______________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):
November 30, 2018
__________

The Walt Disney Company
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of incorporation)
1-11605
(Commission File Number)
95-4545390
(IRS Employer Identification No.)

500 South Buena Vista Street
Burbank, California 91521
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (818) 560-1000
Not applicable
(Former name or address, if changed since last report)

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
________________________________________________________________________





Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e)    On November 30, 2018, The Walt Disney Company (the “Company”) and Robert A. Iger entered into an amendment to Mr. Iger’s employment agreement with the Company (the “Amendment”). In the Amendment, the Company and Mr. Iger agreed to certain adjustments with respect to the one-time performance share unit award granted to Mr. Iger in December 2017 (the “Extension PSU Award”) in connection with his agreement to extend his tenure as the Company’s chief executive officer at the time the Company entered into a merger agreement with 21st Century Fox (the “21st CF Merger Agreement”).

As originally awarded, 50% of the target number of units would have been earned if the Company’s total shareholder return (“TSR”) over the applicable performance period equaled the 25th percentile of the total shareholder return of the companies in the S&P 500 Index (“Relative TSR”), with the target number of units being earned at the 50th percentile, and a maximum of 150% of the target number of units being earned at the 75th percentile. The Company and Mr. Iger have agreed to adjustments that establish meaningfully more rigorous performance goals:

•
As revised, no units will be earned if the Company’s Relative TSR is less than or equal to the 25th percentile, the level at which the target number of units is earned has increased from the 50th percentile to the 65th percentile, and the maximum number of units that can be earned (at the 75th percentile) has decreased from 150% to 125%.

•
The percentage of the target number of units earned is determined by mathematical linear interpolation at performance levels between the 25th and the 65th percentile (from 0% at the 25th to 100% at the 65th percentile), and between the 65th and the 75th percentile (from 100% at the 65th to 125% at the 75th percentile).

To maintain the initial negotiated value of the Extension PSU Award with the addition of more challenging performance criteria that reduce the likelihood of earning the units, the target number of units subject to the award has been increased to 937,599 units, as determined by applying a Monte Carlo simulation and the price of the Company’s common stock established for purposes of applying the exchange ratio under the 21st CF Merger Agreement.

As a result of this Amendment and the more rigorous performance goals, Mr. Iger will receive fewer shares than under the original award if the Company’s Relative TSR does not exceed the 60.5th percentile over the performance period. For example:

•
At the 25th percentile, Mr. Iger will receive no shares versus 343,949 shares under the original award, a reduction of 100%.

•
At the 35th percentile, Mr. Iger will receive 234,400 shares versus 481,529 shares under the original award, a reduction of 51%.

•
At the 50th percentile, Mr. Iger will receive 585,999 shares versus 687,898 shares under the original award, a reduction of 15%.

•
At the 60.5th percentile, Mr. Iger will receive shares equivalent to the number he would have received under the original award at the 60.5th percentile, and at the 75th percentile and above will receive no more than a 14% increase in achievable units compared to the original award.

•
In addition, if the Company’s TSR over the performance period is negative, Mr. Iger may not earn more than 100% of the target number of units.

The remaining terms and conditions of the Extension PSU Award will continue unchanged.





The Company and Mr. Iger have also agreed that annual performance share unit awards granted to Mr. Iger following the closing under the 21st CF Merger Agreement will include the limitation to 100% of the target number of units if the Company’s TSR over the relevant performance period is negative.

The foregoing description is qualified by reference to the Amendment and the restated Extension PSU Award, which are attached as Exhibit 10.1 and Exhibit 10.2, respectively, and each of which is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
 
 
 
 
 
 
The Walt Disney Company
 
 
 
 
By:
 
/s/ Roger J. Patterson
 
 
 
Roger J. Patterson
 
 
 
Associate General Counsel and Assistant Secretary
 
 
 
Registered In-House Counsel
 
Dated: December 3, 2018





Exhibit 10.1

November 30, 2018

Mr. Robert Iger
Chief Executive Officer and Chairman
The Walt Disney Company
500 S. Buena Vista Avenue
Burbank, CA

Amendment to Amended and Restated Employment Agreement
Dated as of October 6, 2011, as amended

