U.S. Securities and Exchange Commission
Washington, D.C. 20549
NOTICE OF EXEMPT SOLICITATION
Submitted pursuant to Rule 14a-6(g)
1. Name of the Registrant:
The Walt Disney Company
2. Name of person relying on exemption:
Roy E. Disney, Patricia A. Disney, Roy P. Disney, Susan Disney Lord,
Abigail E. Disney, Timothy J. Disney, Shamrock Holdings, Inc., Shamrock
Holdings of California, Inc. and Stanley P. Gold
3. Address of person relying on exemption:
4444 Lakeside Drive, 2nd Floor, Burbank, California 91505
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a6(g)(1):
The following slogan was posted on the savedisney.com website and is also
being distributed on bumper stickers:
"Goodbye Michael...Restore the Magic."
****
The attached materials were mailed to shareholders holding more than 250
shares on February 20, 2004.
ROY E. DISNEY
STANLEY P. GOLD
4444 Lakeside Drive
Burbank, CA 91505
February 20, 2004
Dear Fellow Disney Shareholder:
The Disney Board has rejected the current Comcast takeover proposal.
In the view of many, including us, the Comcast offer does not adequately
reflect the true potential value of Disney's assets.
However, the Disney Board is JUST PLAIN WRONG in continuing its
lock-step support for Michael Eisner and his senior management team. It
took your Board less than a week to decide to reject Comcast's bid. Yet,
after NEARLY A DECADE OF SUBSTANDARD PERFORMANCE, your Board still does not
acknowledge that the fundamental problems at Disney are Mr. Eisner's poor
management and the Board's own refusal to hold him and his senior
management accountable.
Mr. Eisner and the Board have tried to raise questions about what's
motivating us to ask you to withhold your vote for him and three other
directors. Mr. Eisner and his Board claim our grievances are personal. They
are not. Compare Comcast's critique of Disney with ours; they are virtually
identical. As we have said all along, we think the record is clear. MR.
EISNER AND HIS TEAM HAVE FAILED TO DELIVER SUSTAINABLE LONG-TERM VALUE TO
SHAREHOLDERS.
It is time to restore Disney to its former greatness. We urge you to
send a message that you want new senior management and you want an
effective, engaged Board that will have the courage to replace a senior
management team that has demonstrated its inability to deliver long-term
value to shareholders. IN THE UPCOMING DIRECTORS' ELECTION, VOTE NO ON
MICHAEL EISNER, JOHN BRYSON, JUDITH ESTRIN AND GEORGE MITCHELL. BECAUSE
THERE IS LITTLE TIME BEFORE THE ANNUAL MEETING, WE ENCOURAGE ALL
SHAREHOLDERS TO ENSURE THAT THEIR VOTE IS COUNTED BY USING TELEPHONE OR
INTERNET VOTING.
THE COMCAST PROPOSAL
Like us, Brian Roberts and his team at Comcast recognize the failure
of Disney senior management to implement effective strategies that would
realize the inherent value of Disney's assets. However, we believe
Comcast's takeover proposal - in which Disney shareholders would receive
less per share than the current stock price and far less than what we
believe is full value for Disney's assets - is clearly not the answer. Of
course, we would seriously consider future offers that fully reflect the
company's intrinsic value.
In our view, what Disney needs now is not necessarily new ownership
but a new senior management team that can generate superior value from the
company's assets. The search by the Board for effective, high-quality
senior management should commence IMMEDIATELY.
Our belief that Disney needs new senior management does not stem from
any special interest on our part. As we have repeatedly stated, neither of
us has any interest in serving as Disney's CEO or Chairman. We do, however,
have an interest in seeing the value of Disney's assets fully utilized for
the benefit of all Disney shareholders.
WE BELIEVE A NEW SENIOR MANAGEMENT TEAM, OVERSEEN BY A VIGILANT,
ACTIVIST BOARD, SHOULD BE ABLE TO TAP INTO AND BUILD UPON WHAT COMCAST
CALLED "THE WONDERFUL TREASURE TROVE OF ASSETS INSIDE THE WALT DISNEY
COMPANY." In this way, we believe that you, as Disney shareholders, will be
able to capture the value that rightfully belongs to you.
WHY IS DISNEY A TARGET?
