude the effect of Compensation Committee meets. extraordinary, unusual and/or nonrecurring Compensation Committee meetings are items and (ii) to reflect such other factors normally scheduled well in advance and as the Committee deems appropriate to are not scheduled with an eye to fairly reflect earnings per share growth. announcements of material information Adjustments to the diluted EPS from con- regarding the Company. The Committee tinuing operations of S&P 500 companies may make an award with an effective date will not normally be made. in the future contingent on commence- ment of employment, execution of a new Units that were awarded prior to 2010 had employment agreement or some other performance tests and other vesting subsequent event. provisions as described in our proxy statements for the years in which the The Committee will not grant stock awards were issued. options with exercise prices below the fair market value of the Company’s stock on The Committee may impose different vest- the date of grant. The Company defines ing conditions on awards of restricted fair market value as the average of the stock units other than the annual award. high and low stock prices on the date of Restricted stock units awarded upon grant, which may be higher or lower than commencement of employment or the closing price on that day. The Commit- execution of a new employment agree- tee believes that the average of high and ment are generally subject to the Sec- low prices is a better representation of the tion 162(m) test and are generally not fair market value on the date of grant and subject to any additional performance tends to be less volatile than the closing test, although restricted stock units price. The Committee will not reduce the awarded to Mr. Iger in connection with the exercise price of stock options (except in execution of his employment agreement in connection with adjustments to reflect 2005, all of which have now vested, were recapitalizations, stock or extraordinary subject to a total shareholder return test dividends, stock splits, mergers, spin-offs based on total shareholder return from the and similar events permitted by the rele- date the agreement was originally entered vant plan) without shareholder approval. into through the applicable vesting dates.

22 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Risk Management Considerations. The executive officer) realized on exercise of Committee believes that the Company’s options for a minimum 12 months. performance-based bonus and equity • If the Company is required to restate its programs create incentives to create long- financial results due to material non- term shareholder value. Several elements compliance with financial reporting of the program are designed to promote requirements under the securities laws the creation of long-term value and as a result of misconduct by an execu- thereby discourage behavior that leads to tive officer, applicable law permits the excessive risk: Company to recover incentive • The financial metrics used to determine compensation from that executive officer the amount of an executive’s bonus are (including profits realized from the sale measures the Committee believes drive of Company securities). In such a sit- long-term shareholder value. These uation, the Board of Directors would measures are operating income, return exercise its business judgment to on invested capital, after-tax free cash determine what action it believes is flow and earnings per share. The Com- appropriate. Action may include recov- mittee attempts to set ranges for these ery or cancellation of any bonus or measures that encourage success with- incentive payments made to an execu- out encouraging excessive risk taking to tive on the basis of having met or achieve short-term results. In addition, exceeded performance targets during a the overall bonus is not expected to period of fraudulent activity or a material exceed two times the target amount, no misstatement of financial results if the matter how much financial performance Board determines that such recovery or exceeds the ranges established at the cancellation is appropriate due to inten- beginning of the year. tional misconduct by the executive offi- cer that resulted in performance targets • The measures used to determine being achieved that would not have whether performance-based stock units been achieved absent such misconduct. vest are based on one to four years of performance for awards granted before Each of these elements of the compensa- 2010, with all subsequent awards based tion program other than the share on three years of performance. The retention requirements apply to all of the Committee believes that the longer per- senior executives of the Company, and all formance periods encourage executives but the share retention requirements and to attain sustained performance over performance tests for equity awards apply several periods, rather than performance to all participants in the program. in a single period. With the assistance of its independent • Stock options become exercisable over consultant, the Committee has reviewed a four-year period and remain the Company’s policies and practices for exercisable for up to ten years (seven its employees and determined that the years for options issued from 2005 to risks arising from those policies and 2009) from the date of grant, encourag- practices are not reasonably likely to have ing executives to look to long-term a material adverse effect on the Company. appreciation in equity values. Fixed Compensation • Named executive officers are required to acquire over time and hold as long as Two elements of compensation for execu- they are executive officers of the Com- tive officers are not performance-based: pany shares (including restricted stock base salary and benefits and perquisites, units) having a value of at least three including pension benefits. These ele- times their base salary amounts, or five ments are discussed below. times in the case of the chief executive officer. To the extent these levels have Base Salary. Base salary provides fixed not been reached, these officers are compensation to an individual that reflects required to retain ownership of shares his or her job responsibilities, experience, representing at least 75% of the after-tax value to the Company, and demonstrated gain (100% in the case of the chief performance.

23 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Salaries or minimum salaries for Mr. Iger, offered to other officers of the Company at Mr. Rasulo, Mr. Braverman, Mr. Mayer, or above the level of vice president, Ms. Parker and Mr. Staggs, are including: the option of receiving an determined in their employment agree- automobile supplied by the Company ments. These salaries or minimum salaries (including insurance, maintenance and and the amount of any increase over fuel) or a monthly payment in lieu of the minimums are determined by the automobile benefit; relocation assistance; Compensation Committee based on its eligibility for reimbursement of up to $450 subjective evaluation of a variety of fac- for health club membership or exercise tors, including: equipment and reimbursement of up to $1,500 for an annual physical exam; com- • the nature and responsibility of the posi- plimentary access to the Company’s tion; theme parks and some resort facilities and • the impact, contribution, expertise and discounts on Company merchandise and experience of the individual executive; resort facilities; and personal use of tick- ets acquired by the Company for business • competitive market information regard- entertainment when they become avail- ing salaries to the extent available and able because no business use has been relevant; arranged. In addition to the benefits and • the importance of retaining the individual perquisites provided to other employees along with the competitiveness of the at or above the vice president level, market for the individual executive’s executive officers may be eligible to talent and services; and receive basic financial planning services, enhanced excess liability coverage, • the recommendations of the president increased relocation assistance, and an and chief executive officer (except in the increased automobile benefit. Of the case of his own compensation). named executive officers only Mr. Iger, Mr. Braverman and Mr. Staggs remain Where not specified by contract, salaries entitled to the Family Income Assurance are generally reviewed annually. Plan, as that program is being phased out and is available only to those whose cur- Benefits and Perquisites. Employment rent employment agreements provide the agreements with Mr. Iger, Mr. Rasulo, right to this benefit. The Company pays Mr. Braverman, Mr. Mayer, Ms. Parker and the cost of security services and equip- Mr. Staggs provide that each is entitled to ment for the president and chief executive participate in employee benefits and per- officer in an amount that the Board quisites generally made available to senior believes is reasonable in light of his secu- executives of the Company. Thus named rity needs and, in the interest of security, executive officers receive benefits the requires the chief executive officer to use Company provides to its salaried employ- corporate aircraft for personal travel. ees, including health care coverage, life Other senior executive officers are also and disability insurance protection, permitted at times to use corporate air- reimbursement of certain educational craft for personal travel at the discretion of expenses and access to favorably priced the chief executive officer. group insurance coverage. The Company provides these benefits to help alleviate Retirement Plans. The Company main- the financial costs and loss of income aris- tains defined benefit and defined con- ing from illness, disability or death, to tribution retirement programs for its encourage ongoing education in salaried employees in which the Compa- job-related areas and to allow employees ny’s named executive officers participate. to take advantage of reduced insurance These programs aim to recruit and retain rates available for group policies. talent by helping provide financial security into retirement and rewarding and motivat- In addition to the benefits provided to ing tenure. salaried employees generally, executive officers receive benefits and perquisites In addition to the Company’s tax-qualified that are substantially the same as those defined benefit plans, the Company main-

24 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement tains non-qualified defined benefit plans in the Company believes that strict bench- which the named executive officers partic- marking against selected groups of ipate. All tax-qualified defined benefit companies does not provide a meaningful plans have a maximum compensation limit basis for establishing compensation. and a maximum annual benefit, which limit Therefore, the Committee does not the benefit to participants whose attempt to maintain a specific target per- compensation exceeds these limits. In centile with respect to a specific list of order to provide retirement benefits benchmark companies in determining commensurate with salary levels, the compensation for named executive offi- non-qualified plans provide benefits to key cers. Rather, the Committee reviews salaried employees, including the named information regarding competitive con- executive officers, using the same formula ditions from a variety of sources in making for calculating benefits as is used under compensation decisions. These sources the tax-qualified plans but on compensa- include broad public company indexes tion in excess of the compensation limi- such as Fortune 100 companies, the four tations and maximum benefit accruals for U.S. public companies that are major, tax-qualified plans. Additional information complex, diversified and publicly-held regarding the terms of retirement pro- entertainment companies (CBS Corp., grams for named executive officers is News Corp., Time Warner and Viacom), included in “Compensation Tables — Pen- and a group of companies proposed by sion Benefits” beginning on page 44. management, which the Committee believes are relevant to its determinations Competitive Considerations in a number of respects, including size, complexity, diversity and global presence. In designing the Company’s compensation The Committee periodically revises this program, the Committee seeks to offer group, which, at the beginning of fiscal compensation that responds to the com- 2010, consisted of the following 29 petitive market for executive talent in such companies: a way that the Company can attract executives of the highest caliber. We con- • Accenture • IBM sider the competitive landscape in • Amazon.com • Johnson & Johnson determining the mix of compensation • Apple • Kimberly-Clark • AT&T • elements, the level of compensation and • CBS • News Corp. other specific terms of compensation • • Oracle packages, and we seek to promote attrac- • Colgate Palmolive • Pepsico tion and retention of executives by offering • Comcast • Procter & Gamble the opportunity for compensation that is • Dell • SAP competitively desirable in the event of • DirectTV • Texas Instruments successful performance. • Emerson Electric • Time Warner Cable • EMC • Time Warner • • Verizon Communications The Company is a complex organization • Hewlett-Packard • Viacom that operates and recruits talent across • diverse industries and markets and necessarily must make each compensa- By the end of the fiscal year, this list was tion decision in the context of the partic- revised to add Coca Cola (because it is ular situation, including the characteristics deemed to be a comparably-sized busi- of the business or businesses in which the ness whose consumer-oriented focus was individual operates and the individual’s determined to be similar to that of the specific roles, responsibilities, qual- Company) and to delete Emerson Electric ifications and experience. The Company and SAP (because their revenues are sig- takes into account information about the nificantly below the median revenue of the competitive market for executive talent, group and their consumer focus is but because of the complex mix of busi- indirect). nesses in which the Company is engaged,

25 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Other Considerations shareholders’ long-term interests rather than any loss of prospective compensa- Employment Agreements. The Committee tion the executive may suffer as a result of enters into employment agreements with the change in control. senior officers when it determines that an employment agreement is desirable for the The termination provisions are also Company to obtain a measure of assur- designed to align executives’ interests ance as to the executive’s continued with long-term shareholder growth by employment in light of prevailing market providing that, in those circumstances in competition for the particular position held which bonus payments are made and by the executive officer, or where the equity awards vest after termination, the Committee determines that an employ- payments and awards are (except in the ment agreement is necessary and appro- case of vesting of restricted stock units priate to attract an executive in light of following termination due to death or market conditions, the prior experience of disability) subject to the same perform- the executive or practices at the Company ance measures (other than the test to with respect to other similarly situated assure deductibility under Section 162(m)) employees. With respect to the named as apply if there is no termination. executive officers, the Company has Other material terms of the employment entered into employment agreements with agreements with Mr. Iger, Mr. Rasulo, Mr. Iger (for a term through January 31, Mr. Braverman, Mr. Mayer, Ms. Parker and 2013), Mr. Rasulo (for a term through Mr. Staggs are described under “Fixed January 31, 2015), Mr. Braverman (for a Compensation” above and “Fiscal 2010 term through September 30, 2013), Decisions” below. Mr. Mayer (for a term through Sep- tember 30, 2012), Ms. Parker (for a term Tax deductibility. Section 162(m) of the through August 31, 2012) and Mr. Staggs Internal Revenue Code generally disallows (for a term through March 31, 2013). a tax deduction to public corporations for compensation over $1,000,000 paid for any fiscal year to the corporation’s chief Employment agreements with executive executive officer and up to three other officers provide executive officers with executive officers whose compensation certain benefits upon termination of their must be included in this proxy statement employment in various circumstances, as because they are the most highly described under “Compensation Tables — compensated executive officers. However, Payments and Rights on Termination,” the statute exempts qualifying beginning on page 46. The termination performance-based compensation from provisions define the rights of the execu- the deduction limit if certain requirements tives and the Company in various termi- are met. The Committee has structured nation scenarios and serve a variety of awards to executive officers under the purposes including providing benefits to Company’s annual performance-based the executive and his or her family in the bonus program and equity awards pro- event of the death or disability of the gram to qualify for this exemption. How- executive, defining when an executive can ever, the Committee believes that be terminated with cause and receive no shareholder interests are best served if the further compensation, and clearly defining Committee’s discretion and flexibility in rights in the event of a termination in other awarding compensation is not restricted, circumstances. even though some compensation awards may result in non-deductible compensa- The agreements specifically define bene- tion expenses. Therefore, the Committee fits that are provided in the event of termi- has approved salaries for executive offi- nation following a change in control, which cers that were not fully deductible are intended to motivate executive officers because of Section 162(m) at the time of to remain with the Company despite the approval and retains the right to authorize uncertainty and dislocation that arises in payments or take other actions that can the context of change in control situations result in the payment of compensation and to ensure that opportunities for that is not deductible for income tax pur- change in control are evaluated in light of poses.

26 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Fiscal 2010 Decisions assigned the employment relationship to Walt Disney Parks and Resorts Worldwide; The following is a discussion of specific and provided that Mr. Staggs’ bonus decisions made by the Compensation opportunity for fiscal 2011 and thereafter Committee in fiscal year 2010 or with and equity awards and perquisites after respect to fiscal year 2010 compensation the date of the amendment would be for the named executive officers. comparable to those offered the most senior officers of subsidiaries of The Walt Employment Agreements Disney Company rather than those offered to executive officers of The Walt Disney Company. During the fiscal year, the Compensation Committee approved the terms of a new employment agreement for Mr. Rasulo in Consistent with past practice, the Commit- connection with his becoming Senior tee has reviewed the practice of providing Executive Vice President and Chief Finan- compensation for certain executives who cial Officer, and approved an amendment are subject to excise taxes on compensa- to Mr. Staggs’ employment agreement in tion received on termination following a connection with his becoming Chairman, change in control. During fiscal 2009, the Walt Disney Parks and Resorts Worldwide. Committee determined that it would The material terms for Mr. Rasulo’s and establish a cap on this reimbursement in Mr. Staggs’ employment agreements are connection with any renegotiation of described under “Other Considerations — material terms of, or renewal or replace- Employment Agreements” and “Fixed ment of, employment agreements with any Compensation” above and “Compensation executive officer. In light of additional Tables — Payments and Rights on feedback from the Company’s shareholder Termination,” beginning on page 46. On base and considering evolving market Mr. Iger’s recommendation, the Commit- practices, the Compensation Committee, tee determined that the terms of subsequent to the end of fiscal 2010, Mr. Rasulo’s new employment agreement adopted a policy that it will not, without should be substantially similar to the shareholder approval, include reimburse- terms of Mr. Staggs’ employment agree- ment for excise taxes payable by an ment when he served as Senior Executive executive upon termination following a Vice President and , change in control in any future agreements except that: with executive officers or in any material • the amount of reimbursement for excise amendments or extensions of existing taxes on compensation received on agreements. termination following a change in control in Mr. Rasulo’s agreement is limited to Base Salary $2,000,000, which was the amount in his prior employment agreement, rather than Employment agreements with Mr. Iger, the $4,000,000 in Mr. Staggs’ agreement; Mr. Rasulo, Mr. Braverman, Mr. Mayer, and Ms. Parker and Mr. Staggs provide for a • consistent with the Committee’s determi- base salary as follows: nation in fiscal 2009 to phase out the • Mr. Iger’s employment agreement pro- Family Income Assistance Plan, vides for Mr. Iger to receive an annual Mr. Rasulo’s agreement provides that he salary of at least $2,000,000. is not entitled to this benefit. • Mr. Rasulo’s employment agreement The amendment to Mr. Staggs’ employ- provides for an annual salary of ment agreement retained the substantive $1,400,000 for the first year of the terms of his employment agreement, but agreement, effective January 1, 2010, made the following changes to conform and provides for the Company to set an the agreement to his new position: annual salary for subsequent years in its changed his duties to those of Chairman, sole discretion as long as the amount is Walt Disney Parks and Resorts Worldwide; at least $1,400,000.

27 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

• Mr. Braverman’s employment agreement in his employment agreement for April 1, provides for an annual salary of 2009 until February 2010. As scheduled, $1,100,000 for the first year of the his salary increased to $1,400,000 effec- agreement, effective October 1, 2008, tive April 1, 2010. and provides for the Company to set an annual salary for subsequent years in its Annual Performance Bonuses for sole discretion as long as the amount is Named Executive Officers at least $1,100,000. Based on Mr. Iger’s recommendation, Mr. Braverman’s per- formance during the preceding year and The Committee approved one change in the fact that Mr. Braverman did not the performance bonus program design receive an increase in salary in 2009, the during fiscal 2010. The program had pre- Committee in fiscal 2010 approved an viously provided that the maximum per- increase in Mr. Braverman’s salary to formance factor applied to the 70% $1,150,000 effective February 1, 2010. portion of the annual award based on financial performance would be 200% for • Mr. Mayer’s employment agreement the President and Chief Executive Officer, provides for an annual salary of $700,000 the Senior Executive Vice President and for the first year of the agreement, effec- Chief Financial Officer and the Senior tive October 1, 2008, and provides for Executive Vice President and General the Company to set an annual salary of Counsel and 150% for other executive no less than that amount for subsequent officers. Based on its experience in apply- years in its sole discretion. Based on ing the terms of the program, the Commit- Mr. Iger’s recommendation, Mr. Mayer’s tee determined that the maximum factor performance during the preceding year should be consistent among all executive and the fact that Mr. Mayer did not officers, and therefore standardized the receive an increase in salary in 2009, the maximum financial performance factor at Committee in fiscal 2010 approved an 200% for all named executive officers. increase in Mr. Mayer’s salary to $725,000 effective February 1, 2010. The Committee approved the following • Ms. Parker’s employment agreement target bonuses for the named executive provides for an annual salary of $550,000 officers for fiscal 2010: for the first year of the agreement, effec- tive September 1, 2009 and provides for the Company to set an annual salary for Named Executive Officer Target Bonus Robert A. Iger $10,000,000 subsequent years in its sole discretion James A. Rasulo 200% of fiscal year-end salary as long as the amount is at least Alan N. Braverman 200% of fiscal year-end salary $550,000. Based on Mr. Iger’s recom- Kevin A. Mayer 125% of fiscal year-end salary mendation and Ms. Parker’s perform- M. Jayne Parker 100% of fiscal year-end salary Thomas O. Staggs 200% of fiscal year-end salary ance during the preceding year, the Committee in fiscal 2010 approved an increase in Ms. Parker’s salary to For each named executive officer, the $625,000 effective September 1, 2010. targets were equal to the minimum amount set forth in their respective • Mr. Staggs’s employment agreement employment agreements. provides for an annual salary of $1,250,000 from April 1, 2008 through March 31, 2009, $1,325,000 through In January 2010, the Committee also March 31, 2010, $1,400,000 through selected four financial performance meas- March 31, 2011, $1,450,000 through ures to be used in making the determi- March 31, 2012 and $1,500,000 through nation with respect to the 70% portion of March 31, 2013. In light of the adverse the target bonus based on financial per- economic environment facing the formance measures. The Committee Company’s businesses and efforts to selected operating income, return on reduce costs in response to these con- invested capital, after-tax free cash flow ditions, Mr. Staggs volunteered to defer and earnings per share and established the increase in his base salary scheduled the performance ranges and weightings

28 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

shown in the table on the following page. At the same time, the Committee also The performance measures and relative approved other Company-wide perform- weightings were the same as were used in ance factors to be used in making the fiscal 2009. The Committee selected the determination with respect to the 30% performance ranges based on recom- portion of the target bonus for each of the mendations of the chief executive officer named executive officers. The Committee and after reviewing the Company’s annual approved the following factors based on operating plan for fiscal 2010 and the the recommendation of Mr. Iger and the long-term strategic plan. The Committee strategic objectives of the Company: determined that performance below the threshold level of each range represented • Foster quality, creativity and innovation performance at a level that, in light of to differentiate our content, products planned business operations and and experiences expected conditions for the year, repre- • Prudently invest for growth with a focus sented marginal performance and that the on consumer-facing, brand and share maximum of each range represented building initiatives across global markets exceptional performance in light of these conditions and expectations. In light of • Invest in our people including an continuing economic uncertainty, the emphasis on diversity, leadership and Committee established ranges that were succession planning narrower than those established for fiscal 2009 but broader than in years prior to • Successfully integrate the Marvel busi- 2009. nesses and franchises.

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. The resulting perform- ance 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 2010 Range Performance Resulting (dollars in millions except per Performance Weighted Performance Measure share amounts) Factor Weight Multiple Operating income $4,063-$8,803 $7,556 139% .250 34.7% Return on invested capital* 4.6%-9.6% 8.5% 147% .250 36.8% After-tax free cash flow** $1,191-$5,658 $4,059 140% .214 30.1% Earnings per share $1.07-$2.31 $2.06 153% .286 43.6% Aggregate Financial Performance Goal Multiple*** 145.1%

* “Return on invested capital” is aggregate segment operating income less corporate and unallocated shared expenses and income tax expense, divided by average net assets (including gross goodwill) invested in operations, all on an equity basis (i.e., including Euro Disney and Hong Kong 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 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.

29 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

In comparing actual performance for fiscal instigating efforts to enhance career year 2010 to the performance ranges, the planning at the corporate level with Committee adjusted the ranges to reflect increased emphasis on cross-segment the acquisition of Marvel and excluded the and cross-function review in filling impacts of the following items in determin- open positions. He also led significant ing the adjusted actual performance: aspects of the integration of Marvel. restructuring and impairment charges; gains on the sale of businesses; and a • Mr. Braverman continued to provide gain recorded in connection with the outstanding leadership of the legal acquisition of Disney Store Japan. The function and assumed new amounts included in the table above responsibilities for government rela- reflect these adjustments. tions. His accomplishments included: actions that led to the realization of • The Committee then evaluated each savings in the legal function and officer’s performance against the other reducing costs from budgeted levels; performance objectives established in selecting new leadership for US-based January 2010 as set forth above. With government relations activities and for respect to performance by each execu- China-based government relations; tive officer, the Committee determined and developing a long- term global (in the case of Mr. Iger) and concurred policy strategy and recruiting leader- with Mr. Iger’s conclusions (with respect ship for that function. In addition, to the other executive officers) that: Mr. Braverman played a significant role in the integration of Marvel and suc- • Mr. Iger led the Company’s emergence cessfully implemented the Company’s from the extraordinary difficult diversity initiative in filling openings in economic environment of the prior the legal department. year, delivering robust financial growth during this fiscal year while continuing • Mr. Mayer brought an innovative to positio n the Company for growth approach to the corporate strategy and over the long-term. Results for the year development function, identifying were driven substantially by execution acquisitions such as Playdom that on one of Mr. Iger’s strategic priorities bring important capabilities and quality – the creation of quality creative prod- content to the Company. He success- uct – through creative successes fully pursued cost mitigation efforts including record ratings for Disney and completed significant transactions Channel, ESPN and ABC Family and during the year without use of outside the release of two films – Alice in advisors. Mr. Mayer also contributed Wonderland and 3 – that extraordinary efforts in leading the achieved over $1 billion in worldwide transaction for the successful sale of box office. Mr. Iger continued to stress during the fiscal year. innovation by implementing a new • Ms. Parker rapidly made a substantial approach to managing the Company’s contribution in her new role as Chief presence on social networks. Mr. Iger Human Resources Officer bringing a took substantial steps to continue strategic mind-set and collaborative development of management leader- style that resulted in immediate ship through implementation of new, improvements to the efficiency of the and management of recent changes in, human resources function across the senior executive positions. enterprise. Her accomplishments dur- ing the year included: the first • Mr. Rasulo successfully transitioned enterprise-wide employee survey; into his new role as Chief Financial leadership of an enterprise-wide rede- Officer, quickly assuming the new role, sign of the talent planning and succes- earning respect internally and sion process; streamlining of the externally and bringing a fresh per- recruiting process across the Com- spective to the position. His accom- pany; and establishment of a plishments included leading an overall Company-wide diversity roadmap. efficiency review, implementing changes in corporate structure and

30 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

• Mr. Staggs assumed the managed the business through the responsibilities in his new role as ongoing economic recovery and is lead Chairman, Walt Disney Parks and ing implementation of investments in Resorts Worldwide extremely well, upgrading and expansion of park and gaining the respect of his new team, resort facilities in Florida, California, quickly learning the business and pro- Hawaii and China and in new cruise viding strong leadership. He effectively ships. In light of the factors described above and (except in the case of Mr. Iger), Mr. Iger’s recommendations, the Committee established the individual performance factors set forth below for each of the named executive officers. In particular, the factor established for Mr. Mayer reflected his extraordinary effort in connection with the sale of the Miramax film business, for which the majority of the work was completed during the fiscal year. • The Committee then calculated final fiscal year 2010 bonuses for the named executive offi- cers as follows, rounding to the nearest $10,000:

BONUS CALCULATION FOR FISCAL 2010

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

Robert A. Iger $10,000,000 $7,000,000 145.1% $10,158,279 $3,000,000 110% $3,300,000 $13,460,000 James A. Rasulo 2,800,000 1,960,000 145.1% 2,844,318 840,000 102% 856,800 3,700,000 Alan N. Braverman 2,300,000 1,610,000 145.1% 2,336,404 690,000 100% 690,000 3,030,000 Kevin A. Mayer 906,250 634,375 145.1% 920,594 271,875 245% 666,094 1,590,000 M. Jayne Parker 625,000 437,500 145.1% 634,892 187,500 113% 211,875 850,000 Thomas O. Staggs 2,800,000 1,960,000 145.1% 2,844,318 840,000 102% 856,800 3,700,000

Long-Term Incentive Compensation Mr. Braverman and Mr. Staggs were equal to $4,200,000, $2,200,000 and $4,200,000, The Committee made regular annual respectively, which were equal to the equity awards to the named executive minimum provided in their respective officers in January 2010. Consistent with employment agreements. The values of the equity award policies described under the award to Mr. Mayer and Ms. Parker, “Performance-Based Compensation — neither of whom have contractually agreed Equity-Based Compensation” above, the minimums, were $1,700,000 and Committee awarded restricted stock units $1,200,000, respectively. In addition, and options, with 30% of the grant-date Mr. Braverman assumed responsibility for fair value of the award in the form of governmental affairs at the beginning of restricted stock units subject to perform- the calendar year and he therefore ance vesting conditions in addition to the received an award of 50,000 restricted Section 162(m) test, 30% in the form of stock units in January 2010, as provided restricted stock units subject only to the by the terms of his employment agree- Section 162(m) test and 40% in the form of ment, which required the award of these options. Awards made to Mr. Staggs were units upon his assuming a significant not subject to the Section 162(m) test. The increase in his responsibilities. The num- number of options and units awarded was ber of restricted stock units and options is determined by valuing stock unit awards reflected in the Fiscal 2010 Grants of Plan at an amount equal to the dollar amount of Based Awards table on page 36 below. the award allocated to stock units by the market price on the date of grant without In determining the annual grants of taking into account any valuation adjust- restricted stock units and options for each ments related to achievement of perform- executive officer, the Committee consid- ance tests. On this basis, the value of the ered the minimums required by employ- award to Mr. Iger was $11,000,000. The ment agreements, where applicable, and value of the awards to Mr. Rasulo, the Company’s overall long-term incentive guidelines for all executives, which

31 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement attempt to balance, in the context of the tion 162(m), the criterion established must competitive market for executive talent, not be certain of being achieved at the the benefits of incentive compensation time it is set. The regulations under Sec- tied to performance of the Company’s tion 162(m) specifically indicate that a test stock with the dilutive effect of equity based on profitability is not assured of compensation awards. The Committee being attained. Accordingly, our bonus also considered Mr. Iger’s recom- program and equity award program both mendations, except in the case of use a test based on adjusted net income, Mr. Iger’s own agreement and award. In which means net income adjusted, as determining the size of the equity award appropriate, to exclude the following items for Mr. Iger, the Committee chose a value or variances: change in accounting princi- in excess of the minimum required by his ples; acquisitions; dispositions of a busi- contract to reward Mr. Iger’s excellent ness; asset impairments; restructuring management of the Company in a difficult charges; extraordinary, unusual or economic environment. infrequent items; and extraordinary liti- gation costs and insurance recoveries. For Benefits and Perquisites the one-year period ending at the end of fiscal 2010, the adjusted net income target The Committee did not make any changes was $2.03 billion, and the Company ach- in the Company’s policies with respect to ieved adjusted net income of $4.04 billion. benefits and perquisites during fiscal year Net income was adjusted by reducing it 2010. for the amount of gains on the sale of businesses ($75 million) and the amount of Deductibility of Compensation a gain recorded in connection with the acquisition of The Disney Store Japan ($21 Awards to executive officers under the million) and by increasing it to reflect Management Incentive Bonus Program restructuring and impairment charges and the long-term incentive program ($169 million). Therefore, bonuses earned include a test specifically designed to in fiscal 2010 and restricted stock units ensure that the awards are fully deductible vesting in fiscal 2010 are deductible under under Section 162(m). As required by Sec- Section 162(m).