This letter amends your Amended and Restated Employment Agreement, dated October 6, 2011, as amended by letters dated July 1, 2013, October 2, 2014, March 22, 2017 and December 13, 2017 (as amended, the “Agreement ” ), to modify the performance conditions applicable to certain performance stock unit awards in the manner specified below.
1. The terms and conditions of the Extension PSUs as originally set forth in Section 5 of the letter dated December 13, 2017 shall be as set forth in the attached Performance-Based Stock Unit Award Agreement, dated as of December 13, 2017 and as amended and restated as of the date hereof (the “Restated 2017 Award Agreement”).
2. As to any annual performance stock unit awards to be issued in accordance with Section 3 of the letter dated December 13, 2017 at or following the Transaction Closing Date, notwithstanding the provisions of Sections 3(c)(ii)(A) and 3(c)(ii)(E) of the Agreement, if the Total Shareholder Return (as such term is defined in the Restated 2017 Award Agreement) of the Company with respect to the applicable performance period is negative, not more that 100% of the units subject to such award shall be earned and payable.
3. Except as specified above, the Agreement shall otherwise continue in accordance with its terms and, in the event of any conflict between the terms contained










herein and the Agreement, the terms contained herein shall govern. Defined terms used, but not defined, in this letter have the meanings ascribed thereto in the Agreement.

If you agree that the foregoing sets forth our full understanding regarding the amendment of the Agreement, please evidence your agreement and acceptance by counter-signing two copies of this letter where indicated below, returning one executed copy to me.

THE WALT DISNEY COMPANY

/s/ Alan N. Braverman
 By: Alan N. Braverman
Senior Executive Vice President,
General Counsel and Secretary


AGREED AND ACEPTED:

/s/ Robert A. Iger
Robert A. Iger

Dated: November 30, 2018


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Exhibit 10.2

THE WALT DISNEY COMPANY
Performance-Based Stock Unit Award
(Four-Year Vesting subject to Total Shareholder Return Test)
As Amended and Restated November 30, 2018
AMENDED AND RESTATED AWARD AGREEMENT, dated as of November 30, 2018, between The Walt Disney Company, a Delaware corporation (“ Disney ”), and Robert Iger (the “ Participant ”). This award was initially granted on December 13, 2017 (the “ Date of Grant ”) by the Compensation Committee of the Disney Board of Directors (the “ Committee ”) pursuant to the terms of the Amended and Restated 2002 Executive Performance Plan (the “ Plan ”), and pursuant to the terms of the 2011 Stock Incentive Plan (the “ Stock Plan ”), and is amended and restated hereby. The applicable terms of the Plan and the Stock Plan are incorporated herein by reference, including the definitions of terms contained therein.
Section 1. Stock Unit Award . Disney granted the Participant an award of Stock Units on December 13, 2017 (the “Award”). Disney and the Participant hereby agree to amend and restate the terms of such Award to modify the vesting requirements applicable with respect to such Award in the manner specified below and to increase the target number of Stock Units subject to the Award to 937,599 (such target number of Stock Units, together with such number of additional whole or fractional Stock Unit(s), if any, as may from time to time be credited with respect thereto (as dividend equivalents) pursuant to Section 4 hereof, being referred to herein as the “ Target Award Amount ”). The number of Stock Units which may be earned hereunder is dependent upon the satisfaction of the conditions set forth herein and may range from no Stock Units to 125% of the Target Award Amount. The Stock Units are notional units of measurement denominated in Shares of Disney (i.e., one Stock Unit is equivalent in value to one Share, subject to the terms hereof). The Stock Units represent an unfunded, unsecured obligation of Disney.
Section 2. Forfeiture of Award Notwithstanding anything in this Award Agreement to the contrary, this Award shall be forfeited without any obligation for Disney or any Affiliate to make any payment to the Participant hereunder in the event that either (i) Participant terminates employment voluntarily (other than pursuant to a Termination for Good Reason as defined in Participant’s employment agreement with Disney) prior to the Scheduled Vesting Date (as defined below) or (ii) the “ Transaction Closing Date” (as defined in the Letter Agreement) does not occur on or before the Scheduled Vesting Date.
Section 3. Vesting Requirements . Subject to Section 2, the vesting of this Award (other than pursuant to accelerated vesting in certain circumstances as provided in Section 4 below or vesting pursuant to Section 7 below) shall be subject to the satisfaction of the conditions set forth in each of subsections A and B of this Section 3:
A.
Total Shareholder Return Test. The vesting of the Target Award Amount (the “ TSR Target Award Amount ”) shall be conditioned upon the satisfaction of a performance vesting requirement (the “ TSR Performance Requirement ”) based on Total Shareholder Return of Disney as compared to the Total Shareholder Returns of the S&P 500 Companies, in each case, with respect to the approximately four-year period ending on the Determination Date (as each such term is defined below). To satisfy the TSR Performance Requirement, the TSR Percentile (as hereinafter defined)