In explaining the reasons for their takeover proposal, Comcast's
executives reprised many of our long-standing views regarding the failures
of Mr. Eisner and his senior management team, including:
o ABC: Among television networks, Comcast pointed out that ABC is
"a weak number four," only breaking even while "CBS, Fox and NBC
make between $800 million and $1.3 billion a year."
o Disney Cable Network Group: Comcast commented that, "If you look
at The Walt Disney Company's cable assets, they are fantastic
assets. However, if you drill down and look at the Disney Cable
Networks Group and, in particular, ABC Family ... [it is]
certainly not a fair return on investment."
o Animation: Comcast noted the rich legacy of Disney animation and
its importance as the heart of Disney and observed that, "until
fairly recently ... [i]t was the dream of every great animator to
grow up some day and work for The Walt Disney Company."
o Theme Parks: Comcast stated that there is "room for
revitalization and improvement ... to restore some of the
creative spark to the attractions and hotel and concession side
of those businesses."
We wholeheartedly agree that Disney possesses extraordinary assets and
that those assets need to be sustained and nurtured. We also agree with the
Comcast bid's implicit message that poor senior management and leadership
are at the heart of Disney's problems. Disney shareholders deserve a new
senior management team that will fuel original and exciting concepts and
foster creative partnerships that lead to long-term shareholder value, not
just sequels and repackaged versions of existing products and attractions.
WHAT CAN BE DONE?
The failure of senior management and the Board, in our view, has made
Disney a target for unacceptably low bids such as the one Comcast offered
last week. BUT DISNEY SHAREHOLDERS SHOULD NOT HAVE TO CHOOSE BETWEEN
ACCEPTING AN INADEQUATE BID PRICE OR CONTINUING TO TOLERATE A SENIOR
MANAGEMENT THAT IS INCAPABLE OF REALIZING DISNEY'S INHERENT VALUE.
Shareholders deserve better.
The solution to the challenges highlighted by the Comcast bid is
simple - the Disney Board must replace Mr. Eisner NOW and appoint new
senior management who can help ENSURE THAT THE COMPANY'S FULL VALUE IS
REALIZED BY DISNEY'S SHAREHOLDERS. We caution the Board against taking any
self-serving actions that do not address the fundamental issues facing
Disney. Superficially expedient measures - such as the implementation of a
"poison pill" defense, dispositions of assets at "fire sale" prices or
imprudent or overpriced acquisitions - would have the long-term effect of
lowering shareholder value.
WE URGE SHAREHOLDERS TO SEND A MESSAGE TO THE DISNEY BOARD THAT
OPPOSITION TO THE COMCAST BID DOES NOT MEAN SUPPORT OF THE STATUS QUO. Let
the Board know that you will not sit idly by while, in our view, senior
management squanders Disney's rich heritage and fails to develop and
support new, creative and exciting concepts. Shareholders deserve a Board
that will finally demonstrate its active independence by replacing a senior
management team that over the past eight years has failed to deliver.
Remind senior management and the Board that shareholders are the ultimate
authority. VOTE NO ON THE RE-ELECTION OF MICHAEL EISNER, AND VOTE NO ON
JOHN BRYSON, JUDITH ESTRIN AND GEORGE MITCHELL.
PLEASE VOTE TODAY
DON'T MISS THE OPPORTUNITY TO HAVE YOUR VOICE HEARD!
For your convenience, we have enclosed The Walt Disney Company's proxy
card. Please take a few moments to vote your shares. YOUR VOTE MATTERS. We
need you to sign and return your proxy card to The Walt Disney Company in
the envelope provided - BUT PLEASE TAKE THE TIME TO INDICATE ON YOUR PROXY
CARD THAT YOU ARE WITHHOLDING YOUR VOTE ON MICHAEL EISNER, JOHN BRYSON,
JUDITH ESTRIN AND GEORGE MITCHELL.
PLEASE MARK AN "X" ON YOUR PROXY CARD IN THE THIRD BOX "FOR ALL
EXCEPT" AND WRITE THE NUMBER 3 IN THE BLANK SPACE PROVIDED TO WITHHOLD ON
MICHAEL EISNER, THE NUMBER 1 TO WITHHOLD ON JOHN BRYSON, THE NUMBER 4 TO
WITHHOLD ON JUDITH ESTRIN AND THE NUMBER 9 TO WITHHOLD ON GEORGE MITCHELL.
(You also have the option to mark an "X" in the box "Withhold All" to
withhold on all 11 directors.)
Even if you have already voted for any or all of Disney's nominees,
YOU CAN CHANGE YOUR MIND AND YOUR VOTE by sending in the enclosed Walt
Disney Company proxy card, marked with an "X" in the box "For All Except"
and write the numbers 3, 1, 4 and 9 to withhold on Eisner, Bryson, Estrin
and Mitchell, respectively.
