WALT DISNEY CO/ (Form: 10-Q, Received: 02/03/2009 17:20:08)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934


For the Quarterly Period Ended		Commission File Number 1-11605
December 27, 2008

LOGO

Incorporated in Delaware

I.R.S. Employer Identification

No. 95-4545390

500 South Buena Vista Street, Burbank, California 91521

(818) 560-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).


Large accelerated filer	X	Accelerated filer

Non-accelerated filer (Do not check if a smaller reporting company)		Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes No X

There were 1,856,334,612 shares of common stock outstanding as of January 30, 2009.

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited; in millions, except per share data)


	Quarter Ended
	December 27, 2008			December 29, 2007
Revenues	$	9,599		$	10,452

Costs and expenses		(8,382	)		(8,419	)

Other income		114			—

Net interest expense		(139	)		(123	)

Equity in the income of investees		147			123


Income before income taxes and minority interests		1,339			2,033

Income taxes		(488	)		(759	)

Minority interests		(6	)		(24	)


Net income	$	845		$	1,250

Earnings per share:
Diluted	$	0.45		$	0.63

Basic	$	0.46		$	0.66

Weighted average number of common and common equivalent shares outstanding:
Diluted		1,872			1,989

Basic		1,852			1,904

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; in millions, except per share data)


	December 27, 2008			September 27, 2008
ASSETS
Current assets
Cash and cash equivalents	$	3,795		$	3,001
Receivables		6,106			5,373
Inventories		1,174			1,124
Television costs		708			541
Deferred income taxes		1,024			1,024
Other current assets		665			603

Total current assets		13,472			11,666
Film and television costs		5,582			5,394
Investments		1,674			1,563
Parks, resorts and other property, at cost
Attractions, buildings and equipment		31,407			31,493
Accumulated depreciation		(16,434	)		(16,310	)

		14,973			15,183
Projects in progress		1,167			1,169
Land		1,165			1,180

		17,305			17,532
Intangible assets, net		2,404			2,428
Goodwill		22,392			22,151
Other assets		2,072			1,763

	$	64,901		$	62,497

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and other accrued liabilities	$	6,638		$	5,980
Current portion of borrowings		3,771			3,529
Unearned royalties and other advances		2,195			2,082

Total current liabilities		12,604			11,591
Borrowings		12,232			11,110
Deferred income taxes		2,380			2,350
Other long-term liabilities		3,770			3,779
Minority interests		1,260			1,344
Commitments and contingencies
Shareholders’ equity
Preferred stock, $.01 par value
Authorized – 100 million shares, Issued – none		—			—
Common stock, $.01 par value
Authorized – 3.6 billion shares, Issued – 2.6 billion shares		26,662			26,546
Retained earnings		28,575			28,413
Accumulated other comprehensive income (loss)		77			(81	)

		55,314			54,878

Treasury stock, at cost, 780.3 million shares at December 27, 2008 and 777.1 million shares at September 27, 2008		(22,659	)		(22,555	)

		32,655			32,323

	$	64,901		$	62,497

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)


	Quarter Ended
	December 27, 2008			December 29, 2007
OPERATING ACTIVITIES
Net income	$	845		$	1,250
Depreciation and amortization		396			385
Gain on sale of equity investment		(114	)		—
Deferred income taxes		(24	)		(31	)
Equity in the income of investees		(147	)		(123	)
Cash distributions received from equity investees		87			119
Minority interests		6			24
Net change in film and television costs		(245	)		216
Equity-based compensation		114			103
Other		31			(4	)
Changes in operating assets and liabilities:
Receivables		(779	)		(1,990	)
Inventories		(18	)		(34	)
Other assets		16			(17	)
Accounts payable and other accrued liabilities		(325	)		188
Income taxes		419			576

Cash provided by operations		262			662


INVESTING ACTIVITIES
Investments in parks, resorts and other property		(291	)		(249	)
Proceeds from sale of equity investments		185			—
Acquisitions		(475	)		(17	)
Other		3			(58	)

Cash used in investing activities		(578	)		(324	)


FINANCING ACTIVITIES
Commercial paper borrowings, net		687			(402	)
Borrowings		1,096			854
Reduction of borrowings		(579	)		(117	)
Repurchases of common stock		(104	)		(1,045	)
Exercise of stock options and other		10			116

Cash provided/(used) by financing activities		1,110			(594	)


Increase/(decrease) in cash and cash equivalents		794			(256	)
Cash and cash equivalents, beginning of period		3,001			3,670

Cash and cash equivalents, end of period	$	3,795		$	3,414

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


1.		*Principles of Consolidation*

These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, normal recurring adjustments considered necessary for a fair presentation have been reflected in these Condensed Consolidated Financial Statements. Operating results for the quarter ended December 27, 2008 are not necessarily indicative of the results that may be expected for the year ending October 3, 2009. Certain reclassifications have been made in the prior year financial statements to conform to the current year presentation.

These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended September 27, 2008.

In December 1999, DVD Financing, Inc. (DFI), a subsidiary of Disney Vacation Development, Inc. and an indirect subsidiary of the Company, completed a receivables sale transaction that established a facility that permitted DFI to sell receivables arising from the sale of vacation club memberships on a periodic basis. In connection with this facility, DFI prepares separate financial statements, although its separate assets and liabilities are also consolidated in these financial statements. DFI’s ability to sell new receivables under this facility ended on December 4, 2008. (See Note 12 for further discussion of this facility in the Company’s disclosures related to FSP FAS 140-4 and FIN 46(R)-8)

The terms “Company,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company and the subsidiaries through which our various businesses are actually conducted.


2.		*Segment Information*

The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and in assessing performance. The Company reports the performance of its operating segments including equity in the income of investees, which consists primarily of cable businesses included in the Media Networks segment.

The Company has combined the operations and management of Disney Interactive Studios and the Walt Disney Internet Group into a new business unit, the Disney Interactive Media Group which creates and delivers Disney-branded entertainment and lifestyle content across interactive media platforms. The primary operating businesses of the Disney Interactive Media Group are Disney Interactive Studios, which produces video games for global distribution, and Disney Online, which produces web sites and online virtual worlds in the United States and internationally. The Disney Interactive Media Group also manages the Company’s Disney-branded mobile phone initiatives and provides technical infrastructure services to the Company’s non Disney-branded websites, such as ABC.com and ESPN.com, and to its Disney-branded e-commerce websites, principally Disneyshopping.com and Walt Disney Parks and Resorts Online. The Disney Interactive Media Group is reimbursed for the cost of providing these technical infrastructure services, and since these other websites that the Disney Interactive Media Group supports are managed within the Company’s other segments, the financial results of these websites are reported within the Company’s other segments rather than as part of the Disney Interactive Media Group.

Beginning with the first quarter fiscal 2009 financial statements, the Company is reporting the Disney Interactive Media Group along with certain new business initiatives as “Interactive Media” for segment reporting purposes. Previously, Disney Interactive Studios and the Walt Disney Internet Group

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

were reported in the Consumer Products and Media Networks segments, respectively, while the new business initiatives were reported in corporate and unallocated shared expenses. The new presentation aligns with how management reports and measures segment performance for internal management purposes.


	Quarter Ended
	December 27, 2008			December 29, 2007
*Revenues* ^(1 ) :
Media Networks	$	3,903		$	4,109
Parks and Resorts		2,665			2,772
Studio Entertainment		1,945			2,641
Consumer Products		773			654
Interactive Media		313			276

	$	9,599		$	10,452

*Segment operating income (loss)* ⁽ ¹⁾ :
Media Networks	$	655		$	929
Parks and Resorts		382			505
Studio Entertainment		187			514
Consumer Products		265			287
Interactive Media		(45	)		13

	$	1,444		$	2,248

⁽¹ ⁾

Studio Entertainment segment revenues and operating income include an allocation of Consumer Products and Interactive Media revenues, which is meant to reflect royalties on sales of merchandise based on certain Studio film properties. Consumer Products and Interactive Media results exclude amounts allocated to Studio Entertainment. For the quarters ended December 27, 2008 and December 29, 2007, the intersegment revenue and operating income was $43 million and $44 million between Consumer Products and Studio Entertainment, respectively, and $9 million and $10 million between Interactive Media and Studio Entertainment, respectively.

A reconciliation of segment operating income to income before income taxes and minority interests is as follows:


	Quarter Ended
	December 27, 2008			December 29, 2007
Segment operating income	$	1,444		$	2,248
Corporate and unallocated shared expenses		(80	)		(92	)
Other income		114			—
Net interest expense		(139	)		(123	)

Income before income taxes and minority interests	$	1,339		$	2,033

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


3.		*Acquisitions and Dispositions and Other Income*

Acquisitions

In December 2008, the Company acquired an additional 26% interest in Jetix Europe N.V., a publicly traded pan-European kids entertainment company, for approximately $349 million (bringing our total ownership interest to over 99%). The Company intends to acquire the remaining outstanding shares through open-market purchases and statutory buy-out proceedings. The Company is in the process of finalizing its allocation of the purchase price to the assets acquired and liabilities assumed.

On October 11, 2008, the Company entered into an agreement with Media-One Holdings Limited to acquire a 49% ownership interest in Media-One TV, LLC (Media-One TV) for approximately $233 million. Consummation of the transaction is subject to receipt of regulatory approval from Russian governmental authorities. If such approval is obtained, the joint venture plans to launch a predominately free-to-air Disney branded television channel on 30 stations throughout Russia that are currently owned and operated by Media-One TV. The Company expects to provide programming, marketing and content acquisition support while Media-One TV would provide local market operating and advertising experience.

On May 9, 2008, the Company acquired an 18% interest (bringing its fully diluted interest to 32%) in UTV Software Communications Limited (UTV), a media company headquartered and publicly traded in India, for approximately $197 million. In accordance with Indian securities regulations, the Company was required to make an open tender offer to purchase up to an additional 23% of UTV’s voting shares held by the public for a price equivalent to the May 9th Indian rupee purchase price. In November 2008, the Company completed the open offer and acquired an incremental 23% of UTV’s voting shares for approximately $138 million. Due to the change in the exchange rate between the US dollar and the Indian rupee from May to November, the dollar price per share was lower in November as compared to May. UTV’s founder has a four year option to buy all or a portion of the shares acquired during the open offer period at a price no less than the Company’s open offer price or the then trading price, capped at a 10% annual return. The Company does not have the right to vote the shares subject to the option until the expiration of the option and accordingly the Company’s ownership interest in voting shares is 48%. In addition to the acquisition of UTV, on August 5, 2008, the Company invested $28 million in a UTV subsidiary, UTV Global Broadcasting Limited, (along with UTV, “the UTV Group”). The UTV Group is accounted for under the equity method.

As of December 27, 2008, the Company’s combined carrying value of the UTV Group was $371 million. Due to a recent decline in UTV’s publicly traded stock price, the market value of the Company’s shares of UTV has declined to approximately $111 million. Given the short duration of the decline and other indicators of value including projected future cash flows along with the fact that UTV’s performance to date has been consistent with our expectations, the Company does not believe that it is appropriate to recognize an impairment at this time. However, the Company will continue to monitor and evaluate its investment in UTV and the performance of the underlying business.

On August 1, 2007, the Company acquired all of the outstanding shares of Club Penguin Entertainment, Inc. (Club Penguin), a Canadian company that operates clubpenguin.com, an online virtual world for children. The purchase price included upfront cash consideration of approximately $350 million and additional consideration of up to $350 million payable if Club Penguin achieved predefined earnings targets in calendar years 2008 and 2009. There have been no additional payments of consideration for Club Penguin and remaining additional consideration of $175 million is potentially payable based on calendar year 2009 results.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

Dispositions

On December 22, 2008, the Company sold our investment in two pay television services in Latin America, for approximately $185 million, resulting in a pre-tax gain of $114 million reported in “Other income” in the Condensed Consolidated Statements of Income.


4.		*Borrowings*

During the quarter ended December 27, 2008, the Company’s borrowing activity was as follows:


	September 27, 2008		Additions		Payments			Other Activity			December 27, 2008
Commercial paper borrowings	$	1,985	$	687	$	—		$	—		$	2,672
U.S. medium-term notes		7,005		1,000		(125	)		(9	)		7,871
European medium-term notes		318		—		—			28			346
Capital Cities/ABC debt		178		—		—			(1	)		177
Film financing		248		95		(47	)		7			303
Other ⁽¹⁾		1,199		1		(2	)		216			1,414
Euro Disney borrowings ⁽²⁾		2,457		—		(30	)		(101	)		2,326
Hong Kong Disneyland borrowings ⁽³⁾		1,249		—		(375	)		20			894

Total	$	14,639	$	1,783	$	(579	)	$	160		$	16,003

⁽¹ ⁾	The other activity is primarily market value adjustments for debt with qualifying hedges.

⁽² ⁾	The other activity is primarily the impact of foreign currency translation as a result of the strengthening of the U.S. dollar against the Euro.

⁽³ ⁾	During the quarter, Hong Kong Disneyland borrowed funds from the Company that were used to repay Hong Kong Disneyland’s commercial term loan and revolving credit facility.


5.		*Euro Disney and Hong Kong Disneyland*

The Company has a 51% effective ownership interest in the operations of Euro Disney and a 43% ownership interest in the operations of Hong Kong Disneyland which are both consolidated in the Company’s financial statements.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

The following table presents a condensed consolidating balance sheet for the Company as of December 27, 2008, reflecting the impact of consolidating the balance sheets of Euro Disney and Hong Kong Disneyland.


	Before Euro Disney and Hong Kong Disneyland Consolidation		Euro Disney, Hong Kong Disneyland and Adjustments			Total
Cash and cash equivalents	$	3,282	$	513		$	3,795
Other current assets		9,393		284			9,677

Total current assets		12,675		797			13,472
Investments		2,684		(1,010	)		1,674
Fixed assets		12,771		4,534			17,305
Other assets		32,399		51			32,450


Total assets	$	60,529	$	4,372		$	64,901


Current portion of borrowings	$	3,649	$	122		$	3,771
Other current liabilities		8,331		502			8,833

Total current liabilities		11,980		624			12,604
Borrowings		9,134		3,098			12,232
Deferred income taxes and other long-term liabilities		5,977		173			6,150
Minority interest		783		477			1,260
Shareholders’ equity		32,655		—			32,655


Total liabilities and shareholders’ equity	$	60,529	$	4,372		$	64,901

The following table presents a condensed consolidating income statement of the Company for the quarter ended December 27, 2008, reflecting the impact of consolidating the income statements of Euro Disney and Hong Kong Disneyland.


	Before Euro Disney and Hong Kong Disneyland Consolidation			Euro Disney, Hong Kong Disneyland and Adjustments			Total
Revenues	$	9,068		$	531		$	9,599
Cost and expenses		(7,888	)		(494	)		(8,382	)
Other income		114			—			114
Net interest expense		(98	)		(41	)		(139	)
Equity in the income of investees		149			(2	)		147

Income before income taxes and minority interests		1,345			(6	)		1,339
Income taxes		(488	)		—			(488	)
Minority interests		(12	)		6			(6	)

Net income	$	845		$	—		$	845

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

The following table presents a condensed consolidating cash flow statement of the Company for the quarter ended December 27, 2008, reflecting the impact of consolidating the cash flow statements of Euro Disney and Hong Kong Disneyland.


	Before Euro Disney and Hong Kong Disneyland Consolidation			Euro Disney, Hong Kong Disneyland and Adjustments			Total
Cash provided (used) by operations	$	365		$	(103	)	$	262
Investments in parks, resorts and other property		(278	)		(13	)		(291	)
Other investing activities		(628	)		341			(287	)
Cash provided (used) by financing activities		1,515			(405	)		1,110

Increase / (decrease) in cash and cash equivalents		974			(180	)		794
Cash and cash equivalents, beginning of period		2,308			693			3,001

Cash and cash equivalents, end of period	$	3,282		$	513		$	3,795


6.		*Pension and Other Benefit Programs*

The components of net periodic benefit cost are as follows:


	Pension Plans						Postretirement Medical Plans
	Quarter Ended						Quarter Ended
	December 27, 2008			December 29, 2007			December 27, 2008			December 29, 2007
Service cost	$	42		$	45		$	4		$	5
Interest cost		90			81			18			16
Expected return on plan assets		(93	)		(89	)		(6	)		(6	)
Recognized net actuarial (gain) loss		1			9			(3	)		—

Net periodic benefit cost	$	40		$	46		$	13		$	15

During the quarter ended December 27, 2008, the Company did not make any material contributions to its pension and post-retirement medical plans. The Company expects pension and post-retirement medical plan contributions in fiscal 2009 to range from $200 million to $300 million. However, final funding requirements for fiscal 2009 will be determined based on our funding actuarial valuation as of January 1, 2009 which will be completed later in the fiscal year. The Company may also make discretionary contributions above the minimum requirements.

The Company adopted the measurement provisions of SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FAS Statements No. 87, 88, 106, and 132(R) (SFAS 158). See Note 12 for the impact of adopting SFAS 158.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


7.		*Earnings Per Share*

Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period and are calculated using the treasury stock method for equity-based compensation awards and assuming conversion of the Company’s convertible senior notes through the redemption date which occurred in the third quarter of fiscal 2008. Options excluded from the diluted earnings per share calculation as they were anti-dilutive were 138 million and 46 million shares for the quarters ended December 27, 2008 and December 29, 2007, respectively. A reconciliation of net income and weighted average number of common and common equivalent shares outstanding for calculating diluted earnings per share is as follows:


	Quarter Ended
	December 27, 2008		December 29, 2007
Net income	$	845	$	1,250
Interest expense on convertible senior notes (net of tax)		—		5

	$	845	$	1,255

Shares (in millions):
Weighted average number of common shares outstanding (basic)		1,852		1,904
Weighted average dilutive impact of equity-based compensation awards		20		40
Weighted average assumed conversion of convertible senior notes		—		45

Weighted average number of common and common equivalent shares outstanding (diluted)		1,872		1,989


8.		*Shareholders’ Equity*

The Company declared a $648 million dividend ($0.35 per share) on December 3, 2008, related to fiscal 2008, which was paid on January 20, 2009, to shareholders of record on December 15, 2008. The Company paid a $664 million dividend ($0.35 per share) during the second quarter of fiscal 2008 related to fiscal 2007.

During the quarter ended December 27, 2008, the Company repurchased 3 million shares for approximately $104 million. As of December 27, 2008, the Company had remaining authorization in place to repurchase approximately 180 million additional shares. The repurchase program does not have an expiration date.

The Company also has 1.0 billion shares of Internet Group Stock at $.01 par value authorized. No shares are issued or outstanding.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


9.		*Comprehensive Income*

Comprehensive income (loss), net of tax, is as follows:


	Quarter Ended
	December 27, 2008			December 29, 2007
Net income	$	845		$	1,250
Market value adjustments for investments and hedges		91			11
Pension and postretirement medical adjustments		(1	)		5
Foreign currency translation and other		(32	)		2

Comprehensive income	$	903		$	1,268

Accumulated other comprehensive income (loss), net of tax, is as follows:


	December 27, 2008			September 27, 2008
Market value adjustments for investments and hedges	$	169		$	78
Foreign currency translation and other		105			137
Unrecognized pension and postretirement medical expense ⁽¹⁾		(197	)		(296	)

Accumulated other comprehensive income (loss)	$	77		$	(81	)

⁽¹ ⁾	Pursuant to the adoption of the measurement provisions of SFAS 158, the Company recorded a $100 million benefit to the opening balance of accumulated other comprehensive income (loss). See footnote 12 for further details on the impact of the adoption of SFAS 158.


10.		*Equity-Based Compensation*

The impact of stock options and restricted stock units (RSUs) on net income is as follows:


	Quarter Ended
	December 27, 2008		December 29, 2007
Stock option compensation expense	$	62	$	60
RSU compensation expense		52		43

Total equity-based compensation expense	$	114	$	103

Unrecognized compensation cost related to unvested stock options and RSUs totaled approximately $379 million and $407 million, respectively, as of December 27, 2008.

In January 2009, the Company made stock compensation grants, which included its regular annual grant, consisting of 14 million stock options and 15 million RSUs, of which 3 million RSUs included market and/or performance conditions.

The weighted average grant date fair values of options issued during the quarters ended December 27, 2008, and December 29, 2007, were $7.80 and $9.96, respectively.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


11.		*Commitments and Contingencies*

The Company has exposure to various legal and other contingencies arising from the conduct of its businesses.

Legal Matters

Milne and Disney Enterprises, Inc. v. Stephen Slesinger, Inc. On November 5, 2002, Clare Milne, the granddaughter of A. A. Milne, author of the Winnie the Pooh books, and the Company’s subsidiary Disney Enterprises, Inc. (DEI) filed a complaint against Stephen Slesinger, Inc. (SSI) in the United States District Court for the Central District of California. On November 4, 2002, Ms. Milne served notices to SSI and DEI terminating A. A. Milne’s prior grant of rights to Winnie the Pooh, effective November 5, 2004, and granted all of those rights to DEI. In their lawsuit, Ms. Milne and DEI sought a declaratory judgment, under United States copyright law, that Ms. Milne’s termination notices were valid; that SSI’s rights to Winnie the Pooh in the United States terminated effective November 5, 2004; that upon termination of SSI’s rights in the United States, the 1983 licensing agreement that is the subject of the Stephen Slesinger, Inc. v. The Walt Disney Company lawsuit (the “state court action”) terminated by operation of law; and that, as of November 5, 2004, SSI was entitled to no further royalties for uses of Winnie the Pooh. SSI filed (a) an answer denying the material allegations of the complaint and (b) counterclaims seeking a declaration that (i) Ms. Milne’s grant of rights to DEI is void and unenforceable and (ii) DEI remains obligated to pay SSI royalties under the 1983 licensing agreement. The District Court ruled that Milne’s termination notices were invalid. The Court of Appeals for the Ninth Circuit affirmed, and on June 26, 2006, the United States Supreme Court denied Milne’s petition for a writ of certiorari. On August 1, 2003, SSI filed an amended answer and counterclaims and a third-party complaint against Harriet Hunt (heir to E. H. Shepard, illustrator of the original Winnie the Pooh stories), who had served a notice of termination and a grant of rights similar to Ms. Milne’s, and asserted counterclaims against the Company allegedly arising from the Milne and Hunt terminations and the grant of rights to DEI for (a) unlawful and unfair business practices; and (b) breach of the 1983 licensing agreement.

On October 19, 2006, the parties stipulated to SSI’s filing its Fourth Amended Answer and Counterclaims (Fourth Amended Answer) seeking (a) to invalidate the Hunt termination notice, (b) to terminate the Company’s rights vis-à-vis SSI, and (c) damages in excess of two billion dollars, among other relief. That stipulation also provided that Hunt and the Company need not respond to the Fourth Amended Answer until the conclusion of two events: the state court appeal in Stephen Slesinger, Inc. v. The Walt Disney Company , and the trial in the District Court on the validity of the Hunt termination notice. SSI then sought to withdraw both the Fourth Amended Answer and its stipulation, but on November 3, 2006, the District Court denied that request. SSI’s motion for summary judgment on the validity of Hunt’s 2002 attempt to recapture E. H. Shepard’s rights was granted on February 15, 2007, and thereafter, on March 27, 2007, the District Court dismissed as moot all claims against Hunt and three of SSI’s counterclaims against the Company related to the Company’s agreements with Milne and Hunt concerning the termination and disposition of their rights. On January 3, 2008, the California Supreme Court denied SSI’s petition for review in the state court action, whereupon on April 21, 2008, the Company moved for summary judgment on all of SSI’s claims in the District Court action. On June 3, 2008, the District Court ordered further briefing on the issue of whether SSI’s misconduct in the state court action warrants dismissal of all of its claims in the District Court, and then on July 29, 2008, the District Court referred the summary judgment motion to a Special Master who will issue findings and recommendations on the preclusion and termination issues raised by the motion.

Relatedly, on December 4, 2006, August 22, 2007, and February 8, April 18, August 27, 2008, and October 31, 2008, SSI initiated proceedings in the United States Patent and Trademark Office (PTO) seeking cancellation of certain Winnie the Pooh trademark registrations and opposing applications for other Winnie the Pooh trademarks. The PTO has suspended all the proceedings on the grounds that the

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

relief sought is effectively duplicative of that sought in the Fourth Amended Answer. Also, on April 18 and October 16, 2008, SSI initiated actions before the Canadian Intellectual Property Office (“CIPO”) opposing applications for certain Winnie the Pooh trademarks. On September 4, 2008, the Company filed an answer to the April 18 action before the CIPO, denying SSI’s claims.

The Company, together with, in some instances, certain of its directors and officers, is a defendant or co-defendant in various other legal actions involving copyright, breach of contract and various other claims incident to the conduct of its businesses. Management does not expect the Company to suffer any material liability by reason of such actions.

Contractual Guarantees

The Company has guaranteed certain bond issuances by the Anaheim Public Authority that were used by the City of Anaheim to finance construction of infrastructure and a public parking facility adjacent to the Disneyland Resort. Revenues from sales, occupancy and property taxes from the Disneyland Resort and non-Disney hotels are used by the City of Anaheim to repay the bonds. In the event of a debt service shortfall, the Company is responsible for satisfying the shortfall. As of December 27, 2008, the remaining debt service obligation guaranteed by the Company was $380 million, of which $100 million was principal. To the extent that subsequent tax revenues exceed the debt service payments, the Company would be reimbursed for any shortfalls it funded. To date, tax revenues have exceeded the debt service payments for the Anaheim bonds.

ESPN STAR Sports, a joint-venture in which ESPN owns a 50% equity interest, has an agreement for global programming rights to International Cricket Council events from 2007 through 2015. Under the terms of the agreement, ESPN and the other joint-venture partner have jointly guaranteed the programming rights obligation of $1.0 billion over the remaining term of the agreement.

Accounts Receivable Risk

In light of the recent turmoil in the domestic and global economy, our estimates and judgments with respect to the collectibility of our receivables have become subject to greater uncertainty than in more stable periods.


12.		*New Accounting Pronouncements*

EITF 07-1

In December 2007, the FASB issued Emerging Issues Task Force Issue No. 07-1, Accounting for Collaborative Arrangements (EITF 07-1). EITF 07-1 defines collaborative arrangements and establishes accounting and reporting requirements for transactions between participants in the arrangement and third parties. A collaborative arrangement is a contractual arrangement that involves a joint operating activity, for example an agreement to co-produce and distribute a motion picture with another studio. EITF 07-1 is effective for the Company’s 2010 fiscal year. The Company is currently assessing the potential effect of EITF 07-1 on its financial statements.

SFAS 141R

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141R, Business Combinations (SFAS 141R). SFAS 141R establishes principles and requirements for determining how an

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

enterprise recognizes and measures the fair value of certain assets and liabilities acquired in a business combination, including noncontrolling interests, contingent consideration, and certain acquired contingencies. SFAS 141R also requires acquisition-related transaction expenses and restructuring costs be expensed as incurred rather than capitalized as a component of the business combination. SFAS 141R will be applicable prospectively to business combinations beginning in the Company’s 2010 fiscal year.

SFAS 160

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary. SFAS 160 also requires that upon the deconsolidation of a subsidiary, a retained noncontrolling interest be initially measured at its fair value. SFAS 160 is effective for the Company’s 2010 fiscal year. Upon adoption of SFAS 160, the Company will be required to report its noncontrolling interests as a separate component of shareholders’ equity. The Company will also be required to present net income allocable to the noncontrolling interests and net income attributable to the shareholders of the Company separately in its consolidated statements of income. Currently, noncontrolling interests (minority interests) are reported between liabilities and shareholders’ equity in the Company’s statement of financial position and the related income attributable to minority interests is reflected as an expense in arriving at net income. SFAS 160 requires retroactive adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of SFAS 160 are to be applied prospectively.

SFAS 159

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 gives the Company the irrevocable option to carry most financial assets and liabilities at fair value, with changes in fair value recognized in earnings. The Company adopted SFAS 159 at the beginning of fiscal year 2009. The Company did not elect to account for any of its financial assets and liabilities using the fair value option and accordingly, the adoption did not have a material impact on the Company’s financial statements.

SFAS 158

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158). This statement requires recognition of the overfunded or underfunded status of defined benefit pension and other postretirement plans as an asset or liability in the statement of financial position and changes in that funded status to be recognized in comprehensive income in the year in which the changes occur. SFAS 158 also requires measurement of the funded status of a plan as of the end of the fiscal year. The Company adopted the recognition provisions of SFAS 158 in fiscal year 2007 which resulted in a $261 million charge to accumulated other comprehensive income. The Company adopted the measurement date provisions by remeasuring plan assets and benefit obligations at the beginning of fiscal 2009. Adoption of the measurement date provisions resulted in a reduction of $35 million to retained earnings and a $100 million benefit to accumulated other comprehensive income (loss).

Key assumptions used for the measurements at the beginning of fiscal 2009 were 7.80% for the discount rate, 7.50% for the rate of return on plan assets, and 5.00% for salary increases. Based on this measurement of plan assets and benefit obligations, pension and postretirement medical costs will decrease to approximately $214 million in fiscal 2009 compared to $255 million for fiscal 2008. The decrease in pension and postretirement medical expense was primarily due to an increase in the discount rate used to measure the present value of plan obligations.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

FSP FAS 140-4 and FIN 46(R)-8

In December 2008, the FASB issued FASB Staff Position No. FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities (FSP 140-4). FSP 140-4 requires disclosure about transfers of financial assets.

Through December 4, 2008, the Company sold mortgage receivables arising from the sales of its vacation ownership units under a receivable purchase facility that expired on December 4, 2008 and was not renewed. The Company sold $17 million and $41 million of mortgage receivables during the three months ended December 27, 2008, and December 29, 2007, which resulted in immaterial gains.

The Company continues to service the sold receivables and has a residual interest in those receivables. As of December 27, 2008, the outstanding principal amount for sold mortgage receivables was $476 million and the carrying value of the Company’s residual interest, which is recorded in other long-term assets, was $96 million.

The Company also provides a letter of credit in support of the outstanding balance of the sold mortgage receivables which the mortgage receivables acquirer may draw on in the event of losses under the facility. The Company’s maximum exposure under this letter of credit is equal to approximately 17% of the outstanding principal balance. The Company maintains a reserve for estimated credit losses under the facility.

The Company repurchases defaulted mortgage receivables at their outstanding balance. The Company did not make material repurchases in the three months ended December 27, 2008 or December 29, 2007. The Company generally has been able to sell the repurchased vacation ownership units for amounts that exceed their carrying value.


13.		*Fair Value Measurements*

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157). SFAS 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings.

In February 2008, the FASB issued FSP SFAS No. 157-2, Effective Date of FASB Statement No. 157 (FSP 157-2), which delays the effective date for SFAS 157 for all nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities until the Company’s 2010 fiscal year.

The Company adopted SFAS 157 at the beginning of fiscal 2009 for fair value measurements of financial instruments and fair value measurements of non-financial assets and liabilities made on a recurring basis. Pursuant to the provisions of FASB Staff Position 157-2, the Company will not apply the provisions of SFAS 157 to non-financial assets and liabilities measured on a non-recurring basis until fiscal 2010. The Company does not expect the adoption of SFAS 157 for nonrecurring fair value measurements of nonfinancial assets and liabilities will have a material impact on its financial statements.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

SFAS 157 defines fair value as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories:

•

Level 1 - Quoted prices for identical instruments in active markets

•

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets

•

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable

The Company’s assets and liabilities measured at fair value on a recurring basis are summarized in the following table by the type of inputs applicable to the fair value measurements.


	Fair Value Measurements at December 27, 2008
Description	Total as of December 27, 2008			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets
Investments	$	68		$	10	$	55		$	3
Derivatives		757			—		661			96
Liabilities
Derivatives		(119	)		—		(119	)		—
Other		(14	)		—		—			(14	)

Total	$	692		$	10	$	597		$	85

The fair value of Level 1 investments are determined by using publicly quoted market prices in active markets. The fair value of Level 2 investments are primarily determined by reference to market prices based on recent trading activity and other relevant information including pricing for similar securities as determined by third-party pricing services.

The fair values of Level 2 derivatives, which consist of interest rate and foreign currency hedges, are primarily determined based on the present value of future cash flows using internal models and third-party pricing services with observable inputs, including interest rates, yield curves and foreign currency exchange rates. Counterparty credit risk, which is mitigated by the existence of master netting agreements and collateral posting arrangements with certain counterparties, did not have a material impact on derivative fair value estimates. Level 3 derivatives consist of our residual interests in securitized vacation ownership mortgage receivables and are determined using a discounted cash flow model that considers estimated interest rates, discount rates, prepayment, and defaults. There were no material changes in Level 3 derivatives from September 28, 2008 to December 27, 2008.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

ORGANIZATION OF INFORMATION

Management’s Discussion and Analysis provides a narrative of the Company’s financial performance and condition that should be read in conjunction with the accompanying financial statements. It includes the following sections:

Overview

Seasonality

Business Segment Results

Other Financial Information

Financial Condition

Commitments and Contingencies

Other Matters

Market Risk

OVERVIEW

Our summary consolidated results are presented below:


	Quarter Ended
(in millions, except per share data)	December 27, 2008			December 29, 2007
Revenues	$	9,599		$	10,452
Costs and expenses		(8,382	)		(8,419	)
Other income		114			—
Net interest expense		(139	)		(123	)
Equity in the income of investees		147			123

Income before income taxes and minority interests		1,339			2,033
Income taxes		(488	)		(759	)
Minority interests		(6	)		(24	)

Net income	$	845		$	1,250

Diluted earnings per share	$	0.45		$	0.63

Quarter Results

Diluted earnings per share decreased 29% for the quarter due primarily to lower operating results, partially offset by a gain on the sale of our investment in two pay television services in Latin America which resulted in a benefit of $0.04 per diluted share. Lower operating results reflected decreased DVD unit sales due to the strong performance in the prior-year quarter of Pirates of the Caribbean: At World’s End and High School Musical 2 and a decrease in catalog sales, lower advertising revenues at the ABC Television Network, ESPN and the owned television stations and decreased attendance and occupancy at our domestic parks. These decreases were partially offset by higher revenues from cable, satellite and telecommunications service providers (Cable Service Providers), principally at ESPN and lower broadcast programming and production cost amortization.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

SEASONALITY

The Company’s businesses are subject to the effects of seasonality. Consequently, the operating results for the quarter ended December 27, 2008 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.