32 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Compensation Tables

The following table provides information concerning total compensation earned in fiscal 2008, fiscal 2009 and fiscal 2010 by the chief executive officer, the chief financial officer and the three other persons serving as executive officers at the end of fiscal 2010 who were the most highly compensated executive officers of the Company in fiscal 2010. In addition, we have included information for fiscal 2010 with respect to Thomas O. Staggs, who was Senior Executive Vice President and Chief Financial Officer through December 31, 2009, after which he became Chairman, Walt Disney Parks and Resorts, Worldwide. 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 Awards Awards Compensation Earnings Compensation Total Robert A. Iger 2010 $2,000,000 $7,359,0602 $ 4,399,991 $13,460,000 $1,600,4804 $798,433 $29,617,964 President and Chief Executive 2009 2,038,462 5,940,006 3,598,402 9,260,000 2,343,1434 741,601 23,921,614 Officer 2008 2,000,000 5,904,000 28,449,9973 13,945,493 156,761 773,090 51,229,341

James A. Rasulo 2010 1,350,769 2,809,8392 1,680,005 3,700,000 963,9534 30,556 10,535,122 Senior Executive Vice President and Chief Financial Officer

Alan N. Braverman 2010 1,133,654 3,027,8542,5 880,002 3,030,000 640,1054 56,395 8,768,010 Senior Executive Vice 2009 1,120,769 4,487,5395 879,614 2,035,000 815,4394 34,150 9,372,511 President, General Counsel and Secretary 2008 1,032,885 1,180,800 686,393 3,000,000 277,071 67,649 6,244,798

Kevin A. Mayer 2010 716,827 1,137,3572 679,999 1,590,000 249,8214 20,160 4,394,164 Executive Vice President, 2009 713,269 996,633 603,737 900,000 257,1004 19,889 3,490,628 Corporate Strategy and, 2008 646,442 619,920 360,358 1,025,000 52,824 18,956 2,723,500 Business Development

M. Jayne Parker 2010 556,634 802,8612 480,005 850,000 300,7744 27,501 3,017,775 Executive Vice President and Chief Human Resources Officer

Thomas O. Staggs6 2010 1,338,558 2,809,8392 1,680,005 3,700,000 632,5294 48,539 10,209,470 Chairman, Walt Disney Parks 2009 1,274,038 2,623,517 1,589,294 2,450,000 717,7974 43,786 8,698,432 and Resorts, Worldwide 2008 1,187,019 9,151,2007 1,029,586 4,100,000 47,617 78,097 15,593,519

1 The amounts reflect compensation for 53 weeks in fiscal year 2009 compared to 52 weeks in fiscal 2010 and fiscal 2008 due to the timing of fiscal period end. 2 Stock awards for fiscal 2010 include awards subject to performance conditions that were valued based on the probability that performance targets will be achieved. Assuming the highest level of performance conditions are achieved, the grant date stock award values for fiscal 2010 would be $8,250,068, $3,150,044, $3,206,060, $1,275,064, $900,068 and $3,150,044 for Mr. Iger, Mr. Rasulo, Mr. Braverman, Mr. Mayer, Ms. Parker and Mr. Staggs, respectively. 3 The amount recorded for fiscal 2008 includes $25,018,048, 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, which was awarded to Mr. Iger in fiscal 2008 as an inducement to enter into an extended employment agreement. 4 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, and from fiscal 2009 to fiscal 2010, is driven largely by changes in the discount rate applied to calculate the present value of future pension payments. 5 The amount recorded for fiscal 2010 includes $1,556,000 relating to an award of 50,000 restricted stock units scheduled to vest through 2014 awarded to Mr. Braverman in fiscal 2010 as provided in an employment agreement entered into in fiscal 2009 and upon Mr. Braverman’s assumption of new duties in fiscal 2010. The amount recorded for fiscal 2009 includes $3,035,500 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 the employment agreement. 6 Mr. Staggs is included in the table because he was Senior Executive Vice President and Chief Financial Officer during the fiscal year. 7 The amount recorded for fiscal 2008 includes $7,380,000 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.

33 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Salary. This column sets forth salary Discussion and Analysis, beginning on earned during each fiscal year, none of page 14. which was deferred. Change in Pension Value and Nonqualified Stock Awards. This column sets forth the Deferred Compensation Earnings.This grant date fair value of grants during each column reflects the aggregate change in the fiscal year of restricted stock units actuarial present value of each named awarded as part of the Company’s long- executive officer’s accumulated benefit term incentive compensation program. under all defined benefit plans, including The grant date fair value of all restricted supplemental plans, during each fiscal year stock unit awards is equal to the number reported. The amounts recorded in this of units awarded times the average of the column vary with a number of factors, high and low trading price of the Compa- including the discount rate applied to ny’s common stock on the grant date determine the value of future payment subject to valuation adjustments for streams. As a result of a reduction in restricted stock units that have perform- prevailing interest rates in the credit markets ance vesting conditions other than the test during late 2008 and 2009, the discount rate to assure deductibility under Sec- used pursuant to pension accounting rules tion 162(m). The valuation adjustments are to calculate the present value of future determined using a Monte Carlo simu- payments decreased from 7.00% for fiscal lation that determines the probability that 2008 to 5.75% for fiscal 2009, driving the the performance targets will be achieved. substantial increases in the present value of The grant date fair value of restricted future payments reported for fiscal 2009. stock units awarded during fiscal 2010 is The discount rate continued to decrease to also included in the Grants of Plan Based 5.25% for fiscal 2010 contributing to a fur- Awards table on page 36. ther increase in the present value of future payments. The increase in pension value Option Awards. This column sets forth resulting from the change in the discount the grant date fair value of grants during rate does not result in any increase in the each fiscal year of options awarded to the benefits payable to participants under the named executive officers. The grant-date plan. None of the named executive officers fair values of options were calculated had earnings on deferred compensation using the binomial model. The assump- other than Mr. Iger, whose earnings on tions used in estimating the fair value of deferred compensation, which are disclosed options are set forth in footnote 13 to the below under “Deferred Compensation,” were Company’s Audited Financial Statements not above market rates and therefore are for fiscal year 2010. The grant date fair not included in this column. value of options awarded during fiscal 2010 is also included in the Grants of Plan All Other Compensation. This column sets Based Awards table on page 36. forth compensation that is not included in other columns, including: Non-Equity Incentive Plan Compensa- • the incremental cost to the Company of tion. This column sets forth the amount perquisites and other personal benefits; of compensation earned by the named executive officers under the Company’s • the amount of Company contributions to Management Incentive Bonus program employee savings plans; and during each fiscal year. A description of • the dollar value of insurance premiums the Company’s annual performance-based paid by the Company with respect to bonus program is included in the dis- excess liability insurance for the named cussion of “Performance Based Compensa- executive officers. tion” in the “Compensation Objectives and Program Design” section, and the determi- In accordance with SEC interpretations of nation of performance-based bonuses for its rules, the table includes the incremental fiscal 2010 is described in the discussion cost of some items that are provided to of “Annual Performance Bonus for Named executives for business purposes but Executive Officers” in the “Fiscal 2010 which may not be considered integrally Decisions” section, of the Compensation related to the executive’s duties.

34 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

The following table identifies the incremental cost of each perquisite or personal benefit that exceeded the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for a named executive officer in fiscal 2010.

FISCAL 2010 PERQUISITES AND PERSONAL BENEFITS Personal Air Travel Security Other Total Robert A. Iger $192,284 $562,034 $38,390 $792,708 James A. Rasulo — — 24,859 24,859 Alan N. Braverman — — 50,670 50,670 Kevin A. Mayer — — 14,997 14,997 M. Jayne Parker — — 22,212 22,212 Thomas O. Staggs — — 42,727 42,727

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

35 The Walt Disney Company Notice of 2011 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 2010 and information concerning option and restricted stock unit awards made to named executive officers during fiscal 2010. Additional information regarding the amounts in each column fol- lows the table.

FISCAL 2010 GRANTS OF PLAN BASED AWARDS

All Other All Other Grant Estimated Future Estimated Future Payouts Stock Option Date Grant Payouts Under Non-Equity Under Equity Awards: Awards: Exercise Closing Date Fair Incentive Plan Awards Incentive Plan Awards Number of Number of or Base Price of Value of Shares of Securities Price of Shares Stock and Grant Stock or Underlying Option Underlying Option Date Threshold Target Maximum Threshold Target Maximum Units Options Awards Options Awards Robert A. Iger 1/13/10 465,578 $31.12 $31.29 $4,399,991 1/13/10 106,042 212,084 265,105 7,359,0601 $3,500,000 $10,000,000 $20,000,000 James A. Rasulo 1/13/10 177,767 31.12 31.29 1,680,005 1/13/10 40,489 80,978 101,223 2,809,8391 $ 980,000 $ 2,800,000 $ 5,600,000 Alan N. Braverman 1/13/10 50,0002 1,556,000 1/13/10 93,116 31.12 31.29 880,002 1/13/10 21,209 42,418 53,023 1,471,8541 $ 805,000 $ 2,300,000 $ 4,600,000 Kevin A. Mayer 1/13/10 71,953 31.12 31.29 679,999 1/13/10 16,389 32,778 40,973 1,137,3571 $ 317,188 $ 906,250 $ 1,812,500 M. Jayne Parker 1/13/10 50,791 31.12 31.29 480,005 1/13/10 11,569 23,138 28,923 802,8611 $ 218,750 $ 625,000 $ 1,250,000 Thomas O. Staggs 1/13/10 40,489 1,260,018 1/13/10 177,767 31.12 31.29 1,680,005 1/13/10 0 40,489 60,734 1,549,8221 $ 980,000 $ 2,800,000 $ 5,600,000

1 Stock awards for fiscal 2010 include awards subject to performance conditions that were valued based on the probability that performance targets will be achieved. Assuming the highest level of performance conditions are achieved, the grant date stock award values for fiscal 2010 would be $8,250,068, $3,150,044, $1,650,060, $1,275,064, $900,068 and $1,890,027 for Mr. Iger, Mr. Rasulo, Mr. Braverman, Mr. Mayer, Ms. Parker and Mr. Staggs, respectively. 2 Restricted stock units scheduled to vest through 2014 pursuant to the terms of Mr. Braverman’s 2008 employment agreement upon assumption of new duties under the agreement.

Grant date. The Compensation Committee Performance Plan, and bonuses for named awarded the annual grant of stock options executive officers will, except in special and restricted stock units for fiscal 2010 on circumstances such as unusual challenges January 13, 2010. The Compensation or extraordinary successes, range from Committee approved awards under the 35% to 200% of the target amount based Management Incentive Bonus Program on on financial performance factors and other December 16, 2010. performance factors for the fiscal year, but the bonus may be zero if performance Estimated Future Payouts Under Non-equity factors (including the Section 162(m) test) Incentive Plan Awards. As described in the fall below threshold amounts or less than Compensation Discussion and Analysis, the the calculated amounts if the Committee Compensation Committee sets target otherwise decides to reduce the bonus. As bonuses at the beginning of the fiscal year addressed in the discussion of Fiscal 2010 under the Company’s Management Decisions in the Compensation Discussion Incentive Bonus Program and the and Analysis, the employment agreements Amended and Restated 2002 Executive of Mr. Iger, Mr. Rasulo, Mr. Braverman,

36 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Mr. Mayer, Ms. Parker and Mr. Staggs set a number of shares equal to that set a minimum target bonus. This column forth in the “threshold” column, plus any shows the range of bonus amounts for shares received as dividend equivalents each named executive officer from the prior to vesting, comprised of only those threshold to the maximum based on the shares that are subject only to the Sec- target set at the beginning of the fiscal tion 162(m) test. In this circumstance, year. The actual amounts awarded for none of the shares that are subject to fiscal 2010 are set forth in the Summary additional performance tests will vest. Compensation Table in the Non-Equity Incentive Plan Compensation column. • If the total shareholder return equals or exceeds the 25th percentile or earnings per share equals or exceeds the 50th Estimated Future Payouts Under Equity percentile, the named executive officer Incentive Plan Awards. This column sets will receive a number of shares equal to forth the number of restricted stock units (a) those shares that are subject to only awarded to the named executive officers the Section 162(m) test; plus (b) the during fiscal 2010 that are subject to per- percentage of shares that are subject to formance tests as described below and/or additional performance tests as set forth to the test to assure eligibility for in the table set forth on page 22 ( plus, in deduction under Section 162(m). These each case, any shares received as divi- include: dend equivalents prior to vesting). For • units awarded to each of the named example, the total number of shares executive officers as part of the annual vesting would equal the number in the grant in January 2010, 50% of which are “target” column if, on the measurement subject to the performance tests date, the total shareholder return test is th described in the Compensation Dis- met at the 50 percentile, and at the cussion and Analysis under the heading number in the “maximum” column if the “Performance-based Compensation — total shareholder return equals or th Equity-based Compensation” and all of exceeds the 75 percentile. which (other than those awarded to Mr. Staggs) are subject to the test to (When dividends are distributed to stock- assure eligibility under Section 162(m); holders, dividend equivalents are credited and in an amount equal to the dollar amount of dividends on the number of units held on • units awarded to Mr. Braverman in the dividend record date divided by the January 2010 in connection with his fair market value of the Company’s shares assuming additional responsibilities as of common stock on the dividend dis- provided for in his employment agree- tribution date.) If the Section 162(m) test is ment entered into October 1, 2008 not met on any measurement date, the (which are subject to the test to assure executive would receive no shares on the eligibility under Section 162(m)). applicable vesting date.

Vesting dates for all restricted stock units held as of the end of fiscal year 2010 are All Other Stock Awards: Number of Shares described under “Outstanding Equity of Stock or Units. This column sets forth Awards,” below. the number of restricted stock units awarded to the named executive officers during fiscal 2010 that are not subject to In each of the cases described above any performance tests (including the test (assuming the Section 162(m) test is met, to assure eligibility for deduction under where applicable): Section 162(m)). • If the total shareholder return test is below the 25th percentile and the earn- All Other Option Awards: Number of Secu- ings per share test is below the 50th rities Underlying Options. This column percentile, the named executive officer sets forth options awarded to the named will be entitled to receive on the appli- executive officers as part of the annual cable vesting date grant in January 2010. Vesting dates for

37 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement these options are described under date fair value of stock and option awards “Outstanding Equity Awards,” below. The calculated in accordance with applicable options are scheduled to expire ten years accounting requirements. The grant date after the date of grant. fair value of all restricted stock unit awards and options is determined as Exercise or Base Price of Option Awards; described on page 34, above. Grant Date Closing Price of Shares Under- lying Options. These columns set forth Outstanding Equity Awards the exercise price for each option grant and the closing price of the Company’s The following table provides information common stock on the date of grant. The concerning unexercised options and exercise price is equal to the average of unvested restricted stock unit awards held the high and low trading price on the grant by the named executive officers of the date, which may be higher or lower than Company as of October 2, 2010. the closing price on the grant date. Information regarding the amounts in the columns follows the table. Grant Date Fair Value of Stock and Option Awards. This column sets forth the grant

38 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

OUTSTANDING EQUITY AWARDS AT END OF FISCAL 2010 Option Awards Stock Awards

Equity Incentive Plan Awards

Market Number Market Number of Value of of Value of Number of Securities Shares or Shares or Unearned Unearned Underlying Units of Units of Units Units Unexercised Options Option Option Stock That Stock That That That Grant Exercise Expiration Have Have Have Not Have Not Date Exercisable Unexercisable Price Date Not Vested Not Vested Vested Vested Robert A. Iger 06/27/05 274,241 — $25.81 06/27/12 — — — — 10/02/05 — — — — — — 107,479(A) 3,583,346 01/09/06 411,000 — 24.87 01/09/13 — — — — 01/10/07 283,333 94,445(B) 34.27 01/10/14 — — 100,154(C) 3,339,143 01/09/08 210,526 210,527(D) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 102,828(E) 3,428,286 01/31/08 1,000,000 2,000,000(F) 29.51 01/31/15 — — — — 01/14/09 120,000 360,000(G) 20.81 01/14/16 — — 252,999(H) 8,434,983 01/13/10 — 465,578(I) 31.12 01/13/20 — — 265,105(J) 8,838,601 James A. Rasulo 02/05/01 100,000 — $30.23 02/05/11 — — — — 01/22/04 150,000 — 24.64 01/22/14 — — — — 01/03/05 80,000 — 28.04 01/03/12 — — — — 06/27/05 20,000 — 25.81 06/27/12 — — — — 01/09/06 110,000 — 24.87 01/09/13 — — — — 01/10/07 74,250 24,750(B) 34.27 01/10/14 13,124(K) 437,543 13,124(K) 437,543 01/09/08 52,632 52,632(D) 29.90 01/09/15 12,997(L) 433,334 — — 01/30/08 — — — — — — 12,853(M) 428,519 01/14/09 28,000 84,000(G) 20.81 01/14/16 25,355(N) 845,332 33,680(N) 1,122,887 01/13/10 — 177,767(I) 31.12 01/13/20 — — 101,223(J) 3,374,758 Alan N. Braverman 02/05/01 80,000 — $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 87,000 — 24.87 01/09/13 — — — — 01/10/07 69,000 23,000(B) 34.27 01/10/14 6,565(O) 218, 876 24,391(C) 813,197 01/09/08 42,106 42,106(D) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 20,566(E) 685,670 10/02/08 — — — — — — 102,828(P) 3,428,284 01/14/09 29,334 88,001(G) 20.81 01/14/16 — — 61,846(H) 2,061,937 01/13/10 — — — — — — 50,000(Q) 1,667,000 01/13/10 — 93,116(I) 31.12 01/13/20 — — 53,023(J) 1,767,770 Kevin A. Mayer 06/27/05 30,000 — $25.81 06/27/12 — — — — 01/09/06 40,000 — 24.87 01/09/13 — — — — 01/10/07 33,000 11,000(B) 34.27 01/10/14 — — 11,665(C) 388,897 01/09/08 22,105 22,106(D) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 10,796(E) 359,939 01/14/09 20,133 60,401(G) 20.81 01/14/16 — — 42,449(H) 1,415,274 01/13/10 — 71,953(I) 31.12 01/13/20 — — 40,973(J) 1,366,023 M. Jayne Parker 02/05/01 2,882 — $30.23 02/05/11 — — — — 01/28/02 8,000 — 22.20 01/28/12 — — — — 01/22/04 7,200 — 24.64 01/22/14 — — — — 01/03/05 4,800 — 28.04 01/03/12 — — — — 01/09/06 6,400 — 24.87 01/09/13 — — — — 01/10/07 4,500 1,500(B) 34.27 01/10/14 1,447(R) 48,228 — — 01/09/08 3,790 3,790(D) 29.90 01/09/15 894(L) 29,800 — — 01/30/08 — — — — — — 884(M) 29,473 01/14/09 4,286 12,857(G) 20.81 01/14/16 2,673(N) 89,112 3,550(N) 118,351 01/13/10 — 50,791(I) 31.12 01/13/20 — — 28,923(J) 964,276 Thomas O. Staggs 06/27/05 125,367 — $25.81 06/27/12 — — — — 01/09/06 154,000 — 24.87 01/09/13 — — — — 01/10/07 90,000 30,000(B) 34.27 01/10/14 12,348(O) 411,686 31,814(C) 1,060,683 01/09/08 63,158 63,158(D) 29.90 01/09/15 — — — — 01/30/08 — — — — — — 30,848(E) 1,028,472 01/30/08 — — — — — — 257,070(S) 8,570,709 01/14/09 53,000 159,000(G) 20.81 01/14/16 — — 111,743(H) 3,725,496 01/13/10 — 177,767(I) 31.12 01/13/20 40,489(T) 1,349,903 60,734(T) 2,024,855

39 The Walt Disney Company Notice of 2011 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 1, 2010, 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 “Vesting Schedule,” identified by the letter following the num- 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. (A) Restricted stock units granted Number; Market Value of Shares or Units of October 2, 2005 subject to These Stock That Have Not Vested. performance tests: The remaining columns report the number and market units vested on November 30, 2010 value, respectively, of shares underlying upon determination that the test to each grant of restricted stock units to assure eligibility under Sec- each officer that subject to perform- is not tion 162(m) was satisfied. ance vesting conditions nor the test to assure eligibility for deduction pursuant to (B) Options granted January 10, 2007: Section 162(m). The number of shares The remaining unexercisable includes dividend equivalent units that options became exercisable on have accrued for dividends payable January 10, 2011. through October 2, 2010. The market value (C) Restricted stock units granted is equal to the number of shares under- January 10, 2007 subject to lying the units times the closing market performance tests: The remaining price of the Company’s common stock on units vested on January 10, 2011. Friday, October 1, 2010, the last trading day of the Company’s fiscal year. The (D) Options granted January 9, 2008: vesting schedule for each grant is shown One half of the remaining below, with grants identified by the letter unexercisable options became following the number of shares underlying exercisable on January 9, 2011 and the grant. Vesting of restricted stock units the remaining unexercisable options held by named executive officers may be are scheduled to become accelerated in the circumstances exercisable on January 9, 2012. described under “Payments and Rights on Termination,” below. (E) Restricted stock units granted January 30, 2008 subject to performance tests: The remaining Number; Market Value of Unearned Units units are scheduled to vest on These columns That Have Not Vested. January 30, 2012, subject to report the maximum number and market determination that the test to assure value, respectively, of shares underlying eligibility under Section 162(m) was each grant of restricted stock units to satisfied, except that vesting of half each officer that subject to performance is of the units is also subject to sat- vesting conditions and/or the test to isfaction of a total shareholder assure eligibility for deduction pursuant to return or earnings per share test as Section 162(m). The number of shares described in prior proxy statements. includes dividend equivalent units that have accrued for dividends payable (F) Options granted January 31, 2008 in through October 2, 2010 and includes connection with the extension of units awarded to compensate for the dilu- Mr. Iger’s employment agreement:

40 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

500,000 of the options become return and earnings per share test exercisable on each of January 31, described under “Compensation 2011and January 31, 2012 and Discussion and Analysis — Compen- options with respect to 1,000,000 sation Objectives and Program shares become exercisable on Design — Performance-based January 31, 2013. Compensation — Equity-based Compensation,” above, with the (G) Options granted January 14, 2009: number of units vesting depending One third of the remaining options on the level at which the tests were became exercisable on January 14, satisfied. The amount shown is the 2011. One half of the then remaining maximum number of units that unexercisable options are sched- could vest. uled to become exercisable on each of January 14, 2012 and 2013. (K) Restricted stock units granted January 10, 2007, half of which were (H) Restricted stock units granted subject to performance tests: The January 14, 2009 subject to remaining units vested on Jan- performance tests: Approximately uary 10, 2011. 43% of the units vested on Jan- uary 14, 2011. One quarter of the (L) Restricted stock units granted then remaining units are scheduled January 9, 2008: The remaining to vest on each of January 14, 2012 units are scheduled to vest on and 2013, in each case subject to January 30, 2012. determination that the test to assure (M)Restricted stock units granted eligibility under Section 162(m) was January 30, 2008, subject to per- satisfied. One half of the then formance tests: The remaining units remaining units are scheduled to are scheduled to vest on Jan- vest on January 14, 2013, subject to uary 30, 2012, subject to sat- determination that the test to assure isfaction of total shareholder return eligibility under Section 162(m) was or earnings per share test described satisfied and also subject to sat- in prior proxy statements. isfaction of a total shareholder return or earnings per share test (N) Restricted stock units granted described in prior proxy statements. January 14, 2009, half of which were subject to performance tests: (I) Options granted January 13, 2010: Approximately 43% of the units One-fourth of the remaining vested on January 14, 2011. One unexercisable options became quarter of the then remaining units exercisable on January 13, 2011 are scheduled to vest on each of and one-third of the then remaining January 14, 2012 and 2013. One half unexercisable options are sched- of the remaining units are sched- uled to become exercisable on each uled to vest on January 14, 2013, of January 13, 2012, 2013 and 2014. subject to satisfaction of total (J) Restricted stock units granted shareholder return or earnings per January 13, 2010 subject to share test described in prior proxy performance tests: 10% of the units statements. vested January 13, 2011 and 10% (O) Restricted stock units granted of the units vest on each of Jan- January 10, 2007: The remaining uary 13, 2012, 2013 and 2014, in units vested on January 10, 2011. each case subject to determination that the test to assure eligibility (P) Restricted units awarded to under Section 162(m) was satisfied. Mr. Braverman on October 2, 2008 The remaining units vest Jan- in connection with the execution of uary 13, 2013 subject to determi- his new employment agreement. nation that the test to assure One half of these units vested upon eligibility under Section 162(m) was the certification by the Compensa- satisfied and also subject to sat- tion Committee on November 30, isfaction of the total shareholder 2010 that the test to assure eligi-

41 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

bility under Section 162(m) was March 31, 2013, subject to determi- satisfied with respect to these units. nation that the test to assure eligi- The remaining units are scheduled bility under Section 162(m) is to vest on October 2, 2012, subject satisfied. to the test to assure eligibility under Section 162(m). (T) Restricted stock units granted January 13, 2010, 40% of which are (Q) Restricted stock units awarded to subject to performance tests: 10% Mr. Braverman on January 13, 2010 of the units vested January 13, 2011 pursuant to his employment agree- and 10% of the units vest on each ment in connection with his of January 13, 2012, 2013 and 2014. assumption of new responsibilities. The remaining units vest Jan- One half of these units vest on each uary 13, 2013 subject to satisfaction of January 13, 2012 and 2014, sub- of the total shareholder return and ject to the test to assure eligibility earnings per share test described under Section 162(m). under “Compensation Discussion and Analysis — Compensation (R) Restricted stock units granted Objectives and Program Design — January 10, 2007: The remaining Performance-based Compensation — units vested on January 10, 2011. Equity-based Compensation,” above, (S) Restricted stock units granted to with the number of units vesting Mr. Staggs January 30, 2008 in depending on the level at which the connection with the execution of a tests were satisfied. The amount new employment agreement and shown is the maximum number of subject to performance tests: All of units that could vest. the units are scheduled to vest on

42 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Option Exercises and Stock Unit Vesting During Fiscal 2010 The following table provides information concerning exercises of options and vesting of restricted stock units held by the named executive officers during fiscal 2010. Information regarding the amounts in the columns follows the table.