If you have any questions on how to VOTE NO, please contact our proxy
specialists -- MacKenzie Partners, Inc. Toll-Free at (800)-322-2885 or at
(212)-929-5500 or by email at SAVEDISNEY@MACKENZIEPARTNERS.COM. They will
be pleased to help you through the process. You may also see
www.savedisney.com for specific instructions or email us at
VOTENO@SAVEDISNEY.COM.
WE NEED YOUR HELP TO RESTORE THE MAGIC. THE DECISION IS YOURS.
VOTE NO TODAY!
THANK YOU FOR YOUR SUPPORT.
Sincerely,
/s/ Roy E. Disney /s/ Stanley P. Gold
Roy E. Disney Stanley P. Gold
P.S. We thought you might find the attached newspaper article from the
Los Angeles Times of interest when making your determination whether to
VOTE NO on Michael Eisner, John Bryson, Judith Estrin and George
Mitchell!
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MICHAEL HILTZIK
GOLDEN STATE
ARE DISNEY'S DIRECTORS ONLY EISNER'S PUPPETS?
February 16, 2004
To WALT DISNEY Co. shareholders hoping that COMCAST Corp.'s offer -- or any
others that follow -- will get an objective hearing on their behalf, the
scariest words in the world might have been the ones uttered by Disney
Chairman and Chief Executive Michael Eisner late last week: "The board is
very solidly behind the management of this company."
Of course, it's possible that Eisner was talking through his hat. It's also
possible that the board is behind him largely because several directors who
stood up to him in the past, namely Andrea Van de Kamp, Roy E. Disney and
Disney's business partner, Stanley P. Gold, have been ousted or quit.
Finally, it's possible that the board sees in Eisner something that Comcast
has overlooked: a skilled executive poised to lead his company back to
glory after seven years of wandering through the slough of despond.
Comcast's bid threw down the gauntlet to a board that has long had a
reputation as Eisner's cat's-paw. According to the traditional picture of
this body, Eisner sets its agendas. He brooks little discussion at board
meetings and certainly not heated disagreement, and seldom loses a vote. He
discourages directors' getting to know one another outside of board
meetings, the better to remain the sole source of information for each.
Several board members say this picture is a caricature, but it nevertheless
contributed to last week's recommendation by Institutional Shareholder
Services, a widely respected advisory firm for institutional investors,
that shareholders cast a symbolic "no" vote against Eisner's election to
the board at the Disney annual meeting next month. ("If there were ever a
case for separating the roles of Chairman and CEO," ISS wrote, "this
company is the poster child.")
Is that changing? In recent years, the board has taken steps to move toward
what corporate do-gooders call "improved governance." It retired several
directors whose role seemed to be chiefly decorative, such as the movie
star Sidney Poitier, and raised the ratio of at least nominally independent
directors -- those without financial ties to Eisner or the company.
It created the post of presiding director, a job designed as a sort of
non-Eisner center of authority, and filled it with former U.S. Sen. George
Mitchell, a longtime Disney director whose work as a negotiator in Northern
Ireland and the Middle East has given him unassailable credentials for
rectitude and intrepidness. Mitchell schedules an executive session at
every board meeting, from which Eisner and other Disney officers are
excluded.
"The board is absolutely getting a bad rap," Judith Estrin, a successful
Silicon Valley entrepreneur and a Disney director since 1998, told me. She
says it has made steady progress toward modern standards of independence
and stockholder representation, and that public perceptions haven't caught
up to reality. "This process takes time," she says. "You can't find great
board members in a month."
Plainly its bad rap has begun to get under the board's skin. Over the last
few days Estrin and other directors have taken rare public exception to an
attack -- some of it exceedingly personal -- that Gold and Roy Disney
launched in a conference call with a proxy advisory firm the day the
Comcast offer was unveiled. ("About two-thirds of the way through every
meeting I've ever sat through," Disney said at one point, "they're looking
at their watch trying to figure out what time the plane leaves.")
The conclusion is unavoidable that things must have gotten, well, rather
colorful inside the boardroom while Gold and Disney were still directors.
(Some of the remaining members talk about "appreciating" and "respecting"
the brusque and outspoken Gold in tones that suggest that most of the time
they were wishing he'd just shut up.) Now that the two dissidents are on
the outside tossing bombshells back over the wall, their targets contend
that they're trying to provoke the board into dumping Eisner simply to get
some peace and quiet.
Board members say that whatever the case in the past, the current Disney
board is a "model of independence," in the words of Raymond L. Watson, vice
chairman of IRVINE CO. and a Disney director for 30 years. (Watson will
retire from the board next month.) "It's totally false that the board is
Michael Eisner's instrument."