Media Networks revenues are subject to seasonal advertising patterns and changes in viewership levels. In general, advertising revenues are somewhat higher during the fall and somewhat lower during the summer months. Affiliate revenues are typically collected ratably throughout the year. Certain affiliate revenues at ESPN are deferred until annual programming commitments are met, and these commitments are typically satisfied during the second half of the Company’s fiscal year which generally results in higher revenue recognition during that period.

Parks and Resorts revenues fluctuate with changes in theme park attendance and resort occupancy resulting from the seasonal nature of vacation travel and leisure activities. Peak attendance and resort occupancy generally occur during the summer months when school vacations occur and during early-winter and spring-holiday periods.

Studio Entertainment revenues fluctuate due to the timing and performance of releases in the theatrical, home entertainment, and television markets. Release dates are determined by several factors, including competition and the timing of vacation and holiday periods.

Consumer Products revenues are influenced by seasonal consumer purchasing behavior and by the timing and performance of theatrical releases and cable programming broadcasts.

Interactive Media revenues fluctuate due to the timing and performance of video game releases which are determined by several factors, including theatrical releases and cable programming broadcasts, competition and the timing of holiday periods. Revenues from our internet and mobile operations are not subject to significant seasonal trends.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

BUSINESS SEGMENT RESULTS

The Company evaluates the performance of its operating segments based on segment operating income, which is shown below along with segment revenues:


	Quarter Ended
(in millions)	December 27, 2008			December 29, 2007
Revenues:
Media Networks	$	3,903		$	4,109
Parks and Resorts		2,665			2,772
Studio Entertainment		1,945			2,641
Consumer Products		773			654
Interactive Media		313			276

	$	9,599		$	10,452

Segment operating income :
Media Networks	$	655		$	929
Parks and Resorts		382			505
Studio Entertainment		187			514
Consumer Products		265			287
Interactive Media		(45	)		13

	$	1,444		$	2,248

The following table reconciles segment operating income to income before income taxes and minority interests:


	Quarter Ended
(in millions)	December 27, 2008			December 29, 2007
Segment operating income	$	1,444		$	2,248
Corporate and unallocated shared expenses		(80	)		(92	)
Other income		114			—
Net interest expense		(139	)		(123	)

Income before income taxes and minority interests	$	1,339		$	2,033

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Depreciation expense is as follows:


	Quarter Ended
(in millions)	December 27, 2008		December 29, 2007
Media Networks
Cable Networks	$	24	$	22
Broadcasting		22		21

Total Media Networks		46		43

Parks and Resorts
Domestic		205		198
International		79		82

Total Parks and Resorts		284		280

Studio Entertainment		12		9
Consumer Products		6		4
Interactive Media		3		5
Corporate		32		30

Total depreciation expense	$	383	$	371

Media Networks

The following table provides supplemental revenue and segment operating income detail for the Media Networks segment:


	Quarter Ended
(in millions)	December 27, 2008		December 29, 2007		Change
Revenues:
Cable Networks	$	2,452	$	2,412	2		%
Broadcasting		1,451		1,697	(14	)	%

	$	3,903	$	4,109	(5	)	%

Segment operating income :
Cable Networks	$	517	$	586	(12	)	%
Broadcasting		138		343	(60	)	%

	$	655	$	929	(29	)	%

Revenues

Media Networks revenues decreased 5%, or $206 million, to $3.9 billion, consisting of a 2% increase, or $40 million, at the Cable Networks and a 14% decrease, or $246 million, at Broadcasting.

Increased Cable Networks revenues were due to growth of $111 million from Cable Service Providers, partially offset by decreases of $55 million in advertising revenues and $16 million in other revenues. Revenues from Cable Service Providers are generally derived from fees charged on a per subscriber basis, and the increase in the current quarter was due to contractual rate increases and, to a lesser extent, subscriber growth primarily at ESPN. Lower advertising revenue reflected a decrease in sold inventory, partially offset by higher rates. The decrease in other revenues was driven by lower DVD sales reflecting the success of High School Musical 2 in the prior-year quarter, partially offset by miscellaneous other revenue increases.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Certain of the Company’s contracts with Cable Service Providers include annual programming commitments. In these cases, revenue subject to the commitment is deferred until the annual commitments are satisfied which generally results in revenue shifting from the first half of the year to the second half.

Decreased Broadcasting revenues were primarily due to lower advertising revenue at the ABC Television Network and at the owned television stations. The decrease in advertising revenues at the ABC Television Network was driven by lower primetime ratings.

Costs and Expenses

Costs and expenses at Media Networks, which consist primarily of programming rights costs, production costs, participation costs, distribution and marketing expenses, labor costs, and general and administrative costs, increased 2%, or $78 million, reflecting a 6% increase, or $119 million, at the Cable Networks, and a 3% decrease, or $41 million, at Broadcasting. The increase at Cable Networks was driven by an increase at ESPN primarily due to higher NFL programming costs and higher general and administrative costs. The decrease at Broadcasting was primarily due to lower programming costs at the ABC Television Network due to a lower cost mix of programming including a shift of hours from primetime to news, partially offset by a bad debt charge in connection with the bankruptcy of a syndication customer.

Segment Operating Income

Segment operating income decreased 29%, or $274 million, to $655 million for the quarter due to a decrease of 12%, or $69 million, at the Cable Networks and a decrease of 60%, or $205 million, at Broadcasting. The decrease at the Cable Networks was primarily due to decreases at the domestic Disney Channels and at ESPN. The decrease at Broadcasting was primarily due to lower primetime advertising revenue at the ABC Television Network and at the owned television stations, and a bad debt charge in connection with the bankruptcy of a syndication customer, partially offset by lower programming and development costs.

Parks and Resorts

Revenues

Parks and Resorts revenues decreased 4%, or $107 million, to $2.7 billion due to decreases of $69 million at our domestic operations and $38 million at our international operations.

Domestic Operations

At our domestic operations, decreased revenue was primarily due to lower attendance and occupancy, partially offset by higher vacation club ownership sales at Disney Vacation Club.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

The following table presents attendance, per capita theme park guest spending and hotel statistics for our domestic properties:


	East Coast						West Coast						Total Domestic
	Quarter Ended						Quarter Ended						Quarter Ended
	December 27, 2008			December 29, 2007			December 27, 2008			December 29, 2007			December 27, 2008			December 29, 2007
Parks
(Increase/decrease)
Attendance		(5	)%		4	%		(6	)%		1	%		(5	)%		3	%
Per Capita Guest Spending		1	%		3	%		(3	)%		2	%		—	%		3	%
Hotels ⁽¹⁾
Occupancy		85	%		89	%		85	%		91	%		85	%		89	%
Available Room Nights (in thousands)		2,113			2,136			200			200			2,313			2,336
Per Room Guest Spending	$	219		$	218		$	333		$	321		$	229		$	227

⁽¹⁾

Per room guest spending consists of the average daily hotel room rate as well as guest spending on food, beverage and merchandise at the hotels. Hotel statistics include rentals of Disney Vacation Club units.

International Operations

At our international operations, decreased revenue was due to a decline at Disneyland Resort Paris due to the unfavorable impact of foreign currency translation, as a result of the strengthening of the U.S. dollar against the Euro, and lower real estate sales, partially offset by an increase in attendance.

Costs and Expenses

Costs and expenses, which consist primarily of labor, depreciation, costs of merchandise, food and beverage sold, marketing and sales expense, repairs and maintenance and entertainment, increased 1%, or $16 million. The increase in costs and expenses was due to an increase at our domestic operations, partially offset by a decrease at Disneyland Resort Paris. Higher costs at our domestic operations reflected mark to market adjustments on fuel hedge contracts, labor and other cost inflation and higher cost of ownership sales at Disney Vacation Club, partially offset by cost mitigation activities. The decrease at Disneyland Resort Paris was primarily due to the favorable impact of foreign currency translation as a result of the strengthening of the U.S. dollar against the Euro and lower real estate cost of sales, partially offset by labor cost inflation and higher marketing and sales costs.

Segment Operating Income

Segment operating income decreased 24%, or $123 million, to $382 million due to decreases at the domestic operations and Disneyland Resort Paris.

Studio Entertainment

Revenues

Revenues decreased 26%, or $696 million, to $1.9 billion primarily due to a decrease of $516 million at worldwide home entertainment driven by a decline in DVD unit sales reflecting the strong performance of Pirates of the Caribbean: At World’s End , High School Musical 2 , Ratatouille and Jungle Book Platinum Release in the prior-year quarter and lower catalog sales in the current quarter. Key current quarter releases included WALL-E , The Chronicles of Narnia: Prince Caspian and Tinker Bell .

Costs and Expenses

Costs and expenses, which consist primarily of production cost amortization, distribution and marketing expenses, product costs and participation costs decreased 17%, or $369 million, primarily due

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

to a decrease in worldwide home entertainment driven by lower amortization, distribution expenses, and participation costs as a result of decreased unit sales.

Segment Operating Income

Segment operating income decreased 64%, or $327 million, to $187 million primarily due to a decrease at worldwide home entertainment.

Consumer Products

Revenues

Revenues for the quarter increased 18%, or $119 million, to $773 million, primarily due to an increase of $114 million at our retail business due to the acquisition of the Disney Stores North America during the third quarter of fiscal 2008. At Merchandise Licensing, revenue was comparable to the prior-year quarter.

Costs and Expenses

Costs and expenses, which consist primarily of cost of sales, salaries and benefits, marketing, and occupancy, increased 38%, or $141 million, to $508 million, primarily due to an increase at our retail business driven by the acquisition of the Disney Stores North America as well as higher selling and administrative costs.

Operating Income

Segment operating income decreased 8%, or $22 million, to $265 million, driven by lower results at our retail business, including the absence of royalties from the former licensee for the Disney Stores North America, and higher selling and administrative costs.

Interactive Media

Revenues

Interactive Media revenues increased 13%, or $37 million, to $313 million primarily due to an increase of $23 million at Disney Interactive Studios.

The increase at Disney Interactive Studios was primarily due to higher video game unit volume driven by current quarter titles, which included High School Musical 3 , Sing It and Bolt compared to the prior-year quarter, which included High School Musical and Hannah Montana .

Costs and Expenses

Costs and expenses, which consist primarily of video game and internet content development costs, product costs, distribution and marketing expenses, general and administrative costs, and technology infrastructure costs, increased 36%, or $95 million, to $358 million. The increase was primarily due to an increase in unit cost of sales and increased distribution and marketing costs at Disney Interactive Studios.

Operating Income

Segment operating income decreased $58 million to a loss of $45 million due to a decline at Disney Interactive Studios.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

OTHER FINANCIAL INFORMATION

Corporate and Unallocated Shared Expenses

Corporate and unallocated shared expenses decreased from $92 million to $80 million for the quarter due to an increase in allocation of costs to the business segments.

Net Interest Expense

Net interest expense is as follows:


(in millions)	Quarter Ended
(in millions)	December 27, 2008			December 29, 2007			Change
Interest expense	$	(168	)	$	(216	)	(22	)	%
Interest and investment income		29			93		(69	)	%

Net interest expense	$	(139	)	$	(123	)	13		%

The decrease in interest expense for the quarter was primarily due to lower effective interest rates.

Interest and investment income for the quarter decreased as the prior-year quarter included a gain on the sale of an investment and a recovery in connection with the Company’s leveraged lease investment with Delta Air Lines which had been written off previously.

Income Taxes

The effective income tax rate decreased 0.9 percentage points from 37.3% to 36.4% for the quarter. The decrease in the effective income tax rate was driven by increased benefits from Internal Revenue Code (IRC) Section 199 related to qualified domestic production activities.

Minority Interests

Minority interest expense decreased for the quarter due to the impact of lower performance at Disneyland Resort Paris and at ESPN. The minority interest impact is determined on income after royalties, financing costs and income taxes.

FINANCIAL CONDITION

The change in cash and cash equivalents is as follows:


(in millions)	Quarter Ended
(in millions)	December 27, 2008			December 29, 2007			Change
Cash provided by operations	$	262		$	662		$	(400	)
Cash used in investing activities		(578	)		(324	)		(254	)
Cash provided (used) by financing activities		1,110			(594	)		1,704

Increase/(decrease) in cash and cash equivalents	$	794		$	(256	)	$	1,050

Operating Activities

Cash provided by operations decreased by $400 million to $262 million primarily due to lower segment operating results and higher net investment in film and television productions, partially offset by lower income tax payments.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Film and Television Costs

The Company’s Studio Entertainment and Media Networks segments incur costs to acquire and produce television and feature film programming. Film and television production costs include all internally produced content such as live action and animated feature films, animated direct-to-video programming, television series, television specials, theatrical stage plays or other similar product. Programming costs include film or television product licensed for a specific period from third parties for airing on the Company’s broadcast, cable networks and television stations. Programming assets are generally recorded when the programming becomes available to us with a corresponding increase in programming liabilities. Accordingly, we analyze our programming assets net of the related liability.

The Company’s film and television production and programming activity for the quarters ended December 27, 2008 and December 29, 2007 are as follows:


	Quarter Ended
(in millions)	December 27, 2008			December 29, 2007
Beginning balances:
Production and programming assets	$	5,935		$	5,682
Programming liabilities		(1,108	)		(1,210	)

		4,827			4,472

Spending:
Film and television production		998			850
Broadcast programming		1,431			1,348

		2,429			2,198

Amortization:
Film and television production		(790	)		(1,022	)
Broadcast programming		(1,394	)		(1,392	)

		(2,184	)		(2,414	)

Change in film and television production and programming costs		245			(216	)
Other non-cash activity		(24	)		12

Ending balances:
Production and programming assets		6,290			5,632
Programming liabilities		(1,242	)		(1,364	)

	$	5,048		$	4,268

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Investing Activities

Cash used by investing activities during the quarter ended December 27, 2008 of $578 million included $291 million of investments in parks, resorts and other property and $475 million of acquisitions, partially offset by proceeds totaling $185 million from the sale of our investment in two pay television services in Latin America.


	Quarter Ended
(in millions)	December 27, 2008		December 29, 2007
Media Networks	$	41	$	29
Parks and Resorts
Domestic		169		133
International		13		43

Total Parks and Resorts		182		176

Studio Entertainment		54		25
Consumer Products		7		9
Interactive Media		6		3
Corporate		1		7

	$	291	$	249

The increase in capital expenditures for the quarter was primarily due to the expansion at Disney’s California Adventure and new production facilities at Studio Entertainment.

Financing Activities

Cash provided by financing activities during the quarter ended December 27, 2008 of $1.1 billion reflected net proceeds from borrowings.

During the quarter ended December 27, 2008, the Company’s borrowing activity was as follows:


(in millions)	September 27, 2008		Additions		Payments			Other Activity			December 27, 2008
Commercial paper borrowings	$	1,985	$	687	$	–		$	–		$	2,672
U.S. medium-term notes		7,005		1,000		(125	)		(9	)		7,871
European medium-term notes		318		–		–			28			346
Capital Cities/ABC debt		178		–		–			(1	)		177
Film financing		248		95		(47	)		7			303
Other ⁽¹⁾		1,199		1		(2	)		216			1,414
Euro Disney borrowings ⁽²⁾		2,457		–		(30	)		(101	)		2,326
Hong Kong Disneyland borrowings ⁽³⁾		1,249		–		(375	)		20			894

Total	$	14,639	$	1,783	$	(579	)	$	160		$	16,003

⁽¹ ⁾	The other activity is primarily market value adjustments for debt with qualifying hedges.

⁽² ⁾	The other activity is primarily the impact of foreign currency translation as a result of the strengthening of the U.S. dollar against the Euro.

⁽³ ⁾	During the quarter, Hong Kong Disneyland borrowed funds from the Company that were used to repay Hong Kong Disneyland’s commercial term loan and revolving credit facility.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

The Company’s bank facilities as of December 27, 2008 were as follows:


(in millions)	Committed Capacity		Capacity Used		Unused Capacity
Bank facilities expiring 2010	$	2,225	$	–	$	2,225
Bank facilities expiring 2011		2,225		242		1,983

Total	$	4,450	$	242	$	4,208

These bank facilities allow for borrowings at LIBOR-based rates plus a spread, which depends on the Company’s public debt rating and can range from 0.175% to 0.75%. As of December 27, 2008, the Company had not borrowed under these bank facilities. The Company also has the ability to issue up to $800 million of letters of credit under the facility expiring in 2011, which if utilized, reduces available borrowings under this facility. As of December 27, 2008, $242 million of letters of credit had been issued under this facility.

The Company may use commercial paper borrowings up to the amount of its unused bank facilities, in conjunction with term debt issuance and operating cash flow, to retire or refinance other borrowings before or as they come due.

We believe that the Company’s financial condition is strong and that its cash balances, other liquid assets, operating cash flows, access to debt and equity capital markets and borrowing capacity, taken together, provide adequate resources to fund ongoing operating requirements and future capital expenditures related to the expansion of existing businesses and development of new projects. However, the Company’s operating cash flow and access to the capital markets can be impacted by macroeconomic factors outside of its control. In addition to macroeconomic factors, the Company’s borrowing costs can be impacted by short and long-term debt ratings assigned by independent rating agencies, which are based, in significant part, on the Company’s performance as measured by certain credit metrics such as interest coverage and leverage ratios. As of December 27, 2008, Moody’s Investors Service’s long and short-term debt ratings for the Company were A2 and P-1, respectively, with stable outlook; and Standard & Poor’s long and short-term debt ratings for the Company were A and A-1, respectively, with stable outlook. The Company’s bank facilities contain only one financial covenant, relating to interest coverage, which the Company met on December 27, 2008, by a significant margin. The Company’s bank facilities also specifically exclude certain entities, such as Euro Disney and Hong Kong Disneyland, from any representations, covenants or events of default.

Euro Disney has annual covenants under its debt agreements that limit its investment and financing activities and require it to meet certain financial performance covenants. Euro Disney was in compliance with these covenants for fiscal 2008.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

COMMITMENTS AND CONTINGENCIES

Legal Matters

As disclosed in Notes 11 to the Condensed Consolidated Financial Statements, the Company has exposure for certain legal matters.

Guarantees

See Note 11 to the Condensed Consolidated Financial Statements for information regarding the Company’s guarantees.

Tax Matters

As disclosed in Note 8 to the Consolidated Financial Statements in the 2008 Annual Report on Form 10-K, the Company has exposure for certain tax matters.

Contractual Commitments

Refer to Note 14 in the Consolidated Financial Statements in the 2008 Annual Report on Form 10-K for information regarding the Company’s contractual commitments.

OTHER MATTERS

Accounting Policies and Estimates

We believe that the application of the following accounting policies, which are important to our financial position and results of operations, require significant judgments and estimates on the part of management. For a summary of our significant accounting policies, including the accounting policies discussed below, see Note 2 to the Consolidated Financial Statements in the 2008 Annual Report on Form 10-K as amended on Form 8-K dated February 3, 2009.

Film and Television Revenues and Costs

We expense film and television production and participation costs over the applicable product life cycle based upon the ratio of the current period’s gross revenues to the estimated remaining total gross revenues (Ultimate Revenues) for each production. If our estimate of Ultimate Revenues decreases, amortization of film and television costs may be accelerated. Conversely, if estimates of Ultimate Revenues increase, film and television cost amortization may be slowed. For film productions, Ultimate Revenues include revenues from all sources that will be earned within ten years of the date of the initial theatrical release. For television series, we include revenues that will be earned within ten years of the delivery of the first episode, or if still in production, five years from the date of delivery of the most recent episode, if later.

With respect to films intended for theatrical release, the most sensitive factor affecting our estimate of Ultimate Revenues (and therefore affecting future film cost amortization and/or impairment) is domestic theatrical performance. Revenues derived from other markets subsequent to the domestic theatrical release (e.g. the home video or international theatrical markets) have historically been highly correlated with domestic theatrical performance. Domestic theatrical performance varies primarily based upon the public interest and demand for a particular film, the quality of competing films at the time of release, as well as the level of marketing effort. Upon a film’s release and determination of domestic theatrical performance, the Company’s estimates of revenues from succeeding windows and markets are revised based on historical relationships and an analysis of current market trends. The most sensitive factor affecting our estimate of Ultimate Revenues for released films is the extent of home entertainment sales achieved. Home entertainment sales vary based on the volume and quality of competing home video products as well as the manner in which retailers market and price our products.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

With respect to television series or other television productions intended for broadcast, the most sensitive factor affecting estimates of Ultimate Revenues is the program’s rating. Program ratings, which are an indication of market acceptance, directly affect the Company’s ability to generate advertising revenues during the airing of the program. In addition, television series with greater market acceptance are more likely to generate incremental revenues through the eventual sale of the program rights in the syndication, international and home entertainment markets. Alternatively, poor ratings may result in a television series cancellation, which would require the immediate write-off of any unamortized production costs.

We expense the cost of television broadcast rights for acquired movies, series and other programs based on the number of times the program is expected to be aired or on a straight-line basis over the useful life, as appropriate. Amortization of those television programming assets being amortized on a number of airings basis may be accelerated if we reduce the estimated future airings and slowed if we increase the estimated future airings. The number of future airings of a particular program is impacted primarily by the program’s ratings in previous airings, expected advertising rates and availability and quality of alternative programming. Accordingly, planned usage is reviewed periodically and revised if necessary. Rights costs for multi-year sports programming arrangements are amortized based upon the ratio of the current period’s gross revenues to Ultimate Revenues (the Projected Revenue Method) or on a straight-line basis over the contract period, as appropriate. Gross revenues include both advertising revenues and an allocation of affiliate fees. If the annual contractual payments related to each season over the term of a multi-year sports programming arrangement approximate each season’s rights cost based on the Projected Revenue Method, we expense the related annual payments during the applicable season. If Ultimate Revenues change significantly from projections, amortization of the rights costs may be accelerated or slowed.

Costs of film and television productions are subject to regular recoverability assessments which compare the estimated fair values with the unamortized costs. The net realizable value of the television broadcast program licenses and rights are reviewed using a daypart methodology. A daypart is defined as an aggregation of programs broadcast during a particular time of day or programs of a similar type. The Company’s dayparts are: early morning, daytime, late night, primetime, news, children, and sports (includes network and cable). The net realizable values of other cable programming assets are reviewed on an aggregated basis for each cable channel. Individual programs are written-off when there are no plans to air or sublicense the program. Estimated values are based upon assumptions about future demand and market conditions. If actual demand or market conditions are less favorable than our projections, film, television and programming cost write-downs may be required.

Revenue Recognition

The Company has revenue recognition policies for its various operating segments that are appropriate to the circumstances of each business. See Note 2 to the Consolidated Financial Statements in the 2008 Annual Report on Form 10-K for a summary of these revenue recognition policies.

We record reductions to home entertainment and software product revenues for estimated future returns of merchandise and for customer programs and sales incentives. These estimates are based upon historical return experience, current economic trends and projections of customer demand for and acceptance of our products. If we underestimate the level of returns and concessions in a particular period, we may record less revenue in later periods when returns exceed the estimated amount. Conversely, if we overestimate the level of returns and concessions for a period, we may have additional revenue in later periods when returns and concessions are less than estimated.

Revenues from advance theme park ticket sales are recognized when the tickets are used. For non-expiring, multi-day tickets, we recognize revenue over a three-year time period based on estimated usage,

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

which is derived from historical usage patterns. A change from the estimated usage patterns could have an impact on the timing of revenue recognition.

Pension and Postretirement Medical Plan Actuarial Assumptions

The Company’s pension and postretirement medical benefit obligations and related costs are calculated using a number of actuarial assumptions. Two critical assumptions, the discount rate and the expected return on plan assets, are important elements of expense and/or liability measurement which we evaluate annually. Refer to the 2008 Annual Report on Form 10-K for estimated impacts of changes in these assumptions. Other assumptions include the healthcare cost trend rate and employee demographic factors such as retirement patterns, mortality, turnover and rate of compensation increase.

The discount rate enables us to state expected future cash payments for benefits as a present value on the measurement date. A lower discount rate increases the present value of benefit obligations and increases pension expense. The guideline for setting this rate is high-quality long-term corporate bond rates that are currently available. The Company’s discount rate is determined by considering the average of pension yield curves constructed of a large population of high quality corporate bonds. The resulting discount rate reflects the matching of plan liability cash flows to the yield curves.

To determine the expected long-term rate of return on the plan assets, we consider the current and expected asset allocation, as well as historical and expected returns on each plan asset class. A lower expected rate of return on pension plan assets will increase pension expense.

Goodwill, Intangible Assets and Investments

SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142) requires that goodwill and other indefinite-lived intangible assets be tested for impairment on an annual basis and between annual tests if current events or circumstances require an interim impairment assessment. As required by SFAS 142, goodwill is allocated to various reporting units, which are generally one reporting level below the operating segment. SFAS 142 requires the Company to compare the fair value of each reporting unit to its carrying amount on an annual basis to determine if there is potential goodwill impairment. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than the carrying value of its goodwill.

To determine the fair value of our reporting units, we generally use a present value technique (discounted cash flow) corroborated by market multiples when available and as appropriate. A key factor for our discounted cash flow analyses is the estimate of future cash flows of each reporting unit which is, in turn, sensitive to our estimates of future revenue growth and margins for these businesses.

A present value technique was not used to determine the fair value of the ABC Television Network, a business within the Television Broadcasting reporting unit within the Media Networks operating segment. To determine the fair value of the ABC Television Network, we used a revenue multiple, as a present value technique may not consistently capture the full fair value of the ABC Television Network and there is little comparable market data available due to the scarcity of television networks. If there was a publicly disclosed sale of a comparable network, this may provide better market information with which to estimate the value of the ABC Television Network and could impact our impairment assessment. We applied what we believe to be the most appropriate valuation methodology for each of the reporting units. If we had established different reporting units or utilized different valuation methodologies, the impairment test results could differ.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

SFAS 142 requires the Company to compare the fair values of other indefinite-lived intangible assets to their carrying amounts. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. Fair values of other indefinite-lived intangible assets are determined based on discounted cash flows or appraised values, as appropriate.

In light of recent adverse economic conditions in the global economy, the Company’s long-term cash flow forecasts are subject to a greater degree of uncertainty. If there is a material reduction in our estimates, or if actual results are materially below our estimates, we may be required to record an impairment to goodwill and other indefinite lived intangible assets.

The Company has cost and equity investments. The fair value of these investments is dependent on the performance of the investee companies, as well as volatility inherent in the external markets for these investments. In assessing potential impairment for these investments, we consider these factors as well as forecasted financial performance of our investees and market values, where available. If these forecasts are not met or market values indicate an other than temporary decline in value, impairment charges may be required.

Allowance for Doubtful Accounts

We evaluate our allowance for doubtful accounts and estimate collectibility of accounts receivable based on our analysis of historical bad debt experience in conjunction with our assessment of the financial condition of individual companies with which we do business. In light of the recent turmoil in the domestic and global economy that has affected many companies, our estimates and judgments with respect to the collectibility of our receivables from these companies have become subject to greater uncertainty than in more stable periods. If our estimate of uncollectible accounts is too low, costs and expenses may increase in future periods and if it is too high, cost and expenses may decrease in future periods.

Contingencies and Litigation

We are currently involved in certain legal proceedings and, as required, have accrued estimates of the probable and estimable losses for the resolution of these claims. These estimates have been developed in consultation with outside counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. See Note 11 to the Condensed Consolidated Financial Statements for more detailed information on litigation exposure.

Income Tax Audits

As a matter of course, the Company is regularly audited by federal, state and foreign tax authorities. From time to time, these audits result in proposed assessments. Our determinations regarding the recognition of income tax benefits are made in consultation with outside tax and legal counsel where appropriate and are based upon the technical merits of our tax positions in consideration of applicable tax statutes and related interpretations and precedents and upon the expected outcome of proceedings (or negotiations) with taxing and legal authorities. The tax benefits ultimately realized by the Company may differ from those recognized in our financial statements based on a number of factors, including the Company’s decision to settle rather than litigate a matter, relevant legal precedent related to similar matters and the Company’s success in supporting its filing positions with taxing authorities.

Stock Option Compensation Expense

Compensation expense for stock options is estimated on the date of grant using a binomial valuation model. The weighted average assumptions used in the binomial valuation model during the quarter ended December 27, 2008 were 33% for the expected volatility, 1.4 for the expected exercise multiple (the multiple of exercise price to grant price at which exercises are expected to occur on average) and 8% for the expected termination rate. Although the initial fair value of stock options is not adjusted after the grant date, changes in the Company’s assumptions may change the estimated fair value of and therefore, the expense related to future stock option grants. The assumptions that cause the greatest variation in fair value in the binomial valuation model are the assumed volatility and expected exercise

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

multiple. Increases or decreases in either the assumed volatility or expected exercise multiple will cause the binomial option value to increase or decrease, respectively.

The volatility assumption considers both historical and implied volatility and may be impacted by the Company’s performance as well as changes in economic and market conditions. The expected exercise multiple may be influenced by the Company’s future stock performance, stock price volatility and employee turnover rate. Refer to the 2008 Annual Report on Form 10-K for estimated impacts of changes in these assumptions.

New Accounting Pronouncements

See Note 12 to the Condensed Consolidated Financial Statements for information regarding new accounting pronouncements.

MARKET RISK

The Company is exposed to the impact of interest rate changes, foreign currency fluctuations, commodity fluctuations and changes in the market values of its investments.

Policies and Procedures

In the normal course of business, we employ established policies and procedures to manage the Company’s exposure to changes in interest rates, foreign currencies, commodities, and the fair market value of certain investments in debt and equity securities using a variety of financial instruments.

Our objectives in managing exposure to interest rate changes are to limit the impact of interest rate volatility on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we primarily use interest rate swaps to manage net exposure to interest rate changes related to the Company’s portfolio of borrowings. By policy, the Company targets fixed-rate debt as a percentage of its net debt between minimum and maximum percentages.

Our objective in managing exposure to foreign currency fluctuations is to reduce volatility of earnings and cash flow in order to allow management to focus on core business issues and challenges. Accordingly, the Company enters into various contracts that change in value as foreign exchange rates change to protect the U.S. dollar equivalent value of its existing foreign currency assets, liabilities, commitments and forecasted foreign currency revenues. The Company utilizes option strategies and forward contracts that provide for the sale of foreign currencies to hedge probable, but not firmly committed, transactions. The Company also uses forward contracts to hedge foreign currency assets and liabilities. The principal foreign currencies hedged are the Euro, British pound, Japanese yen and Canadian dollar. Cross-currency swaps are used to effectively convert foreign currency denominated borrowings to U.S. dollar denominated borrowings. By policy, the Company maintains hedge coverage between minimum and maximum percentages of its forecasted foreign exchange exposures generally for periods not to exceed five years. The gains and losses on these contracts offset changes in the U.S. dollar equivalent value of the related exposures.

Our objectives in managing exposure to commodity fluctuations are to use commodity derivatives to reduce volatility of earnings and cash flows arising from commodity price changes. The amounts hedged using commodity swap contracts are based on forecasted levels of consumption of certain commodities, such as fuel oil and gasoline.

It is the Company’s policy to enter into foreign currency and interest rate derivative transactions and other financial instruments only to the extent considered necessary to meet its objectives as stated above. The Company does not enter into these transactions or any other hedging transactions for speculative purposes.

Item 3. Quantitative and Qualitative Disclosures about Market Risk. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures — We have established disclosure controls and procedures to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and made known to the officers who certify the Company’s financial reports and to other members of senior management and the Board of Directors as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation as of December 27, 2008, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective.

There have been no changes in our internal controls over financial reporting during the first quarter of fiscal 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A. Risk Factors

The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for “forward-looking statements” made by or on behalf of the Company. We may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission and in reports to our shareholders. All forward-looking statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made and the Company does not undertake any obligation to update its disclosure relating to forward looking matters. Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions), as well as from developments beyond the Company’s control, including: changes in domestic and global economic conditions, competitive conditions and consumer preferences; adverse weather conditions or natural disasters; health concerns; international, political or military developments; and technological developments. Such developments may affect travel and leisure businesses generally and may, among other things, affect the performance of the Company’s theatrical and home entertainment releases, the advertising market for broadcast and cable television programming, expenses of providing medical and pension benefits, demand for our products and performance of some or all company businesses either directly or through their impact on those who distribute our products. Additional factors are discussed in the 2008 Annual Report on Form 10-K under the Item 1A, “Risk Factors.”