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of Disney must exceed the TSR Percentile of 25.00% of the S&P 500 Companies (the “ S&P 25 th TSR Percentile ”). If this requirement is met, the number of Stock Units as to which the TSR Performance Requirement shall be satisfied shall be determined as follows:
i.
If the TSR Percentile of Disney is equal to “ S&P 25 th TSR Percentile ”, then the number of Stock Units which shall satisfy the TSR Performance Requirement shall be 0% of the TSR Target Award Amount.
ii.
If the TSR Percentile of Disney equals the TSR Percentile of 65.00% of the S&P 500 Companies (the “ S&P 65 th TSR Percentile ”), the number of Stock Units which shall satisfy the TSR Performance Requirement shall be 100% of the TSR Target Award Amount.
iii.
If the TSR Percentile of Disney equals or exceeds the TSR Percentile of 75.00% of the S&P 500 Companies (the “ S&P 75 th TSR Percentile ”), the number of Stock Units which shall satisfy the TSR Performance Requirement shall be 125% of the TSR Target Award Amount.
iv.
If the TSR Percentile of Disney exceeds the S&P 25 th TSR Percentile but is less than the S&P 65 th TSR Percentile or exceeds the S&P 65 th TSR Percentile but is less than the S&P 75 th TSR Percentile the percentage of Stock Units as to which the TSR Performance Requirement shall have been satisfied shall be determined by mathematical interpolation between 0% and 100% or 100% and 125%, as applicable. For example, if the TSR Percentile of Disney is 35.00%, then Stock Units equal to 25% of the TSR Target Award Amount shall have satisfied the TSR Performance Requirement; if the TSR Percentile of Disney is 60.00%, then 87.5% of the TSR Target Award Amount shall have satisfied the TSR Performance Requirement.
v.
Notwithstanding the foregoing, provisions of this subsection 3(A), if Disney’s Total Shareholder Return at the Determination Date is a negative number, in no event shall the number of Stock Units which shall satisfy the TSR Performance Requirement exceed 100% of the TSR Target Award Amount
For the purposes hereof, the terms set forth below shall have the following meanings:
“ Determination Date ” shall mean the date which precedes the Scheduled Vesting Date (as hereinafter defined) by one month.
“ Total Shareholder Return ” shall mean an amount equal to the average of the total return figures for the approximately four-year period ending on the twenty (20) trading days referred to below as currently reported under “Comparative Returns” by Bloomberg L.P. (“ Bloomberg ”) (or any other reporting service that the Committee may designate from time to time):
(i)
for Disney (as such total return figures for Disney may be adjusted by the Committee, by no later than the Scheduled Vesting Date, to take into account any factors which the Committee has determined are not properly reflected in such reported figures) or
(ii)
for any other S&P 500 Company,