FISCAL 2010 OPTION EXERCISE AND STOCK VESTED Option Awards Stock Awards Number of Value Number of Shares Realized Shares Value Acquired on on Acquired on Realized on Exercise Exercise Vesting Vesting Robert A. Iger 1,750,000 $21,181,908 515,142 $15,876,417 James A. Rasulo 150,000 1,754,610 89,089 2,792,882 Alan N. Braverman 40,000 191,000 73,671 2,286,447 Kevin A. Mayer 90,000 828,750 35,945 1,112,777 M. Jayne Parker 11,118 52,977 4,595 143,276 Thomas O. Staggs 935,000 7,934,067 162,600 5,035,393

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 2, 2010, 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 152,261,7672 $27.733 106,701,8264 Equity compensation plans not approved by security holders — — — Total 152,261,7672 $27.733 106,701,8264

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 Includes an aggregate of 32,504,206 restricted stock units and performance-based restricted stock units. Also includes options to purchase an aggregate of 19,919,739 shares, at a weighted average exercise price of $24.57, and 475,578 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. 3 Weighted average exercise price of outstanding options; excludes restricted stock units and performance-based restricted stock units. 4 Includes 389,800 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.

43 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Pension Benefits compensation and years of credited serv- ice while employed by ABC, Inc., less an The Company maintains a tax-qualified, actuarially determined Social Security noncontributory retirement plan, called the offset, while a participant under the plan. Disney Salaried Retirement Plan, for sal- Average compensation is based on the aried employees who have completed one highest five consecutive years of year of service. Benefits are based on a compensation during the last ten-year percentage of total average monthly period of active plan participation, and compensation plus a portion of average compensation includes salary and bonus, monthly compensation that exceeds but excludes equity compensation, fringe $2,500 multiplied by years of credited benefits and expense allowances. Like the service. Average monthly compensation is Company’s Amended and Restated Key equal to base salary and excludes other Plan, the Benefits Equalization Plan of compensation such as bonuses and equity ABC, Inc., is a non-qualified, non-funded compensation and is calculated based on plan that provides eligible participants the highest five consecutive years of retirement benefits in excess of the com- compensation during the ten year period pensation limits and maximum benefit prior to termination or retirement, which- accruals that apply to tax-qualified plans. ever is earlier. In addition, each participant In addition, a term of the 1995 purchase receives a flat dollar amount derived from agreement between ABC, Inc. and the a table based solely on years and hours of Company provides that employees trans- service. Retirement benefits are ferring employment to coverage under a non-forfeitable after five years of vesting Disney pension plan will receive an addi- service, or at age 65 after one year of serv- tional benefit under Disney plans equal to ice. After five years of vesting service, (a) the amount the employee would actuarially reduced benefits are paid to receive under the Disney pension plans if participants who retire before age 65 but all of his or her ABC service were counted on or after age 55. under the Disney pension less (b) the combined benefits he or she receives In calendar year 2010, the maximum under the ABC plan (for service prior to compensation limit under a tax-qualified the transfer) and the Disney plan (for serv- plan was $245,000, and the maximum ice after the transfer). annual benefit that may be accrued under a tax-qualified defined benefit plan was Both Mr. Iger and Mr. Braverman trans- $195,000. To provide additional retirement ferred from ABC, and each receives a benefits for key salaried employees, the pension benefit to bring his total benefit Company maintains a supplemental non- up to the amount he would have received qualified, unfunded plan, the Amended if all his years of service had been credited and Restated Key Plan, which provides under the Disney plans. (The effect of retirement benefits in excess of the com- these benefits is reflected in the present pensation limitations and maximum bene- value of benefits under the Disney plans in fit accruals under tax-qualified plans. This the table below). plan recognizes deferred amounts of base salary for years prior to 2006 for purposes Both Mr. Iger and Mr. Braverman are cur- of determining applicable retirement bene- rently eligible for early retirement. The fits, and benefits are otherwise calculated early retirement reduction for the Disney on the same basis as under the Salaried Retirement Plan and the Restated 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

44 The Walt Disney Company Notice of 2011 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 he or Disney plans; the earliest age at which she is 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 2010 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 11 $ 560,549 — Disney Amended and Restated Key Plan 11 4,231,950 — ABC, Inc. Retirement Plan 25 805,085 — Benefit and Equalization Plan of ABC, Inc. 25 6,356,147 — Total $11,953,731 — James A. Rasulo Disney Salaried Retirement Plan 25 767,960 — Disney Amended and Restated Key Plan 25 3,087,036 — Total $ 3,854,996 — Alan N. Braverman Disney Salaried Retirement Plan 8 $ 571,489 — Disney Amended and Restated Key Plan 8 1,485,600 — ABC, Inc. Retirement Plan 9 258,727 — Benefit and Equalization Plan of ABC, Inc. 9 1,442,467 — Total $ 3,758,282 — Kevin A. Mayer Disney Salaried Retirement Plan 13 $ 289,576 — Disney Amended and Restated Key Plan 13 518,747 — Total $ 808,323 — M. Jayne Parker Disney Salaried Retirement Plan 22 $ 545,475 — Disney Amended and Restated Key Plan 22 260,754 — Total $ 806,229 — Thomas O. Staggs Disney Salaried Retirement Plan 21 $ 505,446 — Disney Amended and Restated Key Plan 21 2,080,300 — Total $ 2,585,746 —

The present values were calculated using Deferred Compensation the 5.25% 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 2010 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. The present values Mr. Iger’s employment agreement pro- shown in the table are not available as vides that the deferred compensation will lump sum payment under the plans. be paid, together with interest at the applicable federal rate for mid-term treas- uries, reset annually, no later than 30 days after Mr. Iger is no longer subject to the provisions of Section 162(m) of the Internal

45 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Revenue Code (or at such later date as is The compensation that each of our named necessary to avoid the imposition of an executive officers may receive under each additional tax on Mr. Iger under Sec- of these termination circumstances is tion 409A of the Internal Revenue Code). described below, including quantification The interest rate is adjusted annually in of the amount each executive would have March and the weighted average interest become entitled to assuming a termination rate for fiscal 2010 was 2.38%. The follow- at the end of fiscal 2010 under the circum- ing table sets forth the earnings on the stances described. deferred amount in fiscal 2010 and the aggregate balance including accumulated Any actual compensation received by our earnings as of October 2, 2010. There named executive officers in the circum- were no additions during the fiscal year to stances described below may be different the deferred amount by either the Com- than we describe because many factors pany or Mr. Iger other than these earnings affect the amount of any compensation and no withdrawals during the fiscal year. received. These factors include: the date Because the earnings during this year and of the executive’s termination of employ- previous years were not above market or ment; the executive’s base salary at the preferential, these amounts are not time of termination; the Company’s stock included in the Summary Compensation price at the time of termination; and the Table. executive’s age and service with the Company at the time of termination. In addition, although the Company has entered into individual agreements with FISCAL 2010 NONQUALIFIED DEFERRED COMPENSATION each of our named executive officers, in Aggregate Aggregate connection with a particular termination of Earnings Balance at employment the Company and the named in Last Last Fiscal Fiscal Year Year End executive officer may mutually agree on severance terms that vary from those $86,641 $3,730,826 provided in pre-existing agreements. In each of the circumstances described Payments and Rights on Termination below, our executive officers are entitled to earned, unpaid salary through the date Our named executive officers may receive of termination and accrued benefits that compensation in connection with the are unconditionally accrued as of the date termination of their employment. This of termination pursuant to policies appli- compensation is payable pursuant to cable to all employees. In Mr. Iger’s case, (a) the terms of compensation plans appli- this includes the deferred salary and inter- cable by their terms to all participating est earned on it as described under employees and (b) the terms of employ- “Deferred Compensation,” above. This ment agreements of Mr. Iger, Mr. Rasulo, earned compensation is not described or Mr. Braverman, Mr. Mayer, Ms. Parker and quantified below because the amount of Mr. Staggs. The availability, nature and compensation to which the officer is enti- amount of this compensation differ tled does not change because of the depending on whether employment termi- termination, but we do describe and quan- nates because of: tify benefits that continue beyond the date • death or disability; of termination that are in addition to those provided for in the applicable benefit • the Company’s termination of the execu- plans. The executive’s accrued benefits tive pursuant to the Company’s termi- include the pension benefits described nation right or the executive’s decision under “Pension Benefits,” above, which to terminate because of action the become payable to all participants who Company takes or fails to take; have reached retirement age. Because they have reached retirement age under • the Company’s termination of the the plans, Mr. Iger and Mr. Braverman employee for cause; or each would have been entitled to these • expiration of an employment agreement, early retirement benefits if their employ- retirement or other voluntary termination. ment had terminated at the end of fiscal

46 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement year 2010. Because the pension benefits restricted stock units awarded to the par- available to Mr. Iger and Mr. Braverman ticipant under the plans will, to the extent upon termination are not different from the units had not previously been forfeited, those described above under “Pension vest and become payable upon the death Benefits” except in ways that are equally or disability of the participant. Upon applicable to all salaried employees, the termination due to disability, the exercis- nature and amount of pension benefits are ability of options will not accelerate but not described or quantified below. the participant will have one year following termination (or 18 months in the case of Death and Disability participants who are eligible for immediate retirement benefits) rather than three The employment agreements of Mr. Iger, months following termination to exercise Mr. Rasulo, Mr. Braverman, Mr. Mayer, options that were at the time of termi- Ms. Parker and Mr. Staggs each provide nation, or within three months would that if he or she dies or his or her become, exercisable. employment terminates because of dis- ability during the term of the agreement, Options awarded after December 2009 he or she (or his or her estate) will receive (and awarded at least one year before a bonus for any fiscal year that had been termination) will continue to vest for three completed at the time of his death or years after termination of employment by termination of employment due to dis- reason of disability and will remain ability but for which the bonus had not yet exercisable until the earlier of three years been paid. The amount of the bonus will after such termination and the original be determined by the Compensation expiration date if the participant is age 60 Committee using the same criteria used or greater and has at least ten years of for determining a bonus as if the executive service at the time of termination due to remained employed. disability except that this does not apply for certain employees outside the United In addition, Mr. Iger, Mr. Staggs and States. As none of the awards to named Mr. Braverman are currently eligible for executive officers covered by this provi- participation in the Company’s Family sion had been awarded more than a year Income Assurance Plan, which is being prior to the end of fiscal year 2010, it did phased out as described in the Compensa- not have any effect on the quantification of tion Discussion and Analysis, above. The benefits described below. plan provides that, in the event of the death of a participating key executive In addition, Mr. Iger’s employment agree- while employed by the Company, the ment provides that, upon his death, the eligible spouse, same sex domestic part- restricted stock units (plus any dividend ner or dependent child is entitled to equivalent units that had accrued with receive an amount equal to 100% of the respect to those units) awarded to Mr. Iger executive’s salary in effect at the date of in connection with the signing of his 2005 death for the first year after such date of employment agreement that had not pre- death, 75% thereof during the second viously vested will immediately vest. The year, and 50% thereof during the third agreement provides that upon Mr. Iger’s year. termination due to disability, these units will be distributed on the dates they would In addition to the compensation and rights have vested in the absence of such termi- in the employment agreements described nation, but without regard to whether the above, pursuant to the terms of the performance tests were satisfied as of Amended and Restated 1995 Stock those dates. All remaining units under this Incentive Plan and the Amended and award vested October 2, 2010, subject to Restated 2005 Stock Incentive Plan (which certification by the Compensation we refer to as the 1995 and 2005 Plans, Committee that the test to assure eligi- respectively), all options awarded to a bility under Section 162(m) was satisfied, participant (including the named executive which certification was made on officers) become exercisable upon the November 30, 2010, and accordingly the death of the participant and remain affect of their acceleration in not included exercisable for 18 months, and all in the table below.

47 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

The following table provides the value of weighted average exercise price of benefits each of our executive officers options with an exercise price less than would have received under compensation the market price times the number of such plans and their employment agreements options that would accelerate as a result or compensation arrangements in effect of termination. The value of restricted on the date of this proxy statement if their stock unit acceleration is equal to the employment had terminated at the close $33.34 market price of shares of the of business on the last day of fiscal 2010 Company’s common stock on October 2, as a result of death or disability. The value 2010 and the number of units that would of option acceleration is equal to the accelerate as a result of (or, in the case of difference between the $33.34 closing Mr. Iger’s disability, continue to vest market price of shares of the Company’s despite) termination. common stock on October 1, 2010 (the last trading day in fiscal 2010) and the

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

Robert A. Iger $17,960,0001 $13,939,649 $22,273,292 James A. Rasulo 3,700,0001 1,628,480 6,404,964 Alan N. Braverman 5,587,5001 1,454,425 8,575,038 Kevin A. Mayer 1,590,0001 992,715 3,256,927 M. Jayne Parker 850,0001 286,923 1,086,385 Thomas O. Staggs 6,850,0001 2,604,492 17,496,853

1 This amount is equal to the bonus awarded to the executives with respect to fiscal 2010 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. Braverman and Mr. Staggs, amounts payable under the Family Income Assurance Plan.

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

48 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

and one day after termination of his named executive officer’s employment employment equal to the base salary the subject to the foregoing compensation in named executive officer would have its sole, absolute and unfettered discretion earned had he or she remained for any reason or no reason whatsoever. A employed after the termination of his or termination for cause does not constitute her consulting agreement and until the an exercise of this right and would be original scheduled expiration date of his subject to the compensation provisions or her employment agreement. described below under “Termination for Cause.” • A bonus for the year in which he or she is terminated equal to a pro-rata amount Termination by the executive for good of a target bonus amount determined in reason means a termination by the named accordance with his or her employment executive officer following notice given to agreement. the Company within three months of his • All options that had vested as of the having actual notice of the occurrence of termination date or were scheduled to any of the following events (except that vest prior to the original scheduled the Company will have 30 days after expiration date of his or her employment receipt of the notice to cure the conduct agreement (or within three months specified in the notice): (i) a reduction in thereafter) will remain or become the named executive officer’s base salary, exercisable as though the named execu- annual target bonus opportunity or (where tive officer were employed until the applicable) annual target long-term original scheduled expiration date of his incentive award opportunity; (ii) the or her employment agreement and will removal of the officer from his position remain exercisable until the earlier of (including in the case of Mr. Iger, the fail- (a) the scheduled expiration date of the ure to elect or reelect him as a member of options and (b) three months (or in the the Board or his removal from the position case of Mr. Iger and Mr. Braverman, 18 of president other than in connection with months, as provided in the Company’s the appointment of another person who is equity compensation plans) after the acceptable to him to serve as president); original scheduled expiration date of his (iii) a material reduction in his duties and or her employment agreement. In addi- responsibilities (other than, in the case of tion, all options issued to Mr. Iger prior Mr. Iger, in connection with the appoint- to 2005 (all of which are currently ment of another person to serve as exercisable) will remain exercisable for president); (iv) the assignment to him of the period specified in the applicable duties that are materially inconsistent with option agreements. his position or duties or that materially impair his ability to function in his office; • All restricted stock units that were sched- (v) relocation of his principal office to a uled to vest prior to the original sched- location that is more than 50 miles outside uled expiration date of his or her of the greater Los Angeles area and, in the employment agreement will (subject to case of Mr. Iger, that is also more than 50 satisfaction of applicable performance miles from Manhattan; or (vi) a material conditions) vest as though the named breach of any material provision of the executive officer were employed until the agreement by the Company. original scheduled expiration date of his or her employment agreement, except Termination for good reason also includes that any test to assure deductibility of any occurrence after a change in control compensation under Section 162(m) will (as defined in the 1995 and 2005 Plans) be waived for any units scheduled to that would constitute a triggering event. vest after the fiscal year in which the The 1995 and 2005 Plans each provide termination of employment occurs that if, within 12 months following a unless application of the test is neces- change in control as defined in the plans, sary to preserve deductibility. a “triggering event” occurs, any out- standing stock options, restricted stock Under the employment agreements, the units, performance-based restricted stock Company has the right to terminate the units or other plan awards will generally

49 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement become fully vested and, in certain cases, Ms. Parker and Mr. Staggs provide that paid to the plan participant. A triggering they are not required to seek other event is defined to include: (a) a termi- employment to obtain compensation to nation of employment by the Company offset the amounts payable by the Com- other than for death, disability or “cause;” pany as described above, and compensa- or (b) a termination of employment by the tion resulting from subsequent participant following a reduction in posi- employment will not be offset against tion, pay or other “constructive amounts described above. termination.” Under the plans, cause has the meaning in the executive’s employ- Restricted stock units that were awarded ment agreement, if applicable, as defined in lieu of cash as a portion of a bonus below under “Termination for Cause” or, if award vest upon termination for any rea- there is no employment agreement or the son other than a termination for cause as executive would have greater rights under defined in an executive’s employment the following definition, cause means agreement. conviction for or pleading to a felony under state or Federal law, willful gross Options and restricted stock units misconduct or material breach of an awarded after December 2009 (and agreement with the Company with respect awarded at least one year before termi- to confidentiality, noncompetition, non- nation) will continue to vest for three years solicitation or a similar restrictive cove- after termination of employment for any nant. Under the terms of the plans, reason other than death, cause (as defined payments under awards that become in the 1995 and 2005 Plans, as applicable) subject to the excess parachute tax rules or, in the case of restricted stock units, may be reduced under certain circum- disability (and options will remain stances. exercisable until the earlier of three years after such termination and the original If any of the compensation or rights expiration date) if the participant is age 60 described above is paid after a change in or greater and has at least ten years of control such that the compensation or service at the time of retirement except rights could be subject to excise tax as an that this does not apply for certain “excess parachute payment” under federal employees outside the United States. income tax rules, the Company has agreed Where, as is the case with named execu- to pay Mr. Iger, Mr. Rasulo, Mr. Braverman tive officers, vesting and, in the case of and Mr. Staggs an additional amount to stock options, exercise is extended by the compensate for the incremental tax costs terms of the holder’s employment agree- as a result of the excise tax, up to a max- ment to the original scheduled expiration imum of $2 million in the case of date of the holder’s employment agree- Mr. Rasulo and Mr. Braverman and $4 mil- ment, this provision for continued vesting lion in the case of Mr. Staggs. This obliga- and exercise is applied as of the original tion to provide additional compensation scheduled expiration date of the holder’s will not apply if the aggregate amounts employment agreement. payable to the named executive officer that are treated as “parachute payments” The following table quantifies benefits for purposes of the applicable federal tax each of our executive officers would have provisions would not exceed the max- received if their employment had been imum amount that can be paid to the terminated at the end of fiscal 2010 by the named executive officer without incurring Company pursuant to its termination right such excise tax by at least 10%, in which or by the executive with good reason. case the named executive officer’s com- pensation would be reduced to the max- The table quantifies the benefits of con- imum amount that would not result in the tinued vesting and exercisability of options named executive officer incurring the in the case of a termination in the absence excise tax. of a change in control by setting forth the difference between the $33.34 closing The employment agreements of Mr. Iger, market price of shares of the Company’s Mr. Rasulo, Mr. Braverman, Mr. Mayer, common stock on October 1, 2010 and the

50 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement weighted average exercise price of vesting of the restricted stock units and options with an exercise price less than depending on the number of units that will the market price times the number of vest, which depends on the extent to options that would become exercisable which performance tests are satisified. despite the termination, although, as described above, options do not become The value of compensation for additional immediately exercisable absent a change taxation is the amount estimated to be in control. The actual value of the options payable to compensate the executive for realized by an executive when they the excise tax payable (and the additional become exercisable may therefore be taxes payable due to such additional more or less than that shown below payment) by reason of the compensation depending on movements in the stock received as a result of a change in con- price pending actual vesting of the trol. The calculation of whether, and to options. The table quantifies the benefits what extent, any such compensation of continued vesting of restricted stock would have been payable to each of the units in the absence of a change in control executive officers was based on the by setting forth an amount equal to the assumption that the termination occurre- $33.34 closing market price of shares of das of the close of business on the last the Company’s common stock on day of fiscal 2010 and applying the regu- October 1, 2010 times the target number lations under Section 280G of the Internal of units that are scheduled to vest prior to Revenue Code, including, as applicable the scheduled termination date of the (including in respect of the annual applicable employment agreement, bonuses payable to each such officer), the although, as described above, restricted special rules applicable to amounts the stock units do not immediately vest payment of which is contingent solely on absent a change in control. The value of the continued performance of services for restricted stock units realized by an a specified period and in respect of which executive may again be more or less than at least a portion of the services were that shown below depending on move- performed before the termination. ments in the stock price pending actual

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 $18,126,6671 $13,939,649 $22,273,292 — Change in control 18,126,6671 13,939,649 22,273,292 — James A. Rasulo No change in control 9,766,6671 1,628,480 6,404,964 — Change in control 9,766,6671 1,628,480 6,404,964 — Alan N. Braverman No change in control 6,450,0001 1,454,425 8,575,038 — Change in control 6,450,0001 1,454,425 8,575,038 — Kevin A. Mayer No change in control 3,040,0001 660,573 1,830,986 — Change in control 3,040,0001 992,715 3,256,927 — M. Jayne Parker No change in control 2,047,9171 176,842 418,940 — Change in control 2,047,9171 286,923 1,086,385 — Thomas O. Staggs No change in control 7,200,0001 2,505,831 17,159,377 — Change in control 7,200,0001 2,604,492 17,496,853 —

1 This amount is equal to the bonus awarded to the executives with respect to fiscal 2010 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.

51 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Termination for Cause willful material breach of the agreement by the executive unless, if the Company The employment agreements of Mr. Iger, determines that the conduct or cause is Mr. Rasulo, Mr. Braverman, Mr. Mayer, curable, such conduct or cause is timely Ms. Parker and Mr. Staggs each provide cured by the executive. that if his or her employment is terminated Expiration of Employment Term; by the Company for cause he or she will only be entitled to compensation earned Retirement and benefits vested through the date of Under his employment agreement, if termination, including any rights he or she Mr. Iger’s employment ends at or within 30 may have under his indemnification days following the expiration of the stated agreement with the Company or the equity term of his employment agreement (i.e., plans of the Company. January 31, 2013), he will be entitled to the following compensation and rights, in “Termination for Cause” is defined in addition to compensation earned through Mr. Iger’s employment agreement as that date: termination by the Company due to (i) conviction of a felony or the entering of • A separation payment equal to the sum a plea of nolo contendere to a felony of his then current base salary and aver- charge; (ii) gross neglect, willful malfea- age bonus payable to him for the last sance or willful gross misconduct in con- three completed fiscal years for which nection with his employment which has the bonus has been determined at the had a material adverse effect on the busi- time of the termination. In determining ness of the Company and its subsidiaries, the average bonus, the bonus for any unless he reasonably believed in good year for which no bonus is received shall faith that such act or non-act was in, or be zero. Payment of the separation not opposed to, the best interests of the payment is subject to Mr. Iger executing Company; (iii) his substantial and continual a mutual release of liability in sub- refusal to perform his duties, stantially the form attached to his responsibilities or obligations under the employment agreement. If Mr. Iger’s agreement that continues after receipt of employment agreement were scheduled written notice identifying the duties, to expire at the end of fiscal 2010 and he responsibilities or obligations not being terminated within 30 days thereafter, this performed; (iv) a violation that is not timely payment would be equal to $14,292,060. cured of the Company’s code of conduct • Mr. Iger and his eligible dependants will or any Company policy that is generally be entitled to continue participating in all applicable to all employees or all officers medical, dental and hospitalization of the Company that he knows or reason benefit plans until the earlier of 12 ably should know could reasonably be months following the date of termination expected to result in a material adverse and the date Mr. Iger receives equivalent effect on the Company; (v) any failure (that coverage and benefits from a sub- is not timely cured) to cooperate, if sequent employer. If this continuation of requested by the Board, with any inves- benefits conflicts with any law or regu- tigation or inquiry into his or the Compa- lation or has adverse tax consequences ny’s business practices, whether internal for Mr. Iger, the Company or other pro- or external; or (vi) any material breach that gram participants, Mr. Iger will receive is not timely cured of covenants relating to the economic equivalent of the con- non-competition during the term of tinuation of benefits including employment and protection of the compensation for the tax costs of receiv- Company’s confidential information. ing the economic equivalent rather than the benefits. If Mr. Iger’s employment “Termination for Cause” is defined in agreement were scheduled to expire at Mr. Rasulo’s, Mr. Braverman’s, the end of fiscal 2010 and he terminated Mr. Mayer’s, Ms. Parker’s and Mr. Stagg’s within 30 days thereafter, this value of employment agreement as termination by continued benefits would be $19,884 the Company due to gross negligence, based on the Company’s estimated cost gross misconduct, willful nonfeasance or of providing these benefits.