PART II. OTHER INFORMATION (continued)

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about Company purchases of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act during the quarter ended December 27, 2008 :


Period	Total Number of Shares Purchased ⁽¹⁾	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾
September 28, 2008 – October 25, 2008	3,410,923	$	31.63	3,275,100	180 million
October 26, 2008 – November 29, 2008	154,746		22.28	—	180 million
November 30, 2008 – December 27, 2008	208,782		21.55	—	180 million

Total	3,774,451		30.69	3,275,100	180 million

⁽¹⁾

499,351 shares were purchased on the open market to provide shares to participants in the Walt Disney Investment Plan (WDIP) and Employee Stock Purchase Plan (ESPP). These purchases were not made pursuant to a publicly announced repurchase plan or program.

⁽²⁾

The Company is authorized to repurchase shares of its common stock under a share repurchase program implemented effective June 10, 1998. On May 1, 2007, following share repurchases made through May 1, 2007, the Company’s Board of Directors increased the repurchase authorization to a total of 400 million shares as of that date. The repurchase program does not have an expiration date.

PART II. OTHER INFORMATION (continued)

ITEM 6. Exhibits

See Index of Exhibits.

SIGNATURE

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 thereunto duly authorized.


		THE WALT DISNEY COMPANY
		(Registrant)

By:		/s/ THOMAS O. STAGGS
		Thomas O. Staggs, Senior Executive Vice President and Chief Financial Officer

February 3, 2009

Burbank, California

INDEX OF EXHIBITS


Number and Description of Exhibit (Numbers Coincide with Item 601 of Regulation S-K)		Document Incorporated by Reference from a Previous Filing or Filed Herewith, as Indicated below
10.1	Amended and Restated Employment Agreement, dated as of December 23, 2008 between the Company and Robert A. Iger	Filed herewith

10.2	Amended and Restated Employment Agreement, dated as of December 18, 2008 between the Company and Thomas O. Staggs	Filed herewith

10.3	Amended and Restated Employment Agreement, dated as of December 22, 2008 between the Company and Dennis Shuler	Filed herewith

10.4	Severance Pay Plan Amended and Restated effective January 1, 2009	Filed herewith

10.5	Form of Performance-Based Stock Unit Award Agreement (Total Shareholder Return/Average Annual Adjusted EPS Growth Goals/Section 162(m) Vesting Requirement)	Filed herewith

31(a)	Rule 13a-14(a) Certification of Chief Executive Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

31(b)	Rule 13a-14(a) Certification of Chief Financial Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

32(a)	Section 1350 Certification of Chief Executive Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002*	Furnished

32(b)	Section 1350 Certification of Chief Financial Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002*	Furnished

* A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 10.1

Amended and Restated Employment Agreement

Between The Walt Disney Company And Robert A. Iger

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “ Agreement ”), dated as of December 23, 2008, by and between The Walt Disney Company, a Delaware corporation (the “ Company ”), and Robert A. Iger (“ Executive ”) amending and restating in its entirety Executive’s Employment Agreement with Company dated as of January 31, 2008 (the “ January 31 Agreement ”).

W I T N E S S E T H:

WHEREAS, the Company and its subsidiaries have employed Executive in various senior officer positions, most recently as President and Chief Executive Officer of the Company;

WHEREAS, Executive and the Company were on January 31, 2008 parties to an employment agreement, dated as of October 2, 2005, which was scheduled to expire by its own terms on September 30, 2010 (the “ 2005 Agreement ”);

WHEREAS, in furtherance of the Company’s desire to continue to secure the services of Executive, the Company and Executive entered into the January 31 Agreement, which superseded the 2005 Agreement;

WHEREAS, the Company and Executive desire to amend and restate the January 31 Agreement for the purposes of making certain changes intended to ensure compliance with Section 409A of the Internal Revenue Code and to make certain additional minor corrections in the January 31 Agreement;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment . Upon the terms and subject to the conditions of this Agreement, the Company hereby employs Executive and Executive hereby accepts employment by the Company for the period commencing on the date hereof and ending on the last day of the fiscal year of the Company ending on January 31, 2013 (or such earlier date as shall be determined pursuant to Paragraph 7). The period during which Executive is employed pursuant to this Agreement shall be referred to as the “ Employment Period ”.

2. Position and Duties . During the Employment Period, Executive shall serve as President and Chief Executive Officer of the Company and in such other position or positions with the Company and its subsidiaries, consistent with his positions as President and Chief Executive Officer of the Company, as the Board of Directors of the Company (the “ Board ”) shall reasonably assign Executive from time to time. Executive

shall be the most senior officer of the Company and report directly and exclusively to the Board. During the Employment Period, unless and until the Board exercises any authority reserved to it under the Company’s By-Laws, Executive shall have the duties, responsibilities and obligations customarily exercised by individuals serving as the chief executive officer in a company of the size and nature of the Company. During the Employment Period, the Company shall also nominate Executive for re-election as a member of the Board at the expiration of each term of office, and Executive shall serve as a member of the Board for each period for which he is so elected. During the Employment Period, Executive shall devote substantially all his business time to the services required of him hereunder, and shall perform such services in a manner consonant with the duties of his position. Executive shall be subject to the terms and conditions of any applicable policy of the Company regarding service (including as a director) on behalf of any other organization, provided that, subject to the provisions of Paragraph 11(a), nothing herein shall preclude Executive from ( i ) engaging in charitable activities and community affairs, and ( ii ) managing his personal investments and affairs, so long as the activities listed in subclauses (i)-(ii) do not materially interfere, individually or in the aggregate, with the proper performance of his duties and responsibilities as the Company’s Chief Executive Officer.

3. Compensation.

(a) Base Salary . During the Employment Period, the Company shall pay Executive a base salary at the annual rate of no less than $2,000,000. The amount of annual base salary currently payable under this Paragraph 3(a) shall be reduced, however, to the extent Executive elects in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and interpretations thereunder (“Section 409A”) to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or any of its subsidiaries. Executive’s annual base salary payable hereunder, without reduction for any amounts deferred as described above, is referred to herein as the “ Base Salary ”. The Company shall pay Executive the portion of his Base Salary not deferred at the election of Executive in accordance with its generally applicable policies for senior executives, but not less frequently than in equal monthly installments. Amounts of base salary accrued but deferred pursuant to the terms of the employment agreement between Executive and the Company, dated as of January 24, 2000 (the “ 2000 Agreement ”), shall be paid to Executive by the Company, together with interest thereon (which interest shall accrue at the rate of the applicable federal rate for mid-term treasuries and which rate shall be reset annually on the basis of the rate in effect for March for each year during which the deferral shall be in effect), six months and one day after the date upon which Executive incurs a separation from service with the Company within the meaning of Section 409A or, if earlier, promptly after Executive’s death; provided that, for purposes of applying such Section 409A, the parties agree, as permitted in accordance with the final regulations thereunder, a “separation from service” shall occur when Executive and

the Company reasonably anticipate that Executive’s level of bona fide services for the Company (whether as an employee or an independent contractor) will permanently decrease to no more than 40 percent of the average level of bona fide services performed by Executive for the Company over the immediately preceding 36 months. The determination of whether and when a separation from service has occurred shall be made in accordance with this subparagraph and in a manner consistent with Treasury Regulation Section 1.409A-1(h).

(b) Incentive Compensation . Executive shall be given the opportunity to earn an annual incentive bonus in accordance with the annual bonus plan generally applicable to the Company’s executive officers, as the same may be in effect from time to time (the “ Annual Plan ”). Executive’s target annual incentive bonus opportunity under the Annual Plan during each fiscal year during the term hereof (including the fiscal year commencing October 1, 2007) shall be no less than $10,000,000. The actual amount payable to Executive as an annual bonus under the Annual Plan shall be dependent upon the achievement of performance objectives established in accordance with the Annual Plan by the Board or the committee of the Board responsible for administering such Annual Plan (the “ Compensation Committee ”), which shall be substantially the same as the objectives established under the Annual Plan for other senior executive officers of the Company. Accordingly, depending on such performance, the actual amount payable as an annual bonus to Executive under the Annual Plan may be less than, greater than or equal to the target bonus specified above. Any bonus payable pursuant to this Paragraph 3(b) shall be paid at the same time as annual bonuses are payable to other officers of the Company in accordance with the provisions of the Annual Plan, subject to Executive’s continued employment with the Company through the date on which such bonuses are paid.

(c) Eligibility for Equity Awards . Subject to the terms of this Agreement, Executive shall be entitled to participate in any stock option, performance share, performance unit or other equity based long-term incentive compensation plan, program or arrangement generally made available to senior executive officers of the Company, on substantially the same terms and conditions as generally apply to such other officers, except that the size of the awards made to Executive shall reflect Executive’s position with the Company and the Compensation Committee’s evaluation of Executive’s performance and competitive compensation practices. During each fiscal year during the term hereof (including the fiscal year commencing October 1, 2007, Executive shall receive an annual award with a target award value (which value shall be as determined in accordance with the policies and practices generally applicable to other senior executives of the Company) of not less than $9,000,000; it being understood that the form of the award shall be determined by the Compensation Committee and such form shall be subject to the terms of the applicable plan or plans of the Company. The Compensation Committee may increase the award value of any award made in respect of any such fiscal year based on its evaluation of Executive’s performance. The actual benefits conveyed to

Executive in respect of any such awards may be less than, greater than or equal to the targeted award value, as such benefits will be dependent on a series of performance and other factors, such as the value of the Company’s common stock and satisfaction of any applicable vesting requirements and performance conditions.

4. Performance Based Stock Units Award .

(a) Commencement Stock Units . On October 2, 2005 (the “ Commencement Date ”), the Company made a one-time grant to Executive of 500,000 performance based stock units (each, a “ Commencement Stock Unit ”), pursuant to the terms of each of the 2002 Executive Performance Plan (the “ Performance Plan ”) and the Amended and Restated 1995 Stock Incentive Plan (the “ Stock Plan ”) and subject to the terms and conditions set forth in this Agreement. Units are notional units of measurement denominated in shares of the Company’s common stock (each, a “ Share ”) ( i.e. , one Stock Unit is equivalent in value to one Share). The Commencement Stock Units constitute Restricted Units as defined in Section 2.2 of the Performance Plan.

(b) Vesting . Subject to the continued employment requirement specified below, the Commencement Stock Units shall become vested, if at all, based upon, and solely to the extent that, as of the applicable Measurement Date and the end of the Performance Period (as each such term is defined below) ending on such Measurement Date, each of the following performance criteria are achieved:

(i) the TSR (as defined below) of the Company meets or exceeds the TSR for the Standard & Poor’s 500 Composite Index (the “ S&P 500 Index ”) in each case, as reported by Bloomberg L.P. (or such other reporting service that the Committee may designate from time to time) with respect to:

(A) the performance periods which are established in the TSR Table set forth below by reference to the Measurement Dates set forth therein, and

(B) the number of Commencement Stock Units eligible for vesting at the end of such performance period (also determined in accordance with the table set forth below) and

(ii) the 162(m) Performance Condition (as defined below) is satisfied.

For the avoidance of doubt, if and to the extent that one type of performance condition applicable to any of the Commencement Stock Units (i.e., either a TSR condition or a 162(m) Performance Condition, as the case may be) is not satisfied as of the applicable Measurement Date, such Commencement Stock Units shall not vest as of such date regardless of whether the other type of performance condition is achieved. However, any

Commencement Stock Units that could, but do not, vest as of the last day of the fiscal year ending on or about September 30, 2008 or September 30, 2009 because either or both the TSR condition or the 162(m) Performance Condition are not met as of such date shall become vested as of the last day of the fiscal year ending on or about September 30, 2009 or September 30, 2010, as the case may be, if and to the extent that the applicable performance criteria are met as of such date. For example, subject to satisfaction of the continued employment requirement set forth below, if the TSR condition and/or 162(m) Performance Condition is not satisfied as of the last day of the fiscal year ending on or about September 30, 2008, no Commencement Stock Units will vest as of the last day of such fiscal year, but if the TSR condition is satisfied and the 162(m) Performance Condition is achieved as of the last day of the fiscal year ending on or about September 30, 2009, Executive shall become vested in 80% of the Commencement Stock Units as of the last day of such fiscal year.

TSR TABLE


TSR Shall be Measured from Commencement Date to (each such date being hereinafter referred to as a “ *Measurement Date* ”):	The Company’s TSR at the Applicable Measurement Date	Aggregate Cumulative Percentage of Total Number of Commencement Stock Units That Become Vested
The end of the fiscal year ending on or about September 30, 2008	Meets or exceeds the S&P 500 Index TSR (as defined below) for the relevant period	60%

The end of the fiscal year ending on or about September 30, 2009	Meets or exceeds the S&P 500 Index TSR for the relevant period	80%

The end of the fiscal year ending on or about September 30, 2010	Meets or exceeds the S&P 500 Index TSR for the relevant period	100%

The Committee shall establish, in accordance with the requirements of Section 162(m), one or more performance conditions from among the performance objectives permitted under the Performance Plan, as in effect on the date such objectives are established, (the “ 162(m) Performance Condition ”) with respect to three performance periods (each, a “ Performance Period ”). Such Performance Periods shall commence on or after the Commencement Date and be of such duration as shall be selected by the Committee, provided that one such Performance Period shall end on the last day of the fiscal year ending on or about September 30, 2008, one shall end on the last day of the fiscal year ending on or about September 30, 2009 and one shall end on the last day of the fiscal

year ending on or about September 30, 2010. The number of Commencement Stock Units that shall be subject to the 162(m) Performance Conditions with respect to a particular Performance Period shall be the same number as are subject to the TSR condition with a Measurement Date occurring on the last day of such Performance Period. The performance conditions selected by the Committee shall generally be consistent with the criteria established for other senior executive officers of the Company, but taking into account differences in the relevant performance periods.

Except as otherwise provided in Paragraphs 4(c), 7(b)(i), 7(b)(iii) and 7(d)(iii) hereof, the Commencement Stock Units which are eligible to vest at any Measurement Date shall become vested only if Executive remains continuously employed by the Company from the Commencement Date until the Measurement Date on which the performance is measured (each such Measurement Date shall hereinafter be referred to as a “ Vesting Date ”) ( e.g. , Executive must still be employed on September 30, 2009 to vest in the portion of the Stock Units that could otherwise become vested on such Measurement Date by reason of the achievement of the applicable performance criteria).

“ TSR ” shall mean, as of any Measurement Date, an amount equal to the average of the total return figures, calculated on the basis of weekly periodicity, as currently reported under “ Comparative Returns ” by Bloomberg L.P. (or any other reporting service that the Committee may designate from time to time) (i) for the Company and (ii) for the S&P 500 Index (the “ S&P 500 Index TSR ”), as the case may be, for each of the four weeks immediately preceding the determination date, it being understood that if any such determination is made on the last trading day of any week, then that week shall be treated as a preceding week.

(c) Accelerated Vesting . In accordance with Section 11 of the Stock Plan (other than subsection 11(c)) as currently in effect, upon the occurrence of a Triggering Event within the 12-month period following a Change in Control, the Commencement Stock Units shall become fully vested and payable pursuant to Paragraph 4(d). For purposes of this Paragraph 4(c), “Triggering Event” and “Change in Control” shall have the meanings given to such term in the Stock Plan, as amended through October 2, 2008.

(d) Payment of Award . To the extent that any Commencement Stock Units vest as of any applicable Vesting Date (including by reason of the application of Section 7(b)(i) or 7(b)(iii) and 7(d(iii)) hereof), the Company shall, within 30 days of the later of the date on which such Commencement Stock Units vest and the date of certification by the Compensation Committee of the achievement of the performance criteria applicable to the vesting of such Commencement Stock Units, which shall in any event be done within 90 days of the applicable Vesting Date (and in all events within 30 days following vesting under Paragraph 4(c)), issue to Executive payment in respect of the number of Commencement Stock Units that became vested as of such date (or, if any Commencement Stock Units became vested as of any prior Vesting Date, the remainder

of ( i ) the maximum aggregate number of Commencement Stock Units that could have become vested as of such date minus ( ii ) the total number of such Commencement Stock Units that shall have vested prior thereto). Without limiting the generality of the immediately preceding sentence, in no event shall any earned Commencement Stock Units be paid later than the end of the Executive’s tax year in which the Vesting Date occurs. The Commencement Stock Units shall be paid in Shares. The Commencement Stock Units, whether or not vested, will not confer any voting rights upon Executive, unless and until Executive receives Shares as payment in respect of such Commencement Stock Units.

(e) Dividend Equivalents . Any dividends paid on Shares will be credited to Executive as additional Commencement Stock Units as if the Commencement Stock Units previously held by Executive were outstanding Shares, as follows: Such credit shall be made in whole and/or fractional Commencement Stock Units 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 and the amount reported by the Company as paid to shareholders in respect of such dividends, provided, however, that if any dividend is paid in common stock of the Company, the number of additional Commencement Stock Units (or fractions thereof) credited in respect of each then outstanding Commencement Stock Unit shall be equal to the number of shares of common stock (or fractions thereof) distributed in respect of one share of common stock. All such additional Commencement Stock Units shall be subject to the same vesting requirements applicable to the previously held Commencement Stock Units in respect of which they were credited and shall be payable in accordance with Paragraph 4(d) hereof.

5. Extension Stock Option Grant .

(a) Grant of Extension Stock Options . On (or as soon as practicable, but not later than five business days, after) the date this Agreement is executed (the “ Extension Date ”), the Company shall grant Executive options to purchase 3,000,000 shares of the Company’s Common Stock (the “ Extension Stock Option Grant ”). Such options shall be granted under the terms of the Amended and Restated 2005 Stock and Incentive Plan (the “ 2005 Stock Plan ”), and except as otherwise expressly provided herein, shall be subject to the terms and conditions of the 2005 Stock Plan and the form of stock award agreement attached hereto as Exhibit A (the “ Option Award Agreement ”). The options shall have a maximum term of seven years from the Extension Date, provided that, subject to Paragraph 7 of this Agreement, such options shall earlier terminate as provided in the 2005 Stock Plan and the Option Award Agreement. The per share exercise price of the Extension Stock Option Grant shall be equal to the Fair Market Value (as defined in the 2005 Stock Plan ) on the date of grant. The Extension Stock Option Grant shall become vested and exercisable as to 500,000 shares of stock on each of the first four anniversaries of the Extension Date, and as to the remaining number of shares on the fifth anniversary of the Extension Date, subject in each case to

Executive’s continued employment with the Company through such anniversary of the Extension Date, and, if applicable, to the provisions of the Option Award Agreement and the 2005 Stock Plan.

(b) Accelerated Vesting . In accordance with Section 11 of the 2005 Stock Plan (other than subsection 11.3) as currently in effect, upon the occurrence of a Triggering Event within the 12-month period following a Change in Control, the Extension Stock Option Grant shall become fully vested and exercisable. For purposes of this Paragraph 5(b), “Triggering Event” and “Change in Control” shall have the meanings given to such terms in the 2005 Stock Plan, as amended through October 2, 2008.

6. Benefits, Perquisites and Expenses .

(a) Benefits . During the Employment Period, Executive shall be eligible to participate in ( i ) each welfare benefit plan sponsored or maintained by the Company and made available generally to its senior officers, including, without limitation, each group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of the Company, and ( ii ) each pension, profit sharing, retirement, deferred compensation or savings plan sponsored or maintained by the Company for its senior officers, in each case, whether now existing or established hereafter, in accordance with the generally applicable provisions thereof.

(b) Perquisites . During the Employment Period, Executive shall be entitled to receive such perquisites as are generally provided to other senior officers of the Company in accordance with the then current policies and practices of the Company.

(c) Business Expenses . The Company shall pay or reimburse Executive for all reasonable expenses incurred or paid by Executive during the Employment Period in the performance of Executive’s duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may require and in accordance with the generally applicable policies and procedures of the Company.

(d) Indemnification . Executive and the Company are parties to an indemnification agreement effective as of October 1, 2003 (the “ Indemnification Agreement ”), which shall continue in full force and effect in accordance with its terms.

7. Termination of Employment .

terminates as of a date specified under this Paragraph 7, Executive agrees that, upon written request from the Company, he shall resign from the Board and each other position he holds with the Company and any of its subsidiaries or affiliates, effective immediately following receipt of such request from the Company (or at such later date as the Company may specify).

(b) Benefits Payable Upon Termination .

(i) (i) In the event of Executive’s death during the Employment Period or a Termination due to Disability, Executive or his beneficiaries or legal representatives shall be provided the Unconditional Entitlements, including, but not limited to, any such Unconditional Entitlements that are or become payable under any Company plan, policy, practice or program or any contract or agreement with the Company by reason of Executive’s death or Termination due to Disability. In the event of the Executive’s death during the Employment Period or a Termination due to Disability, all Commencement Stock Units shall become fully vested and shall be payable to Executive or his beneficiaries or legal representatives (i) in the event of death, in accordance with the terms of Paragraph 4(d) hereof and (ii) in the event of a Termination due to Disability, at the date or dates such amounts would have been payable under Paragraph 4(d) without regard to such termination, but assuming that the 162(m) Performance Condition and the TSR conditions were satisfied. Additionally, the Grandfathered Option Awards shall be or become exercisable to the extent provided in, and remain exercisable for the period specified in, the 2000 Agreement, if applicable, or the terms and conditions of the applicable plan and the applicable option agreements. Subject to Paragraph 7(d), in the event of Executive’s death or disability, any other stock options then held by Executive or his permitted transferees (including the Extension Stock Option Grant) shall be exercisable in accordance with the terms of the applicable plan and the applicable option agreements.

(ii) In the event of Executive’s Termination for Cause, Executive shall be provided the Unconditional Entitlements.

(iii) In the event of a Termination for Good Reason or the exercise by the Company of its Termination Right, Executive shall be provided the Unconditional Entitlements and the Company shall provide the Conditional Benefits to Executive, subject to ( A ) Executive’s execution of the Release, ( B ) Executive having not revoked such Release within the seven-day revocation period permitted following delivery of such Release and ( C ) Executive’s execution of the Consulting Agreement. For Executive to become entitled to the Conditional Benefits, Executive must deliver both the executed Release and the executed Consulting Agreement to the Company by no later than twenty-two (22) days following the Termination Date.

(iv) In the event of a Termination for Good Reason or the exercise by the Company of its Termination Right, any Grandfathered Option Awards shall remain exercisable for the periods specified in the 2000 Agreement.

(c) Unconditional Entitlements . For purposes of this Agreement, the “ Unconditional Entitlements ” to which Executive may become entitled under Paragraph 7(b) are as follows:

(i) Earned Amounts . The Earned Compensation shall be paid within 30 days following the termination of Executive’s employment hereunder, or if any part thereof constitutes a bonus which is subject to or conditioned upon any performance conditions, within thirty (30) days following the determination that such conditions have been met, provided that in no event shall the bonus be paid later than 90 days following his termination of employment.

(ii) Benefits . All benefits payable to Executive under any employee benefit plans (including, without limitation any pension plans or 401(k) plans) of the Company or any of its affiliates applicable to Executive at the time of termination of Executive’s employment with the Company and all amounts and benefits (other than the Conditional Benefits) which are vested or which Executive is otherwise entitled to receive under the terms of or in accordance with any plan, policy, practice or program of, or any contract or agreement with, the Company, at or subsequent to the date of his termination without regard to the performance by Executive of further services or the resolution of a contingency, shall be paid or provided in accordance with and subject to the terms and provisions of such plans, it being understood that all such benefits shall be determined on the basis of the actual date of termination of Executive’s employment with the Company. Notwithstanding the immediately preceding sentence, Executive shall not be entitled to any benefits under any severance plan or policy of the Company or any of its subsidiaries.

(iii) Indemnities . Any right which Executive may have to claim a defense and/or indemnity for liabilities to or claims asserted by third parties in connection with Executive’s activities as an officer, director or employee of the Company or any of its affiliates pursuant to the terms of the Indemnification Agreement referenced in Paragraph 6(d) shall be unaffected by Executive’s termination of employment and shall remain in effect in accordance with its terms.

(iv) Medical Coverage . Executive shall be entitled to such continuation of health care coverage as is required under, and in accordance with, applicable law or otherwise provided in accordance with the Company’s policies. Executive shall be notified in writing of his rights to continue such coverage after the termination of his employment pursuant to this Paragraph 7(c)(iv), provided that Executive timely complies with the conditions to continue such coverage. Executive understands and acknowledges that Executive is responsible to make for all payments

required for any such continued health care coverage that Executive may choose to receive.

(v) Business Expenses . Executive shall be entitled to reimbursement, in accordance with the Company’s policies regarding expense reimbursement as in effect from time to time, for all business expenses incurred by him prior to the termination of his employment.

(vi) Stock Options/RSUs . Except to the extent additional rights are provided upon Executive’s qualifying to receive the Conditional Benefits, Executive’s rights with respect to any stock options and/or restricted stock units granted to him by the Company shall be governed by the terms and provisions of the plans (including plan rules) and award agreements pursuant to which such stock options and restricted stock units were awarded, as in effect at the date Executive’s employment terminates.

(d) Conditional Benefits . For purposes of this Agreement, the “ Conditional Benefits ” to which Executive may become entitled under Paragraph 7(b)(iii), provided he complies with the terms and conditions thereof, are as follows:

(i) Remaining Salary . As specified in further detail in paragraph 2 of the Consulting Agreement, the Company shall pay Executive a lump sum amount equal to the Consulting Amount as compensation for his consulting services under the Consulting Agreement. If the Scheduled Expiration Date is later than the end of the Consulting Agreement Period, the Company shall also pay Executive the Severance Amount. The Consulting Amount and the Severance Amount shall be paid on the date that is six months and one day after the Termination Date (or upon Executive’s death, if earlier).

(ii) Stock Options . All of Executive’s Continuing Unvested Options shall become exercisable in accordance with the applicable Original Stock Option Award Documents, on the same basis as such options would have become vested and exercisable if Executive had remained employed under this Agreement through the Scheduled Expiration Date. Once exercisable, all Continuing Unvested Options shall remain exercisable until the Stock Option Termination Date. All of Executive’s Remaining Stock Options that were vested and exercisable at the Termination Date shall remain exercisable until the Stock Option Termination Date. Notwithstanding any other term or provision hereof, any of Executive’s stock options which are not vested at the Termination Date, and which are not Grandfathered Option Awards or Continuing Unvested Options, shall automatically terminate upon the Termination Date. Except as otherwise expressly provided herein, all of the Remaining Stock Options shall continue to be subject to the Original Stock Option Award Documents. Notwithstanding the foregoing, in the event of Executive’s death prior to the Stock Option Termination Date, all Continuing Unvested Options shall vest on the date of Executive’s death and all

Remaining Stock Options shall be exercisable for the period following Executive’s death determined under such Original Stock Option Award Documents on the same basis as though Executive was employed on the date of his death and regardless of when the Stock Option Termination Date would otherwise have occurred. However, any provisions in the Original Stock Option Award Documents relating to disability or change in control of the Company shall not be operative after the Termination Date with respect to any Remaining Stock Options.

(iii) RSUs . The Remaining Stock Units shall continue to vest in accordance with the terms of the Original RSU Award Documents regardless of Executive’s termination of employment. Except as otherwise expressly provided herein, all such Remaining Stock Units shall be subject to, and administered in accordance with, the Original RSU Award Documents. Any of Executive’s restricted stock unit awards that have not become vested on or before the Termination Date, and that are outstanding at the Termination Date, but which are not Remaining Stock Units, shall automatically terminate on the Termination Date. Notwithstanding any term or provision of the Original RSU Award Documents:

(A) any provisions in such Original RSU Award Documents relating to disability shall not be applicable to any such Remaining Stock Units after the Termination Date;

(B) in the event of Executive’s death after the Termination Date but prior to the Scheduled Expiration Date, the terms and provisions of the Original RSU Award Documents shall be interpreted and applied in the same manner with respect to such Remaining Stock Units as if Executive were an active employee on the date of his death; and

(C) to the extent that, under the Company’s compensation practices and policies, any tranche of Remaining Stock Units is subject to the achievement of performance conditions which were imposed solely because Executive was an executive officer of the Company who could have been a covered employee within the meaning of Section 162(m) at the time payment in respect of such award was expected to be made (the “Applicable 162(m) Criteria”) and such Applicable 162(m) Criteria relate, in whole or in part, to any performance period continuing after the end of the Company’s fiscal year in which the Termination Date occurs, such Applicable 162(m) Criteria shall be waived as of the Termination Date with respect to such tranche of the Remaining Stock Units; provided, however, that this Paragraph 7(d)(iii)(D) shall not be applicable if and to the extent, in the reasonable opinion of tax counsel to the Company, the presence of

such provision would cause any stock units intended to be qualified as other performance based compensation within the meaning of Section 162(m) of the Code to fail to be so qualified at any time prior to Executive’s Termination Date.

(iv) Pro-Rated Current Year Bonus . A pro rata annual bonus for the year in which the Termination Date occurs, determined on the basis of an assumed full-year target bonus determined pursuant to Section 3(b) and the number of days in the applicable fiscal year occurring on or before the Termination Date. Such pro-rata current year bonus shall be paid no later than the later of ( i ) two and a half months after the end of Executive’s tax year in which the Termination Date occurs and ( ii ) two and a half months after the end of the Company’s tax year in which the Termination Date occurs.

(v) Additional Distribution Rules in Respect of Conditional Benefits . The following additional rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to Executive under Paragraph 7(d)(i), (iii) and (iv) and, if applicable Paragraph 8:

(A) It is intended that each installment of the payments and benefits provided under Paragraphs 7(d)(i), (iii) and (iv) shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A;

(B) Distribution in respect of any tranche of Remaining Stock Units to which Paragraph 7(b)(iii)(D) applies shall be made within 90 days following the later of the date that ( i ) the service conditions that had originally been specified for such tranche of Remaining Stock Units under the applicable Original RSU Award Documents would otherwise have been satisfied (had Executive continued to be employed) and ( ii ) the last performance measurement period applicable in respect of such tranche of Remaining Stock Units under the applicable Original RSU Award Documents would otherwise have expired;

(C) Each installment of the payments and benefits due under Paragraph 7(d)(i) and (iii), or Paragraph 8, that would, absent this subsection, be paid within the six-month period following Executive’s “separation from service” from the Company (within the meaning of Section 409A and as provided in Paragraph 7(g) hereof ) shall not be paid until the date that is six months and one day after such separation from service (or, if

earlier, Executive’s death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following Executive’s separation from service. (Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of Executive’s second taxable year following the taxable year of Executive’s in which the separation from service occurs.) Any subsequent installments that would be payable more than six months following Executive’s separation from service shall be paid in accordance with the dates and terms set forth herein.

(e) Definitions . For purposes of this Paragraph 7 and, to the extent applicable, Paragraph 8, the following terms shall have the meanings ascribed to them below:

“ Consulting Agreement ” means the consulting agreement in the form attached hereto as Exhibit B.

“ Consulting Agreement Period ” means the period established under the Consulting Agreement during which Executive shall be required to provide consulting services to the Company.

“ Consulting Amount ” means a lump sum amount equal to the aggregate Base Salary which would have been earned by Executive had his employment under this Agreement continued after the Termination Date and through the earlier to occur of ( i ) the end of the Consulting Agreement Period or ( ii ) any earlier date that the Consulting Agreement terminates for any reason whatsoever.

“ Continuing Unvested Option s” means any of Executive’s stock options (other than Grandfathered Option Awards, but including the Extension Stock Option Grant) that were not vested and exercisable at the Termination Date, but that would have become vested and exercisable on or prior to the Latest Stock Option Vesting Date had Executive continued to be employed by the Company through the Scheduled Expiration Date.

before the annual incentive compensation payable for services rendered in that fiscal year has been paid, the annual incentive compensation that would have been payable to Executive for such completed fiscal year in accordance with Paragraph 3(b).

“ Grandfathered Option Awards ” means any stock options granted to Executive prior to 2005 and outstanding on the Termination Date.

“ Latest Stock Option Vesting Date ” means the date which is three months after the Scheduled Expiration Date.

“ Original Stock Option Award Documents ” means, with respect to any Remaining Stock Option, the terms and provisions of the award agreement and plan pursuant to which such Remaining Stock Option was granted, each as in effect on the Termination Date.

“ Original RSU Award Documents ” means, with respect to any tranche of Remaining Stock Units, the terms and provisions of the award agreement related to and the plan governing, such tranche of Remaining Stock Units, each as in effect on the Termination Date.

“ Release ” means the General Release in the form set forth in Exhibit C attached hereto.

“ Remaining Stock Options ” means any of Executive’s stock options, other than the Grandfathered Option Awards, which are (i) vested at the Termination Date or (ii) Continuing Unvested Options.

“ Remaining Stock Units ” means any of Executive’s restricted stock units (including any Commencement Stock Units) outstanding at the Termination Date (whether or not subject to performance conditions) that, subject to the satisfaction of any applicable performance conditions, would have become vested on or prior to the Scheduled Expiration Date had Executive continued to be employed by the Company through the Scheduled Expiration Date.

“ Scheduled Expiration Date ” means January 31, 2013.

“ Severance Amount ” means an amount equal to the aggregate Base Salary which would have been earned by Executive under this Agreement for the period commencing on the day after termination of the Consulting Agreement Period and ending on the Scheduled Expiration Date; provided that if the Company terminates the Consulting Agreement due to Executive’s material breach of the terms thereof, the Severance Amount shall be reduced to zero.