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in each case reported for the twenty (20) latest trading days up to and (if the Determination Date is a trading day) including the Determination Date. In determining Total Shareholder Return, the total return figures for each of Disney and each other S&P 500 Company for such respective four year periods shall be compared to the relative values reported for each such company for the twenty (20) days commencing with the day that is twenty (20) trading days prior to the Date of Grant.
“ TSR Percentile ” shall mean the percentile ranking (which shall be carried out to two decimal points) as determined by Disney on the basis of the Total Shareholder Return figures reported by Bloomberg (or any other reporting service that the Committee may designate from time to time) for each of the S&P 500 Companies, including Disney (provided that in the case of Disney adjustments may be made by the Committee with respect to Total Shareholder Return as provided above).
“ S&P 500 Companies ” shall mean all of the companies which are listed on the Standard & Poor’s 500 Composite Index, including Disney, on the date which is approximately four years and twenty (20) trading days prior to the Determination Date and which remain continuously listed on the Standard & Poor’s 500 Composite Index through and including the Determination Date; provided however, that for the purposes hereof the Standard & Poor’s 500 Composite Index shall be deemed to include companies that were removed therefrom during the measurement period but that continued during the entire measurement period to have their shares listed on at least one of the NYSE, NASDAQ, American Stock Exchange, Boston Stock Exchange, Chicago Stock Exchange, National Stock Exchanged (formerly Cincinnati Stock Exchange), NYSE Arca (formerly known as the Pacific Stock Exchange), Philadelphia Stock Exchange or any other exchange(s) that the Committee may designate from time to time.
B.
Service Vesting Requirement . In addition to performance vesting requirements of subsection A and subsection B, if applicable, of this Section 3, the right of the Participant to receive payment of this Award shall become vested only if he or she remains continuously employed by Disney or an Affiliate from the date hereof until the Scheduled Vesting Date.
If the service vesting requirements of this Section 3.C are not satisfied, all of the Stock Units subject to this Award shall be immediately forfeited and the Participant’s rights with respect thereto shall cease.
Subject to any limitations set forth in Section 6, Stock Units for which all of the requirements of this Section 3 have been satisfied shall become vested and shall thereafter be payable in accordance with Section 6 hereof. Subject to the terms, conditions and performance-based vesting requirements set forth herein, the Stock Units subject to this Award will vest on December 31, 2021 (the “ Scheduled Vesting Date ”).
Section 4. Accelerated Vesting . Notwithstanding the terms and conditions of Section 3 hereof, if the Participant dies or incurs a disability (within the meaning of Section 409A of the Internal Revenue Code), or incurs a Triggering Event within the 12-month period following a Change in Control in accordance with Section 11 of the Stock Plan as in effect as of the date of the Triggering Event (any of the foregoing being an “ Accelerating Event ”) (provided, in each case, that the Participant is employed by Disney (or an Affiliate) at the time of such Accelerating Event), this Award shall become fully vested with respect to the Target Award Amount of Stock Units on the later to occur of (i) the date of the Participant’s death or disability or the occurrence of such a Triggering Event and (ii) the occurrence of Transaction Closing Date (as defined in the Letter Agreement) on or before

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the Scheduled Vesting Date; provided, however, that notwithstanding the foregoing, if such Accelerating Event shall have occurred after the Determination Date but before the Scheduled Vesting Date, then the number of Stock Units which shall become fully vested shall be determined on the same basis as if the Participant had been continuously employed by Disney (or an Affiliate) until the Scheduled Vesting Date and shall be payable in accordance with Section 6 hereof to the extent that it has not previously been forfeited. For the avoidance of doubt, if the Transaction Closing Date does not occur on or before the Scheduled Vesting Date, no accelerated vesting shall occur pursuant to this Section 4.
Section 5. Dividend Equivalents . Any dividends paid in cash on Shares of Disney will be credited to the Participant with respect to the Target Award Amount of Stock Units as additional Stock Units as if the Stock Units previously held by the Participant were outstanding Shares, as follows: such credit shall be made in whole and/or fractional Stock Units on the Target Award Amount as in effect at the time of such crediting and shall be based on the fair market value (as defined in the Stock Plan) of the Shares on the date of payment of such dividend. All such additional Stock Units shall be subject to the same vesting requirements applicable to the Stock Units in respect of which they were credited and shall be payable in accordance with Section 5 hereof.
Section 6. Payment of Award . In no event shall a payment be made in respect to this Award unless the Transaction Closing Date does in fact occur on or before the Scheduled Vesting Date. Subject to the immediately preceding sentence, payment of any vested portion of the TSR Target Award Amount shall be made within 30 days following the later of:
(i)
the date as of which all of the vesting requirements under Section 3 applicable to the TSR Target Award Amount as applicable, shall have been satisfied, or
(ii)
the date of certification of achievement of the Performance Target by the Committee, as required under Section 3.A and 3.B, if applicable,
(or within 30 days following acceleration of vesting under Section 3 hereof, if applicable) but in no event later than two and one-half months after the end of Disney’s fiscal year in which the Scheduled Vesting Date occurs. The Stock Units shall be paid in cash or in Shares (or some combination thereof), as determined by the Committee in its discretion at the time of payment, and in either case shall be paid to the Participant after deduction of applicable minimum statutory withholding taxes.
Section 7. Extended Vesting
(a) Notwithstanding any other term or provision hereof, if at the time of termination of employment (other than upon the scheduled expiration date of an employment agreement) Participant is employed pursuant to an employment agreement with Disney or an Affiliate which provides under certain circumstances for the continued vesting of any Stock Units subject to this Award in the event of the termination of such employment agreement prior to its scheduled expiration date (a “Contractual Extension Provision”), then, except as otherwise provided in such employment agreement, (i) this Section 7 shall be interpreted and applied in all respects as if Participant had remained continuously employed by Disney or an Affiliate thereof from the Date of Grant of this Award through the scheduled expiration date of such employment agreement and (ii) the date of termination of Participant’s employment for all purposes under this Section 7 shall be deemed to be the scheduled expiration date of such employment agreement. For the avoidance of doubt, nothing in this Section 7(a) shall be interpreted or construed to limit the applicability of Section 2 hereof.