52 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Mr. Iger is not required to seek other Mr. Rasulo, Mr. Braverman, Mr. Mayer, employment to obtain compensation to Ms. Parker and Mr. Staggs are entitled to offset the amounts payable by the Com- earned, unpaid salary and unconditionally pany as described above, and compensa- vested accrued benefits if their employ- tion resulting from subsequent ment terminates at the expiration of their employment will not be offset against employment agreement (where applicable) amounts described above except that or they otherwise retire, but they are not continuation of medical benefits may be contractually entitled to any additional terminated if Mr. Iger receives equivalent compensation in this circumstance. coverage and benefits as described above. Options and restricted stock units awarded after December 2009 (and Under the terms of restricted stock units awarded at least one year before retire- awarded to Mr. Braverman and Mr. Staggs ment) will continue to vest for three years in lieu of a portion of their annual bonus after retirement (and options will remain award, these restricted stock units will exercisable until the earlier of three years vest immediately upon termination of their after retirement and the original employment for any reason other than expirationdate) if the participant is age 60 cause. If Mr. Braverman or Mr. Staggs’s or greater and has at least ten years of employment had terminated at the end of service at the time of retirement except fiscal 2010 for any reason other than when, in the judgment of management, cause, the value of this acceleration, this would create issues under applicable based on the market price of shares of the local laws. As none of the awards to Company’s common stock on October 2, named executive officers covered by this 2010 times the number of units that would provision had been awarded more than a accelerate as a result of termination, year prior to the end of fiscal year 2010, it would be $218,876 and $411,686 for did not have any effect on the quantifica- Mr. Braverman and Mr. Staggs, tion of benefits described above. respectively.

53 The Walt Disney Compan y Notice of 2011 Annual Meeting and Proxy Statement

Audit-Related Matters whenever appropriate, executive sessions in which the Committee meets separately with the Company’s independent regis- Audit Committee Report tered public accountants, the Company’s internal auditors, the Company’s chief The charter of the Audit Committee of the financial officer and the Company’s gen- Board specifies that the purpose of the eral counsel. Committee is to assist the Board in its oversight of: As part of its oversight of the Company’s • the integrity of the Company’s financial financial statements, the Committee statements; reviews and discusses with both management and the Company’s • the adequacy of the Company’s system independent registered public account- of internal controls; ants all annual and quarterly financial • the Company’s compliance with legal statements prior to their issuance. During and regulatory requirements; fiscal 2010, management advised the Committee that each set of financial • the qualifications and independence of statements reviewed had been prepared in the Company’s independent registered accordance with generally accepted public accountants; and accounting principles, and management • the performance of the Company’s reviewed significant accounting and dis- independent registered public account- closure issues with the Committee. These ants and of the Company’s internal audit reviews included discussion with the function. independent registered public account- ants of matters required to be discussed In carrying out these responsibilities, the pursuant to Public Company Accounting Audit Committee, among other things: Oversight Board AU 380 (Communication With Audit Committees), including the qual- • monitors preparation of quarterly and ity of the Company’s accounting princi- annual financial reports by the Compa- ples, the reasonableness of significant ny’s management; judgments and the clarity of disclosures in • supervises the relationship between the the financial statements. The Committee Company and its independent registered also discussed with Pricewaterhou- public accountants, including: having seCoopers LLP matters relating to its direct responsibility for their appoint- independence, including a review of audit ment, compensation and retention; and non-audit fees and the written dis- reviewing the scope of their audit serv- closures and letter from Pricewaterhou- ices; approving audit and non-audit serv- seCoopers LLP to the Committee pursuant ices; and confirming the independence to applicable requirements of the Public of the independent registered public Company Accounting Oversight Board accountants; and regarding the independent accountants’ communications with the Audit Committee • oversees management’s implementation concerning independence. and maintenance of effective systems of internal and disclosure controls, includ- In addition, the Committee reviewed key ing review of the Company’s policies initiatives and programs aimed at relating to legal and regulatory com- maintaining the effectiveness of the pliance, ethics and conflicts of interests Company’s internal and disclosure control and review of the Company’s internal structure. As part of this process, the auditing program. Committee continued to monitor the scope and adequacy of the Company’s The Committee met nine times during internal auditing program, reviewing fiscal 2010. The Committee schedules its internal audit department staffing levels meetings with a view to ensuring that it and steps taken to maintain the effective- devotes appropriate attention to all of its ness of internal procedures and controls. tasks. The Committee’s meetings include,

54 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Taking all of these reviews and dis- authorizes the Committee to delegate to cussions into account, the undersigned one or more of its members pre-approval Committee members recommended to the authority with respect to permitted serv- Board that the Board approve the ices, and the Committee has delegated to inclusion of the Company’s audited finan- the Chairman of the Committee the cial statements in the Company’s Annual authority to pre-approve services in cer- Report on Form 10-K for the fiscal year tain circumstances. ended October 2, 2010, for filing with the Securities and Exchange Commission. Auditor Fees and Services

Members of the Audit Committee The following table presents fees for pro- fessional services rendered by Pricewa- Monica C. Lozano terhouseCoopers LLP for the audit of the Robert W. Matschullat Company’s annual financial statements John E. Pepper, Jr. and internal control over financial report- Orin C. Smith (Chair) ing for fiscal 2010 and fiscal 2009, together with fees for audit-related serv- Policy for Approval of Audit and ices and tax services rendered by Permitted Non-audit Services PricewaterhouseCoopers LLP during fiscal 2010 and fiscal 2009. Audit-related serv- All audit, audit-related and tax services ices consisted principally of audits of were pre-approved by the Audit Commit- employee benefit plans and other entities tee, which concluded that the provision of related to the Company and financial due such services by PricewaterhouseCoopers diligence reviews. Tax services consisted LLP was compatible with the maintenance principally of tax compliance (primarily of that firm’s independence in the conduct international returns), planning and advi- of its auditing functions. The Audit sory services, sales and use tax recovery Committee’s Outside Auditor assistance, tax due diligence assistance, Independence Policy provides for and tax examination assistance. pre-approval of specifically described Fiscal 2010 Fiscal 2009 audit, audit-related and tax services by the Committee on an annual basis, but (in millions) individual engagements anticipated to Audit fees $17.2 $18.9 exceed pre-established thresholds must Audit-related fees 2.6 2.3 be separately approved. The policy also Tax fees 3.6 2.3 requires specific approval by the Commit- tee if total fees for audit-related and tax All other fees — — services would exceed total fees for audit services in any fiscal year. The policy

55 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Items to Be Voted On and Nominating Committee is required to promptly assess the appropriateness of such nominee continuing to serve as a Election of Directors Director and recommend to the Board the action to be taken with respect to the The current term of office of all of the tendered resignation. The Board is Company’s Directors expires at the 2011 required to determine whether to accept annual meeting. The Board proposes that or reject the resignation, or what other all of the currently serving Directors be action should be taken, within 90 days of re-elected for a term of one year and until the date of the certification of election their successors are duly elected and results. qualified. Each of the nominees has consented to serve if elected. If any of Brokers holding shares beneficially owned them becomes unavailable to serve as a by their clients do not have the ability to Director before the annual meeting, the cast votes with respect to the election of Board may designate a substitute nomi- Directors unless they have received nee. In that case, the persons named as instructions from the beneficial owner of proxies will vote for the substitute nomi- the shares. It is therefore important that nee designated by the Board. you provide instructions to your broker if your shares are held by a broker so that Directors are elected by a majority of your vote with respect to Directors is votes cast unless the election is con- counted. tested, in which case Directors are elected by a plurality of votes cast. A majority of The Board recommends a vote “FOR” votes cast means that the number of each of the persons nominated by the shares voted “for” a Director exceeds the Board. number of votes cast “against” the Direc- tor. If an incumbent Director in an uncon- tested election does not receive a majority of votes cast for his or her election, the Director is required to submit a letter of resignation to the Board of Directors for consideration by the Governance and Nominating Committee. The Governance

56 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Susan E. Arnold, 56, is Institute of Technology, a director of the retired and was Presi- W.M. Keck Foundation and the California dent—Global Business Endowment, and was a director of West- Units of Procter & Gam- ern Asset Income Fund from 1986 to 2006. ble from 2007 to 2009. Mr. Bryson has been a Director of the Prior to that, she was Company since 2000. Vice Chair of P&G Beauty and Health from 2006, Mr. Bryson contributes to the mix of experi- Vice Chair of P&G Beauty ence and qualifications the Board seeks to from 2004 and President Global Personal maintain primarily through his years of Beauty Care and Global Feminine Care experience in senior management at Edi- from 2002. She has been a director of son International culminating as chairman McDonalds Corporation since 2008. Ms. and chief executive officer, through his Arnold has been a Director of the Com- other public company board experience pany since 2007. and through his involvement in gov- ernmental and non-governmental orga- Ms. Arnold contributes to the mix of experi- nizations engaged in environmental and ence and qualifications the Board seeks to other matters. At Edison, Mr. Bryson maintain primarily through her experience served in senior legal, finance and operat- as an executive of Procter & Gamble and ing positions before becoming chairman her other public company board experi- and chief executive officer and thus had ence. At Procter & Gamble, Ms. Arnold responsibilities for the entire range of this was a senior executive responsible for large public utility’s business. Mr. Bryson’s major consumer brands in a large, com- experience on governmental and plex retailing and global brand manage- non-governmental organizations included ment company. As a result of this service as President of the California Pub- experience, Ms. Arnold brings to our lic Utilities Commission and as Chairman Board in-depth knowledge of brand of the California State Water Resources management and marketing, environ- Control Board and as founder and attor- mental sustainability, product develop- ney for the Natural Resources Defense ment, international consumer markets, Council and service on the boards of the finance and executive management, Council on Foreign Relations, the Public including executive compensation and Policy Institute of California, and the Cal- management leadership. ifornia Institute of Technology. As a result of this experience, Mr. Bryson brings to John E. Bryson, 67, our Board practical knowledge in all serves as Senior Advisor aspects of managing and providing to Kohlberg Kravis Rob- leadership to complex business orga- erts & Co. (KKR) and is nizations and expertise in environmental Retired Chairman of the issues. Board and Chief Execu- tive Officer, Edison Inter- national. Mr. Bryson was Chairman and Chief Executive Officer of Edison International (an electric power generator and distributor), the parent company of South- ern California Edison and Edison Mission Group from 1990 to 2008. He has been a director of The Boeing Company since 1995, is a non-executive chairman of the board of BrightSource Energy, Inc. and of the board of overseers of Keck School of Medicine of the University of Southern California, and is a trustee of the California

57 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

John S. Chen, 55, is Judith L. Estrin, 56, is Chairman and Chief Chief Executive Officer of Executive Officer of Syb- JLABS, LLC, (formerly ase Inc., a software Packet Design Manage- developer and a wholly- ment Company, LLC), a owned subsidiary of SAP privately held company AG. Prior to SAP’s acquis- focused on furthering ition of Sybase in July innovation in business, 2010, Mr. Chen had been government and Chairman of the Board, Chief Executive non-profit organizations. Ms. Estrin served Officer and President of Sybase, Inc., as Chief Technology Officer and Senior since November 1998. From February Vice President of Cisco Systems Inc., a 1998 through November 1998, he served developer of networking products, from as co-Chief Executive Officer. Mr. Chen 1998 until April 2000, and as President and joined Sybase in August 1997 as Chief Chief Executive Officer of Precept Soft- Operating Officer and served in that ware, Inc., a developer of networking capacity until February 1998. From March software of which she was co-founder, 1995 to July 1997, Mr. Chen was President from 1995 until its acquisition by Cisco in of the Open Enterprise Computing Divi- 1998. She was also a director of FedEx sion, Siemens Nixdorf, a computer and Corporation, an international provider of electronics company, and Chief Executive transportation and delivery services, from Officer and Chairman of Siemens Pyramid, 1989 to September 2010. Ms. Estrin has a subsidiary of Siemens Nixdorf. He has been a Director of the Company since been a director of Wells Fargo & Company 1998. since 2006. Mr. Chen has been a Director of the Company since 2004. Ms. Estrin contributes to the mix of experi- ence and qualifications the Board seeks to Mr. Chen contributes to the mix of experi- maintain primarily through her experience ence and qualifications the Board seeks to in both large and developing technology maintain primarily through his experience businesses, her other public company as a leader of a variety of technology board experience and her ongoing work in businesses, his experience doing business the field of innovation. In addition to serv- in Asia and his other public company ing as Chief Technology Officer at Cisco, board experience. In his roles at Sybase Ms. Estrin co-founded seven technology and Siemens Nixdorf, Mr. Chen was businesses and is author of a book on responsible for overseeing and managing innovation. She continues to promote executive teams and a sizeable work force innovation in business and academia engaged in high technology development, through her work at JLabs and her service production and marketing. Mr. Chen also on academic advisory boards. As a result interacted regularly with businesses and of this experience, Ms. Estrin brings to our governments in Asia in connection with Board an understanding of the process of these businesses. As a result of this technological innovation, its application in experience, Mr. Chen brings to our Board a wide variety of settings, and practice in an understanding of the rapidly changing the oversight of complex public busi- technological landscape and intense famil- nesses. iarity with all issues involved in managing technology businesses and particularly with businesses and governmental practi- ces in Asia.

58 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Robert A. Iger, 59, has February 1986. Mr. Jobs has been a Direc- served as President and tor of the Company since the Company’s Chief Executive Officer of acquisition of Pixar in May 2006. the Company since October 2005, having pre- Mr. Jobs contributes to the mix of experi- viously served as President ence and qualifications the Board seeks to and maintain primarily through his experience since January 2000 and as as chief executive officer of Apple and his President of Walt Disney experience with Apple and NeXT, Inc. International and Chairman of the ABC beginning in 1976 and with Pixar from its Group from 1999 to January 2000. From creation in 1986 through the Company’s 1974 to 1998, Mr. Iger held a series of acquisition of Pixar in 2006. In these posi- increasingly responsible positions at ABC, tions, Mr. Jobs was responsible for Inc. and its predecessor Capital Cities/ABC, overseeing all aspects of Apple and Pixar’s Inc., culminating in service as President of businesses. the ABC Network Television Group from 1993 to 1994 and President and Chief Fred H. Langhammer, 67, Operating Officer of ABC, Inc. from 1994 to is Chairman, Global Affairs, 1999. He is a member of the Board of Direc- of The Estée Lauder tors of Lincoln Center for the Performing Companies Inc., a manu- Arts in New York City. Mr. Iger has been a facturer and marketer of Director of the Company since 2000. The cosmetics products. Prior Company has agreed in Mr. Iger’s employ- to being named Chairman, ment agreement to nominate him for Global Affairs, re-election as a member of the Board at the Mr. Langhammer was Chief expiration of each term of office during the Executive Officer of The Estée Lauder term of the agreement, and he has agreed Companies Inc. from 2000 to 2004, Presi- to continue to serve on the Board if elected. dent from 1995 to 2004 and Chief Operating Officer from 1985 through 1999. Mr. Iger contributes to the mix of experi- Mr. Langhammer joined The Estée Lauder ence and qualifications the Board seeks to Companies in 1975 as President of its maintain primarily through his position as operations in Japan. In 1982, he was chief executive officer of the Company and appointed Managing Director of its oper- his long experience with the business of the ations in Germany. He has been a director Company. As president and chief executive of Central European Media Enterprises, officer and as a result of the experience he Ltd., since December 2009 and was also a gained in over 35 years at ABC and Disney, director of The Shinsei Bank Limited from Mr. Iger has an intimate knowledge of all 2005 to 2009 and a director of AIG from aspects of the Company’s business and 2006 to 2008. Mr. Langhammer has been a close working relationships with all of the Director of the Company since 2005. Company’s senior executives. Mr. Langhammer contributes to the mix of Steven P. Jobs, 55, has experience and qualifications the Board served as Chief Executive seeks to maintain primarily through his Officer of Apple Inc., a experience at Estee Lauder, a complex designer, manufacturer and worldwide branded consumer products marketer of a range of business, and his experience with business personal computers, outside the United States. In addition to mobile communication and serving in Estee Lauder’s Japan and Ger- media devices and port- man operations and on the Board of Shinsei able digital music and Bank, a Japan based commercial bank, Mr. video players, since February 1997 and is a Langhammer served as general manager of member of its Board of Directors. Prior to the Japan operations of a British trading the Company’s acquisition of Pixar, company. He also serves as Co-Chairman Mr. Jobs also served as Chairman of the of the American Institute for Contemporary Board of Pixar from March 1991 and as German Studies at Johns Hopkins Uni- Chief Executive Officer of Pixar from versity and he is a senior fellow of the

59 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Foreign Policy Association and a member nesses offering consumer products. At of the Trilateral Commission. As a result of Potbelly Sandwich Works, Mr. Lewis’s this experience, Mr. Langhammer brings responsibilities include developing and to our Board an understanding of growth implementing the company’s growth strategies in worldwide branded busi- strategy. As a result of this experience, Mr. nesses, specific knowledge of Asian and Lewis brings to our Board knowledge of European markets, and extensive familiar- consumer branding strategy and tactics, ity with all aspects of managing and management and leadership of complex providing leadership to a complex busi- worldwide retail and service businesses, ness organization. and insights into promoting growth strat- egies for new consumer-facing busi- Aylwin B. Lewis, 56, has nesses. served as President and Chief Executive Officer of Monica C. Lozano, 54, is Potbelly Sandwich Works Chief Executive Officer of since June 2008. Prior to Impermedia, LLC, and that, Mr. Lewis was Publisher and Chief President and Chief Executive Officer of Executive Officer of Sears La Opinión, the largest Holdings Corporation, a Spanish-language news- nationwide retailer, from September 2005 paper in the United to February 2008. Prior to being named States. In addition, Chief Executive Officer of Sears, Mr. Lewis Ms. Lozano is a member of the Board of was President of Sears Holdings and Chief Regents of the University of California and Executive Officer of KMart and Sears a trustee of the University of Southern Retail following Sears’ acquisition of California. She has been a director of Bank KMart Holding Corporation in March 2005. of America Corporation since 2005 and is Prior to that acquisition, Mr. Lewis had a director of the Weingart Foundation. been President and Chief Executive Offi- Ms. Lozano has been a Director of the cer of KMart since October 2004. Prior to Company since 2000. that, Mr. Lewis was Chief Multibranding and Operating Officer of YUM! Brands, Ms. Lozano contributes to the mix of Inc., a franchisor and licensor experience and qualifications the Board of quick service restaurants including seeks to maintain primarily through her KFC, Long John Silvers, Pizza Hut, Taco experience managing Impremedia’s media Bell and A&W, from 2003 until October businesses, her other public company 2004, Chief Operating Officer of YUM! board experience and her service on a Brands from 2000 until 2003 and Chief variety of non-profit boards and advisory Operating Officer of Pizza Hut from 1996. groups. In addition to the board service Mr. Lewis served on the Board of Direc- described above, Ms. Lozano is a member tors of Sears Holding Corp. from 2005 of the President’s Economic Recovery through 2008 and on the Board of Direc- Advisory Board and the Council on For- tors of Kmart from 2004 through 2008. eign Relations, and has served on the Mr. Lewis has been a Director of the boards of Sumitomo Bank, First Interstate Company since 2004. Bank of California, Tenet Healthcare Corp., the National Council of La Raza (where Mr. Lewis contributes to the mix of experi- she served as chair of the board), the Cal- ence and qualifications the Board seeks to ifornia Health Care Corp., and the Public maintain primarily through his experience Policy Institute of California, among oth- in various positions at, Yum! Brands, ers. Through this experience, Ms. Lozano Kmart, Sears and Potbelly Sandwich brings to our Board a wide-ranging Works. At Yum! Brands, Mr. Lewis was knowledge of cultural and consumer responsible for marketing and branding of trends, particularly in the Hispanic com- consumer facing products and services in munity, and an understanding of corporate the quick serve food industry, and at governance practices and practice in Kmart and Sears he was responsible for all overseeing the management of complex aspects of complex, worldwide busi- public businesses.

60 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Robert W. Matschullat, Underground Railroad Freedom Center 63, a private equity from December 2005 to May 2007 and as investor, served from Vice President of Finance and Admin- 1995 until 2000 as Vice istration at Yale University from January Chairman of the board of 2004 to December 2005. Prior to that, he directors and Chief served as Chairman of the Executive Financial Officer of The Committee of the Board of Directors of Seagram Company Ltd., a The Procter & Gamble Company until global company with December 2003. Since 1963, he had entertainment and beverage operations. served in various positions at Procter & Prior to joining Seagram, Mr. Matschullat Gamble, including Chairman of the Board was head of worldwide investment bank- from 2000 to 2002, Chief Executive Officer ing for Morgan Stanley & Co. and Chairman from 1995 to 1999, Presi- Incorporated, a securities and investment dent from 1986 to 1995 and director from firm, and was on the Morgan Stanley 1984 to 2003. Mr. Pepper served on the Group board of directors. He is a director board of Boston Scientific Corp. from 2003 of The Clorox Company, where he was to May 2010 and is a member of the Interim Chairman of the Board and Interim Executive Committee of the Cincinnati Chief Executive Officer from March to Youth Collaborative. Mr. Pepper has been October 2006, and a director of Visa Inc. a Director of the Company since 2006. He was a director of McKesson Corpo- ration from 2002 to 2007. Mr. Matschullat Mr. Pepper contributes to the mix of expe- has been a Director of the Company since rience and qualifications the Board seeks 2002. to maintain primarily through his experi- ence at Procter & Gamble, at Yale and his Mr. Matschullat contributes to the mix of other public company board experience. experience and qualifications the Board At Procter & Gamble, Mr. Pepper had a 40 seeks to maintain primarily through his year career including positions as execu- experience at Seagram and Morgan Stan- tive for product lines and for international ley, his expertise in financial management operations, and culminating in service as and his other public company board expe- Chief Executive Officer and Chairman of rience. At Seagram, Mr. Matschullat was the Board and, separately, as responsible for the financial function of the non-executive Chairman of the Board. firm as well as serving on Seagram’s Following his retirement from Procter & board of directors. At Morgan Stanley, he Gamble, Mr. Pepper provided his was engaged in an active investment expertise in finance and administration to banking practice, as well as serving as a Yale University and the National Under- senior executive and on the board of ground Railroad Freedom Center. In addi- directors of the firm. As a result of this tion to the Board experience described experience, Mr. Matschullat brings to our above, Mr. Pepper served on the Board of Board expertise in a wide range of finan- Directors of Xerox and Motorola. As a cial and accounting matters, practical result of this experience, Mr. Pepper knowledge of executive management of brings to our Board facility in managing all complex, worldwide businesses, and aspects of a large, complex and diversi- knowledge of board level oversight as fied company involved in selling branded both a director and interim leader of a products worldwide, as well as under- worldwide consumer products business. standing of financial and administrative John E. Pepper, Jr., 72, matters in a variety of contacts. His has served as Chairman experience as both an executive and of the Board of the non-executive chairman makes him Company since exceptionally qualified to provide January 1, 2007 and is independent leadership to our Board of Co-Chairman of the Directors and a constructive working rela- National Underground tionship with senior management of the Railroad Freedom Center. Company. Previously, he served as Chief Executive Officer of the National

61 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Sheryl Sandberg, 41, has Orin C. Smith, 68, is retired served as the Chief Operat- and was President and ing Officer of , Chief Executive Officer of Inc., an online social net- Starbucks Corporation working company, since from 2000 to 2005. He March 2008. From 2001 to joined Starbucks as Vice March 2008, Ms. Sandberg President and Chief Finan- was the Vice President of cial Officer in 1990, Global Online Sales and became President and Operations for Google Inc., an Internet Chief Operating Officer in 1994, and search engine company. Ms. Sandberg also became a director of Starbucks in 1996. is a former Chief of Staff of the United Prior to joining Starbucks, Mr. Smith spent States Treasury Department and previously a total of 14 years with Deloitte & Touche. served as a management consultant with Mr. Smith has been a director of Nike, Inc. McKinsey & Company and as an economist since 2004 and of Washington Mutual, Inc. with The World Bank. Ms. Sandberg has since 2005. He also serves on the Board of been a director of Starbucks Corp. since Directors of Conservation International and 2009 and serves on a number of nonprofit the University of Washington Foundation boards including Women for Women Inter- Board and is Chairman of the Starbucks national, and V-Day. She served as a direc- Foundation Board. Mr. Smith has been a tor of eHealth, Inc. from 2006 to 2008. She Director of the Company since 2006. has been a Director of the Company since March 2010. Mr. Smith contributes to the mix of experi- ence and qualifications the Board seeks to Ms. Sandberg contributes to the mix of maintain primarily through his experience at experience and qualifications the Board Starbucks, Deloitte & Touche, his other seeks to maintain primarily through her public company board experience and his experience at Google, Facebook, McKinsey service on not for profit boards. At - & Company and in government service. At bucks, Mr. Smith was first responsible for Facebook, Ms. Sandberg is responsible for the financial function and then, as presi- all of Facebook’s operational functions, and dent, chief operating officer, chief executive at Google she was responsible for the officer and a member of the board of direc- development and marketing of Google’s tors, for all aspects of managing and lead- online advertising products and services. At ing Starbuck’s business offering branded McKinsey, she advised businesses on products and services worldwide. Through growth strategies. In addition to her service his service on the board of Conservation in a senior position at the United States International, Mr. Smith has experience with Treasury, Ms. Sandberg served at the World a range of environmental and sustainability Bank. As a result of this experience, Ms. issues. As a result of this experience, Mr. Sandberg brings to our Board expertise in Smith brings to our Board practical knowl- the online world, considerable knowledge edge of management and leadership of of international finance and business and a complex worldwide consumer products deep understanding of consumer behavior. businesses, expertise in financial matters and insights into international labor stan- dards, environmental, sustainability and other corporate responsibility issues.