“ Stock Option Termination Date ” means with respect to any Remaining Stock Option the earlier to occur of (A) the date which is eighteen (18) months after the Scheduled Expiration Date and (B) the expiration of the stated term of such award.

“ Termination for Cause ” means a termination of Executive’s employment by the Company due to (i) Executive’s conviction of a felony or the entering by Executive of a plea of nolo contendere to a felony charge; (ii) Executive’s gross neglect, willful malfeasance or willful gross misconduct in connection with his employment hereunder which has had a material adverse effect on the business of the Company and its subsidiaries, unless Executive reasonably believed in good faith that such act or non-act was in or not opposed to the best interests of the Company; (iii) a substantial and continual refusal by Executive in breach of this Agreement to perform Executive’s duties, responsibilities or obligations assigned to Executive in accordance with the terms hereof (provided that such duties, responsibilities or obligations are not inconsistent with his positions as Chief Executive Officer and are otherwise lawful) that continues after receipt by Executive of written notice from the Company identifying the duties, responsibilities or obligations not being performed; (iv) a violation by Executive of any policy of the Company that is generally applicable to all employees or all officers of the Companies including, but not limited to, policies concerning insider trading or sexual harassment, or the Company’s code of conduct, that Executive knows or reasonably should know could reasonably be expected to result in a material adverse effect on the Company; (v) Executive’s failure to cooperate, if requested by the Board, with any investigation or inquiry into his or the Company’s business practices, whether internal or external, including, but not limited to Executive’s refusal to be deposed or to provide testimony at any trial or inquiry; or (vi) any material breach by Executive of the provisions of Paragraph 11; provided, however, that in the case of subclauses (iv), (v) and (vi), Cause shall not exist if, such violation, failure to cooperate or breach, if capable of being cured, shall have been cured by Executive within 30 days after receipt of notice thereof from the Company. Any Termination for Cause shall be effected by a resolution of the majority of the members of the Board, excluding Executive. Prior to the effectiveness of any such termination, Executive shall be afforded an opportunity to meet with the Board, upon reasonable notice under the circumstances, and explain and defend any action or omission alleged to constitute grounds for a Termination for Cause; provided that, the Board may suspend Executive from his duties hereunder prior to such opportunity and such suspension shall not constitute a breach of this Agreement by the Company or otherwise form the basis for a Termination for Good Reason. If Executive has, and utilizes, such opportunity to be heard, the Board shall promptly reaffirm that grounds for a Termination for Cause exist or reinstate Executive to his position hereunder.

“ Termination Date ” means, subject to the provisions of Paragraph 7(g), the earlier to occur of (i) the date the Company specifies in writing to Executive in connection with the exercise of its Termination Right or (ii) the date Executive specifies in writing to the Company in connection with any notice to effect a Termination for Good Reason.

“ Termination due to Disability ” means a termination of Executive’s employment by the Company because Executive has been incapable, after reasonable accommodation, of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement because of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of (i) six consecutive months or (ii) an aggregate of nine months (whether or not consecutive) in any twelve month period. Any question as to the existence, extent or potentiality of Executive’s disability shall be determined by a qualified physician selected by the Company with the consent of Executive, which consent shall not be unreasonably withheld. Executive or his legal representatives or any adult member of his immediate family shall have the right to present to such physician such information and arguments as to Executive’s disability as he, she or they deem appropriate, including the opinion of Executive’s personal physician.

“ Termination for Good Reason ” means a termination of Executive’s employment by Executive within 30 days of the Company’s failure to cure, in accordance with the procedures set forth below, any of the following events: (i) a reduction in any of Executive’s compensation rights hereunder (that is, Base Salary, target bonus opportunity specified in Paragraph 3(b) or annual target incentive awards specified in Paragraph 3(c)), it being understood that the failure of Executive to receive an actual bonus for any fiscal year equal to or greater than the target bonus opportunity, or to receive in respect of any equity award granted an amount that is equal to or greater than the annual target incentive value ascribed to such award is not a reduction in such compensation rights; (ii) the failure to elect or reelect Executive as a member of the Board of Directors, or the removal of him by the Company from the position of Chief Executive Officer; (iii) the removal of Executive from the position of President of the Company other than in connection with the appointment of another person who is acceptable to Executive to serve as President of the Company; (iv) a material reduction in Executive’s duties and responsibilities as in effect immediately prior to such reduction (other than in connection with the appointment of a person other than Executive to serve as President of the Company); (v) the assignment to Executive of duties that are materially inconsistent with his position or duties or that materially impair Executive’s ability to function as Chief Executive Officer of the Company and any other position in which he is then serving; (vi) the relocation of Executive’s principal office to a location that is both more than 50 miles from Manhattan and more than 50 miles outside of the greater Los Angeles

area; or (vii) a material breach of any material provision of this Agreement by the Company. In addition, following the occurrence of a Change in Control, any occurrence that would constitute a Triggering Event for purposes of Section 11 of the 2005 Stock Plan shall also constitute an event upon which Executive may effect a Termination for Good Reason in accordance with this Agreement. For purposes of the preceding sentence, the terms Change of Control and Triggering Event shall have the meaning set forth in the 2005 Stock Plan as amended through October 2, 2008. Notwithstanding the foregoing, a termination shall not be treated as a Termination for Good Reason (A) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination for Good Reason, (B) if the Board removes Executive from the position of President to appoint as President a person who Executive recommends or otherwise agrees to be acceptable, or (C) unless Executive shall have delivered a written notice to the Board within three months of his having actual knowledge of the occurrence of one of such events stating that he intends to terminate his employment for Good Reason and specifying the factual basis for such termination, and such event, if capable of being cured, shall not have been cured within 30 days of the receipt of such notice.

“ Termination Right ” means the right of the Company, in its sole, absolute and unfettered discretion, to terminate Executive’s employment under this Agreement for any reason or no reason whatsoever. For the avoidance of doubt, any Termination for Cause effected by the Company shall not constitute the exercise of its Termination Right.

(f) Conflict With Plans . As permitted under each of the Stock Plan and the 2005 Stock Plan, the Company and Executive agree that the definitions of Termination for Cause or Termination for Good Reason set forth in this Paragraph 7 shall apply in place of any similar definition or comparable concept applicable under either of the plans (or any similar definition in any successor plan), except that, in connection with a “Triggering Event” as defined in the Stock Plan as amended through October 2, 2008, the terms of the Stock Plan shall apply to determine Executive’s rights and entitlements in respect of the awards made under such plan (and only in respect of such awards).

under Paragraphs 3(a) or 7) or otherwise in connection with his termination of employment with the Company, Executive shall not be deemed to have incurred a termination of employment unless and until he shall incur a “separation from service” within the meaning of Section 409A of the Code, as determined in accordance with Paragraph 3(a) hereof. To the extent that the Company and Executive determine that any provision of this Agreement could reasonably be expected to result in Executive’s being subject to the payment of interest or additional tax under Section 409A, the Company and Executive agree, to the extent reasonably possible as determined in good faith, to amend this Agreement, retroactively, if necessary, in order to avoid the imposition of any such interest or additional tax under Section 409A. All reimbursements and in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

(h) Amendment of Existing Agreements . The parties acknowledge and agree that to the extent that this Paragraph 7 affects any of the terms and conditions of Executive’s Remaining Stock Options or Remaining Stock Units, this Agreement shall constitute an amendment of the Original Stock Option Award Documents and Original RSU Award Documents as they pertain to Executive.

8. Expiration of the Term of this Agreement . If the Employment Period ends at the expiration of the term stated in Paragraph 1 hereof (i.e., on January 31, 2013) and, prior to such date, the parties hereto have not ( i ) entered into a mutually satisfactory extension hereof or a new employment agreement to have effect after such date, or ( ii ) otherwise agreed to continue Executive’s employment without the benefit of an employment agreement, either party may (by written notice to the other) terminate Executive’s employment on, or within 30 days following such expiration of the Employment Period hereunder, in which case (but subject to Paragraph 9 hereof), Executive shall be entitled to receive from the Company a separation payment equal to the sum of ( x ) the Base Salary and ( y ) the average of the annual bonuses payable (including in such average a zero for any year for which no such bonus is payable) to Executive with respect to each of the last three completed fiscal years of the Company for which the amount of such bonus has been determined at the date of such termination (the “ Separation Payment ”), as well as the Unconditional Entitlements. The Separation Payment shall be paid six months and one day following Executive’s Termination Date , but subject to Executive’s execution and non-revocation of the Release. For Executive to

become entitled to the Separation Payment, Executive must deliver the executed Release to the Company by no later than twenty-two (22) days following the date of his Termination Date. Unconditional Entitlements shall be payable at the times provided with respect to the applicable components thereof in Paragraph 7(c). In addition, Executive and his eligible dependents who were participating in any such arrangements at the Termination Date shall be entitled to continued participation in all medical, dental, hospitalization benefit plans or programs in which he and/or they were participating on the date of the termination of his employment until the earlier of ( A ) 12 months following termination of his employment and ( B ) the date, or dates, he receives equivalent coverage and benefits under the plans and programs of a subsequent employer; provided , however , that if Executive’s continued participation in any employee plan or program as provided in this Paragraph 8 would conflict with any law or regulation, or would result in any adverse tax consequences for Executive, the Company or other participants in such plan or program, he shall be provided with the economic equivalent of the benefits provided under the plan or program in which he is unable to participate. In the case of any welfare benefit plan, the economic equivalent of any benefit foregone (x) shall be deemed to be the lowest cost that would be incurred by Executive in obtaining such benefit himself on an individual basis and (y) shall be provided on a “tax grossed-up basis” to the extent the economic equivalent is taxable to Executive, but provision of the benefit to Executive while an employee was not taxable. If Executive becomes entitled to receive the Separation Payment, Executive agrees that, upon written request from the Company, he shall resign from the Board, effective immediately following receipt of such request from the Company (or at such later date as the Company may specify). Notwithstanding anything in this Paragraph 6 to the contrary, payment of the Separation Payment and any other payments or in-kind benefits provided under this Paragraph 8 shall be subject to the terms and conditions set forth in Paragraph 7(d)(v) hereof.

9. Exclusive Remedy . Executive shall be under no obligation to seek other employment or other engagement of his services. Executive acknowledges and agrees that the payments and rights provided under either Paragraph 7 or 8, as the case may be, are fair and reasonable, and are Executive’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, for termination of his employment by the Company upon exercise of its Termination Right pursuant to this Agreement or upon a Termination for Good Reason or upon termination of his employment upon the expiration of this Agreement. The failure of Executive to execute and timely deliver the Release and, if applicable, the Consulting Agreement for any reason ( i ) shall limit his rights in connection with the exercise by the Company of its Termination Right, or upon the termination of his employment at or following the expiration of the term of this Agreement, solely to the right to receive the Unconditional Entitlements, ( ii ) shall not effect a modification of any of his commitments set forth in this Agreement (none of which are contingent upon execution of the Release by him) and ( iii ) shall not preserve or revive any rights waived by Executive hereunder. Subject to Executive’s execution and delivery of the Release without revocation thereof and execution and delivery of the

Consulting Agreement, (i) the Company agrees to enter into the Release and (ii) there shall be no offset available to the Company against any amounts due, paid or payable to him in respect of the Contingent Benefits under Paragraph 7 or the Separation Payment under Paragraph 8 with respect to any compensation, remuneration or payment attributable to any services that Executive may provide to any third party subsequent to termination of employment hereunder, whether as an employee or otherwise.

10. Additional Payments Following a Change in Control . In the event that the aggregate of all payments or benefits made or provided to the Executive under this Agreement and under all other plans, programs or arrangements of the Company (the “ Aggregate Payment ”) constitutes a parachute payment, as such term is defined in Section 280G(b)(2) of the Code, the Company shall pay to the Executive, prior to the time any excise tax imposed by Section 4999 of the Code (“ Excise Tax ”) is payable with respect to such Aggregate Payment, an additional amount which, after the imposition of all income and excise taxes and interest and penalties thereon, is equal to the Excise Tax on the Aggregate Payment. Notwithstanding the immediately preceding sentence, if the Aggregate Payments are less than 110% of the product of (i) three (3) times ( ii ) Executive’s Base Amount (as such term is defined in Section 280G of the Code), the Company shall have no obligation to make any additional payments under this Paragraph 10 and the Aggregate Payments to Executive shall be reduced such that no amount payable to Executive shall be subject to the Excise Tax. Any reduction in the Aggregate Payments effected pursuant to the immediately preceding sentence shall be effected in accordance with the procedure for reducing excess parachute payments specified in Section 11.3 of the 2005 Stock Plan, as amended through October 2, 2008. For the avoidance of doubt, except to the extent provided in the preceding sentence, the provisions of this Section 10 shall override any limitation on the benefits payable to Executive contained in each of Section 11(c) of the Stock Plan and Section 11.3 of the 2005 Stock Plan. The determination of whether the Aggregate Payment constitutes a Parachute Payment and, if so, the amount to be paid to the Executive and the time of payment pursuant to this Paragraph 10 shall be made by an independent accounting firm (the “ Accounting Firm ”) selected by the Company prior to the Change in Control. The Accounting Firm shall be a nationally recognized United States public accounting firm which has not, during the two years preceding the date of its selection, acted in any way on behalf of ( x ) the Company or any affiliate thereof or ( y ) Executive. In the event that the Excise Tax is later determined by the Accounting Firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the payment is made under this Paragraph 10 (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of such payment), the Company shall make an additional payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined. In the event that the Excise Tax is subsequently determined by the Accounting Firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount

taken into account hereunder in calculating the payment to be made pursuant to this Paragraph 10, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior payment that would not have been paid if such Excise Tax had been applied in initially calculating such payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event that any portion of the payment made hereunder that is to be refunded to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive, and interest payable to the Company shall not exceed interest received or credited to Executive by such tax authority for the period it held such portion. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

11. Non-competition and Confidentiality .

(a) Non-competition . During the Employment Period, Executive shall not become associated with any entity, whether as a principal, partner, employee, consultant or shareholder (other than as a holder of not in excess of 1% of the outstanding voting shares of any publicly traded company), that is actively engaged in any geographic area in any business which is in competition with a business conducted by the Company at the time of the alleged competition.

(b) Confidentiality . Without the prior written consent of the Company, except ( i ) as reasonably necessary in the course of carrying out his duties hereunder or ( ii ) to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, Executive shall not disclose any trade secrets, customer lists, drawings, designs, information regarding product development, existing theatrical projects, marketing plans, sales plans, manufacturing plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records or other financial, commercial, business or technical information relating to the Company or any of its subsidiaries or information designated as confidential or proprietary that the Company or any of its subsidiaries may receive belonging to suppliers, customers or others who do business with the Company or any of its subsidiaries (collectively, “ Confidential Information ”) unless such Confidential Information has been previously disclosed to the public by the Company or has otherwise become available to the public (other than by reason of Executive’s breach of this Paragraph 11(b)).

(c) Company Property . Promptly following Executive’s termination of employment, Executive shall return to the Company all property of the Company, and all copies thereof in Executive’s possession or under his control, except that Executive

may retain his personal notes, diaries, Rolodexes, calendars and correspondence of a personal nature.

(d) Non-Solicitation of Employees . During the Employment Period and, subject to the provisions of applicable law, during the one-year period following any termination of Executive’s employment, Executive shall not, except in the course of carrying out his duties hereunder, directly or indirectly induce any employee of the Company or any of its subsidiaries to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, knowingly employ or offer employment to any person who is or was employed by the Company or a subsidiary thereof unless such person shall have ceased to be employed by such entity for a period of at least six (6) months.

(e) Injunctive Relief with Respect to Covenants . Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, nonsolicitation, confidentiality and the Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations may cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company shall be entitled to obtain an injunction, restraining order or such other equitable relief restraining Executive from committing any violation of the covenants and obligations contained in this Paragraph 11. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity.

12. Miscellaneous .

(a) Survival . Paragraphs 7 (relating to early termination of the Employment Period), 8 (relating to payments to be made at the expiration of this Agreement), 10 (relating to certain additional payments following a change in control), 11 (relating to nondisclosure and nonsolicitation of employees) and 12(o) (relating to governing law) shall survive the termination hereof, whether such termination shall be by expiration of the Employment Period in accordance with Paragraph 1 or an early termination of the Employment Period pursuant to Paragraph 7 hereof.

(b) Binding Effect . This Agreement shall be binding on, and shall inure to the benefit of, the Company and any person or entity that succeeds to the interest of the Company (regardless of whether such succession does or does not occur by operation of law) by reason of a merger, consolidation or reorganization involving the Company or a sale of all or substantially all of the assets of the Company. The Company further agrees that, in the event of a sale of assets as described in the preceding sentence, it shall use its reasonable best efforts to cause such assignee or transferee to expressly assume the liabilities, obligations and duties of the Company hereunder. This Agreement shall also inure to the benefit of Executive’s heirs, executors, administrators and legal representatives and beneficiaries as provided in Paragraph 12(d).

(c) Assignment . Except as provided under Paragraph 12(b), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

(d) Beneficiaries/References . Executive shall be entitled, to the extent permitted under any applicable law and the terms of any applicable plan, to select and change a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive’s death by giving the Company written notice thereof. In the event of Executive’s death or a judicial determination of his incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative.

(e) Entire Agreement . This Agreement and each of the agreements evidencing the terms of the Grandfathered Option Awards, the Commencement Stock Units and Extension Stock Option Grant shall constitute the entire agreement between the parties hereto with respect to the matters referred to herein; provided that this Agreement shall not alter, amend, or supersede ( i ) except as specifically provided in Paragraph 7, any agreement that evidences the terms of any equity grant made prior to the date hereof or ( ii ) the Indemnification Agreement referenced in Paragraph 6(d). This Agreement expressly supersedes the 2005 Agreement and the January 31 Agreement. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein.

(f) Representations . Executive represents that his employment hereunder and compliance by him with the terms and conditions of this Agreement will not conflict with or result in the breach of any agreement to which he is a party or by which he may be bound. The Company represents that ( i ) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. ( ii ) it has the full corporate power and authority to execute and deliver this Agreement and ( iii ) the execution, delivery and performance of this Agreement has been duly and validly authorized.

(g) Authority of the Board . For the avoidance of doubt, nothing is this Agreement shall preclude the Board from its ability to exercise any power or authority to take such actions as it is required or permitted to take as a matter of law or pursuant to the terms of the Company’s governing documents. Nothing in this Paragraph 12(g) shall be construed to modify, amend, limit or otherwise impair the rights and entitlements of Executive set forth in the other Paragraphs of this Agreement (including, without limitation, the rights and entitlements specified in Paragraph 7).

in accordance with its terms, Executive and the Company agree that such subparagraph of such Paragraph 11 shall be reformed to make such Paragraph enforceable in a manner which provides the Company the maximum rights permitted at law.

(i) Waiver . Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions.

(j) Notices . Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally, by courier service, by registered mail, return receipt requested, or by telecopy and shall be effective upon actual receipt when delivered or sent by telecopy and upon mailing when sent by registered mail, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

If to the Company:

The Walt Disney Company

500 South Buena Vista Avenue

Burbank, California 91521

Attention: General Counsel

Telecopy No.: (818) 569-5146

with a copy to:

Debevoise & Plimpton, LLP

919 Third Avenue

New York, New York 10022

Attention: Lawrence K. Cagney, Esq.

Telecopy No.: (212) 909-6836

If to Executive:

To the address listed as Executive’s principal residence in the Company’s human resources records and to his principal place of employment with the Company

with a copy to:

Milbank, Tweed, Hadley & McCloy

One Chase Manhattan Plaza

New York, New York

Attention: Mel Immergut, Esq.

Telecopy No.: (212) 530-5730

(k) Amendments . No amendment to this Agreement shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought.

(l) Headings . Headings to paragraphs in this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(m) Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(n) Withholding . Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable federal, state or local income or employment tax laws or similar statutes or other provisions of law then in effect.

(o) Governing Law . This Agreement shall be governed by the laws of the State of California, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply; provided that Paragraph 4 shall be governed by the laws of the State of Delaware without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has hereunto set his hand as of the day and year first above written.


	THE WALT DISNEY COMPANY

Dated: December 23, 2008	By:	/s/ ALAN N. BRAVERMAN
		Senior Executive Vice President, General Counsel and Secretary

	ROBERT A. IGER

Dated: December 31, 2008	/s/ ROBERT A. IGER

EXHIBIT A

THE WALT DISNEY COMPANY

Non-Qualified Stock Option Award Agreement

[Seven-year Form]

This AWARD AGREEMENT (the “Agreement”) is between you, Robert A. Iger, and The Walt Disney Company (“Disney”), in connection with the Non-Qualified Stock Option Award (the “Option”) granted to you on (“Grant Date”), by the Compensation Committee of the Board of Directors of Disney pursuant to the terms of the Amended and Restated 2005 Stock Incentive Plan (the “Plan”), the applicable terms and conditions of which are incorporated herein by reference and made a part of this Agreement.

This Option gives you the opportunity to purchase 3,000,000 shares of Common Stock of The Walt Disney Company at an exercise price of $Option Price per share. The exercise price is the average of the highest and the lowest market prices for the Common Stock on the above grant date as determined pursuant to the Plan.

This Option may not be exercised before first anniversary of the Grant Date. On or after that date, subject to your continued employment by Disney or an affiliated company (as described further below) and to the other provisions of the Plan, you may exercise the Option with respect to the number of shares set forth opposite the first date below. As the subsequent dates set forth below occur, you may exercise the Option as to the additional number of shares set forth opposite those dates:


First Anniversary of the Grant Date		500,000 Shares

Second Anniversary of the Grant Date		500,000 Shares

Third Anniversary of the Grant Date		500,000 Shares

Fourth Anniversary of the Grant Date		500,000 Shares

Fifth Anniversary of the Grant Date		1,000,000 Shares

Provided your employment continues, the term of this Option is seven years from the grant date and, therefore, expires on . Except as otherwise provided below, if your employment should cease prior to the date on which your grant expires, your right to vest under and exercise the Option will be subject to early termination as provided in the Plan. Except under certain circumstances specified in the Plan or in this Agreement, you will generally have the right of continued vesting for three months following the date

of termination of your employment and, because you are retirement eligible on the date hereof, you will have the right to exercise the shares covered by the Option that were vested on the date of termination, and any shares that vest during the three-month period referenced above, for 18 months after the termination of your employment (or for the remaining term of the Option, whichever is shorter). Notwithstanding the foregoing, because you are employed pursuant to an employment agreement with Disney, in the event of your termination of employment due to the exercise by the Company of its Termination Right or a termination by you for Good Reason (as each such term is defined in such employment agreement), the provisions of Paragraph 7 thereof shall determine the extent to which you may become vested in the Option and the period of time during which the Option may be exercised following your termination of employment.

You may exercise this Option as to all or part of the number of shares covered by the Option which are then vested by paying the aggregate exercise price and applicable withholding taxes on the gross gain. You will be provided with additional information at the time of exercise about the methods available for exercising your Option and paying your withholding taxes, in accordance with the methods of exercising options permitted under the Plan. You are urged to seek advice from your tax accountant or attorney when making decisions regarding the exercise of this Option. This Option may not be transferred or assigned.

Notwithstanding any other term or provision hereof, you agree by acceptance of this Option that, except for certain shares (the “Tax-Available Shares”) that may be sold to pay taxes up to the Maximum Tax Liability (as defined below) upon an exercise of a portion of, or all of, this Option, you will hold, for not less than twelve months from the date of exercise of this Option, shares representing no less than one hundred percent (100%) of the shares acquired by you (other than Tax-Available Shares) upon such exercise. In no event shall the foregoing restriction on sale of shares acquired upon the exercise of the Option apply after any termination of your employment with Disney.

For purposes hereof the term “Maximum Tax Liability” shall mean the amount calculated by multiplying total income recognized, as reported by Disney for Federal income tax purposes, upon an exercise of this Option, by a percentage determined as follows:

FR + SR (100-FR) + MR

where:

FR = the highest Federal income tax rate in effect at time of exercise of the Option;

SR = the highest state income tax rate, if any, in effect at the time of exercise of the Option in the state where your principle Disney office is located; and

MR = the Medicare tax rate in effect at time of exercise of the Option.

The number of whole shares acquired upon any exercise of the Options that may be sold to discharge the Maximum Tax Liability shall be determined by dividing the Maximum Tax Liability by the fair market value (as defined in the Plan) of one share of Disney common stock on the date of exercise of the Option and disregarding any fractional amount resulting from such calculation. For the purposes hereof, your commitment to hold the percentage of shares referred to above for not less than twelve months shall constitute and undertaking by you not to sell, transfer, pledge, encumber, assign or otherwise dispose of, except for certain transfers to “family members” and certain others permitted with the prior approval of the Committee pursuant to the Plan, any of such shares during such period.

Please sign this Non-Qualified Stock Option Award Agreement where indicated below. Your signature acknowledges receipt of a copy of the Plan and evidences your agreement to be bound by all the terms and provisions of this Agreement and the Plan.


THE WALT DISNEY COMPANY	PARTICIPANT

By:	By:
		(Signature of Participant)

EXHIBIT B

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (hereinafter referred to as “Agreement”) is made and entered into by and between Robert A. Iger (hereinafter referred to as “ Consultant ”) and The Walt Disney Company (hereinafter referred to as “ Company ”) on and as of , 20 pursuant to that certain Employment Agreement by and between Executive and Company dated 2008 (the “ Employment Agreement ”). All capitalized terms not defined herein shall have the meaning ascribed to them in the Employment Agreement.

1. (a) Unless this Agreement is earlier terminated as hereinafter provided or the Board or a committee thereof waives any of Consultant’s duties and obligations, in whole or in part, for a period following the termination of Consultant’s employment under the Employment Agreement equal to the lesser of 6 months or the remaining period of the Term of the Employment Agreement (the “ Consulting Agreement Period ”), Consultant shall personally and diligently provide to the Chief Executive Officer of the Company such consulting services as the Chief Executive Officer or the Board may reasonably request from time to time, provided that such services shall relate to matters appropriate for the former Chief Executive Officer of the Company and shall be a type and nature and duration typical for a post-employment consulting agreement with the former Chief Executive Officer of the Company. Consultant shall not be required to report to Employer’s offices and shall be permitted, subject to the terms hereof, to provide consulting services to third parties during the term hereof, provided (i) in no event shall consulting services or other services or advice of any nature be provided by Consultant, directly or indirectly (whether as an employee, consultant, independent contractor, agent, partner, principal, owner or otherwise) to any person or entity which directly or indirectly owns, operates, manages, develops, controls or provides services to, any business involved in any of the following activities: (A) the conception, creation, development, production, purchase, sale, distribution, broadcast, transmission or other disposition (including, without limitation, the licensing and/or merchandising of related consumer products) of audio and/or visual product or works of any nature in any media, including, without limiting the generality of the foregoing, any activity relating to ( i ) any aspect of the network, cable, broadcasting, television (including pay-per-view, closed circuit or any inter-active form of distribution of television or other audio/visual product) or internet businesses, or ( ii ) the development, marketing or distribution by any vehicle whatsoever of any film or television product or any similar content in any media, whether or not now existing, ( B ) the operation, management, development, licensing and promotion of themed resorts, hotels and restaurants or amusement or themed entertainment parks; or ( C ) the design, development, publishing, promotion or sale of products based on cartoon or other animated characters, films, television and theatrical productions and other intellectual property derived therefrom, in each case, only to the extent that such person or entity is actively engaged in any geographic area in any

business which is in competition with a business conducted by the Company or one of its subsidiaries at the time of the performance of such services (the “Specified Activities”), and (ii) that any services required by Company shall at all times be provided with precedence being given to Company and on a “first priority” basis to Company, although Company shall endeavor to provide, when possible, reasonable notice to Consultant of all services required hereunder and to give due consideration, to the extent practicable, to any prior commitments Consultant may have at such time. In no event shall Consultant be required to devote more than 20 hours per month to services to Company hereunder, and the parties agree and understand that Consultant’s expected commitment to such services shall regularly be less than the stated maximum monthly hours.

(b) In the event of a material uncured breach by Consultant of any term or provision of this paragraph 1 hereof, all of which terms and conditions Consultant acknowledges and agrees are of the essence of this Agreement, or any other term or provision hereof, Company by action of the Board shall have the right, in addition to any other right of remedy available to it at law or in equity, to terminate this Agreement. In such event Company shall have no further obligation to make payments or perform or honor any commitments under the Release or to pay or honor any commitments which relate to or constitute any of the Conditional Benefits; provided , however , that notwithstanding the foregoing, except as otherwise specifically provided in the immediately preceding sentence, no breach of this Agreement by Consultant, no termination of this Agreement by Company, and no other action or inaction by either of them (other than the execution by the parties of a written agreement amending or superseding the Release or any part thereof) shall in any event or under any circumstances have any effect whatsoever on the validity, enforceability, binding nature, effect or interpretation of the release set forth in paragraph 7 of the Release, and the release set forth therein shall remain in full force and effect.

(c) In the event that Consultant shall receive a notice of breach of this Agreement from the Board, Consultant shall have ten (10) business days to cure such breach unless the Board shall have determined in its good faith business judgment that such breach is not curable. Any notice of termination pursuant to this paragraph 2 shall set forth in reasonable detail the basis for such breach and shall contain a statement as to whether or not such breach has been determined to be curable by the Board. In the event that he receives a notice of breach of the Agreement from the Board, Executive may challenge such finding of a breach, by written notice to the Board, and shall be afforded an opportunity to present his objection to the Board, in person or in writing, as determined by the Board, prior to Company having any right to terminate this Agreement and the Conditional Benefits provided under the Employment Agreement.

2. Consultant shall receive gross consulting fees for his services hereunder which, for any period during the Consulting Agreement Period, shall equal the amount of gross salary Consultant would have earned had he remained as an employee of the Company under the Employment Agreement for such period. The consulting fee

payments shall be made at the date set forth in Paragraph 7(d)(i) of the Employment Agreement.

3. Company shall reimburse Consultant, in accordance with the procedures of Company then in effect for its employees, for reasonable business expenses incurred by Consultant in the course of performing the services hereunder.

4. Company, its successors, privies and assigns shall be entitled to, and shall, own as their exclusive property all of the results and proceeds of the services (which results and proceeds are hereinafter collectively referred to as the “ Work Product ”) in whatever stage of completion, all of which shall be considered a work-for-hire, including, without limitation, all written work, research, plot outlines, computer programs, plans, drawings, paintings, sculptures, fanciful creations, specifications, ideas, scripts, sketches, designs, concepts, software, systems, reports, documentation, and other tangible or intangible work product produced. Company shall own all rights in the Work Product in perpetuity throughout the universe including, without limitation, the rights to produce, manufacture, record, reproduce, distribute, transfer or prepare derivative works from the Work Product by any art, medium or method and all copyrights, trademarks and/or patents in the Work Product. Company shall be deemed the sole author of the Work Product and is entitled to the copyright therein (and all renewals and extensions thereof), and the full ownership to the original and all copies of the Work Product. Company shall have the right to dispose of the Work Product and/or make any or all uses thereof as it, at any time and in the exercise of its sole discretion, may desire. Consultant shall deliver all originals and copies of the Work Product (whether completed or in process) and all research, plans, designs, specifications and any other work product or information which pertains to the Work Product to Company upon completion of the services performed hereunder or upon earlier termination of this Agreement. Consultant shall not retain, use or disclose any of the Work Product without Company’s prior written consent. The termination, completion or breach of this Agreement on whatever grounds and by whomsoever affected shall not affect Company’s exclusive ownership of the Work Product. Consultant hereby assigns to Company all now known or hereafter existing rights of every kind throughout the universe, in perpetuity and in all languages, pertaining to the Work Product, including, without limitation, all exclusive exploitation rights, of every kind and nature, including, but not limited to, all trademarks, copyrights and neighboring rights, to the full extent such assignment is allowed by law, and any renewals and extensions therefor throughout the universe, in perpetuity, or for the duration of the rights in each country, and in all languages. Consultant acknowledges that new rights to the Work Product may come into being or be recognized in the future, under the law or in equity (the “ New Exploitation Rights ”), and Consultant intends to and does hereby grant and convey to Company any and all such New Exploitation Rights to the Work Product. Consultant is also aware and acknowledges that new or changed technology, uses, media, format, modes of transmission and methods of distribution, dissemination, exhibition or performance (the “ New Exploitation Methods ”) are being and will inevitably continue

to be developed in the future, which would offer new opportunities for exploiting the Work Product. Consultant intends to and does hereby grant and convey to Company any and all rights to such New Exploitation Methods with respect to the Work Product. Consultant agrees to execute, at any time upon Company’s request, such further documents and do such other acts as may be required to evidence or confirm Company’s exclusive ownership of and exploitation rights to the Work Product and to effectuate Consultant’s purpose to convey such rights to Company including, but not limited to, the New Exploitation Rights and any and all of the New Exploitation Methods. Consultant agrees that he will not seek to (i) challenge, through the courts, administrative governmental bodies, private organizations or in any other manner, the rights of Company to exploit the Work Product by any means whatsoever or (ii) thwart, hinder or subvert the intent of the preceding grants and conveyances to Company, or the collection by Company of any proceeds relating to the rights conveyed under this Agreement. The provisions of this paragraph shall survive the expiration or sooner termination of this Agreement.