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(b) Solely for purposes of determining whether, and to what extent, the Participant shall have satisfied the service vesting requirement in Section 3.C, the Participant shall be deemed to have continued in employment (without duplication of any service credit afforded with respect to a Contractual Extension Provision) with Disney or an Affiliate during any period for which the Company provides Participant pay in lieu of notice in connection with The Worker Adjustment and Retraining Notification Act, as currently in effect and as the same may be amended from time to time, or any successor statute thereto or any comparable provision of state, local or foreign law applicable to the Participant.
Section 8. Restrictions on Transfer . Neither this Award nor any Stock Units covered hereby may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to Disney as a result of forfeiture of the Stock Units as provided herein and as provided in Section 6 of the Plan. The Stock Units constitute Restricted Units as defined in Section 2.2 of the Plan.
Section 9. No Voting Rights . The Stock Units granted pursuant to this Award, whether or not vested, will not confer any voting rights upon the Participant, unless and until the Award is paid in Shares.
Section 10. Award Subject to Plan . This Restricted Stock Unit Award is subject to the terms of the Plan and the Stock Plan, the terms and provisions of which are hereby incorporated by reference. In the event of a conflict or ambiguity between any term or provision contained herein and a term or provision of the Plan or the Stock Plan, the Plan or the Stock Plan, as applicable, will govern and prevail; provided, however, that in no event shall the Stock Plan or this Award Agreement be construed to override the provisions of Section 2 hereof.
Section 11. Changes in Capitalization . The Stock Units under this Award shall be subject to the provisions of the Plan relating to adjustments for changes in corporate capitalization.
Section 12. No Right of Employment . Nothing in this Award Agreement shall confer upon the Participant any right to continue as an employee of Disney or an Affiliate nor interfere in any way with the right of Disney or an Affiliate to terminate the Participant's employment at any time or to change the terms and conditions of such employment.
Section 13. Effect of Employment Agreement. If the Participant is employed pursuant to an employment agreement with Disney, any provisions thereof relating to the effect of a termination of the Participant’s employment upon his or her rights with respect to this Award, including, without limitation, any provisions regarding acceleration of vesting and/or payment of this Award in the event of termination of employment, shall be fully applicable and supersede any provisions hereof (other than Section 2, as incorporated from the Letter Agreement) with respect to the same subject matter.
Section 14. Data Privacy . The Participant expressly authorizes and consents to the collection, possession, use, retention and transfer of personal data of the Participant, whether in electronic or other form, by and among Disney, its Affiliates, third-party administrator(s) and other possible recipients, in each case for the exclusive purpose of implementing, administering, facilitating and/or managing the Participant’s Awards under, and participation in, the Plan and the Stock Plan. Such personal data may include, without limitation, the Participant’s name, home address and telephone number, date of birth, Social Security Number, social insurance number or other identification number, salary, nationality, job title and other job-related information, tax information, the number of Disney shares held or sold by the Participant, and the details of all Awards (including any information contained in this Award and all Award-related materials) granted to the Participant, whether exercised, unexercised, vested, unvested, cancelled or outstanding (“ Data ”). The

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Participant acknowledges, understands and agrees that Data will be transferred to Merrill Lynch, which is assisting Disney with the implementation, administration and management of the Plan and the Stock Plan, and/or to such other third-party plan administrator(s) and/or recipients as may be selected by Disney in the future. The Participant understands that one or more of the administrators or recipients of Data may be located in countries other than the country of Participant’s current residence, and that such other countries may have data privacy laws and protections different from, and less protective than, the laws and protections of the country of Participant’s current residence, the Member States of the European Union or any other country to which the Participant may be at any time relocated.
Section 15. Governing Law . This Award Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the choice of law principles thereof.

THE WALT DISNEY COMPANY

/s/ Alan N. Braverman
 By: Alan N. Braverman
Senior Executive Vice President,
General Counsel and Secretary

AGREED AND ACEPTED:

/s/ Robert A. Iger
Robert A. Iger




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