62 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Ratification of Appointment of Approval of the 2011 Stock Independent Registered Public Incentive Plan Accountants The Board of Directors recommends that The Audit Committee of the Board has shareholders approve the Company’s appointed PricewaterhouseCoopers LLP 2011 Stock Incentive Plan (which we refer as the Company’s independent registered to as the 2011 Plan). The 2011 Plan would public accountants for the fiscal year govern grants of stock-based awards to ending October 1, 2011. Services provided employees and non-employee directors to the Company and its subsidiaries by and is intended to replace the Amended PricewaterhouseCoopers LLP in fiscal and Restated 1995 Stock Incentive Plan 2010 are described under “Audit-Related (which we refer to as the 1995 Plan) and Matters — Auditor Fees and Services,” the Amended and Restated 2005 Stock above. Incentive Plan (which we refer to as the 2005 Plan), each of which expires during We are asking our shareholders to ratify 2011. The 2011 Plan provides that shares the selection of PricewaterhouseCoopers that remain available for issuance pur- LLP as our independent registered public suant to the 1995 Plan and the 2005 Plan accountants. Although ratification is not and shares that become available under required by our Bylaws or otherwise, the those plans as a result of forfeitures may Board is submitting the selection of be issued under the 2011 Plan. As of PricewaterhouseCoopers LLP to our January 26, 2011, 70.5 million shares were shareholders for ratification as a matter of available under the 1995 Plan and the good corporate practice. 2005 Plan. In addition, the 2011 Plan includes authorization for the issuance of Representatives of Pricewaterhou- an additional 64.0 million shares of Disney seCoopers LLP will be present at the common stock thereunder. annual meeting to respond to appropriate questions and to make such statements as they may desire. The terms of the 2011 Plan are sub- stantially similar to the terms of the 2005 The affirmative vote of the holders of a Plan as currently in effect. The material majority of shares represented in person terms of the 2011 Plan are described or by proxy and entitled to vote on this under “Summary of the 2011 Plan,” below, item will be required for approval. and a copy of the 2011 Plan is attached as Abstentions will be counted as repre- Annex A to this proxy statement. The sented and entitled to vote and will there- substantive changes from the 2005 Plan fore have the effect of a negative vote. are as follows: • The 2011 Plan (in Section 6.3) provides The Board recommends that share- for acceleration of vesting of options holders vote “FOR” ratification of the upon termination of employment due to appointment of Pricewaterhou- disability, which makes treatment of seCoopers LLP as the Company’s these awards on disability consistent independent registered public with the treatment of restricted stock accountants for fiscal 2011. units. In the event shareholders do not ratify the • The 2011 Plan (in Section 6.5) allows appointment, the appointment will be awards to continue to vest when an reconsidered by the Audit Committee and employee is transferred to an entity in the Board. Even if the selection is ratified, which the Company holds an investment the Audit Committee in its discretion may even if the entity does not meet the select a different registered public formal definition of Affiliate. accounting firm at any time during the • The definition of “Fair Market Value” has year if it determines that such a change been changed to give the Compensation would be in the best interests of the Committee additional flexibility to Company and our shareholders. determine an appropriate measure of fair market value.

63 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

• Language has been changed (in Sec- Purpose of the 2011 Plan tion 6.6) to facilitate cashless exercise of options and the payment of taxes by an The 2011 Plan will govern grants of stock- exercising holder. based awards to employees and non-employee directors. It is designed to The term of the 2011 Plan is 10 years. support the Company’s long-term busi- ness objectives in a manner consistent Based upon the recommendation of the with our executive compensation philoso- Board’s Compensation Committee, the phy. The Board believes that by allowing Board of Directors has unanimously the Company to continue to offer its approved the 2011 Plan, subject to share- employees long-term, performance-based holder approval at the annual meeting. The compensation through the 2011 Plan, the 2011 Plan is designed to support the Company will promote the following key Company’s long-term business objectives objectives: in a manner consistent with our executive • aligning the interest of employees with compensation philosophy. those of the shareholders; The increase in authorized shares repre- • reinforcing key Company goals and sented by the 2011 Plan is intended to objectives that help drive shareholder secure adequate shares to fund expected value; and awards under the Company’s long-term • attracting, motivating and retaining incentive program through at least the experienced and highly qualified annual award in January 2012. The employees who contribute to the Board believes that this number repre- Company’s financial success. sents a reasonable amount of potential equity dilution and allows the Company to Shares Available Under Plans continue awarding equity incentives, which are an important component of our overall compensation program. Shares available under the 2011 Plan will include shares that remain available, or The affirmative vote of the holders of a become available due to forfeitures of majority of shares represented in person awards currently outstanding, under the or by proxy and entitled to vote on this 1995 and 2005 Plans plus an additional item will be required for approval of the 64.0 million shares authorized by the 2011 amendments to the 2011 Plan. Plan. As of January 26, 2011, and prior to Abstentions will be counted as repre- the adoption of the 2011 Plan, sented and entitled to vote and will there- 70.5 million shares remain available for fore have the effect of a negative vote. issuance of future awards pursuant to the Broker non-votes (as described under 1995 Plan and the 2005 Plan. In addition, 0.4 million shares remain available for “Information About Voting and the Meet- future awards pursuant to the Walt Disney ing — Voting”) will not be considered enti- tled to vote on this item and therefore will Company/Pixar 2004 Equity Incentive Plan not be counted in determining the number (which we refer to as the Disney/Pixar of shares necessary for approval. Plan). The shares that are available for issuance under the 2011 Plan from the 1995 and 2005 Plan, and shares that are Additional information regarding the pur- available for issuance under the Disney/ pose of the 2011 Plan, shares available Pixar Plan, may increase to the extent under plans, and the terms of the 2011 outstanding awards are cancelled due to and existing plans is set out below. forfeiture of awards or expiration of awards without exercise. The Company maintains other plans under which there are outstanding awards, but no future awards may be made from those plans.

64 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

The following table sets forth the number of shares authorized for future issuance (including shares authorized for issuance pursuant to restricted stock, restricted stock unit and stock awards) as of January 26, 2011 and after including the additional shares authorized by the 2011 Plan, along with the equity dilution represented by the shares available for future awards as a percentage of the common 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 26, 20111 71.0 3.74% Requested increase to shares available in the 2011 Plan 64.0 3.37% Shares authorized for future awards after approval of the 2011 Plan1 135.0 7.11%

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 26, 2011, the equity overhang, or the percentage of outstanding shares (plus shares that could be issued pursuant to plans) represented by all stock incentives granted and those available for future grant under all plans, was 9.8%.1 The equity overhang from all stock incentives granted and available would be approximately 12.5% assuming approval of the 2011 Plan. Equity overhang following the original approval of the 2005 Plan in February 2005 and subsequent amendments was as follows:

Action and Date Overhang After Action Adoption in February 2005 12.9% Amendment in March 2007 12.1% Amendment in March 2008 12.7% Amendment in March 2009 13.6% Amendment in March 2010 12.7%

In light of the Company’s ongoing share connection with the acquisition of Marvel), buyback program, under which the Com- the Company believes its overhang level is pany repurchased 21.2 million shares reasonable and will continue to be so after during Fiscal 2010 (net of shares issued in approval of the 2011 Plan.

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.

65 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

The following table sets forth information regarding outstanding options and restricted stock units as of January 26, 2011.

OUTSTANDING AWARDS BY EXERCISE PRICE (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 1.7 $12.42 2.1 n/a $16 - $20.99 16.1 19.99 4.5 n/a $21 - $25.99 13.4 24.16 2.4 n/a $26 - $30.99 32.4 28.98 3.9 n/a $31 - $35.99 27.4 32.89 5.5 n/a $36 - $45.99 10.5 39.62 10.0 n/a Total 101.5 $28.81 4.8 34.3

The following table sets forth information regarding options outstanding on January 26, 2011. Approximately 61.7% of all options outstanding on January 26, 2011 were exercisable on that date and had exercise prices below the closing trading price on that date, and approximately 15.3% 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 BY TIME OUTSTANDING (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 15.5 $22.85 1.9 All options outstanding less than six years 85.9 $29.88 5.3 Underwater options outstanding six years or more 0.0 NA NA

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 2008 2009 2010 Average Stock options granted 29.8 17.4 12.0 19.7 Service-based restricted stock units granted 7.4 11.3 13.8 10.8 Actual performance-based restricted stock units earned 0.3 1.8 2.6 1.6 Basic common shares outstanding at fiscal year end 1,853.8 1,861.4 1,894.1 1,869.8 Run rate 2.02% 1.64% 1.50% 1.72%

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 2008, 2009 and 2010 to adjusted grant guidelines for fiscal 2011 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.

66 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

On January 26, 2011, the closing price of if they are granted in accordance with the our common stock traded on the New Company’s Amended and Restated 2002 York Stock Exchange was $39.44 per Executive Performance Plan and subject share. to performance conditions as specified in that plan. Also, in order to meet Sec- Overview of Plans tion 162(m) requirements, the 2011 Plan includes limits on the number and type of shares that any one participant may As with the 2005 Plan, all employees of the receive during any calendar-year period, Company and its affiliates will be eligible as described below. to receive awards under the 2011 Plan, but awards under the existing plans in fiscal Neither the 2011 Plan nor the 1995 or 2005 2010 were generally limited to approx- Plans permit any modification of options imately 4,800 employees and or stock appreciation rights that would be non-employee Directors of Disney (of treated as a “repricing” (under applicable whom there are currently 12 and one of rules, regulations or New York Stock whom does not receive Director Exchange listing requirements) without the compensation). The relative weight of approval of shareholders, nor the granting equity compensation in the total compen- of discounted options or stock options sation package generally increases in rela- with reload features. They each count tion to a participant’s role in influencing stock appreciation rights as one share for shareholder value. every stock-settled exercise, regardless of the actual number of shares used to settle Like the 2005 Plan, the 2011 Plan is an the stock appreciation right upon exercise. “omnibus” stock plan that provides for a None of these plans contain an variety of equity award vehicles to main- “evergreen” provision to automatically tain flexibility. The 2011 Plan permits the increase the number of shares available grant of stock options, stock appreciation for future issuance. rights, restricted and unrestricted stock awards and stock units. As described The Disney/Pixar Plan does not permit the more fully in Compensation Discussion and granting of discounted options or stock Analysis, participants currently are gen- options with reload features. The Disney/ erally granted a mix of stock options and Pixar Plan does not prohibit the repricing restricted stock units. Restricted stock of options, but the Board does not intend units granted in fiscal 2010 that do not to reprice options or stock appreciation have performance conditions (other than rights granted from this plan without the the test to assure deductibility under Sec- approval of shareholders. In addition, the tion 162(m)) vest 25% on each of the first Company is subject to exchange rules four anniversaries of grant. Restricted which prohibit the repricing of stock stock units granted in fiscal 2010 that have options without shareholder approval. performance conditions (in addition to the test to assure deductibility under Sec- Summary of the 2011 Plan tion 162(m), where applicable) vest on the third anniversary of the grant. Except for The following is a summary of the material restricted stock units issued as a part of terms of the 2011 Plan. an executive’s bonus, a portion of restricted stock units awarded to senior Plan Administration executives (and all non-bonus related units awarded to executives subject to The selection of employee participants in Section 162(m)) include performance the 2011 Plan, the level of participation of requirements for vesting. The 2011 Plan is each participant and the terms and con- designed to meet the requirements for ditions of all awards are determined by the deductibility of executive compensation Compensation Committee. It is intended under Section 162(m) of the Internal Rev- that each member of the Compensation enue Code with respect to stock options Committee will be an “independent direc- and stock appreciation rights. Other tor” for purposes of the Company’s Corpo- awards may qualify under Section 162(m) rate Governance Guidelines, the

67 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Compensation Committee’s charter and Shares delivered under the 2011 Plan will the New York Stock Exchange listing be authorized but unissued shares of requirements; a “non-employee Director” Disney 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 granted under the 2011 the meaning of Section 162(m) of the Plan, the 2005 Plan or the 1995 Plan is Internal Revenue Code. Currently, the forfeited, cancelled, returned to the Compensation Committee is comprised of Company for failure to satisfy vesting five directors meeting these independence requirements or upon the occurrence of criteria. The Compensation Committee has other forfeiture events, or otherwise the discretionary authority to interpret the terminates without payment being made in 2011 Plan, to prescribe, amend and shares, the shares covered thereby will no rescind rules and regulations relating to longer be charged against the maximum the 2011 Plan, and to make all other share limitation (if granted under the 2011 determinations necessary or advisable for Plan) and will be available for new awards the administration of the 2011 Plan. The under the 2011 Plan, and will return at the Committee may delegate authority to same ratio as the ratio at which they were administer the 2011 Plan as it deems granted under the terms of the applicable appropriate, subject to the express limi- plan. Notwithstanding the foregoing, upon tations set forth in the 2011 Plan. In the exercise of a stock-settled stock case of awards under the 2011 Plan to appreciation right, the number of shares non-employee Directors, the powers of the subject to the award being exercised shall Compensation Committee will be be counted against the maximum exercised by the full Board. aggregate number of shares of common stock that may be issued under the plan Limits on Plan Awards as provided above, on the basis of one The Board has reserved a maximum of share for every share subject thereto, 64,000,000 new shares, plus the number of regardless of the actual number of shares shares remaining available for issuance used to settle the stock appreciation right under the 1995 and 2005 Plans immedi- upon exercise. Any awards settled in cash ately prior to approval of the 2011 Plan, for will not be counted against the maximum issuance pursuant to stock options, stock share reserve under the 2011 Plan. Any appreciation rights, restricted and unre- shares exchanged by a participant or stricted stock awards and stock unit withheld from a participant as full or partial awards under the 2011 Plan. Each share payment to the Company of the exercise subject to a stock option or stock price or the tax withholding upon exercise appreciation award reduces the number of or payment of an award will not be shares available for issuance under the returned to the number of shares available 2011 Plan by one share, and each share for issuance under the 2011 Plan. subject to an award of restricted or unre- Eligibility and Participation stricted stock, or stock unit awards reduces the number of shares available for All of the approximately 106,000 full-time issuance by two shares. A maximum of employees of the Company and its affili- 4,0000,000 shares may be granted under ates, as well as the Company’s the 2011 Plan to an individual pursuant to non-employee Directors, are eligible to stock options and stock appreciation participate in the 2011 Plan. Approx- rights awarded during any calendar year. imately 4,800 Disney employees (including For restricted stock, restricted stock units six executive officers of the Company) and and stock awards, a maximum of non-employee Directors receive long-term 2,000,000 shares may be granted under incentive awards in a given year, although the 2011 Plan to an individual during any this may vary from year to year. From time calendar year. These limitations on grants to time, the Compensation Committee (or to an individual will be applied in as to non-employee Directors, the Board) aggregate to all awards granted under any will determine who will be granted awards, equity-based compensation plan of the the number of shares subject to such Company. grants and all other terms of awards.

68 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

As described in “Corporate Governance annual awards, the exercise term is ten and Board Matters — Board Compensation”, years. The Committee specifies at the time each non-employee Director (other than each option is granted the time or times at Mr. Jobs) was awarded in 2010 and prior which, and in what proportions, an option years stock options to purchase shares of becomes vested and exercisable. Vesting Disney common stock pursuant to a may be based on the continued service of Director compensation program adopted the participant for specified time periods by the Board of Directors. Each or on the attainment of specified business non-employee Director (other than or stock price performance goals estab- Mr. Jobs) is also awarded a grant or lished by the Committee or both. The grants of stock or deferred stock units. Committee may accelerate the vesting of The Board has determined not to include options at any time and, unless otherwise stock options in Director compensation provided in the award agreement, vesting beginning in 2011. The Board expects that accelerates if the participant dies or his or annual awards of stock or deferred stock her employment terminates due to dis- units will be continued under the 2011 ability while employed by the Company or Plan, and any change to that program any of its affiliates. would be determined by the Board of Directors in the future. In general, except for termination for cause as described in the 2011 Plan, a Types of Plan Awards stock option expires on the earlier of the scheduled expiration date and (i) 12 As described in the Compensation Dis- months after termination of service, if cussion and Analysis, the Company’s cur- service ceases due to disability, (ii) for rent equity compensation awards to awards granted on or after January 1, employees are generally comprised of 2010, 36 months after termination, if serv- stock options and restricted stock units, ice ceases when the participant has though the Company did issue stock reached the age of 60 with 10 years of appreciation rights in exchange for exist- service unless management determines ing equity awards in connection with a that doing so for a participant outside the recent acquisition. The 2011 Plan provides United States would create issues under for a variety of other equity instruments to applicable local laws, (iii) 18 months after preserve flexibility. The types of securities termination, if service ceases when the that may be issued under the 2011 Plan participant is eligible to elect immediate are described below. commencement of retirement benefits under a pension plan to which the Com- Stock Options. Stock options granted pany has made contributions or if the par- under the 2011 Plan may be either ticipant died while employed by the non-qualified stock options or incentive Company or any of its affiliates, or (iv) 3 stock options qualifying under Section 422 months after termination, if service ceases of the Internal Revenue Code. The price of under any other circumstances. The any stock option granted may not be less Compensation Committee may provide for than the fair market value of the Disney extension of the expiration of options in common stock on the date the option is individual option agreements and has granted. The option price is payable in done so pursuant to employment agree- cash, shares of Disney common stock, ments of certain officers as described through a broker-assisted cashless under Payments and Rights on Termination, exercise or as otherwise permitted by the above. Compensation Committee. As noted above, the 2011 Plan allows the Commit- Stock Appreciation Rights. A stock tee to determine fair market value from appreciation right (which we refer to as an several generally accepted alternative SAR) entitles the participant, upon settle- methods of establishing such value. ment, to receive a payment based on the excess of the fair market value of a share The Compensation Committee determines of Disney common stock on the date of the terms of each stock option grant at the settlement over the base price of the right, time of the grant. Beginning with the 2010 multiplied by the applicable number of

69 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement shares of Disney common stock. SARs unit award may also be granted on a fully may be granted on a stand-alone basis or vested basis, with a deferred payment in tandem with a related stock option. The date. Stock unit awards are payable in base price may not be less than the fair cash or in shares of Disney common stock market value of a share of Disney common or in a combination of both. Stock units stock on the date of grant. The may also be granted together with related Compensation Committee will determine dividend equivalent rights. the vesting requirements and the payment and other terms of an SAR, including the Stock Awards. A stock award repre- effect of termination of service of a partic- sents shares of Disney common stock that ipant. Vesting may be based on the con- are issued free of restrictions on transfer tinued service of the participant for and free of forfeiture conditions and to specified time periods or on the attain- which the participant is entitled all the ment of specified business performance rights of a shareholder. A stock award may goals established by the Committee or be granted for past services, in lieu of both. The Committee may accelerate the bonus or other cash compensation, as vesting of SARs at any time. Generally, Director’s compensation or for any other any SAR, if granted, would terminate after valid purpose as determined by the the ten-year period from the date of the Compensation Committee. grant. SARs may be payable in cash or in shares of Disney common stock or in a Section 162(m) Awards combination of both as determined by the Committee. Awards of options and stock appreciation rights granted under the 2011 Plan will Restricted Stock. A restricted stock automatically qualify as “performance- award represents shares of Disney com- based compensation” under Sec- mon stock that are issued subject to tion 162(m) of the Internal Revenue Code restrictions on transfer and vesting pursuant to their expected terms. In addi- requirements as determined by the Com- tion, 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- Stock Units. An award of stock units tion Committee discretion to decrease the provides the participant the right to amount of compensation payable). receive a payment based on the value of a share of Disney common stock. Stock Effect of Change in Control units may be subject to such vesting requirements, restrictions and conditions Awards under the 2011 Plan are generally to payment as the Compensation Commit- subject to special provisions upon the tee determines are appropriate. Vesting occurrence of a “change in control” (as requirements may be based on the con- defined in the 2011 Plan) transaction with tinued service of the participant for a respect to the Company. Under the 2011 specified time period or on the attainment Plan, if within twelve months of a change of specified business performance goals in control there occurs a “triggering event” established by the Committee or both as (as defined in the 2011 Plan) with respect determined by the Committee. A stock to the employment of the participant, any

70 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement outstanding stock options, SARs or other able in its sole discretion for purposes of equity awards under the 2011 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 2011 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 2011 Plan are not currently determinable. With respect to Limited Transferability fiscal year 2010, 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 2011 Plan are non- captioned Fiscal 2010 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 1.1 million shares and a total of 0.5 million and distribution or through a beneficiary restricted stock units, having an aggregate designation, or in the case of nonqualified grant date fair value of $27.0 million were options, during the participant’s lifetime to awarded to the executive officers as a immediate family members of the partic- group, including Mr. Staggs, who served ipant as may be approved by the as an executive officer for a portion of the Compensation Committee. fiscal year. With respect to fiscal year 2010, options, stock units and deferred Adjustments for Corporate Changes units were granted to non-employee Directors as set forth in the tables cap- In the event of stock splits, stock divi- tioned Form of Receipt of Director Fees dends, recapitalizations, reclassifications, for Fiscal 2010 and, Director Stock Unit mergers, spin-offs or other changes Awards for Fiscal 2010 and the accom- affecting the Company or shares of Disney panying text and having an aggregate common stock, equitable adjustments grant date fair value of $2.3 million. shall be made to the number of shares of Options for a total of 10.8 million shares Disney common stock available for grant, and a total of 13.7 million restricted stock as well as to other maximum limitations units, having an aggregate grant date fair under the 2011 Plan, and the number and value of $530 million, were awarded to kind of shares of Disney common stock or employees other than executive officers other rights and prices under outstanding with respect to fiscal year 2010. awards and other terms of outstanding awards affected by such events. U.S. Tax Treatment of Awards

Term, Amendment and Termination Incentive Stock Options. An incentive stock option results in no taxable income The 2011 Plan has a term of ten years to the optionee or deduction to the Com- expiring on December 1, 2020, unless pany at the time it is granted or exercised. terminated earlier by the Board of Direc- However, the excess of the fair market tors. The Board may at any time and from value of the shares acquired over the time to time and in any respect amend or option price is an item of adjustment in modify the Plan. The Board may seek the computing the alternative minimum tax- approval of any amendment or mod- able income of the optionee. If the optio- ification by the Company’s shareholders nee holds the stock received as a result of to the extent it deems necessary or advis- an exercise of an incentive stock option

71 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement for at least two years from the date of the owned shares tendered will be considered grant and one year from the date of to have been received in a tax-free exercise, then the gain realized on dis- exchange; the optionee’s basis and hold- position of the stock is treated as a long- ing period for such number of new shares term capital gain. If the shares are will be equal to the basis and holding disposed of during this period (i.e., a period of the previously owned shares “disqualifying disposition”), then the exchanged. The optionee will have com- optionee will include in income, as com- pensation income equal to the fair market pensation for the year of the disposition, value on the date of exercise of the num- an amount equal to the excess, if any, of ber of new shares received in excess of the fair market value of the shares upon such number of exchanged shares; the exercise of the option over the option optionee’s basis in such excess shares price (or, if less, the excess of the amount will be equal to the amount of such com- realized upon disposition over the option pensation income; and the holding period price). The excess, if any, of the sale price in such excess shares will begin on the over the fair market value on the date of date of exercise. exercise will be a short-term capital gain. In such case, the Company will be entitled Stock Appreciation Rights. Generally, to a deduction, in the year of such a dis- the recipient of a stand-alone SAR will not position, for the amount includible in the recognize taxable income at the time the optionee’s income as compensation. The stand-alone SAR is granted. If an optionee’s basis in the shares acquired employee receives the appreciation upon exercise of an incentive stock option inherent in the SARs in cash, the cash will is equal to the option price paid, plus any be taxed as ordinary income to the amount includible in his or her income as a employee at the time it is received. If an result of a disqualifying disposition. employee receives the appreciation inherent in the SARs in stock, the spread Non-Qualified Stock Options. A between the then current fair market value non-qualified stock option results in no of the stock and the base price will be taxable income to the optionee or taxed as ordinary income to the employee deduction to the Company at the time it is at the time the stock is received. In gen- granted. An optionee exercising such an eral, there will be no federal income tax option will, at that time, realize taxable deduction allowed to the Company upon compensation in an amount equal to the the grant or termination of SARs. How- difference between the option price and ever, upon the settlement of an SAR, the the then market value of the shares. A Company will be entitled to a deduction deduction for federal income tax purposes equal to the amount of ordinary income will be allowable to the Company in the the recipient is required to recognize as a year of exercise in an amount equal to the result of the settlement. taxable compensation recognized by the Other Awards. The current United optionee. States federal income tax consequences The optionee’s basis in such shares is of other awards authorized under the 2011 equal to the sum of the option price plus Plan are generally in accordance with the the amount includible in his or her income following: (i) restricted stock is generally as compensation upon exercise. Any gain subject to ordinary income tax at the time (or loss) upon subsequent disposition of the restrictions lapse, unless the recipient the shares will be a long-term or short- elects to accelerate recognition as of the term gain (or loss), depending upon the date of grant; (ii) stock unit awards are holding period of the shares. generally subject to ordinary income tax at the time of payment; and (iii) unrestricted If a non-qualified option is exercised by stock awards are generally subject to tendering previously owned shares of the ordinary income tax at the time of grant. In Company’s common stock in payment of each of the foregoing cases, the Company the option price, then, instead of the will generally be entitled to a correspond- treatment described above, the following ing federal income tax deduction at the generally will apply: a number of new same time the participant recognizes shares equal to the number of previously ordinary income.

72 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Section 162(m). Compensation of per- named executive officers, as dis- sons who are “covered employees” of the closed pursuant to the compensa- Company is subject to the tax deduction tion disclosure rules of the limits of Section 162(m) of the Internal Securities and Exchange Revenue Code. Awards that qualify as Commission (which disclosure “performance-based compensation” are shall include the Compensation exempt from Section 162(m), thus allowing Discussion and Analysis, the the Company the full federal tax deduction compensation tables, and any otherwise permitted for such compensa- related material). tion. The 2011 Plan enables the Compensation Committee to grant awards The compensation of our executive offi- that will be exempt from the deduction cers is based on a design that ties a sub- limits of Section 162(m). stantial percentage of an executive’s compensation to the attainment of finan- Section 409A. Acceleration of income, cial and other performance measures that, additional taxes, and interest apply to the Board believes, promote the creation nonqualified deferred compensation that of long-term shareholder value and posi- is not compliant with Section 409A of the tion the Company for long-term success. Internal Revenue Code. To be compliant As described more fully in the Compensa- with Section 409A rules with respect to the tion Discussion and Analysis, the mix of timing of elections to defer compensation, fixed and performance based compensa- distribution events and funding must be tion, the terms of the Management satisfied. The terms of the 2011 Plan are Incentive Bonus Program and the terms of intended to ensure that awards under it long-term incentive awards, as well as the will not be subject to adverse tax con- terms of executives’ employment agree- sequences applicable to deferred ments, are all designed to enable the compensation under Section 409A. Company to attract and maintain top tal- ent while, at the same time, creating a Tax Treatment of Awards to close relationship between performance Non-Employee Directors and to Employ- and compensation. The Compensation ees Outside the United States. The Committee and the Board of Directors grant and exercise of options and awards believe that the design of the program, under the 2011 Plan to non-employee and hence the compensation awarded to Directors and to employees outside the named executive officers under the cur- United States may be taxed on a different rent program, fulfills this objective. basis. Shareholders are urged to read the Com- The Board recommends that pensation Discussion and Analysis section shareholders vote “FOR” approval of of this Proxy Statement, which discusses the 2011 Stock Incentive Plan. in detail how our compensation policies and procedures implement our compensa- tion philosophy.