5. This Agreement is for the personal services of Consultant and may not be subcontracted or assigned by Consultant in any fashion, whether by operation of law, or by conveyance of any type, without the prior written consent of Company, which consent Company may withhold in its sole discretion. Company may not assign all or any portion of this Agreement at any time to any of its affiliates or to any other person.

6. (a) Consultant, by virtue of this Agreement, shall acquire no right to use, and shall not use, the name “Disney” or “ABC” or “American Broadcasting Companies” or “ESPN” (either alone or in conjunction with or as a part of any other word, mark, or name) or any marks, fanciful characters or designs of The Walt Disney Company, or Company or any of their related, affiliated, or subsidiary companies in any advertising, publicity, or promotion; to express or imply any endorsement by Disney or Company or any of their related, affiliated or subsidiary companies of Consultant’s services; or in any other manner whatsoever (whether or not similar to the uses hereinabove specifically prohibited). Consistent with his obligations under Paragraph 7, this Paragraph 6(a) shall not prevent Executive from using such names to describe his activities with respect to Company and its subsidiaries under and prior to the Employment Agreement and under this Agreement.

(b) Consultant hereby represents and warrants to Company that as of the date of this Agreement, Consultant does not provide any services (including, without limitation, as an employee) to any person or entity that (i) is engaged in, or whose affiliated entities are engaged in, one or more of the Specified Activities or (ii) advises or provides consulting services to any person or entity that is engaged in, or whose affiliated entities are engaged in, any business or activity relating to or constituting one or more of the Specified Activities. Consultant further represents and warrants to Company that he

shall make written disclosure to Company prior to providing any services, during the term of this Agreement, to any of the above mentioned persons or entities.

7. Consultant may, during the course of Consultant’s engagement hereunder, have access to, and acquire knowledge of or from, materials, data, strategies, systems or other information relating to the services hereunder or Company, or its parent, related, affiliated or subsidiary companies, which may not be accessible or known to the general public (including, but not limited to, the existence of this Agreement and the terms hereof and any Work Product not readily available to the general public) (“ Confidential Information ”). Any such knowledge acquired by Consultant shall be kept confidential and shall not be used, published, or divulged by Consultant to any other person, firm, or corporation, or in any advertising or promotion regarding Consultant or Consultant’s services, or in any other manner or connection whatsoever without first having obtained the prior written permission of Company, which permission Company may withhold in its sole discretion. Upon Company’s request, Consultant shall immediately return to Company or destroy, all documents, magnetic copies, or other physical evidence of all Confidential Information in Consultant’s possession or in the possession of any of Consultant’s directors, officers, employees, agents or representatives (including, without limitation, all copies, transcriptions, notes, extracts, analyses, compilations, studies, or other documents, records, or data prepared by Consultant) which contain or otherwise reflect or are generated from the Confidential Information without retaining any copy thereof, all of the foregoing being Confidential Information and the sole property of Company, Consultant shall certify to Company that all of the foregoing has been returned or destroyed as provided in this paragraph. Consultant agrees that Company would be irreparably harmed by any violation or threatened violation of this paragraph and that, therefore, Company shall be entitled to an injunction prohibiting Consultant from any violation or threatened violation of this paragraph. The provisions of this paragraph shall survive the expiration or sooner termination of this Agreement. The parties agree that Consultant shall have no greater duty or obligation in respect of this Paragraph 7 than applies to Executive under Paragraph 11(b) of the Employment Agreement.

8. This Agreement shall be construed and interpreted in accordance with the laws of the State of California without regard to conflicts of laws principles.

9. The terms and provisions of this Agreement, the Release and Paragraphs 7 and 10 of the Employment Agreement constitute the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersede all previous communications, representations, or agreements, either oral or written, between the parties relating to such subject matter hereof. No change, alteration or modification of this Agreement shall be effective unless made in writing and signed by both parties hereto.

IN WITNESS WHEREOF , the parties have caused this Agreement to be duly executed as of the day and year first above written.


THE WALT DISNEY COMPANY						Consultant

By:						By:
Title:						[Name]

EXHIBIT C

GENERAL RELEASE

WHEREAS, Robert A. Iger (hereinafter referred to as “Executive”) and The Walt Disney Company (hereinafter referred to as the “Company”) are parties to an Employment Agreement , originally dated October 2, 2005, and amended and restated as of January , 2008 (the “Employment Agreement”), which provided for Executive’s employment with the Company on the terms and conditions specified therein; and

WHEREAS, pursuant to paragraph 9 of the Employment Agreement, Executive and the Company have agreed to execute mutual releases of the type and nature set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and mutual promises herein contained and for other good and valuable consideration received in accordance with the terms of the Employment Agreement, it is agreed as follows:

1. (a) Upon the later of (i) the execution hereof by the Company and Executive, (ii) the passage of seven days following execution hereof by Executive without Executive’s having exercised the revocation rights referred to in paragraph 12 hereof and (iii) the time specified in the Employment Agreement for payment of a particular item of compensation, the Company shall (x) provide Executive the amounts and benefits described in Paragraph [7][8] of the Employment Agreement and (y) make full payment for vacation and floating holidays accrued but unused as of the date hereof, less amounts required to be withheld by law or authorized by Executive to be withheld (it being understood that from and after the date hereof no further rights to vacation or floating holidays or compensation therefor shall accrue or be payable to Executive). Such payment shall be made by check payable to Executive.

(b) The covenants and commitments of the Company referred to herein (including, specifically, but without limitation, any and all benefits conferred upon Executive pursuant to Paragraph 7 or 8 of the Employment Agreement) shall be in lieu of and in full and final discharge of any and all obligations to Executive for compensation, severance payments, or any other expectations of payment, remuneration, continued coverage of any nature or benefit on the part of Executive arising out of or in connection with Executive’s employment with the Company, or under any agreement, arrangement, commitment, plan, program, practice or policy of the Company, or otherwise, other than as expressly provided in the Employment Agreement.

subject to the terms of (i) the Employment Agreement, (ii) any applicable retirement plan(s) to which Executive may be subject, (iii) any applicable stock option plan or other incentive compensation plan of the Company to which Executive may be subject, (iv) any right which Executive now has or may hereafter have to claim a defense and/or indemnity for liabilities to third parties in connection with his activities as an employee of the Company or any of its affiliates pursuant to the terms of any applicable statute, under any insurance policy, pursuant to the certificate of incorporation or bylaws or established policies of the Company or any affiliate thereof or pursuant to written agreement (including, without limitation, the Indemnification Agreement dated as of October 1, 2003) expressly providing for such indemnity between Executive and the Company or any affiliate thereof, and (v) any other applicable employee welfare benefit plans to which Executive may be subject. Further, Executive shall be entitled to such continuation of health care coverage as is required under, and subject to, applicable law, of which Executive shall be notified in writing after the Termination Date, provided Executive timely exercises Executive’s rights in accordance therewith. Executive understands and acknowledges that all payments for any such continued health care coverage he may elect will be paid by him, except to the extent the Employment Agreement provides that such payments shall be made by the Company.

2. Executive confirms that, on or prior to seven (7) days from the date hereof, Executive shall turn over to the Company all files, memoranda, records, credit cards and other documents and physical or personal property that Executive received from the Company or that Executive generated in connection with his employment by the Company or that are the property of the Company.

3. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under law. Should there be any conflict between any provision hereof and any present or future law, such law will prevail, but the provisions affected thereby will be curtailed and limited only to the extent necessary to bring them within the requirements of law, and the remaining provisions of this Agreement will remain in full force and effect and be fully valid and enforceable.

4. Executive represents and agrees (a) that Executive has to the extent he desires discussed all aspects of this Agreement with his attorney, (b) that Executive has carefully read and fully understands all of the provisions of this Agreement, and (c) that Executive is voluntarily entering into this Agreement.

“Releasees”), or any of them, from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, suspected or unsuspected, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort or any legal restrictions on the Company’s right to terminate employees, or any Federal, state or other governmental statute, regulation or ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Federal Age Discrimination In Employment Act of 1967, as amended, and the California Fair Employment and Housing Act that Executive now has, or has ever had, or ever will have, against each or any of the Releasees, by reason of any and all acts, omissions, events, circumstances or facts existing or occurring up through the date of Executive’s execution hereof that directly or indirectly arise out of, relate to, or are connected with, Executive’s services to, or employment by the Company (any of the foregoing being an “Executive Claim” or, collectively, the “Executive Claims”).

6. Executive expressly waives and relinquishes all rights and benefits afforded by California Civil Code Section 1542 and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 states as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of the Releasees, Executive expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all Executive Claims that Executive does not know or suspect to exist in Executive’s favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such Executive Claim or Executive Claims.

contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, that the Company now has, or has ever had, or ever will have, against Executive and/or the Executive Releasees, by reason of any and all acts, omissions, events, circumstances or facts existing or occurring up through the date of the Company’s execution hereof, that directly or indirectly arise out of, relate to, or are connected with, Executive’s services to, or employment by the Company (hereinafter referred to as a “Claim” or collectively, the “Claims”); provided , however , that, notwithstanding any other term or provision hereof, any Claim or Claims rising out of, under, or resulting from, in part or whole, (i) any illegal or fraudulent act(s) or illegal or fraudulent omission(s) to act of Executive, (ii) any action(s) or omission(s) to act which would constitute self-dealing or a breach of Executive’s confidentiality obligations to the Company or any affiliate thereof, or a breach of The Walt Disney Company and Associated Companies Confidentiality Agreement executed by Executive, or (iii) the Board’s policy, as the same may be in effect from time to time, regarding the ability of the Company to recoup bonus or incentive payments as a result of the Company being required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, are hereby expressly excluded in their entirety from the foregoing release, acquittal and discharge and are unaffected thereby (any Claim or Claims not so excluded pursuant to this proviso being hereinafter referred to as a the “Company Claim” or, collectively, as the “Company Claims”).

8. Except as expressly reserved herein, the Company expressly waives and relinquishes all rights and benefits afforded by California Civil Code Section 1542 and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 states as follows:

9. Executive understands that Executive has been given a period of 21 days to review and consider this Agreement before signing it pursuant to the Age Discrimination In Employment Act of 1967, as amended. Executive further understands

that Executive may use as much of this 21-day period as Executive wishes prior to signing.

10. Executive acknowledges and represents that he understands that he may revoke the waiver of his rights under the Age Discrimination In Employment Act of 1967, as amended, effectuated in this Agreement within 7 days of signing this Agreement. Revocation can be made by delivering a written notice of revocation to General Counsel, The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521. For this revocation to be effective, written notice must be received by the General Counsel no later than the close of business on the seventh day after Executive signs this Agreement. If Executive revokes the waiver of his rights under the Age Discrimination In Employment Act of 1967, as amended, the Company shall have no obligations to Executive hereunder, and this Agreement and the Employment Agreement shall have no further force and effect.

11. Executive and the Company respectively represent and acknowledge that in executing this Agreement neither of them is relying upon, and has not relied upon, any representation or statement not set forth herein made by any of the agents, representatives or attorneys of the Releasees or of the Executive Releasees with regard to the subject matter, basis or effect of this Agreement or otherwise.

12. This Agreement shall not in any way be construed as an admission by any of the Company Releasees or Executive Releasees, respectively, that any Company Releasee or Executive Releasee has acted wrongfully or that the Company or Executive has any rights whatsoever against any of the Company Releasees or Executive Releasees except as specifically set forth herein, and each of the Company Releasees and Executive Releasees specifically disclaims any liability to any party for any wrongful acts.

and all prior agreements or understandings between the parties hereto pertaining to the subject matter hereof; and may not be changed except by explicit written agreement to that effect subscribed by the parties hereto.

PLEASE READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Executed at , California.




ROBERT A. IGER

Dated:

Executed at , California.


THE WALT DISNEY COMPANY

By:
Title:
Dated:

Exhibit 10.2

Amended and Restated Employment Agreement

Between The Walt Disney Company And Thomas O. Staggs

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“ Agreement ”), dated as of December 18, 2008, by and between Thomas O. Staggs (“ Executive ”) and The Walt Disney Company, a Delaware corporation (“ Company ”), amending and restating in its entirety Executive’s Employment Agreement with Company dated as of January 31, 2008 (the “ January 31 Agreement ”).

W I T N E S S E T H :

WHEREAS, the Company and its subsidiaries have employed Executive in various senior officer positions, most recently as Chief Financial Officer of the Company;

WHEREAS, Executive and the Company were on January 31, 2008 parties to an employment agreement, dated as of September 26, 2003, which was scheduled to expire by its own terms on March 31, 2008; (the “ 2003 Agreement ”);

WHEREAS, in furtherance of the Company’s desire to continue to secure the services of Executive, and to induce him to enter into the January 31 Agreement (which took effect following the expiration of the 2003 Agreement), the Company granted Executive an award of restricted stock units on January 30, 2008 that are scheduled to vest, if at all, based on his continued service for the Company through March 31, 2013;

WHEREAS, the Company and Executive entered into the January 31 Agreement to provide for his continued service to the Company; and

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment . Upon the terms and subject to the conditions of this Agreement, the Company hereby employs Executive and Executive hereby accepts employment by the Company for the period commencing on April 1, 2008 and ending on March 31, 2013 (or such earlier date as shall be determined pursuant to Paragraph 5). The period during which Executive is employed pursuant to this Agreement shall be referred to as the “ Employment Period ”.

2. Position and Duties . During the Employment Period, Executive shall serve as Chief Financial Officer of the Company and in such other position or positions with the Company and its subsidiaries, consistent with his position as Chief Financial Officer of the Company, as the Chief Executive Officer of the Company or the Board of Directors of the Company (the “ Board ”) shall reasonably assign Executive from time to time. Executive shall report to the Chief Executive Officer. During the Employment Period, Executive shall devote substantially all his business time to the services required of him hereunder, and shall perform such services in a manner consonant with the duties of his position. Executive shall be subject to the terms and conditions of any applicable policy of the Company regarding service (including as a director) on behalf of any other organization, provided that, subject to the provisions of Paragraph 8(a), nothing herein shall preclude Executive from ( i ) engaging in charitable activities and community affairs, and ( ii ) managing his personal investments and affairs, so long as the activities listed in subclauses (i)-(ii) do not materially interfere, individually or in the aggregate, with the proper performance of his duties and responsibilities as the Company’s Chief Financial Officer.

3. Compensation .

(a) Base Salary . During the Employment Period, the Company shall pay Executive a base salary at the annual rate of no less than the amount determined in accordance with the following schedule:


Date Rate of Salary Effective	Annual Rate of Base Salary
April 1, 2008	$	1,250,000
April 1, 2009	$	1,325,000
April 1, 2010	$	1,400,000
April 1, 2011	$	1,450,000
April 1, 2012	$	1,500,000

The amount of annual base salary currently payable under this Paragraph 3(a) shall be reduced, however, to the extent Executive elects in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and the regulations and interpretations thereunder (“ Section 409A ”), to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or any of its subsidiaries. Executive’s annual base salary payable hereunder, without reduction for any amounts deferred as described above, is referred to herein as the “ Base Salary ”.

The Company shall pay Executive the portion of his Base Salary not deferred at the election of Executive in accordance with its generally applicable policies for senior executives, but not less frequently than in equal monthly installments.

(b) Incentive Compensation . Executive shall be given the opportunity to earn an annual incentive bonus in accordance with the annual bonus plan generally applicable to the Company’s executive officers, as the same may be in effect from time to time (the “ Annual Plan ”). Executive’s target annual incentive bonus opportunity under the Annual Plan during each fiscal year during the term hereof (including the fiscal year commencing October 1, 2007) shall be no less than twice Executive’s Base Salary as expected to be in effect at the end of such fiscal year, as determined in accordance with the schedule established under Paragraph 3(a). The actual amount payable to Executive as an annual bonus under the Annual Plan shall be dependent upon the achievement of performance objectives established in accordance with the Annual Plan by the Board or the committee of the Board responsible for administering such Annual Plan (the “ Compensation Committee ”), which shall be substantially the same as the objectives established under the Annual Plan for other senior executive officers of the Company. The preceding sentence shall not limit any power or discretion of the Board or the Committee in the administration of the Annual Plan. Accordingly, depending on performance, the actual amount payable as an annual bonus to Executive under the Annual Plan may be less than, greater than or equal to the target bonus specified above. Any bonus payable pursuant to this Paragraph 3(b) shall be paid at the same time as annual bonuses are payable to other officers of the Company in accordance with the provisions of the Annual Plan, subject to Executive’s continued employment with the Company through the date on which such bonuses are paid.

(c) Eligibility for Equity Awards . Subject to the terms of this Agreement, Executive shall be entitled to participate in any stock option, performance share, performance unit or other equity based long-term incentive compensation plan, program or arrangement generally made available to senior executive officers of the Company, on substantially the same terms and conditions as generally apply to such other officers, except that the size of the awards made to Executive shall reflect Executive’s position with the Company and the Compensation Committee’s evaluation of Executive’s performance and competitive compensation practices. During each fiscal year during the term hereof (including the fiscal year commencing October 1, 2007), Executive shall receive an annual award with a target award value (which value shall be as determined in accordance with the policies and practices generally applicable to other senior executives of the Company) of not less than three time Executive’s Base Salary as expected to be in effect at the end of such fiscal year, as determined in accordance with the schedule established under Paragraph 3(a); it being understood that the form of the award shall be determined by the

Compensation Committee and such form shall be subject to the terms of the applicable plan or plans of the Company. The preceding sentence shall not limit any power or discretion of the Board or the Committee in the administration of any such long-term incentive plan. The Compensation Committee may increase the award value of any award made in respect of any such fiscal year based on its evaluation of Executive’s performance. The actual benefits conveyed to Executive in respect of any such awards may be less than, greater than or equal to the targeted award value, as such benefits will be dependent on a series of performance and other factors, such as the value of the Company’s common stock and satisfaction of any applicable vesting requirements and performance conditions.

4. Benefits, Perquisites and Expenses .

(d) Indemnification . Executive and the Company are parties to an indemnification agreement, which shall continue in full force and effect in accordance with its terms.

5. Termination of Employment .

Cause, ( iv ) the Termination Date specified in connection with any exercise by the Company of its Termination Right or ( v ) a Termination for Good Reason. If the Employment Period terminates as of a date specified under this Paragraph 5, Executive agrees that, upon written request from the Company, he shall resign from any and all positions he holds with the Company and any of its subsidiaries and affiliates, effective immediately following receipt of such request from the Company (or at such later date as the Company may specify).

(b) Benefits Payable Upon Termination .

(i) In the event of Executive’s death during the Employment Period or a Termination due to Disability, Executive or his beneficiaries or legal representatives shall be provided the Unconditional Entitlements, including, but not limited to, any such Unconditional Entitlements that are or become payable under any Company plan, policy, practice or program or any contract or agreement with the Company by reason of Executive’s death or Termination due to Disability.

(ii) In the event of Executive’s Termination for Cause, Executive shall be provided the Unconditional Entitlements.

(iii) In the event of a Termination for Good Reason or the exercise by the Company of its Termination Right, Executive shall be provided the Unconditional Entitlements and the Company shall provide Executive the Conditional Benefits, subject to ( A ) Executive’s execution of the Release, ( B ) Executive having not revoked such Release within the seven-day revocation period permitted following delivery of such Release and ( C ) Executive’s execution of the Consulting Agreement. For Executive to become entitled to the Conditional Benefits, Executive must deliver both the executed Release and the executed Consulting Agreement to the Company by no later than twenty-two (22) days following the Termination Date.

(c) Unconditional Entitlements . For purposes of this Agreement, the “ Unconditional Entitlements ” to which Executive may become entitled under Paragraph 5(b) are as follows:

(iii) Indemnities . Any right which Executive may have to claim a defense and/or indemnity for liabilities to or claims asserted by third parties in connection with Executive’s activities as an officer, director or employee of the Company or any of its affiliates pursuant to the terms of the Indemnification Agreement referenced in Paragraph 4(d) shall be unaffected by Executive’s termination of employment and shall remain in effect in accordance with its terms.

(iv) Medical Coverage . Executive shall be entitled to such continuation of health care coverage as is required under, and in accordance with, applicable law or otherwise provided in accordance with the Company’s policies. Executive shall be notified in writing of his rights to continue such coverage after the termination of his employment pursuant to this Paragraph 5(c)(iv), provided that Executive timely complies with the conditions to continue such coverage. Executive understands and acknowledges that Executive is responsible to make for all payments required for any such continued health care coverage that Executive may choose to receive.

(vi) Stock Options/RSUs . Except to the extent additional rights are provided upon Executive’s qualifying to receive the Conditional

Benefits, Executive’s rights with respect to any stock options and/or restricted stock units granted to him by the Company shall be governed by the terms and provisions of the plans (including plan rules) and award agreements pursuant to which such stock options and restricted stock units were awarded, as in effect at the date Executive’s employment terminates.

(d) Conditional Benefits . For purposes of this Agreement, the “ Conditional Benefits ” to which Executive may become entitled, provided he complies with the terms and conditions thereof, are as follows:

(ii) Stock Options . All of Executive’s Continuing Unvested Options shall become exercisable in accordance with the applicable Original Stock Option Award Documents, on the same basis as such options would have become vested and exercisable if Executive had remained employed under this Agreement through the Scheduled Expiration Date. Once exercisable, all Continuing Unvested Options shall remain exercisable until the Stock Option Termination Date. All of Executive’s Remaining Stock Options that were vested and exercisable at the Termination Date shall remain exercisable until the Stock Option Termination Date. Notwithstanding any other term or provision hereof, any of Executive’s stock options which are not vested at the Termination Date, and which are not Continuing Unvested Options, shall automatically terminate upon the Termination Date. Except as otherwise expressly provided herein, all of the Remaining Stock Options shall continue to be subject to the Original Stock Option Award Documents. Notwithstanding the foregoing, in the event of Executive’s death prior to the Stock Option Termination Date, all Continuing Unvested Options shall vest on the date of Executive’s death and all Remaining Stock Options shall be exercisable for the period following Executive’s death determined under such Original Stock Option Award Documents on the same basis as though Executive was employed on the date of his death and regardless of when the Stock Option Termination Date would otherwise have occurred. However, any provisions in the Original Stock Option Award Documents relating to

disability or change in control of the Company shall not be operative after the Termination Date with respect to any Remaining Stock Options.

(iii) RSUs . The Remaining Stock Units shall continue to vest in accordance with the terms of the Original RSU Award Documents, regardless of Executive’s termination of employment. Except as otherwise expressly provided herein, all such Remaining Stock Units shall be subject to, and administered in accordance with, the Original RSU Award Documents. Any of Executive’s restricted stock unit awards that have not become vested on or before the Termination Date, and that are outstanding at the Termination Date, but which are not Remaining Stock Units, shall automatically terminate on the Termination Date. Notwithstanding any term or provision of the Original RSU Award Documents:

(A) any provisions in such Original RSU Award Documents relating to disability shall not be applicable to any such Remaining Stock Units after the Termination Date;

(B) for so long as this Agreement shall be in effect (that is, regardless of whether the Termination Right has been exercised or a Termination for Good Reason shall have occurred), any terms in any of the Original RSU Award Documents relating to a change in control of the Company shall not be operative unless the event that constitutes a change in control of the Company also constitutes a “change in control event” with respect to the Company within the meaning of Section 409A;

(C) in the event of Executive’s death after the Termination Date but prior to the Scheduled Expiration Date, the terms and provisions of the Original RSU Award Documents shall be interpreted and applied in the same manner with respect to such Remaining Stock Units as if Executive were an active employee on the date of his death; and

Termination Date occurs, such Applicable 162(m) Criteria shall be waived as of the Termination Date with respect to such tranche of the Remaining Stock Units; provided, however, that this Paragraph 5(d)(iii)(D) shall not be applicable if and to the extent, in the reasonable opinion of tax counsel to the Company, the presence of such provision would cause any stock units intended to be qualified as other performance based compensation within the meaning of Section 162(m) of the Code to fail to be so qualified at any time prior to Executive’s Termination Date.

(A) It is intended that each installment of the payments and benefits provided under Paragraphs 5(d)(i), (iii) and (iv) shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A;

(B) Distribution in respect of any tranche of Remaining Stock Units to which Paragraph 5(b)(iii)(D) applies shall be made within 90 days following the later of the date that ( i ) the service conditions that had originally been specified for such tranche of Remaining Stock Units under the applicable Original RSU Award Documents would otherwise have been satisfied (had Executive continued to be employed) and ( ii ) the last performance measurement period applicable in respect of such tranche of Remaining Stock Units under the applicable Original RSU Award Documents would otherwise have expired;

(C) Each installment of the payments and benefits due under Paragraph 5(d)(i) and (iii) that would, absent this subsection, be paid within the six-month period following Executive’s “separation from service” (within the meaning of Section 409A of the Code and as provided in Paragraph 5(g) hereof) from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, Executive’s death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following Executive’s separation from service; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments and benefits if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). (Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of Executive’s second taxable year following the taxable year of Executive’s in which the separation from service occurs.) Any subsequent installments that would be payable more than six months following Executive’s separation from service shall be paid in accordance with the dates and terms set forth herein.

(e) Definitions . For purposes of this Paragraph 5, the following terms shall have the meanings ascribed to them below:

“ Consulting Agreement ” means the consulting agreement in the form attached hereto as Exhibit A.

“ Consulting Agreement Period ” means the period established under the Consulting Agreement during which Executive shall be required to provide consulting services to the Company.

“ Continuing Unvested Options ” means any of Executive’s stock options that were not vested and exercisable at the Termination Date, but that would

have become vested and exercisable on or prior to the Latest Stock Option Vesting Date had Executive continued to be employed by the Company through the Scheduled Expiration Date.

“ Earned Compensation ” means the sum of ( a ) any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ends pursuant to Paragraph 5(a) (but excluding any salary and interest accrued thereon payment of which has been deferred) and ( b ) if Executive’s employment terminates due to Executive’s death or in a Termination due to Disability or a Termination for Good Reason or due to the Company’s exercise of its Termination Right, in any case, after the end of a fiscal year, but before the annual incentive compensation payable for services rendered in that fiscal year has been paid, the annual incentive compensation that would have been payable to Executive for such completed fiscal year in accordance with Paragraph 3(b).

“ Latest Stock Option Vesting Date ” means the date which is three months after the Scheduled Expiration Date.

“ Release ” means the General Release in the form set forth in Exhibit B attached hereto.

“ Remaining Stock Options ” means any of Executive’s stock options which are ( i ) vested at the Termination Date or ( ii ) Continuing Unvested Options.

“ Remaining Stock Units ” means any of Executive’s restricted stock units (including, but not limited to, the 250,000 restricted stock units granted on January 30, 2008) outstanding at the Termination Date (whether or not subject to performance conditions) that, subject to the satisfaction of any applicable performance conditions, would have become vested on or prior to the Scheduled Expiration Date had Executive continued to be employed by the Company through the Scheduled Expiration Date .

“ Scheduled Expiration Date ” means March 31, 2013.

“ Severance Amount ” means an amount equal to the aggregate Base Salary which would have been earned by Executive under this Agreement (including any scheduled increase therein) for the period commencing on the day after termination of the Consulting Agreement Period and ending on the Scheduled Expiration Date; provided that if the Company terminates the Consulting Agreement due to Executive’s material breach of the terms thereof, the Severance Amount shall be reduced to zero.

“ Stock Option Termination Date ” means with respect to any Remaining Stock Option the earlier to occur of ( i ) the date which is three months after the Scheduled Expiration Date and ( ii ) the expiration of the stated term of such award.

“ Termination for Cause ” means a termination of Executive’s employment by the Company due to ( i ) gross negligence, ( ii ) gross misconduct, ( iii ) willful nonfeasance or ( iv ) willful material breach of this Agreement, which termination may be effected (A) immediately upon notice from the Company if the Company shall reasonably and in good faith determine that the conduct or cause specified in such notice is not curable (it being understood that such notice shall describe in reasonable detail the conduct or cause giving rise to such notice and shall state the reason(s) why the Company has determined that such conduct or cause is not curable); or (B) upon twenty business days notice from the Company, if the Company shall reasonably and in good faith determine that the conduct or cause specified in such notice is curable (it being understood that such notice shall describe in reasonable detail the conduct or cause giving rise to such notice and shall state the reason(s) why the Company has determined that such conduct or cause is curable and what steps the Company believes should or could be taken to cure such conduct or cause); provided that the Company shall not be entitled to terminate Executive’s employment for Cause, if Executive has, within five business days after the date notice in accordance with subclause (B) has been given personally to Executive or otherwise has been received by Executive, commenced in good faith to cure the conduct or cause specified in such notice and completes such cure within 20 business days following the date such notice was received.

“ Termination Date ” means the earlier to occur of ( i ) the date the Company specifies in writing to Executive in connection with the exercise of its Termination Right or ( ii ) the date Executive specifies in writing to the Company in connection with any notice to effect a Termination for Good Reason.

“ Termination due to Disability ” means a termination of Executive’s employment by the Company because Executive has been incapable, after

reasonable accommodation, of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement because of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of ( i ) six consecutive months or ( ii ) an aggregate of nine months (whether or not consecutive) in any twelve month period. Any question as to the existence, extent or potentiality of Executive’s disability shall be determined by a qualified physician selected by the Company with the consent of Executive, which consent shall not be unreasonably withheld. Executive or his legal representatives or any adult member of his immediate family shall have the right to present to such physician such information and arguments as to Executive’s disability as he, she or they deem appropriate, including the opinion of Executive’s personal physician.

“ Termination for Good Reason ” means a termination of Executive’s employment by Executive within 30 days of the Company’s failure to cure, in accordance with the procedures set forth below, any of the following events: ( i ) a reduction in any of Executive’s compensation rights hereunder (that is, Base Salary, target bonus opportunity specified in Paragraph 3(b) or annual target incentive awards specified in Paragraph 3(c)), it being understood that the failure of Executive to receive an actual bonus for any fiscal year equal to or greater than the target bonus opportunity, or to receive in respect of any equity award granted an amount that is equal to or greater than the annual target incentive value ascribed to such award is not a reduction in such compensation rights, but a failure to effect a scheduled increase in the Base Salary would be a reduction in such compensation rights; ( ii ) the removal of him by the Company from the position of Chief Financial Officer; ( iii ) a material reduction in Executive’s duties and responsibilities as in effect immediately prior to such reduction; ( v ) the assignment to Executive of duties that are materially inconsistent with his position or duties or that materially impair Executive’s ability to function as Chief Financial Officer of the Company and any other position in which he is then serving; ( vi ) the relocation of Executive’s principal office to a location that is more than 50 miles outside of the greater Los Angeles area; or ( vii ) a material breach of any material provision of this Agreement by the Company. In addition, following the occurrence of a Change in Control (as defined in the Amended and Restated 2005 Stock Incentive Plan (the “ 2005 Stock Plan ”) and the Amended and Restated 1995 Stock Incentive Plan (the “ 1995 Stock Plan ”)), any occurrence that would constitute a Triggering Event for purposes of Section 11 of the 2005 Stock Plan and the 1995 Stock Plan (the “ Plans ”), as such Plans have been amended through October 2, 2008, shall also constitute an event upon which Executive may effect a Termination for Good Reason in accordance with

this Agreement. Notwithstanding the foregoing, a termination shall not be treated as a Termination for Good Reason ( A ) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination for Good Reason, or ( B ) unless Executive shall have delivered a written notice to the Board within three months of his having actual knowledge of the occurrence of one of such events stating that he intends to terminate his employment for Good Reason and specifying the factual basis for such termination, and such event, if capable of being cured, shall not have been cured within 30 days of the receipt of such notice.

(f) Conflict With Plans . As permitted under the terms of the applicable Plans, the Company and Executive agree that the definitions of Termination for Cause or Termination for Good Reason set forth in this Paragraph 5 shall apply in place of any similar definition or comparable concept applicable under either of the Plans (or any similar definition in any successor plan), except that, in connection with a “Triggering Event” as defined in the Plans, as amended through October 2, 2008, the terms of the applicable plan (and not the definitions of Termination for Cause or Termination for Good Reason set forth in this Paragraph 5) shall apply to determine Executive’s rights and entitlements in respect of the awards made under any such plan (and only in respect of such awards).

(g) Section 409A . To the extent applicable, it is intended that this Agreement comply with the requirements of Section 409A, and this Agreement shall be interpreted in a manner consistent with this intent. Notwithstanding anything else contained herein to the contrary, any payment required to be made to Executive hereunder upon his termination of employment (including any payment to this Paragraph 5) shall be made promptly after the six month anniversary of Executive’s date of termination to the extent necessary to avoid imposition on Executive of any tax penalty imposed under Section 409A of the Code. Solely for purposes of determining the time and form of payments due Executive under this Agreement (including any payments due under Paragraphs 3(a) or 7) or otherwise in connection with his termination of employment with the Company, Executive shall not be deemed to have incurred a termination of employment unless and until he shall incur a “separation from service” within the meaning of Section 409A of the Code. The parties agree, as permitted in accordance with the final regulations thereunder, a “separation from service” shall

occur when Executive and the Company reasonably anticipate that Executive’s level of bona fide services for the Company (whether as an employee or an independent contractor) will permanently decrease to no more than 40 percent of the average level of bona fide services performed by Executive for the Company over the immediately preceding 36 months. The determination of whether and when a separation from service has occurred shall be made in accordance with this subparagraph and in a manner consistent with Treasury Regulation Section 1.409A-1(h). To the extent that the Company and Executive determine that any provision of this Agreement could reasonably be expected to result in Executive’s being subject to the payment of interest or additional tax under Section 409A, the Company and Executive agree, to the extent reasonably possible as determined in good faith, to amend this Agreement, retroactively, if necessary, in order to avoid the imposition of any such interest or additional tax under Section 409A. All reimbursements and in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

(h) Amendment of Existing Agreements . The parties acknowledge and agree that to the extent that this Paragraph 5 affects any of the terms and conditions of Executive’s Remaining Stock Options or Remaining Stock Units, this Agreement shall constitute an amendment of the Original Stock Option Award Documents and Original RSU Award Documents as they pertain to Executive.