Still, in many ways the Disney board remains a living testament to what's
wrong with American corporate governance, even in this supposed golden age
of empowered oversight.
Among the directors are current or former officials of companies so
troubled that their ability to oversee Disney's journey out of the swamp is
debatable.
Take John E. Bryson, the chairman and chief executive of EDISON
INTERNATIONAL and a Disney director since 2000. As a utility executive
Bryson lobbied for the deregulation of California's electrical industry,
which he saw as an opportunity to reap huge profits in the free market.
When deregulation turned catastrophic, he recast his company as a reluctant
participant and lobbied for a state bailout from the risks of competition
in the cold, cruel world. Southern California Edison customers are still
paying the price for his misjudgments.
Bryson also sits on the board of BOEING Co., where scandals involving its
apparent misappropriation of a competitor's secrets and its alleged
tampering with a Defense Department official cost CEO Phil Condit his job
last year.
Former Sen. Mitchell was a director of XEROX Corp. through 2002, a period
in which that company faced allegations that its management manipulated its
financial results for four years -- and failed to cooperate with government
investigators to boot. (The company paid a stiff fine, restated four years
of results and, surprise, neither admitted nor denied the charges.)
One of the board's newest directors -- joining only last month -- is Aylwin
Lewis, the chief operating officer of YUM BRANDS Inc. (This is the holding
company for KFC, Pizza Hut and a few other fast-food chains). Lewis sits on
one other board -- that of HALLIBURTON Co., which is no longer famous for
being the company once headed by Vice President Dick Cheney. It's now
famous because of its apparent compulsion to rip off the federal government
in ever-novel ways on its contracts for oil and administrative services in
Iraq.
Mitchell's resume, meanwhile, raises another important point about the
Disney board (and, sadly, many others): He looks to be stretched rather
thin. At present, Mitchell sits on three corporate boards other than
Disney's -- FEDEX Corp., STAPLES Inc. and STARWOOD HOTELS & RESORTS
WORLDWIDE Inc. He is also a partner in a prominent Washington lobbying
firm, and presumably remains on call to help quell any geopolitical crises
that may require his intervention.
To be fair, Mitchell, has sharply scaled back his workload -- in the
2000-02 period, he sat on eight boards. And he has many admirers in the
company, who say he has never missed a board or committee meeting in his
nine years as a director.
"His reputation speaks for itself -- he is a very high-integrity person,"
Estrin says. "He's at every board meeting, engaged. This is a high priority
for him."
One principle of corporate board-making, Watson observes, is that directors
should have enough outside interests and financial resources to keep them
from being beholden to any company's management. But how many directorships
can one person handle while remaining fully engaged? Eight seems certainly
to be overdoing it, but what about four? (This reminds me of the old joke
about martinis -- one's not enough, two's too many, three's not enough,
etc.)
The prevalence of multiple directorships among the Disney board members --
and once again, this is characteristic of almost all corporate boards --
underscores how the traditional view of directorships as part-time jobs is
increasingly at odds with the time demands of board membership, its
increasing exposure to legal liability and mounting shareholder
expectations.
Even the compensation paid to directors recognizes implicitly that
managements don't really expect them to pay rapt attention. After all, the
benchmark fee of about $50,000 a year may seem lavish for a VIP to sit
through four or six board meetings a year in a stupor; but it's not nearly
enough for someone determined to keep a canny CEO like Michael Eisner in
check by actually learning the business.
The truth is, it's impossible to tell just from the testimony of insiders
and dissidents whether the Disney board is now genuinely independent or
whether its governance initiative is still, to crib from the title of
Eisner's 1998 autobiography, a work in progress. Board members can praise
Eisner's assiduousness in meeting and communicating with them, while
begging the question of whether he's always told them everything they need
to know.
One can attribute Disney's woeful performance over the last few years to
the bad economy and the aftermath of 9/11, as Eisner's fans do, or consider
whether the fabulous job he did with the late Frank Wells in turning around
the company from 1984 to 1994 continues to inoculate him from taking more
responsibility for the dismal decade that followed.
If this board is truly independent, it could ask for no better opportunity
to show it than through its handling of the Comcast offer. That doesn't
mean it has to accept even a bid at a financial premium, only that a
rejection will have to be based on more than: In Eisner we trust. Comcast
implicitly made Eisner the issue in its merger offer, and it may be that
the board can fulfill its responsibility to the shareholders only by
isolating him from the review process and striking out on its own, wherever
the path leads.
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Copyright 2004 Los Angeles Times
Permission to reprint this article was neither sought nor obtained.