Advisory Vote on Executive Although the vote is non-binding, the Compensation Board of Directors and the Compensation Committee will review the voting results in As required by Section 14A of the Secu- connection with their ongoing evaluation rities Exchange Act, we are seeking advi- of the Company’s compensation program. sory shareholder approval of the Broker non-votes (as described under compensation of named executive officers “Information About Voting and the Meeting as disclosed in the section of this proxy — Voting”) are not entitled to vote on these statement titled “Executive Compensation.” proposals and will not be counted in Shareholders are being asked to vote on evaluating the results of the vote. the following advisory resolution: Resolved, that the shareholders The Board of Directors recommends a advise that they approve the vote FOR advisory approval of the compensation of the Company’s resolution set forth above.

73 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Advisory Vote on Frequency of Votes Compensation Committee the opportunity on Executive Compensation to evaluate individual compensation deci- sions each year in light of the ongoing Section 14A of the Securities Exchange Act feedback from shareholders. requires us to submit a non-binding, advisory resolution to shareholders at least once every Given the expression of views the Company six years to determine whether advisory has received from shareholders on this votes on executive compensation should be question, the Board believes that the most held every one, two or three years. In sat- strongly held views on this question favor an isfaction of this requirement, shareholders annual advisory vote. For that reason, the are being asked to vote on the following Board of Directors recommends a vote advisory resolution: for the holding of advisory votes on Resolved, that the shareholders of executive compensation every year. the Company advise that an advi- sory resolution with respect to Broker non-votes (as described under executive compensation should be “Information About Voting and the Meeting presented every one, two or three — Voting”) are not entitled to vote on these years as reflected by their votes for proposals and will not be counted in each of these alternatives in con- evaluating the results of the vote. nection with this resolution.

In voting on this resolution, you should Shareholder Proposal mark your proxy for one, two or three based on your preference as to the fre- The Company has been notified that Unite quency with which an advisory vote on Here, a shareholder of the Company, executive compensation should be held. If intends to present a proposal for consid- you have no preference you should abstain. eration at the annual meeting. Unite Here has presented the following proposal and The optimal frequency of vote necessarily supporting statement and we are present- turns on a judgment about the relative ing the proposal and the supporting benefits and burdens of each of the statement as it was submitted to us. While options. There have been diverging views we take issue with certain of the state- expressed on this question and the Board ments contained in the proposal and the believes there is a reasonable basis for supporting statement, we have limited our each of the options. response to the most important points and have not attempted to address all the Some have argued for less frequency. They statements with which we disagree. The point out that a less frequent vote would address and stock ownership of the allow shareholders to focus on overall proponent will be furnished by the design issues rather than details of Company’s Secretary to any person, orally individual decisions, would align with the or in writing as requested, promptly upon goal of compensation programs — such as receipt of any oral or written request. that of this Company — which are designed to reward performance that The affirmative vote of the holders of a promotes long-term shareholder value, and majority of shares represented in person or would avoid the burden that annual votes by proxy and entitled to vote on the proposal would impose on shareholders required to will be required for approval of the proposal. evaluate the compensation programs of a Abstentions will be counted as represented large number of companies each year. and entitled to vote and will have the effect of a negative vote on the proposal. Broker Others believe that an annual vote is non-votes (as described under “Information needed to give shareholders the oppor- About Voting and the Meeting — Voting”) will tunity to react promptly to emerging not be considered entitled to vote on this trends in compensation, provide feedback proposal and will not be counted in before those trends become pronounced determining the number of shares necessary over time, and give the Board and the for approval of the proposal.

74 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Unite Here has notified the Company that RMG criticized the re-testing prac- it intends to present the following pro- tice, noting in February 2009 that posal for consideration at the annual “the company’s disclosure on the meeting: various performance tests is RESOLVED, that shareholders convoluted and not transparent to recommend that the Company’s shareholders…RMG believes that Compensation Committee adopt a companies should not retest their policy to only use one test to performance conditions and if assess performance in determin- they fail to meet the performance ing eligibility for awards of stock requirements, the awards should in the Long Term Incentive Plan be forfeited.” for senior executives, rather than Disney’s 2010 proxy statement allowing re-tests that increase the notes that only one re-test was likelihood of executives receiving allowed for stock units granted in the awards. calendar year 2010. Crucially, however, there is currently no Supporting Statement: In fiscal guarantee that Disney will not years 2008 and 2009, Disney’s introduce more re-testing oppor- Compensation Committee allowed tunities in future years. senior executives re-tests to determine whether they received The re-testing practice shines an performance-based “restricted unfavorable spotlight on director stock units” under the company’s Fred Langhammer who became Long Term Incentive Plan. Such a the Compensation Committee practice delinks executive com- Chairman before the 2008 annual pensation from company meeting. Mr. Langhammer was a performance because it allows director of AIG from January 2006 senior executives multiple oppor- until his November 2008 resig- tunities under different criteria to nation, and sat on AIG’s receive awards and “Compensation and Management de-emphasizes company Resources Committee” and performance as a factor in receiv- “Finance Committee.” During this ing them. period, AIG endured criticism for Disney’s Compensation Commit- showering large bonuses and lav- tee modified the plan prior to the ish junkets on top executives as 2009 annual meeting to give top the company imploded. executives three tests in order to Disney shareholders and others receive stock units granted in have also displayed an increasing fiscal year 2008. RiskMetrics concern over Disney’s executive Group (RMG), noted that “if per- compensation policies: formance units do not vest under the first criteria, the second cri- • A majority of outside share- teria would apply. If the perform- holders voted for a resolution at ance units do not vest under the the 2010 annual meeting advo- second criteria, the third criteria cating an advisory vote on would apply.” A May 11, 2009 executive compensation. MarketWatch article notes that • The Corporate Library, a “re-testing like this means execu- respected corporate governance tives are more likely to eventually authority, gave Disney a “D” get their shares, making perform- grade in its September 2010 ance a less important part of the report, stating that the grade “is outcome.” a reflection of high governance risk due to continued concerns This arrangement was not related to executive approved by shareholders. compensation.”

75 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Disney should better tie compen- appropriate to create the desired sation to performance by incentives for management. While total implementing a policy disallowing shareholder return directly measures the re-tests for assessing perform- creation of shareholder value, superior ance to determine eligibility for earnings per share performance is itself an awards, in order to better link important contributor to the creation of compensation with company such value that should likewise be performance. Accordingly, we rewarded. Yet, there can be instances urge shareholders to vote FOR where even superior earnings performance this proposal. would not be reflected in the Company’s relative stock price such as where events extraneous to management’s performance The Board of the Company have a short-term detrimental effect on recommends a vote “AGAINST” this share prices for businesses in our industry proposal for the following reasons: at the time the measurement is made. The Committee established the earnings per The Board believes that the proposal’s share measure so that the contribution to restriction to a single measure for long-term value could be rewarded even in performance tests would inappropriately these circumstances. limit the Compensation Committee’s abil- ity to craft a compensation program that Similarly, in years prior to 2010, the Com- appropriately incentivizes performance mittee established a performance test that that drives long term shareholder value. permitted vesting after four years if the performance test was not met after two As discussed more fully in the Compensa- years. The Committee did so in the belief tion Discussion and Analysis section of that measures designed to increase this proxy statement, one core element of shareholder value may have an impact the compensation program for our execu- over varying periods of time, and that it is tives established by the Compensation appropriate to reward such improvements Committee is the performance vesting whether they take a relatively shorter or criteria that tie compensation to perform- longer time to mature. While the Commit- ance measures that the Committee tee opted to simplify the structure of its believes create the appropriate set of performance tests in 2010 by moving to a incentives to drive the creation of long- single, three-year test, the Board believes term shareholder value. In each annual it is important to retain the flexibility to use grant of such awards, the Compensation those performance measures that it Committee establishes performance goals believes create the most appropriate set that it believes to be appropriate to of incentives based on experience with achieve that end in light of the prevailing incentives previously used or in reaction to competitive environment for executive changing conditions. talent. The Board believes that program has worked effectively to meet this goal. Because the proposal would restrict the Compensation Committee’s ability to use The Board believes that the appropriate measures that it believes are necessary to criteria for a performance test sometimes appropriately align incentives with the can and should be based on more than creation of long-term shareholder value, one measure of performance or based on the Board believes the proposal is measurements at more than one time. For ill-advised. example, the performance test established for stock unit awards made in 2010 and Accordingly, the Board 2011 included both a total shareholder recommends that you vote return element and an earnings per share element, in each case based on the “AGAINST” this proposal, and if the Company’s performance relative to other proposal is presented your proxy companies in the S&P 500. In creating that will be voted against this proposal design, the Committee believed that the unless you specify otherwise. use of both of these measures was

76 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Other Matters charge through one of the following methods: Management is not aware of any other 1) by internet: www.ProxyVote.com matters that will be presented at the Annual Meeting, and Company Bylaws do 2) by Phone: (800) 579-1639 not allow proposals to be presented at the 3) by email: meeting unless they were properly pre- [email protected] (your sented to the Company prior to email should contain the 12 digit December 10, 2010. However, if any other number in the subject line). question that requires a vote is properly presented at the meeting, the proxy hold- The deadline for voting by telephone or ers will vote as recommended by the electronically is 11:59 p.m., Eastern Time, Board or, if no recommendation is given, on March 22, 2011. If you are a registered in their own discretion. shareholder and attend the meeting, you may deliver your completed proxy card in person. “Street name” shareholders who wish to vote at the meeting will need to Information About Voting and obtain a proxy form from the institution the Meeting that holds their shares.

Shares Outstanding If you properly sign and return your proxy card or complete your proxy via the tele- phone or Internet, your shares will be Shareholders owning Disney common voted as you direct. If you sign and return stock at the close of business on Jan- your proxy but do not specify how you uary 24, 2011 (the record date), may vote want your shares voted, they will be voted at the 2011 Annual Meeting and any post- FOR the election of all nominees for Direc- ponements or adjournments of the meet- tor as set forth under “Election of ing. On that date, 1,898,305,774 shares of Directors,” FOR the ratification of the common stock were outstanding. Each appointment of the independent regis- share is entitled to one vote on each mat- tered public accountants, FOR approval of ter considered at the meeting. the 2011 Stock Incentive Plan, FOR the advisory vote on executive compensation, Voting ONE YEAR on the resolution relating to the frequency of advisory votes on executive Shareholders have a choice of voting over compensation and AGAINST the share- the Internet, by telephone or by using a holder proposal. traditional proxy card. You may revoke your proxy and change • To vote by Internet, go to your vote at any time before the close of www.ProxyVote.com and follow the balloting at the Annual Meeting by submit- instructions there. You will need the 12 ting a written notice to the Secretary, by digit number included on your proxy submitting a later dated and properly card, voter instruction form or notice. executed proxy (including by means of a telephone or Internet vote) or by voting in • To vote by telephone, registered share- person at the Annual Meeting. holders should dial (800) 690-6903 and follow the instructions. Beneficial hold- If you participate in the Disney Savings ers should dial the phone number listed and Investment Plan or the Disney Hourly on your voter instruction form. You will Savings and Investment Plan, you may need the 12 digit number included on give voting instructions as to the number your proxy card, voter instruction form or of shares of common stock you hold in the notice. plan as of the record date. You may pro- • If you received a notice and wish to vote vide voting instructions to Fidelity by traditional proxy card, you can Management Trust Company by voting receive a full set of materials at no online or by completing and returning a proxy card if you received one. If you hold

77 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement shares other than through these plans and compensation and the shareholder pro- you vote electronically, voting instructions posals. you give with respect to your other shares will be applied to Disney stock credited to We will post preliminary results of voting your accounts in a savings and investment at the meeting on our investor relations plan unless you request a separate control web site promptly after the meeting and number with respect to each account. To file results with the Securities and receive separate control numbers, please Exchange Commission as required by call (866) 412-8382. applicable rules.

The trustee will vote your shares in accord- Attendance at the Meeting ance with your duly executed instructions received by March 18, 2011. If you do not If you plan to attend the meeting, you send instructions, the trustee will vote the must request an admission ticket in number of shares equal to the share advance. Tickets will be issued to regis- equivalents credited to your account in the tered and beneficial owners and to one same proportion that it votes shares in guest accompanying each registered or your plan for which it did receive timely beneficial owner. You may request tickets instructions from other participants. You by: may revoke previously given voting instructions by March 18, 2011, by either • visiting www.disney.com/ revising your instructions on line or by annualmeeting2011 and following the submitting to the trustee either a written instructions provided; notice of revocation or a properly com- pleted and signed proxy card bearing a • sending an e-mail to the Shareholder later date. Your voting instructions will be Services department at kept confidential by the trustee. [email protected] providing the name under which you hold shares of record or the evidence Under New York Stock Exchange Rules, described below of your beneficial the proposal to approve the appointment ownership of shares and whether you of independent auditors is considered a are requesting one or two tickets; “discretionary” item. This means that brokerage firms may vote in their dis- • sending a fax to (818) 553-7210 provid- cretion on this matter on behalf of clients ing the name under which you hold who have not furnished voting instructions shares of record or the evidence at least 10 days before the date of the described below of your beneficial meeting. In contrast, the election of direc- ownership of shares and whether you tors, the approval of the 2011 Stock are requesting one or two tickets; Incentive Plan, the advisory vote on executive compensation, the advisory vote • calling Shareholder Services at on frequency of advisory votes on execu- (818) 553-7200 and following the tive compensation and the shareholder instructions provided; or proposals are “non-discretionary” items. • sending a request by mail to Shareholder This means brokerage firms that have not Services, The Walt Disney Company, 500 received voting instructions from their S. Buena Vista St., MC 9722, Burbank, clients on these proposals may not vote CA 91521 providing the name under on them. These so-called “broker which you hold shares of record or the non-votes” will be included in the calcu- evidence described below of your lation of the number of votes considered beneficial ownership of shares and to be present at the meeting for purposes whether you are requesting one or two of determining a quorum, but will not be tickets. considered in determining the number of votes necessary for approval and will have Please note that if you hold your shares in no effect on the outcome of the vote for “street name” (that is, through a broker or Directors, the advisory vote on executive other nominee), you will need to send a compensation, the advisory vote on fre- written request for a ticket either by regu- quency of advisory votes on executive lar mail, fax or e-mail, along with proof of

78 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

share ownership, such as a copy of the The following table shows the amount of portion of your voting instruction form Disney common stock beneficially owned showing your name and address, a bank (unless otherwise indicated) by our current or brokerage firm account statement or a Directors, nominees and named executive letter from the broker, trustee, bank or officers and by Directors, nominees and nominee holding your shares, confirming executive officers as a group. Except as ownership. otherwise indicated, all information is as of January 24, 2011.

Requests for admission tickets will be Shares processed in the order in which they are Acquirable Percent Stock Within of received and must be requested no later Name Shares1,2 Units3,4 60 Days4,5 Class than March 18, 2011. Please note that Susan E. Arnold 4,926 12,457 10,315 * seating is limited and requests for tickets Alan N. Braverman 249,091 — 664,854 * will be accepted on a first-come, first- John E. Bryson 13,392 35,743 51,115 * served basis. On the day of the meeting, John S. Chen 16,170 16,586 33,115 * each shareholder will be required to pres- Judith L. Estrin 39,197 6,272 51,115 * Robert A. Iger 1,051,401 — 2,549,961 * ent a valid picture identification such as a Steven P. Jobs 138,000,007 — — 7.3% driver’s license or passport with their Fred H. admission ticket. Seating will begin at 9:00 Langhammer 19,092 19,885 27,115 * a.m. and the meeting will begin at 10:00 Aylwin B. Lewis 11,466 18,059 33,115 * a.m. Cameras (including cell phones with Monica C. Lozano 11,627 27,170 51,115 * Robert W. Matschullat 10,923 34,004 39,115 * photographic capabilities), recording Kevin A. Mayer 65 — 115,280 * devices and other electronic devices will M. Jayne Parker 19,433 — 59,352 * not be permitted at the meeting. John E. Pepper, Jr. 71,488 17,484 21,115 * James A. Rasulo 53,815 — 638,389 * Sheryl Sandberg — 3,363 — — Orin C. Smith 9,571 6,272 21,115 * All Directors and Other Information executive officers as a group (18 persons) 139,637,261 197,295 4,604,671 7.6% Stock Ownership * Less than 1% of outstanding shares. 1 The number of shares shown includes shares that are Based on a review of filings with the Secu- individually or jointly owned, as well as shares over which the individual has either sole or shared invest- rities and Exchange Commission, the ment or voting authority. Some Directors and executive Company has determined that the follow- officers disclaim beneficial ownership of some of the ing person holds more than 5% of the shares included in the table, as indicated below: • Mr. Chen – 1,125 shares held for the benefit of chil- outstanding shares of Disney common dren; stock: • Ms. Lozano – 57 shares held for the benefit of a child; • Mr. Mayer – 65 shares held for the benefit of mem- Name and Percent bers of his family; and Address of Beneficial owner Shares of Class • Mr. Pepper – 150 shares held for the benefit of a child. Steven P. Jobs 138,000,0071 7.3% All Directors and executive officers as a group disclaim One Infinite Loop beneficial ownership of a total of 1,397 shares. Cupertino, CA 95014 2 For executive officers, the number of shares listed includes interests in shares held in Company savings FMR LLC 97,073,0552 5.1% and investment plans as of January 24, 2011: Mr. Iger— 82 Devonshire Street 17,979 shares; Mr. Rasulo—20,943 shares; Boston, MA 02109 Mr. Braverman—8,916 shares; Ms. Parker—12,418 shares and all executive officers as a group—63,114 1 Held indirectly by Mr. Jobs through a trust. shares. 2 Based on a report on Form 13F filed by FMR on 3 Reflects the number of stock units credited as of November 15, 2010 reporting share ownership as of January 24, 2011 to the account of each non-employee September 30, 2010. Director participating in the Company’s Amended and Restated 1997 Non-Employee Directors Stock and Deferred Compensation Plan. These units are payable solely in shares of Company common stock as described under “Corporate Governance and Board Matters — Board Compensation,” but do not have current voting or investment power. Excludes unvested restricted stock units awarded to executives under the Company’s Amended and Restated 2002 Executive Performance Plan which vest on a performance basis and other restricted stock units awarded to executives that have not vested under their vesting schedules.

79 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

4 Excludes dividends to be credited March 31, 2011 on elect to receive electronic proxy and restricted stock units held on December 31, 2010. 5 Reflects the number of shares that could be purchased annual report access or a paper notice of by exercise of options exercisable at January 24, 2011, availability for future annual meetings by or within 60 days thereafter under the Company’s stock option plans and the number of shares underlying registering online at www.disney.com/ restricted stock units that are not subject to perform- investors. If you received electronic or ance conditions and vest within 60 days of January 24, paper notice of availability of these proxy 2011. 6 Held indirectly by Mr. Jobs through a trust. materials and wish to receive paper deliv- ery of a full set of future proxy materials, you may do so at the same location. Section 16(a) Beneficial Ownership Beneficial or “street name” shareholders Reporting Compliance who wish to elect one of these options may also do so at www.disney.com/ Based upon a review of filings with the investors. Securities and Exchange Commission and written representations that no other Reduce Duplicate Mailings reports were required, we believe that all of our Directors and executive officers The Company is required to provide an complied during fiscal 2010 with the annual report and proxy statement or reporting requirements of Section 16(a) of notice of availability of these materials to the Securities Exchange Act of 1934. all shareholders of record. If you have more than one account in your name or at Electronic Availability of Proxy the same address as other shareholders, Statement and Annual Report the Company or your broker may dis- continue mailings of multiple copies. If you wish to receive separate mailings for As permitted by Securities and Exchange multiple accounts at the same address, Commission rules, we are making this you should mark the designated box on proxy statement and our annual report your proxy card. If you are voting by tele- available to shareholders electronically via phone or the Internet and you wish to the Internet on the Company’s website at receive multiple copies, you may notify us www.disney.com/investors. On January 28, at the address and phone number at the 2011, we began mailing to our share- end of the following paragraph if you are a holders a notice containing instructions on shareholder of record or notify your broker how to access this proxy statement and if you hold through a broker. our annual report and how to vote online. If you received that notice, you will not Once you have received notice from your receive a printed copy of the proxy broker or us that they or we will dis- materials unless you request it by follow- continue sending multiple copies to the ing the instructions for requesting such same address, you will receive only one materials contained on the notice or set copy until you are notified otherwise or forth in the following paragraph. until you revoke your consent. If you received only one copy of this proxy If you received a paper copy of this proxy statement and the annual report or notice statement by mail and you wish to receive of availability of these materials and wish a notice of availability of next year’s proxy to receive a separate copy for each statement either in paper form or shareholder at your household, or if, at electronically via e-mail, you can elect to any time, you wish to resume receiving receive a paper notice of availability by separate proxy statements or annual mail or an e-mail message that will provide reports or notices of availability, or if you a link to these documents on our website. are receiving multiple statements and By opting to receive the notice of avail- reports and wish to receive only one, ability and accessing your proxy materials please notify your broker if your shares are online, you will save the Company the cost held in a brokerage account or us if you of producing and mailing documents to hold registered shares. You can notify us you, reduce the amount of mail you by sending a written request to The Walt receive and help preserve environmental Disney Company, Shareholder Services, resources. Registered shareholders may 500 South Buena Vista Street, MC 9722,

80 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Burbank, California 91521, or by calling in the solicitation. For these and related Shareholder Services at (818) 553-7200 advisory services, we will pay Phoenix a and we will promptly deliver additional fee of $35,000 and reimburse it for certain materials as requested. out-of-pocket disbursements and expenses. Officers and regular employees Proxy Solicitation Costs of the Company may, but without compensation other than their regular The proxies being solicited hereby are compensation, solicit proxies by further being solicited by the Board of Directors mailing or personal conversations, or by of the Company. The cost of soliciting telephone, facsimile or electronic means. proxies in the enclosed form will be borne We will, upon request, reimburse broker- by the Company. We have retained Phoe- age firms and others for their reasonable nix Advisory Partners, LLC, 110 Wall expenses in forwarding solicitation Street, New York, New York 10005, to aid material to the beneficial owners of stock.

81

The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Annex A “Board” means the Board of Directors of the Company. 2011 Stock Incentive Plan “Code” means the Internal Revenue Code 1. Purpose. The purpose of The Walt Dis- of 1986, as amended. ney Company 2011 Stock Incentive Plan is to further align the interests of employees “Common Stock” means the Company’s and directors with those of the share- common stock, par value $0.01 per share. holders by providing incentive compensa- tion opportunities tied to the performance “Committee” means the Compensation of the Common Stock and by promoting Committee of the Board, or such other increased ownership of the Common committee of the Board appointed by the Stock by such individuals. The Plan is also Board to administer all or any specified intended to advance the interests of the portion of the Plan. Company and its shareholders by attract- ing, retaining and motivating key person- “ ” means The Walt Disney nel upon whose judgment, initiative and Company Company, a Delaware corporation. effort the successful conduct of the Company’s business is largely dependent. “Date of Grant” means the date on which 2. Definitions. Wherever the following cap- an Award under the Plan is granted by the italized terms are used in the Plan, they Committee, or such later date as the shall have the meanings specified below: Committee may specify to be the effective date of an Award. “Affiliate” means (i) any entity that would be treated as an “affiliate” of the Company “Disability” means a Participant being for purposes of Rule 12b-2 under the considered “disabled” within the meaning Exchange Act and (ii) any joint venture or of Section 409A(a)(2)(C) of the Code, other entity in which the Company has a unless otherwise provided in an Award direct or indirect beneficial ownership Agreement. interest representing at least one-third (1/3) of the aggregate voting power of the “Effective Date” has the meaning ascribed equity interests of such entity or one-third to it in Section 14.1 hereof. (1/3) of the aggregate fair market value of the equity interests of such entity, as “Eligible Person” means any person who is determined by the Committee. an employee of the Company or any Affili- ate or any person to whom an offer of “Applicable Exchange” means the New employment with the Company or any York Stock Exchange or such other Affiliate is extended, as determined by the exchange or automated trading system on Committee, or any person who is a which the Common Stock is principally Non-Employee Director. traded at the applicable time. “Exchange Act” means the Securities “Award” means an award of a Stock Exchange Act of 1934, as amended. Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit Award “Fair Market Value” of a share of Common or Stock Award granted under the Plan. Stock as of a given date shall be a value based on the opening, closing, actual, “Award Agreement” means a written or high, low, or average selling prices of a electronic agreement, and any and all share of the Common Stock on the Appli- amendments thereto (including any cable Exchange on the applicable date, amendment affected through a Partic- the preceding trading day, the next suc- ipant’s employment agreement), entered ceeding trading day, or an average of trad- into between the Company and a Partic- ing days, as determined by the Committee ipant setting forth the terms and con- in its discretion. Such definition(s) of Fair ditions of an Award granted to a Market Value shall be specified in each Participant. Award Agreement and may differ depend-

A-1 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement ing on whether Fair Market Value is in Incentive Plan (the “1995 Plan”), in each reference to the grant, exercise, vesting, case as in effect immediately prior to the settlement, or payout of an Award. If the Effective Date. Committee does not specify a different definition, Fair Market Value of a share of “Restricted Stock Award” means a grant of Common Stock as of a given date shall be shares of Common Stock to an Eligible the average of the highest and lowest of Person under Section 8 hereof that are the composite tape market prices at which issued subject to such vesting and trans- the shares of Common Stock shall have fer restrictions as the Committee shall been sold regular way on the Applicable determine, and such other conditions, as Exchange (or, if more appropriate under are set forth in the Plan and the applicable the rules of the Applicable Exchange, the Award Agreement. average of the highest bid and lowest ask prices) on the date as of which Fair Market “Section 162(m)” means Section 162(m) of Value is to be determined or, if there shall the Code or any successor provision be no such sale on such date, the next thereto and the regulations thereunder. preceding day on which such a sale shall have occurred. If the Common Stock is “Service” means a Participant’s employ- not traded on an established stock ment with the Company or any Affiliate or exchange, the Committee shall determine a Participant’s service as a Non-Employee in good faith the Fair Market Value in Director with the Company, as applicable. whatever manner it considers appropriate, but based on objective criteria. “Stock Award” means a grant of shares of Common Stock to an Eligible Person “Full-Value Award” means any Restricted under Section 10 hereof that are issued Stock Award, Stock Unit Award or Stock free of transfer restrictions and forfeiture Award. conditions.