6. Exclusive Remedy. Executive shall be under no obligation to seek other employment or other engagement of his services. Executive acknowledges and agrees that the payments and rights provided under Paragraph 5 are fair and reasonable, and are Executive’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, for termination of his employment by the Company upon exercise of its Termination Right pursuant to this Agreement or upon a Termination for Good Reason. The failure of Executive to execute and timely deliver the Release and, if applicable, the Consulting Agreement for any reason ( i ) shall limit his rights in connection with the exercise by the Company of its Termination Right solely to the right to receive the Unconditional Entitlements, ( ii ) shall not effect a modification of any of his commitments set forth in this Agreement (none of which are contingent upon execution of the Release by him) and ( iii ) shall not preserve or revive any rights waived by Executive hereunder. Subject to

Executive’s execution and delivery of the Release without revocation thereof and execution and delivery of the Consulting Agreement, (i) the Company agrees to enter into the Release and (ii) there shall be no offset available to the Company against any amounts due, paid or payable to him in respect of the Conditional Benefits under Paragraph 5 with respect to any compensation, remuneration or payment attributable to any services that Executive may provide to any third party subsequent to termination of employment hereunder, whether as an employee or otherwise.

7. Additional Payments Following a Change in Control . In the event that the aggregate of all payments or benefits made or provided to the Executive under this Agreement and under all other plans, programs or arrangements of the Company (the “ Aggregate Payment ”) constitutes a parachute payment, as such term is defined in Section 280G(b)(2) of the Code, the Company shall pay to the Executive, prior to the time any excise tax imposed by Section 4999 of the Internal Revenue Code (“ Excise Tax ”) is payable with respect to such Aggregate Payment, an additional amount which, after the imposition of all income and excise taxes and interest and penalties thereon, is equal to the Excise Tax on the Aggregate Payment. Notwithstanding the immediately preceding sentence, (i) if the Aggregate Payments are less than 110% of the product of ( A ) three (3) times ( B ) Executive’s Base Amount (as such term is defined in Section 280G of the Code), the Company shall have no obligation to make any additional payments under this Paragraph 7 and the Aggregate Payments to Executive shall be reduced such that no amount payable to Executive shall be subject to the Excise Tax, and (ii) in no event shall the aggregate amount of payments made to Executive under this Paragraph 7 exceed $4,000,000. Solely to the extent that the Executive is better off on an after-tax basis as a result of the reduction of Aggregate Payments, such payments and benefits shall be reduced or eliminated, as determined by the Company, in the following order: (i) any cash payments, (ii) any taxable benefits, (iii) any nontaxable benefits, and (iv) any vesting or accelerated delivery of equity awards, in each case in reverse order beginning with the payments or benefits that are to be paid the farthest in time from the date that triggers the applicable Excise Tax. The determination of whether the Aggregate Payment constitutes a Parachute Payment and, if so, the amount to be paid to the Executive and the time of payment pursuant to this Paragraph 10 shall be made by an independent accounting firm (the “ Accounting Firm ”) selected by the Company prior to the Change in Control. The Accounting Firm shall be a nationally recognized United States public accounting firm which has not, during the two years preceding the date of its selection, acted in any way on behalf of ( x ) the Company or any affiliate thereof or ( y ) Executive. In the event that the Excise Tax is later determined by the Accounting Firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the payment is made under this Paragraph 7 (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of such payment), the Company shall make an additional payment in respect of such excess (plus any interest or penalty payable with respect to such excess) at the time that the amount of such excess is finally determined. In the event that the Excise Tax is subsequently determined by the

Accounting Firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the payment to be made pursuant to this Paragraph 7, Executive shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior payment that would not have been paid if such Excise Tax had been applied in initially calculating such payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event that any portion of the payment made hereunder that is to be refunded to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to Executive, and interest payable to the Company shall not exceed interest received or credited to Executive by such tax authority for the period it held such portion. Executive and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if Executive’s good faith claim for refund or credit is denied.

8. Non-competition and Confidentiality .

(d) Non-Solicitation of Employees . During the Employment Period and, subject to the provisions of applicable law, during the two-year period following any termination of Executive’s employment, Executive shall not, except in the course of carrying out his duties hereunder, directly or indirectly induce any employee of the Company or any of its subsidiaries to terminate employment with such entity, and shall not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, knowingly employ or offer employment to any person who is or was employed by the Company or a subsidiary thereof unless such person shall have ceased to be employed by such entity for a period of at least six (6) months.

(e) Injunctive Relief with Respect to Covenants . Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, nonsolicitation, confidentiality and the Company property relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations may cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company shall be entitled to obtain an injunction, restraining order or such other equitable relief restraining Executive from committing any violation of the covenants and obligations contained in this Paragraph 8. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity.

9. Miscellaneous .

(a) Survival . Paragraphs 5 (relating to early termination of the Employment Period), 7 (relating to certain additional payments following a change in control), 8 (relating to nondisclosure and nonsolicitation of employees) and 9(o) (relating to governing law) shall survive the termination hereof, whether such termination shall be by expiration of the Employment Period in accordance with Paragraph 1 or an early termination of the Employment Period pursuant to Paragraph 5 hereof.

described in the preceding sentence, it shall use its reasonable best efforts to cause such assignee or transferee to expressly assume the liabilities, obligations and duties of the Company hereunder. This Agreement shall also inure to the benefit of Executive’s heirs, executors, administrators and legal representatives and beneficiaries as provided in Paragraph 9(d).

(c) Assignment . Except as provided under Paragraph 9(b), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party.

(e) Entire Agreement . This Agreement shall constitute the entire agreement between the parties hereto with respect to the matters referred to herein; provided that this Agreement shall not alter, amend, or supercede ( i ) except as specifically provided in Paragraph 5, any agreement that evidences the terms of any equity grant made prior to the date hereof or ( ii ) the Indemnification Agreement referenced in Paragraph 4(d). This Agreement expressly supersedes the 2003 Agreement and, for the avoidance of doubt, the January 31 Agreement. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Notwithstanding the foregoing, nothing in this Agreement shall be construed to limit, modify or supersede The Walt Disney Company and Associated Companies Confidentiality Agreement executed by Executive, which shall survive regardless of the termination of this Agreement.

this Paragraph 9(g) shall be construed to modify, amend, limit or otherwise impair the rights and entitlements of Executive set forth in the other Paragraphs of this Agreement (including, without limitation, the rights and entitlements specified in Paragraph 5).

(h) Severability; Reformation . In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event any of Paragraph 8(a), (b) or (d) is not enforceable in accordance with its terms, Executive and the Company agree that such subparagraph of such Paragraph 8 shall be reformed to make such Paragraph enforceable in a manner which provides the Company the maximum rights permitted at law.

If to the Company:

The Walt Disney Company

500 South Buena Vista Avenue

Burbank, California 91521

Attention: General Counsel

Telecopy No.: (818) 569-5146

If to Executive:

To the address listed as Executive’s principal residence in the Company’s human resources records and to his principal place of employment with the Company.

(k) Amendments . No amendment to this Agreement shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought.

(l) Headings . Headings to paragraphs in this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(m) Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has hereunto set his hand as of the day and year first above written.


		THE WALT DISNEY COMPANY

Dated:	December 23, 2008	By:	/s/ ALAN N. BRAVERMAN

Dated:	December 18, 2008	/s/ THOMAS O. STAGGS
		Thomas O. Staggs

EXHIBIT A

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (hereinafter referred to as “ Agreement ”) is made and entered into by and between Thomas O Staggs (hereinafter referred to as “ Consultant ”) and The Walt Disney Company (hereinafter referred to as “ Company ”) on and as of , 20 pursuant to that certain Amended and Restated Employment Agreement by and between Executive and Company dated as of December 18, 2008 (the “ Employment Agreement ”). All capitalized terms not defined herein shall have the meaning ascribed to them in the Employment Agreement.

1.(a) Unless this Agreement is earlier terminated as hereinafter provided, for a period following the termination of Consultant’s employment under the Employment Agreement equal to the lesser of 6 months or the remaining period of the Term of the Employment Agreement (the “ Consulting Agreement Period ”), Consultant shall personally and diligently provide to the Chief Executive Officer or Chief Financial Officer of the Company such consulting services as the Chief Executive Officer, Chief Financial Officer or the Board may reasonably request from time to time, provided that such services shall relate to matters appropriate for the former Chief Financial Officer of the Company and shall be a type and nature and duration typical for a post-employment consulting agreement with the former Chief Financial Officer of the Company. Consultant shall not be required to report to Employer’s offices and shall be permitted, subject to the terms hereof, to provide consulting services to third parties during the term hereof, provided (i) in no event shall consulting services or other services or advice of any nature be provided by Consultant, directly or indirectly (whether as an employee, consultant, independent contractor, agent, partner, principal, owner or otherwise) to any person or entity which directly or indirectly owns, operates, manages, develops, controls or provides services to, any business involved in any of the following activities: (A) the conception, creation, development, production, purchase, sale, distribution, broadcast, transmission or other disposition (including, without limitation, the licensing and/or merchandising of related consumer products) of audio and/or visual product or works of any nature in any media, including, without limiting the generality of the foregoing, any activity relating to ( i ) any aspect of the network, cable, broadcasting, television (including pay-per-view, closed circuit or any inter-active form of distribution of television or other audio/visual product) or internet businesses, or ( ii ) the development, marketing or distribution by any vehicle whatsoever of any film or television product or any similar content in any media, whether or not now existing, ( B ) the operation, management, development, licensing and promotion of themed resorts, hotels and restaurants or amusement or themed entertainment parks; or ( C ) the design, development, publishing, promotion or sale of products based on cartoon or other animated characters, films, television and theatrical productions and other intellectual property derived therefrom, in each case, only to the extent that such person or entity is actively engaged in any geographic area in any

business which is in competition with a business conducted by the Company or one of its subsidiaries at the time of the performance of such services (the “Specified Activities”), and (ii) that any services required by Company shall at all times be provided with precedence being given to Company and on a “first priority” basis to Company, although Company shall endeavor to provide, when possible, reasonable notice to Consultant of all services required hereunder and to give due consideration, to the extent practicable, to any prior commitments Consultant may have at such time. In no event shall Consultant be required to devote more than 13.5 hours per week to services to Company hereunder, and the parties agree an understand that Consultant’s expected commitment to such services shall regularly be less than the stated maximum weekly hours.

4. Company, its successors, privies and assigns shall be entitled to, and shall, own as their exclusive property all of the results and proceeds of the services (which results and proceeds are hereinafter collectively referred to as the “ Work Product ”) in whatever stage of completion, all of which shall be considered a work-for-hire, including, without limitation, all written work, research, plot outlines, computer programs, plans, drawings, paintings, sculptures, fanciful creations, specifications, ideas, scripts, sketches, designs, concepts, software, systems, reports, documentation, and other tangible or intangible work product produced. Company shall own all rights in the Work Product in perpetuity throughout the universe including, without limitation, the rights to produce, manufacture, record, reproduce, distribute, transfer or prepare derivative works from the Work Product by any art, medium or method and all copyrights, trademarks and/or patents in the Work Product. Company shall be deemed the sole author of the Work Product and is entitled to the copyright therein (and all renewals and extensions thereof), and the full ownership to the original and all copies of the Work Product. Company shall have the right to dispose of the Work Product and/or make any or all uses thereof as it, at any time and in the exercise of its sole discretion, may desire. Consultant shall deliver all originals and copies of the Work Product (whether completed or in process) and all research, plans, designs, specifications and any other work product or information which pertains to the Work Product to Company upon completion of the service performed hereunder or upon earlier termination of this Agreement. Consultant shall not retain, use or disclose any of the Work Product without Company’s prior written consent. The termination, completion or breach of this Agreement on whatever grounds and by whomsoever affected shall not affect Company’s exclusive ownership of the Work Product. Consultant hereby assigns to Company all now known or hereafter existing rights of every kind throughout the universe, in perpetuity and in all languages, pertaining to the Work Product, including, without limitation, all exclusive exploitation rights, of every kind and nature, including, but not limited to, all trademarks, copyrights and neighboring rights, to the full extent such assignment is allowed by law, and any renewals and extensions therefor throughout the universe, in perpetuity, or for the duration of the rights in each country, and in all languages. Consultant acknowledges that new rights to the Work Product may come into being or be recognized in the future, under the law or in equity (the “ New Exploitation Rights ”), and Consultant intends to and does hereby grant and convey to Company any and all such New Exploitation Rights to the Work Product. Consultant is also aware and acknowledges that new or changed technology, uses, media, format, modes of transmission and methods of distribution, dissemination, exhibition or performance (the “ New Exploitation Methods ”) are being and will inevitably continue to be developed in the future, which would offer new opportunities for exploiting the Work Product. Consultant intends to and does hereby grant and convey to Company any and all rights to such New Exploitation Methods with respect to the Work Product. Consultant agrees to execute, at any time upon Company’s request, such further documents and do such other acts as may be required to evidence or confirm Company’s

exclusive ownership of and exploitation rights to the Work Product and to effectuate Consultant’s purpose to convey such rights to Company including, but not limited to, the New Exploitation Rights and any and all of the New Exploitation Methods. Consultant agrees that he will not seek to (i) challenge, through the courts, administrative governmental bodies, private organizations or in any other manner, the rights of Company to exploit the Work Product by any means whatsoever or (ii) thwart, hinder or subvert the intent of the preceding grants and conveyances to Company, or the collection by Company of any proceeds relating to the rights conveyed under this Agreement. The provisions of this paragraph shall survive the expiration or sooner termination of this Agreement.

6.(a) Consultant, by virtue of this Agreement, shall acquire no right to use, and shall not use, the name “Disney” or “ABC” or “American Broadcasting Companies” or “ESPN” (either alone or in conjunction with or as a part of any other word, mark, or name) or any marks, fanciful characters or designs of The Walt Disney Company, or Company or any of their related, affiliated, or subsidiary companies in any advertising, publicity, or promotion; to express or imply any endorsement by Disney or Company or any of their related, affiliated or subsidiary companies of Consultant’s services; or in any other manner whatsoever (whether or not similar to the uses hereinabove specifically prohibited). Consistent with his obligations under Paragraph 7, this Paragraph 6(a) shall not prevent Executive from using such names to describe his activities with respect to Company and its subsidiaries under and prior to the Employment Agreement and under this Agreement.

and any Work Product not readily available to the general public) (“ Confidential Information ”). Any such knowledge acquired by Consultant shall be kept confidential and shall not be used, published, or divulged by Consultant to any other person, firm, or corporation, or in any advertising or promotion regarding Consultant or Consultant’s services, or in any other manner or connection whatsoever without first having obtained the prior written permission of Company, which permission Company may withhold in its sole discretion; provided that Consultant shall have no greater duty or obligation in respect of such Confidential Information than applies to Executive under Paragraph 8(b) the Employment Agreement. Upon Company’s request, Consultant shall immediately return to Company or destroy, all documents, magnetic copies, or other physical evidence of all Confidential Information in Consultant’s possession or in the possession of any of Consultant’s directors, officers, employees, agents or representatives (including, without limitation, all copies, transcriptions, notes, extracts, analyses, compilations, studies, or other documents, records, or data prepared by Consultant) which contain or otherwise reflect or are generated from the Confidential Information without retaining any copy thereof, all of the foregoing being Confidential Information and the sole property of Company, Consultant shall certify to Company that all of the foregoing has been returned or destroyed as provided in this paragraph. Consultant agrees that Company would be irreparably harmed by any violation or threatened violation of this paragraph and that, therefore, Company shall be entitled to an injunction prohibiting Consultant from any violation or threatened violation of this paragraph. The provisions of this paragraph shall survive the expiration or sooner termination of this Agreement.

8. This Agreement shall be construed and interpreted in accordance with the laws of the State of California without regard to conflicts of laws principles.

9. The terms and provisions of this Agreement, the Release and Paragraphs 5 and 7 of the Employment Agreement constitute the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersede all previous communications, representations, or agreements, either oral or written, between the parties relating to such subject matter hereof. No change, alteration or modification of this Agreement shall be effective unless made in writing and signed by both parties hereto.

IN WITNESS WHEREOF , the parties have caused this Agreement to be duly executed as of the day and year first above written.


THE WALT DISNEY COMPANY						Consultant

By:						By:
Title:						Thomas O. Staggs

EXHIBIT B

GENERAL RELEASE

WHEREAS, Thomas O. Staggs (hereinafter referred to as “Executive”) and The Walt Disney Company (hereinafter referred to as the “Company”) are parties to an Amended and Restated Employment Agreement, dated as of December 18, 2008 (the “Employment Agreement”), which provided for Executive’s employment with the Company on the terms and conditions specified therein; and

WHEREAS, pursuant to paragraph 6 of the Employment Agreement, Executive and the Company have agreed to execute mutual releases of the type and nature set forth in this Agreement;

1.(a) Upon the later of (i) the execution hereof by the Company and Executive, (ii) the passage of seven days following execution hereof by Executive without Executive’s having exercised the revocation rights referred to in paragraph 12 hereof and (iii) the time specified in the Employment Agreement for payment of a particular item of compensation, the Company shall (x) provide Executive the amounts and benefits described in Paragraph 5 of the Employment Agreement and (y) make full payment for vacation and floating holidays accrued but unused as of the date hereof, less amounts required to be withheld by law or authorized by Executive to be withheld (it being understood that from and after the date hereof no further rights to vacation or floating holidays or compensation therefor shall accrue or be payable to Executive). Such payment shall be made by check payable to Executive.

(b) The covenants and commitments of the Company referred to herein (including, specifically, but without limitation, any and all benefits conferred upon Executive pursuant to Paragraph 5 of the Employment Agreement) shall be in lieu of and in full and final discharge of any and all obligations to Executive for compensation, severance payments, or any other expectations of payment, remuneration, continued coverage of any nature or benefit on the part of Executive arising out of or in connection with Executive’s employment with the Company, or under any agreement, arrangement, commitment, plan, program, practice or policy of the Company, or otherwise, other than as expressly provided in the Employment Agreement.

(c) Notwithstanding the foregoing or any other term or provision hereof, Executive shall be entitled to such rights as are vested in Executive as of the Termination Date, or as are expressly provided in the Employment Agreement, under and subject to the terms of (i) the Employment Agreement, (ii) any applicable retirement plan(s) to which Executive may be subject, (iii) any applicable stock option plan or other incentive compensation plan of the Company to which Executive may be subject, (iv) any right which Executive now has or may hereafter have to claim a defense and/or indemnity for liabilities to third parties in connection with his activities as an employee of the Company or any of its affiliates pursuant to the terms of

any applicable statute, under any insurance policy, pursuant to the certificate of incorporation or bylaws or established policies of the Company or any affiliate thereof or pursuant to written agreement (including, without limitation, the Indemnification Agreement) expressly providing for such indemnity between Executive and the Company or any affiliate thereof, and (v) any other applicable employee welfare benefit plans to which Executive may be subject. Further, Executive shall be entitled to such continuation of health care coverage as is required under, and subject to, applicable law, of which Executive shall be notified in writing after the Termination Date, provided Executive timely exercises Executive’s rights in accordance therewith. Executive understands and acknowledges that all payments for any such continued health care coverage he may elect will be paid by him, except to the extent the Employment Agreement provides that such payments shall be made by the Company.

5. Excluding enforcement of the covenants, promises and/or rights reserved herein, Executive hereby irrevocably and unconditionally releases, acquits and forever discharges the Company and each of the Company’s owners, stockholders, predecessors, successors, assigns, agents, directors, officers, employees, representatives, attorneys, divisions, subsidiaries, affiliates (and agents, directors, officers, employees, representatives and attorneys of such companies, divisions, subsidiaries and affiliates) and all persons acting by, through, under or in concert with any of them (collectively “Releasees”), or any of them, from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, suspected or unsuspected, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort or any legal restrictions on the Company’s right to terminate employees, or any Federal, state or other governmental statute, regulation or ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Federal Age Discrimination In Employment Act of 1967, as amended, and the California Fair Employment and Housing Act that Executive now has, or has ever had, or ever will have, against each or any of the Releasees, by reason of any and all acts, omissions, events, circumstances or facts existing or occurring up through the date of Executive’s

execution hereof that directly or indirectly arise out of, relate to, or are connected with, Executive’s services to, or employment by the Company (any of the foregoing being an “Executive Claim” or, collectively, the “Executive Claims”).

7. Excluding enforcement of the covenants, promises and/or rights reserved herein or in the Employment Agreement, and except as otherwise provided in the proviso at the end of this sentence, the Company, hereby irrevocably and unconditionally releases, acquits and discharges Executive, and Executive’s heirs, assigns and successors in interest (“Executive Releasees”) from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorney’s fees and costs actually incurred), of any nature whatsoever, known or unknown, suspected or unsuspected, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, that the Company now has, or has ever had, or ever will have, against Executive and/or the Executive Releasees, by reason of any and all acts, omissions, events, circumstances or facts existing or occurring up through the date of the Company’s execution hereof, that directly or indirectly arise out of, relate to, or are connected with, Executive’s services to, or employment by the Company (hereinafter referred to as a “Claim” or collectively, the “Claims”); provided , however , that, notwithstanding any other term or provision hereof, any Claim or Claims rising out of, or resulting from, in part or whole, (i) any illegal or fraudulent act(s) or illegal or fraudulent omission(s) to act of Executive, (ii) any action(s) or omission(s) to act which would constitute self-dealing or a breach of Executive’s confidentiality obligations to the Company or any affiliate thereof, or a breach of The Walt Disney Company and Associated Companies Confidentiality Agreement executed by Executive, or (iii) the Board’s policy, as the same may be in effect from time to time, regarding the ability of the Company to recoup bonus or incentive payments as a result of the Company being required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws , are hereby expressly excluded in their entirety from the foregoing release, acquittal and discharge and are unaffected thereby (any Claim or Claims not so excluded

pursuant to this proviso being hereinafter referred to as a the “Company Claim” or, collectively, as the “Company Claims”).

Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release, acquittal and discharge of the Executive Releasees with respect to the Company Claims only, the Company expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all the Company Claims that the Company does not know or suspect to exist in the Company’s favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such Company Claims. Notwithstanding anything in this Release to the contrary, if at any time (whether during or after the Employment Period) the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, nothing in this Release shall be construed to limit the rights of the Company and the Board to seek or obtain recovery from Executive of any incentive compensation (including profits realized from the sale of Company securities) previously paid, or the cancellation of any outstanding awards, in accordance with the terms of the Company’s policy, as in effect from time to time, regarding the ability of the Company to recoup any bonus or incentive payments under such circumstances.

Releasees or of the Executive Releasees with regard to the subject matter, basis or effect of this Agreement or otherwise.

12. This Agreement shall not in any way be construed as an admission by any of the Company Releasees or Executive Releasees, respectively, that any the Company Releasee or Executive Releasee has acted wrongfully or that the Company or Executive has any rights whatsoever against any of the Company Releasees or Executive Releasees except as specifically set forth herein, and each of the Company Releasees and Executive Releasees specifically disclaims any liability to any party for any wrongful acts.

13. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California. This Agreement is binding on the successors and assigns of, and sets forth the entire agreement between, the parties hereto; fully supersedes any and all prior agreements or understandings between the parties hereto pertaining to the subject matter hereof; and may not be changed except by explicit written agreement to that effect subscribed by the parties hereto.

PLEASE READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Executed at , California.




THOMAS O. STAGGS

Dated:		__________________

Executed at , California.


THE WALT DISNEY COMPANY

By:
Title:

Dated:		__________________

Exhibit 10.3

Amended and Restated Employment Agreement

Between The Walt Disney Company And Dennis Shuler

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“ Agreement ”), dated as of December 22, 2008, by and between Dennis Shuler (“ Executive ”) and The Walt Disney Company, a Delaware corporation (“ Company ”), amending and restating in its entirety Executive’s Employment Agreement with Company dated as of March 19, 2008 (the “ March 19 Agreement ”).

W I T N E S S E T H :

WHEREAS, the Company employs Executive as Executive Vice President and Chief Human Resources Officer of the Company pursuant to the March 19 Agreement; and

WHEREAS, the Company and Executive desire to amend and restate the March 19 Agreement for the purpose of making certain changes intended to ensure compliance with Section 409A of the Internal Revenue Code and to make certain additional minor corrections in the March 19 Agreement;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive hereby agree as follows:

1. Employment . Upon the terms and subject to the conditions of this Agreement, the Company hereby employs Executive and Executive hereby accepts employment by the Company for the period commencing on April 1, 2008 and ending on March 31, 2011 (or such earlier date as shall be determined pursuant to Paragraph 5). The period during which Executive is employed pursuant to this Agreement shall be referred to as the “ Employment Period .”

2. Position and Duties . During the Employment Period, Executive shall serve as Executive Vice President and Chief Human Resources Officer of the Company and in such other position or positions with the Company and its subsidiaries, consistent with his position as Executive Vice President and Chief Human Resources Officer of the Company, as the Chief Executive Officer of the Company or the Board of Directors of the Company (the “ Board ”) shall reasonably assign Executive from time to time. Executive shall report to the Chief Executive Officer or to the Chief Operating Officer, President or such other senior officer of Company as determined from time to time by the Chief Executive Officer. During the Employment Period, Executive shall devote substantially all his business time to the services required of him hereunder, and shall perform such services in a manner consonant with the duties of his position. Executive shall be subject to the terms and conditions of any applicable policy of the Company

regarding service (including as a director) on behalf of the Company or any other affiliated organization, provided that, subject to the provisions of Paragraph 8(a), nothing herein shall preclude Executive from ( i ) engaging in charitable activities and community affairs, and ( ii ) managing his personal investments and affairs, so long as the activities listed in subclauses (i)-(ii) do not materially interfere, individually or in the aggregate, with the proper performance of his duties and responsibilities as Executive Vice President and Chief Human Resources Officer of the Company.

3. Compensation .

(a) Base Salary . During the Employment Period, the Company shall pay Executive a base salary at the annual rate of no less than the amount determined in accordance with the following schedule:


Date Rate of Salary Effective	Annual Rate of Base Salary
April 1, 2008	$	650,000
April 1, 2009	$	675,000
April 1, 2010	$	700,000

The amount of annual base salary payable under this Paragraph 3(a) shall be reduced, however, to the extent Executive elects in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and the regulations and interpretations thereunder (“ Section 409A ”), to defer such salary under the terms of any deferred compensation or savings plan or arrangement maintained or established by the Company or any of its subsidiaries. Executive’s annual base salary payable hereunder, without reduction for any amounts deferred as described above, is referred to herein as the “ Base Salary .” The Company shall pay Executive the portion of his Base Salary not deferred at the election of Executive in accordance with its generally applicable policies for senior executives, but not less frequently than in equal monthly installments.

October 1, 2007) is pro rated to reflect commencement of Executive’s employment at the beginning of the seventh month of such fiscal year, thus resulting in a target bonus opportunity of 50% of Executive’s Base Salary for such year. The actual amount payable to Executive as an annual bonus under the Annual Plan shall be dependent upon the achievement of performance objectives established in accordance with the Annual Plan by the Board or the committee of the Board responsible for administering such Annual Plan (the “ Compensation Committee ”), which shall be substantially the same as the objectives established under the Annual Plan for other senior executive officers of the Company. The preceding sentence shall not limit any power or discretion of the Board or the Committee in the administration of the Annual Plan. Accordingly, depending on performance, the actual amount payable as an annual bonus to Executive under the Annual Plan may be less than, greater than or equal to the target bonus specified above. Any bonus payable pursuant to this Paragraph 3(b) shall be paid at the same time as annual bonuses are payable to other officers of the Company in accordance with the provisions of the Annual Plan, subject to Executive’s continued employment with the Company through the date on which such bonuses are paid.

(c) Eligibility for Equity Awards; Award Grant . Subject to the terms of this Agreement, Executive shall be entitled to participate in any stock option, performance share, performance unit or other equity based long-term incentive compensation plan, program or arrangement generally made available to senior executive officers of the Company, on substantially the same terms and conditions as generally apply to such other officers, except that the size of the awards made to Executive shall reflect Executive’s position with the Company and the Compensation Committee’s evaluation of Executive’s performance and competitive compensation practices.

In connection with the execution of this Agreement, the Company shall recommend to the Compensation Committee (“Committee”) of the Board that Executive be granted:

(i) non-qualified stock options pursuant to a stock incentive plan of the Company to purchase 150,000 shares of common stock of the Company, it being understood that such options shall have an exercise price of 100% of fair market value of the common stock of the Company at the date of grant by the Committee (the “ Grant Date ”) and that such options shall vest at the rate of 50% on the second anniversary of the Grant Date and 25% on each of the third and fourth anniversaries of the Grant Date (subject to Executive’s continued employment by the Company and to the other provisions of the applicable stock incentive plan); and

(ii) 40,000 restricted stock units pursuant to a stock incentive plan of the Company, it being understood that such restricted stock units shall be scheduled to vest at the rate of 50% on the second anniversary of the Grant Date and 50% on the fourth anniversary of the Grant Date (subject to Executive’s continued employment by the Company and to the other provisions of the applicable Company stock incentive plan and of the restricted stock unit award, including without limitation certain performance-based conditions to vesting and certain conditions designed to ensure compliance and conditions designed to comply with Section 162(m) by the Company with Section 162(m) of the Internal Revenue Code (“ Section 162(m) ”)

(d) Signing Bonus. Executive shall receive a special one-time signing bonus in the amount of $300,000 (less statutory withholdings) payable within ten business days following the later of (i) the Company’s receipt of this Agreement signed by Executive or (ii) Executive’s commencement of employment hereunder.

4. Benefits, Perquisites and Expenses .

(d) Indemnification . The Company shall provide Executive with an indemnification agreement substantially equivalent to its form for such agreement as currently provided to its senior officers generally, which shall continue in full force and effect in accordance with its terms.

5. Termination of Employment .

(a) Early Termination of the Employment Period . Notwithstanding Paragraph 1, the Employment Period shall end upon the earliest to occur of ( i ) Executive’s death, ( ii ) a Termination due to Disability, ( iii ) a Termination for Cause, ( iv ) the Termination Date specified in connection with any exercise by the Company of its Termination Right or ( v ) a Termination for Good Reason. If the Employment Period terminates as of a date specified under this Paragraph 5, Executive agrees that, upon written request from the Company, he shall resign from any and all positions he holds with the Company and any of its subsidiaries and affiliates, effective immediately following receipt of such request from the Company (or at such later date as the Company may specify).

(b) Benefits Payable Upon Termination .

(ii) In the event of Executive’s Termination for Cause, Executive shall be provided the Unconditional Entitlements.

(iii) In the event of a Termination for Good Reason or the exercise by the Company of its Termination Right, Executive shall be provided the Unconditional Entitlements and the Company shall provide Executive the Conditional Benefits, subject to ( A ) Executive’s execution of the Release, ( B ) Executive having not revoked such Release within the seven-day revocation period permitted following delivery of such Release and ( C ) Executive’s execution of the Consulting Agreement. For Executive to become entitled to the Conditional Benefits, Executive must deliver both the executed Release and the executed Consulting Agreement to the Company by no later than twenty-two (22) days following the Termination Date.

(c) Unconditional Entitlements . For purposes of this Agreement, the “ Unconditional Entitlements ” to which Executive may become entitled under Paragraph 5(b) are as follows:

(iii) Indemnities . Any right which Executive may have to claim a defense and/or indemnity for liabilities to or claims asserted by third parties in connection with Executive’s activities as an officer, director or employee of the Company or any of its affiliates pursuant to the terms of the Indemnification Agreement referenced in Paragraph 4(d) shall be unaffected by Executive’s termination of employment and shall remain in effect in accordance with its terms.

complies with the conditions to continue such coverage. Executive understands and acknowledges that Executive is responsible to make for all payments required for any such continued health care coverage that Executive may choose to receive.

provided herein, all of the Remaining Stock Options shall continue to be subject to the Original Stock Option Award Documents. Notwithstanding the foregoing, in the event of Executive’s death prior to the Stock Option Termination Date, all Continuing Unvested Options shall vest on the date of Executive’s death and all Remaining Stock Options shall be exercisable for the period following Executive’s death determined under such Original Stock Option Award Documents on the same basis as though Executive was employed on the date of his death and regardless of when the Stock Option Termination Date would otherwise have occurred. However, any provisions in the Original Stock Option Award Documents relating to disability or change in control of the Company shall not be operative after the Termination Date with respect to any Remaining Stock Options.

(A) any provisions in such Original RSU Award Documents relating to disability shall not be applicable to any such Remaining Stock Units after the Termination Date;

(D) to the extent that, under the Company’s compensation practices and policies, any tranche of Remaining Stock Units is subject to the achievement of performance conditions which were imposed solely because Executive was an executive officer of the Company who could have been a covered employee within the meaning of Section 162(m) at the time payment in respect of such award was expected to be made (the “ Applicable 162(m) Criteria ”) and such Applicable 162(m) Criteria relate, in whole or in part, to any performance period continuing after the end of the Company’s fiscal year in which the Termination Date occurs, such Applicable 162(m) Criteria shall be waived as of the Termination Date with respect to such tranche of the Remaining Stock Units; provided, however, that this Paragraph 5(d)(iii)(D) shall not be applicable if and to the extent, in the reasonable opinion of tax counsel to the Company, the presence of such provision would cause any stock units intended to be qualified as other performance based compensation within the meaning of Section 162(m) of the Code to fail to be so qualified at any time prior to Executive’s Termination Date.

(e) Definitions . For purposes of this Paragraph 5, the following terms shall have the meanings ascribed to them below:

“ Consulting Agreement ” means the consulting agreement in the form attached hereto as Exhibit A.

“ Consulting Agreement Period” means the period established under the Consulting Agreement during which Executive shall be required to provide consulting services to the Company.

“Consulting Amount” means a lump sum amount equal to the aggregate Base Salary which would have been earned by Executive had his employment under this Agreement continued after the Termination Date and through the earlier to occur of ( i ) the end of the Consulting Agreement Period or ( ii ) any earlier date that the Consulting Agreement terminates for any reason whatsoever.

“ Continuing Unvested Options ” means any of Executive’s stock options that were not vested and exercisable at the Termination Date, but that would have become vested and exercisable on or prior to the Latest Stock Option Vesting Date had Executive continued to be employed by the Company through the Scheduled Expiration Date.

“ Latest Stock Option Vesting Date ” means the date which is three months after the Scheduled Expiration Date.

“ Release ” means the General Release in the form set forth in Exhibit B attached hereto.

“ Remaining Stock Options ” means any of Executive’s stock options which are ( i ) vested at the Termination Date or ( ii ) Continuing Unvested Options.

“ Remaining Stock Units ” means any of Executive’s restricted stock units (whether or not subject to performance conditions) that, subject to the satisfaction of any applicable performance conditions, would have become vested on or prior to the Scheduled Expiration Date had Executive continued to be employed by the Company through the Scheduled Expiration Date.

“ Scheduled Expiration Date ” means March 31, 2011.

cure the conduct or cause specified in such notice and completes such cure within 20 business days following the date such notice was received.

“ Termination due to Disability ” means a termination of Executive’s employment by the Company because Executive has been incapable, after reasonable accommodation, of substantially fulfilling the positions, duties, responsibilities and obligations set forth in this Agreement because of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of ( i ) six consecutive months or ( ii ) an aggregate of nine months (whether or not consecutive) in any twelve month period. Any question as to the existence, extent or potentiality of Executive’s disability shall be determined by a qualified physician selected by the Company with the consent of Executive, which consent shall not be unreasonably withheld. Executive or his legal representatives or any adult member of his immediate family shall have the right to present to such physician such information and arguments as to Executive’s disability as he, she or they deem appropriate, including the opinion of Executive’s personal physician.

any material provision of this Agreement by the Company. In addition, following the occurrence of a Change in Control (as defined in the Amended and Restated 2005 Stock Incentive Plan (the “ 2005 Stock Plan ”)) and the Amended and Restated 1995 Stock Incentive Plan (the “ 1995 Stock Plan ”), any occurrence that would constitute a Triggering Event for purposes of Section 11 of the 2005 Stock Plan and the 1995 Stock Plan (the “ Plans ”), as such Plans may be amended from time to time, shall also constitute an event upon which Executive may effect a Termination for Good Reason in accordance with this Agreement. Notwithstanding the foregoing, a termination shall not be treated as a Termination for Good Reason ( A ) if Executive shall have consented in writing to the occurrence of the event giving rise to the claim of Termination for Good Reason, or ( B ) unless Executive shall have delivered a written notice to the Company within three months of his having actual knowledge of the occurrence of one of such events stating that he intends to terminate his employment for Good Reason and specifying the factual basis for such termination, and such event, if capable of being cured, shall not have been cured within 30 days of the receipt of such notice.

(f) Conflict With Plans. As permitted under the terms of the applicable Plans, the Company and Executive agree that the definitions of Termination for Cause or Termination for Good Reason set forth in this Paragraph 5 shall apply in place of any similar definition or comparable concept applicable under either of the Plans (or any similar definition in any successor plan), except that, in connection with a “Triggering Event” as defined in the Plans, as such Plans may be amended from time to time, the terms of the applicable plan (and not the definitions of Termination for Cause or Termination for Good Reason set forth in this Paragraph 5) shall apply to determine Executive’s rights and entitlements in respect of the awards made under any such plan (and only in respect of such awards).

anniversary of Executive’s date of termination to the extent necessary to avoid imposition on Executive of any tax penalty imposed under Section 409A of the Code. Solely for purposes of determining the time and form of payments due Executive under this Agreement (including any payments due under Paragraph 3(a)) or otherwise in connection with his termination of employment with the Company, Executive shall not be deemed to have incurred a termination of employment unless and until he shall incur a “separation from service” within the meaning of Section 409A of the Code. The parties agree, as permitted in accordance with the final regulations thereunder, a “separation from service” shall occur when Executive and the Company reasonably anticipate that Executive’s level of bona fide services for the Company (whether as an employee or an independent contractor) will permanently decrease to no more than 40 percent of the average level of bona fide services performed by Executive for the Company over the immediately preceding 36 months. The determination of whether and when a separation from service has occurred shall be made in accordance with this subparagraph and in a manner consistent with Treasury Regulation Section 1.409A-1(h). To the extent that the Company and Executive determine that any provision of this Agreement could reasonably be expected to result in Executive’s being subject to the payment of interest or additional tax under Section 409A, the Company and Executive agree, to the extent reasonably possible as determined in good faith, to amend this Agreement, retroactively, if necessary, in order to avoid the imposition of any such interest or additional tax under Section 409A. All reimbursements and in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

reasonable, and are Executive’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, for termination of his employment by the Company upon exercise of its Termination Right pursuant to this Agreement or upon a Termination for Good Reason. The failure of Executive to execute and timely deliver the Release and/or, the Consulting Agreement for any reason ( i ) shall limit his rights in connection with the exercise by the Company of its Termination Right solely to the right to receive the Unconditional Entitlements, ( ii ) shall not effect a modification of any of his commitments set forth in this Agreement (none of which are contingent upon execution of the Release by him) and ( iii ) shall not preserve or revive any rights waived by Executive hereunder. Subject to Executive’s execution and delivery of the Release without revocation thereof and execution and delivery of the Consulting Agreement, (i) the Company agrees to enter into the Release and (ii) there shall be no offset available to the Company against any amounts due, paid or payable to him in respect of the Conditional Benefits under Paragraph 5 with respect to any compensation, remuneration or payment attributable to any services that Executive may provide to any third party subsequent to termination of employment hereunder, whether as an employee or otherwise.

7. Excise Tax Limit. Notwithstanding anything contained in this Agreement to the contrary, in the event that any payment or distribution of any type to be received by Executive pursuant to the terms of this Agreement or otherwise (collectively, the “ Total Payments ”) would result in all or a portion of the Total Payments being subject to the excise tax imposed under Section 4999 of the Code (which reference includes, for purposes of this paragraph, any similar successor provision to Section 4999) (the “ Excise Tax ”), then the Total Payments will be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) will result in no portion of the Total Payments being subject to excise tax under Section 4999 of the Code; provided that the reduction will only be made if, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, the reduction would result in the receipt by Executive, on an after-tax basis, of a greater amount of the Total Payments notwithstanding that all or some portion of the Total Payments may be taxable under Section 4999 of the Code. Solely to the extent that the Executive is better off on an after-tax basis as a result of the reduction of Aggregate Payments, such payments and benefits shall be reduced or eliminated, as determined by the Company, in the following order: (i) any cash payments, (ii) any taxable benefits, (iii) any nontaxable benefits, and (iv) any vesting or accelerated delivery of equity awards, in each case in reverse order beginning with the payments or benefits that are to be paid the farthest in time from the date that triggers the applicable Excise Tax.

All determinations required to be made under this Paragraph 7 shall be made by PricewaterhouseCoopers or any other nationally recognized accounting firm

which is Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax, which firm must have experience in such matters and be reasonably acceptable to Executive (the “Accounting Firm” ). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and estimates of Executive’s after-tax net benefits before and after giving effect to such a reduction. Notice must be given to the Accounting Firm within fifteen (15) business days after an event entitling Executive to a payment under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Paragraph 7, the Company and Executive hereby elect and agree to make all determination as to present value using 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded semiannually, as in effect on the date of this Agreement. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Total Payments to Executive which will not have been made by the Company should have been made. The Accounting Firm will determine the amount of such underpayment that has occurred and any such underpayment shall be promptly paid by the Company to Executive or for Executive’s benefit. In the event that any Total Payment made to Executive is determined by the Accounting Firm to result in the imposition of any tax under Section 4999 of the Code and a reduction of Total Payments was otherwise required pursuant to this Paragraph 7 to avoid the imputation of such tax, Executive will promptly repay the amount of such excess to the Company together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G or any successor thereto), from the date Executive received the reimbursable payment to the date Executive repays the same to the Company.

8. Non-competition and Confidentiality .

agency, Executive shall not disclose any trade secrets, customer lists, drawings, designs, information regarding product development, existing theatrical projects, marketing plans, sales plans, manufacturing plans, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, financial records or other financial, commercial, business or technical information relating to the Company or any of its subsidiaries or information designated as confidential or proprietary that the Company or any of its subsidiaries may receive belonging to suppliers, customers or others who do business with the Company or any of its subsidiaries (collectively, “ Confidential Information ”) unless such Confidential Information has been previously disclosed to the public by the Company or has otherwise become available to the public (other than by reason of Executive’s breach of this Paragraph 8(b)). In addition, Executive acknowledges and agrees that he will be required to execute the Company’s standard form of agreement entitled “The Walt Disney Company and Associated Companies Confidentiality Agreement,” a copy of which has been previously provided to Executive. Executive further agrees that such confidentiality agreement (other than certain provisions relating to ownership of intellectual property by the Company) and the provisions of this 8(b) shall become effective upon signing of this Agreement with respect to any information provided to Executive notwithstanding the fact that such information is provided to Executive prior to the commencement of his employment with the Company.

any of the terms of such covenants and obligations may cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company shall be entitled to obtain an injunction, restraining order or such other equitable relief restraining Executive from committing any violation of the covenants and obligations contained in this Paragraph 8. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity.

9. Miscellaneous .

(a) Survival . Paragraphs 5 (relating to early termination of the Employment Period), 7 (relating to certain additional payments following a change in control), 8(a) (relating to nondisclosure and nonsolicitation of employees), 8(b) (relating to certain confidentiality obligations) and 9(o) (relating to governing law) shall survive the termination hereof, whether such termination shall be by expiration of the Employment Period in accordance with Paragraph 1 or an early termination of the Employment Period pursuant to Paragraph 5 hereof.

Indemnification Agreement referenced in Paragraph 4(d). This Agreement expressly supersedes the March 19 Agreement. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Notwithstanding the foregoing, nothing in this Agreement shall be construed to limit, modify or supersede The Walt Disney Company and Associated Companies Confidentiality Agreement executed by Executive, which shall survive regardless of the termination of this Agreement.

(g) Authority of the Board . For the avoidance of doubt, nothing is this Agreement shall preclude the Board from its ability to exercise any power or authority to take such actions as it is required or permitted to take as a matter of law or pursuant to the terms of the Company’s governing documents. Nothing in this Paragraph 9(g) shall be construed to modify, amend, limit or otherwise impair the rights and entitlements of Executive set forth in the other Paragraphs of this Agreement (including, without limitation, the rights and entitlements specified in Paragraph 5).

If to the Company:

The Walt Disney Company

500 South Buena Vista Avenue

Burbank, California 91521

Attention: General Counsel

Telecopy No.: (818) 569-5146

If to Executive:

To the address listed as Executive’s principal residence in the Company’s human resources records and to his principal place of employment with the Company.

(k) Amendments . No amendment to this Agreement shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought.

(l) Headings . Headings to paragraphs in this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof.

(m) Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(p) Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall

constitute one and the same instrument. Facsimiles shall also be accepted as originals and shall be binding.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has hereunto set his hand as of the day and year first above written.


	THE WALT DISNEY COMPANY

Dated: December 23, 2008	By:	/s/ ALAN N. BRAVERMAN



Dated: December 22, 2008						/s/ DENNIS SHULER
						Dennis Shuler

EXHIBIT A

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (hereinafter referred to as “ Agreement ”) is made and entered into by and between Dennis Shuler (hereinafter referred to as “ Consultant ”) and The Walt Disney Company (hereinafter referred to as “ Company ”) on and as of , 20 pursuant to that certain Amended and Restated Employment Agreement by and between Executive and Company dated as of November __, 2008 (the “ Employment Agreement ”). All capitalized terms not defined herein shall have the meaning ascribed to them in the Employment Agreement.

1.(a) Unless this Agreement is earlier terminated as hereinafter provided, for a period following the termination of Consultant’s employment under the Employment Agreement equal to the lesser of 6 months or the remaining period of the Term of the Employment Agreement (the “ Consulting Agreement Period ”), Consultant shall personally and diligently provide to the Company such consulting services as the Company may reasonably request from time to time, provided that such services shall relate to matters appropriate for the former Executive Vice President and Chief Human Resources Officer of the Company and shall be a type and nature and duration typical for a post-employment consulting agreement with the former Executive Vice President and Chief Human Resources Officer of the Company. Consultant shall not be required to report to the Company’s offices and shall be permitted, subject to the terms hereof, to provide consulting services to third parties during the term hereof, provided (i) in no event shall consulting services or other services or advice of any nature be provided by Consultant, directly or indirectly (whether as an employee, consultant, independent contractor, agent, partner, principal, owner or otherwise) to any person or entity which directly or indirectly owns, operates, manages, develops, controls or provides services to, any business involved in any of the following activities: (A) the conception, creation, development, production, purchase, sale, distribution, broadcast, transmission or other disposition (including, without limitation, the licensing and/or merchandising of related consumer products) of audio and/or visual product or works of any nature in any media, including, without limiting the generality of the foregoing, any activity relating to ( i ) any aspect of the network, cable, broadcasting, television (including pay-per-view, closed circuit or any inter-active form of distribution of television or other audio/visual product) or internet businesses, or ( ii ) the development, marketing or distribution by any vehicle whatsoever of any film or television product or any similar content in any media, whether or not now existing, ( B ) the operation, management, development, licensing and promotion of themed resorts, hotels and restaurants or amusement or themed entertainment parks; or ( C ) the design, development, publishing, promotion or sale of products based on cartoon or other animated characters, films, television and theatrical productions and other intellectual property derived therefrom, in each case, only to the extent that such person or entity is actively engaged in any geographic area in any

business which is in competition with a business conducted by the Company or one of its subsidiaries at the time of the performance of such services (the “Specified Activities”), and (ii) that any services required by Company shall at all times be provided with precedence being given to Company and on a “first priority” basis to Company, although Company shall endeavor to provide, when possible, reasonable notice to Consultant of all services required hereunder and to give due consideration, to the extent practicable, to any prior commitments Consultant may have at such time. In no event shall Consultant be required to devote more than 13.5 hours per week to services to Company hereunder, and the parties agree and understand that Consultant’s expected commitment to such services shall regularly be less than the stated maximum weekly hours.

(c) In the event that Consultant shall receive a notice of breach of this Agreement from the Company, Consultant shall have ten (10) business days to cure such breach unless the Company shall have determined in its good faith business judgment that such breach is not curable. Any notice of termination pursuant to this paragraph 2 shall set forth in reasonable detail the basis for such breach and shall contain a statement as to whether or not such breach has been determined to be curable by the Company. In the event that he receives a notice of breach of the Agreement from the Company, Executive may challenge such finding of a breach, by written notice to the Board, and shall be afforded an opportunity to present his objection to the Company, in person or in writing, as determined by the Company, prior to Company having any right to terminate this Agreement and the Conditional Benefits provided under the Employment Agreement.

4. Company, its successors, privies and assigns shall be entitled to, and shall, own as their exclusive property all of the results and proceeds of the services (which results and proceeds are hereinafter collectively referred to as the “ Work Product ”) in whatever stage of completion, all of which shall be considered a work-for-hire, including, without limitation, all written work, research, plot outlines, computer programs, plans, drawings, paintings, sculptures, fanciful creations, specifications, ideas, scripts, sketches, designs, concepts, software, systems, reports, documentation, and other tangible or intangible work product produced. Company shall own all rights in the Work Product in perpetuity throughout the universe including, without limitation, the rights to produce, manufacture, record, reproduce, distribute, transfer or prepare derivative works from the Work Product by any art, medium or method and all copyrights, trademarks and/or patents in the Work Product. Company shall be deemed the sole author of the Work Product and is entitled to the copyright therein (and all renewals and extensions thereof), and the full ownership to the original and all copies of the Work Product. Company shall have the right to dispose of the Work Product and/or make any or all uses thereof as it, at any time and in the exercise of its sole discretion, may desire. Consultant shall deliver all originals and copies of the Work Product (whether completed or in process) and all research, plans, designs, specifications and any other work product or information which pertains to the Work Product to Company upon completion of the service performed hereunder or upon earlier termination of this Agreement. Consultant shall not retain, use or disclose any of the Work Product without Company’s prior written consent. The termination, completion or breach of this Agreement on whatever grounds and by whomsoever affected shall not affect Company’s exclusive ownership of the Work Product. Consultant hereby assigns to Company all now known or hereafter existing rights of every kind throughout the universe, in perpetuity and in all languages, pertaining to the Work Product, including, without limitation, all exclusive exploitation rights, of every kind and nature, including, but not limited to, all trademarks, copyrights and neighboring rights, to the full extent such assignment is allowed by law, and any renewals and extensions therefor throughout the universe, in perpetuity, or for the duration of the rights in each country, and in all languages. Consultant acknowledges that new rights to the Work Product may come into being or be recognized in the future, under the law or in equity (the “ New Exploitation Rights ”), and Consultant intends to and does hereby grant and convey to Company any and all such New Exploitation Rights to the Work Product. Consultant is also aware and acknowledges that new or changed technology, uses, media, format, modes of transmission and methods of distribution, dissemination, exhibition or performance (the “ New Exploitation Methods ”) are being and will inevitably continue to be developed in the future, which would offer new opportunities for exploiting the Work Product. Consultant intends to and does hereby grant and convey to Company any and all rights to such New Exploitation Methods with respect to the Work Product. Consultant agrees to execute, at any time upon Company’s request, such further documents and do such other acts as may be required to evidence or confirm Company’s

6.(a) Consultant, by virtue of this Agreement, shall acquire no right to use, and shall not use, the name “Disney” or “ABC” or “American Broadcasting Companies” or “ESPN” (either alone or in conjunction with or as a part of any other word, mark, or name) or any marks, fanciful characters or designs of The Walt Disney Company, or Company or any of their related, affiliated, or subsidiary companies in any advertising, publicity, or promotion; to express or imply any endorsement by Disney or Company or any of their related, affiliated or subsidiary companies of Consultant’s services; or in any other manner whatsoever (whether or not similar to the uses hereinabove specifically prohibited). Consistent with his obligations under Paragraph 7, this Paragraph 6(a) shall not prevent Executive from using such names to describe his activities with respect to Company and its subsidiaries under and prior to the Employment Agreement and under this Agreement.

8. This Agreement shall be construed and interpreted in accordance with the laws of the State of California without regard to conflicts of laws principles.

IN WITNESS WHEREOF , the parties have caused this Agreement to be duly executed as of the day and year first above written.


THE WALT DISNEY COMPANY						Consultant

By:						By:
Title:						Dennis Shuler

EXHIBIT B

GENERAL RELEASE

WHEREAS, Dennis Shuler (hereinafter referred to as “Executive”) and The Walt Disney Company (hereinafter referred to as the “Company”) are parties to an Amended and Restated Employment Agreement, dated as of November __, 2008, (the “Employment Agreement”), which provided for Executive’s employment with the Company on the terms and conditions specified therein; and

WHEREAS, pursuant to paragraph 6 of the Employment Agreement, Executive and the Company have agreed to execute mutual releases of the type and nature set forth in this Agreement;

1.(a) Upon the later of (i) the execution hereof by the Company and Executive, (ii) the passage of seven days following execution hereof by Executive without Executive’s having exercised the revocation rights referred to in paragraph 12 hereof and (iii) the time specified in the Employment Agreement for payment of a particular item of compensation, the Company shall (x) provide Executive the amounts and benefits described in Paragraph 5 of the Employment Agreement and (y) make full payment for vacation and floating holidays accrued but unused as of the date hereof, less amounts required to be withheld by law or authorized by Executive to be withheld (it being understood that from and after the date hereof no further rights to vacation or floating holidays or compensation therefor shall accrue or be payable to Executive). Such payment shall be made by check payable to Executive.

(b) The covenants and commitments of the Company referred to herein (including, specifically, but without limitation, any and all benefits conferred upon Executive pursuant to Paragraph 5 of the Employment Agreement) shall be in lieu of and in full and final discharge of any and all obligations to Executive for compensation, severance payments, or any other expectations of payment, remuneration, continued coverage of any nature or benefit on the part of Executive arising out of or in connection with Executive’s employment with the Company, or under any agreement, arrangement, commitment, plan, program, practice or policy of the Company, or otherwise, other than as expressly provided in the Employment Agreement.

with his activities as an employee of the Company or any of its affiliates pursuant to the terms of any applicable statute, under any insurance policy, pursuant to the certificate of incorporation or bylaws or established policies of the Company or any affiliate thereof or pursuant to written agreement (including, without limitation, the Indemnification Agreement) expressly providing for such indemnity between Executive and the Company or any affiliate thereof, and (v) any other applicable employee welfare benefit plans to which Executive may be subject. Further, Executive shall be entitled to such continuation of health care coverage as is required under, and subject to, applicable law, of which Executive shall be notified in writing after the Termination Date, provided Executive timely exercises Executive’s rights in accordance therewith. Executive understands and acknowledges that all payments for any such continued health care coverage he may elect will be paid by him, except to the extent the Employment Agreement provides that such payments shall be made by the Company.

omissions, events, circumstances or facts existing or occurring up through the date of Executive’s execution hereof that directly or indirectly arise out of, relate to, or are connected with, Executive’s services to, or employment by the Company (any of the foregoing being an “Executive Claim” or, collectively, the “Executive Claims”).

pursuant to this proviso being hereinafter referred to as a the “Company Claim” or, collectively, as the “Company Claims”).

Releasees or of the Executive Releasees with regard to the subject matter, basis or effect of this Agreement or otherwise.

PLEASE READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Executed at , California.

DENNIS SHULER

Dated: _________________

Executed at , California.


THE WALT DISNEY COMPANY

By:
Title:

Dated:		_________________

Exhibit 10.4

Disney Severance Pay Plan

As Amended and Restated

Effective January 1, 2009

(Conformed Text Including

First Amendment to Plan as Amended

and Restated January 1, 2009)

TABLE OF CONTENTS


		Page
SECTION 1.	INTRODUCTION	1

SECTION 2.	DEFINITIONS AND INTERPRETATIONS	1

SECTION 3.	HOW DO YOU BECOME ELIGIBLE FOR BENEFITS?	5

SECTION 4.	WHAT ARE YOUR BENEFITS UNDER THE PLAN?	5

SECTION 5.	HOW AND WHEN WILL AMOUNTS BE PAID?	9

SECTION 6.	AMENDMENT AND TERMINATION	10

SECTION 7.	MISCELLANEOUS PROVISIONS	11

SECTION 8.	WHAT ELSE DO YOU NEED TO KNOW ABOUT THE PLAN?	12

	Claim Procedure	12

	Plan Interpretation and Benefit Determination	13

	Your Rights Under ERISA	14

	Other Important Facts	15

SECTION 1. - INTRODUCTION

The Walt Disney Company (“Disney”) adopted the Disney Severance Pay Plan (hereinafter “Plan”) originally effective as of May 15, 2001. The Plan was thereafter amended three times and, effective as of January 1, 2009, the Plan as set forth herein has been amended and restated in its entirety.

The Plan provides severance benefits under the circumstances described below to eligible employees (referred to as “Eligible Employees”) of Disney and certain of its subsidiaries and Affiliates (collectively the “Company”).

SECTION 2. - DEFINITIONS AND INTERPRETATIONS

The following definitions and interpretations of important terms apply to the Plan:

(a) Affiliate . A company or business organization which is affiliated with the Company as defined under Securities and Exchange Commission Rule 144(a)(1), as amended from time to time.

(b) COBRA . Continuation health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985.

(d) Company . Disney and any subsidiary or other Controlled Group Member of Disney that, with the approval of the Plan Administrator and subject to such conditions as the Plan Administrator may impose, adopts the Plan. Any subsidiary or other Controlled Group Member will be considered to have adopted the Plan with the approval of the Plan Administrator if it takes significant action that is consistent with the adoption of the Plan, the Plan Administrator is aware of the action, and neither objects in writing to the action. The Plan Administrator or a subsidiary or Controlled Group Member may terminate the subsidiary or Controlled Group Member’s participation in the Plan by written notice to each other. An entity will cease to be part of the Company, and will cease to participate in the Plan, after the date on which it ceases to be a Controlled Group Member.

(e) Controlled Group Member . A member of a controlled group of corporations of which Disney is a member, or an unincorporated trade or business that is under common control with Disney, all as determined under the Sections 414(b) and 414(c) of the Code.

(f) Disney . The Walt Disney Company.

(g) Effective Date . January 1, 2009, the date this Plan was amended and restated.

(h) Eligible Employee . As of his or her Layoff Date, an Employee

(i)

who is employed in an employment classification, department or origin identified by the Company as eligible for this Plan;

(ii)

who does not have a personal services contract with the Company; and

(iii)

who has not previously agreed either orally or in writing to waive eligibility for this Plan, as determined by the Plan Administrator based on Company records.

(i) Employee . Any person employed by the Company on or after the Effective Date as a regular, full-time employee on a payroll maintained in the United States but excluding any employee included in a unit of employees covered by a collective bargaining agreement between the Company and employee representatives unless such bargaining agreement provides for his or her inclusion hereunder. If a collective bargaining agreement does provide for inclusion of a represented employee, his or her participation hereunder will be subject to such modification in Plan terms as may be provided in the applicable collective bargaining agreement.

If a person is not treated by the Company as an employee, as conclusively evidenced by failure to withhold taxes from payment made for services rendered, then such person is not considered an Employee under this Plan even if the person is determined to have been a common law employee of the Company by a court of law, a governmental agency or by any other body or means.

(j) Employment Position . The classification of an Employee by job responsibility as either a Salaried or an Hourly Employee, a Manager, a Director or a Vice President or Above. An Employee’s Employment Position will be determined by the Plan Administrator in its sole and absolute discretion, taking into consideration the following definitions:

Salaried or Hourly Employee : An Employee who is neither a Vice President or Above, a Director or a Manager.

Manager : An Employee with a title of manager or with a title or job responsibility comparable to that of a manager.

Director : An Employee with a title of director or with a title or job responsibility comparable to that of a director.

Vice President or Above : An Employee with a title of vice president or higher or with a title or job responsibility comparable to that of a vice president or higher position.

For the avoidance of doubt, a job title (such as “manager” or “director”) is not conclusively determinative of an Employee’s classification (for example, as a Manager or Director) hereunder.

(k) ERISA . The Employee Retirement Income Security Act of 1974, as amended from time to time.

(l) Layoff . The involuntary termination of employment of an Eligible Employee from the Company. Notwithstanding the foregoing, in no event will an involuntary termination of employment be considered a Layoff if (i) the involuntary termination of employment is due to Reason or (ii) the involuntary termination of employment does not qualify as a “separation of service” within the meaning of Section 409A of the Code and Treasury Regulation Section 1.409A–1(h).

(m) Layoff Date . An Eligible Employee’s last day of employment on account of his or her Layoff.

(n) Participant . An Eligible Employee who meets the requirements for benefits under the Plan, as set forth in Section 3 of the Plan (entitled “How Do You Become Eligible for Benefits?”) An individual will cease being a Participant once payment of all severance pay and other benefits due to such individual under the Plan has been completed and no person will have any further rights under the Plan with respect to such former Participant.

(o) Plan Administrator . The Investment and Administrative Committee of the Walt Disney Company Sponsored Qualified Benefit Plans and Key Employees Deferred Compensation and Retirement Plan.

(p) Reason . Any one of the following reasons for the discharge or other involuntary termination of an Employee from employment with the Company:

(i)

any act or omission by the Employee resulting or intended to result in personal gain at the expense of the Company;

(ii)

the performance by the Employee of his or her employment duties in a manner deemed by the Company to be in any way unsatisfactory;

(iii)

the improper disclosure by the Employee of proprietary or confidential information or trade secrets of the Company or any Affiliate;

(iv)

misconduct by the Employee, including, but not limited to fraud, intentional violation of or negligent disregard for the rules and procedures of the Company (including a violation of the Company’s business code of conduct), dishonesty, insubordination, theft or other illegal conduct, violent acts or threats of violence, or possession of alcohol or controlled substances on the property of the Company, or any other terminable offense under the Company’s policies and practices;

(v)

the receipt of an offer of employment by the Employee from a Successor Employer to commence promptly following his or her termination of employment by the Company, whether the Eligible Employee accepts the position or not;

(vi)

any other involuntary termination of an Employee’s employment by the Company that does not constitute a Layoff, as determined by the Company in its sole and absolute discretion.

For purposes of the Plan, the determination of whether a discharge or other release from employment is for Reason will be made by the Plan Administrator, in its sole and absolute discretion, and such determination will be conclusive and binding on the affected Employee.

(q) Successor Employer . Successor Employer means any entity that:

(i)

assumes operations or functions formerly carried out by the Company (such as the buyer of a facility or any entity to which a Company operation or function has been outsourced);

(ii)

is an Affiliate of Disney; or

(iii)

makes a job offer at the request of the Company (such as a joint venture of which Disney or an Affiliate is a member).

(r) WARN Act . Worker Adjustment and Retraining Notification Act.

(s) Weekly Base Pay . An Eligible Employee’s weekly rate of salary or wages as of his or her Layoff Date, as reflected in the records maintained by the Company’s payroll department, and will (i) include any salary reduction contributions made on his or her behalf to any plan of the Company, or pursuant to a collective bargaining agreement, under Section 125 or 401(k) of the Code , and (ii) exclude bonuses, overtime pay, temporary assignment shift differentials, incentive compensation, Company contributions to or benefits paid from any employee retirement or welfare plan (other than salary reduction contributions to such a plan), and other additional compensation or benefits provided by the Company and, except as provided below, commissions.

If a significant portion of an Eligible Employee’s compensation is sales-based commissions, as determined by the Plan Administrator in its sole and absolute discretion, then the Employee’s Weekly Base Pay will include any commissions actually paid (and not merely accrued) to him or her by the Company during the last 24 full calendar month period of his or her last continuous period of employment with the Company prior to his or her Layoff Date, divided by 104. If an Eligible Employee’s last continuous period of employment with the Company is less than 24 full calendar months, then the amount to be included in his or her Weekly Base Pay is the amount of sales-based commissions actually paid (and not merely accrued) to him or her

by the Company during the number of full calendar months of his or her last continuous period of employment with the Company prior to his or her Layoff Date, divided by the number of weeks within those full calendar months.

(t) Year of Service . The number of consecutive full 12 month periods of an Eligible Employee’s employment with the Company and any Controlled Group Member since his or her most recent hire date in which the Eligible Employee is paid by the Company or a Controlled Group Member for the performance of full-time services. Years of Service will be measured in full years and partial Years of Service will be disregarded. If the Company has a bridging of service policy, any prior employment recognized for the Eligible Employee under that policy will be recognized under this Plan and added to the Eligible Employee’s most recent period of employment to determine Years of Service except that Years of Service for which the Eligible Employee previously received severance pay from the Company or any Controlled Group Member pursuant to this Plan or any other severance or separation plan or program shall be disregarded.

SECTION 3. - HOW DO YOU BECOME ELIGIBLE FOR BENEFITS?

(a) Eligibility . You become eligible for benefits under the Plan (i.e., you become a “Participant”) if you are an Eligible Employee and your employment termination is a Layoff.

(b) Changed Decisions . The Company has the right to cancel a Layoff or reschedule a Layoff Date at any time before your employment terminates. You will not become eligible for benefits under this Plan if your Layoff Date is cancelled or if you voluntarily terminate employment before the Layoff Date specified by the Company.

SECTION 4. - WHAT ARE YOUR BENEFITS UNDER THE PLAN?