“Incentive Stock Option” means a Stock “Stock Appreciation Right” means a con- Option granted under Section 6 hereof tractual right granted to an Eligible Person that is intended to meet the requirements under Section 7 hereof entitling such of Section 422 of the Code and the regu- Eligible Person to receive a payment, lations thereunder. whether in cash, Common Stock or a combination thereof, or representing the “Non-Employee Director” means any difference between the base price per member of the Board who is not an share of the right and the Fair Market employee of the Company. Value of a share of Common Stock, at such time, and subject to such conditions, “Nonqualified Stock Option” means a Stock as are set forth in the Plan and the appli- Option granted under Section 6 hereof cable Award Agreement. that is not an Incentive Stock Option. “Stock Option” means a contractual right “Participant” means any Eligible Person granted to an Eligible Person under Sec- who holds an outstanding Award under tion 6 hereof to purchase shares of the Plan. Common Stock at such time and price, and subject to such conditions, as are set “Plan” means The Walt Disney Company forth in the Plan and the applicable Award 2011 Stock Incentive Plan as set forth Agreement. herein, effective as provided in Sec- tion 14.1 hereof and as may be amended “Stock Unit Award” means a contractual from time to time. right granted to an Eligible Person under Section 9 hereof representing notional unit “Predecessor Plans” collectively means interests equal in value to a share of The Walt Disney Company Amended and Common Stock to be paid or distributed at Restated 2005 Stock Incentive Plan (the such times, and subject to such con- “2005 Plan”) and The Walt Disney Com- ditions, as set forth in the Plan and the pany Amended and Restated 1995 Stock applicable Award Agreement.

A-2 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

3. Administration. The Committee may prescribe, amend, and rescind rules and regulations relating 3.1 Committee Members. The Plan shall be to the Plan. The Committee’s determi- administered by a Committee comprised nations under the Plan need not be uni- of no fewer than two members of the form and may be made by the Committee Board. It is intended that each Committee selectively among Participants and Eligible member shall satisfy the requirements for Persons, whether or not such persons are (i) an “independent director” for purposes similarly situated. The Committee shall, in of the Company’s Corporate Governance its discretion, consider such factors as it Guidelines and the Compensation deems relevant in making its inter- Committee Charter, (ii) an “independent pretations, determinations and actions director” under rules adopted by the under the Plan including, without limi- Applicable Exchange, (iii) a “nonemployee tation, the recommendations or advice of director” for purposes of such Rule 16b-3 any officer or employee of the Company or under the Exchange Act and (iv) an such attorneys, consultants, accountants “outside director” under Section 162(m) of or other advisors as it may select. All the Code. No member of the Committee interpretations, determinations and shall be liable for any action or determi- actions by the Committee shall be final, nation made in good faith by the Commit- conclusive, and binding upon all parties. tee with respect to the Plan or any Award thereunder. 3.3 Delegation of Authority. The Committee 3.2 Committee Authority. The Committee shall have the right, from time to time, to shall have such powers and authority as delegate to one or more officers of the may be necessary or appropriate for the Company the authority of the Committee to Committee to carry out its functions as grant and determine the terms and con- described in the Plan. Subject to the ditions of Awards granted under the Plan, express limitations of the Plan, the Com- subject to the requirements of Sec- mittee shall have authority in its discretion tion 157(c) of the Delaware General Corpo- to determine the Eligible Persons to ration Law (or any successor provision) and whom, and the time or times at which, such other limitations as the Committee Awards may be granted, the number of shall determine. In no event shall any such shares, units or other rights subject to delegation of authority be permitted with each Award, the exercise, base or pur- respect to Awards to be granted to any chase price of an Award (if any), the time member of the Board or to any Eligible or times at which an Award will become Person who is subject to the reporting vested, exercisable or payable, the per- requirements of Section 16(a) of the formance goals and other conditions of an Exchange Act or who is a covered Award, the duration of the Award, and all employee under Section 162(m) of the other terms of the Award. Subject to the Code. The Committee shall also be permit- terms of the Plan, the Committee shall ted to delegate, to any appropriate officer have the authority to amend the terms of or employee of the Company, responsibility an Award in any manner that is not incon- for performing certain ministerial functions sistent with the Plan, provided that no under the Plan. In the event that the Com- such action shall adversely affect in any mittee’s authority is delegated to officers or material way the rights of a Participant employees in accordance with the fore- with respect to an outstanding Award going, all provisions of the Plan relating to without the Participant’s consent. The the Committee shall be interpreted in a Committee shall also have discretionary manner consistent with the foregoing by authority to interpret the Plan and Award treating any such reference as a reference Agreements issued under the Plan, to to such officer or employee for such pur- make factual determinations under the pose. Any action undertaken in accordance Plan, and to make all other determinations with the Committee’s delegation of author- necessary or advisable for Plan admin- ity hereunder shall have the same force and istration, including, without limitation, to effect as if such action was undertaken correct any defect, to supply any omission directly by the Committee and shall be or to reconcile any inconsistency in the deemed for all purposes of the Plan to have Plan or any Award Agreement hereunder. been taken by the Committee.

A-3 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

3.4 Grants to Non-Employee Directors. Any Plans. To the extent that any award Awards or formula for granting Awards granted under the 1995 Plan or under the under the Plan made to Non-Employee 2005 Plan prior to March 10, 2009 is Directors shall be approved by the Board. comparable to a Full-Value Award and is With respect to awards to such directors, forfeited, cancelled, returned to the all rights, powers and authorities vested in Company on or after the Effective Date for the Committee under the Plan shall failure to satisfy vesting requirements or instead be exercised by the Board, and all other conditions to such award under provisions of the Plan relating to the such Predecessor Plan, or otherwise Committee shall be interpreted in a man- terminates without an issuance of shares ner consistent with the foregoing by treat- of Common Stock being made thereunder, ing any such reference as a reference to the maximum share limitation in this Sec- the Board for such purpose. tion 4.1 shall be credited with one share of Common Stock for each share of Common Stock subject to such award under either 4. Shares Subject to the Plan. such Predecessor Plan, and such number 4.1 Maximum Share Limitations. Subject to of credited shares of Common Stock may adjustment pursuant to Section 4.3 hereof, be made subject to Awards under the the maximum aggregate number of shares Plan. To the extent that any Full-Value of Common Stock that may be issued and Award granted under the Plan or any sold under all Awards granted under the award comparable to a Full-Value Award Plan shall be 64 million shares, plus the granted under the 2005 Plan on or after aggregate number of shares remaining March 10, 2009 is forfeited, cancelled, available for issuance as awards under the returned to the Company for failure to Predecessor Plans immediately prior to satisfy vesting requirements or other con- the Effective Date. Any shares of Common ditions to the Award, or otherwise termi- Stock subject to Stock Options or Stock nates without an issuance of shares of Appreciation Rights shall be counted Common Stock being made thereunder, against the maximum share limitation of the maximum share limitation in this Sec- this Section 4.1 as one share of Common tion 4.1 shall be credited with two shares Stock for every share of Common Stock of Common Stock for each share of subject thereto. Any shares of Common Common Stock subject to such Full-Value Stock subject to Full-Value Awards shall Award or other comparable award and be counted against the maximum share such number of credited shares of Com- limitation of this Section 4.1 as two shares mon Stock may be made subject to of Common Stock for every share of Awards under the Plan. Shares of Com- Common Stock subject thereto. To the mon Stock delivered to the Company by a extent that any Award of Stock Options or Participant to (A) purchase shares of Stock Appreciation Rights granted under Common Stock upon the exercise of an the Plan or any similar award granted Award or any award under the Prede- under the Predecessor Plans prior to the cessor Plan or (B) satisfy tax withholding Effective Date is forfeited, cancelled, obligations (including shares retained from returned to the Company on or after the the Award or any award under the Prede- Effective Date for failure to satisfy vesting cessor Plan creating the obligation) shall requirements or other conditions thereof, not be added back to the number of or otherwise terminates without an issu- shares available for the future grant of ance of shares of Common Stock being Awards. Shares of Common Stock made thereunder, the maximum share repurchased by the Company on the open limitation in this Section 4.1 shall be cred- market using the proceeds from the ited with the number of shares of Common exercise of an Award or any award under Stock covered thereby and such credited the Predecessor Plan shall not increase number of shares may be made subject to the number of shares available for future Awards under the Plan, on the basis of grant of Awards. Upon exercise of a Stock one share for every share of Common Appreciation Right or the exercise of a Stock subject to such Award of Stock Stock Option by means of a net settle- Options or Stock Appreciation Rights or ment, the number of shares subject to the similar award under the Predecessor Award that are then being exercised shall

A-4 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

be counted against the maximum Common Stock, or any merger, reorganiza- aggregate number of shares of Common tion, consolidation, combination, spin-off, Stock that may be issued under the Plan or other similar corporate change, or any as provided above, on the basis of one other change affecting the Common share for every share subject thereto, Stock, the Committee shall, in the manner regardless of the actual number of shares, and to the extent it considers equitable to if any, used to settle the Stock Apprecia- the Participants and consistent with the tion Right upon exercise. This share con- terms of the Plan, cause an adjustment to tinuing rule shall also be applied to be made in (i) the maximum number and determine the number of shares that may kind of shares and the share counting become available for Awards hereunder in rules provided in Section 4.1 and Sec- respect to the exercise of any comparable tion 4.2 hereof, (ii) the number and kind of award granted under the Predecessor shares of Common Stock, units, or other Plans. Except as otherwise expressly pro- rights subject to then outstanding Awards, vided in this Section 4.1, any Awards or (iii) the exercise or base price for each portions thereof that are settled in cash share or unit or other right subject to then and not in shares of Common Stock shall outstanding Awards, and (iv) any other not be counted against the maximum terms of an Award that are affected by the share limitation of this Section 4.1. Shares event. Notwithstanding the foregoing, in of Common Stock issued and sold under the case of Incentive Stock Options, any the Plan may be either authorized but such adjustments shall, to the extent unissued shares or shares held in the practicable, be made in a manner con- Company’s treasury. In the case of sistent with the requirements of Sec- Incentive Stock Options, the foregoing tion 424(a) of the Code. provisions shall be subject to the provi- sions of the Code. 5. Participation and Awards. 4.2 Individual Participant Limitations. The maximum number of shares of Common 5.1 Designation of Participants. All Eligible Stock that may be subject to Stock Persons are eligible to be designated by Options and Stock Appreciation Rights in the Committee to receive Awards and the aggregate granted to any one Partic- become Participants under the Plan. The ipant during any single calendar year Committee has the authority, in its dis- period shall be four million shares. The cretion, to determine and designate from maximum number of shares of Common time to time those Eligible Persons who Stock that may be subject to Full-Value are to be granted Awards, the types of Awards in the aggregate granted to any Awards to be granted and the number of one Participant during any single calendar shares of Common Stock or units subject year period shall be two million shares. to Awards granted under the Plan. In The foregoing limitations shall each be selecting Eligible Persons to be Partic- applied on an aggregate basis taking into ipants and in determining the type and account Awards granted to a Participant amount of Awards to be granted under the under the Plan as well as awards of the Plan, the Committee shall consider any same type granted to a Participant under and all factors that it deems relevant or any other equity-based compensation appropriate. plan of the Company or any Affiliate. The per Participant limits described in this 5.2 Determination of Awards. The Commit- Section 4.2 shall be construed and applied tee shall determine the terms and con- consistently with Section 162(m). ditions of all Awards granted to Participants in accordance with its author- 4.3 Adjustments. If there shall occur any ity under Section 3.2 hereof. An Award change with respect to the outstanding may consist of one type of right or benefit shares of Common Stock by reason of any hereunder or of two or more such rights or recapitalization, reclassification, stock benefits granted in tandem or in the alter- dividend, extraordinary dividend, stock native. In the case of any fractional share split, reverse stock split or other dis- or unit resulting from the grant, vesting, tribution with respect to the shares of payment or crediting of dividends or divi-

A-5 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement dend equivalents under an Award, the 6.4 Term of Stock Options. The Committee Committee shall have the discretionary shall in its discretion prescribe in an authority to (i) disregard such fractional Award Agreement the period during which share or unit, (ii) round such fractional a vested Stock Option may be exercised, share or unit to the nearest lower or higher provided that the maximum term of a whole share or unit, or (iii) convert such Stock Option shall be ten years from the fractional share or unit into a right to Date of Grant. Except as otherwise pro- receive a cash payment. To the extent vided in this Section 6, Section 13.2 or as deemed necessary by the Committee, an otherwise may be provided by the Award shall be evidenced by an Award Committee in an Award Agreement, no Agreement as described in Section 13.1 Stock Option may be exercised at any hereof. time during the term thereof unless the Participant is then in the Service of the Company or one of its Affiliates. 6. Stock Options. 6.1 Grant of Stock Options. A Stock Option 6.5 Termination of Service. Subject to Sec- may be granted to any Eligible Person tion 6.8 hereof with respect to Incentive selected by the Committee. Subject to the Stock Options, the Stock Option of any provisions of Section 6.8 hereof and Sec- Participant whose Service with the Com- tion 422 of the Code, each Stock Option pany or one of its Affiliates is terminated shall be designated, in the discretion of for any reason shall terminate on the ear- the Committee, as an Incentive Stock lier of (A) the date that the Stock Option Option or as a Nonqualified Stock Option. expires in accordance with its terms or (B) unless otherwise provided in an Award Agreement, and except for termination for 6.2 Exercise Price. The exercise price per cause (as described in Section 12.2 share of a Stock Option shall not be less hereof), the expiration of the applicable than 100 percent of the Fair Market Value time period following termination of Serv- of the shares of Common Stock on the ice, in accordance with the following: Date of Grant, provided that the Commit- (1) twelve months if Service ceased due to tee may in its discretion specify for any Disability, (2) eighteen months if Service Stock Option an exercise price per share ceased at a time when the Participant is that is higher than the Fair Market Value eligible to elect immediate commence- on the Date of Grant. ment of retirement benefits at a specified retirement age under a pension plan to 6.3 Vesting of Stock Options. The Commit- which the Company or any of its Affiliates tee shall in its discretion prescribe the had made contributions, (3) eighteen time or times at which, or any conditions months if the Participant died while in the upon which, a Stock Option or portion Service of the Company or any of its Affili- thereof shall become vested and/or ates, or (4) three months if Service ceased exercisable, and may accelerate the vest- for any other reason. Except as otherwise ing or exercisability of any Stock Option at provided in Section 6, Section 13.2 or the any time. The requirements for vesting and Participant’s Award Agreement, or as may exercisability of a Stock Option may be otherwise be specified by the Committee, based on the continued Service of the following any termination of Service for Participant with the Company or an Affili- any reason, solely for the purposes of (and ate for a specified time period (or periods), solely to the extent necessary in) on the attainment of a specified perform- determining the extent to which a Stock ance goal (or goals) or on such other Option shall be exercisable (i.e., may vest) terms and conditions as approved by the following termination of Service, a Partic- Committee in its discretion. Notwithstand- ipant shall be treated as though he or she ing the foregoing provisions of this Sec- had remained in the continued Service of tion 6.3, unless otherwise provided by the the Company or any Affiliate for three Committee, each Stock Option granted to months after the date his or her Service a Participant under the Plan shall become terminated and shall not be entitled to vest exercisable in full upon such Participant’s in any Stock Options that would have Disability while in Service. become exercisable after such three

A-6 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement month period of deemed Service. The promptly delivered the amount of pro- Committee shall have authority to ceeds necessary to satisfy the exercise determine in each case whether an price, or (iv) by a combination of the authorized leave of absence or the methods described above. The Committee reassignment of a Participant’s employ- may permit payment to be made by any ment, at the request of the Company, to other method as it shall approve. In addi- an entity in which the Company has a tion, the Committee may permit any Stock substantial, direct or indirect, financial Option to be exercised without payment of interest shall be deemed a termination of the purchase price, in which case the Service for any or all purposes hereof, as Company’s sole obligation shall be to well as the effect of such a leave of issue to the Participant the same number absence or Company requested transfer of shares of Common Stock as would of employment on the vesting and have been issued had such Stock Option exercisability of a Stock Option; provided, been Stock Appreciation Rights that are however, that, unless the Committee shall being exercised at the same time in otherwise determine, an approved leave of respect of an identical number of shares absence or employment with an entity that of Common Stock. In addition to and at is not a Subsidiary but in which the Com- the time of payment of the exercise price pany holds at least one-third of the voting (or as a condition to the delivery of any power or the economic value of all classes shares without payment of the exercise of capital stock or other preferred and price), the Participant shall pay to the common equity shall be deemed not to Company the full amount of any and all result in a termination of employment for applicable income tax, employment tax purposes of the Plan and any Predecessor and other amounts required to be withheld Plan. Unless otherwise provided by the in connection with such exercise, using Committee, if an entity ceases to be an such of the methods described above for Affiliate or otherwise ceases to be quali- the payment of the exercise price or such fied under the Plan or if all or substantially other methods as may be approved by the all of the assets of an Affiliate are con- Committee and set forth in the Award veyed (other than by encumbrance), such Agreement. cessation or action, as the case may be, shall be deemed for purposes hereof to be 6.7 Limited Transferability of Nonqualified a termination of the Service. Stock Options. All Stock Options shall be nontransferable except (i) upon the Partic- 6.6 Stock Option Exercise; Tax Withholding. ipant’s death, in accordance with Sec- Subject to such terms and conditions as tion 13.2 hereof or (ii) in the case of shall be specified in an Award Agreement, Nonqualified Stock Options only, for the a Stock Option may be exercised in whole transfer of all or part of the Stock Option or in part at any time during the term to a Participant’s “family member” (as thereof by notice in the form required by defined for purposes of the Form S-8 the Company, together with payment of registration statement under the Securities the aggregate exercise price therefor and Act of 1933), as may be approved by the applicable withholding tax. Unless other- Committee in its discretion at the time of wise specified by the Committee, payment proposed transfer. The transfer of a Non- of the exercise price may be made in qualified Stock Option may be subject to accordance with any of the following such terms and conditions as the Commit- methods: (i) in cash or by cash equivalent tee may in its discretion impose from time acceptable to the Committee, (ii) by to time. Subsequent transfers of a Non- payment in shares of Common Stock that qualified Stock Option shall be prohibited have been held by the Participant for at other than in accordance with Section 13.2 least six months (or such period as the hereof. Committee may deem appropriate, for accounting purposes or otherwise) valued 6.8 Additional Rules for Incentive Stock at the Fair Market Value of such shares on Options. the date of exercise, (iii) through an open- market, broker-assisted sales transaction (a) Eligibility. An Incentive Stock Option pursuant to which the Company is may only be granted to an Eligible

A-7 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

Person who is considered an employee qualified Stock Option to the extent for purposes of Treasury Regulation that certain requirements applicable to §1.421-7(h) with respect to the Com- “incentive stock options” under the pany or any Affiliate that qualifies as a Code shall not be satisfied. An “subsidiary corporation” with respect Incentive Stock Option shall by its to the Company for purposes of Sec- terms be nontransferable other than by tion 424(f) of the Code. will or by the laws of descent and dis- (b) Annual Limits. No Incentive Stock tribution, and shall be exercisable dur- Option shall be granted to a Participant ing the lifetime of a Participant only by as a result of which the aggregate Fair such Participant. Market Value (determined as of the (e) Disqualifying Dispositions. If shares Date of Grant) of the stock with respect of Common Stock acquired by exercise to which incentive stock options under of an Incentive Stock Option are dis- Section 422 of the Code are posed of within two years following the exercisable for the first time in any Date of Grant or one year following the calendar year under the Plan and any transfer of such shares to the Partic- other stock option plans of the Com- ipant upon exercise, the Participant pany or any subsidiary or parent shall, promptly following such dis- corporation, would exceed $100,000, position, notify the Company in writing determined in accordance with Sec- of the date and terms of such dis- tion 422(d) of the Code. This limitation position and provide such other shall be applied by taking stock information regarding the disposition options into account in the order in as the Company may reasonably which granted. require. (c) Termination of Employment. Notwith- standing the provisions of Section 6.5, 6.9 Repricing Prohibited. Subject to the an Award of an Incentive Stock Option anti-dilution adjustment provisions con- may provide that such Stock Option tained in Section 4.3 hereof, without the may be exercised not later than 3 prior approval of the Company’s share- months following termination of holders, given in accordance with the rules employment of the Participant with the of the Applicable Exchange and applicable Company and all Subsidiaries, or not law, neither the Committee nor the Board later than one year following a perma- shall cause the cancellation, substitution nent and total disability within the or amendment of a Stock Option that meaning of Section 22(e)(3) of the would have the effect of reducing the Code, as and to the extent determined exercise price of such a Stock Option by the Committee to comply with the previously granted under the Plan or any requirements of Section 422 of the similar award granted under any Prede- Code. cessor Plan, or otherwise approve any modification to such a Stock Option that (d) Other Terms and Conditions; Non- would be treated as a “repricing” under transferability. Any Incentive Stock the then applicable rules, regulations or Option granted hereunder shall contain listing requirements adopted by the Appli- such additional terms and conditions, cable Exchange. not inconsistent with the terms of the Plan, as are deemed necessary or desirable by the Committee, which 7. Stock Appreciation Rights. terms, together with the terms of the Plan, shall be intended and interpreted 7.1 Grant of Stock Appreciation Rights.A to cause such Incentive Stock Option Stock Appreciation Right may be granted to qualify as an “incentive stock to any Eligible Person selected by the option” under Section 422 of the Code. Committee. Stock Appreciation Rights Notwithstanding anything else in this may be granted on a basis that allows for Section 6.8 to the contrary, an Award the exercise of the right by the Participant Agreement for an Incentive Stock or that provides for the automatic payment Option may provide that such Stock of the right upon a specified date or event. Option shall be treated as a Non-

A-8 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

7.2 Freestanding Stock Appreciation Rights. Appreciation Right, resulting in the reduction A Stock Appreciation Right may be of the corresponding number of shares granted without any related Stock Option. subject to the right so exercised as well as The Committee shall in its discretion pro- the tandem right not so exercised. A Stock vide in an Award Agreement the time or Appreciation Right granted in tandem with a times at which, or the conditions upon Stock Option hereunder shall have a base which, a Stock Appreciation Right or por- price per share equal to the per share tion thereof shall become vested and/or exercise price of the Stock Option, will be exercisable, and may accelerate the vest- vested and exercisable at the same time or ing or exercisability of any Stock times that a related Stock Option is vested Appreciation Right at any time. The and exercisable, and will expire no later than requirements for vesting and exercisability the time at which the related Stock Option of a Stock Appreciation Right may be expires. based on the continued Service of a Participant with the Company or an Affili- 7.4 Payment of Stock Appreciation Rights.A ate for a specified time period (or periods). Stock Appreciation Right will entitle the on the attainment of a specified perform- holder, upon exercise or other payment of ance goal (or goals) or on such other the Stock Appreciation Right, as appli- terms and conditions as approved by the cable, to receive an amount determined by Committee in its discretion. A Stock multiplying: (i) the excess of the Fair Mar- Appreciation Right will be exercisable or ket Value of a share of Common Stock on payable at such time or times as the date of exercise or payment of the determined by the Committee, provided Stock Appreciation Right over the base that the maximum term of a Stock price of such Stock Appreciation Right, by Appreciation Right shall be ten years from (ii) the number of shares as to which such the Date of Grant. The base price of a Stock Appreciation Right is exercised or Stock Appreciation Right granted without paid. Subject to the requirements of Sec- any related Stock Option shall be tion 409A of the Code, payment of the determined by the Committee in its sole amount determined under the foregoing discretion; provided, however, that the may be made, as approved by the base price per share of any such free- Committee and set forth in the Award standing Stock Appreciation Right shall Agreement, in shares of Common Stock not be less than 100 percent of the Fair valued at their Fair Market Value on the Market Value of the shares of Common date of exercise or payment, in cash, or in Stock on the Date of Grant. Without limit- a combination of shares of Common Stock ing the generality of the foregoing, unless and cash, subject to applicable tax with- otherwise determined by the Committee at holding requirements. the time of grant, any free-standing Stock Appreciation Right shall be subject to the 7.5 Repricing Prohibited. Subject to the anti- same rules regarding exercisability dilution adjustment provisions contained in (including those pertaining to the impact Section 4.3 hereof, without the prior appro- of termination of employment and the val of the Company’s shareholders given in periods during which such Award may be accordance with the rules of the Applicable exercised following termination of Exchange or applicable law, neither the employment) that apply to Stock Options Committee nor the Board shall cause the under Section 6. cancellation, substitution or amendment of a Stock Appreciation Right that would have 7.3 Tandem Stock Option/Stock Appreciation the effect of reducing the base price of such Rights. A Stock Appreciation Right may be a Stock Appreciation Right previously granted in tandem with a Stock Option, granted under the Plan or any similar award either at the time of grant or at any time granted under any Predecessor Plan, or thereafter during the term of the Stock otherwise approve any modification to such Option. A tandem Stock Option/Stock a Stock Appreciation Right that would be Appreciation Right will entitle the holder to treated as a “repricing” under the then elect, as to all or any portion of the number applicable rules, regulations or listing of shares subject to the Award, to exercise requirements adopted by the Applicable either the Stock Option or the Stock Exchange.

A-9 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

8. Restricted Stock Awards. the applicable Award Agreement, the Par- ticipant shall have all rights of a share- 8.1 Grant of Restricted Stock Awards.A holder with respect to the shares granted Restricted Stock Award may be granted to to the Participant under a Restricted Stock any Eligible Person selected by the Com- Award, including the right to vote the mittee. The Committee may require the shares and receive all dividends and other payment by the Participant of a specified distributions paid or made with respect purchase price in connection with any thereto. The Committee may provide in an Restricted Stock Award. Award Agreement for the payment of divi- dends and distributions to the Participant 8.2 Vesting Requirements. The restrictions at such times as paid to shareholders imposed on shares granted under a generally or at the times of vesting or Restricted Stock Award shall lapse in other payment of the Restricted Stock accordance with the vesting requirements Award. specified by the Committee, which shall be set forth in the Award Agreement. The 8.5 Section 83(b) Election. If a Participant requirements for vesting of a Restricted makes an election pursuant to Sec- Stock Award may be based on the con- tion 83(b) of the Code with respect to a tinued Service of the Participant with the Restricted Stock Award, the Participant Company or an Affiliate for a specified shall file, within 30 days following the Date time period (or periods), on the attainment of Grant, a copy of such election with the of a specified performance goal (or goals) Company and with the Internal Revenue or on such other terms and conditions as Service, in accordance with the regu- approved by the Committee in its dis- lations under Section 83 of the Code. The cretion. The Committee may accelerate Committee may provide in an Award the vesting of a Restricted Stock Award at Agreement that the Restricted Stock any time. If the vesting requirements of a Award is conditioned upon the Partic- Restricted Stock Award shall not be sat- ipant’s making or refraining from making isfied, the Award shall be forfeited and the an election with respect to the Award shares of Common Stock subject to the under Section 83(b) of the Code. Award shall be returned to the Company.