If you are eligible for benefits under the Plan (i.e., you become a Participant), your benefits under the Plan will be as follows:

(a) Severance Pay . You will be entitled to receive severance pay under the Plan based on your Employment Position and Years of Service as of your Layoff Date, and which will be equal to the number of weeks determined in accordance with whichever of the following schedules is applicable to you, multiplied by your Weekly Base Pay:

Salaried or Hourly Employee


Years of Service		Severance Pay
Less than 5 years		4 weeks

5 or more years		1 week for each Year of Service, to a maximum of 52 weeks

Manager


Years of Service		Severance Pay
Less than 5 years		6 weeks

5 or more years		4 weeks plus 1 week for each Year of Service, to a maximum of 52 weeks

Director


Years of Service		Severance Pay
Less than 5 years		13 weeks

5 or more years		6 weeks plus 2 weeks for each Year of Service, to a maximum of 52 weeks

Vice-President or Above


Years of Service		Severance Pay
Less than 5 years		26 weeks

5 or more years		18 weeks plus 2 weeks for each Year of Service, to a maximum of 52 weeks

(b) Continued Health Care Coverage and COBRA . If you are participating in a Company health care plan at your Layoff Date, you will be eligible to continue health care coverage under this Plan for the length of your Health Care Coverage Period for you and, as applicable, your eligible dependents and Same-Sex Domestic Partner, under the same terms and conditions of the health care plan applicable to you. If you elect such coverage, during your Health Care Coverage Period, your contributions will be those charged for the same coverage to similarly situated active employees under the Company health care plan applicable to you. Your “Health Care Period” is four weeks if you have less than five Years of Service as of your Layoff Date or one week for each Year of Service, up to a maximum of 52 weeks, if you have five or more Years of Service as of your Layoff Date. After your Health Care Coverage Period, your COBRA coverage or continued coverage for Same-Sex Domestic Partners under the Company health care plan applicable to you will commence, and your cost for such coverage will be the COBRA cost charged for that coverage to other similarly situated terminated employees under

the Company health care plan applicable to you. The length and terms of your COBRA coverage will be governed by the Company health care plan applicable to you. Your eligibility for COBRA continuation of any flexible spending account or similar benefit will be limited under this Plan and the Company health care plan applicable to you to the COBRA period specified by the Company health care plan applicable to you and will not be extended by your Health Care Coverage Period. This Plan’s continued health care coverage will be provided through a separate plan within the Signature Benefits Plan.

In addition, whether or not you participate in a Company health care plan following your Layoff Date, you will remain eligible for the services provided by the Company’s Personal Assistant Network for six months after your Layoff Date.

(c) Health Care Payment for Manager or Above . If you have a Severance Period that exceeds your Health Care Coverage Period, as determined under Section 4(b) above, you will receive a health care payment to help you defray the cost of COBRA coverage for the balance of your Severance Period. The cash payment will be determined based on the Company’s average projected cost of Signature Benefits Plan active employee health care coverage for the year of your Layoff (less applicable employee contributions) and will be paid on or as soon as practicable following your Layoff Date. If you are not enrolled for coverage under a Company health care plan as of your Layoff Date, you will not receive a health care payment. Your “Severance Period” is the number of weeks used to calculate your severance pay as specified in the schedule applicable to you under Section 4(a) above.

(d) Paid Leave in Lieu of Notice . If you become entitled to severance pay under Section 4(a) on account of Layoff subject to WARN, then, to the extent you have been given less than the WARN-required advance notice of the date your active services will actually terminate, you will be given a Paid Leave in Lieu of Notice for the balance of the WARN-required advance notice period, as follows:

(i)

During your Paid Leave in Lieu of Notice, you will be an inactive employee but you will be entitled to the same benefit plan benefits and participation rights to which you would have been entitled had your active employment continued, except that you will not accrue any paid leave, paid vacation days or additional severance benefits under this Plan.

(ii)

If you die during a Paid Leave in Lieu of Notice, your paid leave will end and the full and partial weeks of Weekly Base Pay that you would have received during the balance of the paid leave will be paid to your estate in a lump sum. All other Paid Leave in Lieu of Notice benefits will stop on the day you die and your estate will not be entitled to any additional severance pay under this Plan.

(iii)

When your Paid Leave in Lieu of Notice ends, you will then be entitled to severance pay under Section 4(a) and health benefits under Sections 4(b), and if applicable, 4(c), but the amount of severance pay otherwise payable

will be reduced by the cash wages you received for your paid leave. You will also be entitled to the other benefits set forth below in this Section 4.

The WARN-required advance notice period is generally 60 days, but under certain unusual circumstances, may be less. Any payment of Paid Leave in Lieu of Notice shall be subject to the timing limitations of Section 7(h).

(e) Paid Terminal Leaves . If the Company puts you on a Paid Terminal Leave, your Plan benefits will be modified in accordance with this Section. 4(e). A “Paid Terminal Leave” is a period of paid employment during which the Company does not intend to have you perform any material services (e.g., a period of inactive employment) and at the end of which your employment will terminate on account of a Layoff not subject to WARN. Examples of activities that will not be considered the performance of material services are providing transition assistance on substantially less than a full-time basis, and reviewing and responding to e-mails and telephone calls. The Company’s intent as to whether you are to perform material services, not the level of services you actually provide, will be conclusive. If you are put on a Paid Terminal Leave:

(i)

During your Paid Terminal Leave, you will be an inactive employee but you will be entitled to the same benefit plan benefits and participation rights to which you would have been entitled had your active employment continued, except that you will not accrue any paid leave, paid vacation days or additional severance benefits under this Plan.

(ii)

If you die during a Paid Terminal Leave, your paid leave will end. All other Paid Terminal Leave benefits will stop on the day you die and your estate will not be entitled to any additional severance pay under this Plan.

(iii)

When your Paid Terminal Leave ends by reason of Layoff, you will then be entitled to severance pay under Section 4(a) and health benefits under Sections 4(b), and, if applicable, 4(c), but the amount of severance pay otherwise payable will be reduced by the cash wages you received for your Paid Terminal Leave. You will also be entitled to the other benefits set forth below in this Section 4.

(f) Outplacement Support Benefits . The Company in its sole and absolute discretion may arrange to provide you with, and you may elect to utilize, outplacement counseling services from an outplacement firm selected by the Company. You must complete any outplacement program provided to you within one year after your Layoff Date. The Company will pay the full cost of any such outplacement services provided to you. Any payment for outplacement services shall be subject to the timing limitations of Section 7(h).

(g) Stay Bonus . In certain cases, you may be asked to stay with the Company for an extended period prior to your Layoff Date. In such case, the Company may elect, in its sole discretion, to offer you a stay bonus to induce you to remain at work until your Layoff Date. Any such offer by the Company will be made by means of a written stay bonus offer and may

contain such contingencies or variations in Plan terms as the Company may determine. For example, a stay bonus may include increased severance pay or may be contingent upon your execution of an agreement releasing the Company from liability for any and all claims specified in the agreement. Any payment of stay bonus shall be subject to the timing limitations of Section 7(h).

(h) Other Benefits .

(i)

Educational Reimbursement . Your Layoff will not affect your eligibility for tuition reimbursement under the Company’s Educational Reimbursement Program with respect to any class that you successfully complete and that you began attending with Company approval before your Layoff Date.

(ii)

Relocation . You will not have to repay any relocation costs you may have otherwise owed the Company on account of premature termination of employment under a relocation agreement previously entered into between you and the Company.

Any payment for such other benefits shall be subject to the timing limitations of Section 7(h).

(i) Integration With Other Payments . If you are a Participant (that is, you receive benefits under the Plan), you will not be entitled to receive any other severance, separation, notice or termination payments on account of your employment with the Company or any other Controlled Group Member. In addition, benefits under this Plan are not intended to duplicate such benefits as workers’ compensation wage replacement benefits, disability benefits, pay-in-lieu-of-notice, severance pay, or similar benefits under other benefit plans, severance programs, employment contracts, or similar benefits, damages or penalties under applicable laws, such as the WARN Act and the Paid Leave In Lieu of Notice provisions of Section 4(d) or the Paid Terminal Leave provisions of Section 4(e). Should such other benefits, damages or penalties be payable, benefits payable to a Participant under this Plan will be offset or, alternatively, benefits previously paid under this Plan will be treated as having been paid to satisfy such other benefit damages, or penalty obligations. In either case, the Plan Administrator, in its sole discretion, will determine how to apply this provision and may override other provisions of this Plan in doing so.

(j) Taxes . Employment and income taxes will be deducted or withheld from benefits under the Plan to the extent required by law, as determined by the Company.

SECTION 5. - HOW AND WHEN WILL AMOUNTS BE PAID?

Any severance pay payable under Section 4(a) above and any health care payment payable under Section 4(c) above will be paid to you in a single lump sum payment as soon as practicable following your Layoff Date, subject to the timing limitations of Section 7(h).

If you are rehired by the Company or any Controlled Group Member prior to the expiration of your Severance Period, you will be required to repay to the Company a portion of your severance pay under Section 4(a) and, if you received one, your health care payment under Section 4(c). The portion of your severance pay that you will be required to repay will be equal to your Weekly Base Pay multiplied by the number of weeks remaining in your Severance Period from and after your date or rehire by the Company or any Controlled Group Member. Your “Severance Period” is the number of weeks used to calculate your severance pay, as specified in the schedule applicable to you under Section 4(a) above. You will be required to repay the health care payment you received multiplied by fraction, the denominator of which is the number of weeks used to determine your health care payment, and the numerator is the denominator minus one for each week your rehire date is later than the end of your Health Care Coverage Period under Section 4(b).

Any other benefits provided to you under Section 4(b) and Sections 4(f) through 4(h) will be provided to you at the time and by the means specified in such Sections. If you are rehired by the Company or any Controlled Group Member, you will not be required to repay any benefits you received under Section 4(b) or Sections 4(f) through 4(h), but any provisions of a relocation agreement entered into between you and the Company which are still applicable will continue to apply during the period of your rehire and at your later termination of employment.

SECTION 6. - AMENDMENT AND TERMINATION

The Plan Administrator, acting in its nonfiduciary settlor capacity, reserves the right, in its sole and absolute discretion, to terminate, amend or modify the Plan, in whole or in part, at any time and for any reason, prospectively or retroactively and with or without advance notice. If the Plan is terminated, amended or modified, your right to participate in, or receive benefits under, the Plan may be changed or eliminated, regardless if benefits have already commenced or been fully paid to you.

If legislation is enacted enhancing Participants’ COBRA health care continuation rights or providing them other access to or subsidies for health care coverage, Plan benefits may be modified by the Plan Administrator (without amending the Plan), to reflect that legislation, as the Plan Administrator determines to be appropriate, acting in a nonfidicuary, settlor capacity. Modifications generally would result in the same overall level of health care or related benefits being provided under the Plan and applicable laws, as determined after taking the legislative changes into account (e.g., by reducing lump sum health care subsidies to the extent that the legislation makes them excessive, by requiring repayment of excessive amounts, etc.). By accepting Plan benefits, Participants agree to these and all other Plan terms.

Neither the establishment of the Plan, nor any modification thereof, nor the payment of any benefits hereunder, will be construed as giving to any Participant, Employee (or any beneficiary of either), or other person any legal or equitable right against the Company or any officer, director or employee thereof, and in no event will the terms and conditions of employment by the Company of any Employee be modified or in any way affected by the Plan. This Plan does not give any Employee any vested right to Plan benefits.

No individual may become entitled to additional benefits or other rights under the Plan after the Plan is terminated.

SECTION 7. - MISCELLANEOUS PROVISIONS

(a) Records . The records of the Company with respect to length of employment, employment history, reason for employment termination, base pay, absences, and all other relevant matters may be conclusively relied on by the Plan Administrator.

(b) Governing Law . This Plan is an employee welfare benefit plan that is regulated by ERISA, a federal law. To the extent, if any, that state laws apply to the Plan, California law shall apply (except to the extent it would require use of another state’s law).

(c) Severability . Should any provisions of the Plan be deemed or held to be unlawful or invalid for any reason, the balance of the Plan shall remain in effect, unless it is amended or terminated as provided in Section 6.

(d) Incompetency . If the Plan Administrator finds that a Participant is unable to care for his or her affairs because of illness or accident, then benefits payable hereunder, unless claim has been made therefor by a duly appointed guardian, committee, or other legal representative, may be paid in such manner as the Plan Administrator will determine, and will constitute a complete discharge of all liability for any payments or benefits to which such Participant was or would have been otherwise entitled under the Plan.

(e) Assignment and Alienation . Except as required by law, the benefits payable under this Plan will not be subject to alienation, transfer, assignment, garnishment, execution or levy of any kind, and any attempt to cause any benefits to be so subjected will not be recognized.

(f) Plan Not a Contract of Employment . Nothing contained in the Plan will be held or construed to create any liability upon the Company to retain any Employee in its service. All Employees will remain subject to discharge or discipline to the same extent as if the Plan had not been put into effect. Nothing in this Plan shall preclude the Company from terminating an Employee for any reason or no reason or preclude a person from being or continuing to be an at-will employee.

(g) Overpayments . If any overpayment is made under the Plan for any reason, the Plan Administrator will have the right to recover the overpayment. The Participant shall cooperate fully with the Plan and return any overpayment.

(h) CODE SECTION 409A COMPLIANCE

(i) Timing of Payments and Benefits . Any payment of severance pay, stay bonus or Pay in Lieu of Notice made pursuant to this Plan shall be made within the time period permitted in order to satisfy the “short-term deferral” exception under section 409A of the Code and Treasury Regulation section 1.409A-1(b)(4). Any payment in respect of outplacement benefits or other reimbursements made pursuant to this Plan shall

be made within the time period permitted in order to satisfy the requirements for such benefits to be exempt under Section 409A of the Code in accordance with Treasury Regulation Section 1.409A-1(b)(9)(v).

(ii) Prohibition on Deferral or Acceleration . Neither the Company nor any Employee shall be permitted under the Plan take any action that would be considered a deferral of a payment under the Plan for the purposes of Section 409A of the Code and Treasury Regulation section 1.409A-2(b). Neither the Company nor any Employee shall be permitted under the Plan take any action that would be considered an acceleration of a payment or benefit under the Plan for purposes of Section 409A of the Code and Treasury Regulation section 1.409A-3(j).

(iii) Possible Delay of Payments . In the event that any payment or benefit under the Plan is determined to be a “deferral of compensation” within the meaning of Section 409A of the Code notwithstanding the terms and limitations hereof, and such payment or benefit is to be made to an Employee who is treated as a “Specified Employee” (within the meaning of Section 409A of the Code and Treasury Regulation 1.409A-1(i)) then, solely as and to the extent required to comply with Section 409A of the Code, any such payment or benefit (or portion thereof) shall be made at the expiration of the six-month period following termination of employment, as provided in Treasury Regulation Section 1.409A-3(i)(2).

(iv) General 409A Compliance . To the extent applicable, it is intended that the Plan comply with the provisions of section 409A of the Code, and the Plan shall be construed and applied by the Plan Administrator in a manner consistent with this intent. Any provision that would cause any amount payable under the Plan to be includible in the gross income of a Employee under section 409A(a)(1) of the Code shall have no force or effect. The Plan may be amended by the Plan Administrator at any time in accordance with Section 6 hereof in order to comply with Section 409A of the Code. No provision of the Plan shall be construed as a representation or guarantee of any particular tax effect for the payments and benefits under the Plan, and neither Disney, the Plan nor the Plan Administrator shall have any liability or be responsible for any claim related to the incurrence by any Employee of any tax, interest expense, loss of tax benefit, or any other obligation or liability, in each case, arising under or related to Section 409A of the Code or any other provision of the Code.

SECTION 8. - WHAT ELSE DO YOU NEED TO KNOW ABOUT THE PLAN?

(a)	Claim Procedure

If you are a Participant in the Plan, you will automatically receive any benefits set forth under Section 4 of the Plan for which you are entitled. If you feel you have not been provided with all benefits to which you are entitled under the Plan, you may file a written claim with the Plan Administrator with respect to your rights to receive benefits from the Plan. You will be informed of the Plan Administrator’s decision with respect to your claim within 90 days after it is filed. Under special circumstances, the Plan Administrator may require an additional period of

not more than 90 days to review your claim. If this occurs, you will be notified in writing as to the length of the extension, the reason for the extension, and any other information needed in order to process your claim.

If your claim is denied, in whole or in part, you will be notified in writing of the specific reason for the denial, the exact Plan provision on which the decision was based, what additional material or information is relevant to your claim, and what procedure you should follow to get your claim reviewed again. If you are not notified within the 90-day (or 180-day, if so extended) period, you may consider your claim to be denied. In either case, you then have 60 days to appeal the decision to the Plan Administrator.

Your appeal must be submitted in writing. You may submit a written statement of issues and comments.

A decision as to your appeal will be made within 60 days after the appeal is received. Under special circumstances, the Plan Administrator may require an additional period of not more than 60 days to review your appeal. If this occurs, you will be notified in writing as to the length of the extension, not to exceed 120 days from the day on which your appeal was received.

If your appeal is denied, in whole or in part, you will be notified in writing of the specific reason for the denial and the exact Plan provision on which the decision was based. The decision on your appeal will be final and binding on all parties and persons affected thereby. If you are not notified within the 60-day (or 120-day, if extended) period you may consider your appeal as denied.

(b)	Plan Interpretation and Benefit Determination

The Plan is administered and operated by the Plan Administrator, who has complete authority, in its sole and absolute discretion, to construe the terms of the Plan (and any related or underlying documents or policies), to interpret applicable law, to make findings of fact and to determine the eligibility for, and amount of, benefits due under the Plan to Participants or any persons claiming benefits derivatively through them. All such interpretations and determinations of the Plan Administrator (whether of fact or law) will be final and binding upon all parties and persons affected thereby. If challenged in a legal proceeding, the Plan Administrator’s interpretations and determinations will be reviewed under the most deferential abuse of discretion standard of review.

If, due to errors in drafting, any Plan provision does not accurately reflect its intended meaning, as demonstrated by consistent interpretations or other evidence of intent, or as determined by the Plan Administrator in its sole and absolute discretion, the provision shall be considered ambiguous and shall be interpreted by the Plan Administrator in a fashion consistent with its intent, as determined in the sole and absolute discretion of the Plan Administrator.

This Section 8(b) may not be invoked by you or any person to require the Plan to be interpreted in a manner inconsistent with its interpretation by the Plan Administrator.

(c)	Your Rights Under ERISA

As a Participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan Participants will be entitled to:

(i)

examine, without charge, at the Plan Administrator’s office, and at other specified locations, all Plan documents; and

(ii)

obtain copies of all Plan documents upon written request to the Plan Administrator, who may make a reasonable charge for the copies.

In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of an employee benefit plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan Participants and beneficiaries. No one, including your Company or other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit under this Plan or exercising your rights under ERISA. If your claim for a welfare benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. Within certain time limits specified under Section 8(a) (Claim Procedure), you have the right to have the Plan review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights.

For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

Provided you have exhausted all the claim review procedures of Section 8(a) and your claim for benefits hereunder was denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file a suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits Administrator, U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Pension and Welfare Benefits Administration.

(d)	Other Important Facts


OFFICIAL NAME OF THE PLAN:		Disney Severance Pay Plan

SPONSOR:		The Walt Disney Company
		500 South Buena Vista Street
		Burbank, CA 91521

EMPLOYER IDENTIFICATION
NUMBER (EIN):		95-4545390

PLAN NUMBER:		513

TYPE OF PLAN:		Employee Welfare Severance Benefit Plan

END OF PLAN YEAR:		December 31

TYPE OF ADMINISTRATION:		Employer Administered

PLAN ADMINISTRATOR:		Investment and Administrative Committee of The Walt Disney Company Sponsored Qualified Benefit Plans and Key Employees Deferred Compensation and Retirement Plan
		The Walt Disney Company
		500 South Buena Vista Street
		Burbank, CA 91521
		(818) 560-1000

ORIGINAL EFFECTIVE DATE:		May 15, 2001

RESTATEMENT EFFECTIVE DATE:		January 1, 2009

The Plan Administrator keeps records of the Plan and is responsible for the administration of the Plan. The Plan Administrator will also answer any questions you may have about the Plan.

Service of legal process may be made upon the General Counsel of The Walt Disney Company at the address specified above.

All benefits under the Plan are paid out of the general assets of the Company. The Plan is not funded and has no assets.

Exhibit 10.5

THE WALT DISNEY COMPANY

Performance-Based

Stock Unit Award

(Total Shareholder Return/Average Annual Adjusted EPS Growth Goals/Section

162(m) Vesting Requirement)

AWARD AGREEMENT, dated as of <DATED> between The Walt Disney Company, a Delaware corporation (“ Disney ”), and (the “ Participant ”). This Award is granted on <GRANT DATE> (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 Amended and Restated 2005 Stock Incentive Plan (the “ Stock Plan ”). 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 hereby grants to the Participant, on the terms and conditions set forth herein, an Award of <#STOCK UNITS> “Stock Units.” 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. The Stock Units granted by this Award are grouped into subdivisions referred to herein as “ Tranches. ” Each of Tranche A and Tranche B constitutes one quarter (25%) of the Award, and each of Tranche C, Tranche D, Tranche E and Tranche F constitutes one-eighth (12 ¹ / 2 %) of the Award. Subject to the terms, conditions and performance-based vesting requirements set forth herein,

(i) Tranche A of this Award will vest on the second or fourth anniversary date of the Date of Grant, and Tranche B will vest on the fourth anniversary of the Date of Grant, and

(ii) Tranches C, D, E and F will vest on the first, second, third and fourth anniversary dates, respectively, of the Date of Grant.

Section 2. Vesting Requirements . The vesting of this Award (other than pursuant to accelerated vesting in certain circumstances as provided in Section 3 below) shall be subject to the satisfaction of the conditions set forth in subsections A, B and C of this Section 2:

Total Shareholder Return/EPS Growth Test for Tranche A and Tranche B .

(a) Total Shareholder Return: One-or-Two-Year Test. The vesting of each of Tranche A and Tranche B of this Award shall be subject to the satisfaction of a performance vesting requirement under this Section 2.A. This performance vesting requirement shall be

satisfied if the Total Shareholder Return (as defined below) of Disney exceeds the Total Shareholder Return for the Standard & Poor’s 500 Composite Stock Index (the “ Reference TSR ”) in respect of either (i) the one-year period immediately preceding the first day of the month preceding the month in which the applicable anniversary date falls (the “ Determination Date ”) or (ii) the two-year period immediately preceding such Determination Date (the “ One-or-Two-Year TSR Test ”). “ Total Shareholder Return ” shall mean, for any given Determination Date, an amount equal to the average of the total return figures for the relevant period ( i . e ., one year, two years or, as provided further below, four years) as currently reported under “Comparative Returns” by Bloomberg L.P. (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 anniversary date in respect of which the Total Shareholder Return performance requirement is being applied, to take into account any factors which the Committee has determined are not properly reflected in such reported figures) or (ii) for the Reference TSR, as the case may be, for the twenty (20) trading days immediately preceding such Determination Date. For the avoidance of doubt, the One-or-Two-Year TSR Test is applicable to Tranche A on the Determination Date preceding the second anniversary date of the Date of Grant (the “ Second Anniversary Determination Date ”) and to Tranche B on the Determination Date preceding the fourth anniversary date of the Date of Grant (the “ Fourth Anniversary Determination Date ”).

(b) Total Shareholder Return: One Year or Four Year TSR Test for Tranche A. If the One-or-Two-Year TSR Test is not satisfied for Tranche A on the Second Anniversary Determination Date, then Tranche A shall not vest on the second anniversary date of the Date of Grant. However, Tranche A shall not be forfeited at that time and the performance vesting requirement of this Section 2.A shall be satisfied for Tranche A if the Total Shareholder Return of Disney, determined on the Fourth Anniversary Determination Date, exceeds the Reference TSR in respect of either (i) the period of one year preceding such Fourth Anniversary Determination Date or (ii) the period of four years preceding such Fourth Anniversary Determination Date.

(c) EPS Growth Test for Tranche A and/or Tranche B. If either Tranche A or Tranche B or both of them will not vest, or shall not have vested, on the fourth anniversary date of the Date of Grant (the “ Remaining Unvested Performance-Tested Tranche(s) ” by reason of the non-satisfaction of any of the vesting requirements set forth above in Sections 2.A(a) or (b) hereof), then the

Committee shall, no later than sixty (60) days after the fourth anniversary date of the Date of Grant, determine the Average Annual Adjusted EPS Growth Rate (as defined below) and apply the alternative performance vesting tests set forth below with respect to such Remaining Unvested Performance-Tested Tranche(s):

(i) If the Committee shall determine that the Average Annual Adjusted EPS Growth Rate (as defined below) is greater than 10%, then the performance vesting requirement of this Section 2.A shall be met with respect to all Remaining Unvested Performance-Tested Tranche(s).

(ii) If the Committee shall determine that the Average Annual Adjusted EPS Growth Rate is greater than 8% but less than or equal to 10%, then the performance vesting requirement of this Section 2.A shall be met with respect to fifty percent (50%) of all Remaining Unvested Performance-Based Tranche(s), and the remaining fifty percent (50%) thereof shall be immediately forfeited.

(iii) If the Committee shall determine that the Average Annual Adjusted EPS Growth Rate is 8% or less, then all Remaining Unvested Performance-Based Tranche(s) shall be immediately forfeited.

“ Average Annual Adjusted EPS Growth Rate ” shall mean the average annual growth rate of the Adjusted EPS (as defined below) of Disney for the sixteen (16) fiscal quarters of Disney ended immediately prior to the fourth anniversary date of the Date of Grant for which financial results have been filed with the Securities and Exchange Commission on a Form 10-Q or Form 10-K (the “ Adjusted EPS Growth Period ”). “ Adjusted EPS ” shall mean the diluted earnings per share of Disney, as reported in Disney’s consolidated financial statements for the relevant period, after such adjustments thereto as the Committee deems appropriate in its sole discretion (i) to exclude the effect of extraordinary, unusual and/or nonrecurring items and (ii) to reflect such other factors as the Committee deems appropriate to fairly reflect earnings per share growth. In the event that the Adjusted EPS Growth Period corresponds to the four completed fiscal years of Disney immediately preceding the fourth anniversary date of the Date of Grant, then the Average Annual Adjusted EPS Growth Rate shall be the average of the annual growth rates of Adjusted EPS of Disney for such four fiscal years. If the Adjusted EPS Growth Period does not correspond to the four completed fiscal

years of Disney immediately prior to the fourth anniversary date of the Date of Grant, the sixteen (16) quarters comprising such period will be treated as four consecutive annual periods (each equivalent to a fiscal year) for the purpose of determining the Average Annual Adjusted EPS Growth Rate.

Section 162(m) Vesting Requirement . This Award shall also be subject to additional performance vesting requirements under this Section 2.B, with respect to all Tranches, based upon the achievement of the Performance Targets applicable to the Performance Periods which are set forth below, subject to certification of achievement of such Performance Targets by the Committee pursuant to Section 4.8 of the Plan. The respective Performance Targets (together with the Business Criteria with respect to such Performance Targets) shall be established by the Committee for each Tranche by no later than 90 days following the beginning of the Performance Period applicable to such Tranche. If the Performance Target for a Tranche is not satisfied, all of the Stock Units comprising such Tranche shall be immediately forfeited. For each of the Tranches of Stock Units granted hereunder the Performance Period (which in each case shall be a specified period of one or more fiscal years (or portions thereof) of Disney (any such fiscal year being a “ Fiscal Year ”)) shall be as follows:


Tranche	Performance Period	Stock Units
Tranche A	Fiscal Year 2010	______
Tranche B	Fiscal Year 2012	______
Tranche C	Fiscal Year 2009	______
Tranche D	Fiscal Year 2010	______
Tranche E	Fiscal Year 2011	______
Tranche F	Fiscal Year 2012	______

Service Vesting Requirement . In addition to the performance vesting requirements of subsections A and B of this Section 2, 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:

(i) the second anniversary of the Date of Grant in the case of Tranche A, except that if the One-or-

Two-Year TSR Test provided for in Section 2.A(a) hereof is not met, and as a consequence thereof the vesting of Tranche A becomes subject to performance vesting requirements being met after the second anniversary of the Date of Grant, the Participant shall be required, in order to vest with respect to Tranche A, to remain continuously employed by Disney or an Affiliate until the fourth anniversary of the Date of Grant;

(ii) the fourth anniversary of the Date of Grant in the case of Tranche B;

(iii) the first anniversary of the Date of Grant in the case of Tranche C;

(iv) the second anniversary of the Date of Grant in the case of Tranche D;

(v) the third anniversary of the Date of Grant in the case of Tranche E; and

(vi) the fourth anniversary of the Date of Grant in the case of Tranche F;

provided , however , that, nothing set forth herein shall be deemed to modify, qualify, or otherwise derogate from, the requirement of Section 4.8 of the Plan that the Committee certify in writing that the applicable Performance Targets of Section 2.B above have been satisfied prior to the payment of any amount to the Participant under this Award.

If the service vesting requirements of this Section 2.C are not satisfied for any Tranche or Tranches, the applicable number of Stock Units shall be immediately forfeited and the Participant’s rights with respect thereto shall cease.

All Stock Units for which all of the requirements of this Section 2 have been satisfied shall become vested and shall thereafter be payable in accordance with Section 5 hereof.

Section 3. Accelerated Vesting . Notwithstanding the terms and conditions of Section 2 hereof, upon the Participant’s death or disability (within the meaning of Section 409A of the Internal Revenue Code), or upon the occurrence of 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 (provided, in each case, that the Participant is employed by Disney (or an Affiliate) at the time of

such death, disability or occurrence of a Triggering Event), this Award shall become fully vested and shall be payable in accordance with Section 5 hereof to the extent that it has not previously been forfeited. In addition, 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 with respect to the same subject matter.

Section 4. Dividend Equivalents . Any dividends paid in cash on Shares of Disney will be credited to the Participant 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 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 5. Payment of Award . Payment of vested Stock Units shall be made within 30 days following the later of:

(i)

the date as of which all of the applicable vesting requirements under Section 2 hereof shall have been satisfied for the applicable Tranche, or

(ii)

the date of certification of achievement of the applicable Performance Targets by the Committee for the applicable Tranche, as required under Sections 2.B and 2.C hereof,

(or within 30 days following acceleration of vesting under Section 3 hereof, if applicable). 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 6. Restrictions on Transfer . Neither this Stock Unit 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 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 7. 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 8. Award Subject to Plans, Etc. This 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.

Section 9. Changes in Capitalization . The Stock Units under this Award shall be subject to the provisions of the Stock Plan relating to adjustments for changes in corporate capitalization.

Section 10. 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 11. Prior Performance-Based Stock Unit Awards. Disney and the Participant agree that those provisions of Section 2.B hereof relating to Tranche A and Tranche B shall (i) be fully applicable to any Performance-Based Stock Unit Award Agreement previously granted to Participant by Disney (a “ Previous Award ”) as to which there are any Performance Period(s) which commence with Fiscal Year 2009 or any later Fiscal Year and (ii) supersede Section 2.A or 2.B (as applicable) of any such Previous Award in its entirety, if such (applicable) Section provides for any Performance Period(s) of greater duration than one Fiscal Year; provided , however , that, notwithstanding the foregoing, when the provisions of Section 2.B of this Award Agreement are applied to any Previous Award, such provisions shall only apply to Performance Period(s) (as in effect prior to this Section 11 becoming effective with respect to any such Previous Award) which commence with Fiscal Year 2009 or any later Fiscal Year, and such provisions of this Award Agreement shall be deemed modified, solely for the purpose of applying them to the Previous Award, (a) by disregarding the Performance Periods set for in this Award Agreement and instead changing the specific Performance Periods for “Tranche A” and “Tranche B” set forth in the corresponding Section 2.A or 2.B (as applicable) of the Previous Award to refer only to the last Fiscal Year included in such Performance Periods, and (b) by deeming the number of Stock Units set forth as “Tranche A” and “Tranche B,” respectively, in such Previous Award (which number is set forth therein opposite the specified duration of the applicable Performance Period(s) in such Previous Award) to continue to be the number of Stock Units for “Tranche A” and “Tranche B” in such Previous Award notwithstanding any change in the Performance Period(s) in the Previous Award effected by this Section 11.

Section 12. 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

By:
Name:
Title:

PARTICIPANT

Exhibit 31(a)

RULE 13a-14(a) CERTIFICATION IN

ACCORDANCE WITH SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company (the “Company”), certify that:

1.	I have reviewed this quarterly report on Form 10-Q of the Company;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 3, 2009



By:		/s/ ROBERT A. IGER
		Robert A. Iger
		President and Chief Executive Officer

Exhibit 31(b)

RULE 13a-14(a) CERTIFICATION IN

ACCORDANCE WITH SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas O. Staggs, Senior Executive Vice President and Chief Financial Officer of The Walt Disney Company (the “Company”), certify that:

1.	I have reviewed this quarterly report on Form 10-Q of the Company;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 3, 2009



By:		/s/ THOMAS O. STAGGS
		Thomas O. Staggs
		Senior Executive Vice President and Chief Financial Officer

Exhibit 32(a)

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of The Walt Disney Company (the “Company”) on Form 10-Q for the fiscal quarter ended December 27, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert A. Iger, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.



By:		/s/ ROBERT A. IGER
		Robert A. Iger
		President and Chief Executive Officer February 3, 2009

*	A signed original of this written statement required by Section 906 has been provided to The Walt Disney Company and will be retained by The Walt Disney Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32(b)

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of The Walt Disney Company (the “Company”) on Form 10-Q for the fiscal quarter ended December 27, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas O. Staggs, Senior Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.



By:		/s/ THOMAS O. STAGGS
		Thomas O. Staggs
		Senior Executive Vice President and Chief Financial Officer February 3, 2009

*	A signed original of this written statement required by Section 906 has been provided to The Walt Disney Company and will be retained by The Walt Disney Company and furnished to the Securities and Exchange Commission or its staff upon request.