8.3 Restrictions. Shares granted under any 9. Stock Unit Awards. Restricted Stock Award may not be trans- 9.1 Grant of Stock Unit Awards. A Stock ferred, assigned or subject to any encum- Unit Award may be granted to any Eligible brance, pledge, or charge until all Person selected by the Committee. The applicable restrictions are removed or value of each stock unit under a Stock have expired, unless otherwise allowed by Unit Award is equal to the Fair Market the Committee. Failure to satisfy any Value of the Common Stock on the appli- applicable restrictions shall result in the cable date or time period of determination, subject shares of the Restricted Stock as specified by the Committee. A Stock Award being forfeited and returned to the Unit Award shall be subject to such Company. The Committee may require in restrictions and conditions as the Commit- an Award Agreement that, if certificates tee shall determine. A Stock Unit Award are issued to evidence such Restricted may be granted together with a dividend Stock, any certificates representing the equivalent right with respect to the shares shares granted under a Restricted Stock of Common Stock subject to the Award, Award bear a legend making appropriate which may be accumulated and may be reference to the restrictions imposed, and deemed reinvested in additional stock that certificates representing the shares units, as determined by the Committee in granted or sold under a Restricted Stock its discretion. Award will remain in the physical custody of an escrow holder until all restrictions 9.2 Vesting of Stock Unit Awards. On the are removed or have expired. Date of Grant, the Committee shall determine any vesting requirements with 8.4 Rights as Shareholder. Subject to the respect to a Stock Unit Award, which shall foregoing provisions of this Section 8 and be set forth in the Award Agreement. The

A-10 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement requirements for vesting of a Stock Unit 10.2 Rights as Shareholder. Subject to the Award may be based on the continued foregoing provisions of this Section 10 and Service of the Participant with the Com- the applicable Award Agreement, upon the pany or an Affiliate for a specified time issuance of the Common Stock under a period (or periods), on the attainment of a Stock Award the Participant shall have all specified performance goal (or goals) or rights of a shareholder with respect to the on such other terms and conditions as shares of Common Stock, including the approved by the Committee in its dis- right to vote the shares and receive all cretion. A Stock Unit Award may be dividends and other distributions paid or granted on a fully vested basis, with a made with respect thereto. deferred payment date and/or the Committee may accelerate the vesting of a 11. Change in Control. Stock Unit Award at any time. 11.1 Effect of a Change in Control. Except 9.3 Payment of Stock Unit Awards. A Stock to the extent an Award Agreement pro- Unit Award shall become payable to a vides for a different result (in which case Participant at the time or times determined the Award Agreement will govern and this by the Committee and set forth in the Section 11 of the Plan shall not be Award Agreement, which may be upon or applicable), and except as may be limited following the vesting of the Award. Pay- by the provisions of Section 11.3 hereof, ment of a Stock Unit Award may be made, notwithstanding anything elsewhere in the at the discretion of the Committee, in cash Plan or any rules adopted by the Commit- or in shares of Common Stock, or in a tee pursuant to the Plan to the contrary, if combination thereof, subject to applicable a Triggering Event shall occur within the tax withholding requirements. Any cash 12-month period beginning with a Change payment of a Stock Unit Award shall be in Control of the Company, then, effective made based upon the Fair Market Value of immediately prior to the Triggering Event: the Common Stock, determined on such date or over such time period as (i) each outstanding Stock Option and determined by the Committee. Stock Appreciation Right, to the extent that it shall not otherwise have become 9.4 No Rights as Shareholder. The Partic- vested and exercisable, shall ipant shall not have any rights as a share- automatically become fully and holder with respect to the shares subject immediately vested and exercisable, to a Stock Unit Award until such time as without regard to any otherwise appli- shares of Common Stock are delivered to cable vesting requirement; the Participant pursuant to the terms of (ii) each Restricted Stock Award shall the Award Agreement. become fully and immediately vested and all forfeiture and transfer 10. Stock Awards. restrictions thereon shall lapse; and 10.1 Grant of Stock Awards. A Stock Award (iii) each outstanding Stock Unit Award may be granted to any Eligible Person shall become immediately and fully selected by the Committee. A Stock vested and payable; Award may be granted for past services, in lieu of bonus or other cash compensation, provided, however, that with respect to as directors’ compensation or for any Stock Unit Awards and any other Awards other valid purpose as determined by the that are subject to Section 409A of the Committee. A Stock Award granted to an Code and the guidance issued thereunder Eligible Person represents shares of (“Section 409A”), the Common Stock, Common Stock that are issued without securities, cash or other consideration restrictions on transfer and other incidents payable with respect to the Award shall be of ownership and free of forfeiture con- payable immediately following (and in no ditions, except as otherwise provided in event more than 90 days following) the the Plan and the Award Agreement. The Participant’s “separation from service” (as Committee may, in connection with any defined under Section 409A), except that, Stock Award, require the payment of a to the extent that such Awards are held by specified purchase price. a Participant who is a “specified employ-

A-11 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement ee” (as determined under Section 409A), power of the then outstanding stock the delivery of the Common Stock, secu- of the Company entitled to vote rities, cash or other consideration payable generally in the election of direc- with respect to such Awards shall be tors, but excluding the following delayed to the date that is six months and transactions (the “Excluded one day following the Participant’s Acquisitions”): “separation from service” solely to the extent necessary to avoid the additional (1) any acquisition directly from taxes imposed by Section 409A(a)(i)(B) of the Company (other than an the Code. acquisition by virtue of the exercise of a conversion privilege of a security that was not 11.2 Definitions. acquired directly from the Company), (a) Cause. For purposes of this Sec- tion 11, the term “Cause” shall mean (2) any acquisition by the Com- that a Participant (i) has been con- pany, and victed of, or entered a plea of nolo (3) any acquisition by an contendere to, a crime that constitutes employee benefit plan (or related a felony under Federal or state law, trust) sponsored or maintained by (ii) has engaged in willful gross mis- the Company); conduct in the performance of the Par- ticipant’s duties to the Company or an (ii) any time during a period of 12 Affiliate or (iii) has committed a material months or less, individuals who at breach of any written agreement with the beginning of such period con- the Company or any Affiliate with stitute the Board (and any new respect to confidentiality, non- directors whose election by the competition, nonsolicitation or similar Board or nomination for election by restrictive covenant. Subject to the first the Company’s shareholders was sentence of Section 11.1 hereof, in the approved by a vote of at least a event that a Participant is a party to an majority of the directors then still in employment agreement with the office who either were directors at Company or any Affiliate that defines the beginning of the period or termination on account of “Cause” (or whose election or nomination for a term having similar meaning), such election was so approved) ceasing definition shall apply as the definition for any reason to constitute a of a termination on account of “Cause” majority thereof: for purposes hereof, but only to the (iii) an acquisition (other than an extent that such definition provides the Excluded Acquisition) by any Per- Participant with greater rights. A termi- son of fifty percent (50%) or more of nation on account of Cause shall be the voting power or value of the communicated by written notice to the Company’s stock; Participant, and shall be deemed to occur on the date such notice is deliv- (iv) the consummation of a merger, ered to the Participant. consolidation, reorganization or sim- ilar corporate transaction, whether or (b) Change in Control. For purposes of this Section 11, a “Change in Control” not the Company is the surviving shall occur upon: company in such transaction, other than a merger, consolidation, or (i) the acquisition within any reorganization that would result in the 12-month period by any individual, Persons who are beneficial owners of entity or group (within the meaning the Company’s stock outstanding of Section 13(d)(3) or 14(d)(2) of the immediately prior thereto continuing Exchange Act) (a “Person”) of bene- to beneficially own, directly or ficial ownership (within the meaning indirectly, in substantially the same of Rule 13d-3 promulgated under proportions, at least fifty percent the Exchange Act) of thirty percent (50%) of the combined voting power (30%) or more of the total voting or value of the Company’s stock (or

A-12 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

the stock of the surviving entity) out- be deemed to occur on the date such standing immediately after such notice is delivered to the Committee, merger, consolidation or reorganiza- unless the circumstances giving rise to tion; or the Constructive Termination are cured (v) the sale or other disposition within five (5) days of such notice. during any 12 month period of all or (d) Triggering Event. For purposes of substantially all of the assets of the this Section 11, a “Triggering Event” Company, provided that such sale shall mean (i) the termination of Service is of assets having a total gross fair of a Participant by the Company or an market value equal to or greater Affiliate (or any successor thereof) than 40% of the total gross fair other than on account of death, Dis- market value of the assets of the ability or Cause or (ii) the occurrence of Company immediately prior to such a Constructive Termination. sale or disposition.

The foregoing definition of “Change in 11.3 Excise Tax Limit. Except to the extent Control” is intended to comply with the an Award Agreement provides for a differ- requirements of Section 409A of the Code ent result (in which case the Award and the guidance issued thereunder and Agreement will govern and this Sec- shall be interpreted and applied by the tion 11.3 shall not be applicable), in the Committee in a manner consistent there- event that the vesting of Awards together with. with all other payments and the value of any benefits received or to be received by (c) Constructive Termination. For pur- a Participant (the “Total Payments”) would poses of this Section 11, a result in all or a portion of such Total “Constructive Termination” shall mean Payments being subject to the excise tax a termination of employment by a Par- under Section 4999 of the Code (the ticipant within sixty (60) days following “Excise Tax”), then the Participant’s Total the occurrence of any one or more of Payments shall be either (i) the full amount the following events without the Partic- of such payments and benefits or (ii) such ipant’s written consent (i) any reduction lesser amount that would result in no por- in position, title (for Vice Presidents tion of the Total Payments being subject and above), overall responsibilities, to excise tax under Section 4999 of the level of authority, level of reporting (for Code, whichever of the foregoing Vice Presidents and above), base amounts, taking into account the appli- compensation, annual incentive com- cable Federal, state, and local employ- pensation opportunity, aggregate ment taxes, income taxes and the Excise employee benefits or (ii) a request that Tax, results in the receipt by the Partic- the Participant’s location of employ- ipant, on an after-tax basis, of the greatest ment be relocated by more than fifty amount of payments and benefits (50) miles. Subject to the first sentence notwithstanding that all or some portion of of Section 11.1 hereof, in the event that such payments and benefits may be tax- a Participant is a party to an employ- able under Section 4999 of the Code. ment agreement with the Company or Solely to the extent that the Participant is an Affiliate (or a successor entity) that better off on an after-tax basis as a result defines a termination on account of of the reduction of Total Payments, such “Constructive Termination,” “Good payments and benefits shall be reduced or Reason” or “Breach of Agreement” (or eliminated, as determined by the Com- a term having similar meaning), such pany, in the following order: (i) any cash definition shall apply as the definition payments, (ii) any taxable benefits, (iii) any of “Constructive Termination” for pur- nontaxable benefits, and (iv) any vesting or poses hereof in lieu of the foregoing, accelerated delivery of equity awards in but only to the extent that such defi- each case in reverse order beginning with nition provides the Participant with the payments or benefits that would have greater rights. A Constructive Termi- been paid, in the ordinary course, the far- nation shall be communicated by writ- thest in time from the date that triggers ten notice to the Committee, and shall the applicable Excise Tax.

A-13 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement

All determinations required to be made provided that, if a Participant is party to an under this Section 11 shall be made by the employment (or similar) agreement with accounting firm which is the Company’s the Company or any Affiliate that defines outside auditor immediately prior to the the term “cause,” such definition shall event triggering the payments that are apply for purposes of the Plan. The subject to the Excise Tax (the “Accounting Company shall have the power to Firm”). The Company shall cause the determine whether the Participant has Accounting Firm to provide detailed sup- been terminated for cause and the date porting calculations of its determinations upon which such termination for cause to the Company and the Participant. All occurs. Any such determination shall be fees and expenses of the Accounting Firm final, conclusive and binding upon the shall be borne solely by the Company. The Participant. In addition, if the Company Accounting Firm’s determinations must be shall reasonably determine that a Partic- made with substantial authority (within the ipant has committed or may have commit- meaning of Section 6662 of the Code). For ted any act which could constitute the the purposes of all calculations under basis for a termination of such Partic- Section 280G of the Code and the applica- ipant’s employment for cause, the Com- tion of this Section 11.3, all determinations pany may suspend the Participant’s rights as to the present value shall be made in to exercise any option, receive any pay- accordance with the regulations promul- ment or vest in any right with respect to gated under Section 280G of the Code. any Award pending a determination by the Company of whether an act has been committed which could constitute the 12. Forfeiture Events. basis for a termination for “cause” as pro- 12.1 General. The Committee may specify vided in this Section 12.2. Notwithstanding in an Award Agreement at the time of the anything in this Section 12.2 to the con- Award that the Participant’s rights, pay- trary, following a Change in Control, ments and benefits with respect to an whether cause exists with respect to the Award shall be subject to reduction, can- termination of a Participant’s employment cellation, forfeiture or recoupment upon shall be determined exclusively by apply- the occurrence of certain specified events, ing the provisions of Section 11. in addition to any otherwise applicable vesting or performance conditions of an 13. General Provisions. Award. Such events shall include, but shall not be limited to, termination of Service for 13.1 Award Agreement. To the extent cause, violation of material Company poli- deemed necessary by the Committee, an cies, breach of noncompetition, con- Award under the Plan shall be evidenced fidentiality or other restrictive covenants by an Award Agreement in a written or that may apply to the Participant, or other electronic form approved by the Commit- conduct by the Participant that is detri- tee setting forth the number of shares of mental to the business or reputation of the Common Stock or units subject to the Company. Award, the exercise price, base price, or purchase price of the Award, the time or 12.2 Termination for Cause. Unless other- times at which an Award will become wise provided by the Committee and set vested, exercisable or payable and the forth in an Award Agreement, if a Partic- term of the Award. The Award Agreement ipant’s employment with the Company or may also set forth the effect on an Award any Affiliate shall be terminated for cause, of termination of Service under certain the Company may, in its sole discretion, circumstances. The Award Agreement immediately terminate such Participant’s shall be subject to and incorporate, by right to any further payments, vesting or reference or otherwise, all of the appli- exercisability with respect to any Award in cable terms and conditions of the Plan, its entirety. The Company shall, in its sole and may also set forth other terms and discretion, determine whether the con- conditions applicable to the Award as duct, actions, omissions or nonfeasance determined by the Committee consistent of a Participant give rise to cause to with the limitations of the Plan. Award terminate such Participant’s employment; Agreements evidencing Incentive Stock

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Options shall contain such terms and with their terms at the same time they conditions as may be necessary to meet would have expired if such Participant had the applicable provisions of Section 422 of not died, and may be exercised prior to the Code. The grant of an Award under the their expiration by a Beneficiary in respect Plan shall not confer any rights upon the to the same number of shares, in the same Participant holding such Award other than manner and to the same extent as if such such terms, and subject to such con- Participant were then living. In the case of ditions, as are specified in the Plan as Awards other than Stock Options, except being applicable to such type of Award (or as otherwise provided in an Award to all Awards) or as are expressly set forth Agreement, any outstanding Awards of a in the Award Agreement. The Committee Participant who dies while in Service shall need not require the execution of an become fully vested and, in the case of Award Agreement by a Participant, in Stock Appreciation Rights, exercisable as which case, acceptance of the Award by provided above with respect to stock the Participant shall constitute agreement options, and in the case of all other types by the Participant to the terms, conditions, of Awards, payable to the Beneficiary restrictions and limitations set forth in the promptly following the Participant’s death. Plan and the Award Agreement as well as the administrative guidelines of the Com- 13.3 No Assignment or Transfer; Beneficia- pany in effect from time to time. ries. Except as provided in Sections 6.7 and 13.2 hereof, Awards under the Plan 13.2 Treatment of Awards upon Death.In shall not be assignable or transferable by the event of the death of a Participant the Participant, and shall not be subject in while employed by the Company or any of any manner to assignment, alienation, its Affiliates, except as otherwise provided pledge, encumbrance or charge. Notwith- by the Committee in an Award Agreement, standing the foregoing, the Committee an outstanding Award may be exercised may provide in the terms of an Award by or shall become payable to the Partic- Agreement or in any other manner pre- ipant’s beneficiary as designated by the scribed by the Committee that the Partic- Participant in the manner prescribed by ipant shall have the right to designate a the Committee or, in the absence of an beneficiary or beneficiaries who shall be authorized beneficiary designation, by the entitled to any rights, payments or other a legatee or legatees of such Award under benefits specified under an Award follow- the Participant’s last will, or by such ing the Participant’s death. During the life- Participant’s executors, personal repre- time of a Participant, an Award shall be sentatives or distributees of such Award in exercised only by such Participant or such accordance with the Participant’s will or Participant’s guardian or legal representa- the laws of descent and distribution (a tive. “Beneficiary”). In the case of Stock Options, except as otherwise provided in 13.4 Deferrals of Payment. The Committee an Award Agreement, any outstanding may in its discretion permit a Participant Stock Options of a Participant who dies to defer the receipt of payment of cash or while in Service may be exercised by such delivery of shares of Common Stock that Beneficiary in respect of all or any part of would otherwise be due to the Participant the total number of shares subject to such by virtue of the exercise of a right or the options at the time of such Participant’s satisfaction of vesting or other conditions death (whether or not, at the time of death, with respect to an Award. If any such the deceased Participant would have been deferral is to be permitted by the Commit- entitled to exercise such options to the tee, the Committee shall establish rules extent of all or any of the shares covered and procedures relating to such deferral in thereby). However, except as otherwise a manner intended to comply with the provided by the Committee in an Award requirements of Section 409A of the Code, Agreement, in the event of the death of the including, without limitation, the time when Participant after the date of termination of an election to defer may be made, the time Service while an Option remains out- period of the deferral and the events that standing, then such deceased Partic- would result in payment of the deferred ipant’s Options shall expire in accordance amount, the interest or other earnings

A-15 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement attributable to the deferral and the method been fully met. As a condition precedent of funding, if any, attributable to the to the issuance of shares pursuant to the deferred amount. grant or exercise of an Award, the Com- pany may require the Participant to take 13.5 Employment or Service. Nothing in the any reasonable action to meet such Plan, in the grant of any Award or in any requirements. The Committee may impose Award Agreement shall confer upon any such conditions on any shares of Common Eligible Person or any Participant any right Stock issuable under the Plan as it may to continue in the Service of the Company deem advisable, including, without limi- or any of its Affiliates, or interfere in any tation, restrictions under the Securities Act way with the right of the Company or any of 1933, as amended, under the require- of its Affiliates to terminate the employ- ments of any exchange upon which such ment or other service relationship of an shares of the same class are then listed, Eligible employee or a Participant for any and under any blue sky or other securities reason at any time. laws applicable to such shares. The Committee may also require the Partic- 13.6 Rights as Shareholder. A Participant ipant to represent and warrant at the time shall have no rights as a holder of shares of issuance or transfer that the shares of of Common Stock with respect to any Common Stock are being acquired only unissued securities covered by an Award for investment purposes and without any until the date the Participant becomes the current intention to sell or distribute such holder of record of such securities. Except shares. as provided in Section 4.3 hereof, no adjustment or other provision shall be 13.8 Tax Withholding. The Participant shall made for dividends or other shareholder be responsible for payment of any taxes or rights, except to the extent that the Award similar charges required by law to be paid Agreement provides for dividend pay- or withheld from an Award or an amount ments or dividend equivalent rights. The paid in satisfaction of an Award. Any Committee may determine in its discretion required withholdings shall be paid by the the manner of delivery of Common Stock Participant on or prior to the payment or to be issued under the Plan, which may be other event that results in taxable income by delivery of stock certificates, electronic in respect of an Award. The Award account entry into new or existing Agreement may specify the manner in accounts or any other means as the which the withholding obligation shall be Committee, in its discretion, deems satisfied with respect to the particular type appropriate. The Committee may require of Award. that any stock certificates that may be issued be held in escrow by the Company 13.9 Unfunded Plan. The adoption of the for any shares of Common Stock or cause Plan and any reservation of shares of the shares to be legended in order to Common Stock or cash amounts by the comply with the securities laws or other Company to discharge its obligations applicable restrictions, or should the hereunder shall not be deemed to create a shares of Common Stock be represented trust or other funded arrangement. Except by book or electronic account entry rather upon the issuance of Common Stock than a certificate, the Committee may take pursuant to an Award, any rights of a Par- such steps to restrict transfer of the ticipant under the Plan shall be those of a shares of Common Stock as the Commit- general unsecured creditor of the Com- tee considers necessary or advisable. pany, and neither a Participant nor the Participant’s permitted transferees or 13.7 Securities Laws. No shares of Com- estate shall have any other interest in any mon Stock will be issued or transferred assets of the Company by virtue of the pursuant to an Award unless and until all Plan. Notwithstanding the foregoing, the then applicable requirements imposed by Company shall have the right to implement Federal and state securities and other or set aside funds in a grantor trust, sub- laws, rules and regulations and by any ject to the claims of the Company’s cred- regulatory agencies having jurisdiction, itors or otherwise, to discharge its and by the Applicable Exchange, have obligations under the Plan.

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13.10 Other Compensation and Benefit necessary or appropriate for such pur- Plans. The adoption of the Plan shall not poses, without thereby affecting the terms affect any other share incentive or other of the Plan as in effect for any other pur- compensation plans in effect for the pose. Company or any Affiliate, nor shall the Plan preclude the Company from 13.14 Substitute Awards in Corporate Trans- establishing any other forms of share actions. Nothing contained in the Plan shall incentive or other compensation or benefit be construed to limit the right of the program for employees of the Company or Committee to grant Awards under the Plan any Affiliate. The amount of any in connection with the acquisition, compensation deemed to be received by a whether by purchase, merger, con- Participant pursuant to an Award shall not solidation or other corporate transaction, constitute includable compensation for of the business or assets of any corpo- purposes of determining the amount of ration or other entity. Without limiting the benefits to which a Participant is entitled foregoing, the Committee may grant under any other compensation or benefit Awards under the Plan to an employee or plan or program of the Company or an director of another corporation who Affiliate, including, without limitation, becomes an Eligible Person by reason of under any pension or severance benefits any such corporate transaction in sub- plan, except to the extent specifically stitution for awards previously granted by provided by the terms of any such plan. such corporation or entity to such person. The terms and conditions of the substitute 13.11 Plan Binding on Transferees. The Awards may vary from the terms and Plan shall be binding upon the Company, conditions that would otherwise be its transferees and assigns, and the Partic required by the Plan solely to the extent ipant, the Participant’s executor, admin- the Committee deems necessary for such istrator and permitted transferees and purpose. beneficiaries. 13.15 Coordination with 2002 Executive 13.12 Severability. If any provision of the Performance Plan. For purposes of Plan or any Award Agreement shall be Restricted Stock Awards, Stock Unit determined to be illegal or unenforceable Awards and Stock Awards granted under by any court of law in any jurisdiction, the the Plan that are intended to qualify as remaining provisions hereof and thereof “performance-based” compensation shall be severable and enforceable in under Section 162(m) of the Code, such accordance with their terms, and all provi- Awards shall be granted in accordance sions shall remain enforceable in any other with the provisions of the Company’s 2002 jurisdiction. Executive Performance Plan (or any suc- cessor plan) to the extent necessary to 13.13 Foreign Jurisdictions. The Committee satisfy the requirements of Section 162(m) may adopt, amend and terminate such of the Code. arrangements and grant such Awards, not inconsistent with the intent of the Plan, as 13.16 Section 409A Compliance. To the it may deem necessary or desirable to extent applicable, it is intended that the comply with any tax, securities, regulatory Plan and all Awards hereunder comply or other laws of other jurisdictions with with the requirements of Section 409A of respect to Awards that may be subject to the Code, and the Plan and all Award such laws. The terms and conditions of Agreements shall be interpreted and such Awards may vary from the terms and applied by the Committee in a manner conditions that would otherwise be consistent with this intent in order to avoid required by the Plan solely to the extent the imposition of any additional tax under the Committee deems necessary for such Section 409A of the Code. In the event purpose. Moreover, the Board may that any provision of the Plan or an Award approve such supplements to or amend- Agreement is determined by the Commit- ments, restatements or alternative ver- tee to not comply with the applicable sions of the Plan, not inconsistent with the requirements of Section 409A of the Code, intent of the Plan, as it may consider the Committee shall have the authority to

A-17 The Walt Disney Company Notice of 2011 Annual Meeting and Proxy Statement take such actions and to make such tofore granted without the consent of the changes to the Plan or an Award Agree- Participant or the permitted transferee of ment as the Committee deems necessary the Award. to comply with such requirements, pro- vided that no such action shall adversely 14.3 Termination. The Plan shall terminate affect any outstanding Award without the on the tenth anniversary of the date the consent of the affected Participant. Not- Plan is approved by the Board. The Board withstanding the foregoing or anything may, in its discretion and at any earlier elsewhere in the Plan or an Award Agree- date, terminate the Plan. Notwithstanding ment to the contrary: (a) unless the Com- the foregoing, no termination of the Plan mittee shall otherwise expressly provide, shall adversely affect any Award there- the term “disability” shall have the mean- tofore granted without the consent of the ing given to such term under Section 409A Participant or the permitted transferee of and the regulations and guidance issued the Award. thereunder with respect to any Awards (other than Stock Options), and (b) if a Participant is a “specified employee” as defined in Section 409A of the Code at the time of termination of Service with respect to an Award, then solely to the extent necessary to avoid the imposition of any additional tax under Section 409A of the Code, the commencement of any pay- ments or benefits under the Award shall be deferred until the date that is six months following the Participant’s termi- nation of Service (or such other period as required to comply with Section 409A).

13.17 Governing Law. The Plan and all rights hereunder shall be subject to and interpreted in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws, and to applicable Federal securities laws.

14. Effective Date; Amendment and Termination. 14.1 Effective Date. The Plan shall become effective immediately following its appro- val by the shareholders of the Company.

14.2 Amendment. The Board may at any time and from time to time and in any respect, amend or modify the Plan. The Board may seek the approval of any amendment or modification by the Company’s shareholders to the extent it deems necessary or advisable in its dis- cretion, including for purposes of com- pliance with Section 162(m) or Section 422 of the Code or the listing or governance requirements of the Applicable Exchange. No amendment or modification of the Plan shall adversely affect any Award there-

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